Document:

Ex-10.1 Credit Agreement

 

Exhibit 10.1

Published CUSIP Number: 67082KAC9

Revolving Credit CUSIP Number: 67082KAD7

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as
of October 18, 2006,

by and among

O’CHARLEY’S INC.,

as Borrower,

the Lenders referred to herein,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

BANK OF AMERICA, N.A. and AMSOUTH BANK, as Syndication Agents,

KEY BANK, NATIONAL ASSOCIATION

and

JPMORGAN CHASE BANK, as Documentation Agents,

WACHOVIA CAPITAL MARKETS, LLC,

as a Lead Arranger and Sole Book Manager,

and

AMSOUTH BANK, as a Lead Arranger

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	ARTICLE I DEFINITIONS	 	 	1	 
	SECTION 1.1
	 	Definitions	 	 	1	 
	SECTION 1.2
	 	General	 	 	19	 
	SECTION 1.3
	 	Other Definitions and Provisions	 	 	19	 
	ARTICLE II REVOLVING CREDIT FACILITY	 	 	19	 
	SECTION 2.1
	 	Revolving Credit Loans	 	 	19	 
	SECTION 2.2
	 	Swingline Loans	 	 	20	 
	SECTION 2.3
	 	Procedure for Advances of Revolving Credit Loans	 	 	22	 
	SECTION 2.4
	 	Repayment of Loans	 	 	23	 
	SECTION 2.5
	 	Evidence of Debt	 	 	24	 
	SECTION 2.6
	 	Permanent Reduction of the Revolving Credit Commitment	 	 	24	 
	SECTION 2.7
	 	Termination of Revolving Credit Facility	 	 	25	 
	SECTION 2.8
	 	Increase of Revolving Credit Commitment	 	 	25	 
	ARTICLE III LETTER OF CREDIT FACILITY	 	 	26	 
	SECTION 3.1
	 	L/C Commitment	 	 	26	 
	SECTION 3.2
	 	Procedure for Issuance of Letters of Credit	 	 	27	 
	SECTION 3.3
	 	Commissions and Other Charges	 	 	27	 
	SECTION 3.4
	 	L/C Participations	 	 	28	 
	SECTION 3.5
	 	Reimbursement Obligation of the Borrower	 	 	29	 
	SECTION 3.6
	 	Obligations Absolute	 	 	29	 
	SECTION 3.7
	 	Effect of Application	 	 	30	 
	ARTICLE IV [Intentionally Omitted]	 	 	30	 
	ARTICLE V GENERAL LOAN PROVISIONS	 	 	30	 
	SECTION 5.1
	 	Interest	 	 	30	 
	SECTION 5.2
	 	Notice and Manner of Conversion or Continuation of Loans	 	 	33	 
	SECTION 5.3
	 	Fees	 	 	33	 
	SECTION 5.4
	 	Manner of Payment	 	 	35	 
	SECTION 5.5
	 	Crediting of Payments and Proceeds	 	 	35	 
	SECTION 5.6
	 	Adjustments	 	 	35	 
	SECTION 5.7
	 	Obligations of Lenders	 	 	36	 
	SECTION 5.8
	 	Changed Circumstances	 	 	37	 
	SECTION 5.9
	 	Indemnity	 	 	38	 
	SECTION 5.10
	 	Increased Costs	 	 	38	 
	SECTION 5.11
	 	Taxes	 	 	39	 
	SECTION 5.12
	 	Security	 	 	41	 
	SECTION 5.13
	 	Mitigation Obligations; Replacement of Lenders	 	 	41	 
	ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING	 	 	42	 
	SECTION 6.1
	 	Closing	 	 	42	 
	SECTION 6.2
	 	Conditions to Closing and Initial Extensions of Credit	 	 	42	 
	SECTION 6.3
	 	Conditions to All Extensions of Credit	 	 	47	 
	ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER	 	 	47	 
	SECTION 7.1
	 	Representations and Warranties	 	 	47	 
	SECTION 7.2
	 	Survival of Representations and Warranties, Etc	 	 	55	 

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	 	 	 	 	Page	 
	 
	ARTICLE VIII FINANCIAL INFORMATION AND NOTICES	 	 	56	 
	SECTION 8.1
	 	Financial Statements and Projections	 	 	56	 
	SECTION 8.2
	 	Officer’s Compliance Certificate	 	 	57	 
	SECTION 8.3
	 	Accountants’ Certificate	 	 	57	 
	SECTION 8.4
	 	Other Reports	 	 	57	 
	SECTION 8.5
	 	Notice of Litigation and Other Matters	 	 	58	 
	SECTION 8.6
	 	Accuracy of Information	 	 	59	 
	ARTICLE IX AFFIRMATIVE COVENANTS	 	 	59	 
	SECTION 9.1
	 	Preservation of Corporate Existence and Related Matters	 	 	59	 
	SECTION 9.2
	 	Maintenance of Property	 	 	59	 
	SECTION 9.3
	 	Insurance	 	 	59	 
	SECTION 9.4
	 	Accounting Methods and Financial Records	 	 	60	 
	SECTION 9.5
	 	Payment and Performance of Obligations	 	 	60	 
	SECTION 9.6
	 	Compliance with Laws and Approvals	 	 	60	 
	SECTION 9.7
	 	Environmental Laws	 	 	60	 
	SECTION 9.8
	 	Compliance with ERISA	 	 	61	 
	SECTION 9.9
	 	Compliance with Agreements	 	 	61	 
	SECTION 9.10
	 	Visits and Inspections	 	 	61	 
	SECTION 9.11
	 	Additional Subsidiaries; Equipment; Real Property Acquisitions	 	 	61	 
	SECTION 9.12
	 	Use of Proceeds	 	 	63	 
	SECTION 9.13
	 	Conduct of Business	 	 	63	 
	SECTION 9.14
	 	Further Assurances	 	 	63	 
	SECTION 9.15
	 	Landlord Consents	 	 	63	 
	ARTICLE X FINANCIAL COVENANTS	 	 	63	 
	SECTION 10.1
	 	Maximum Adjusted Debt to EBITDAR Ratio	 	 	63	 
	SECTION 10.2
	 	Maximum Senior Secured Leverage Ratio	 	 	63	 
	SECTION 10.3
	 	Minimum Fixed Charge Coverage Ratio	 	 	64	 
	SECTION 10.4
	 	Minimum Capital Expenditures Ratio	 	 	64	 
	ARTICLE XI NEGATIVE COVENANTS	 	 	64	 
	SECTION 11.1
	 	Limitations on Debt	 	 	64	 
	SECTION 11.2
	 	Limitations on Liens	 	 	66	 
	SECTION 11.3
	 	Limitations on Loans, Advances, Investments and Acquisitions	 	 	67	 
	SECTION 11.4
	 	Limitations on Mergers and Liquidation	 	 	68	 
	SECTION 11.5
	 	Limitations on Sale of Assets	 	 	68	 
	SECTION 11.6
	 	Limitations on Dividends and Distributions	 	 	70	 
	SECTION 11.7
	 	Limitations on Exchange and Issuance of Ownership Interests	 	 	71	 
	SECTION 11.8
	 	Transactions with Affiliates	 	 	71	 
	SECTION 11.9
	 	Certain Accounting Changes; Organizational Documents	 	 	71	 
	SECTION 11.10
	 	Amendments; Payments and Prepayments of Subordinated Debt	 	 	72	 
	SECTION 11.11
	 	Restrictive Agreements	 	 	72	 
	SECTION 11.12
	 	Nature of Business	 	 	72	 
	SECTION 11.13
	 	Impairment of Security Interests	 	 	72	 
	SECTION 11.14
	 	SRLS Entities Restrictions	 	 	72	 
	SECTION 11.15
	 	Franchisees Restrictions	 	 	73	 
	ARTICLE XII DEFAULT AND REMEDIES	 	 	73	 
	SECTION 12.1
	 	Events of Default	 	 	73	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	SECTION 12.2
	 	Remedies	 	 	76	 
	SECTION 12.3
	 	Rights and Remedies Cumulative; Non-Waiver; etc	 	 	76	 
	SECTION 12.4
	 	Administrative Agent May File Proofs of Claim	 	 	77	 
	ARTICLE XIII THE ADMINISTRATIVE AGENT	 	 	78	 
	SECTION 13.1
	 	Appointment and Authority	 	 	78	 
	SECTION 13.2
	 	Rights as a Lender	 	 	78	 
	SECTION 13.3
	 	Exculpatory Provisions	 	 	78	 
	SECTION 13.4
	 	Reliance by the Administrative Agent	 	 	79	 
	SECTION 13.5
	 	Delegation of Duties	 	 	79	 
	SECTION 13.6
	 	Resignation of Administrative Agent	 	 	79	 
	SECTION 13.7
	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	80	 
	SECTION 13.8
	 	No Other Duties, etc	 	 	81	 
	SECTION 13.9
	 	Collateral and Guaranty Matters	 	 	81	 
	ARTICLE XIV MISCELLANEOUS	 	 	81	 
	SECTION 14.1
	 	Notices	 	 	81	 
	SECTION 14.2
	 	Expenses; Indemnity	 	 	83	 
	SECTION 14.3
	 	Right of Set-off	 	 	85	 
	SECTION 14.4
	 	Governing Law	 	 	85	 
	SECTION 14.5
	 	Jurisdiction and Venue	 	 	85	 
	SECTION 14.6
	 	Waiver of Jury Trial	 	 	86	 
	SECTION 14.7
	 	Reversal of Payments	 	 	86	 
	SECTION 14.8
	 	Injunctive Relief; Punitive Damages	 	 	86	 
	SECTION 14.9
	 	Accounting Matters	 	 	87	 
	SECTION 14.10
	 	Successors and Assigns; Participations	 	 	87	 
	SECTION 14.11
	 	Amendments, Waivers and Consents	 	 	90	 
	SECTION 14.12
	 	Confidentiality	 	 	91	 
	SECTION 14.13
	 	Performance of Duties	 	 	92	 
	SECTION 14.14
	 	All Powers Coupled with Interest	 	 	92	 
	SECTION 14.15
	 	Survival of Indemnities	 	 	92	 
	SECTION 14.16
	 	Titles and Captions	 	 	92	 
	SECTION 14.17
	 	Severability of Provisions	 	 	92	 
	SECTION 14.18
	 	Electronic Execution of Assignments	 	 	92	 
	SECTION 14.19
	 	Counterparts; Integration; Effectiveness	 	 	93	 
	SECTION 14.20
	 	Term of Agreement	 	 	93	 
	SECTION 14.21
	 	Advice of Counsel	 	 	93	 
	SECTION 14.22
	 	USA Patriot Act	 	 	93	 
	SECTION 14.23
	 	No Strict Construction	 	 	93	 
	SECTION 14.24
	 	Inconsistencies with Other
Documents; Independent Effect of Covenants	 	 	93	 

iii

 

	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A-1

	 	—
	 	Form of Amended and Restated Revolving Credit Note
	Exhibit A-2

	 	 	 	Form of Amended and Restated Swingline Note
	Exhibit B

	 	—
	 	Form of Notice of Borrowing
	Exhibit C

	 	—
	 	Form of Notice of Account Designation
	Exhibit D

	 	—
	 	Form of Notice of Prepayment
	Exhibit E

	 	—
	 	Form of Notice of Conversion/Continuation
	Exhibit F

	 	—
	 	Form of Officer’s Compliance Certificate
	Exhibit G

	 	—
	 	Form of Assignment and Assumption
	 
	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule 1.1

	 	 	 	Existing Letters of Credit
	Schedule 7.1(a)

	 	—
	 	Jurisdictions of Organization and Qualification
	Schedule 7.1(b)

	 	—
	 	Subsidiaries and Capitalization
	Schedule 7.1(h)

	 	—
	 	Environmental Matters
	Schedule 7.1(i)

	 	—
	 	ERISA Plans
	Schedule 7.1(l)

	 	—
	 	Material Contracts
	Schedule 7.1(m)

	 	—
	 	Labor and Collective Bargaining Agreements
	Schedule 7.1(r)

	 	—
	 	Real Property
	Schedule 7.1(t)

	 	—
	 	Debt and Guaranty Obligations
	Schedule 7.1(u)

	 	—
	 	Litigation
	Schedule 11.2

	 	—
	 	Existing Liens
	Schedule 11.3

	 	—
	 	Existing Loans, Advances and Investments

i

 

     SECOND
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 18th day of October, 2006, by
and among O’CHARLEY’S INC., a Tennessee corporation, as Borrower, the lenders who are or may become
a party to this Agreement, as Lenders, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as Administrative Agent for the Lenders.

STATEMENT OF PURPOSE

     Pursuant to the Amended and Restated Credit Agreement dated as of November 4, 2003 (as
amended, restated, supplemented or otherwise modified prior to the date hereof, the “Existing
Credit Agreement”), by and among the Borrower, the lenders party thereto (the “Existing
Lenders”) and Wachovia Bank, National Association, as administrative agent, the Existing
Lenders extended certain credit facilities to the Borrower pursuant to the terms thereof.

     The Borrower has requested, and, subject to the terms and conditions hereof, the Lenders have
agreed, to amend and restate the Existing Credit Agreement on the terms and conditions of this
Agreement.

     It is the intent of the parties hereto that this Agreement not constitute a novation of the
obligations and liabilities of the parties under the Existing Credit Agreement or be deemed to be
evidence or constitute repayment of all or any portion of such obligations and liabilities, but
that this Agreement amend and restate in its entirety the Existing Credit Agreement and re-evidence
the obligations and liabilities of the Borrower and the other credit parties outstanding
thereunder.

     It is also the intent of the Borrower and Subsidiary Guarantors (as defined below) to confirm
that all obligations under the loan documents referred to in the Existing Credit Agreement shall
continue in full force and effect as modified by the Loan Documents referred to herein and that,
from and after the Closing Date, all references to the “Credit Agreement” contained in any such
existing loan documents shall be deemed to refer to this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties hereby agree that the Existing Credit
Agreement is hereby amended and restated as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.1 Definitions. The following terms when used in this Agreement shall have
the meanings assigned to them below:

     “Adjusted Debt” means, as of any date of calculation, the sum of the following
determined on a Consolidated basis, without duplication, for the Borrower and its Subsidiaries in
accordance with GAAP: (a) Debt as of such date, plus (b) the product of (i) Rental Expense for the
four (4) consecutive Fiscal Quarter period ending on or immediately prior to such date, multiplied
by (ii) 8.0; provided, however, that for purposes of calculating compliance with
Section 10.1, Rental Expense for the four (4) consecutive Fiscal Quarter period ending on such

 

 

date shall be increased to include rental expense associated with any sale-leaseback transaction
permitted hereunder on a pro forma basis.

     “Adjusted Debt to EBITDAR Ratio” shall mean the ratio set forth in Section 10.1.

     “Administrative Agent” means Wachovia in its capacity as Administrative Agent
hereunder, and any successor thereto appointed pursuant to Section 13.6.

     “Administrative Agent’s Office” means the office of the Administrative Agent specified
in or determined in accordance with the provisions of Section 14.1(c).

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

     “Affiliate” means, with respect to any Person, any other Person (other than a
Subsidiary of the Borrower) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first Person or any of its
Subsidiaries. The term “control” means (a) the power to vote ten percent (10%) or more of the
securities or other equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting securities, by contract or
otherwise.

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

     “Aggregate Commitment” means the aggregate amount of the Lenders’ Commitments
hereunder, as such amount may be reduced or otherwise modified at any time or from time to time
pursuant to the terms hereof. On the Closing Date, the Aggregate Commitment shall be One Hundred
Twenty-Five Million Dollars ($125,000,000).

     “Aggregate Permitted Note Repurchases Amount” means Fifty Million Dollars
($50,000,000).

     “Applicable Law” means all applicable provisions of constitutions, laws, statutes,
ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

     “Applicable Margin” shall have the meaning assigned thereto in Section 5.1(c).

     “Application” means an application, in the form specified by the Issuing Lender from
time to time, requesting the Issuing Lender to issue a Letter of Credit.

     “Approved Fund” means any Person (other than a natural Person), including, without
limitation, any special purpose entity, that is (or will be) engaged in making, purchasing, holding
or otherwise investing in commercial loans and similar extensions of credit in the ordinary course
of its business; provided, that such Approved Fund must be administered by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

2

 

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

     “Base Rate” means, at any time, the higher of (a) the Prime Rate and (b) the Federal
Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take effect simultaneously with the
corresponding change or changes in the Prime Rate or the Federal Funds Rate.

     “Base Rate Loan” means any Loan bearing interest at a rate based upon the Base Rate as
provided in Section 5.1(a).

     “Borrower” means O’Charley’s Inc., a Tennessee corporation, in its capacity as
borrower hereunder.

     “Build-to-Suit Sale-Leaseback Transaction” means, in respect of any real property
acquired and improved by the Borrower or any of its Subsidiary Guarantors after November 4, 2003
solely in connection with new store openings, any transaction occurring after November 4, 2003
whereby such real property is sold by and leased back to the Borrower or such Subsidiary Guarantors
within a period ending not later than the date that is the earlier of (i) two years after the date
such real property was acquired and (ii) 270 days after the date that construction work to improve
such real property commenced.

     “Business Day” means (a) for all purposes other than as set forth in clause (b) below,
any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina
and New York, New York, are open for the conduct of their commercial banking business, and (b) with
respect to all notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and that
is also a day for trading by and between banks in Dollar deposits in the London interbank market.

     “Calculation Date” shall have the meaning assigned thereto in Section 5.1(c).

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

     “Capital Expenditures” means with respect to the Borrower and its Subsidiaries for any
period, the aggregate cost of all Capital Assets acquired by the Borrower and its Subsidiaries
during such period, as determined in accordance with GAAP.

     “Capital Lease” means any lease of any property by the Borrower or any of its
Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and accounted for as a
capital lease on a Consolidated balance sheet of the Borrower and its Subsidiaries.

     “Cash Equivalents” shall have the meaning assigned thereto in Section 11.3(b).

3

 

     “Cash Management Program” means the cash management program of the Swingline Lender
and any other cash management or other arrangement which the Borrower and the Swingline Lender
agree should be included in the borrowing and repayment of Swingline Loans pursuant to Section 2.2.

     “Change in Control” shall have the meaning assigned thereto in Section 12.1(i).

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

     “Closing Date” means the date of this Agreement or such later Business Day upon which
each condition described in Section 6.2 shall be satisfied or waived in all respects in a manner
acceptable to the Administrative Agent, in its sole discretion.

     “Code” means the Internal Revenue Code of 1986, and the rules and regulations
thereunder, each as amended or modified from time to time.

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

     “Collateral Agreement” means the Second Amended and Restated Collateral Agreement
dated as of the date hereof, executed by the Borrower and the Subsidiary Guarantors in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders, as amended, restated,
supplemented or otherwise modified from time to time.

     “Collateral Assignment Agreement” means the Amended and Restated Collateral Assignment
Agreement dated as of the date hereof, executed by the Borrower or any of its Subsidiaries, as
applicable, in favor of the Administrative Agent for the ratable benefit of itself and the Lenders,
as amended, restated or supplemented from time to time.

     “Commitment” means, as to any Lender, the obligation of such Lender to make Loans to
and issue or participate in Letters of Credit issued for the account of the Borrower hereunder in
an aggregate principal or face amount at any time outstanding not to exceed the amount set forth
opposite such Lender’s name in the Register, as the same may be reduced or otherwise modified at
any time or from time to time pursuant to the terms hereof.

     “Commitment Fee Rate” shall have the meaning assigned thereto in Section 5.3(a).

     “Commitment Percentage” means, as to any Lender at any time, the ratio of (a) the
amount of the Commitment of such Lender to (b) the Aggregate Commitments of all of the Lenders.

     “Consolidated” means, when used with reference to financial statements or financial
statement items of the Borrower and its Subsidiaries, such statements or items on a consolidated
basis in accordance with applicable principles of consolidation under GAAP.

4

 

     “Credit Facility” means, collectively, the Revolving Credit Facility and the L/C
Facility.

     “Credit Parties” means, collectively, the Borrower and the Subsidiary Guarantors.

     “Cumulative Net Income” means Net Income for the period commencing with the Fiscal
Quarter beginning December 26, 2005 and ending as of the end of the last Fiscal Quarter with
respect to which the Borrower has delivered to the Administrative Agent quarterly financial
statements pursuant to Section 8.1(a) of this Agreement.

     “Debt” means, with respect to the Borrower and its Subsidiaries at any date and
without duplication, the sum of the following calculated in accordance with GAAP: (a) all
liabilities, obligations and indebtedness for borrowed money including, but not limited to,
obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person,
(b) all obligations to pay the deferred purchase price of property or services of any such Person
(including, without limitation, all obligations under non-competition agreements), except trade
payables arising in the ordinary course of business not more than ninety (90) days past due, (c)
all obligations of any such Person as lessee under Capital Leases, (d) all Debt of any other Person
secured by a Lien on any asset of any such Person, (e) all Guaranty Obligations of any such Person,
(f) all obligations, contingent or otherwise, of any such Person relative to the face amount of
letters of credit, whether or not drawn, including, without limitation, any Reimbursement
Obligation, and banker’s acceptances issued for the account of any such Person, (g) all obligations
of any such Person to redeem, repurchase, exchange, defease or otherwise make payments in respect
of capital stock or other securities or partnership interests of such Person, (h) the Termination
Values of all Hedging Agreements and (i) all outstanding payment obligations with respect to
Synthetic Leases.

     “Default” means any of the events specified in Section 12.1 which with the passage of
time, the giving of notice or any other condition, would constitute an Event of Default.

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

     “Disputes” means any dispute, claim or controversy arising out of, connected with or
relating to this Agreement or any other Loan Document, between or among parties hereto and to the
other Loan Documents.

     “Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the
United States.

     “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States.

     “EBITDA” means, for any period, the sum of the following determined on a Consolidated
basis, without duplication, for the Borrower and its Subsidiaries in accordance with

5

 

GAAP: (a) Net
Income for such period plus (b) the sum of the following to the extent deducted in
determining Net Income: (i) Tax Expense, (ii) Interest Expense, and (iii) amortization,
depreciation and other non-cash charges, less (c) interest income and any extraordinary
gains, plus (d) extraordinary losses in amounts reasonably acceptable to the
Administrative Agent.

     “EBITDAR” means, for any period, the sum of the following determined on a Consolidated
basis, without duplication, for the Borrower and its Subsidiaries: (a) EBITDA for such period,
plus (b) Rental Expense for such period.

     “Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by (i) the Administrative
Agent, (ii) in the case of any assignment of a Revolving Credit Commitment, the Swingline Lender
and the Issuing Lender, and (iii) unless a Default or Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

     “Employee Benefit Plan” means (a) any employee benefit plan within the meaning of
Section 3(3) of ERISA which is maintained for employees of the Borrower or any ERISA Affiliate or
(b) any Pension Plan or Multiemployer Plan that has at any time within the preceding six (6) years
been maintained for the employees of the Borrower or any current or former ERISA Affiliate.

     “Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations (other than internal reports prepared by any Person in the ordinary course of
business and not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any Environmental Law
or relating to any permit issued, or any approval given, under any such Environmental Law,
including, without limitation, any and all claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages, contribution, indemnification
cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to human health or the environment.

     “Environmental Laws” means any and all federal, foreign, state, provincial and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, legally binding
interpretations and orders of courts or Governmental Authorities, relating to the protection of
human health or the environment, including, but not limited to, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

     “ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and
regulations thereunder, each as amended or modified from time to time.

     “ERISA Affiliate” means any Person who together with the Borrower is treated as a
single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section
4001(b) of ERISA.

6

 

     “Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as a
decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for
such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, without limitation, any basic,
supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category
of liabilities for a member bank of the Federal Reserve System in New York City.

     “Event of Default” means any of the events specified in Section 12.1, provided that
any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section
5.13(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable
to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply
with Section 5.11(e), except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 5.11(a).

     “Existing Credit Agreement” shall have the meaning given thereto in the Statement of
Purpose herein.

     “Existing Lenders” shall have the meaning assigned thereto in the Statement of Purpose
herein.

     “Existing Letters of Credit” means those letters of credit existing on the Closing
Date and identified on Schedule 1.1.

     “Existing Loans” shall have the meaning assigned thereto in Section 6.2(h).

     “Expansion Capital Expenditures” means Capital Expenditures of the Borrower and its
Subsidiaries associated solely with new store openings.

     “Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the
sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then
outstanding, and (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans
then outstanding, or (b) the making of any Loan or participation in any Letter of Credit by such
Lender, as the context requires.

7

 

     “FDIC” means the Federal Deposit Insurance Corporation, or any successor thereto.

     “Federal Funds Rate” means, the rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) representing the daily effective federal funds rate as quoted by the
Administrative Agent and confirmed in Federal Reserve Board Statistical Release H.15 (519) or any
successor or substitute publication selected by the Administrative Agent. If, for any reason, such
rate is not available, then “Federal Funds Rate” shall mean a daily rate which is determined, in
the opinion of the Administrative Agent, to be the rate at which federal funds are being offered
for sale in the national federal funds market at 9:00 a.m. (Charlotte time). Rates for weekends or
holidays shall be the same as the rate for the most immediately preceding Business Day.

     “Fiscal Quarter” means each fiscal quarter of the Borrower and its Subsidiaries ending
on the Sunday that is sixteen (16), twenty-eight (28), forty (40) and fifty-two (52) weeks (or
fifty-three (53) weeks in Fiscal Years containing fifty-three (53) weeks) from the first day of the
Borrower’s Fiscal Year.

     “Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries ending on the
Sunday closest to December 31.

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

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

     “Franchisee” means, any Person with whom the Borrower or any of its Subsidiaries has
entered into a franchise agreement or similar arrangement for the purpose of developing and
operating restaurants.

     “GAAP” means generally accepted accounting principles, as recognized by the American
Institute of Certified Public Accountants and the Financial Accounting Standards Board,
consistently applied and maintained on a consistent basis for the Borrower and its Subsidiaries
throughout the period indicated and (subject to Section 14.9) consistent with the prior financial
practice of the Borrower and its Subsidiaries.

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

     “Governmental Authority” means any nation, province, state or political subdivision
thereof, and any government or any Person exercising executive, legislative, regulatory or
administrative functions of or pertaining to government, and any corporation or other entity owned
or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

     “Guaranty Obligation” means, with respect to the Borrower and its Subsidiaries,
without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which
such Person has directly or indirectly guaranteed any Debt or other obligation of any other Person
and,

8

 

without limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided, that the term Guaranty Obligation shall not include endorsements for collection
or deposit in the ordinary course of business.

     “Hazardous Materials” means any substances or materials (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants, or toxic substances
under any Environmental Law, (b)which are toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and
are or become regulated by any Governmental Authority, (c) the presence of which require
investigation or remediation under any Environmental Law or common law, (d) the discharge or
emission or release of which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance or a trespass which pose a
health or safety hazard to Persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any substance, or (g)
which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.

     “Hedging Agreement” means any agreement with respect to any Interest Rate Contract,
forward rate agreement, commodity swap, forward foreign exchange agreement, currency swap
agreement, cross-currency rate swap agreement, currency option agreement or other agreement or
arrangement designed to alter the risks of any Person arising from fluctuations in interest rates,
currency values or commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.

     “Hedging Obligations” shall have the meaning assigned thereto in the definition of
“Obligations.”

     “Indemnified Taxes” means Taxes and Other Taxes other than Excluded Taxes.

     “Intercompany Loan” means the revolving credit facility extended to the Borrower by
O’Charley’s Finance Company, Inc., pursuant to that certain Revolving Credit Agreement dated as of
October 7, 2002 by and between the Borrower and O’Charley’s Finance Company, Inc. and
that certain Secured Demand Promissory Note dated as of October 7, 2002 by the Borrower to
O’Charley’s Finance Company, Inc.

     “Intercreditor and Subordination Agreement” means the amended and restated
intercreditor and subordination agreement dated as of the date hereof between the Administrative
Agent and O’Charley’s Finance Company, Inc., as amended, restated, supplemented or otherwise
modified from time to time.

9

 

     “Interest Expense” means, with respect to the Borrower and its Subsidiaries for any
period, the gross interest expense (including, without limitation, interest expense attributable to
Capital Leases and all net payment obligations pursuant to Hedging Agreements), all determined for
such period on a Consolidated basis, without duplication, in accordance with GAAP.

     “Interest Period” shall have the meaning assigned thereto in Section 5.1(b).

     “Interest Rate Contract” means any interest rate swap agreement, interest rate cap
agreement, interest rate floor agreement, interest rate collar agreement, interest rate option or
any other agreement regarding the hedging of interest rate risk exposure executed in connection
with hedging the interest rate exposure of any Person and any confirming letter executed pursuant
to such agreement, all as amended, restated, supplemented or otherwise modified from time to time.

     “ISP98” means the International Standby Practices (1998 Revision, effective January 1,
1999), International Chamber of Commerce Publication No. 590.

     “Issuing Lender” means (a) Wachovia, in its capacity as issuer of any Letter of
Credit, or any successor thereto and (b) with respect to the Existing Letters of Credit, the Lender
issuing such Existing Letter of Credit.

     “L/C Commitment” means the lesser of (a) Fifteen Million Dollars ($15,000,000) and (b)
the Revolving Credit Commitment.

     “L/C Facility” means the letter of credit facility established pursuant to Article
III.

     “L/C Obligations” means at any time, an amount equal to the sum of (a) the aggregate
undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.5.

     “L/C Participant” means, with respect to the L/C Facility, each Person executing this
Agreement as a Lender under the Revolving Credit Facility (other than the Issuing Lender).

     “Lender” means each Person executing this Agreement as a Lender (including, without
limitation, the Issuing Lender, L/C Participants and the Swingline Lender unless the context
otherwise requires) set forth on the signature pages hereto and each Person that hereafter becomes
a party to this Agreement as a Lender pursuant to Section 14.10.

     “Lending Office” means, with respect to any Lender, the office of such Lender
maintaining such Lender’s Revolving Credit Commitment Percentage of the Extensions of Credit.

     “Letters of Credit” means the collective reference to letters of credit issued
pursuant to Section 3.1 and the Existing Letters of Credit.

     “LIBOR” means the rate of interest per annum determined on the basis of the rate for
deposits in Dollars in minimum amounts of at least Five Million Dollars ($5,000,000) for a period
equal to the applicable Interest Period which appears on the Telerate Page 3750 at

10

 

approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest
Period (rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate
does not appear on Telerate Page 3750, then “LIBOR” shall be determined by the Administrative Agent
to be the arithmetic average of the rate per annum at which deposits in Dollars in minimum amounts
of at least Five Million Dollars ($5,000,000) would be offered by first class banks in the London
interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period for a period equal to such
Interest Period. Each calculation by the Administrative Agent of LIBOR shall be conclusive and
binding for all purposes, absent manifest error.

     “LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

	 	 	 	 	 	 	 
	 

	 	LIBOR Rate =
	 	LIBOR
 

1.00-Eurodollar Reserve Percentage
	 	 

     “LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR Rate
as provided in Section 5.1(a).

     “Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien,
pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement relating to such
asset.

     “Loan Documents” means, collectively, this Agreement, the Notes, the Applications, the
Intercreditor and Subordination Agreement, the Subsidiary Guaranty Agreement, the Collateral
Agreement, the Security Documents, each joinder agreement executed pursuant to Section 9.11 and
each other document, instrument, certificate and agreement executed and delivered by the Borrower
or any Subsidiary thereof in connection with this Agreement or otherwise referred to herein or
contemplated hereby (excluding any Hedging Agreement), all as may be amended, restated,
supplemented or otherwise modified from time to time.

     “Loans” means the collective reference to the Revolving Credit Loans and the Swingline
Loans and “Loan” means any of such Loans.

     “Maintenance Capital Expenditures” means, with respect to the Borrower and its
Subsidiaries, Capital Expenditures less Expansion Capital Expenditures.

     “Material Adverse Effect” means, with respect to the Borrower or any of its
Subsidiaries, a material adverse effect on the properties, business, operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the ability of
any such Person to perform its obligations under any Loan Document to which it is a party.

     “Material Contract” means (a) any contract or other agreement, written or oral, of the
Borrower or any of its Subsidiaries involving monetary liability of or to any such Person in an
amount in excess of Ten Million Dollars ($10,000,000) per annum, or (b) any other contract or

11

 

agreement, written or oral, of the Borrower or any of its Subsidiaries the failure to comply with
which could reasonably be expected to have a Material Adverse Effect.

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

     “Mortgages” means the collective reference to each deed of trust, mortgage, or other
real property security document encumbering certain real property now or hereafter owned by the
Borrower or any Subsidiary, in each case in form and content satisfactory to the Administrative
Agent and executed by the Borrower or any Subsidiary thereof in favor of the Administrative Agent
for the ratable benefit of itself and the Lenders, as each such document may be amended, restated,
or supplemented from time to time.

     “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Borrower or any ERISA Affiliate is making, or is accruing an obligation to make,
or has accrued an obligation to make contributions within the preceding six (6) years.

     “Net Cash Proceeds” means, as applicable, (a) with respect to any sale or other
disposition of assets, the gross cash proceeds received by the Borrower or any of its Subsidiaries
from such sale less the sum of (i) all income taxes and other taxes assessed by a
Governmental Authority as a result of such sale and any other fees and expenses incurred in
connection therewith and (ii) the principal amount of, premium, if any, and interest on any Debt
secured by a Lien on the asset (or a portion thereof) sold, which Debt is required to be repaid in
connection with such sale, (b) with respect to any offering of equity securities or issuance of
Debt, the gross cash proceeds received by the Borrower or any of its Subsidiaries therefrom
less all legal, underwriting and other fees and expenses incurred in connection therewith
and (c) with respect to any payment under an insurance policy or in connection with a condemnation
proceeding, the amount of cash proceeds received by the Borrower or its Subsidiaries from an
insurance company or Governmental Authority, as applicable, net of all expenses of collection.

     “Net Income” means, with respect to the Borrower and its Subsidiaries, for any period
of determination, the net income (or loss) for such period, determined on a Consolidated basis in
accordance with GAAP; provided that there shall be excluded from Net Income (a) the net
income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c)
below), in which the Borrower or any of its Subsidiaries has a joint interest with a third party,
except to the extent such net income is actually paid to the Borrower or any of its Subsidiaries by
dividend or other distribution during such period (in an amount not to exceed the Borrower’s or
such Subsidiary’s share of the equity income from such Person), (b) the net income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of such Person or is merged into or
consolidated with such Person or any of its Subsidiaries or that Person’s assets are acquired by
such Person or any of its Subsidiaries except to the extent included pursuant to the foregoing
clause (a), and (c) the net income (if positive) of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary to the Borrower or
any of its Subsidiaries of such net income (i) is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order, statute rule or
governmental regulation applicable to such Subsidiary or (ii) would be subject to any taxes payable
on such dividends or distributions.

12

 

     “Notes” means the collective reference to the Revolving Credit Notes and the Swingline
Note, and “Note” means any of such Notes.

     “Notice of Account Designation” shall have the meaning assigned thereto in Section
2.3(b).

     “Notice of Borrowing” shall have the meaning assigned thereto in Section 2.3(a).

     “Notice of Conversion/Continuation” shall have the meaning assigned thereto in Section
5.2.

     “Notice of Prepayment” shall have the meaning assigned thereto in Section 2.4(c).

     “Obligations” means, in each case, whether now in existence or hereafter arising: (a)
the principal of and interest on (including interest accruing after the filing of any bankruptcy or
similar petition) the Loans, (b) the L/C Obligations, (c) all existing or future payment and other
obligations owing by the Borrower under any Hedging Agreement (which such Hedging Agreement is
permitted hereunder) with any Person that is a Lender hereunder, or any Affiliate of a Lender, at
the time such Hedging Agreement is executed (all such obligations with respect to any such Hedging
Agreement, “Hedging Obligations”) and (d) all other fees and commissions (including
attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations,
covenants and duties owing by the Borrower or any of its Subsidiaries to the Lenders or the
Administrative Agent, in each case under or in respect of this Agreement, any Note, any Letter of
Credit or any of the other Loan Documents of every kind, nature and description, direct or
indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note.

     “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

     “Officer’s Compliance Certificate” shall have the meaning assigned thereto in Section
8.2.

     “Operating Lease” shall mean, as to any Person as determined in accordance with GAAP,
any lease of property (whether real, personal or mixed) by such Person as lessee which is not a
Capital Lease.

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

     “PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

     “Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which
is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is
maintained for the employees of the Borrower or any ERISA Affiliates or (b) has at any time within
the preceding six (6) years been maintained for the employees of the Borrower or any of its current
or former ERISA Affiliates.

13

 

     “Permitted Acquisition” shall have the meaning assigned thereto in Section 11.3(c).

     “Permitted Lien” means any Lien permitted pursuant to Section 11.2 hereof.

     “Permitted Note Repurchases” means the repurchase by the Borrower of the Senior
Subordinated Notes on the open market in an aggregate amount not to exceed the Aggregate Permitted
Note Repurchases Amount during the term of the Credit Facility; provided that immediately
prior to and after giving effect to any such repurchase, (i) no Default or Event of Default has
occurred and is continuing, and (ii) the Borrower shall have demonstrated to the Administrative
Agent pro forma compliance with each covenant contained in, and in the manner set
forth in, Article X prior to the consummation of such repurchase (which shall be evidenced by an
Officer’s Compliance Certificate, in form and substance reasonably satisfactory to the
Administrative Agent, delivered to the Administrative Agent prior to such repurchase by the
Borrower).

     “Person” means an individual, corporation, limited liability company, partnership,
association, trust, business trust, joint venture, joint stock company, pool, syndicate, sole
proprietorship, unincorporated organization, Governmental Authority or any other form of entity or
group thereof.

     “Prime Rate” means, at any time, the rate of interest per annum publicly announced
from time to time by Wachovia as its prime rate. Each change in the Prime Rate shall be effective
as of the opening of business on the day such change in such prime rate occurs. The parties hereto
acknowledge that the rate announced publicly by Wachovia as its prime rate is an index or base rate
and shall not necessarily be its lowest or best rate charged to its customers or other banks.

     “Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed
as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of
the Commitment of such Lender at such time and the denominator of which is the amount of the
Aggregate Commitments at such time. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on the Register or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

     “Ratings Downgrade” means (a) a downgrade of the rating of the Credit Facility to (i)
a rating less than BB- by Standard and Poor’s and (ii) a rating less than Ba3 by Moody’s or (b) the
Credit Facility not being rated by either Standard and Poor’s or Moody’s.

     “Register” shall have the meaning assigned thereto in Section 14.10(c).

     “Reimbursement Obligation” means the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.

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

     “Rental Expense” means, with respect to the Borrower and its Subsidiaries for any
period, all rental expenses with respect to long-term real property leases and operating leases of

14

 

the Borrower and its Subsidiaries for such period, determined on a Consolidated basis in accordance
with GAAP.

     “Required Lenders” means, at any date, any combination of Lenders holding more than
fifty percent (50%) of the Revolving Credit Commitments (or the Revolving Credit Loans if such
Commitments have been terminated), provided that the Revolving Credit Commitment of, and
the portion of the Extensions of Credit, as applicable, held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required Lenders.

     “Responsible Officer” means any of the following: the chief executive officer,
president, vice-president, chief financial officer or secretary of the Borrower or applicable
Subsidiary Guarantor or any other officer of the Borrower or applicable Subsidiary Guarantor
reasonably acceptable to the Administrative Agent.

     “Revolving Credit Commitment” means (a) as to any Lender, the obligation of such
Lender to make Revolving Credit Loans to the account of the Borrower hereunder in an aggregate
principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s
name on the Register as such amount may be reduced or modified at any time or from time to time
pursuant to the terms hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Revolving Credit Loans, as such amount may be reduced or modified at any time or from time to
time pursuant to the terms hereof. The Revolving Credit Commitment of all Lenders on the Closing
Date shall be One Hundred Twenty-Five Million Dollars ($125,000,000).

     “Revolving Credit Commitment Percentage” means, as to any Lender at any time, the
ratio of (a) the amount of the Revolving Credit Commitment of such Lender to (b) the Revolving
Credit Commitments of all Lenders.

     “Revolving Credit Facility” means the revolving credit facility established pursuant
to Article II.

     “Revolving Credit Loan” means any revolving loan made to the Borrower pursuant to
Section 2.1, and all such revolving loans collectively as the context requires.

     “Revolving Credit Maturity Date” means the earliest of the dates referred to in
Section 2.7.

     “Revolving Credit Notes” means the collective reference to any Second Amended and
Restated Revolving Credit Notes made by the Borrower at the request of a Lender, payable to the
order of such Lender holding a Revolving Credit Commitment, substantially in the form of
Exhibit A-1 hereto, evidencing the Revolving Credit Facility, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or
extensions thereof, in whole or in part.

     “Sanctioned Entity” means (i) an agency of the government of, (ii) an organization
directly or indirectly controlled by, or (iii) a person resident in a country that is subject to a
sanctions program identified on the list maintained by OFAC and available at

15

 

http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html, or as otherwise published from
time to time as such program may be applicable to such agency, organization or person.

     “Sanctioned Person” means a person named on the list of Specially Designated Nationals
or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

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

     “Senior Debt” means Total Debt less Subordinated Debt.

     “Senior Secured Leverage Ratio” shall have the meaning assigned thereto in Section
10.2.

     “Senior Subordinated Notes” means the 9.00% unsecured senior subordinated notes issued
by the Borrower due November 1, 2013 in the aggregate original principal amount not to exceed One
Hundred Twenty-Five Million ($125,000,000) as described in the Indenture dated November 4, 2003.

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

     “SRLS Entities” means, collectively, SRLS LLC 5001, SRLS LLC 5002, SRLS LLC 5003, SRLS
LLC 5004, SRLS LLC 5005 and SRLS LLC 5006.

     “Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.

     “Subordinated Debt” means the collective reference to (i) the Senior Subordinated
Notes and (ii) other subordinated Debt consisting of high-yield notes or convertible notes with a
maturity no earlier than a date that is six (6) months after the Revolving Credit Maturity
Date issued on terms and conditions (including subordination provisions) in form and substance
reasonably satisfactory to the Administrative Agent and consistent with then-current market terms
and conditions for such tenor of subordinated Debt.

     “Subsidiary” means as to any Person, any corporation, partnership, limited liability
company or other entity of which more than fifty percent (50%) of the outstanding capital stock or
other ownership interests having ordinary voting power to elect a majority of the board of

16

 

directors or other managers of such corporation, partnership, limited liability company or other
entity is at the time owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership interests of any other
class or classes of such corporation, partnership, limited liability company or other entity shall
have or might have voting power by reason of the happening of any contingency). Unless otherwise
qualified references to “Subsidiary” or “Subsidiaries” herein shall refer to those
of the Borrower.

     “Subsidiary Guaranteed Obligations” means the collective reference to the guaranteed
obligations of each of the Subsidiaries party to the Subsidiary Guaranty Agreement.

     “Subsidiary Guarantors” means the collective reference to the Domestic Subsidiaries of
the Borrower now or hereafter party to the Subsidiary Guaranty Agreement; provided,
however, that SRLS Entities and any Franchisees shall not be Subsidiary Guarantors.

     “Subsidiary Guaranty Agreement” means the unconditional amended and restated guaranty
agreement dated as of the date hereof, executed by the Subsidiary Guarantors in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders, as amended, restated,
supplemented or otherwise modified from time to time.

     “Swingline Commitment” means the lesser of (a) Ten Million Dollars ($10,000,000) and
(b) the Revolving Credit Commitment.

     “Swingline Facility” means the swingline facility established pursuant to Section 2.2.

     “Swingline Lender” means AmSouth Bank, in its capacity as provider of Swingline Loans,
or any successor swingline lender hereunder.

     “Swingline Loan” means any swingline loan made by the Swingline Lender to the Borrower
pursuant to Section 2.2, and all such swingline loans collectively as the context requires.

     “Swingline Note” means the Second Amended and Restated Swingline Note made by the
Borrower at the request of the Swingline Lender, payable to the order of the Swingline Lender,
substantially in the form of Exhibit A-2 hereto, evidencing the Swingline Loans, and any
amendments, supplements and modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.

     “Swingline Termination Date” means the Revolving Credit Maturity Date.

     “Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in
accordance with GAAP.

     “Tax Expense” means, with respect to the Borrower and its Subsidiaries for any period,
federal, state, local and foreign income, value added and similar taxes, franchise taxes and single
business taxes imposed on the Borrower or any of its Subsidiaries, without duplication, for such
period.

17

 

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority with respect
to this Agreement, any of the other Loan Documents or the transactions that are the subject
thereof, including any interest, additions to tax or penalties applicable thereto.

     “Termination Event” means except for any such event or condition that could not
reasonably be expected to have a Material Adverse Effect: (a) a “Reportable Event” described in
Section 4043 of ERISA for which the notice requirement has not been waived by the PBGC, or (b) the
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which
it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, or (c) the termination
of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of
a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not
sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan, or (f) the imposition of a Lien
pursuant to Section 412 of the Code or Section 302 of ERISA, or (g)the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan if withdrawal liability
is asserted by such plan, or (h)any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or
the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA.

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

     “Total Debt” means, as of any date of determination with respect to the Borrower and
its Subsidiaries on a Consolidated basis without duplication, the sum of all Debt of the Borrower
and its Subsidiaries.

     “Uniform Customs” means the Uniform Customs and Practice for Documentary Credits (1993
Revision), effective January, 1994 International Chamber of Commerce Publication No. 500.

     “UCC” means the Uniform Commercial Code as in effect in the State of New York, as
amended or modified from time to time.

     “United States” means the United States of America.

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     “Wachovia” means Wachovia Bank, National Association, a national banking association,
and its successors.

     “Working Capital” means, for any period of determination, current assets minus cash
and minus current liabilities (excluding any principal payments associated with the
Revolving Credit Loans), all determined in accordance with GAAP.

          SECTION 1.2 General. Unless otherwise specified, a reference in this Agreement to a
particular article, section, subsection, Schedule or Exhibit is a reference to that article,
section, subsection, Schedule or Exhibit of this Agreement. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to “Charlotte time” shall refer to
the applicable time of day in Charlotte, North Carolina.

          SECTION 1.3 Other Definitions and Provisions.

     (a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when used in
this Agreement and the other Loan Documents or any certificate, report or other document
made or delivered pursuant to this Agreement.

     (b) Miscellaneous. The words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement.

     (c) Plural and Singular. The meanings of defined terms are equally applicable
to the singular and plural forms of the defined terms.

ARTICLE II

REVOLVING CREDIT FACILITY

          SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions of this Agreement, and in reliance upon the
representations and warranties set forth herein, each Lender severally agrees to make Revolving
Credit Loans to the Borrower from time to time from the Closing Date through, but not including,
the Revolving Credit Maturity Date as requested by the Borrower in accordance with the terms of
Section 2.3; provided, that (a) the aggregate principal amount of all outstanding Revolving
Credit Loans (after giving effect to any amount requested) shall not exceed the Revolving Credit
Commitment less the Swingline Commitment less all L/C Obligations and (b) the
principal amount of outstanding Revolving Credit Loans from any Lender to the Borrower shall not at
any time exceed such Lender’s Revolving Credit Commitment less such Lender’s Revolving
Credit Commitment Percentage of outstanding L/C Obligations and less such Lender’s
Revolving Credit Commitment Percentage of the Swingline Commitment. Each Revolving Credit Loan by
a Lender shall be in a principal amount equal to such Lender’s Revolving Credit Commitment
Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion.
Subject to the terms and conditions hereof,

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the Borrower may borrow, repay and reborrow Revolving
Credit Loans hereunder until the Revolving Credit Maturity Date.

          SECTION 2.2 Swingline Loans.

     (a) Availability. Subject to the terms and conditions of this Agreement, the
Swingline Lender agrees to make Swingline Loans to the Borrower from time to time from the
Closing Date through, but not including, the Swingline Termination Date; provided,
that the aggregate principal amount of all outstanding Swingline Loans (after giving effect
to any amount requested), shall not exceed the lesser of (i) the Revolving Credit Commitment
less the sum of all outstanding Revolving Credit Loans and the L/C Obligations and (ii) the
Swingline Commitment; provided further that the Swingline Lender will not
make a Swingline Loan after it has received written notice from the Administrative Agent
that one or more of the applicable conditions to Extensions of Credit specified in Section
6.3 is not then satisfied until such conditions are satisfied or waived in accordance with
the provisions of this Agreement (and the Swingline Lender shall be entitled to conclusively
rely on any such notice and shall have no obligation to independently investigate the
accuracy of such notice and shall have no liability to the Borrower in respect thereof if
such notice proves to be inaccurate).

     (b) Procedure for Advances of Swingline Loans. The Borrower shall give the
Swingline Lender notice at such times and in such form and substance as may be agreed upon
by the Swingline Lender and the Borrower; provided, however, that the obligation of
the Swingline Lender under this Section 2.2 to make any such Swingline Loan to the Borrower
shall be subject to all the terms and conditions hereof (including, without limitation, the
terms and conditions set forth in subsection (a) above).

     (c) Payment of Principal and Interest. Principal and interest on Swingline
Loans deemed requested pursuant to Section 2.2(b) hereof shall be paid pursuant to the terms
and conditions agreed upon between the Swingline Lender and the Borrower without any
deduction, setoff or counterclaim whatsoever. Principal and interest on
Swingline Loans requested pursuant to this Section 2.2 shall be paid pursuant to the
terms of this Agreement. Unless sooner paid pursuant to the provisions hereof or the
provisions of any Cash Management Program, the principal of the Swingline Loans shall be
paid in full, together with accrued interest thereon, on the Swingline Termination Date.

     (d) Refunding.

     (i) Swingline Loans shall be refunded by the Lenders with a Revolving Credit
Commitment on demand by the Swingline Lender. Such refundings shall be made by the
Lenders in accordance with their respective Revolving Credit Commitment Percentages
and shall thereafter be reflected as Revolving Credit Loans of the Lenders on the
books and records of the Administrative Agent. Each Lender shall fund its
respective Revolving Credit Commitment Percentage of Revolving Credit Loans as
required to repay Swingline Loans outstanding to the Swingline Lender upon demand by
the Swingline Lender but in no event later than 2:00 p.m. (Charlotte time) on the
next

20

 

succeeding Business Day after such demand is made. No Lender’s obligation to
fund its respective Revolving Credit Commitment Percentage of a Swingline Loan shall
be affected by any other Lender’s failure to fund its Revolving Credit Commitment
Percentage of a Swingline Loan, nor shall any Lender’s Revolving Credit Commitment
Percentage be increased as a result of any such failure of any other Lender to fund
its Revolving Credit Commitment Percentage of a Swingline Loan.

     (ii) The Borrower shall pay to the Swingline Lender on demand the amount of
such Swingline Loans to the extent amounts received from the Lenders pursuant to
subsection 2.2(d)(i) are not sufficient to repay in full the outstanding Swingline
Loans requested or required to be refunded. In addition, the Borrower hereby
authorizes the Administrative Agent to charge any account maintained by the Borrower
with the Swingline Lender (up to the amount available therein) in order to
immediately pay the Swingline Lender the amount of such Swingline Loans to the
extent amounts received from the Lenders pursuant to subsection 2.2(d)(i) are not
sufficient to repay in full the outstanding Swingline Loans requested or required to
be refunded. If any portion of any such amount paid to the Swingline Lender shall
be recovered by or on behalf of the Borrower from the Swingline Lender in bankruptcy
or otherwise, the loss of the amount so recovered shall be ratably shared among all
the Lenders in accordance with their respective Revolving Credit Commitment
Percentages (unless the amounts so recovered by or on behalf of the Borrower pertain
to a Swingline Loan extended after the occurrence and during the continuance of an
Event of Default of which the Administrative Agent has received notice in the manner
required pursuant to Section 13.3 and which such Event of Default has not been
waived by the Required Lenders or the Lenders, as applicable).

     (iii) Each Lender with a Revolving Credit Commitment acknowledges and agrees
that its obligation to refund Swingline Loans in accordance with the terms of this
Section 2.2 is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including, without limitation, non-satisfaction of
the conditions set forth in Article VI. Further, each Lender agrees and
acknowledges that if prior to the refunding of any outstanding Swingline Loans
pursuant to this Section 2.2, one of the events described in Section 12.1(j) or (k)
shall have occurred, each Lender will, on the date the applicable Revolving Credit
Loan would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Revolving Credit Commitment
Percentage of the aggregate amount of such Swingline Loan. Each Lender will
immediately transfer to the Swingline Lender, in immediately available funds, the
amount of its participation and upon receipt thereof the Swingline Lender will
deliver to such Lender a certificate evidencing such participation dated the date of
receipt of such funds and for such amount. Whenever, at any time after the
Swingline Lender has received from any Lender such Lender’s participating interest
in a Swingline Loan, the Swingline Lender receives any payment on account thereof,
the Swingline Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in

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the case of interest payments, to reflect
the period of time during which such Lender’s participating interest was outstanding
and funded).

          SECTION 2.3 Procedure for Advances of Revolving Credit Loans.

     (a) Requests for Borrowing.

     (i) Revolving Credit Loans. The Borrower shall give the Administrative
Agent irrevocable prior written notice substantially in the form of Exhibit B
attached hereto (a “Notice of Borrowing”) not later than 11:00 a.m.
(Charlotte time) (i) on the same Business Day as each Base Rate Loan and (ii) at
least three (3) Business Days before each LIBOR Rate Loan, of its intention to
borrow, specifying (A) the date of such borrowing, which shall be a Business Day,
(B) the amount of such borrowing, which shall be, (x) with respect to Base Rate
Loans in an aggregate principal amount of $1,000,000 or a whole multiple of $500,000
in excess thereof, and (y) with respect to LIBOR Rate Loans in an aggregate
principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof,
(C) whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (D) in the
case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto.
A Notice of Borrowing received after 11:00 a.m. (Charlotte time) shall be deemed
received on the next Business Day. The Administrative Agent shall promptly notify
the Lenders of each Notice of Borrowing.

     (ii) Swingline Loans. Swingline Loans shall be requested in the manner
set forth in Section 2.2(b).

     (b) Disbursements.

     (i) Revolving Credit Loans. Not later than 2:00 p.m. (Charlotte time)
on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender’s Revolving Credit Commitment Percentage of the Revolving Credit Loans
to be made on such borrowing date. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each borrowing requested pursuant
to this Section 2.3 in immediately available funds by crediting or wiring such
proceeds to the deposit account of the Borrower identified in the most recent notice
substantially in the form of Exhibit C hereto (a “Notice of Account
Designation”) delivered by the Borrower to the Administrative Agent or as may be
otherwise agreed upon by the Borrower and the Administrative Agent from time to
time. Subject to Section 5.7 hereof, the Administrative Agent shall not be
obligated to disburse the portion of the proceeds of any Revolving Credit Loan
requested pursuant to this Section 2.3 to the extent that any Lender has not made
available to the Administrative Agent its Revolving Credit Commitment Percentage of
such Loan. Revolving Credit Loans to be made for the purpose of

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refunding Swingline
Loans shall be made by the Lenders as provided in Section 2.2(d).

     (ii) Swingline Loans. Swingline Loans shall be disbursed in the manner
set forth in Section 2.2(b).

          SECTION 2.4 Repayment of Loans.

     (a) Repayment on Termination Date. The Borrower hereby agrees to repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on the Revolving
Credit Maturity Date, and (ii) all Swingline Loans in accordance with Section 2.2(c),
together, in each case, with all accrued but unpaid interest thereon.

     (b) Mandatory Repayment of Revolving Credit Loans. If at any time the
outstanding principal amount of all Revolving Credit Loans plus the Swingline Commitment and
L/C Obligations exceeds the Revolving Credit Commitment, then the Borrower shall repay
immediately upon notice from the Administrative Agent, by payment to the Administrative
Agent for the account of the Lenders, Extensions of Credit in an amount equal to such excess
with each such repayment applied first to the principal amount of outstanding
Swingline Loans, second to the principal amount of outstanding Revolving Credit
Loans and third, with respect to any Letters of Credit then outstanding, a payment
of cash collateral into a cash collateral account opened by the Administrative Agent, for
the benefit of the Lenders in an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit (such cash collateral to be applied in accordance with
Section 12.2(b)).

     (c) Optional Repayments. The Borrower may at any time and from time to time
repay the Loans, in whole or in part, upon at least three (3) Business Days’
irrevocable notice to the Administrative Agent with respect to LIBOR Rate Loans and one
(1) Business Day irrevocable notice with respect to Base Rate Loans and Swingline Loans,
substantially in the form attached hereto as Exhibit D (a “Notice of Prepayment”)
specifying the date and amount of repayment and whether the repayment is of LIBOR Rate
Loans, Base Rate Loans, Swingline Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Lender. If any such notice is given, the amount specified
in such notice shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount (i) of $1,000,000 or a whole multiple of $500,000
in excess thereof with respect to Base Rate Loans (other than Swingline Loans), (ii) of
$1,000,000 or a whole multiple of $500,000 in excess thereof with respect to LIBOR Rate
Loans and (iii) permitted pursuant to the Cash Management Program (or as otherwise agreed to
by the Swingline Lender and the Borrower) with respect to Swingline Loans. Each such
repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.

     (d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not repay
any LIBOR Rate Loan on any day other than on the last day of the Interest Period

23

 

applicable
thereto unless such repayment is accompanied by any amount required to be paid pursuant to
Section 5.9 hereof.

     (e) Hedging Agreements. No repayment or prepayment pursuant to this Section
2.4 shall affect any of the Borrower’s obligations under any Hedging Agreement.

          SECTION 2.5 Evidence of Debt..

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

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

          SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment.

     (a) Voluntary Reduction. The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to the
Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire
Revolving Credit Commitment at any time or (ii) portions of the Revolving Credit Commitment,
from time to time, in an aggregate principal amount not less than $3,000,000 or any whole
multiple of $1,000,000 in excess thereof. The amount of each partial permanent reduction
shall permanently reduce the Lenders’ Revolving Credit Commitments pro rata in accordance
with their respective Revolving Credit Commitment Percentages.

     (b) [Intentionally Omitted].

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     (c) Corresponding Payment. Each permanent reduction permitted pursuant to this
Section 2.6 shall be accompanied by a payment of principal sufficient to reduce the
aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as
applicable, after such reduction to the Revolving Credit Commitment as so reduced and if the
Revolving Credit Commitment as so reduced is less than the aggregate amount of all
outstanding Letters of Credit, the Borrower shall be required to deposit cash collateral in
a cash collateral account opened by the Administrative Agent in an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. Such cash collateral
shall be applied in accordance with Section 12.2(b). Any reduction of the Revolving Credit
Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans
and Swingline Loans (and furnishing of cash collateral satisfactory to the Administrative
Agent for all L/C Obligations) and shall result in the termination of the Revolving Credit
Commitment and the Swingline Commitment and the Revolving Credit Facility. Such cash
collateral shall be applied in accordance with Section 12.2(b). If the reduction of the
Revolving Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9.

          SECTION 2.7 Termination of Revolving Credit Facility. The Revolving Credit Facility
shall terminate on the earliest of (a) October [___], 2011, (b) the date of termination by the
Borrower pursuant to Section 2.6, or (c) the date of termination by the Administrative Agent on
behalf of the Lenders pursuant to Section 12.2(a).

          SECTION 2.8 Increase of Revolving Credit Commitment.

     (a) At any time prior to the Revolving Credit Maturity Date, the Borrower shall have
the right to increase the Revolving Credit Commitment upon not less than thirty (30) days
prior written notice to the Administrative Agent (which shall promptly notify the Lenders);
provided that (i) no Lender shall have any obligation to increase its Revolving
Credit Commitment and the failure by any Lender to respond to a request for such increase
shall be deemed to be a refusal of such request by such Lender, (ii) such requested increase
shall be in a minimum principal amount of $5,000,000 or a whole multiple of $5,000,000 in
excess thereof, (iii) in no event shall the Revolving Credit Commitment be increased to an
aggregate amount greater than One Hundred Fifty Million Dollars ($150,000,000), (iv) no
Default or Event of Default shall have occurred and be continuing either prior to or after
giving effect to such increase in the Revolving Credit Commitment, and (v) the
Administrative Agent shall have received a resolution duly adopted by the Board of Directors
of the Borrower authorizing the increase contemplated in this Section 2.8. Each Lender
shall notify the Administrative Agent whether or not it agrees to increase its Revolving
Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its
Pro Rata Share of such requested increase (any increases requested hereunder shall be
offered to the Lenders on a pro rata basis prior to offering any such
increase to a Person that is not party to this Agreement). The Administrative Agent shall
notify the Borrower and each Lender of the Lender’s responses to each request made
hereunder.

25

 

     (b) Any increase in the Revolving Credit Commitment which is accomplished by increasing
the Commitment of any Lender or Lenders who are at the time of such increase party to this
Agreement (which Lender or Lenders may consent to such increase in their sole and absolute
discretion) shall be accomplished as follows: (i) this Agreement will be amended by the
Borrower, the Administrative Agent and those Lender(s) whose Commitment(s) is or are being
increased to reflect the revised Commitment amounts of each of the Lenders, (ii) the
Administrative Agent will deliver an updated Register to the Borrower and each of the
Lenders reflecting the revised Commitment amounts and Commitment Percentages of each of the
Lenders, (iii) the Borrower shall pay any and all costs required pursuant to Section 5.9 in
connection with such reallocation as if such reallocation were a repayment, and (iv) if
requested, the Borrower will deliver new Note(s) to the Lender or Lenders whose
Commitment(s) is or are being increased reflecting the revised Commitment amount of such
Lender(s).

     (c) Any increase in the Revolving Credit Commitment which is accomplished by addition
of a new Lender under the Agreement shall be accomplished as follows: (i) such new Lender
shall be an Eligible Assignee and shall be subject to the consent of the Borrower and the
Administrative Agent, which consent shall not be unreasonably withheld, (ii) this Agreement
will be amended by the Borrower, the Administrative Agent and by the party becoming an
additional Lender hereunder to reflect the addition of such party as a Lender hereunder,
(iii) the Administrative Agent will deliver an updated Register to the Borrower and each of
the Lenders reflecting the revised Commitment
amounts and Commitment Percentages of each of the Lenders, (iv) the Borrower shall pay
any and all costs required pursuant to Section 5.9 in connection with such reallocation as
if such reallocation were a repayment, and (v) if requested, the Borrower will deliver
Note(s) to any such new Lender and new Note(s) to the Lender or Lenders whose Commitment(s)
is or are being increased reflecting the revised Commitment amount of such Lender(s).

ARTICLE III

LETTER OF CREDIT FACILITY

          SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the L/C Participants set forth in Section 3.4(a), agrees
to issue standby Letters of Credit for the account of the Borrower on any Business Day from the
Closing Date through but not including the fifth (5th) Business Day prior to the Revolving Credit
Maturity Date in such form as may be approved from time to time by the Issuing Lender;
provided, that the Issuing Lender shall have no obligation to issue, and L/C Participants
shall have no obligation to participate in, any Letter of Credit if, after giving effect to such
issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b) the aggregate principal
amount of outstanding Revolving Credit Loans, plus the Swingline Commitment, plus the aggregate
amount of L/C Obligations would exceed the Revolving Credit Commitment. Each Letter of Credit
shall (i) be in a minimum amount of $50,000, (ii) be a standby letter of credit issued to support
obligations of the Borrower or any of the Subsidiary Guarantors, contingent or otherwise, incurred
in the ordinary course of business, (iii) expire on a date satisfactory to the Issuing Lender,
which date shall be no later than the earlier of (A) one year

26

 

from the date of issuance of such
Letter of Credit and (B) the fifth (5th) Business Day prior to the Revolving Credit Maturity Date
and (iv) be subject to the Uniform Customs and/or ISP98, as set forth in the Application or as
determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the
State of North Carolina. The Issuing Lender shall not at any time be obligated to issue, and L/C
Participants shall have no obligation to participate in, any Letter of Credit hereunder if such
issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law. References herein to “issue” and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of any existing Letters
of Credit, unless the context otherwise requires. The Existing Letters of Credit shall be deemed
to be Letters of Credit issued and outstanding under this Agreement on and after the Closing Date;
provided, however, that such Existing Letters of Credit shall be replaced by letters of
credit issued by Wachovia, as Issuing Lender, pursuant to and under the terms of this Agreement
upon the expiration and/or maturity thereof and shall not otherwise be extended, renewed or
modified.

          SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower may from time
to time request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing
Lender at the Administrative Agent’s Office an Application therefor, completed to the satisfaction
of the Issuing Lender, and such other certificates, documents and other papers and information as
the Issuing Lender may reasonably request.
Upon receipt of any Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall, subject to Section 3.1 and Article VI hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be
required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of
the Application therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing Lender
shall promptly furnish to the Borrower a copy of such Letter of Credit and promptly notify each
Lender of the issuance and upon request by any Lender, furnish to such Lender a copy of such Letter
of Credit and the amount of such Lender’s Letter of Credit participation therein.

          SECTION 3.3 Commissions and Other Charges.

     (a) Letter of Credit Commission. The Borrower shall pay to the Administrative
Agent, for the account of the Issuing Lender and the L/C Participants, a letter of credit
commission with respect to each Letter of Credit in an amount equal to the face amount of
such Letter of Credit, as applicable, multiplied by the Applicable Margin
with respect to LIBOR Rate Loans for the Revolving Credit Facility (determined on a per
annum basis). Such commission shall be payable quarterly in arrears on the last Business
Day of each calendar quarter and on the Revolving Credit Maturity Date. The Administrative
Agent shall, promptly following its receipt thereof, distribute to the Issuing Lender and
the L/C Participants all commissions received pursuant to this Section 3.3(a) in accordance
with their respective Revolving Credit Commitment Percentages.

     (b) Issuance Fee. In addition to the foregoing commission, the Borrower shall
pay the Issuing Lender, for its own account, an issuance fee with respect to each Letter of

27

 

Credit in an amount equal to the face amount of such Letter of Credit multiplied by 0.125%
per annum. Such issuance fee shall be payable quarterly in arrears on the last Business Day
of each calendar quarter and on the Revolving Credit Maturity Date.

     (c) Other Fees and Expenses. In addition to the foregoing fees and
commissions, the Borrower shall pay or reimburse the Issuing Lender, for its own account,
for such normal and customary costs and expenses as are incurred or charged by the Issuing
Lender in issuing, effecting payment under, amending or otherwise administering any Letter
of Credit.

          SECTION 3.4 L/C Participations.

     (a) Participations. The Issuing Lender irrevocably agrees to grant and hereby
grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant’s own account and risk an undivided interest equal to
such L/C Participant’s Revolving Credit Commitment Percentage in the Issuing Lender’s
obligations and rights under and in respect of each Letter of Credit issued hereunder and
the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid
under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower through a Revolving Credit Loan or otherwise in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at the Issuing
Lender’s address for notices specified herein an amount equal to such L/C Participant’s
Revolving Credit Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed.

     (b) Payments by L/C Participants. Upon becoming aware of any amount required
to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.4(a) in
respect of any unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit, the Issuing Lender shall notify each L/C Participant of the amount and due
date of such required payment and such L/C Participant shall pay to the Issuing Lender the
amount specified on the applicable due date. If any such amount is paid to the Issuing
Lender after the date such payment is due, such L/C Participant shall pay to the Issuing
Lender on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average Federal Funds Rate as determined by the Administrative Agent during
the period from and including the date such payment is due to the date on which such payment
is immediately available to the Issuing Lender, times (iii) a fraction the numerator of
which is the number of days that elapse during such period and the denominator of which is
360. A certificate of the Issuing Lender with respect to any amounts owing under this
Section 3.4(b) shall be conclusive in the absence of manifest error. With respect to
payment to the Issuing Lender of the unreimbursed amounts described in this Section 3.4(b),
if the L/C Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due on the
following Business Day.

28

 

     (c) Distributions to L/C Participants. Whenever, at any time after the Issuing
Lender has made payment under any Letter of Credit and has received from any L/C Participant
its Revolving Credit Commitment Percentage of such payment in accordance with this Section
3.4, the Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share thereof;
provided, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant shall return to
the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

          SECTION 3.5 Reimbursement Obligation of the Borrower. In the event of any drawing
under any Letter of Credit, the Borrower agrees to reimburse (either with the proceeds of a
Revolving Credit Loan as provided for in this Section
3.5 or with funds from other sources), in same day funds, the Issuing Lender on each date on
which the Issuing Lender notifies the Borrower of the date and amount of a draft paid under any
Letter of Credit for the amount of (a) such draft so paid and (b) any amounts referred to in
Section 3.3(c) incurred by the Issuing Lender in connection with such payment. Unless the Borrower
shall immediately notify the Issuing Lender that the Borrower intends to reimburse the Issuing
Lender for such drawing from other sources or funds, the Borrower shall be deemed to have timely
given a Notice of Borrowing to the Administrative Agent requesting that the Lenders make a
Revolving Credit Loan bearing interest at the Base Rate on such date in the amount of (a) such
draft so paid and (b) any amounts referred to in Section 3.3(c) incurred by the Issuing Lender in
connection with such payment, and the Lenders shall make a Revolving Credit Loan bearing interest
at the Base Rate in such amount, the proceeds of which shall be applied to reimburse the Issuing
Lender for the amount of the related drawing and costs and expenses. Each Lender acknowledges and
agrees that its obligation to fund a Revolving Credit Loan in accordance with this Section 3.5 to
reimburse the Issuing Lender for any draft paid under a Letter of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including, without
limitation, non-satisfaction of the conditions set forth in Section 2.3(a) or Article VI. If the
Borrower has elected to pay the amount of such drawing with funds from other sources and shall fail
to reimburse the Issuing Lender as provided above, the unreimbursed amount of such drawing shall
bear interest at the rate which would be payable on any outstanding Base Rate Loans which were then
overdue from the date such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full.

          SECTION 3.6 Obligations Absolute. The Borrower’s obligations under this Article III
(including, without limitation, the Reimbursement Obligation) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Issuing Lender or any beneficiary of a Letter
of Credit or any other Person. The Borrower also agrees that the Issuing Lender and the L/C
Participants shall not be responsible for, and the Borrower’s Reimbursement Obligation under
Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower against any beneficiary of such Letter of

29

 

Credit or any such transferee.
The Issuing Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however transmitted, in connection
with any Letter of Credit, except for errors or omissions caused by the Issuing Lender’s gross
negligence or willful misconduct, as determined by a court of competent jurisdiction by final
nonappealable judgment. The Borrower agrees that any action taken or omitted by the Issuing Lender
under or in connection with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not
result in any liability of the Issuing Lender or any L/C Participant to the Borrower. The
responsibility of the Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit, in addition to any payment obligation expressly provided for in
such Letter of Credit, shall be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.

          SECTION 3.7 Effect of Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions of this Article
III, the provisions of this Article III shall apply.

ARTICLE IV

          SECTION 4.1 [Intentionally Omitted].

          SECTION 4.2 [Intentionally Omitted].

          SECTION 4.3 [Intentionally Omitted].

          SECTION 4.4 Any proceeds received by the Administrative Agent or any Lender in accordance with
the terms of this Agreement or any other Loan Document in connection with any disposition of
Collateral (including, without limitation, whether by reason of insurance or condemnation events),
shall be applied in accordance with Section 5.5.

          SECTION 4.5 [Intentionally Omitted].

ARTICLE V

GENERAL LOAN PROVISIONS

          SECTION 5.1 Interest.

     (a) Interest Rate Options. Subject to the provisions of this Section 5.1, at
the election of the Borrower, (i) Revolving Credit Loans shall bear interest at (A) the Base
Rate plus the Applicable Margin as set forth in Section 5.1(c) or (B) the LIBOR Rate
plus the Applicable Margin as set forth in Section 5.1(c) and (ii) any Swingline
Loan shall bear interest at the Base Rate plus the Applicable Margin as set forth in
Section 5.1(c). The Borrower shall select the rate of interest and Interest Period, if any,
applicable to any Loan at the time a Notice of Borrowing is given pursuant to Section 2.3,
as applicable, or

30

 

at the time a Notice of Conversion/Continuation is given pursuant to
Section 5.2. Any Loan or any portion thereof as to which the Borrower has not duly
specified an interest rate as provided herein shall be deemed a Base Rate Loan.

     (b) Interest Periods. In connection with each LIBOR Rate Loan, the Borrower,
by giving notice at the times described in Section 5.1(a), shall elect an interest period
(each, an “Interest Period”) to be applicable to such Loan, which Interest Period
shall be a period of one (1), two (2), three (3), or six (6) months with respect to
each LIBOR Rate Loan; provided that:

     (i) the Interest Period shall commence on the date of advance of or conversion
to any LIBOR Rate Loan and, in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the date on which the immediately
preceding Interest Period expires;

     (ii) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business Day;
provided, that if any Interest Period with respect to a LIBOR Rate Loan
would otherwise expire on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period shall
expire on the immediately preceding Business Day;

     (iii) any Interest Period with respect to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall
end on the last Business Day of the relevant calendar month at the end of such
Interest Period;

     (iv) no Interest Period shall extend beyond the Revolving Credit Maturity Date;
and

     (v) there shall be no more than six (6) Interest Periods in effect at any time.

     (c) Applicable Margin. The Applicable Margin provided for in Section 5.1(a)
with respect to any Loan (the “Applicable Margin”) shall be based upon the table set
forth below and shall be determined and adjusted quarterly on the date (each a
“Calculation Date”) ten (10) Business Days after the earlier of (i) the date on
which Borrower provides or (ii) the date on which the Borrower is required to provide, an
Officer’s Compliance Certificate for the most recently ended Fiscal Quarter of the Borrower;
provided, however, that (A) the initial Applicable Margin shall be based on Pricing
Level IV (as shown below) and shall remain at Pricing Level IV until the first Calculation
Date occurring after the Closing Date and, thereafter the Pricing Level shall be determined
by reference to the Senior Secured Leverage Ratio as of the last day of the most recently
ended Fiscal Quarter of the Borrower

31

 

preceding the applicable Calculation Date, and (B) if
the Borrower fails to provide the Officer’s Compliance Certificate as required by Section
8.2 for the most recently ended Fiscal Quarter of the Borrower preceding the applicable
Calculation Date, the Applicable Margin from such Calculation Date shall be based on Pricing
Level I (as shown below) until such time as an appropriate Officer’s Compliance Certificate
is provided, at which time the Pricing Level shall be determined by reference to the Senior
Secured Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the
Borrower preceding such Calculation Date. Subject to Sections 5.1(c)(ii)(A) and (B) in the
preceding sentence, the Applicable Margin shall be effective from one Calculation Date until
the next Calculation Date. Any
adjustment in the Applicable Margin shall be applicable to all Extensions of Credit
then existing or subsequently made or issued.

Pricing Grid

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Senior Secured	 	Applicable Base	 	Applicable LIBOR
	Level	 	Leverage Ratio	 	Rate Margin	 	Rate Margin
	I

	 	Greater than or equal
to 1.75 to 1.00
	 	 	0.500	%	 	 	1.250	%
	 
	 	 	 	 	 	 	 	 	 	 
	II

	 	Greater than or equal
to 1.25 to 1.00 but
less than 1.75 to 1.00
	 	 	0.250	%	 	 	1.000	%
	 
	 	 	 	 	 	 	 	 	 	 
	III

	 	Greater than or equal
to 0.75 to 1.00 but
less than 1.25 to 1.00
	 	 	0.125	%	 	 	0.875	%
	 
	 	 	 	 	 	 	 	 	 	 
	IV

	 	Less than 0.75 to 1.00
	 	 	0.000	%	 	 	0.750	%

     (d) Default Rate. Subject to Section 12.3, at the discretion of the
Administrative Agent or as directed by the Required Lenders, upon the occurrence and during
the continuance of an Event of Default, (i) the Borrower shall no longer have the option to
request LIBOR Rate Loans or Swingline Loans, (ii) all outstanding LIBOR Rate Loans shall
bear interest at a rate per annum of two percent (2%) in excess of the rate then applicable
to LIBOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate
equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans, and
(iii) all outstanding Base Rate Loans and other Obligations arising hereunder or under any
other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans or such other Obligations arising
hereunder or under any other Loan Document. Interest shall continue to accrue on the
Obligations after the filing by or against the Borrower of any petition seeking any relief
in bankruptcy or under any act or law pertaining to insolvency or debtor relief, whether
state, federal or foreign.

     (e) Interest Payment and Computation. Interest on each Base Rate Loan shall be
payable in arrears on the last Business Day of each calendar quarter commencing December 31,
2006; and interest on each LIBOR Rate Loan shall be payable on the last day of each Interest
Period applicable thereto, and if such Interest Period extends over three (3) months, at the
end of each three (3) month interval during such Interest Period. Interest on LIBOR Rate
Loans and all fees payable hereunder shall be computed on the basis of a 360-day year and
assessed for the actual number of days elapsed and interest on

32

 

Base Rate Loans shall be
computed on the basis of a 365/366-day year and assessed for the actual number of days
elapsed.

     (f) Maximum Rate. In no contingency or event whatsoever shall the aggregate of
all amounts deemed interest under this Agreement charged or collected pursuant to the terms
of this Agreement exceed the highest rate permissible under any Applicable Law which a court
of competent jurisdiction shall, in a final determination,
deem applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable rate, the
rate in effect hereunder shall automatically be reduced to the maximum rate permitted by
Applicable Law and the Lenders shall at the Administrative Agent’s option (i) promptly
refund to the Borrower any interest received by the Lenders in excess of the maximum lawful
rate or (ii) apply such excess to the principal balance of the Obligations on a pro
rata basis. It is the intent hereof that the Borrower not pay or contract to pay,
and that neither the Administrative Agent nor any Lender receive or contract to receive,
directly or indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Borrower under Applicable Law.

          SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans. Provided that
no Default or Event of Default has occurred and is then continuing, the Borrower shall have the
option to (a) convert at any time following the third Business Day after the Closing Date all or
any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount
equal to $1,000,000 or any whole multiple of $500,000 in excess thereof into one or more LIBOR Rate
Loans and (b) upon the expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $1,000,000 or a whole multiple of
$500,000 in excess thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such
LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert or continue Loans
as provided above, the Borrower shall give the Administrative Agent irrevocable prior written
notice in the form attached as Exhibit E (a “Notice of Conversion/Continuation”) not later
than 11:00 a.m. (Charlotte time) three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted
or continued, and, in the case of any LIBOR Rate Loan to be converted or continued, the last day of
the Interest Period therefor, (B) the effective date of such conversion or continuation (which
shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and
(D) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan. The
Administrative Agent shall promptly notify the Lenders of such Notice of Conversion/Continuation.
LIBOR Rate Loans shall be converted to Base Rate Loans upon the expiration of the applicable
Interest Period unless the Administrative Agent shall have received a Notice of
Conversion/Continuation pursuant to the above.

          SECTION 5.3 Fees.

     (a) Commitment Fee. Commencing on the Closing Date, the Borrower shall pay to
the Administrative Agent, for the account of the Lenders, a non-refundable commitment fee at
a rate per annum equal to the applicable rate based upon the table set forth below (the
“Commitment Fee Rate”) on the aggregate average daily unused portion

33

 

of the
Revolving Credit Commitment; provided, that the amount of outstanding Swingline
Loans shall not be considered usage of the Revolving Credit Commitment for the purpose of
calculating such commitment fee (other than with respect to calculating any commitment fee
due to the Swingline Lender in which case, the full Swingline
Commitment shall be deemed usage of the Revolving Credit Commitment). The commitment
fee shall be payable in arrears on the last Business Day of each calendar quarter during the
term of this Agreement commencing on the first such date following the Closing Date, and on
the Revolving Credit Maturity Date. Such commitment fee shall be distributed by the
Administrative Agent to the Lenders pro rata in accordance with the Lenders’
respective Revolving Credit Commitment Percentages. The Commitment Fee Rate shall be based
upon the table set forth below and shall be determined and adjusted quarterly on each
Calculation Date; provided, however, that (i) the initial Commitment Fee
Rate shall be based on Pricing Level IV (as shown below) and shall remain at Pricing Level
IV until the first Calculation Date occurring after the Closing Date and thereafter the
Pricing Level shall be determined by reference to the Senior Secured Leverage Ratio as of
the last day of the most recently ended Fiscal Quarter of the Borrower preceding the
applicable Calculation Date, and (ii) if the Borrower fails to provide the Officer’s
Compliance Certificate as required by Section 8.2 for the most recently ended Fiscal Quarter
of the Borrower preceding the applicable Calculation Date, the Commitment Fee Rate from such
Calculation Date shall be based on Pricing Level I (as shown below) until such time as an
appropriate Officer’s Compliance Certificate is provided, at which time the Pricing Level
shall be determined by reference to the Senior Secured Leverage Ratio as of the last day of
the most recently ended Fiscal Quarter of the Borrower preceding such Calculation Date.
Subject to Sections 5.3(a)(i) and (ii) in the preceding sentence, the Commitment Fee Rate
shall be effective from one Calculation Date until the next Calculation Date.

	 	 	 	 	 	 	 
	Pricing Level	 	Senior Secured Leverage Ratio	 	Commitment Fee Rate
	I

	 	Greater than or equal to 1.75 to 1.00
	 	 	0.375	%
	 
	 	 	 	 	 	 
	II

	 	Greater than or equal to 1.25 to
1.0, but less than 1.75 to 1.00
	 	 	0.375	%
	 
	 	 	 	 	 	 
	III

	 	Greater than or equal to 0.75 to
1.00 but less than 1.25 to 1.00
	 	 	0.250	%
	 
	 	 	 	 	 	 
	IV

	 	Less than 0.75 to 1.00
	 	 	0.250	%

     (b) Upfront Fees. On the Closing Date, the Borrower shall pay to the
Administrative Agent, for the account of the Lenders, Upfront Fees as provided in that
certain fee letter between the Borrower and the Administrative Agent dated as of August 30,
2006 (the “Fee Letter”).

     (c) Administrative Agent’s and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its obligations
hereunder, the Borrower agrees to pay to the Administrative Agent, for its account, the
administrative fee and other fees set forth in the Fee Letter.

34

 

          SECTION 5.4 Manner of Payment. Each payment by the Borrower on account of the
principal of or interest on the Loans or of any fee, commission or other amounts (including the
Reimbursement Obligation) payable to the Lenders under this Agreement or any other Loan Document
shall be made not later than
1:00 p.m. (Charlotte time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent’s Office for the account of the Lenders (other
than as set forth below) pro rata in accordance with their respective Revolving
Credit Commitment Percentages (except as specified below), in Dollars, in immediately available
funds and shall be made without any setoff, counterclaim or deduction whatsoever. Any payment
received after such time but before 2:00 p.m. (Charlotte time) on such day shall be deemed a
payment on such date for the purposes of Section 12.1, but for all other purposes shall be deemed
to have been made on the next succeeding Business Day. Any payment received after 2:00 p.m.
(Charlotte time) shall be deemed to have been made on the next succeeding Business Day for all
purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent
shall distribute to each Lender at its address for notices set forth herein its pro
rata share of such payment in accordance with such Lender’s Revolving Credit Commitment
Percentage (except as specified below) and shall wire advice of the amount of such credit to each
Lender. Each payment to the Administrative Agent of the Issuing Lender’s fees or L/C Participants’
commissions shall be made in like manner, but for the account of the Issuing Lender or the L/C
Participants, as the case may be. Each payment to the Administrative Agent of Administrative
Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount
payable to any Lender under Sections 5.8, 5.9, 5.10, 5.11 or 14.2 shall be paid to the
Administrative Agent for the account of the applicable Lender. Subject to Section 5.1(b)(ii), if
any payment under this Agreement shall be specified to be made upon a day which is not a Business
Day, it shall be made on the next succeeding day which is a Business Day and such extension of time
shall in such case be included in computing any interest if payable along with such payment.

          SECTION 5.5 Crediting of Payments and Proceeds. In the event that the Borrower shall
fail to pay any of the Obligations when due and the Obligations have been accelerated pursuant to
Section 12.2, all payments received by the Lenders on the Obligations and all net proceeds from the
enforcement of the Obligations shall be applied: (a) first to all expenses then due and payable by
the Borrower hereunder and under the other Loan Documents, (b) then to all indemnity obligations
then due and payable by the Borrower hereunder and under the other Loan Documents, (c) then to all
Administrative Agent’s and Issuing Lender’s fees then due and payable, (d) then to all commitment
and other fees and commissions then due and payable, (e) then to accrued and unpaid interest on the
Loans and accrued and unpaid interest on the Reimbursement Obligation (pro rata in accordance with
all such amounts due), (f) then to the principal amount of the Loans and Reimbursement Obligation
and any payments (including any termination payments and any accrued and unpaid interest thereon)
due in respect of a Hedging Agreement with any Lender or the Administrative Agent (which such
Hedging Agreement is permitted hereunder) (pro rata in accordance with all such amounts due) and
(g) then to the cash collateral account described in Section 12.2(b) hereof to the extent of any
L/C Obligations then outstanding, in that order.

          SECTION 5.6 Adjustments. If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its
Loans or other obligations hereunder resulting in such Lender’s receiving payment of a

35

 

proportion of the aggregate amount
of its Loans and accrued interest thereon or other such obligations (other than pursuant to
Sections 5.9, 5.10, 5.11 or 14.2 hereof) greater than its pro rata share thereof as
provided herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the
Loans and such other obligations of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on their respective Loans
and other amounts owing them; provided that:

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

     (b) the provisions of this paragraph shall not be construed to apply to (x) any payment made
by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in Swingline Loans and Letters of Credit to any assignee or
participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of
this paragraph shall apply).

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

          SECTION 5.7 Obligations of Lenders.

     (a) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of any
borrowing that such Lender will not make available to the Administrative Agent such Lender’s share
of such borrowing, the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.3(b) and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and including the date
such amount is made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the
daily average Federal Funds Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation and (ii) in the case of a payment to be made
by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the
Borrower for such period. If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such borrowing. Any payment by the Borrower shall be without

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prejudice to any claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

     (b) Nature of Obligations of Lenders Regarding Extensions of Credit. The obligations
of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit
are several and are not joint or joint and several. The failure of any Lender to make available
its Commitment Percentage of any Loan requested by the Borrower shall not relieve it or any other
Lender of its obligation, if any, hereunder to make its Commitment Percentage of such Loan
available on the borrowing date, but no Lender shall be responsible for the failure of any other
Lender to make its Commitment Percentage of such Loan available on the borrowing date.

          SECTION 5.8 Changed Circumstances.

     (a) Circumstances Affecting LIBOR Rate Availability. If, with respect to any Interest
Period, the Administrative Agent or any Lender (after consultation with the Administrative Agent)
shall determine that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable amounts are not being quoted via the
Telerate Page 3750 or offered to the Administrative Agent or such Lender for such Interest Period,
then the Administrative Agent shall forthwith give notice thereof to the Borrower. Thereafter,
until the Administrative Agent notifies the Borrower that such circumstances no longer exist, the
obligation of the Lenders to make LIBOR Rate Loans and the right of the Borrower to convert any
Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall repay
in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR
Rate Loan together with accrued interest thereon, on the last day of the then current Interest
Period applicable to such LIBOR Rate Loan or convert the then outstanding principal amount of each
such LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.

     (b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the Lenders (or any of
their respective Lending Offices) with any request or directive (whether or not having the force of
law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its
obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly give
notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative Agent notifies the
Borrower that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR
Rate Loans and the right of the Borrower to convert any Loan or continue any Loan as a LIBOR Rate
Loan shall be suspended and thereafter the Borrower may select only Base Rate Loans hereunder, and
(ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be
converted to a Base Rate Loan for the remainder of such Interest Period.

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          SECTION 5.9 Indemnity. The Borrower hereby indemnifies each of the Lenders against
any loss or expense which may arise or be attributable to each Lender’s obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a
consequence of any failure by the Borrower to make any payment when due of any amount due hereunder
in connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow, continue or
convert on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation
or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan on a date other than the
last day of the Interest Period therefor. The amount of such loss or expense shall be determined,
in the applicable Lender’s sole discretion, based upon the assumption that such Lender funded its
Revolving Credit Commitment Percentage of the LIBOR Rate Loans in the London interbank market and
using any reasonable attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining such amount or
amounts necessary to compensate such Lender shall be forwarded to the Borrower through the
Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

          SECTION 5.10 Increased Costs.

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

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or advances, loans or other credit extended or participated in by, any Lender (except
any reserve requirement reflected in the LIBOR Rate) or the Issuing Lender;

     (ii) subject any Lender or the Issuing Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or
any LIBOR Rate Loan made by it, or change the basis of taxation of payments to such Lender
or the Issuing Lender in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 5.11 and the imposition of, or any change in the rate of any Excluded Tax
payable by such Lender or the Issuing Lender); or

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

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

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

     (c) Certificates for Reimbursement. A certificate of a Lender or the Issuing Lender
setting forth the amount or amounts necessary to compensate such Lender or the Issuing Lender or
its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such
Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate
within fifteen (15) days after receipt thereof.

     (d) Delay in Requests. Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Lender’s right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender or the Issuing Lender pursuant to this
Section for any increased costs incurred or reductions suffered more than six (6) months prior to
the date that such Lender or the Issuing Lender, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing
Lender’s intention to claim compensation therefor (except that if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period referred to above
shall be extended to include the period of retroactive effect thereof).

          SECTION 5.11 Taxes.

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

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     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
paragraph (a) above, the Borrower shall timely pay any Other Taxes (other than Excluded Taxes) to
the relevant Governmental Authority in accordance with Applicable Law.

     (c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Lender, within thirty (30) days after demand therefor, for the
full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender
or the Issuing Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the Issuing Lender (with a
copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing Lender, shall be conclusive absent manifest error.

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

     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by Applicable Law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or
reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to backup or other
withholding or information reporting requirements. Without limiting the generality of the
foregoing, in the event that the Borrower is a resident for tax purposes in the United States, any
Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter
upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender
is legally entitled to do so), whichever of the following is applicable:

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

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

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

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

     (f) Treatment of Certain Refunds. If the Administrative Agent, a Lender or the
Issuing Lender determines, in its sole discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or
the Issuing Lender, as the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided that the Borrower,
upon the request of the Administrative Agent, such Lender or the Issuing Lender, agrees to repay
the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Lender in
the event the Administrative Agent, such Lender or the Issuing Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent, any Lender or the Issuing Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the Borrower or any other
Person.

     (g) Survival. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in this Section shall
survive the payment in full of the Obligations and the termination of the Commitments.

          SECTION 5.12 Security. The Obligations of the Borrower and the Subsidiary Guaranteed
Obligations shall be secured as provided in the Security Documents.

          SECTION 5.13 Mitigation Obligations; Replacement of Lenders.

     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 5.10, or requires the Borrower to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 5.11, then such Lender
shall use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 5.10 or Section 5.11, as the case may
be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense

41

 

and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such designation or
assignment. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

     (b) Replacement of Lenders. If any Lender requests compensation under Section 5.10,
or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.11, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained in, and consents
required by, Section 14.10), all of its interests, rights and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that:

     (i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 14.10,

     (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in Letters of Credit, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder and
under the other Loan Documents (including any amounts under Section 5.9) from the
assignee (to the extent of such outstanding principal and accrued interest and fees)
or the Borrower (in the case of all other amounts),

     (iii) in the case of any such assignment resulting from a claim for
compensation under Section 5.10 or payments required to be made pursuant to Section
5.11, such assignment will result in a reduction in such compensation or payments
thereafter, and

     (iv) such assignment does not conflict with Applicable Law.

     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

ARTICLE VI

CLOSING; CONDITIONS OF CLOSING AND BORROWING

          SECTION 6.1 Closing. The closing shall take place at the offices of Kennedy Covington
Lobdell & Hickman, L.L.P. at 10:00 a.m. on October [___], 2006 or at such other place, and on such
other date and time as the parties hereto shall mutually agree.

          SECTION 6.2 Conditions to Closing and Initial Extensions of Credit. The obligation of
the Lenders to close this Agreement and to make the initial Loan or issue or participate in the
initial Letter of Credit, if any, is subject to the satisfaction of each of the following
conditions:

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     (a) Executed Loan Documents. This Agreement, the Revolving Credit Notes (if
requested by any Lender), the Swingline Note (if requested by the Swingline Lender), the
Security Documents (including, without limitation, the amendments or modifications to each
Mortgage), the Intercreditor and Subordination Agreement, together with any other applicable
Loan Documents, shall have been duly authorized, executed and delivered to the
Administrative Agent by the parties thereto, shall be in full force and effect and no
Default or Event of Default shall exist thereunder, and the Borrower shall have delivered
original counterparts thereof to the Administrative Agent.

     (b) Closing Certificates; etc.

     (i) Officer’s Certificate of the Borrower. The Administrative Agent
shall have received a certificate from a Responsible Officer, in form and substance
satisfactory to the Administrative Agent, to the effect that all representations and
warranties of the Borrower and its Subsidiaries contained in this Agreement and the
other Loan Documents are true, correct and complete; that neither the Borrower nor
any of its Subsidiaries is in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default has
occurred and is continuing; and that the Borrower and its Subsidiaries have
satisfied each of the closing conditions.

     (ii) Certificate of Secretary of the Borrower and each of the Subsidiary
Guarantors. The Administrative Agent shall have received a certificate of the
secretary or assistant secretary of the Borrower and each of the Subsidiary
Guarantors certifying as to the incumbency and genuineness of the signature of each
officer of the Borrower or such Subsidiary Guarantor executing the Loan Documents to
which it is a party and certifying that attached thereto is a true, correct and
complete copy of (A) the articles of incorporation or other organizational document
of the Borrower or such Subsidiary Guarantor and all amendments thereto, certified
as of a recent date by the appropriate Governmental
Authority in its jurisdiction of incorporation, (B) the bylaws or other
operative document of the Borrower or such Subsidiary Guarantor as in effect on the
date of such certifications, (C) resolutions duly adopted by the Board of Directors
or other governing body of the Borrower or such Subsidiary Guarantor authorizing the
borrowings contemplated hereunder and the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, and (D) each
certificate required to be delivered pursuant to Section 6.2(b)(iii).

     (iii) Certificates of Good Standing. The Administrative Agent shall
have received long-form certificates as of a recent date of the good standing of the
Borrower and each Subsidiary Guarantor under the laws of its respective jurisdiction
of organization and, to the extent requested by the Administrative Agent, each other
jurisdiction where the Borrower and each of the Subsidiary Guarantors is qualified
to do business and a certificate of the relevant taxing

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authorities of such
jurisdictions certifying that such Person has filed required tax returns and owes no
delinquent taxes.

     (iv) Opinions of Counsel. The Administrative Agent shall have received
favorable opinions of counsel to the Borrower and the Subsidiary Guarantors,
including local counsel opinions, addressed to the Administrative Agent and the
Lenders with respect to the Borrower, the Subsidiary Guarantors, real estate
collateral matters, the Loan Documents and such other matters as the Lenders shall
request.

     (v) Tax Forms. The Administrative Agent shall have received copies of
the United States Internal Revenue Service forms required by Section 5.11(e) hereof.

     (c) Collateral.

     (i) Filings and Recordings. All filings and recordations that are
necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents, including, without limitation, the amendments
and modifications to the Mortgages, shall have been received by the Administrative
Agent and the Administrative Agent shall have received evidence satisfactory thereto
that upon such filings and recordations such security interests constitute valid and
perfected first priority Liens therein, subject only to Permitted Liens.

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

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

     (iv) Real Property Documentation. The Administrative Agent shall have
received each requested amendment/ modification to the Mortgages, any and all
certificates, documents and information reasonably requested by Administrative Agent
or the Lenders on the parcels of real property subject to the Mortgages, including,
without limitation, title insurance, title exceptions, matters relating to flood
hazard properties, surveys, environmental assessments, engineering and structural
reports, permanent certificates of occupancy and evidence of zoning compliance, each
in form and substance reasonably satisfactory to the Administrative Agent. With
respect to each parcel of real

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property already subject to Mortgages, the
Administrative Agent shall have received such endorsements to title insurance
policies as may be requested by the Administrative Agent, such title policy
endorsements to be in form and substance satisfactory to the Administrative Agent.

     (d) Consents; Defaults.

     (i) Governmental and Third Party Approvals. The Borrower shall have
obtained all necessary approvals, authorizations and consents of any Person and of
all Governmental Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement and the other Loan Documents.

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

     (iii) No Event of Default. No Default or Event of Default shall have
occurred and be continuing.

     (e) Financial Matters.

     (i) Financial Statements. The Administrative Agent shall have received
the most recent audited Consolidated financial statements of the Borrower and its
Subsidiaries, all in form and substance satisfactory to the Administrative Agent and
prepared in accordance with GAAP.

     (ii) Financial Condition Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by a Responsible
Officer, that (A) the Borrower and each of its Subsidiaries are each Solvent, (B)
the Borrower’s and its Subsidiaries’ payables are current and not past due, (C)
attached thereto are calculations evidencing compliance on a pro forma basis with
the covenants contained in Article X hereof, (D) the financial projections
previously delivered to the Administrative Agent represent the good faith estimates
(utilizing reasonable assumptions) of the financial condition and operations of the
Borrower and its Subsidiaries and (E) attached thereto is a calculation of the
Applicable Margin pursuant to Section 5.1(c).

     (iii) Payment at Closing; Fee Letters. The Borrower shall have paid to
the Administrative Agent and the Lenders the fees set forth or referenced in Section
5.3 and any other accrued and unpaid fees or commissions due hereunder (including,
without limitation, legal fees and expenses) and to any other Person such amount as
may be due thereto in connection with the transactions

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contemplated hereby,
including all taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of any of the Loan Documents.

     (f) Miscellaneous.

     (i) Notice of Borrowing. The Administrative Agent shall have received
a Notice of Borrowing, as applicable, from the Borrower in accordance with Section
2.3(a), and a Notice of Account Designation specifying the account or accounts to
which the proceeds of any Loans made after the Closing Date are to be disbursed.

     (ii) Existing Debt. All Debt of the Borrower and its Subsidiaries,
other than Debt permitted pursuant to Section 11.1 and the Existing Letters of
Credit, shall be repaid in full and terminated and all security therefor released.

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

     (g) Amendment to Intercompany Loan. The Administrative Agent shall have
received executed versions of an amendment to the Intercompany Loan (i) extending
the maturity date thereof to a date at least six (6) months following the Revolving
Credit Maturity Date and (ii) otherwise in form and substance satisfactory to the
Administrative Agent.

     (h) Repayment and Assignment of Certain Amounts Outstanding under Existing Credit
Agreement. On the Closing Date, (i) all outstanding loans under the Existing Credit
Agreement (the “Existing Loans”) made by any Existing Lender who is not a Lender
hereunder shall be assigned in full to the Administrative Agent (or such new Lender as the
Administrative Agent may direct) and the commitments and other obligations and rights
(except as expressly set forth in the Existing Credit Agreement) of such Existing Lender
shall be terminated, (ii) all outstanding Existing Loans not being assigned under clause (i)
above shall be deemed Revolving Credit Loans hereunder and the Administrative Agent shall
make such transfers of funds as are necessary in order that the outstanding balance of such
Revolving Credit Loans together with any Revolving Credit Loans funded on the Closing Date,
are in accordance with the Revolving Credit Commitment Percentage of the Lenders hereunder,
(iii) there shall have been paid in cash in full all accrued but unpaid interest due on the
Existing Loans on the Closing Date, (iv) there shall have been paid in cash in full all
accrued but unpaid fees under the Existing Credit Agreement due to the Existing Lenders and
all other amounts, costs and expenses then owing to any of the Existing Lenders and/or
Wachovia, as administrative agent under the Existing Credit Agreement, (v) all outstanding
Letters of Credit under the Existing Credit Agreement shall be Letters of Credit hereunder
and (vi) all outstanding

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promissory notes issued by the Borrower to the Existing Lenders
under the Existing Credit Agreement shall be promptly returned to the Borrower for
cancellation.

          SECTION 6.3 Conditions to All Extensions of Credit. The obligations of the Lenders to
make any Extensions of Credit (including the initial Extension of Credit), convert or continue any
Loan and/or the Issuing Lender to issue or extend any Letter of Credit are subject to the
satisfaction of the following conditions precedent on the relevant borrowing, continuation,
conversion, issuance or extension date:

     (a) Continuation of Representations and Warranties. The representations and
warranties contained in Article VII shall be true and correct on and as of such borrowing,
continuation, conversion, issuance or extension date with the same effect as if made on and
as of such date, except for any representation and warranty made as of an earlier date,
which representation and warranty shall remain true and correct as of such earlier date.

     (b) No Existing Default. No Default or Event of Default shall have occurred
and be continuing (i) on the borrowing, continuation or conversion date with respect to such
Loan or after giving effect to the Loans to be made, continued or converted on such date or
(ii) on the issuance or extension date with respect to such Letter of Credit or after giving
effect to the issuance or extension of such Letter of Credit on such date.

     (c) Notices. The Administrative Agent shall have received a Notice of
Borrowing or Notice of Conversion/Continuation, as applicable, from the Borrower in
accordance with Section 2.3(a) or Section 5.2.

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

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

          SECTION 7.1 Representations and Warranties. To induce the Administrative Agent and
Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, the
Borrower and its Subsidiaries hereby represent and warrant to the Administrative Agent and Lenders
both before and after giving effect to the transactions contemplated hereunder that:

     (a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has the power and authority to own its
properties and to carry on its business as now being and hereafter proposed to be conducted
and is duly qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such qualification and
authorization, except to the extent that the failure to so qualify or be in good standing
could not, in the aggregate, reasonably be expected to have a Material

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Adverse Effect. The
jurisdictions in which the Borrower and its Subsidiaries are organized and qualified to do
business as of the Closing Date are described on Schedule 7.1(a).

     (b) Ownership. Each Subsidiary of the Borrower as of the Closing Date is
listed on Schedule 7.1(b). As of the Closing Date, the capitalization of the
Borrower and its Subsidiaries consists of the number of shares, authorized, issued and
outstanding, of such classes and series, with or without par value, membership interests, or
other ownership interests described on Schedule 7.1(b). All outstanding shares or
other ownership interests of the Borrower and its Subsidiaries have been duly authorized and
validly issued and are fully paid and nonassessable, with no personal liability attaching to
the ownership thereof, and not subject to any preemptive or similar rights. The
equityholders of the Subsidiaries of the Borrower and the number of shares or other
ownership units owned by each as of the Closing Date are described on Schedule
7.1(b). As of the Closing Date, there are no outstanding stock purchase warrants,
subscriptions, options, securities, instruments or other rights of any type or nature
whatsoever, which are convertible into, exchangeable for or otherwise provide for or permit
the issuance of capital stock, membership interests or other ownership interests of the
Borrower or its Subsidiaries, except as described on Schedule 7.1(b).

     (c) Authorization of Agreement, Loan Documents and Borrowing. Each of the
Borrower and its Subsidiaries has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and performance of this
Agreement and each of the other Loan Documents to which it is a party in accordance with
their respective terms. This Agreement and each of the other Loan Documents have been duly
executed and delivered by the duly authorized officers of the Borrower and each of its
Subsidiaries party thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower or its Subsidiary party thereto,
enforceable in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor
relief laws from time to time in effect which affect the enforcement of creditors’ rights in
general and the availability of equitable remedies.

     (d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The
execution, delivery and performance by the Borrower and its Subsidiaries of the Loan
Documents to which each such Person is a party, in accordance with their respective terms,
the Extensions of Credit hereunder and the transactions contemplated hereby do not and will
not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any Applicable Law relating to the Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of the Borrower or any of its
Subsidiaries or, except as could not reasonably be expected to result in a Material Adverse
Effect, any indenture, agreement or other instrument to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval relating to such
Person, (iii) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by such Person other than Liens
arising under the Loan Documents or (iv)

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require any consent or authorization of, filing
with, or other act in respect of, an arbitrator or Governmental Authority and no consent of
any other Person is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement except, in each case, (A) as may be required by
laws affecting the offering and sale of securities generally, (B) filings with the United
States Copyright Office and/or the United States Patent and Trademark Office, (C) filings
under the UCC and recording of the Mortgages and (D) those notices, consents and
authorizations which have been obtained prior to the Closing Date.

     (e) Compliance with Law; Governmental Approvals. Each of the Borrower and its
Subsidiaries (i) has all Governmental Approvals required by any Applicable Law for it to
conduct its business, each of which is in full force and effect, is final and not subject to
review on appeal and is not the subject of any pending or, to the best of its knowledge,
threatened attack by direct or collateral proceeding, (ii) is in compliance with each
Governmental Approval applicable to it and in compliance with all other Applicable Laws
relating to it or any of its respective properties and (iii) has timely filed all material
reports, documents and other materials required to be filed by it under all Applicable Laws
with any Governmental Authority and has retained all material records and documents required
to be retained by it under Applicable Law in each case, except as could not reasonably be
expected to result in a Material Adverse Effect.

     (f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries has
duly filed or caused to be filed all federal, state, local and other tax returns required by
Applicable Law to be filed, and has paid prior to delinquency all federal, state, local and
other taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable. Such returns accurately reflect in
all material respects all liability for taxes of the Borrower and its Subsidiaries for the
periods covered thereby. There is no ongoing audit or examination or, to the knowledge
of the Borrower, other investigation by any Governmental Authority of the tax liability
of the Borrower and its Subsidiaries that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Governmental Authority has
notified the Borrower or any of its Subsidiaries of any Lien or other claim against the
Borrower or any Subsidiary thereof with respect to unpaid taxes which has not been
discharged or resolved. The charges, accruals and reserves on the books of the Borrower and
any of its Subsidiaries in respect of federal, state, local and other taxes for all Fiscal
Years and portions thereof since the organization of the Borrower and any of its
Subsidiaries are in the judgment of the Borrower adequate, and the Borrower does not
anticipate any additional taxes or assessments for any of such years.

     (g) Intellectual Property Matters. Each of the Borrower and its Subsidiaries
owns or possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications, trademarks, trademark
rights, service mark, service mark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are required to conduct its business except where
the absence thereof could not reasonably be expected to have a Material Adverse Effect. No
event has occurred which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such rights, and, to Borrower’s

49

 

knowledge, neither the Borrower nor any Subsidiary thereof is liable to any Person for
infringement under Applicable Law with respect to any such rights as a result of its
business operations.

     (h) Environmental Matters. Except as to matters described in Schedule
7.1(h) and such other matters which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect:

     (i) The properties owned, leased or operated by the Borrower and its
Subsidiaries now do not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations which (A) constitute
or constituted a violation of applicable Environmental Laws or (B) could give rise
to any liability under applicable Environmental Laws;

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

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

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

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

50

 

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

(i) ERISA.

     (i) As of the Closing Date, neither the Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee Benefit Plans
other than those identified on Schedule 7.1(i);

     (ii) The Borrower and each ERISA Affiliate is in material compliance with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section 401(b) of
the Code has not yet expired and except where a failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each trust
related to such plan has been determined to be exempt under Section 501(a) of the
Code except for such plans that have not yet received determination letters but for
which the remedial amendment period for submitting a determination letter has not
yet expired. No liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan except for a liability that could not
reasonably be expected to have a Material Adverse Effect;

     (iii) As of the Closing Date, no Pension Plan has been terminated for which the
liabilities have not been satisfied in full, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred (without regard to
any waiver granted under Section 412 of the Code), nor has any funding waiver from
the Internal Revenue Service been received or requested with respect to any Pension
Plan, nor has the Borrower or any ERISA Affiliate failed to make any contributions
or to pay any amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA, nor has there
been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of
ERISA with respect to any Pension Plan;

     (iv) Except where the failure of any of the following representations to be
correct in all material respects could not reasonably be expected to have a Material
Adverse Effect, neither the Borrower nor any ERISA Affiliate has: (A) engaged in a
nonexempt prohibited transaction described in Section 406 of the ERISA or Section
4975 of the Code, (B) incurred any liability to the PBGC which remains outstanding
other than the payment of premiums and there are no

51

 

premium payments which are due and unpaid, (C) failed to make a required
contribution or payment to a Multiemployer Plan, or (D) failed to make a required
installment or other required payment under Section 412 of the Code;

     (v) No Termination Event has occurred or is reasonably expected to occur; and

     (vi) Except where the failure of any of the following representations to be
correct in all material respects could not reasonably be expected to have a Material
Adverse Effect, no proceeding, claim (other than a benefits claim in the ordinary
course of business), lawsuit and/or investigation is existing or, to the knowledge
of the Borrower after due inquiry, threatened concerning or involving any (A)
employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by the Borrower or any ERISA Affiliate, (B) Pension
Plan or (C) Multiemployer Plan.

     (j) Margin Stock. Neither the Borrower nor any Subsidiary thereof is engaged
principally or as one of its activities in the business of extending credit for the purpose
of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used,
directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve
System). No part of the proceeds of any of the Loans or Letters of Credit will be used for
purchasing or carrying margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of such Board of Governors.

     (k) Government Regulation. Neither the Borrower nor any Subsidiary thereof is
an “investment company” or a company “controlled” by an “investment company” (as each such
term is defined or used in the Investment Company Act of 1940, as amended) and neither the
Borrower nor any Subsidiary thereof is, or after giving effect to any Extension of Credit
will be, subject to regulation under the Public Utility Holding Company Act of 2005 or the
Interstate Commerce Act, each as amended, or any other Applicable Law (including, without
limitation, the Trading with the Enemy Act, OFAC regulations and Executive Order 13224
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit,
or Support Terrorism) which limits its ability to incur or consummate the transactions
contemplated hereby.

     (l) Material Contracts. Schedule 7.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in effect as of
the Closing Date not listed on any other Schedule hereto; other than as set forth in
Schedule 7.1(l), each such Material Contract is, and after giving effect to the
consummation of the transactions contemplated by the Loan Documents will be, in full force
and effect in accordance with the terms thereof. To the extent requested by the
Administrative Agent, the Borrower and its Subsidiaries have delivered to the Administrative
Agent a true and complete copy of each Material Contract required to be listed on
Schedule 7.1(l) or any other Schedule hereto. Neither the Borrower nor any
Subsidiary (nor, to the knowledge of the Borrower, any other party thereto) is in breach of
or in default under any Material Contract in any material respect.

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     (m) Employee Relations. Each of the Borrower and its Subsidiaries has a stable
work force in place and is not, as of the Closing Date, party to any collective bargaining
agreement nor has any labor union been recognized as the representative of its employees
except as set forth on Schedule 7.1(m). The Borrower knows of no pending,
threatened or contemplated strikes, work stoppage or other collective labor disputes
involving its employees or those of its Subsidiaries that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

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

     (o) Financial Statements. The (i) audited Consolidated balance sheet of the
Borrower and its Subsidiaries as of December 25, 2005 and the related audited statements of
income and retained earnings and cash flows for the Fiscal Year then ended and (ii)
unaudited Consolidated balance sheet of the Borrower and its Subsidiaries as of July 9, 2006
and related unaudited interim statements of income and retained earnings, copies of which
have been furnished to the Administrative Agent and each Lender, are complete and correct in
all material respects and fairly present on a Consolidated basis the assets, liabilities and
financial position of the Borrower and its Subsidiaries as at such dates, and the results of
the operations and changes of financial position for the periods then ended (other than
customary year-end adjustments for unaudited financial statements). All such financial
statements, including the related schedules and notes thereto, have been prepared in
accordance with GAAP. As of the Closing Date, the Borrower and its Subsidiaries have no
Debt, obligation or other unusual forward or long-term commitment required by GAAP to be
reflected in the foregoing financial statements or in the notes thereto which is not fairly
reflected in the foregoing financial statements or in the notes thereto.

     (p) No Material Adverse Change. Since December 25, 2005, there has been no
material adverse change in the properties, business, operations, or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, and no event has occurred
or condition arisen that could reasonably be expected to have a Material Adverse Effect.

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

     (r) Titles to Properties. Schedule 7.1(r) sets forth a list of each
parcel of real property owned or leased by the Borrower or its Subsidiaries as of the
Closing Date. Each of the Borrower and its Subsidiaries has such title to the real property
owned or leased by it as is necessary to the conduct of its business and valid and legal
title to all of its material personal property and assets, including, but not limited to,
those reflected on the balance sheets of the Borrower and its Subsidiaries delivered
pursuant to Section 7.1(o), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the ordinary course of
business or as otherwise expressly permitted hereunder.

     (s) Liens. None of the properties and assets of the Borrower or any Subsidiary
thereof is subject to any Lien, except Liens permitted pursuant to Section 11.2. No
financing statement under the Uniform Commercial Code of any state which names the Borrower
or any Subsidiary thereof or any of their respective trade names or divisions as debtor and
which has not been terminated, has been filed in any state or other jurisdiction and neither
the Borrower nor any Subsidiary thereof has signed any such financing statement or any
security agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 11.2 hereof.

     (t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of the Borrower and its Subsidiaries as
of the Closing Date in excess of $1,000,000. The Borrower and its Subsidiaries have
performed and are in compliance in all material respects with all of the terms of such Debt
and Guaranty Obligations and all instruments and agreements relating thereto, and no default
or event of default, or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of the Borrower or any of its
Subsidiaries exists with respect to any such Debt or Guaranty Obligation.

     (u) Litigation. Except for matters existing on the Closing Date which are set
forth on Schedule 7.1(u), there are no actions, suits or proceedings pending or, to
the knowledge of the Borrower, threatened against the Borrower or any Subsidiary thereof or
any of their respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority for which liability to the Borrower or its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.

     (v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which with the
passage of time or giving of notice or both would constitute, a default or event of default
by the Borrower or any Subsidiary thereof under any Material Contract or judgment, decree or
order to which the Borrower or its Subsidiaries is a party or by which the Borrower or its
Subsidiaries or any of their respective properties may be bound or which

54

 

would require the Borrower or its Subsidiaries to make any payment thereunder prior to
the scheduled maturity date therefor.

     (w) Senior Debt Status. The Obligations of the Borrower and each of its
Subsidiaries under this Agreement and each of the other Loan Documents ranks and shall
continue to rank at least senior in priority of payment to the Senior Subordinated Notes and
all other Subordinated Debt of each such Person and is designated as “Senior Indebtedness”
under all instruments and documents, now or in the future, relating to the Senior
Subordinated Notes and all other Subordinated Debt of such Person.

     (x) OFAC. None of the Borrower, any Subsidiary or Subsidiary Guarantor of the
Borrower or, to the knowledge of the Borrower or any Subsidiary thereof, any Affiliate of
the Borrower: (i) is a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned
Entities, or (iii) derives more than 10% of its operating income from investments in, or
transactions with, Sanctioned Persons or Sanctioned Entities. The proceeds of any Loan will
not be used and have not been used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

     (y) Accuracy and Completeness of Information. All written information, reports
and other papers and data produced by or on behalf of the Borrower or any Subsidiary thereof
(other than financial projections, which shall be subject to the standard set forth in
Section 8.1(c)) and furnished to the Lenders were, at the time the same were so furnished,
complete and correct in all material respects to the extent necessary to give the recipient
a true and accurate knowledge of the subject matter. No document furnished or written
statement made to the Administrative Agent or the Lenders by the Borrower or any Subsidiary
thereof in connection with the negotiation, preparation or execution of this Agreement or
any of the Loan Documents contains or will contain any untrue statement of a fact material
to the creditworthiness of the Borrower or its Subsidiaries or omits or will omit to state a
fact necessary in order to make the statements contained therein not misleading. The
Borrower is not aware of any facts which it has not disclosed in writing to the
Administrative Agent having a Material Adverse Effect, or insofar as the Borrower can now
foresee, which could reasonably be expected to have a Material Adverse Effect.

          SECTION 7.2 Survival of Representations and Warranties, Etc. All representations and
warranties set forth in this Article VII and all representations and warranties contained in any
certificate, or any of the Loan Documents (including, but not limited to, any such representation
or warranty made in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties made under this
Agreement shall be made or deemed to be made at and as of the Closing Date (except those that are
expressly made as of a specific date), shall survive the Closing Date and shall not be waived by
the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders
or any borrowing hereunder.

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ARTICLE VIII

FINANCIAL INFORMATION AND NOTICES

     Until all the Obligations have been paid and satisfied in full and the Commitments terminated,
unless consent has been obtained in the manner set forth in Section 14.11, the Borrower will
furnish or cause to be furnished to the Administrative Agent at the Administrative Agent’s Office
at the address set forth in Section 14.1 and to the Lenders at their respective addresses as set
forth in the Register, or such other office as may be designated by the Administrative Agent and
Lenders from time to time:

SECTION 8.1 Financial Statements and Projections.

     (a) Quarterly Financial Statements. As soon as practicable and in any event
within forty-five (45) days after the end of the first three (3) Fiscal Quarters of each
Fiscal Year (or, if either such date is earlier, on the date of any required public filing
thereof, or five (5) days following any date on which the Borrower may be required by GAAP
to file such statements), an unaudited Consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the close of such Fiscal Quarter and unaudited
Consolidated and consolidating statements of income, retained earnings and cash flows for
the Fiscal Quarter then ended and that portion of the Fiscal Year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the corresponding
figures as of the end of and for the corresponding period in the preceding Fiscal Year and
prepared by the Borrower in accordance with GAAP and, if applicable, containing disclosure
of the effect on the financial position or results of operations of any change in the
application of accounting principles and practices during the period, and certified by the
chief financial officer of the Borrower to present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries on a Consolidated and consolidating
basis as of their respective dates and the results of operations of the Borrower and its
Subsidiaries for the respective periods then ended, subject to normal year end adjustments.
Delivery by the Borrower to the Administrative Agent and the Lenders of the Borrower’s
quarterly report to the SEC on Form 10-Q with respect to any Fiscal Quarter, or the
availability of such report on EDGAR Online, within the period specified above shall be
deemed to be compliance by the Borrower with this Section 8.1(a).

     (b) Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days after the end of each Fiscal Year (or, if either such date is
earlier, on the date of any required public filing thereof, or five (5) days following any
date on which the Borrower may be required by GAAP to file such statements), an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such
Fiscal Year and audited Consolidated statements of income, retained earnings and cash flows
for the Fiscal Year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures as of the end of and for the
preceding Fiscal Year and prepared by an independent certified public accounting firm
approved by the Audit Committee of the Board of Directors of the Borrower and reasonably
acceptable to the Administrative Agent in accordance with GAAP and, if

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applicable, containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and practices during
the year, and accompanied by a report thereon by such certified public accountants that is
not qualified with respect to scope limitations imposed by the Borrower or any of its
Subsidiaries or with respect to accounting principles followed by the Borrower or any of its
Subsidiaries not in accordance with GAAP. Delivery by the Borrower to the Administrative
Agent and the Lenders of the Borrower’s annual report to the SEC on Form 10-K with respect
to any Fiscal Quarter, or the availability of such report on EDGAR Online, within the period
specified above shall be deemed to be compliance by the Borrower with this Section 8.1(b).

     (c) Annual Business Plan and Financial Projections. As soon as practicable and
in any event within sixty (60) days after the beginning of each Fiscal Year, a business plan
of the Borrower and its Subsidiaries for the ensuing four (4) Fiscal Quarters and the Fiscal
Year thereafter, such plan to be prepared in accordance with GAAP and to include, on a
quarterly basis, the following: a quarterly operating and capital budget for the ensuing
four (4) Fiscal Quarters, a yearly operating and capital budget for the Fiscal Year
thereafter, a projected income statement, statement of cash flows and balance sheet and a
report containing management’s discussion and analysis of such projections, accompanied by a
certificate from the chief financial officer of the Borrower to the effect that, to the best
of such officer’s knowledge, such projections are good faith estimates (utilizing reasonable
assumptions) of the projected financial condition and operations of the Borrower and its
Subsidiaries for such period.

          SECTION 8.2 Officer’s Compliance Certificate. At each time financial statements are
delivered pursuant to Sections 8.1 (a) or (b) and at such other times as the Administrative Agent
shall reasonably request, a certificate of the chief financial officer or the treasurer of the
Borrower in the form of Exhibit F attached hereto (an “Officer’s Compliance Certificate”).

          SECTION 8.3 Accountants’ Certificate. At each time financial statements are delivered
pursuant to Section 8.1(b), a certificate of the independent public accountants certifying such
financial statements addressed to the Administrative Agent for the benefit of the Lenders:

     (a) stating that in making the examination necessary for the certification of such
financial statements, they obtained no knowledge of any Default or Event of Default or, if
such is not the case, specifying such Default or Event of Default and its nature and period
of existence; and

     (b) including the calculations prepared by such accountants required to establish
whether or not the Borrower and its Subsidiaries are in compliance with the financial
covenants set forth in Article X hereof as at the end of each respective period.

     SECTION 8.4 Other Reports.

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     (a) Promptly upon receipt thereof, copies of all reports, if any, submitted to the
Borrower or its Board of Directors by its independent public accountants in connection with
their auditing function, including, without limitation, any management report and any
management responses thereto;

     (b) Such other information regarding the operations, business affairs and financial
condition of the Borrower or any of its Subsidiaries as the Administrative Agent or any
Lender may reasonably request; and

          SECTION 8.5 Notice of Litigation and Other Matters. Prompt (but in no event later
than ten (10) days after an officer of the Borrower obtains knowledge thereof) telephonic and
written notice of:

     (a) the commencement of all proceedings and investigations by or before any
Governmental Authority and all actions and proceedings in any court or before any arbitrator
against or involving the Borrower or any Subsidiary thereof or any of their respective
properties, assets or businesses which in any such case could reasonably be expected to
result in a Material Adverse Effect;

     (b) any notice of any violation received by the Borrower or any Subsidiary thereof from
any Governmental Authority including, without limitation, any notice of violation of
Environmental Laws which in any such case could reasonably be expected to have a Material
Adverse Effect;

     (c) any labor controversy that has resulted in, or threatens to result in, a strike or
other work action against the Borrower or any Subsidiary thereof that could reasonably be
expected to have a Material Adverse Effect;

     (d) any attachment, judgment, Lien, levy or order exceeding $5,000,000 that may be
assessed against or threatened in writing against the Borrower or any Subsidiary thereof;

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

     (f) (i) any unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code
(along with a copy thereof), (ii) all notices received by the Borrower or any ERISA
Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a trustee appointed
to administer any Pension Plan, (iii) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining
knowledge or reason to know that the Borrower or any ERISA Affiliate has

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filed or intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA;

     (g) any event which makes any of the representations set forth in Section 7.1
inaccurate in any respect;

     (h) any Ratings Downgrade;

     (i) a copy of any notice of any default or event of default, acceleration, redemption,
request for a material waiver, request for a material amendment or any other notice of a
material event delivered to or received by any Person (including, without limitation, any
trustee or noteholder) in connection with the Senior Subordinated Notes or any other
Subordinated Debt.

          SECTION 8.6 Accuracy of Information. All written information, reports, statements and
other papers and data furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender whether pursuant to this Article VIII or any other provision of this Agreement, or any of
the Security Documents, shall be, at the time the same is so furnished, comply with the
representations and warranties set forth in Section 7.1(y).

ARTICLE IX

AFFIRMATIVE COVENANTS

     Until all of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner provided for in Section 14.11, the
Borrower will, and will cause each of its Subsidiaries to:

          SECTION 9.1 Preservation of Corporate Existence and Related Matters. Except as
permitted by Section 11.4, preserve and maintain its separate corporate, limited liability company
or partnership existence and all rights, franchises, licenses and privileges necessary to the
conduct of its business, and qualify and remain qualified as a foreign corporation, limited
liability company or limited partnership and authorized to do business in each jurisdiction where
the nature and scope of its activities require it to so qualify under Applicable Law except where
the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

          SECTION 9.2 Maintenance of Property. In addition to the requirements of any of the
Security Documents, protect and preserve in accordance with sound business practices all properties
useful in and material to its business, including copyrights, patents, trade names, service marks
and trademarks; maintain in accordance with sound business practices all buildings, equipment and
other tangible real and personal property useful in and material to its business; and from time to
time make or cause to be made all renewals, replacements and additions to such property necessary
for the conduct of its business, so that the business carried on in connection therewith may be
conducted at all times in a commercially reasonable manner in accordance with prudent business
practices.

          SECTION 9.3 Insurance. Maintain insurance with financially sound and reputable
insurance companies against such risks and in such amounts as are customarily

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maintained by similar businesses (including hazard and business interruption coverage) and as
are required by Applicable Law and as are required by any Security Documents, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon its request a
detailed list of the insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the properties and
risks covered thereby.

          SECTION 9.4 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and complete in all
material respects) as may be required or as may be necessary to permit the preparation of financial
statements in accordance with GAAP and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.

          SECTION 9.5 Payment and Performance of Obligations. Pay and perform all Obligations
or Subsidiary Guaranteed Obligations, as applicable, under this Agreement and the other Loan
Documents, and pay or perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other indebtedness, obligations and
liabilities in accordance with customary trade practices; provided, that the Borrower or
such Subsidiary may contest any item described in clauses (a) or (b) of this Section 9.5 in good
faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.

          SECTION 9.6 Compliance with Laws and Approvals. Observe and remain in compliance in
all material respects with all Applicable Laws and maintain in full force and effect all material
Governmental Approvals, in each case applicable to the conduct of its business.

          SECTION 9.7 Environmental Laws. In addition to and without limiting the generality of
Section 9.6, (a) comply in all material respects with, and use commercially reasonable efforts to
ensure such compliance by all tenants and subtenants with, all applicable Environmental Laws and
obtain and comply with and maintain, and use commercially reasonable efforts to ensure that all
tenants and subtenants, if any, obtain and comply with and maintain, in all material respects, any
and all licenses, approvals, notifications, registrations or permits required by applicable
Environmental Laws, (b) conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws, and promptly comply with
all lawful orders and directives of any Governmental Authority regarding Environmental Laws, and
(c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or
in any way relating to the presence of Hazardous Materials, or the violation of, noncompliance with
or liability under any Environmental Laws applicable to the operations of the Borrower or any such
Subsidiary, or any orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney’s and consultant’s fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to the extent that any
of the foregoing directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.

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          SECTION 9.8 Compliance with ERISA. In addition to and without limiting the generality
of Section 9.6, (a) except where the failure to so comply could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with all material
applicable provisions of ERISA and the regulations and published interpretations thereunder with
respect to all Employee Benefit Plans, (ii) not take any action or fail to take action the result
of which could be a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any
prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and
(iv) operate each Employee Benefit Plan in such a manner that will not incur any tax liability
under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (b) furnish to the Administrative Agent upon the Administrative Agent’s
request such additional information about any Employee Benefit Plan as may be reasonably requested
by the Administrative Agent to the extent that the furnishing of such information does not violate
ERISA, the Health Insurance Portability and Accountability Act of 1996 or any other Applicable Law.

          SECTION 9.9 Compliance with Agreements. Except to the extent that non-compliance,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, comply with each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without limitation, any Material
Contract.

          SECTION 9.10 Visits and Inspections. Permit representatives of the Administrative
Agent or any Lender, from time to time, to visit and inspect its properties; inspect, audit and
make extracts from its books, records and files, including, but not limited to, management letters
prepared by independent accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of operations and
business prospects. Unless a Default or Event of Default has occurred and is continuing, the
representatives of the Administrative Agent or any Lender will provide the Borrower with advance
notice of such visits and inspections, and will visit and inspect during the Borrower’s normal
business hours.

          SECTION 9.11 Additional Subsidiaries; Equipment; Real Property Acquisitions

     (a) Additional Domestic Subsidiaries. Within thirty (30) days after the
creation or acquisition of any Domestic Subsidiary of the Borrower (excluding any
Franchisees) with assets in excess of $300,000, cause to be executed and delivered to the
Administrative Agent (i) duly executed joinder agreements in form and substance reasonably
satisfactory to the Administrative Agent joining such Subsidiary to the Collateral
Agreement, the Collateral Assignment Agreement and any other applicable Security Documents,
(ii) updated Schedules 7.1(a), 7.1(b) and 7.1(r) reflecting the
creation or acquisition of such Subsidiary, (iii) a Subsidiary Guaranty Agreement duly
executed and delivered by such Subsidiary, (iv) favorable legal opinions addressed to the
Administrative Agent and Lenders in form and substance reasonably satisfactory thereto with
respect to such joinder agreement, (v) original stock or other certificates and stock or
other transfer powers evidencing the ownership interests of the Borrower in such

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Subsidiary, (vi) all documents required by Section 9.11(c), and (vii) any other
documents and certificates as may be requested by the Administrative Agent.

     (b) Additional Foreign Subsidiaries. Notify the Administrative Agent at the
time that any Person becomes a first tier Foreign Subsidiary of the Borrower (excluding any
Franchisees), and promptly thereafter (and in any event within thirty (30) days), cause (i)
the Borrower or applicable Subsidiary to deliver to the Administrative Agent a supplement to
the Security Documents pledging sixty-five percent (65%) of the total outstanding ownership
interest or capital stock of such new Foreign Subsidiary and a consent thereto executed by
such new Foreign Subsidiary (including, without limitation, if applicable, original stock
certificates (or the equivalent thereof pursuant to the Applicable Laws and practices of any
relevant foreign jurisdiction) evidencing the capital stock of such new Foreign Subsidiary,
together with an appropriate undated stock power for each certificate duly executed in blank
by the registered owner thereof), (ii) such Person to deliver to the Administrative Agent
documents of the types referred to in clauses (ii) and (iii) of Section 6.2(b) and favorable
opinions of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to in clauses (i)
and (ii)), and (iii) such Person to deliver to the Administrative Agent such other documents
and closing certificates as may be reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent

     (c) Equipment; Real Property Acquisitions.

     (i) Within thirty (30) days after the date of a Ratings Downgrade, the Borrower
shall deliver to the Administrative Agent a first priority perfected security
interest in all equipment of the Borrower and its direct and indirect Subsidiaries
(excluding any SRLS Entity and any Franchisees) and shall execute any and all
documents requested by the Administrative Agent, all in form and substance
acceptable to the Administrative Agent, to evidence such security interest.

     (ii) Within forty-five (45) days after the occurrence of a Ratings Downgrade,
the Borrower or its direct and indirect Subsidiaries (excluding any SRLS Entity and
any Franchisees) shall, with respect to all real property interests then owned by
the Borrower or its direct and indirect Subsidiaries and not then subject to a
Mortgage, cause to be executed and delivered to the Administrative Agent (A)
Mortgages (unless otherwise agreed by the Administrative Agent and the Required
Lenders), (B) an updated Schedule 7.1(r) together with title insurance
policies, copies of title exceptions, flood surveys, property surveys, environmental
assessments and any other related real property documentation, all in form and
content reasonably acceptable to the Administrative Agent and (C) an updated
Schedule 7.1(h) in form and content reasonably acceptable to the
Administrative Agent.

     (d) Additional Subsidiary Guarantors. Notwithstanding anything to the contrary
contained herein, in the event that any Subsidiary shall guaranty the payment or

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performance of the Senior Subordinated Notes, the Borrower shall cause such Subsidiary
to immediately execute a joinder to the Subsidiary Guaranty Agreement and the Security
Documents described in Section 9.11(a) and to deliver all of the other instruments,
documents, certificates and opinions required pursuant to Section 9.11(a).

          SECTION 9.12 Use of Proceeds. The Borrower shall use the proceeds of the Extensions
of Credit (a) to refinance existing indebtedness of the Borrower, (b) for general corporate
purposes of the Borrower and the Subsidiary Guarantors, including, without limitation, working
capital, capital expenditures in the ordinary course of business, Permitted Acquisitions and
redemptions, repurchases and dividends permitted under Section 11.6(c) of this Agreement, and (c)
to pay fees and expenses incurred in connection with the transactions contemplated herein.

          SECTION 9.13 Conduct of Business. Engage only in businesses in substantially the same
fields as the businesses conducted on the Closing Date.

          SECTION 9.14 Further Assurances. Make, execute and deliver all such additional and
further acts, things, deeds and instruments as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably require to document and consummate the transactions
contemplated hereby and to vest completely in and insure the Administrative Agent and the Lenders
their respective rights under this Agreement, the Letters of Credit and the other Loan Documents.

          SECTION 9.15 Landlord Consents. Use its best good faith efforts to obtain and deliver
landlord consents, estoppel letters of consent and waivers in respect of Collateral held on leased
premises as may be reasonably required from time to time by the Administrative Agent.

ARTICLE X

FINANCIAL COVENANTS

     Until all of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section 14.11, the Borrower
and its Subsidiaries on a Consolidated basis will not:

          SECTION 10.1 Maximum Adjusted Debt to EBITDAR Ratio. As of any Fiscal Quarter end,
permit the ratio of (a) Adjusted Debt on such date (less any cash existing on the Consolidated
balance sheet on such date) to (b) EBITDAR for the period of four (4) consecutive Fiscal Quarters
ending on or immediately prior to such date to be greater than 4.75 to 1.00.

          SECTION 10.2 Maximum Senior Secured Leverage Ratio. As of any Fiscal Quarter end,
permit the ratio of (a) Senior Debt on such date (less any cash existing on the
Consolidated balance sheet on such date) to (b) EBITDA for the period of four (4) consecutive
Fiscal Quarters ending on or immediately prior to such date to be greater than 2.00 to 1.00;
provided, however, that for purposes of calculating compliance with this financial
covenant,

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EBITDA for the four (4) consecutive Fiscal Quarter period ending on or immediately prior to
such date shall be reduced to reflect rental expense associated with any sale-leaseback transaction
permitted hereunder on a pro forma basis.

          SECTION 10.3 Minimum Fixed Charge Coverage Ratio. As of any Fiscal Quarter end,
permit the ratio of (a) EBITDAR for the period of four (4) consecutive Fiscal Quarters ending on or
immediately prior to such date minus the greater of (i) Maintenance Capital Expenditures for the
period of four (4) consecutive Fiscal Quarters ending on or immediately prior to such date or (ii)
50% of depreciation for the period of four (4) consecutive Fiscal Quarters ending on or immediately
prior to such date to (b) Rental Expense for the period of four (4) consecutive Fiscal Quarters
ending on or immediately prior to such date (provided, however, that for purposes
of calculating compliance with this Section 10.3, Rental Expense for the four (4) consecutive
Fiscal Quarter period ending on such date shall be increased to include rental expense associated
with any sale-leaseback transaction permitted hereunder on a pro forma basis) plus
Interest Expense for the period of four (4) consecutive Fiscal Quarters ending on or immediately
prior to such date plus the aggregate amount of any Permitted Note Repurchases by the Borrower for
the period of four (4) consecutive Fiscal Quarters ending on or immediately prior to such date to
be less than 1.25 to 1.00.

          SECTION 10.4 Minimum Capital Expenditures Ratio. As of any Fiscal Quarter end, permit
the ratio of (a) 90% of EBITDA to (b) Expansion Capital Expenditures to be less than 1.00 to 1.00;
provided, however, that for purposes of calculating compliance with this financial
covenant, the Borrower shall be entitled to add back to EBITDA 20% of the Net Cash Proceeds from
issuances of equity consummated during the four (4) consecutive Fiscal Quarter period ending on
such date in an aggregate amount not to exceed $10,000,000 for any one such equity issuance;
provided, further, that for purposes of calculating compliance with this financial covenant, EBITDA
for the four (4) consecutive Fiscal Quarter period ending on or immediately prior to such date
shall be reduced to reflect rental expense associated with any sale-leaseback transaction permitted
hereunder on a pro forma basis.

ARTICLE XI

NEGATIVE COVENANTS

     Until all of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section 14.11, the Borrower
will not and will not permit any of its Subsidiaries to:

          SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer to exist any Debt
except:

     (a) the Obligations (excluding Hedging Obligations permitted pursuant to Section
11.1(b));

     (b) Debt incurred in connection with a Hedging Agreement with a counterparty and upon
terms and conditions (including interest rate) reasonably

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satisfactory to the Administrative Agent; provided, that any counterparty that
is a Lender shall be deemed satisfactory to the Administrative Agent.

     (c) Debt existing on the Closing Date and not otherwise permitted under this Section
11.1, as set forth on Schedule 7.1(t), and the renewal, refinancing, extension and
replacement (but not the increase in the aggregate principal amount) thereof;

     (d) purchase money Debt of the Borrower and its Subsidiaries, and Debt of the Borrower
and its Subsidiaries incurred in connection with Capitalized Leases;

     (e) unsecured Debt of the Borrower and the Subsidiary Guarantors not otherwise
permitted hereunder in an aggregate amount not to exceed Fifteen Million Dollars
($15,000,000) on any date of determination;

     (f) the Senior Subordinated Notes and other Subordinated Debt; provided,
however, (i) that no Default or Event of Default shall have occurred and be continuing and
would be caused by the issuance of such Subordinated Debt and (ii) the Administrative Agent
shall have received satisfactory written evidence that the Borrower would be in compliance
with all covenants contained in this Agreement on a pro forma basis after
giving effect to the issuance of any such Subordinated Debt;

     (g) Guaranty Obligations (including, without limitation, the Subsidiary Guaranteed
Obligations) in favor of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders;

     (h) Guaranty Obligations with respect to Debt permitted pursuant to subsections (a)
through (d) and (f) of this Section 11.1;

     (i) Guaranty Obligations of the Borrower with respect to (i) Debt of the Subsidiary
Guarantors permitted pursuant to subsection (e) of this Section 11.1 and (ii) Operating
Leases of the Subsidiary Guarantors;

     (j) Guaranty Obligations with respect to Debt of (i) Franchisees of the Borrower or
(ii) any SRLS Entities; provided, that the aggregate outstanding amount of all such
Guaranty Obligations permitted under this Section 11.1(j) plus the aggregate amount
of all Permitted Acquisitions permitted under Section 11.3(c) hereunder plus the
aggregate outstanding amount of all investments (other than Permitted Acquisitions)
permitted under Section 11.3(c) hereunder plus the aggregate amount of all sales
permitted under Section 11.5(j) hereunder shall not exceed Thirty-Five Million Dollars
($35,000,000) in the aggregate during the term of the Credit Facility; and

     (k) Debt owed by any Subsidiary Guarantor to the Borrower, by the Borrower to any
Subsidiary Guarantor, or by any Subsidiary Guarantor to another Subsidiary Guarantor.

provided, that no agreement or instrument with respect to Debt permitted to be incurred by
this Section shall restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of the Borrower to make any payment to the Borrower or any of the Subsidiary

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Guarantors (in the form of dividends, intercompany advances or otherwise) for the purpose of
enabling the Borrower to pay the Obligations; provided, further, that
notwithstanding any of the foregoing, no SRLS Entity shall be permitted to incur any Guaranty
Obligations.

          SECTION 11.2 Limitations on Liens. Create, incur, assume or suffer to exist, any Lien
on or with respect to any of its assets or properties (including, without limitation, shares of
capital stock or other ownership interests), real or personal, whether now owned or hereafter
acquired, except:

     (a) Liens for taxes, assessments and other governmental charges or levies (excluding
any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) not yet
due or as to which the period of grace (not to exceed thirty (30) days), if any, related
thereto has not expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;

     (b) the claims of materialmen, mechanics, carriers, warehousemen, processors or
landlords for labor, materials, supplies or rentals incurred in the ordinary course of
business, (i) which are not overdue for a period of more than thirty (30) days or (ii) which
are being contested in good faith and by appropriate proceedings;

     (c) Liens consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers’ compensation,
unemployment insurance or similar legislation;

     (d) Liens constituting encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of real property, which in the aggregate are not
substantial in amount and which do not, in any case, materially detract from the value of
such property or materially impair the use thereof in the ordinary conduct of business;

     (e) Liens of the Administrative Agent for the benefit of the Administrative Agent and
the Lenders;

     (f) Liens not otherwise permitted by this Section 11.2 and in existence on the Closing
Date and described on Schedule 11.2;

     (g) Liens securing Debt permitted under Section 11.1(d); provided that (i) such
Liens shall be created within six (6) months from the date of the acquisition or lease of
the related asset, (ii) such Liens do not at any time encumber any property other than the
property financed by such Debt, (iii) the amount of Debt secured thereby is not increased
and (iv) the principal amount of Debt secured by any such Lien shall at no time exceed one
hundred percent (100%) of the original purchase price or lease payment amount of such
property at the time it was acquired; and

     (h) Liens on real property incurred in connection with leases permitted by Section
11.5(l).

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          SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions. Purchase,
own, invest in or otherwise acquire, directly or indirectly, any capital stock, interests in any
partnership or joint venture (including, without limitation, the creation or capitalization of any
Subsidiary), evidence of Debt or other obligation or security, substantially all or a portion of
the business or assets of any other Person or any other investment or interest whatsoever in any
other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions
of credit to, or any investment in cash or by delivery of property in, any Person except:

     (a) investments (i) in Subsidiaries existing on the Closing Date, (ii)in Subsidiaries
(other than the SRLS Entities and any Franchisees) formed or acquired after the Closing Date
so long as the Borrower and the Subsidiaries (other than the SRLS Entities and any
Franchisees) comply with all applicable provisions of this Credit Agreement (including,
without limitation, Section 9.11), (iii) loans made pursuant to Section 11.1(k) hereof, and
(iv) the other loans, advances and investments described on Schedule 11.3 existing
on the Closing Date;

     (b) investments in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing within one year
from the date of acquisition thereof, (ii) commercial paper, variable or fixed rate notes
maturing no more than six (6) months from the date of acquisition thereof and issued by, or
guaranteed by, a domestic corporation rated A-1 (or the equivalent thereof) or better by
Standard & Poor’s or P-1 (or the equivalent thereof) or better by Moody’s, (iii)
certificates of deposit maturing no more than one year from the date of creation thereof
issued by (A) any of the Lenders or (B) commercial banks incorporated under the laws of the
United States of America, each having combined capital, surplus and undivided profits of not
less than $500,000,000 and having a rating of “A” or better by a nationally recognized
rating agency; provided, that, in each case, the aggregate amount invested in such
certificates of deposit shall not at any time exceed $10,000,000 for any one such
certificate of deposit and $20,000,000 for any one such bank, (iv)time deposits maturing no
more than thirty (30) days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in the FDIC or
the deposits of which are insured by the FDIC and in amounts not exceeding the maximum
amounts of insurance thereunder, (v) repurchase agreements with a Lender or a bank or trust
company or a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United States of
America or (vi) money-market funds; provided that such money-market funds shall be
rated AAA- (or the equivalent thereof) or better by Standard & Poor’s (such investments
described in items (i) through (vi) above, “Cash Equivalents”);

     (c) investments by the Borrower or any of the Subsidiary Guarantors in the form of
acquisitions of a substantially similar business or line of business (whether by the
acquisition of capital stock, assets or any combination thereof) of any other Person (each,
a “Permitted Acquisition”) and other investments by the Borrower or any of the
Subsidiary Guarantors in (i) Franchisees of the Borrower or (ii) any SRLS Entities;
provided, however, that the aggregate amount of all such Permitted
Acquisitions permitted under this Section 11.3(c) plus the aggregate outstanding
amount of all

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investments (other than Permitted Acquisitions) permitted under this Section 11.3(c)
plus the aggregate outstanding amount of all Guaranty Obligations permitted under
Section 11.1(j) hereunder plus the aggregate amount of all sales permitted under
Section 11.5(j) hereunder shall not exceed Thirty-Five Million Dollars ($35,000,000) in the
aggregate during the term of the Credit Facility;

     (d) Hedging Agreements permitted pursuant to Section 11.1;

     (e) purchases of assets in the ordinary course of business;

     (f) other loans, investments and advances in an aggregate amount not to exceed $500,000
on any date of determination; and

     (g) investments in “rabbi trusts” made by the Borrower or any Subsidiary Guarantor in
connection with executive deferred compensation arrangements entered into by the Borrower or
such Subsidiary Guarantor in the ordinary course of business consistent with past practice.

          SECTION 11.4 Limitations on Mergers and Liquidation. Merge, consolidate or enter into
any similar combination with any other Person or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution) except:

     (a) any Subsidiary of the Borrower may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving Person) or with or
into any Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be the
continuing or surviving Person);

     (b) any Subsidiary of the Borrower may merge into the Person such Subsidiary was formed
to acquire in connection with a Permitted Acquisition; provided that the surviving
entity shall promptly execute and deliver such agreements and documents as may be required
pursuant to Section 9.11 or such other documents evidencing continuing guaranty
and/or security interests as may be requested by the Administrative Agent.

     (c) any Subsidiary of the Borrower may wind-up into the Borrower or any Subsidiary
Guarantor and any Foreign Subsidiary of the Borrower may wind-up into the Borrower or any
Subsidiary Guarantor.

          SECTION 11.5 Limitations on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without limitation, the
sale of any receivables and leasehold interests and any sale-leaseback or similar transaction),
whether now owned or hereafter acquired except:

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

     (b) the sale of obsolete assets no longer used or usable in the business of the
Borrower or any of its Subsidiaries;

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     (c) the transfer of assets to the Borrower or any Subsidiary Guarantor of the Borrower
pursuant to Section 11.4;

     (d) the sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection thereof;

     (e) the disposition of any Hedging Agreement;

     (f) (i) sales of real property acquired before November 4, 2003 made in connection with
sale-leaseback transactions consummated at arms-length after the Closing Date on terms and
conditions reasonably satisfactory to the Administrative Agent and (ii) sales of assets made
in connection with store closings and store relocations; provided, that (A) no
Default or Event of Default shall have occurred and be continuing both before and after
giving effect thereto, (B) when the aggregate amount of Net Cash Proceeds resulting from all
such sale-leaseback transactions and sales is equal to or greater than Five Million Dollars
($5,000,000) during any Fiscal Year, then prior to the consummation of any such additional
sale-leaseback transaction or sale, the Borrower shall have demonstrated to the
Administrative Agent pro forma compliance with each covenant contained in,
and in the manner set forth in, Article X and (C) the aggregate amount of Net Cash Proceeds
resulting from all such sale-leaseback transactions and sales relating to store closings and
store relocations shall not exceed an aggregate amount of Forty-Five Million Dollars
($45,000,000) during the term of the Credit Facility;

     (g) sales by Stoney River Management Company, Inc. of up to 6% of the membership
interests in each of the SRLS Entities, to the general manager of each such entity pursuant
to, and in accordance with, the terms and provisions set forth in each such entity’s
operating agreement;

     (h) sales made in connection with Build-to-Suit Sale-Leaseback Transactions;
provided that (i) no Default or Event of Default has occurred and is continuing both
before and after giving effect thereto and (ii) the Borrower is in compliance with all
covenants contained in this Agreement on a pro forma basis after giving
effect to the contemplated Build-to-Suit Sale-Leaseback Transaction;

     (i) sales of real property acquired after November 4, 2003 made in connection with
sale-leaseback transactions that do not otherwise qualify as Build-to-Suit Sale-Leaseback
Transactions hereunder so long as (i) no Default or Event of Default has occurred and is
continuing both before and after giving effect thereto, (ii) the Borrower is in compliance
with all covenants contained in this Agreement on a pro forma basis after
giving effect to such sale-leaseback transaction and (iii) the aggregate amount of all such
sale-leaseback transactions does not exceed Twenty-Five Million Dollars ($25,000,000) during
the term of the Credit Facility;

     (j) sales of assets to Franchisees or any SRLS Entities; provided, that the
aggregate amount of all such sales permitted under this Section 11.5(j) plus the
aggregate outstanding amount of all Guaranty Obligations permitted under Section 11.1(j)
hereunder plus the aggregate amount of all Permitted Acquisitions permitted under

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Section 11.3(c) hereunder plus the aggregate outstanding amount of all
investments (other than Permitted Acquisitions) permitted under Section 11.3(c) hereunder
shall not exceed Thirty-Five Million Dollars ($35,000,000) in the aggregate during the term
of the Credit Facility;

     (k) sales of equipment made in connection with equipment sale-leaseback transactions
provided that (i) no Default or Event of Default has occurred and is continuing both before
and after giving effect to such sale-leaseback transaction and (ii) the Borrower is in
compliance with all covenants contained in this Agreement on a pro forma
basis after giving effect to such sale-leaseback transaction;

     (l) leases of restaurant properties to Persons in order to facilitate the sale of
alcoholic beverages at such restaurant properties, which leases shall be on terms and
conditions reasonably satisfactory to the Administrative Agent; provided that no
Default or Event of Default has occurred, is continuing, or would be caused thereby;
provided further that neither the Borrower nor any Subsidiary thereof shall
be party to more than five (5) such leases at any time during the term of the Credit
Facility;

     (m) sales of assets not otherwise permitted under this Section 11.5; provided
that (i) no Default or Event of Default has occurred, is continuing, or would be caused
thereby, (ii) sales of real estate subject to a Mortgage and sales of other assets in which
the security interest of the Administrative Agent is (or is intended to be) perfected shall
not exceed Five Million Dollars ($5,000,000) in the aggregate during the term of the Credit
Facility, and (iii) sales of real estate not subject to a Mortgage and Equipment shall not
exceed Ten Million Dollars ($10,000,000) in the aggregate during the term of the Credit
Facility;

     (n) ordinary course sales of Cash Equivalents in connection with 11.3(b) and made in
accordance with the Borrower’s past practices; and

          (o) the transfer of assets owned by a Subsidiary or a Subsidiary Guarantor to the Borrower or
a Subsidiary Guarantor; provided that the Borrower and each such transferee shall ensure
compliance with the provisions of the Security Documents and shall otherwise execute such
agreements and other documents as may be requested by the Administrative Agent in connection with
the maintenance of perfected security interests in favor of the Administrative Agent and the
Lenders.

     Upon the consummation of sales made pursuant to the above Section 11.5, and upon the request
of the Borrower, the Administrative Agent and the Lenders will release their liens on the
applicable property and the Administrative Agent shall execute such documents as may be necessary
to evidence such releases, all such documents to be in form and substance satisfactory to the
Administrative Agent.

          SECTION 11.6 Limitations on Dividends and Distributions. Declare or pay any dividends
upon any of its capital stock or any other ownership interests; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership
interests, or make any distribution of cash, property or assets among the holders of

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shares of its capital stock or other ownership interests, or make any change in its capital
structure, except:

     (a) the Borrower or any Subsidiary may pay dividends in shares of its own capital
stock, membership interests, or other ownership units; and

     (b) any Subsidiary may pay cash dividends to the Borrower or to its parent Subsidiary;

     (c) so long as no Default or Event of Default has occurred or would be caused thereby,
and the Borrower is in pro forma compliance with the covenants set forth in Article X
hereof, the Borrower may redeem and repurchase shares of its stock pursuant to a repurchase
program authorized from time to time by its Board of Directors and/or declare and make cash
dividend payments, in an aggregate amount over the term of the Credit Facility (for all such
redemptions, repurchases and dividends) not to exceed Fifty Million Dollars ($50,000,000)
plus fifty percent (50%) of Cumulative Net Income for the period commencing with the fiscal
quarter beginning December 26, 2005 and ending on the most recent fiscal quarter end prior
to such payment or repurchase for which financial statements were delivered in accordance
with Section 8.1; and

     (d) the Borrower may accept in payment of the exercise price of stock options granted
to employees shares of its stock owned by the optionee.

          SECTION 11.7 Limitations on Exchange and Issuance of Ownership Interests. Issue, sell
or otherwise dispose of any class or series of capital stock or other ownership interests that, by
its terms or by the terms of any security into which it is convertible or exchangeable, is, or upon
the happening of an event or passage of time would be, (a) convertible or exchangeable into Debt or
(b) required to be redeemed or repurchased, including at the option of the holder, in whole or in
part, or has, or upon the happening of an event or passage of time would have, a redemption or
similar payment due.

          SECTION 11.8 Transactions with Affiliates. Except for transactions permitted by 11.3,
11.6 and 11.7, directly or indirectly (a) make any loan or advance to, or purchase or assume any
note or other obligation to or from, any of its officers, directors, shareholders or other
Affiliates, or to or from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or subcontract any operations to any of its Affiliates or (b)
enter into, or be a party to, any other transaction not described in clause (a) above with any of
its Affiliates, except pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a comparable arm’s length
transaction with a Person not its Affiliate.

          SECTION 11.9 Certain Accounting Changes; Organizational Documents. (a) Change its
Fiscal Year end or any Fiscal Quarter end, or make any change in its accounting treatment and
reporting practices except consistent with GAAP or (b) amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational documents) or amend, modify or
change its bylaws (or other similar documents) in any manner adverse in any respect to the rights
or interests of the Lenders.

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          SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt. Amend or
modify (or permit the modification or amendment of) any of the terms or provisions of the Senior
Subordinated Notes or any other Subordinated Debt, or cancel or forgive, make any payment or
prepayment on, or redeem or acquire for value (including without limitation by way of depositing
with any trustee with respect thereto money or securities before due for the purpose of paying when
due) the Senior Subordinated Notes or any other Subordinated Debt, other than, so long as no
Default or Event of Default shall have occurred and be continuing or would be caused thereby, (i)
regularly scheduled payments of accrued interest on the Senior Subordinated Notes (including
additional interest required to be paid on account of a registration default arising under the
registration rights agreements in connection with the Senior Subordinated Notes in an amount not to
exceed more than one percent (1%) per year per annum) to the extent such payments are permitted
under the subordination provisions thereof, (ii) Permitted Note Repurchases and (iii) principal
payments or prepayments of intercompany Subordinated Debt between the Borrower and the Subsidiary
Guarantors.

          SECTION 11.11 Restrictive Agreements.

     (a) Negative Pledges. Enter into any Debt which (i) contains any negative
pledge on assets or any covenants more restrictive than the provisions of Articles IX, X and
XI hereof, or (ii) restricts, limits or otherwise encumbers its ability to incur Liens on or
with respect to any of its assets or properties other than the assets or properties securing
such Debt (excluding, solely for the purposes of this Section 11.11(a), the Senior
Subordinated Notes so long as such Senior Subordinated Notes do not restrict, limit or
otherwise encumber the ability of the Borrower or any Subsidiary to incur Liens in favor of
the Administrative Agent or any Lender under this Credit Facility to the extent the Debt
under the Credit Agreement is permitted under the Senior Subordinated Notes).

     (b) Restrictions on Dividends. Enter into or permit to exist any agreement
which impairs or limits the ability of any Subsidiary of the Borrower to pay dividends or
distributions to the Borrower.

          SECTION 11.12 Nature of Business. Alter the character or conduct of the business
conducted by the Borrower and its Subsidiaries as of the Closing Date.

          SECTION 11.13 Impairment of Security Interests. Take or omit to take any action which
might or would have the result of materially impairing the security interests in favor of the
Administrative Agent with respect to the Collateral or grant to any Person (other than the
Administrative Agent for the benefit of itself and the Lenders pursuant to the Security Documents)
any interest whatsoever in the Collateral, except for Liens permitted under Section 11.2 and asset
sales permitted under Section 11.5.

          SECTION 11.14 SRLS Entities Restrictions. (a) Except as permitted under Section 11.4
of this Agreement, materially change or alter the character or conduct of business by any SRLS
Entity from and after the Closing Date, (b) except as expressly permitted under this Agreement,
increase the assets, liabilities or revenue of any SRLS Entity from and after the Closing Date or
(c) permit any SRLS Entity to create, incur, assume or suffer to exist any Guaranty Obligations at
any time.

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          SECTION 11.15 Franchisees Restrictions. Permit the amount of total assets, as
determined in accordance with GAAP, of all Franchisees that are Subsidiaries to exceed Twenty-Five
Million Dollars ($25,000,000) in the aggregate.

ARTICLE XII

DEFAULT AND REMEDIES

          SECTION 12.1 Events of Default. Each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court or any order, rule
or regulation of any Governmental Authority or otherwise:

     (a) Default in Payment of Principal of Loans and Reimbursement Obligations.
The Borrower shall default in any payment of principal of any Loan or Reimbursement
Obligation when and as due (whether at maturity, by reason of acceleration or otherwise).

     (b) Other Payment Default. The Borrower or any other Credit Party shall
default in the payment when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan or Reimbursement Obligation or the payment of any other
Obligation, and such default shall continue unremedied for five (5) Business Days.

     (c) Misrepresentation. Any representation, warranty, certification or
statement of fact made or deemed to be made by or on behalf of the Borrower or any of its
Subsidiaries under this Agreement, any other Loan Document or any document delivered in
connection herewith or therewith that is subject to materiality or Material Adverse Effect
qualifications, be incorrect or misleading in any material respect when made or deemed made,
or any representation, warranty, certification or statement of fact made or deemed made by
or on behalf of the Borrower or any Subsidiary under this Agreement, any other Loan
Document, or in any document delivered in connection herewith or therewith that is not
subject to materiality or Material Adverse Effect qualification shall be incorrect or
misleading in any material respect when made or deemed made.

     (d) Default in Performance of Certain Covenants. The Borrower or any
Subsidiary thereof shall default in the performance or observance of any covenant or
agreement contained in Sections 8.1, 8.2, 8.5(e)(i), 9.10, 9.11 or 9.12 or Articles X or XI
of this Agreement.

     (e) Default in Performance of Other Covenants and Conditions. The Borrower or
any Subsidiary thereof shall default in the performance or observance of any term, covenant,
condition or agreement contained in this Agreement (other than as specifically provided for
otherwise in this Section 12.1) or any other Loan Document and such default shall continue
for a period of thirty (30) days after written notice thereof has been given to the Borrower
by the Administrative Agent.

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     (f) Hedging Agreement. The Borrower shall default in the performance or
observance of any terms, covenant, condition or agreement (after giving effect to any
applicable grace or cure period) under any Hedging Agreement and such default causes the
termination of such Hedging Agreement or permits any counterparty to such Hedging Agreement
to terminate any such Hedging Agreement and the Termination Value owed by the Borrower as a
result thereof exceeds $5,000,000.

     (g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall (i)
default in the payment of any Debt (other than the Loans or any Reimbursement Obligation)
the aggregate outstanding amount of which Debt is in excess of $5,000,000 beyond the period
of grace if any, provided in the instrument or agreement under which such Debt was created,
or (ii) default in the observance or performance of any other agreement or condition
relating to any Debt (other than the Loans or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $5,000,000 or contained in any instrument
or agreement evidencing, securing or relating thereto or any other event shall occur or
condition exist, the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Debt (or a trustee or agent on behalf of such holder or
holders) to cause, with the giving of notice if required, any such Debt to become due prior
to its stated maturity (any applicable grace period having expired).

     (h) Other Cross-Defaults. The Borrower or any of its Subsidiaries shall
default in the payment when due, or in the performance or observance, of any obligation or
condition of any Material Contract which default is not cured within any applicable grace
period, unless, but only as long as, the existence of any such default is being contested by
the Borrower or any such Subsidiary in good faith by appropriate proceedings and adequate
reserves in respect thereof have been established on the books of the Borrower or such
Subsidiary to the extent required by GAAP.

     (i) Change in Control. (i) Any person or group of persons (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership
or control in one or more series of transactions of more than twenty percent (20%) of the
common stock or twenty percent (20%) of the voting power of the Borrower entitled to vote in
the election of members of the board of directors of the Borrower, (ii) there shall have
occurred under any indenture or other instrument evidencing any Debt in excess of $1,000,000
any “change in control” (as defined in such indenture or other evidence of Debt) obligating
the Borrower to repurchase, redeem or repay all or any part of the Debt or capital stock
provided for therein, or (iii) any “Change of Control” under any Subordinated Debt permitted
under this Agreement of the Borrower or its Subsidiaries, including, without limitation, the
Senior Subordinated Notes, or any document executed in connection therewith (any such event,
a “Change in Control”).

     (j) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary thereof
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or hereafter
in effect), (ii) file a petition seeking to take advantage of any other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding up or

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composition for adjustment of debts, (iii) consent to or fail to contest in a timely
and appropriate manner any petition filed against it in an involuntary case under such
bankruptcy laws or other laws, (iv) apply for or consent to, or fail to contest in a timely
and appropriate manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they become due,
(vi) make a general assignment for the benefit of creditors, or (vii) take any corporate
action for the purpose of authorizing any of the foregoing.

     (k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against the Borrower or any Subsidiary thereof in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or hereafter in
effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like for the Borrower or any Subsidiary thereof or
for all or any substantial part of their respective assets, domestic or foreign, and such
case or proceeding shall continue without dismissal or stay for a period of sixty (60)
consecutive days, or an order granting the relief requested in such case or proceeding
(including, but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.

     (l) Failure of Agreements. Any material provision of this Agreement or any
material provision of any other Loan Document shall for any reason cease to be valid and
binding on the Borrower or Subsidiary party thereto or any such Person shall so state in
writing, or any Loan Document shall for any reason cease to create a valid and perfected
first priority Lien on, or security interest in, any of the collateral purported to be
covered thereby, in each case other than in accordance with the express terms hereof or
thereof.

     (m) Termination Event. The occurrence of any of the following events: (i) the
Borrower or any ERISA Affiliate fails to make full payment when due of all amounts which,
under the provisions of any Pension Plan or Section 412 of the Code, the Borrower or any
ERISA Affiliate is required to pay as contributions thereto, (ii) an accumulated funding
deficiency in excess of $1,000,000 occurs or exists, whether or not waived, with respect to
any Pension Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plans makes a complete or partial withdrawal from
any such Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies such
withdrawing employer that such employer has incurred a withdrawal liability requiring
payments in an amount exceeding $1,000,000.

     (n) Judgment. A judgment or order for the payment of money which causes the
aggregate amount of all such judgments to exceed $5,000,000 in any Fiscal Year shall be
entered against the Borrower or any of its Subsidiaries by any court and such judgment or
order shall continue without discharge or stay for a period of thirty (30) days.

     (o) Environmental. Any one or more Environmental Claims shall have been
asserted against the Borrower or any of its Subsidiaries; the Borrower and its Subsidiaries

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would be reasonably likely to incur liability as a result thereof; and such liability
would be reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect.

          SECTION 12.2 Remedies. Upon the occurrence of an Event of Default, with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrower:

     (a) Acceleration; Termination of Facilities. Terminate the Commitments and
declare the principal of and interest on the Loans and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent
under this Agreement or any of the other Loan Documents (including, without limitation, all
L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented or shall be entitled to present the documents required thereunder) and
all other Obligations (other than Hedging Obligations), to be forthwith due and payable,
whereupon the same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived by each Credit Party,
anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Credit Facility and any right of the Borrower to request borrowings or Letters
of Credit thereunder; provided, that upon the occurrence of an Event of Default
specified in Section 12.1(j) or (k), the Credit Facility shall be automatically terminated
and all Obligations (other than Hedging Obligations) shall automatically become due and
payable without presentment, demand, protest or other notice of any kind, all of which are
expressly waived by each Credit Party, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding.

     (b) Letters of Credit. With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an acceleration pursuant
to the preceding paragraph, the Borrower shall at such time deposit in a cash collateral
account opened by the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the other
Obligations on a pro rata basis. After all such Letters of Credit shall
have expired or been fully drawn upon, the Reimbursement Obligation shall have been
satisfied and all other Obligations shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower.

     (c) Rights of Collection. Exercise on behalf of the Lenders all of its other
rights and remedies under this Agreement, the other Loan Documents and Applicable Law, in
order to satisfy all of the Borrower’s Obligations.

          SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration of the
rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not
intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right
or remedy shall not preclude the exercise of any other rights or

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remedies, all of which shall be cumulative, and shall be in addition to any other right or
remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law
or in equity or by suit or otherwise. No delay or failure to take action on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege or be construed to be a waiver of any Event of Default. No course of dealing between the
Borrower, any of its Subsidiaries, the Administrative Agent and the Lenders or their respective
agents or employees shall be effective to change, modify or discharge any provision of this
Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default.

          SECTION 12.4 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Credit Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention
in such proceeding or otherwise:

     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders and the
Administrative Agent and their respective agents and counsel and all other amounts due the
Lenders and the Administrative Agent under Sections 3.3, 5.3 and 14.2) allowed in such
judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 3.3, 5.3 and
14.2.

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

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ARTICLE XIII

THE ADMINISTRATIVE AGENT

     SECTION 13.1 Appointment and Authority. Each of the Lenders, the Issuing Lender and
the Swingline Lender hereby irrevocably appoints Wachovia to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender, and neither the
Borrower nor any Subsidiary thereof shall have rights as a third party beneficiary of any of such
provisions.

     SECTION 13.2 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or
in any other advisory capacity for and generally engage in any kind of business with the Borrower
or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.

     SECTION 13.3 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other Loan Documents.
Without limiting the generality of the foregoing, the Administrative Agent:

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

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

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

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or percentage of the

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Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Section 14.11 and Section 12.2) or (ii) in the
absence of its own gross negligence or willful misconduct as determined by a court of competent
jurisdiction by final nonappealable judgment. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is given to the
Administrative Agent by the Borrower, a Lender or the Issuing Lender.

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

     SECTION 13.4 Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and believed by it to have
been made by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan, or the issuance of a
Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the
Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender or the Issuing Lender prior to the making of such Loan or the issuance of
such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of any such counsel,
accountants or experts.

     SECTION 13.5 Delegation of Duties. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent
and any such sub-agent may perform any and all of its duties and exercise its rights and powers by
or through their respective Related Parties. The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative Agent.

     SECTION 13.6 Resignation of Administrative Agent.

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     (a) The Administrative Agent may at any time give notice of its resignation to the Lenders,
the Issuing Lender and the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which
shall be a bank with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent meeting the qualifications
set forth above provided that if the Administrative Agent shall notify the Borrower and the Lenders
that no qualifying Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Administrative Agent on behalf of the
Lenders or the Issuing Lender under any of the Loan Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor Administrative Agent
is appointed) and (2) all payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender
directly, until such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this paragraph. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder
or under the other Loan Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent’s resignation hereunder and under the other
Loan Documents, the provisions of this Article and Section 14.2 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by any of them while the retiring
Administrative Agent was acting as Administrative Agent.

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

     SECTION 13.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and
the Issuing Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and

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

     SECTION 13.8 No Other Duties, etc. Anything herein to the contrary notwithstanding,
none of the syndication agents, documentation agents, co-agents, book manager, lead manager,
arranger, lead arranger or co-arranger listed on the cover page or signature pages hereof shall
have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the
Issuing Lender hereunder.

     SECTION 13.9 Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,

     (a) to release any Lien on any Collateral granted to or held by the Administrative Agent, for
the ratable benefit of itself and the Lenders, under any Loan Document (i) upon repayment of the
outstanding principal of and all accrued interest on the Loans and Reimbursement Obligations,
payment of all outstanding fees and expenses hereunder, the termination of the Revolving Credit
Commitment and the expiration or termination of all Letters of Credit, (ii) that is sold or to be
sold as part of or in connection with any sale permitted hereunder or under any other Loan
Document, or (iii) subject to Section 14.11, if approved, authorized or ratified in writing by the
Required Lenders;

     (b) to subordinate or release any Lien on any Collateral granted to or held by the
Administrative Agent under any Loan Document to the holder of any lien permitted pursuant to
Section 11.2; and

     (c) to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty
Agreement, the Collateral Agreement and any other Loan Documents if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder.

     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent’s authority to release or subordinate its interest in particular types or
items of property, or to release any Guarantor from its obligations under the Subsidiary Guaranty
Agreement pursuant to this Section.

ARTICLE XIV

MISCELLANEOUS

     SECTION 14.1 Notices.

     (a) Method of Communication. Except as otherwise provided in this Agreement,
all notices and communications hereunder shall be in writing (for purposes hereof, the term
“writing” shall include information in electronic format such as

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electronic mail and internet web pages), or by telephone subsequently confirmed in
writing. Any notice shall be effective if delivered by hand delivery or sent via electronic
mail, posting on an internet web page, telecopy, recognized overnight courier service or
certified mail, return receipt requested, and shall be presumed to be received by a party
hereto (i) on the date of delivery if delivered by hand or sent by electronic mail, posting
on an internet web page (provided the recipients of such notice have been made specifically
aware of the posting of such notice by any other method permitted by this Section 14.1(a)),
telecopy, (ii) on the next Business Day if sent by recognized overnight courier service and
(iii) on the third Business Day following the date sent by certified mail, return receipt
requested. A telephonic notice to the Administrative Agent as understood by the
Administrative Agent will be deemed to be the controlling and proper notice in the event of
a discrepancy with or failure to receive a confirming written notice.

     (b) Addresses for Notices. Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are notified in
writing.

	 	 	 	 	 
	 

	 	If to the Borrower:
	 	O’Charley’s Inc.

3038 Sidco Drive

Nashville, Tennessee 37204

Attention: Mr. Lawrence Hyatt, Chief Financial Officer

Telephone No.: (615) 782-8818

Telecopy No.: (615) 782-5031
	 
	 	 	 	 
	 

	 	With copies to:
	 	Bass, Berry & Sims, PLC

315 Deaderick Street

Nashville, TN 37238

Attention: J. Page Davidson

Telephone No.: (615) 742-6200

Telecopy No.: (615) 742-6293
	 
	 	 	 	 
	 

	 	If to Wachovia as	 	 
	 

	 	Administrative Agent:
	 	Wachovia Bank, National Association

Charlotte Plaza, NC0680

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

Telephone No.: (704) 374-2698

Telecopy No.: (704) 383-0288
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Wachovia Bank, National Association

One South Broad, 8th Floor

Philadelphia, PA 19107

Attention: Ms. Martha Winters

Telephone No.: (267) 321-6714

Telecopy No.: (267) 321-6700

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	 	If to any Lender: To the address set forth on the Register.

     (c) Administrative Agent’s Office. The Administrative Agent hereby designates
its office located at the address set forth above, or any subsequent office which shall have
been specified for such purpose by written notice to the Borrower and Lenders, as the
Administrative Agent’s Office referred to herein, to which payments due are to be made and
at which Loans will be disbursed and Letters of Credit issued.

     SECTION 14.2 Expenses; Indemnity.

     (a) Costs and Expenses. The Borrower and any other Credit Party, jointly and
severally, shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent) in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation, execution, delivery
and administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder
and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any
Lender or the Issuing Lender (including the reasonable fees, charges and disbursements of
any counsel for the Administrative Agent, any Lender or the Issuing Lender) in connection
with the enforcement or protection of its rights (A) in connection with this Agreement and
the other Loan Documents, including its rights under this Section, or (B) in connection with
the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect of such Loans
or Letters of Credit.

     (b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and
each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims (including, without limitation, any Environmental Claims or civil penalties or fines
assessed by OFAC), damages, liabilities and related expenses (including the fees, charges
and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrower or any other Credit Party
arising out of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental

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Claim related in any way to the Borrower or any of its Subsidiaries, (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third party or by
the Borrower or any other Credit Party, and regardless of whether any Indemnitee is a party
thereto, or (v) any claim (including, without limitation, any Environmental Claims or civil
penalties or fines assessed by OFAC), investigation, litigation or other proceeding (whether
or not the Administrative Agent or any Lender is a party thereto) and the prosecution and
defense thereof, arising out of or in any way connected with the Loans, this Agreement, any
other Loan Document, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby, including without limitation, reasonable
attorneys and consultant’s fees, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower or any other Credit Party
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other Loan Document, if the Borrower or such Credit Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of competent
jurisdiction.

     (c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under clause (a) or (b) of this Section to be
paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Related Party of any of the foregoing, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent), the Issuing Lender or such Related Party, as
the case may be, such Lender’s Applicable Margin (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage, liability
or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the Issuing Lender in its capacity as such,
or against any Related Party of any of the foregoing acting for the Administrative Agent (or
any such sub-agent) or Issuing Lender in connection with such capacity. The obligations of
the Lenders under this clause (c) are subject to the provisions of Section 5.7.

     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
Applicable Law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in clause (b) above
shall be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.

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     (e) Payments. All amounts due under this Section shall be payable promptly
after demand therefor.

          SECTION 14.3 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the Issuing Lender, the Swingline Lender and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted
by Applicable Law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, the Issuing Lender, the Swingline Lender or any such
Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any
and all of the obligations of the Borrower or such Credit Party now or hereafter existing under
this Agreement or any other Loan Document to such Lender, the Issuing Lender or the Swingline
Lender, irrespective of whether or not such Lender, the Issuing Lender or the Swingline Lender
shall have made any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to a
branch or office of such Lender, the Issuing Lender or the Swingline Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The rights of each
Lender, the Issuing Lender, the Swingline Lender and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff) that such Lender,
the Issuing Lender, the Swingline Lender or their respective Affiliates may have. Each Lender, the
Issuing Lender and the Swingline Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application; provided that the failure to give such
notice shall not affect the validity of such setoff and application.

          SECTION 14.4 Governing Law. This Agreement and the other Loan Documents, unless
otherwise expressly set forth therein, shall be governed by, construed and enforced in accordance
with and all issues related to the legality, validity or enforceability hereof and thereof shall be
determined under the laws of the State of New York (including Section 5-1401 and Section 5-1402 of
the General Obligations Law of the State of New York), without regard to the conflicts of law
principles thereof.

     SECTION 14.5 Jurisdiction and Venue.

     (a) Jurisdiction. The Borrower hereby irrevocably consents to the personal
jurisdiction of the state and federal courts located in New York, New York and Mecklenburg
County, North Carolina (and any courts from which an appeal from any of such courts must or
may be taken), in any action, claim or other proceeding arising out of any dispute in
connection with this Agreement and the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations. The Borrower
hereby irrevocably consents to the service of a summons and complaint and other process in
any action, claim or proceeding brought by the Administrative Agent or any Lender in
connection with this Agreement or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on behalf of
itself or its property, in the manner specified in Section 14.1. Nothing in this Section
14.5 shall affect the right of the Administrative Agent or any Lender to serve legal process
in any other manner permitted by Applicable Law or affect

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the right of the Administrative Agent or any Lender to bring any action or proceeding
against the Borrower or its properties in the courts of any other jurisdictions.

     (b) Venue. The Borrower hereby irrevocably waives any objection it may have
now or in the future to the laying of venue in the aforesaid jurisdictions in any action,
claim or other proceeding arising out of or in connection with this Agreement, any other
Loan Document or the rights and obligations of the parties hereunder or thereunder. The
Borrower irrevocably waives, in connection with such action, claim or proceeding, any plea
or claim that the action, claim or other proceeding has been brought in an inconvenient
forum.

          SECTION 14.6 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 14.7 Reversal of Payments. To the extent the Borrower makes a payment or
payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative
Agent receives any payment or proceeds of the collateral which payments or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent of such payment or proceeds
received, the Obligations or part thereof intended to be satisfied shall be revived and continued
in full force and effect as if such payment or proceeds had not been received by the Administrative
Agent.

          SECTION 14.8 Injunctive Relief; Punitive Damages.

     (a) Injunctive Relief. The Borrower recognizes that, in the event the Borrower fails
to perform, observe or discharge any of its obligations or liabilities under this Agreement, any
remedy of law may prove to be inadequate relief to the Lenders. Therefore, the Borrower agrees that
the Lenders, at the Lenders’ option, shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.

     (b) Punitive Damages. The Administrative Agent, the Lenders and the Borrower (on
behalf of itself and its Subsidiaries) hereby agree that no such Person shall have a remedy of
punitive or exemplary damages against any other party to a Loan Document and each such

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Person hereby waives any right or claim to punitive or exemplary damages that it may now have
or that may arise in the future in connection with any Dispute, whether such Dispute is resolved
through arbitration or judicially.

          SECTION 14.9 Accounting Matters. All financial and accounting calculations,
measurements and computations made for any purpose relating to this Agreement, including, without
limitation, all computations utilized by the Borrower or any Subsidiary thereof to determine
compliance with any covenant contained herein, shall, except as otherwise expressly contemplated
hereby or unless there is an express written direction by the Administrative Agent to the contrary
agreed to by the Borrower, be performed in accordance with GAAP as in effect on the Closing Date.
In the event that changes in GAAP shall be mandated by the Financial Accounting Standards Board, or
any similar accounting body of comparable standing, or shall be recommended by the Borrower’s
certified public accountants, to the extent that such changes would modify such accounting terms or
the interpretation or computation thereof, such changes shall be followed in defining such
accounting terms only from and after the date the Borrower and the Required Lenders shall have
amended this Agreement to the extent necessary to reflect any such changes in the financial
covenants and other terms and conditions of this Agreement.

          SECTION 14.10 Successors and Assigns; Participations.

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

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

     (i) Minimum Amounts.

     (A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Revolving Credit Commitment and the Loans at the time

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owing to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

     (B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Revolving Credit Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the applicable Revolving Credit Commitment is
not then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative Agent
or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $5,000,000, in the case of any assignment in respect of
the Revolving Credit Facility, unless each of the Administrative Agent and, so long
as no Default or Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or delayed);

          (ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loan or the Revolving Credit Commitment assigned;

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

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

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

     (C) the consents of the Issuing Lender and the Swingline Lender (such consents
not to be unreasonably withheld or delayed) shall be required for any assignment
that increases the obligation of the assignee to participate in exposure under one
or more Letters of Credit (whether or not then outstanding) or for any assignment in
respect of the Revolving Credit Facility.

          (iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500 for each assignment, and the assignee, if it is not a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.

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

88

 

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

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c)
of this Section, from and after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be
entitled to the benefits of Sections 5.8, 5.9, 5.10, 5.11 and 14.2 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply with this paragraph
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (d) of this Section.

     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at one of its offices in Charlotte, North Carolina, a copy of each
Assignment and Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Revolving Credit Commitment of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

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

     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver or modification described in Section
14.11 that directly affects such Participant and could not be affected by a vote of the Required
Lenders. Subject to paragraph (e) of this Section, the Borrower agrees that each

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Participant shall be entitled to the benefits of Sections 5.8, 5.9, 5.10 and 5.11 to the same
extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section. To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 14.2 as though it were a Lender, provided such Participant agrees to be subject
to Section 5.6 as though it were a Lender.

     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 5.10 and 5.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 5.11 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section
5.11(e) as though it were a Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          SECTION 14.11 Amendments, Waivers and Consents. Except as set forth below or as
specifically provided in any Loan Document, any term, covenant, agreement or condition of this
Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders (or by the Administrative Agent with the consent of the Required
Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the
Borrower; provided, that no amendment, waiver or consent shall:

     (a) (i) increase the Revolving Credit Commitment of any Lender or increase the amount of any
Revolving Credit Loan, (ii) reduce the Revolving Credit Commitment Percentage, rate of interest or
fees payable on any Revolving Credit Loan or Reimbursement Obligation, (iii) reduce or forgive the
principal amount of any Revolving Credit Loan or the amount of any Reimbursement Obligation, (iv)
extend the originally scheduled time or times of payment of the principal of any Revolving Credit
Loan or Reimbursement Obligation or the time or times of payment of interest on any Revolving
Credit Loan or Reimbursement Obligation or any fee or commission with respect thereto, (v) permit
any subordination of the principal or interest on any Revolving Credit Loan or Reimbursement
Obligation or (vi) extend the time of the obligation of the Lenders holding Revolving Credit
Commitments to make or issue or participate in letters, in each case, without the written consent
of each Lender holding Revolving Credit Loans or a Revolving Credit Commitment;

     (b) (i) release the Borrower from the Obligations (other than Hedging Obligations) hereunder,
(ii) permit any assignment (other than as specifically permitted or contemplated in this Agreement)
of any of the Borrower’s rights and obligations hereunder, (iii) release any material portion of
the Collateral or release any Security Document (other than asset sales

90

 

permitted pursuant to Section 11.5 (which such Collateral may be released upon the consent of
the Administrative Agent only) and as otherwise specifically permitted or contemplated in this
Agreement or the applicable Security Document), (iv) release any Subsidiary Guarantor from its
respective Guaranty Obligations, (v) permit any Liens (other than Permitted Liens) on any
Collateral secured under this Credit Facility or (vi) amend the provisions of this Section 14.11 or
the definition of Required Lenders, in each case, without the prior written consent of each Lender.

In addition, no amendment, waiver or consent to the provisions of Section 5.4 with respect to the
pro rata treatment of payments, or Section 5.5 with respect to the application of
proceeds, shall be made without the consent of each Lender adversely affected thereby.

In addition, no amendment, waiver or consent shall be made to the provisions of (a) Article XIII
without the written consent of the Administrative Agent, and (b) Article III without the written
consent of the Issuing Lender.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have the right to
approve or disapprove any amendment, waiver or consent hereunder, except that the Revolving Credit
Commitment of such Lender may not be increased or extended without the consent of such Lender.

          SECTION 14.12 Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the extent requested by,
or required to be disclosed to, any rating agency, or regulatory or similar authority (including
any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by Applicable Laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any remedies under this
Agreement or under any other Loan Document (or any Hedging Agreement with a Lender or the
Administrative Agent) or any action or proceeding relating to this Agreement or any other Loan
Document (or any Hedging Agreement with a Lender or the Administrative Agent) or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any purchasing Lender, proposed purchasing Lender,
Participant or proposed Participant or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g)
with the consent of the Borrower, (h) to Gold Sheets and other similar bank trade
publications, such information to consist of deal terms and other information customarily found in
such publications, or (i) to the extent such Information (x) becomes publicly available other than
as a result of a breach of this Section or (y) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a source other than the Borrower or (j) to governmental
regulatory authorities in connection with any regulatory examination of the Administrative Agent or
any Lender or in accordance with the Administrative Agent’s or any Lender’s regulatory compliance
policy if the Administrative Agent or such Lender deems necessary for the mitigation of claims by
those authorities against the Administrative Agent or such Lender or

91

 

any of its subsidiaries or affiliates. For purposes of this Section, “Information” means
all information received from any Credit Party relating to any Credit Party or any of their
respective businesses, other than any such information that is available to the Administrative
Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party;
provided that, in the case of information received from a Credit Party after the date
hereof, such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

          SECTION 14.13 Performance of Duties. The Borrower’s obligations under this Agreement
and each of the other Loan Documents shall be performed by the Borrower at its sole cost and
expense.

          SECTION 14.14 All Powers Coupled with Interest. All powers of attorney and other
authorizations granted to the Lenders, the Administrative Agent and any Persons designated by the
Administrative Agent or any Lender pursuant to any provisions of this Agreement or any of the other
Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of
the Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit
Facility has not been terminated.

          SECTION 14.15 Survival of Indemnities. Notwithstanding any termination of this
Agreement, the indemnities to which the Administrative Agent and the Lenders are entitled under the
provisions of this Article XIV and any other provision of this Agreement and the other Loan
Documents shall continue in full force and effect and shall protect the Administrative Agent and
the Lenders against events arising after such termination as well as before.

          SECTION 14.16 Titles and Captions. Titles and captions of Articles, Sections and
subsections in, and the table of contents of, this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.

          SECTION 14.17 Severability of Provisions. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without
invalidating the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other jurisdiction.

          SECTION 14.18 Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and

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National Commerce Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

          SECTION 14.19 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement and the other Loan Documents, and any separate letter agreements with
respect to fees payable to the Administrative Agent, constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. In the event of any
conflict between the provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of supplemental
rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.

          SECTION 14.20 Term of Agreement. This Agreement shall remain in effect from the
Closing Date through and including the date upon which all Obligations arising hereunder or under
any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full and
all Commitments have been terminated. The Administrative Agent is hereby permitted to release all
Liens on the Collateral in favor of the Administrative Agent, for the ratable benefit of itself and
the Lenders, upon repayment of the outstanding principal of and all accrued interest on the Loans,
payment of all outstanding fees, expenses and other Obligations hereunder and the termination of
the Lender’s Commitments. No termination of this Agreement shall affect the rights and obligations
of the parties hereto arising prior to such termination or in respect of any provision of this
Agreement which survives such termination.

          SECTION 14.21 Advice of Counsel. Each of the parties represents to each other party
hereto that it has discussed this Agreement with its counsel.

          SECTION 14.22 USA Patriot Act. The Administrative Agent and each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.
L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies the Borrower and Guarantors, which information includes the
name and address of each Borrower and Guarantor and other information that will allow such Lender
to identify such Borrower or Guarantor in accordance with the Act.

          SECTION 14.23 No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

          SECTION 14.24 Inconsistencies with Other Documents; Independent Effect of Covenants.

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     (a) In the event there is a conflict or inconsistency between this Agreement and any
other Loan Document, the terms of this Agreement shall control; provided, that any
provision of the Security Documents which imposes additional burdens on the Borrower or its
Subsidiaries or further restricts the rights of the Borrower or its Subsidiaries or gives
the Administrative Agent or Lenders additional rights shall not be deemed to be in conflict
or inconsistent with this Agreement and shall be given full force and effect.

     (b) This Agreement constitutes an amendment and restatement of the Existing Credit
Agreement, as amended, effective from and after the Closing Date. The execution and
delivery of this Agreement shall not constitute a novation of any Debt or other obligations
owing to the Lenders or the Administrative Agent under the Existing Credit Agreement based
on facts or events occurring or existing prior to the execution and delivery of this
Agreement. On the Closing Date, the credit facilities described in the Existing Credit
Agreement, as amended, shall be amended, supplemented, modified and restated in their
entirety by the facilities described herein, and all loans and other obligations of the
Borrower outstanding as of such date under the Existing Credit Agreement, as amended, shall
be deemed to be loans and obligations outstanding under the corresponding facilities
described herein, without any further action by any Person, except that the Administrative
Agent shall make such transfers of funds as are necessary in order that the outstanding
balance of such Loans, together with any Loans funded on the Closing Date, reflect the
Commitments of the Lenders hereunder.

     (c) The Borrower expressly acknowledges and agrees that each covenant contained in
Articles IX, X, or XI hereof shall be given independent effect. Accordingly, the Borrower
shall not engage in any transaction or other act otherwise permitted under any covenant
contained in Articles IX, X, or XI if, before or after giving effect to such transaction or
act, the Borrower shall or would be in breach of any other covenant contained in Articles
IX, X, or XI.

[Signature pages to follow]

94

 

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

	 	 	 	 	 	 	 	 	 
	 	 	O’CHARLEY’S INC., as Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Lawrence E. Hyatt	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Lawrence E. Hyatt	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Chief Financial Officer, Secretary
and Treasuer 	 	 
	 

	 	 	 	 	 	 	 	 

[Signature Pages Continue]

[Second Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent and Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Martha M. Winters	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Martha M. Winters	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Director	 	 
	 

	 	 	 	 	 	 	 	 

[Signature Pages Continue]

[Second Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	AMSOUTH BANK, as Swingline Lender and Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Monty Trimble	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Monty Trimble	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Senior Vice President	 	 
	 

	 	 	 	 	 	 	 	 

[Second Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL
ASSOCIATION, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Marianne T. Meil	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Marianne T. Meil 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Senior Vice President 	 	 
	 

	 	 	 	 	 	 	 	 

[Signature
Pages Continue]

[Second Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,
as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ John H.
Schmidt	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	John H. Schmidt	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 	 	 

[Signature
Pages Continue]

[Second
Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ John B.
Middelberg	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	John B. Middelberg	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Senior Vice President	 	 
	 

	 	 	 	 	 	 	 	 

[Signature
Pages Continue]

[Second
Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	FIFTH THIRD BANK, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ John Perez	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	John Perez	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 	 	 

[Signature
Pages Continue]

[Second
Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL
ASSOCIATION, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Michael P.
Dickman	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Michael P. Dickman	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 	 	 

[Signature
Pages Continue]

[Second
Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	FIRST TENNESSEE BANK, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Ned Spitzer	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Ned Spitzer 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Vice President 	 	 
	 

	 	 	 	 	 	 	 	 

[Signature
Pages Continue]

[Second Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	SUNTRUST BANK, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Kap Yarbrough	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Kap Yarbrough 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Banking Officer 	 	 
	 

	 	 	 	 	 	 	 	 

[Second Amended and Restated Credit Agreement]<PAGE>

                                                                   EXHIBIT 10.30

                  RECLAMATION CONSULTING AND APPLICATIONS, INC.

                       CONVERTIBLE NOTE PURCHASE AGREEMENT

THIS CONVERTIBLE NOTE PURCHASE AGREEMENT (the "AGREEMENT"), is entered into as
of the 17th day of October, 2006 (the "EFFECTIVE DATE"), by and between
RECLAMATION CONSULTING AND APPLICATIONS, INC., a corporation duly organized and
validly existing under the laws of the State of Colorado (the "COMPANY") and
CANVASBACK COMPANY LIMITED, a company organized and validly existing under the
laws of Anguilla ("CANVASBACK"). The Company and Canvasback are sometimes
referenced herein individually as a "PARTY", and collectively as the "PARTIES").

      WHEREAS, the Company is a party to certain convertible promissory note
agreements (the "CONVERTIBLE NOTE AGREEMENTS") as to which the Company has
registered the underlying stock for public trading in accordance with its
agreements with the holders thereof (the "EXISTING NOTEHOLDERS"), and which
Convertible Note Agreements place substantial restrictions on the ability of the
Company to issue certain types of securities and take certain other types of
corporate action while the Convertible Note Agreements are in force;

      WHEREAS, since the beginning of this year, the Company has been in need of
a substantial amount of cash financing to support its operations, and such cash
financing has been difficult to raise due to the various restrictions imposed by
the Convertible Note Agreements;

      WHEREAS, notwithstanding the restrictions imposed upon the Company, since
January 2006 Canvasback has been willing to provide, and has provided, the
Company with cash financing in the form of unsecured loans in order to help the
Company sustain its operations, and the Parties have been operating since that
time under an oral agreement for Canvasback to provide those funds as necessary
on a case-by-case basis;

      WHEREAS, as of September 7, 2006, the Company had received the sum of One
Million, Six Hundred and Sixteen Thousand, Three Hundred Forty Eight Dollars
($1,616,348) of unsecured debt from Canvasback, and as partial consideration for
the right to convert all Unsecured Loans (as defined hereafter), Canvasback had
agreed to provide the Company with additional unsecured debt to permit the
Company to meet its current obligations; and

      WHEREAS, as of the date hereof, Canvasback has provided the Company with
an additional Three Hundred Eighty Seven Thousand, Four Hundred Twenty Eight
Dollars ($387,428) of unsecured debt bringing the balance of all prior unsecured
loans, including accrued interest of Seventy Five Thousand, Two Hundred Ninety
One ($75,291) to Two Million, Seventy-Nine Thousand, Sixty-Seven Dollars
($2,079,067) (the "PRIOR LOANS"),

      WHEREAS, Canvasback has indicated that it is willing to provide the
Company with additional unsecured debt in the principal amount of One Hundred
Twenty Thousand Dollars ($120,000) (the "SUBSEQUENT LOANS", and together with
the Prior Loans, the "UNSECURED DEBT"), provided that the Company delivers to
Canvasback the right to convert the Unsecured Debt into equity in accordance
with this Agreement, and the Parties desire to memorialize their arrangement
through entry into this Agreement as of the date hereof.

                                     - 1 -
<PAGE>

      NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, intending to be legally bound, hereby agree as follows:

                                    ARTICLE I
                            UNSECURED NOTE FINANCING

1.1   Upon execution of this Agreement, the Parties hereby agree that SCHEDULE
      A, attached hereto and made an integral part hereof, constitutes a true
      and complete list of all amounts loaned by Canvasback to the Company as
      Prior Loans through and including the date of this Agreement. The terms of
      the Prior Loans shall be as described in Section 2.2 below, and as set
      forth in the Convertible Note (as defined below), issuable pursuant to
      Article II of this Agreement.

1.2   Canvasback agrees, subject to the entry of the Parties into this
      Agreement, to provide the Subsequent Loans, which Subsequent Loans shall
      be evidenced by the issuance of Convertible Notes having the terms and
      conditions set forth in Section 2.2 below.

                                   ARTICLE II
                                CONVERTIBLE NOTES

2.1   ISSUANCE OF THE CONVERTIBLE NOTES. Subject to the terms and conditions set
      forth in this Agreement, the Company will duly authorize the issuance of
      its 10% Convertible Note in substantially the form of EXHIBIT A hereto as
      consideration for all Prior Loans (such note(s), together with any and all
      notes that may be issued hereafter in substitution or exchange therefore,
      and issued in consideration for Subsequent Loans, are collectively
      referred to herein as the "CONVERTIBLE NOTES" and each such note is
      individually referred to herein as a "CONVERTIBLE NOTE"). The terms and
      conditions of the Convertible Notes are incorporated herein by reference.

2.2   DESCRIPTION OF THE CONVERTIBLE NOTES. The Convertible Notes shall have the
      following terms and conditions:

      (A)   MATURITY DATES. All principal, plus all accrued but unpaid interest
            on the Prior Loans, shall be due and payable on the date that is one
            (1) year from the date of this Agreement. All principal, plus all
            accrued but unpaid interest on the Subsequent Loans shall be due and
            payable on the date that is one (1) year from the date of the
            Convertible Note(s) evidencing such Subsequent Loans. Each date
            referenced in this Section 2.2(a) is hereby a "MATURITY DATE".

                                     - 2 -
<PAGE>

      (B)   INTEREST RATE. The Convertible Notes will accrue simple interest at
            the rate of ten percent (10%) per annum, calculated on the basis of
            a 365-day year from the date of this Agreement.

      (C)   PREPAYMENT. The Company shall have the right to prepay the Unsecured
            Debt, in whole or in part, at any time and from time to time, prior
            to the Maturity Date, without penalty, during the term of the
            applicable Convertible Note, provided that at the time of such
            prepayment the Company shall also pay to Canvasback all unpaid
            interest accrued on the Unsecured Debt through the date of
            prepayment.

      (D)   CONVERSION. As provided for and on the terms and conditions set
            forth in the Convertible Notes, the Convertible Notes may be
            converted at any time after the Conversion Event (as hereafter
            defined) and prior to the Maturity Date (the "CONVERSION PERIOD") at
            the option of the holder, unless previously fully-paid, into shares
            (the "CONVERSION SHARES") of the Company's common stock, par value
            $0.01 per share (the "COMMON STOCK") at a per Conversion Share price
            of Two and One-half Cents ($0.025) (the "CONVERSION PRICE"). As used
            in this Agreement, the term "CONVERSION EVENT" shall mean either (i)
            the delivery to the Company and Canvasback of a written consent of
            the Existing Noteholders to permit the Conversion of the Unsecured
            Debt, or any portion thereof, into Conversion Shares pursuant to the
            terms of this Agreement; or (ii) the termination of the Convertible
            Note Agreement pursuant to the terms thereof and full satisfaction
            by the Company of all obligations pursuant thereto.

2.3   DELIVERY OF THE CONVERTIBLE NOTES. Subject to the terms and conditions set
      forth herein, the Company hereby agrees to issue to Canvasback as
      consideration for the Prior Loans, and Canvasback hereby agrees to accept
      from the Company, a Convertible Note in the principal face amount of Two
      Million, Seventy-Nine Thousand, Sixty-Seven Dollars ($2,079,067) (the
      "PRINCIPAL AMOUNT"). The Convertible Note delivered to Canvasback on the
      Closing Date will be delivered in the form of a single Convertible Note
      registered on the books and records of the Company in the name of
      Canvasback (or in the name of such nominee as Canvasback may specify no
      later than two business days prior to the Closing Date) and in
      substantially the form attached hereto as EXHIBIT A.

                                   ARTICLE III
                                     CLOSING

3.1   CLOSING. The closing of the transactions contemplated by this Agreement
      shall take place on October 17, 2006 at 10:00 a.m., P.D.T. at the offices
      of the August Law Group, P.C., The Atrium Building, 19200 Von Karman
      Avenue, Suite 19200, Irvine, California 92612, or at such other location,
      date and time as may be agreed upon between Canvasback and the Company
      (such closing being called the "CLOSING" and such date and time being
      called the "CLOSING DATE"). At the Closing, the Company shall issue and
      deliver to the Purchaser the Convertible Notes as consideration for the
      Unsecured Debt.

                                     - 3 -
<PAGE>

                                   ARTICLE IV
                               REGISTRATION RIGHTS

4.1   The Company hereby agrees that, within sixty (60) days after the issuance
      of any Conversion Shares, or as soon thereafter as the Company may
      determine in good faith to be commercially reasonable, but in no event
      later than one hundred eighty (180) days the Company shall file a
      registration statement with the United States Securities and Exchange
      Commission (the "SEC") seeking to have such Conversion Shares registered
      for public sale on Form SB-2 or other applicable form of registration
      statement, and naming the holders therein (the "HOLDERS") as selling
      stockholders (unless any Holder shall notify the Company in advance that
      it does not desire to be included in any such registration statement). The
      Company shall pay for all registration expenses incurred in connection
      with any registration, qualification or compliance pursuant to this
      Article IV. All individual selling expenses incurred in connection with
      any such registration, qualification or compliance, including without
      limitation any separate counsel which any Holder may desire to engage in
      connection with the filing of such registration statement apart from the
      Company's counsel, will be borne by the Holders of the Conversion Shares
      participating in such registration, pro rata on the basis of the number of
      their shares so registered.

4.2   In its efforts to register securities on behalf of Holders of Conversion
      Shares desiring to participate as a selling stockholder in such
      registration (the "PARTICIPATING HOLDERS"), the Company shall use its
      commercially reasonable efforts to:

      (A)   prepare and file the registration statement with the SEC within the
            stated time period, and use its best efforts to cause such
            registration statement to become effective within ninety (90) days
            after filing with the SEC and to remain effective for such period as
            may be reasonably necessary to effect the sale of the securities
            covered thereby, not to exceed six (6) months;

      (B)   prepare and file with the SEC such amendments to such registration
            statement and supplements to the prospectus contained therein as may
            be necessary to keep such registration statement effective until the
            earlier of (i) the date on which all securities covered by such
            registration statement have been sold and (ii) 180 days after the
            effective date of such registration statement;

      (C)   register or qualify the securities for sale under such other
            securities or blue sky laws of such jurisdictions as the
            Participating Holders may reasonably request, up to a maximum of
            five (5) such jurisdictions unless the securities can be qualified
            for sale under a nationally-recognized method of state
            qualification, provided that the Company will not for any such
            purpose be required to qualify generally to do business as a foreign
            corporation in any jurisdiction where, but for the requirements of
            this subsection (c), it would not be obligated to be so qualified,
            to subject itself to taxation in any jurisdiction, or to consent to
            general service of process in any such jurisdiction;

                                     - 4 -
<PAGE>

      (D)   furnish to the Participating Holders a reasonable number of copies
            of the registration statement, preliminary prospectus, final
            prospectus and such other documents as the Participating Holders may
            reasonably request in order to facilitate the public offering of
            such securities;

      (E)   notify the Participating Holders, promptly after it receives notice
            thereof, of the time when such registration statement has become
            effective or a supplement to any prospectus forming a part of such
            registration statement has been filed;

      (F)   notify the Participating Holders promptly of any request by the SEC
            for the amending or supplementing of such registration statement or
            prospectus or for additional information;

      (G)   prepare and promptly file with the SEC, and promptly notify the
            Participating Holders of the filing of, any amendment or supplement
            to such registration statement or prospectus as may be necessary to
            correct any statements or omissions if, at the time when a
            prospectus relating to such securities is required to be delivered
            under the Securities Act of 1933 (the "1933 ACT"), any event has
            occurred as the result of which any such prospectus as then in
            effect would include an untrue statement of a material fact or omit
            to state any material fact necessary to make the statements therein,
            in the light of the circumstances in which they were made, not
            misleading;

      (H)   advise the Participating Holders, promptly after it receives notice
            or obtains knowledge thereof, of the issuance of any stop order by
            the SEC suspending the effectiveness of such registration statement
            or the initiation or threatening of any proceeding for that purpose
            and promptly use its best efforts to prevent the issuance of any
            stop order or to obtain its withdrawal if such stop order should be
            issued; and

      (I)   at least three (3) days prior to the filing of any amendment or
            supplement to such registration statement or prospectus, furnish
            copies thereof to the Participating Holders and refrain from filing
            any such amendment or supplement until the Participating Holders
            give their written consent to the filing, such consent not to be
            unreasonably withheld or delayed and in no event later than five (5)
            days after the Participating Holders receive copies of the proposed
            amendment and supplement.

4.3   Each Participating Holder shall furnish to the Company such information
      regarding such Participating Holder and the distribution proposed by such
      Participating Holder as the Company may reasonably request in writing and
      as reasonably required in connection with any registration, qualification
      or compliance referred to herein or otherwise required by applicable state
      or federal securities laws.

                                     - 5 -
<PAGE>

4.4   INDEMNIFICATION.

      (A)   The Company shall, and hereby does, indemnify each Participating
            Holder, each of its officers, directors and partners, and each
            Person controlling such Participating Holder within the meaning of
            the 1933 Act and each underwriter, if any, and each Person who
            controls such underwriter within the meaning of the 1933 Act,
            against all claims, losses, damages and liabilities (or actions in
            respect thereon) arising out of or based on any untrue statement (or
            alleged untrue statement) of a material fact contained in any
            prospectus, offering circular or other document (including any
            related registration statement, notification or the like) incident
            to any such registration, qualification or compliance, or based on
            any omission (or alleged omission) to state therein a material fact
            required to be stated therein or necessary to make the statements
            therein not misleading, or any violation by the Company of the 1933
            Act, the Securities Exchange Act, the securities act of any state,
            or any rule or regulation thereunder applicable to the Company in
            connection with any such registration, qualification or compliance,
            and shall reimburse each Participating Holder, each of its officers,
            directors and partners, and each person controlling such
            Participating Holder, each such underwriter and each person who
            controls any such underwriter, for any legal and any other expenses
            reasonably incurred in connection with investigating and defending
            any such claim, loss, damage, liability or action, whether or not
            resulting in any liability, provided that the Company will not be
            liable in any such case to the extent that any such claim, loss,
            damage, liability or expense arises out of or is based on any untrue
            statement (or alleged untrue statement) or omission (or alleged
            omission) based upon written information furnished to the Company by
            any Holder or underwriter and stated to be specifically for use
            therein.

      (B)   Each Participating Holder shall indemnify the Company, each of its
            directors and officers, each other Participating Holder, each Person
            who controls the Company within the meaning of the 1933 Act and the
            rules and regulations thereunder, and each of their officers,
            directors and partners, against all claims, losses, damages and
            liabilities (or actions in respect thereof) arising out of or based
            on any untrue statement (or alleged untrue statement) of a material
            fact contained in any such registration statement, prospectus,
            offering circular or other document, or any omission (or alleged
            omission) to state therein a material fact required to be stated
            therein or necessary to make the statements therein not misleading,
            and will reimburse the Company and such Participating Holder's
            directors, officers, partners, underwriters or control persons for
            any legal or any other expenses reasonably incurred in connection
            with investigating or defending any such claim, loss, damage,
            liability or action, whether or not resulting in liability, in each
            case to the extent, but only to the extent, that such untrue
            statement (or alleged untrue statement) or omission (or alleged
            omission) is made in such registration statement, prospectus,
            offering circular or other document in reliance upon and in
            conformity with written information furnished to the Company by such
            Participating Holder and stated to be specifically for use therein.

                                     - 6 -
<PAGE>

      (C)   Each party entitled to indemnification under this Section 4.4(c)
            (the "INDEMNIFIED PARTY") shall give notice to the party required to
            provide indemnification (the "INDEMNIFYING PARTY") promptly after
            such Indemnified Party has actual knowledge of any claim as to which
            indemnity may be sought, but the failure of any Indemnified Party to
            give such notice does not relieve the Indemnifying Party of its
            obligations under this Section 4.4(c) (except and to the extent the
            Indemnifying Party has been materially prejudiced as a consequence
            thereof). The Indemnifying Party will be entitled to participate in,
            and to the extent that it may elect by written notice delivered to
            the Indemnified Party promptly after receiving the aforesaid notice
            from such Indemnified Party, at its expense to assume, the defense
            of any such claim or any litigation resulting therefrom, with
            counsel reasonably satisfactory to such Indemnified Party, provided
            that the Indemnified Party may participate in such defense at its
            expense, notwithstanding the assumption of such defense by the
            Indemnifying Party, and provided, further, that if the defendants in
            any such action shall include both the Indemnified Party and the
            Indemnifying Party and the Indemnified Party shall have reasonably
            concluded that there may be legal defenses available to it and/or
            other Indemnified Parties which are different from or additional to
            those available to the Indemnifying Party or that the interests of
            the Indemnified Party reasonably may be deemed to conflict with the
            interests of the Indemnifying Party, the Indemnified Party or
            Parties shall have the right to select one separate counsel to
            assert such legal defenses and to otherwise participate in the
            defense of such action on behalf of such Indemnified Party or
            Parties and the reasonable fees and expenses of such counsel shall
            be paid by the Indemnifying Party. No Indemnifying Party, in the
            defense of any such claim or litigation, shall, except with the
            consent of each Indemnified Party, consent to entry of any judgment
            or enter into any settlement which does not include as an
            unconditional term thereof the giving by the claimant or plaintiff
            to such Indemnified Party of a release from all liability in respect
            to such claim or litigation. Each Indemnified Party shall (A)
            furnish such information regarding itself or the claim in question
            as an Indemnifying Party may reasonably request in writing and as
            shall be reasonably required in connection with defense of such
            claim and litigation resulting therefrom and (B) shall use its best
            efforts to assist the Indemnifying Party in any such defense,
            provided that the Indemnified Party shall be entitled to be
            reimbursed by the Indemnifying Party for its out-of-pocket expenses
            paid in connection with such assistance.

                                     - 7 -
<PAGE>

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
      represents and warrants to Canvasback, as of the date hereof, the
      following:

      (A)   the Company is a corporation duly organized and validly existing
            under the laws of the State of Colorado, and has full power and
            authority to enter into, execute and perform this Agreement, which
            Agreement, once executed by the Company, shall be the valid and
            binding obligation of the Company, enforceable against it by any
            court of competent jurisdiction in accordance with its terms;

      (B)   the individuals signing this Agreement on behalf of the Company are
            the duly elected executive officers of the Company so indicated, and
            have full power and authority to enter into, execute, deliver and
            perform this Agreement for and on behalf of the Company;

      (C)   other than the Convertible Note Agreements, the Company is not bound
            by or subject to any contract, agreement, court order or judgment,
            administrative ruling, law, regulation or any other item which
            prohibits or restricts such party from entering into and performing
            this Agreement in accordance with its terms, or requiring the
            consent of any third party prior to the entry into or performance of
            this Agreement in accordance with its terms by the Company.

5.2   REPRESENTATIONS AND WARRANTIES OF CANVASBACK. Canvasback hereby represents
      and warrants to the Company, as of the date hereof, the following:

      (A)   Canvasback is a limited liability company duly organized and validly
            existing under the laws of the Anguilla, and has full power and
            authority to enter into, execute and perform this Agreement, which
            Agreement, once executed by Canvasback, shall be the valid and
            binding obligation of Canvasback, enforceable against it by any
            court of competent jurisdiction in accordance with its terms;

      (B)   the individuals signing this Agreement on behalf of Canvasback are
            the duly elected executive officers of Canvasback so indicated, and
            have full power and authority to enter into, execute, deliver and
            perform this Agreement for and on behalf of Canvasback;

      (C)   Canvasback is not bound by or subject to any contract, agreement,
            court order or judgment, administrative ruling, law, regulation or
            any other item which prohibits or restricts such party from entering
            into and performing this Agreement in accordance with its terms, or
            requiring the consent of any third party prior to the entry into or
            performance of this Agreement in accordance with its terms by
            Canvasback.

                                     - 8 -
<PAGE>

      (D)   with respect to the Unsecured Debt and the Conversion Shares
            (collectively, the "SECURITIES") being acquired (or which may be
            acquired) by Canvasback:

            (I)   Canvasback is and will be acquiring the Securities for its own
                  account, and not with a view toward the subdivision, resale,
                  distribution, or fractionalization thereof; Canvasback has no
                  contract, undertaking, or arrangement with any person to sell,
                  transfer, or otherwise dispose of the Securities (or any
                  portion thereof hereby subscribed for), and has no present
                  intention to enter into any such contract, undertaking,
                  agreement or arrangement;

            (II)  this subscription for Securities by Canvasback is not the
                  result of any form of general solicitation or general
                  advertising;

            (III) Canvasback hereby acknowledges that: (A) the offering of the
                  Securities was made only through direct, personal
                  communication between Canvasback and the Company; (B)
                  Canvasback has had full access to material concerning the
                  Company's planned business and operations, which material was
                  furnished or made available to Canvasback by officers or
                  representatives of the Company; (C) the Company has given
                  Canvasback the opportunity to ask any questions and obtain all
                  additional information desired in order to verify or
                  supplement the material so furnished; and (D) Canvasback
                  understands and acknowledges that a purchaser of the
                  Securities must be prepared to bear the economic risk of such
                  investment for an indefinite period because of: (I) the
                  heightened nature of the risks associated with an investment
                  in the Company due to its status as an early-stage company,
                  including without limitation the risk of loss of the entire
                  amount of their investment; and (II) illiquidity of the
                  Securities due to the fact that (1) the Securities have not
                  been registered under the 1933 Act or any state securities act
                  (nor passed upon by the SEC or any state securities
                  commission), and (2) the Securities may not be registered or
                  qualified by Canvasback under federal or state securities laws
                  solely in reliance upon an available exemption from such
                  registration or qualification, and hence such Securities
                  cannot be sold unless they are subsequently so registered or
                  qualified, or are otherwise subject to any applicable
                  exemption from such registration requirements; and (3)
                  substantial restrictions on transfer of the Securities, as set
                  forth by legend on the face or reverse side of every
                  certificate evidencing the ownership of the Securities;

                                     - 9 -
<PAGE>

      (E)   Canvasback is an "accredited investor" as such term is defined in
            Rule 501 of Regulation D promulgated by the Securities and Exchange
            Commission under the Act, or, if Canvasback is non-accredited, then
            he and/or she has sufficient business expertise and sophistication
            so as to be able to make a determination concerning the relative
            risks and merits of an investment in the securities, and has a
            pre-existing business or personal relationship with at least one of
            the shareholders, directors or executive officers of the Company;
            and

      (F)   Canvasback has been advised to consult with an attorney regarding
            all legal matters concerning the purchase and ownership of the
            Securities, and with a tax advisor regarding the tax consequences of
            purchasing such Securities.

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

6.1   NOTICES. All notices, requests, demands and other communications to be
      given hereunder shall be in writing and shall be deemed to have been duly
      given on the date of personal service or transmission by fax if such
      transmission is received during the normal business hours of the
      addressee, or on the first business day after sending the same by
      overnight courier service or by telegram, or on the third business day
      after mailing the same by first class mail, or on the day of receipt if
      sent by certified or registered mail, addressed as set forth below, or at
      such other address as any party may hereafter indicate by notice delivered
      as set forth in this Section 6.1:

        If to the Company:             Reclamation Consulting &
                                       Applications, Inc.
                                       940 Calle Amanecer, Suite E
                                       San Clemente, CA 92673
                                       Attn: Mr. Gordon W. Davies
                                             President

        With a copy (which shall
        not constitute notice) to:     August Law Group, P.C.
                                       19200 Von Karman, Suite 900
                                       Irvine, California  92614
                                       Attn: Kenneth S. August, Esquire
                                             President

        If to Canvasback:              Canvasback Company Limited
                                       Hannah Waiver House
                                       The Valley, Anguilla, British West Indies
                                       Attn: Ms. Bernadine Romney
                                             Authorized Signatory

                                     - 10 -
<PAGE>

        With a copy (which shall
        not constitute notice) to:     _____________________________
                                       _____________________________
                                       _____________________________
                                       Attn:    ____________________
                                                ____________________

6.2   BINDING AGREEMENT; ASSIGNMENT. This Agreement shall constitute the binding
      agreement of the parties hereto, enforceable against each of them in
      accordance with its terms. This Agreement shall inure to the benefit of
      each of the parties hereto, and their respective successors and permitted
      assigns; provided, however, that this Agreement may not be assigned
      (whether by contract or by operation of law) by Canvasback without the
      prior written consent of the Company, which consent may be given or
      withheld in the sole discretion of the Company, PROVIDED HOWEVER, that any
      such permitted assignee of this Agreement, the Convertible Notes, or the
      Conversion Shares executes an assignment agreement or such other document
      as the Company may reasonably request containing all the representations,
      warranties and covenants contained in this Agreement and certifying to the
      Company that such permitted assignee is an "Accredited Investor" as such
      term is defined in Rule 501 of Regulation D promulgated by the Securities
      and Exchange Commission under the Act,.

6.3   ENTIRE AGREEMENT. This Agreement constitutes the entire and final
      agreement and understanding between the parties with respect to the
      subject matter hereof and the transactions contemplated hereby, and
      supersedes any and all prior oral or written agreements, statements,
      representations, warranties or understandings between the parties, all of
      which are merged herein and superseded hereby.

6.4   WAIVER. No waiver of any provision of this Agreement shall be deemed to be
      or shall constitute a waiver of any other provision, whether or not
      similar, nor shall any waiver constitute a continuing waiver. No waiver
      shall be binding unless executed in writing by the party making the
      waiver.

6.5   HEADINGS. The headings provided herein are for convenience only and shall
      have no force or effect upon the construction or interpretation of any
      provision hereof.

6.6   COUNTERPARTS; FACSIMILES. This Agreement may be executed in one or more
      counterparts, each of which shall be deemed an original, but all of which
      together shall constitute one and the same instrument. Facsimiles
      containing original signatures shall be deemed for all purposes to be
      originally-signed copies of the documents which are the subject of such
      facsimiles.

6.7   FURTHER DOCUMENTS AND ACTS. Each party agrees to execute such other and
      further documents and to perform such other and further acts as may be
      reasonably necessary to carry out the purposes and provisions of this
      Agreement.

                                     - 11 -
<PAGE>

6.8   GOVERNING LAW; VENUE. This Agreement shall be governed by and construed in
      accordance with the internal laws of the State of California applicable to
      the performance and enforcement of contracts made within such state,
      without giving effect to the law of conflicts of laws applied thereby. In
      the event that any dispute shall occur between the parties arising out of
      or resulting from the construction, interpretation, enforcement or any
      other aspect of this Agreement, the parties hereby agree to accept the
      exclusive jurisdiction of the Courts of the State of California sitting in
      and for the County of Orange. In the event either party shall be forced to
      bring any legal action to protect or defend its rights hereunder, then the
      prevailing party in such proceeding shall be entitled to reimbursement
      from the non-prevailing party of all fees, costs and other expenses
      (including, without limitation, the reasonable expenses of its attorneys)
      in bringing or defending against such action.

6.9   SEVERABLE PROVISIONS. The provisions of this Agreement are severable, and
      if any one or more provisions is determined to be illegal, indefinite,
      invalid or otherwise unenforceable, in whole or in part, by any court of
      competent jurisdiction, then the remaining provisions of this Agreement
      and any partially unenforceable provisions to the extent enforceable in
      the pertinent jurisdiction, shall continue in full force and effect and
      shall be binding and enforceable on the parties.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

RECLAMATION CONSULTING
AND APPLICATIONS, INC.:                 ATTEST:

By: /s/ Gordon W. Davies                By: /s/ Michael C. Davies
    --------------------------              --------------------------
    Gordon W. Davies                        Michael C. Davies
    President                               Secretary

CANVASBACK COMPANY LIMITED:             ATTEST:

By: /s/ Bernadine Romney                By: /s/ John Benjamine
    --------------------------              --------------------------
Name:   Bernadine Romney                Name:   John Benjamine
        Authorized Signatory                    Authorized Signatory

                                     - 12 -
<PAGE>

                                   SCHEDULE A

                                       TO

                       CONVERTIBLE NOTE PURCHASE AGREEMENT

                             DATED OCTOBER 17, 2006

--------------------------------------------------------------------------------

                Date            Original Amount            Loan Balance

                06-Apr-06       $2,000                     $2,000
                10-Apr-06       $40,000                    $42,000
                10-May-06       $6,000                     $48,000
                14-May-06       $100,000                   $148,000
                01-Jun-06       $822,276                   $970,276
                06-Jun-06       $10,000                    $980,276
                07-Jun-06       $55,000                    $1,035,276
                08-Jun-06       $5,000                     $1,040,276
                09-Jun-06       $21,000                    $1,061,276
                13-Jun-06       $27,000                    $1,088,276
                14-Jun-06       $23,000                    $1,111,276
                21-Jun-06       $8,000                     $1,119,276
                22-Jun-06       $6,000                     $1,125,276
                23-Jun-06       $4,000                     $1,129,276
                26-Jun-06       $2,500                     $1,131,776
                27-Jun-06       $15,000                    $1,146,776
                28-Jun-06       $22,000                    $1,168,776
                29-Jun-06       $12,500                    $1,181,276
                01-Jul-06       $40,000                    $1,221,276
                03-Jul-06       $8,500                     $1,229,776
                05-Jul-06       $130,000                   $1,359,776
                17-Jul-06       $10,000                    $1,369,776
                19-Jul-06       $3,000                     $1,372,776
                20-Jul-06       $2,000                     $1,374,776
                25-Jul-06       $50,000                    $1,424,776
                26-Jul-06       $6,000                     $1,430,776
                27-Jul-06       $4,000                     $1,434,776
                28-Jul-06       $5,000                     $1,439,776
                31-Jul-06       $5,000                     $1,444,776
                01-Aug-06       $10,000                    $1,454,776
                04-Aug-06       $5,000                     $1,459,776
                11-Aug-06       $5,000                     $1,464,776
                14-Aug-06       $5,000                     $1,469,776
                16-Aug-06       $5,000                     $1,474,776

<PAGE>

                18-Aug-06       $1,500                     $1,476,276
                22-Aug-05       $5,000                     $1,481,276
                23-Aug-06       $15,000                    $1,496,276
                25-Aug-06       $2,000                     $1,498,276
                28-Aug-06       $2,000                     $1,500,276
                29-Aug-06       $15,000                    $1,515,276
                30-Aug-06       $78,000                    $1,593,276
                31-Aug-06       $3,000                     $1,596,276
                01-Sep-06       $3,500                     $1,599,776
                06-Sep-06       $10,000                    $1,609,776
                07-Sep-06       $30,000                    $1,639,776
                08-Sep-06       $41,000                    $1,680,776
                11-Sep-06       $100,000                   $1,780,776
                13-Sep-06       $10,000                    $1,790,776
                18-Sep-06       $44,000                    $1,834,776
                22-Sep-06       $12,000                    $1,846,776
                28-Sep-06       $20,000                    $1,866,776
                02-Oct-06       $20,000                    $1,886,776
                06-Oct-06       $25,000                    $1,911,776
                12-Oct-06       $2,000                     $1,913,776
                13-Oct-06       $55,000                    $1,968,776
                17-Oct-06       $35,000                    $2,003,776

                Accrued Interest as Of October 17, 2006    $75,291

                Loan Balance as of October 17, 2006        $2,079,067

<PAGE>

                                    EXHIBIT A

                                       TO

                       CONVERTIBLE NOTE PURCHASE AGREEMENT

                             DATED OCTOBER 17, 2006

                           CONVERTIBLE PROMISSORY NOTE

--------------------------------------------------------------------------------

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), NOR UNDER THE LAWS OF ANY STATE, AND MAY NOT BE RESOLD,
ASSIGNED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.

                           CONVERTIBLE PROMISSORY NOTE
                           ---------------------------

$2,079,067                                                      October 17, 2006

      FOR VALUE RECEIVED, RECLAMATION CONSULTING AND APPLICATIONS, INC., a
corporation organized and existing under the laws of the State of Colorado
(hereinafter referred to as the "BORROWER"), hereby promises to pay to the order
of CANVASBACK COMPANY LIMITED, an Anguilla company, (hereinafter referred to as
the "LENDER"), at his/her/its principal address located at Hannah Waiver House,
The Valley, Anguilla BWI, or such other place or places as the Lender may
hereafter direct from time to time, in lawful money of the United States and in
immediately available funds, the principal sum of Two Million, Seventy-Nine
Thousand, Sixty-Seven Dollars ($2,079,067). This Convertible Promissory Note
(hereinafter referred to as the "NOTE") shall accrue simple interest at the rate
of ten percent (10%) per annum, calculated on the basis of a 365-day year from
the date of this Note. The aggregate amount of all principal and accrued
interest shall be due and payable on the first (1st) anniversary of the date
hereof (hereinafter referred to as the "MATURITY DATE"). This Note shall be
unsecured by the Borrower or any other person, and non-recourse to any
shareholder, officer, director, employee, agent or representative of the
Borrower.

1.    PURCHASE AGREEMENT. This Note is issued pursuant to that certain Note
Purchase Agreement, dated as of October 17, 2006, by and between the Borrower
and the Lender (the "Purchase Agreement"), and is subject to the provisions
thereof. If any dispute arises between the terms of the Purchase Agreement and
the terms of this Note, the terms of the Purchase Agreement shall prevail.

                                      - 1 -
<PAGE>

2.    CONVERSION. If, during the Conversion Period, in the sole and exclusive
option of the Lender, the Lender should desire to convert the indebtedness
represented hereby, in whole or in part, into Conversion Shares in lieu of the
repayment obligation of such Borrower pursuant to this Note, then Lender shall
give notice to such effect prior to the Maturity Date. The number of Conversion
Shares to be issued upon such conversion shall be equal to the quotient obtained
by dividing (a) the aggregate amount of principal and accrued but unpaid
interest on this Note as of the date of conversion, by the Conversion Price. If
this Note, or any portion of indebtedness represented hereby, is converted into
Conversion Shares as provided herein, then the provisions of this Note relating
to the obligation of the Borrower to pay principal and interest to Lender, set
forth above, shall be null and void and no payment of principal and interest
shall be owed or paid by Borrower thereafter with respect to the amount of
indebtedness converted into Conversion Shares.

3.    PREPAYMENT. The Borrower shall have the right to prepay the principal
amount of this Note, in whole or in part, at any time and from time to time,
prior to the Maturity Date, without penalty, during the term of this Note,
provided that at the time of such prepayment, the Borrower shall also pay to
Lender all unpaid interest accrued on the principal amount of this Note through
the date of prepayment.

4.    NO VOTING RIGHTS. This Note shall not entitle Lender to any voting rights
or other rights as a stockholder of Borrower.

5.    TRANSFERS. This Note may be transferred only in compliance with the Note
Purchase Agreement and with applicable federal and state securities laws, and
only upon surrender of the original Note for registration of transfer, duly
endorsed, or accompanied by a duly executed written instrument of transfer in
form satisfactory to Borrower. Thereupon, a new promissory note for like
principal amount and interest will be issued to, and registered in the name of,
the transferee. Interest and principal are payable only to the registered holder
of this Note. Lender agrees to provide a form W-9 to Borrower on request.

6.    WAIVER. No waiver of any provision of this Note shall be deemed to be or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver. This Note shall inure
to the benefit of the Lender, his heirs, executors, successors and permitted
assigns, PROVIDED, however, that this Note shall not be assignable to any party
by contract or by operation of law without the prior written consent of the
Borrower. The obligations of the Borrower arising hereunder shall become the
obligations of any successor in interest or assignee thereof, whether by
contract or by operation of law.

7.    GOVERNING LAW; VENUE. This Note shall be governed by and construed in
accordance with the internal laws of the State of California applicable to the
performance and enforcement of contracts made within such state, without giving
effect to the law of conflicts of laws applied thereby. In the event that any
dispute shall occur between the parties arising out of or resulting from the
construction, interpretation, enforcement or any other aspect of this Note, the
parties hereby agree to accept the exclusive jurisdiction of the Courts of the
State of California sitting in and for the County of Orange. In the event either
party shall be forced to bring any legal action to protect or defend its rights
hereunder, then the prevailing party in such proceeding shall be entitled to
reimbursement from the non-prevailing party of all fees, costs and other
expenses (including, without limitation, the reasonable expenses of its
attorneys) in bringing or defending against such action.

                                      - 2 -
<PAGE>

THE BORROWER:

RECLAMATION CONSULTING                  ATTEST:
AND APPLICATIONS, INC.

By: /s/ Gordon W. Davies                By: /s/ Michael Davies
    --------------------------              --------------------------
    Gordon W. Davies                        Mr. Michael Davies
    President                               Secretary

                                      - 3 -

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