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EXHIBIT 4.1

     THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE
BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES
MAY BE SOLD PURSUANT TO RULE 144(K), OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

     SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M.
EASTERN TIME ON DECEMBER 14, 2011 (THE “EXPIRATION DATE”).

No. 1

ZILA, INC.

WARRANT TO PURCHASE 1,218,701 SHARES OF

COMMON STOCK, PAR VALUE $0.001 PER SHARE

     FOR VALUE RECEIVED, Roth Capital Partners, LLC (“Warrantholder”), is entitled to purchase,
subject to the provisions of this Warrant, from Zila, Inc., a Delaware corporation (“Company”), at
any time not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at an
exercise price per share equal to $2.21 (the exercise price in effect being herein called the
“Warrant Price”), 1,218,701 shares (“Warrant Shares”) of the Company’s Common Stock, par value
$0.001 per share (“Common Stock”). The number of Warrant Shares purchasable upon exercise of this
Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.
Terms not otherwise defined herein have the respective meanings ascribed to them in the Purchase
Agreement, dated November 13, 2006 (the “Purchase Agreement”), among the Company and the other
parties thereto.

     Section 1. Registration. The Company shall maintain books for the transfer and
registration of the Warrant. Upon the initial issuance of this Warrant, the Company shall issue
and register the Warrant in the name of the Warrantholder.

     Section 2. Transfers. As provided herein, this Warrant may be transferred only
pursuant to a registration statement filed under the Securities Act of 1933, as amended (the
“Securities Act”), or an exemption from such registration. Subject to such restrictions, the
Company shall transfer this Warrant from time to time upon the books to be maintained by the
Company for that purpose, upon surrender hereof for transfer, properly endorsed or accompanied by
appropriate instructions for transfer and such other documents as may be reasonably required by the
Company, including, if required by the Company, an opinion of its counsel to the effect that such
transfer is exempt from the registration requirements of the Securities Act, to establish that such
transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to
the transferee and the surrendered Warrant shall be canceled by the Company.

     Section 3. Exercise of Warrant. Subject to the provisions hereof, the Warrantholder
may exercise this Warrant, in whole or in part, at any time prior to its expiration upon surrender
of the Warrant, together with delivery of a duly executed Warrant exercise form, in the form
attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash, certified
check or wire transfer of funds (or, in certain circumstances, by
cashless exercise as provided below) of the aggregate Warrant Price for that number of Warrant
Shares then being purchased, to the Company during normal business hours on any business day at the
Company’s principal executive offices (or such other office or agency of the Company as it may
designate by notice to the Warrantholder). The Warrant Shares so purchased shall be deemed to be
issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been surrendered for exercise
(or the date evidence of loss, theft or destruction thereof and security or indemnity satisfactory
to the Company has been provided to the Company in connection with such exercise), the Warrant
Price

 

 

shall have been paid and the completed Exercise Agreement shall have been delivered.
Certificates for the Warrant Shares so purchased shall be delivered to the Warrantholder within a
reasonable time, not exceeding three (3) business days, after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as may be requested by the
Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall
be designated by the Warrantholder, as specified in the Exercise Agreement. If this Warrant shall
have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant
representing the right to purchase the number of shares with respect to which this Warrant shall
not then have been exercised. As used herein, “business day” means a day, other than a Saturday or
Sunday, on which banks in New York City are open for the general transaction of business. Each
exercise hereof shall constitute the re-affirmation by the Warrantholder that the representations
and warranties contained in Section 5 of the Purchase Agreement are true and correct in all
material respects with respect to the Warrantholder as of the time of such exercise.

     Section 4. Compliance with the Securities Act of 1933. Except as provided in the
Purchase Agreement, the Company may cause the legend set forth on the first page of this Warrant to
be set forth on each Warrant, and a similar legend on any security issued or issuable upon exercise
of this Warrant, unless counsel for the Company is of the opinion as to any such security that such
legend is unnecessary.

     Section 5. Payment of Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant;
provided, however, that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance or delivery of any certificates for
Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are
issued, and in such case, the Company shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same has paid to the Company the
amount of such tax or has established to the Company’s reasonable satisfaction that such tax has
been paid. The Warrantholder shall be responsible for income taxes due under federal, state or
other law, if any such tax is due.

     Section 6. Mutilated or Missing Warrants. In case this Warrant shall be mutilated,
lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon
surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of
Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant,
reasonable indemnity with respect thereto, if requested by the Company.

     Section 7. Reservation of Common Stock. The Company hereby represents and warrants
that there have been reserved, and the Company shall at all applicable times keep reserved until
issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares
of Common Stock, sufficient shares to provide for the exercise of the rights of purchase
represented by this Warrant. The Company agrees that all
Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of
the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock of the Company.

     Section 8. Adjustments. Subject and pursuant to the provisions of this Section 8, the
Warrant Price and number of Warrant Shares subject to this Warrant shall be subject to adjustment
from time to time as set forth hereinafter.

          (a) If the Company shall, at any time or from time to time while this Warrant is outstanding,
pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its
outstanding shares of Common Stock into a greater number of shares or combine its outstanding
shares of Common Stock into a smaller number of shares or issue by reclassification of its
outstanding shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the
continuing corporation), then (i) the Warrant Price in effect immediately prior to the date on
which such change shall become effective shall be adjusted by multiplying such Warrant Price by a
fraction, the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such change and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after giving effect to such change and (ii) the number of
Warrant Shares purchasable upon exercise of this Warrant shall be adjusted by multiplying the
number of Warrant Shares purchasable upon exercise of this Warrant immediately prior to the date

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on which such change shall become effective by a fraction, the numerator of which is shall be the
Warrant Price in effect immediately prior to the date on which such change shall become effective
and the denominator of which shall be the Warrant Price in effect immediately after giving effect
to such change, calculated in accordance with clause (i) above. Such adjustments shall be made
successively whenever any event listed above shall occur.

          (b) If any capital reorganization, reclassification of the capital stock of the Company,
consolidation or merger of the Company with another corporation in which the Company is not the
survivor, or sale, transfer or other disposition of all or substantially all of the Company’s
assets to another corporation shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions herein specified and in lieu of the
Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock,
securities or assets as would have been issuable or payable with respect to or in exchange for a
number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable
upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of each Warrantholder to the end that the
provisions hereof (including, without limitation, provision for adjustment of the Warrant Price)
shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company
shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior
to or simultaneously with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise
acquiring such assets or other appropriate corporation or entity shall assume the obligation to
deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of
the Company, such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Warrantholder may be entitled to purchase, and the other obligations under this
Warrant. The provisions of this paragraph (b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other dispositions.

          (c) In case the Company shall fix a payment date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 8(a)), or subscription rights or
warrants, the Warrant Price to be in effect after such payment date shall be determined by
multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the
numerator of which shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price (as defined below) per share of Common Stock immediately prior to such payment
date, less the fair market value (as determined by the Company’s Board of Directors in good faith)
of said assets or evidences of indebtedness so distributed, or of such subscription rights or
warrants, and the denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such Market Price per share of Common Stock immediately prior to such
payment date. “Market Price”, as of a particular date (the “Valuation Date”), shall mean the
following: (a) if the Common Stock is then listed on a national stock exchange, the closing sale
price of one share of Common Stock on such exchange on the last Trading Day prior to the Valuation
Date; (b) if the Common Stock is then quoted on the National Association of Securities Dealers,
Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar quotation system or association, the
closing sale price of one share of Common Stock on the Bulletin Board or such other quotation
system or association on the last Trading Day prior to the Valuation Date or, if no such closing
sale price is available, the average of the high bid and the low asked price quoted thereon on the
last trading day prior to the Valuation Date; (c) if such security is then included in the “pink
sheets,” the closing sale price of one share of Common Stock on the “pink sheets” on the last
Trading Day prior to the Valuation Date or, if no such closing sale price is available, the average
of the high bid and the low ask price quoted on the “pink sheets” as of the end of the last Trading
Day prior to the Valuation Date; or (d) if the Common Stock is not then listed on a national stock
exchange or quoted on the Bulletin Board, the “pink sheets” or such other quotation system or
association, the fair market value of one share of Common Stock as of the Valuation Date, as
determined in good faith by the Board of Directors of the Company and the Warrantholder. If the
Common Stock is not then listed on a national securities exchange or quoted on the Bulletin Board,
the “pink sheets” or other quotation system or association, the Board of Directors of the Company
shall respond promptly, in writing, to an inquiry by the Warrantholder prior to the exercise
hereunder as to the fair market value of a share of Common Stock as determined by the Board of
Directors of the Company. In the event that the Board of Directors of the Company and the
Warrantholder are unable to agree

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upon the fair market value in respect of subpart (d) of this
paragraph, the Company and the Warrantholder shall jointly select an appraiser, who is experienced
in such matters. The decision of such appraiser shall be final and conclusive, and the cost of
such appraiser shall be borne equally by the Company and the Warrantholder. Such adjustment shall
be made successively whenever such a payment date is fixed.

          (d) An adjustment to the Warrant Price shall become effective immediately after the payment
date in the case of each dividend or distribution and immediately after the effective date of each
other event which requires an adjustment.

          (e) In the event that, as a result of an adjustment made pursuant to this Section 8, the
Warrantholder shall become entitled to receive any shares of capital stock of the Company other
than shares of Common Stock, the number of such other shares so receivable upon exercise of this
Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in
this Warrant.

          (f) Except as provided in subsection (g) hereof, if and whenever the Company shall issue or
sell, or is, in accordance with any of subsections (f)(l) through (f)(7) hereof, deemed to have
issued or sold, any
Additional Shares of Common Stock (as defined below) for no consideration or for a
consideration per share less than the Warrant Price in effect immediately prior to the time of such
issuance or sale, then and in each such case (a “Trigger Issuance”) the then-existing
Warrant Price, shall be reduced, as of the close of business on the effective date of the Trigger
Issuance, to a price determined as follows:

          Adjusted Warrant Price = (A x B) + D

                                 
                        A+C

                    where

                    “A” equals the number of shares of Common Stock outstanding, including Additional Shares of
Common Stock (as defined below) deemed to be issued hereunder, immediately preceding such Trigger
Issuance;

                    “B” equals the Warrant Price in effect immediately preceding such Trigger Issuance;

                    “C” equals the number of Additional Shares of Common Stock issued or deemed issued hereunder
as a result of the Trigger Issuance; and

                    “D” equals the aggregate consideration, if any, received or deemed to be received by the
Company upon such Trigger Issuance;

provided, however, that in no event shall the Warrant Price after giving effect to such Trigger
Issuance be greater than the Warrant Price in effect prior to such Trigger Issuance.

     For purposes of this subsection (f), “Additional Shares of Common Stock” shall mean all shares
of Common Stock issued or sold by the Company or deemed to be issued or sold pursuant to this
subsection (f), other than Excluded Issuances (as defined in subsection (g) hereof).

     For purposes of this subsection (f), the following subsections (f)(l) to (f)(8) shall also be
applicable (subject, in each such case, to the provisions of Section 8(g) hereof):

               (f)(1) Issuance of Rights or Options. In case at any time the Company shall in any
manner grant (directly and not by assumption in a merger or otherwise) any warrants or other rights
to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or
security convertible into or exchangeable for Common Stock (such warrants, rights or options being
called “Options” and such convertible or exchangeable stock or securities being called “Convertible
Securities”) whether or not such Options or the right to

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convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common Stock is issuable
upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of
(x) the total amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus (y) the aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon
the issuance or sale of such Convertible Securities and upon the conversion or exchange thereof, by
(ii) the total maximum number of shares of Common Stock issuable upon the exercise of such Options
or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Warrant Price in effect immediately
prior to the time of the granting of such Options, then the total number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or exchange of the total amount
of such Convertible Securities issuable upon the exercise of such Options shall be deemed to have
been issued for such price per share as of the date of granting of such Options or the issuance of
such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of
adjusting the Warrant Price. Except as otherwise provided in subsection 8(f)(3), no adjustment of
the Warrant Price shall be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon exercise of such Options or upon the actual issuance of such Common
Stock upon conversion or exchange of such Convertible Securities.

               (f)(2) Issuance of Convertible Securities. In case the Company shall in any manner
issue (directly and not by assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount received or receivable by the Company as consideration for
the issuance or sale of such Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the
total number of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Warrant Price in effect immediately prior to the
time of such issuance or sale, then the total maximum number of shares of Common Stock issuable
upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued
for such price per share as of the date of the issuance or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the Warrant Price, provided
that (a) except as otherwise provided in subsection 8(f)(3), no adjustment of the Warrant Price
shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities and (b) no further adjustment of the Warrant Price shall be made by reason
of the issuance or sale of Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Warrant Price have been made pursuant to the
other provisions of subsection 8(f).

               (f)(3) Change in Option Price or Conversion Rate. Upon the happening of any of the
following events, namely, if the purchase price provided for in any Option referred to in
subsection 8(f)(l) hereof, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2), or the rate
at which Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2) are convertible into
or exchangeable for Common Stock shall change at any time (including, but not limited to, changes
under or by reason of provisions designed to protect against dilution), the Warrant Price in effect
at the time of such event shall forthwith be readjusted to the Warrant Price which would have been
in effect at such time had such Options or Convertible Securities still outstanding provided for
such changed purchase price, additional consideration or conversion rate, as the case may be, at
the time initially granted, issued or sold. On the termination of any Option for which any
adjustment was made pursuant to this subsection 8(f) or any right to convert or exchange
Convertible Securities for which any adjustment was made pursuant to this subsection 8(f)
(including without limitation upon the redemption or purchase for consideration of such Convertible
Securities by the Company), the Warrant Price then in effect hereunder shall forthwith be changed
to the Warrant Price which would have been in effect at the time of such termination had such
Option or Convertible Securities, to the extent outstanding immediately prior to such termination,
never been issued.

               (f)(4) Stock Dividends. Subject to the provisions of this Section 8(f), in case the
Company shall declare a dividend or make any other distribution upon any stock of the Company
(other than the Common Stock) payable in Common Stock, Options or Convertible Securities, then any
Common Stock, Options
or

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Convertible Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration; provided, that if
any adjustment is made to the Warrant Price as a result of a declaration of a dividend and such
dividend is rescinded, the Warrant Price shall be appropriately readjusted to the Warrant Price in
effect had such dividend not been declared.

               (f)(5) Consideration for Stock. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for cash, the consideration received therefor shall
be deemed to be the net amount received by the Company therefor, after deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock, Options or Convertible Securities shall
be issued or sold for a consideration other than cash, the amount of the consideration other than
cash received by the Company shall be deemed to be the fair value of such consideration as
determined in good faith by the Board of Directors of the Company, after deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any Options shall be issued in connection with the issuance and sale
of other securities of the Company, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as determined in good faith by the Board of
Directors of the Company. If Common Stock, Options or Convertible Securities shall be issued or
sold by the Company and, in connection therewith, other Options or Convertible Securities (the
“Additional Rights”) are issued, then the consideration received or deemed to be received by the
Company shall be reduced by the fair market value of the Additional Rights (as determined using the
Black-Scholes option pricing model or another method mutually agreed to by the Company and the
Warrantholder). The Board of Directors of the Company shall respond promptly, in writing, to an
inquiry by the Warrantholder as to the fair market value of the Additional Rights. In the event
that the Board of Directors of the Company and the Warrantholder are unable to agree upon the fair
market value of the Additional Rights, the Company and the Warrantholder shall jointly select an
appraiser, who is experienced in such matters. The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne evenly by the Company and the
Warrantholder.

               (f)(6) Record Date. In case the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Options or Convertible Securities or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the
date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.

               (f)(7) Treasury Shares. The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the Company or any of its
wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or
retirement thereof) shall be considered an issuance or sale of Common Stock for the purpose of this
subsection (f).

               (f)(8) Nasdaq Limitation. Notwithstanding any other provision in Section 8(f) to the
contrary, if a reduction in the Warrant Price pursuant to Section 8(f) (other than as set forth in
this clause (f)(8)) would require the Company to obtain stockholder approval of the transactions
contemplated by the Purchase Agreement to be consummated on the Closing Date pursuant to Nasdaq
Marketplace Rule 4350(i) and such stockholder approval has not been obtained, (i) the Warrant Price
shall be reduced to the maximum extent that would not require stockholder approval under such Rule,
and (ii) the Company shall use its commercially reasonable efforts to obtain such stockholder
approval as soon as reasonably practicable, including by calling a special meeting of
stockholders to vote on such Warrant Price adjustment. This provision shall not restrict the
number of shares of Common Stock which a Warrantholder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may receive in the event
of a transaction contemplated by Section 8 of this Warrant.

     (g) Anything herein to the contrary notwithstanding, the Company shall not be required to make
any adjustment of the Warrant Price in the case of the issuance of (A) capital stock, Options or
Convertible Securities issued to directors, officers, employees or consultants of the Company in
connection with their service as directors of the Company, their employment by the Company or their
retention as consultants by the Company

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pursuant to an equity compensation program approved by the
Board of Directors of the Company or the compensation committee of the Board of Directors of the
Company, (B) shares of Common Stock issued upon the conversion or exercise of Options or
Convertible Securities issued prior to the date hereof, provided such securities are not amended
after the date hereof to increase the number of shares of Common Stock issuable thereunder or to
lower the exercise or conversion price thereof, (C) securities issued pursuant to the Purchase
Agreement and securities issued upon the exercise or conversion of those securities, (D) shares of
Common Stock issued or issuable by reason of a dividend, stock split or other distribution on
shares of Common Stock (but only to the extent that such a dividend, split or distribution results
in an adjustment in the Warrant Price pursuant to the other provisions of this Warrant) and (E)
securities issued pursuant to the Purchase Agreement, dated as of November 13, 2006, and as that
agreement may be amended from time to time, by and among the Company and the certain investors
thereto, relating to the sale and issuance of 9,100,000 shares of Company’s Common Stock, warrants
to purchase 8,508,000 shares of the Company’s Common Stock and the issuance of $12,075,000 in
aggregate principal amount of the Company’s 12% Convertible Notes due May 2007 (collectively,
“Excluded Issuances”).

          (h) Upon any adjustment to the Warrant Price pursuant to Section 8(f) above, the number of
Warrant Shares purchasable hereunder shall be adjusted by multiplying such number by a fraction,
the numerator of which shall be the Warrant Price in effect immediately prior to such adjustment
and the denominator of which shall be the Warrant Price in effect immediately thereafter.

          (i) To the extent permitted by applicable law and the listing requirements of any stock market
or exchange on which the Common Stock is then listed, the Company from time to time may decrease
the Warrant Price by any amount for any period of time if the period is at least twenty (20) days,
the decrease is irrevocable during the period and the Board shall have made a determination that
such decrease would be in the best interests of the Company, which determination shall be
conclusive. Whenever the Warrant Price is decreased pursuant to the preceding sentence, the
Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to
the date the decreased Warrant Price takes effect, and such notice shall state the decreased
Warrant Price and the period during which it will be in effect.

     Section 9. Fractional Interest. The Company shall not be required to issue fractions
of Warrant Shares upon the exercise of this Warrant. If any fractional share of Common Stock
would, except for the provisions of the first sentence of this Section 9, be deliverable upon such
exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising
Warrantholder an amount in cash equal to the Market Price of such fractional share of Common Stock
on the date of exercise.

     Section 10. Extension of Expiration Date. If the Company fails to cause any
Registration Statement covering Registrable Securities (unless otherwise defined herein,
capitalized terms are as defined in the Registration Rights Agreement relating to the Warrant
Shares (the “Registration Rights Agreement”)) to be
declared effective prior to the applicable dates set forth therein, or if any of the events
specified in Section 2(c)(ii) of the Registration Rights Agreement occurs, and the Blackout Period
(whether alone, or in combination with any other Blackout Period) continues for more than 60 days
in any 12 month period, or for more than a total of 90 days, then the Expiration Date of this
Warrant shall be extended one day for each day beyond the 60-day or 90-day limits, as the case may
be, that the Blackout Period continues.

     Section 11. Benefits. Nothing in this Warrant shall be construed to give any person,
firm or corporation (other than the Company and the Warrantholder) any legal or equitable right,
remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of
the Company and the Warrantholder.

     Section 12. Notices to Warrantholder. Upon the happening of any event requiring an
adjustment of the Warrant Price, the Company shall promptly give written notice thereof to the
Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant
Price and the adjusted number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such calculation is based.
Failure to give such notice to the Warrantholder or any defect therein shall not affect the
legality or validity of the subject adjustment.

     Section 13. Identity of Transfer Agent. The Transfer Agent for the Common Stock is
Computershare Trust Company. Upon the appointment of any subsequent transfer agent for the Common
Stock or other shares of

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the Company’s capital stock issuable upon the exercise of the rights of
purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting
forth the name and address of such transfer agent.

     Section 14. Notices. Unless otherwise provided, any notice required or permitted
under this Warrant shall be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed given upon such
delivery, (ii) if given by telex or facsimile, then such notice shall be deemed given upon receipt
of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed
given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one business day after
delivery to such carrier. All notices shall be addressed as follows: if to the Warrantholder, at
its address as set forth in the Company’s books and records and, if to the Company, at the address
as follows, or at such other address as the Warrantholder or the Company may designate by ten days’
advance written notice to the other:

If to the Company:

Zila, Inc.

5227 North 7th Street

Phoenix, Arizona 85014-2800

Attention: Gary V. Klinefelter, Esq.

Fax: (602) 230-8418

     Section 15. Registration Rights. The initial Warrantholder is entitled to the benefit
of certain registration rights with respect to the shares of Common Stock issuable upon the
exercise of this Warrant as provided in the Registration Rights Agreement, and any subsequent
Warrantholder may be entitled to such rights.

     Section 16. Successors. All the covenants and provisions hereof by or for the benefit
of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns
hereunder.

     Section 17. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Warrant shall be governed by, and construed in accordance with, the internal laws of the State of
New York, without reference to the choice of law provisions thereof. The Company and, by accepting
this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States District Court for
the Southern District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Warrant and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of notices under this
Warrant. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of
venue in such court. The Company and, by accepting this Warrant, the Warrantholder, each
irrevocably waives any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY
ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY
AS TO THIS WAIVER.

     Section 18. Mandatory Exercise. Notwithstanding any other provision contained in this
Warrant to the contrary, in the event that the closing price per share of Common Stock equals or
exceeds $5.00 appropriately adjusted for any stock split, reverse stock split, stock dividend or
other reclassification or combination of the Common Stock occurring after the date hereof) for
twenty (20) consecutive trading days commencing after the Registration Statement (as defined in the
Registration Rights Agreement) with respect to the shares of Common Stock issuable upon the
exercise of this Warrant has been declared effective, the Company, upon thirty (30) days prior
written notice (the “Notice Period”) given to the Warrantholder within one business day
immediately following the end of such twenty (20) trading day period, may demand that the
Warrantholder exercise its cash exercise rights hereunder, and the Warrantholder must exercise its
rights hereunder prior to the end of the Notice Period; provided that (i) the Company
simultaneously gives a similar notice to all holders of Company Warrants (as defined below),

8

 

(ii)
all of the shares of Common Stock issuable hereunder either (A) are registered pursuant to an
effective Registration Statement (as defined in the Registration Rights Agreement) which has not
been suspended and for which no stop order is in effect, and pursuant to which the Warrantholder is
able to sell such shares of Common Stock at all times during the Notice Period or (B) no longer
constitute Registrable Securities (as defined in the Registration Rights Agreement) and (iii) this
Warrant is fully exercisable for the full amount of Warrant Shares covered hereby. If such
exercise is not made or if only a partial exercise is made, any and all rights to further exercise
the Warrant shall cease upon the expiration of the Notice Period. Notwithstanding any such notice
by the Company, the Warrantholder shall have the right to exercise this Warrant prior to the end of
the Notice Period.

     Section 19. Cashless Exercise. Notwithstanding any other provision contained herein
to the contrary, from and after the first anniversary of the Closing Date (as defined in the
Purchase Agreement) and so long as the Company is required under the Registration Rights Agreement
to have effected the registration of the Warrant Shares for resale to the public pursuant to a
Registration Statement (as such term is defined in the Registration Rights Agreement), if the
Warrant Shares may not be freely sold to the public as a result of the Company’s failure to perform
or satisfy its obligations under the Registration Rights Agreement, the Warrantholder may elect to
receive, without the payment by the Warrantholder of the aggregate Warrant Price in respect of the
shares of Common Stock to be acquired, shares of Common Stock of equal value to the value of this
Warrant, or any specified portion hereof, by the surrender of this Warrant (or such portion of this
Warrant being
so exercised) together with a Net Issue Election Notice, in the form annexed hereto as
Appendix B, duly executed, to the Company. Thereupon, the Company shall issue to the Warrantholder
such number of fully paid, validly issued and nonassessable shares of Common Stock as is computed
using the following formula:

X = Y (A - B)

A

where

X = the number of shares of Common Stock to which the Warrantholder is entitled upon such
cashless exercise;

Y = the total number of shares of Common Stock covered by this Warrant for which the
Warrantholder has surrendered purchase

rights at such time for cashless exercise (including both
shares to be issued to the Warrantholder and shares as to which the purchase rights are to be
canceled as payment therefor);

A = the “Market Price” of one share of Common Stock as at the date the net issue election is
made; and

B = the Warrant Price in effect under this Warrant at the time the net issue election is made.

     Section 20. Limitations on Exercise. Notwithstanding anything to the contrary
contained herein, the number of Warrant Shares that may be acquired by the Warrantholder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary
to insure that, following such exercise (or other issuance), the total number of shares of Common
Stock then beneficially owned by such Warrantholder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Warrantholder’s for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not
exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. This provision shall not restrict the number of shares of
Common Stock which a Holder may receive or beneficially own in order to determine the amount of
securities or other consideration that such Holder may receive in the event of a transaction
contemplated by Section 8 of this Warrant. This restriction may not be waived.

     Section 21. No Rights as Stockholder. Prior to the exercise of this Warrant, the
Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of
its ownership of this Warrant.

9

 

     Section 22. Amendment; Waiver. Any term of this Warrant may only be amended or waived
(including the adjustment provisions included in Section 8 of this Warrant) upon the written
consent of the Company and the Warrantholder.

     Section 23. Section Headings. The section headings in this Warrant are for the
convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or
restrict the provisions hereof.

10

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of the 20th
day of February, 2007.

	 	 	 	 	 	 	 
	 	 	ZILA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 /s/ Gary V. Klinefelter
 

 Gary V. Klinefelter
	 	 
	 

	 	Title:
	 Vice President and Secretary	 	 

[Signature Page to Roth Capital Partners, LLC Warrant]

11

 

APPENDIX A

ZILA, INC.

WARRANT EXERCISE FORM

To Zila, Inc.:

     The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and
surrender of the Warrant,
                                         shares of Common Stock (“Warrant Shares”) provided for
therein, and requests that certificates for the Warrant Shares be issued as follows:

                                                                                                    

Name

                                                                                                    

Address

                                                                                                    

Federal Tax ID or Social Security No.

     and delivered by

          ___
(certified mail to the above address, or

          ___
(electronically (provide DWAC Instructions:                                        ), or

          ___
(other (specify):
                                                                                       ).

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise
of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise
of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s
Assignee as below indicated and delivered to the address stated below.

Note: The signature must correspond with the name of the Warrantholder as written on the first
page of the Warrant in every particular, without alteration or enlargement or any change whatever,
unless the Warrant has been assigned.

	 	 	 	 	 	 	 
	Dated:                                         , ___

	 	Signature: 	 	 	 	 
	 

	 	 	  	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Name (please print)	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Address	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Federal Identification or	 	 
	 	 	Social Security No.	 	 

A-1

 

	 	 	 	 	 
	 

	 	Assignee:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

A-2

 

APPENDIX B

ZILA, INC.

NET ISSUE ELECTION NOTICE

To: Zila, Inc.

Date:[                                                                                ]

     The undersigned hereby elects under Section 19 of this Warrant to surrender the right
to purchase [                                        ] shares of Common Stock pursuant to this Warrant and hereby requests the
issuance of [                                        ] shares of Common Stock. The certificate(s) for the shares issuable
upon such net issue election shall be issued in the name of the undersigned or as otherwise
indicated below.

	 	 	 
	 
	 

Signature

	 	 
	 
	 
	 	 
	 

Name for Registration

	 	 
	 
	 	 
	 
	 

Mailing Address

	 	 

B-1Exhibit 10.1

    Exhibit
      10.1

     

    EXECUTION
      VERSION

     

    CREDIT
      AGREEMENT

     

    dated
      as
      of

     

    February
      16, 2007

     

    among

     

    KRISPY
      KREME DOUGHNUT CORPORATION

     

    KRISPY
      KREME DOUGHNUTS, INC.

     

    The
      SUBSIDIARY GUARANTORS Party Hereto

     

    The
      LENDERS Party Hereto

     

    CREDIT
      SUISSE, CAYMAN ISLANDS BRANCH,

     

    as
      Administrative Agent, Collateral Agent, Issuing Lender and Swingline
      Lender

     

    

     

    Arranged
      by

     

    CREDIT
      SUISSE SECURITIES (USA) LLC,

     

    as
      Sole
      Bookrunner and Sole Lead Arranger

     

    

    WELLS
      FARGO FOOTHILL, INC. and WACHOVIA BANK, NATIONAL ASSOCIATION 

    as
      Co-Syndication Agents

    

    and

    

    CAROLINA
      FIRST BANK,
      

    as
      Documentation Agent

    

    ______________

     

    $160,000,000

     

    ______________

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF
      CONTENTS

    

    
      	 	 	 	 	
              Page

            

    

    

    
      	
              ARTICLE
                I DEFINITIONS

            	
              1

            

    

    

    
      	 	
              SECTION
                1.01.

            	
              Defined
                Terms

            	
              1

            
	 	
              SECTION
                1.02.

            	
              Terms
                Generally

            	
              27

            
	 	
              SECTION
                1.03.

            	
              Accounting
                Terms; GAAP; Historical Financial Calculations

            	
              27

            
	 	
              SECTION
                1.04.

            	
              Classification
                of Loans and Borrowings

            	
              27

            

    

    

    
      	
              ARTICLE
                II THE CREDITS

            	
              28

            

    

    

    
      	 	
              SECTION
                2.01.

            	
              The
                Commitments.

            	
              28

            
	 	
              SECTION
                2.02.

            	
              Loans
                and Borrowings.

            	
              30

            
	 	
              SECTION
                2.03.

            	
              Requests
                for Syndicated Borrowings.

            	
              31

            
	 	
              SECTION
                2.04.

            	
              Swingline
                Loans.

            	
              31

            
	 	
              SECTION
                2.05.

            	
              Letters
                of Credit.

            	
              33

            
	 	
              SECTION
                2.06.

            	
              Funding
                of Borrowings.

            	
              37

            
	 	
              SECTION
                2.07.

            	
              Interest
                Elections.

            	
              38

            
	 	
              SECTION
                2.08.

            	
              Termination,
                Reduction and Increase of the Commitments.

            	
              39

            
	 	
              SECTION
                2.09.

            	
              Repayment
                of Loans; Evidence of Debt.

            	
              43

            
	 	
              SECTION
                2.10.

            	
              Prepayment
                of Loans.

            	
              45

            
	 	
              SECTION
                2.11.

            	
              Fees.

            	
              48

            
	 	
              SECTION
                2.12.

            	
              Interest.

            	
              49

            
	 	
              SECTION
                2.13.

            	
              Alternate
                Rate of Interest

            	
              50

            
	 	
              SECTION
                2.14.

            	
              Increased
                Costs.

            	
              51

            
	 	
              SECTION
                2.15.

            	
              Break
                Funding Payments

            	
              52

            
	 	
              SECTION
                2.16.

            	
              Taxes.

            	
              52

            
	 	
              SECTION
                2.17.

            	
              Payments
                Generally; Pro Rata Treatment; Sharing of Set-offs.

            	
              54

            
	 	
              SECTION
                2.18.

            	
              Mitigation
                Obligations; Replacement of Lenders.

            	
              56

            

    

    

    
      	
              ARTICLE
                III GUARANTEE

            	
              57

            

    

    

    
      	 	
              SECTION
                3.01.

            	
              The
                Guarantee

            	
              57

            
	 	
              SECTION
                3.02.

            	
              Obligations
                Unconditional

            	
              58

            
	 	
              SECTION
                3.03.

            	
              Reinstatement

            	
              59

            
	 	
              SECTION
                3.04.

            	
              Subrogation

            	
              59

            
	 	
              SECTION
                3.05.

            	
              Remedies

            	
              59

            
	 	
              SECTION
                3.06.

            	
              Instrument
                for the Payment of Money

            	
              60

            
	 	
              SECTION
                3.07.

            	
              Continuing
                Guarantee

            	
              60

            
	 	
              SECTION
                3.08.

            	
              Rights
                of Contribution

            	
              60

            
	 	
              SECTION
                3.09.

            	
              General
                Limitation on Guarantee Obligations

            	
              61

            
	 	
              SECTION
                3.10.

            	
              No
                Reliance

            	
              61

            
	 	
              SECTION
                3.11.

            	
              Release
                of Subsidiary Guarantors

            	
              61

            

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
              ARTICLE
                IV REPRESENTATIONS AND WARRANTIES

            	
              62

            

    

    

    
      	 	
              SECTION
                4.01.

            	
              Organization;
                Powers

            	
              62

            
	 	
              SECTION
                4.02.

            	
              Authorization;
                Enforceability

            	
              62

            
	 	
              SECTION
                4.03.

            	
              Governmental
                Approvals; No Conflicts

            	
              62

            
	 	
              SECTION
                4.04.

            	
              Financial
                Condition; No Material Adverse Change.

            	
              62

            
	 	
              SECTION
                4.05.

            	
              Properties.

            	
              63

            
	 	
              SECTION
                4.06.

            	
              Litigation.

            	
              63

            
	 	
              SECTION
                4.07.

            	
              Environmental
                Matters.

            	
              63

            
	 	
              SECTION
                4.08.

            	
              Compliance
                with Laws and Agreements

            	
              64

            
	 	
              SECTION
                4.09.

            	
              Investment
                Company Status

            	
              64

            
	 	
              SECTION
                4.10.

            	
              Taxes

            	
              64

            
	 	
              SECTION
                4.11.

            	
              ERISA

            	
              65

            
	 	
              SECTION
                4.12.

            	
              Disclosure

            	
              65

            
	 	
              SECTION
                4.13.

            	
              Use
                of Credit

            	
              65

            
	 	
              SECTION
                4.14.

            	
              Material
                Agreements and Liens.

            	
              65

            
	 	
              SECTION
                4.15.

            	
              Inactive
                Companies

            	
              66

            
	 	
              SECTION
                4.16.

            	
              Subsidiaries
                and Investments.

            	
              66

            
	 	
              SECTION
                4.17.

            	
              Real
                Property

            	
              67

            
	 	
              SECTION
                4.18.

            	
              Solvency

            	
              67

            
	 	
              SECTION
                4.19.

            	
              Labor
                Matters

            	
              68

            

    

    

    
      	
              ARTICLE
                V CONDITIONS

            	
              68

            

    

    

    
      	 	
              SECTION
                5.01.

            	
              Effective
                Date

            	
              68

            
	 	
              SECTION
                5.02.

            	
              Each
                Credit Event

            	
              71

            

    

    

    
      	
              ARTICLE
                VI AFFIRMATIVE COVENANTS

            	
              72

            

    

    

    
      	 	
              SECTION
                6.01.

            	
              Financial
                Statements and Other Information

            	
              72

            
	 	
              SECTION
                6.02.

            	
              Notices
                of Material Events

            	
              74

            
	 	
              SECTION
                6.03.

            	
              Existence;
                Conduct of Business

            	
              75

            
	 	
              SECTION
                6.04.

            	
              Payment
                of Obligations

            	
              75

            
	 	
              SECTION
                6.05.

            	
              Maintenance
                of Properties; Insurance.

            	
              75

            
	 	
              SECTION
                6.06.

            	
              Books
                and Records; Inspection Rights

            	
              76

            
	 	
              SECTION
                6.07.

            	
              Compliance
                with Laws.

            	
              76

            
	 	
              SECTION
                6.08.

            	
              Use
                of Proceeds and Letters of Credit

            	
              77

            
	 	
              SECTION
                6.09.

            	
              Hedging
                Agreements

            	
              78

            
	 	
              SECTION
                6.10.

            	
              Certain
                Obligations Respecting Subsidiaries; Further Assurances.

            	
              78

            
	 	
              SECTION
                6.11.

            	
              Ownership
                of the Borrower

            	
              79

            
	 	
              SECTION
                6.12.

            	
              Ratings

            	
              79

            
	 	
              SECTION
                6.13.

            	
              Separateness

            	
              80

            
	 	
              SECTION
                6.14.

            	
              Post-Closing
                Actions and Other Matters Regarding Real Property.

            	
              80

            

    

    

    
      	
              ARTICLE
                VII NEGATIVE COVENANTS

            	
              81

            

    

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    
 

    
      	 	
              SECTION
                7.01.

            	
              Indebtedness

            	
              81

            
	 	
              SECTION
                7.02.

            	
              Liens

            	
              82

            
	 	
              SECTION
                7.03.

            	
              Fundamental
                Changes

            	
              83

            
	 	
              SECTION
                7.04.

            	
              Lines
                of Business

            	
              85

            
	 	
              SECTION
                7.05.

            	
              Investments

            	
              85

            
	 	
              SECTION
                7.06.

            	
              Restricted
                Payments

            	
              87

            
	 	
              SECTION
                7.07.

            	
              Transactions
                with Affiliates

            	
              87

            
	 	
              SECTION
                7.08.

            	
              Restrictive
                Agreements

            	
              87

            
	 	
              SECTION
                7.09.

            	
              Certain
                Financial Covenants.

            	
              89

            
	 	
              SECTION
                7.10.

            	
              Sale-Leasebacks;
                Synthetic Leases

            	
              91

            
	 	
              SECTION
                7.11.

            	
              Parent
                Guarantor as Holding Company

            	
              91

            
	 	
              SECTION
                7.12.

            	
              Limitations
                on Voluntary Prepayments of Certain Other Indebtedness

            	
              91

            
	 	
              SECTION
                7.13.

            	
              Modifications
                of Certain Documents

            	
              91

            
	 	
              SECTION
                7.14.

            	
              Change
                in Fiscal Year; Accounting Policies; Capital Stock

            	
              92

            

    

    

    
      	
              ARTICLE
                VIII EVENTS OF DEFAULT

            	
              92

            

    

    

    
      	
              ARTICLE
                IX THE ADMINISTRATIVE AGENT, COLLATERAL AGENT, LENDERS AND
                ARRANGER

            	
              95

            

    

    

    
      	
              ARTICLE
                X MISCELLANEOUS

            	
              97

            

    

    

    
      	 	
              SECTION
                10.01.

            	
              Notices;
                Electronic Communications.

            	
              97

            
	 	
              SECTION
                10.02.

            	
              Waivers;
                Amendments.

            	
              98

            
	 	
              SECTION
                10.03.

            	
              Expenses;
                Indemnity; Damage Waiver.

            	
              100

            
	 	
              SECTION
                10.04.

            	
              Successors
                and Assigns.

            	
              102

            
	 	
              SECTION
                10.05.

            	
              Survival

            	
              104

            
	 	
              SECTION
                10.06.

            	
              Counterparts;
                Integration; Effectiveness

            	
              105

            
	 	
              SECTION
                10.07.

            	
              Severability

            	
              105

            
	 	
              SECTION
                10.08.

            	
              Right
                of Setoff

            	
              105

            
	 	
              SECTION
                10.09.

            	
              Governing
                Law; Jurisdiction; Etc.

            	
              106

            
	 	
              SECTION
                10.10.

            	
              WAIVER
                OF JURY TRIAL

            	
              106

            
	 	
              SECTION
                10.11.

            	
              Headings

            	
              107

            
	 	
              SECTION
                10.12.

            	
              Treatment
                of Certain Information; Confidentiality.

            	
              107

            
	 	
              SECTION
                10.13.

            	
              USA
                PATRIOT Act

            	
              108

            

    

    

    

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

    
      	
               

              SCHEDULE
                I

            	
               

              -

            	
               

              Existing
                Letters of Credit

            
	
              SCHEDULE
                II 

            	
              -

            	
              Commitments

            
	
              SCHEDULE
                III 

            	
              -

            	
              Material
                Agreements and Liens

            
	
              SCHEDULE
                IV 

            	
              -

            	
              Restrictive
                Agreements

            
	
              SCHEDULE
                V 

            	
              -

            	
              Litigation

            
	
              SCHEDULE
                VI 

            	
              -

            	
              Environmental
                Matters

            
	
              SCHEDULE
                VII 

            	
              -

            	
              Subsidiaries
                and Investments

            
	
              SCHEDULE
                VIII 

            	
              -

            	
              Real
                Property

            
	
              SCHEDULE
                IX

            	
              -

            	
              Labor
                Matters

            
	
              SCHEDULE
                X

            	
              -

            	
              Specified
                Contingent Obligations

            
	
              SCHEDULE
                XI

            	
              -

            	
              Transactions
                with Affiliates

            
	
              SCHEDULE
                XII

            	
              -

            	
              Certain
                Real Property 

            
	
              SCHEDULE
                XIII

            	
              -

            	
              Title
                Matters

            

    

    

    
      	
              EXHIBIT
                A

            	
              -

            	
              Form
                of Assignment and Acceptance

            
	
              EXHIBIT
                B

            	
              -

            	
              Form
                of Security Agreement

            
	
              EXHIBIT
                C

            	
              -

            	
              Form
                of Guarantee Assumption Agreement

            
	
              EXHIBIT
                D

            	
              -

            	
              Form
                of Request for Loan

            
	
              EXHIBIT
                E

            	
              -

            	
              Form
                of Interest Election Request

            
	
              EXHIBIT
                F

            	
              -

            	
              Form
                of Revolving Credit Note

            
	
              EXHIBIT
                G

            	
              -

            	
              Form
                of Term Note

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CREDIT
      AGREEMENT (this “Agreement”)
      dated
      as of February 16, 2007, among KRISPY KREME DOUGHNUT CORPORATION, a North
      Carolina corporation (the “Borrower”),
      KRISPY
      KREME DOUGHNUTS, INC., a North Carolina corporation (the “Parent
      Guarantor”),
      the
      SUBSIDIARY GUARANTORS (as defined below), the LENDERS (as defined below) and
      CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent, Collateral Agent,
      Issuing Lender and Swingline Lender.

     

    Each
      of
      the Parent Guarantor and the Borrower has requested that the Lenders extend
      credit to the Borrower, under the guarantee of the Guarantors (as defined
      below), in an aggregate principal or face amount not exceeding $160,000,000
      (which may, in circumstances herein provided, be increased to $185,000,000),
      to
      refinance certain indebtedness, to finance the operations of the Borrower and
      the Guarantors and for other purposes. The Lenders are prepared to extend such
      credit upon the terms and conditions hereof, and, accordingly, the parties
      hereto agree as follows:

     

     

    ARTICLE
      I

     

    DEFINITIONS

     

    SECTION
      1.01.  Defined
      Terms.
      As used
      in this Agreement, the following terms have the meanings specified
      below:

     

    “ABR”,
      when
      used in reference to any Loan or Borrowing, means that such Loan, or the Loans
      constituting such Borrowing, are bearing interest at a rate determined by
      reference to the Alternate Base Rate.

     

    “Adjusted
      LIBO Rate”
means,
      for the Interest Period for any Eurodollar Borrowing, an interest rate per
      annum
      equal to (a) the LIBO Rate for such Interest Period multiplied
      by
      (b) the Statutory Reserve Rate for such Interest Period.

     

    “Administrative
      Agent”
means
      CS, in its capacity as administrative agent for the Lenders
      hereunder.

     

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

     

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

     

    “Agents”
means
      the Administrative Agent and the Collateral Agent.

     

    “Agreement”
has
      the
      meaning set forth in the recitals of parties hereof.

     

    “Alternate
      Base Rate” or "ABR"
      means,
      for any day, a rate per annum equal to the greater of (a) the Prime Rate in
      effect on such day and (b) the Federal Funds Effective Rate for such day
plus
      1/2 of
      1%. Any change in the Alternate Base Rate due to a change in the Prime

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Rate
      or
      the Federal Funds Effective Rate shall be effective from and including the
      effective date of such change in the Prime Rate or the Federal Funds Effective
      Rate, as the case may be.

     

    “Applicable
      Commitment Fee Rate”
means
      0.50% per annum, provided
      that if
      the Consolidated Leverage Ratio on the last day of any Test Period ending on
      or
      after July 29, 2007 is less than 2.50 to 1.0, then the Applicable Commitment
      Fee
      Rate shall be 0.375% per annum. For purposes of the foregoing, (i) the
      Consolidated Leverage Ratio shall be determined as of the end of each Test
      Period based upon the Parent Guarantor's consolidated financial statements
      delivered pursuant to Section 6.01(a) or (b) and (ii) each change
      in the Applicable Commitment Fee Rate resulting from a change in the
      Consolidated Leverage Ratio shall be effective during the period commencing
      on
      and including the date three Business Days after delivery to the Administrative
      Agent of such consolidated financial statements indicating such change and
      ending on the date immediately preceding the effective date of the next such
      change; provided that the Applicable Commitment Fee Rate shall be 0.50% per
      annum (A) at any time that an Event of Default has occurred and is
      continuing or (B) if the Parent Guarantor fails to deliver the consolidated
      financial statements required to be delivered by it pursuant to
      Section 6.01(a) or (b), during the period from the expiration of the
      time for delivery thereof until such consolidated financial statements are
      delivered.

     

    “Applicable
      Margin”
means:
      (a) with respect to any ABR Loan, 2.00% per annum; and (b) with
      respect to any Eurodollar Loan, 3.00% per annum; provided
      that if,
      prior to the date falling six months after the date hereof, the Borrower obtains
      both a corporate rating from S&P and a corporate family rating from Moody’s
      (such corporate and corporate family ratings being referred to herein as
“Corporate Ratings”), as well as ratings for the Term Loans and the Revolving
      Credit Loans from both of S&P and Moody’s, then (subject to the following
      sentence) the Applicable Margin for ABR Loans and for Eurodollar Loans shall
      be
      the applicable rate per annum set forth below from and after the date the
      Borrower furnishes written evidence of such Corporate Ratings and such ratings
      for the Term Loans and the Revolving Credit Loans:

     

    
      	
              Level

               

            	
              Moody’s
                and S&P Corporate Ratings

               

            	
              Eurodollar
                Loan

               

            	
              ABR
                Loan

               

            
	
              I

               

            	
              B1
                or higher and B+ or higher (with a stable outlook for each)

               

            	
              2.25%

               

            	
              1.25%

               

            
	
              II

               

            	
              If
                Level I does not apply, B2 or higher and B or higher (with a stable
                outlook for each)

               

            	
              2.50%

               

            	
              1.50%

               

            
	
              III

               

            	
              If
                Level I or Level II does not apply

               

            	
              2.75%

               

            	
              1.75%

               

            

    

    

     

    The
      Applicable Margin for the Incremental Loans of any Series shall be determined
      at
      the time such Series of Loans is established pursuant to Section 2.01(c);
      and (a) if the Applicable Margin for Incremental Facility Term Loans of any
      Series would otherwise be more than 25 basis points higher than the Applicable
      Margin for Term Loans, then the Applicable Margin for Term Loans 

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    shall
      be
      automatically increased to a rate per annum equal to 25 basis points less than
      the Applicable Margin for such Series of Incremental Facility Term Loans from
      and after the earlier of the initial date of borrowing of such Incremental
      Facility Term Loans or the date that the related Incremental Facility Term
      Loan
      Commitments are established and (b) if the Applicable Margin for Incremental
      Revolving Credit Loans of any Series would otherwise be more than 25 basis
      points higher than the Applicable Margin for Revolving Credit Loans, then the
      Applicable Margin for Revolving Credit Loans shall be automatically increased
      to
      a rate per annum equal to 25 basis points less than the Applicable Margin for
      such Series of Incremental Facility Revolving Credit Loans from and after the
      date that the related Incremental Facility Revolving Credit Commitments are
      established. If the Corporate Ratings from S&P and Moody's are two or more
      notches apart then, for purposes of the table above, the lower of such Corporate
      Ratings shall be deemed to be one notch higher than the Corporate Rating so
      assigned.

     

    “Applicable
      Percentage”
means
      (a) with respect to any Revolving Credit Lender for purposes of
      Sections 2.04 or 2.05 or in respect of any indemnity claim under
      Section 10.03(c) arising out of an action or omission of the Swingline
      Lender or any Issuing Lender under this Agreement, the percentage of the total
      Revolving Credit Commitments represented by such Revolving Credit Lender’s
      Revolving Credit Commitment, and (b) with respect to any Lender in respect
      of any indemnity claim under Section 10.03(c) arising out of an action or
      omission of the Administrative Agent under this Agreement, the percentage of
      the
      total (without duplication) unused Commitments, Loans and LC Exposure
      represented by the aggregate amount (without duplication) of such Lender’s
      unused Commitments, Loans and LC Exposure. If the Revolving Credit Commitments
      or Incremental Facility Revolving Credit Commitments have terminated or expired,
      the Applicable Percentages shall be determined based upon the Revolving Credit
      Commitments or Incremental Facility Revolving Credit Commitments most recently
      in effect, giving effect to any assignments.

     

    “Approved
      Fund”
means,
      with respect to any Lender that is a fund that invests in commercial loans,
      any
      other fund that invests in commercial loans and is managed or advised by the
      same investment advisor as such Lender or by an Affiliate of such investment
      advisor.

     

    “Arranger”
means
      CS
      Securities.

     

    “Assignment
      and Acceptance”
means
      an
      assignment and acceptance entered into by a Lender and an assignee (with the
      consent of any party whose consent is required by Section 10.04), and
      accepted by the Administrative Agent, in the form of Exhibit A or any other
      form approved by the Administrative Agent.

     

    “Assuming Revolving
      Credit Lender”
has
      the
      meaning set forth in Section 2.08(e)(i). 

     

    “Assuming Term
      Loan Lender”
has
      the
      meaning set forth in Section 2.08(f)(i). 

     

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

     

    “Borrower”
has
      the
      meaning set forth in the recital of parties hereto.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

     

    “Borrowing”
means
      (a) all Syndicated ABR Loans made, converted or continued on the same
      date, (b) all Eurodollar Loans that have the same Interest Period or (c) a
      Swingline Loan.

     

    “Business
      Day”
means
      any day (a) that is not a Saturday, Sunday or other day on which commercial
      banks in New York City are authorized or required by law to remain closed and
      (b) if such day relates to a borrowing of, a payment or prepayment of principal
      of or interest on, a continuation or conversion of or into, or the Interest
      Period for, a Eurodollar Borrowing, or to a notice by the Borrower with respect
      to any such borrowing, payment, prepayment, continuation, conversion, or
      Interest Period, that is also a day on which dealings in Dollar deposits are
      carried out in the London interbank market.

     

    “Capital
      Expenditures”
means,
      for any period, expenditures (including the aggregate amount of Capital Lease
      Obligations incurred during such period) made by any member of the Financial
      Test Group to acquire or construct fixed assets, plant and equipment (including
      renewals, improvements and replacements, but excluding repairs) during such
      period computed in accordance with GAAP and excluding (x) acquisitions made
      pursuant to Section 7.03(l), (y) Investments made pursuant to Section 7.05(i)
      and (o), and (z) Capital Lease Obligations entered into pursuant to Section
      7.01(e).

     

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

     

    “Casualty
      Event”
means,
      with respect to any property of any Person, any loss of or damage to, or any
      condemnation or other taking of, such property for which such Person or any
      of
      its Included Subsidiaries receives insurance proceeds, or proceeds of a
      condemnation award or other compensation.

     

    “CERCLA”
means
      the Comprehensive Environmental Response, Compensation and Liability Act of
      1980
      (42 USC § 9601 et
      seq.),
      as
      amended from time to time, and any regulations promulgated with respect thereto
      and any state or local counterparts thereto.

     

    “Change
      in Control”
means
      (a) any Person or two or more Persons acting in concert shall have acquired
      beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
      Exchange Commission under the Securities Exchange Act of 1934) of 35% or more
      of
      the outstanding shares of the voting stock of the Parent Guarantor; or (b)
      as of
      any date a majority of the Board of Directors of the Parent Guarantor consists
      of individuals who were not either (i) directors of the Parent Guarantor as
      of
      the corresponding date of the previous year, (ii) selected or nominated to
      become directors by the Board of Directors of the Parent Guarantor of which
      a
      majority consisted of individuals described in clause (i), or
      (iii) selected or nominated to become directors by the Board of Directors
      of the Parent Guarantor of which a majority consisted of individuals described
      in clause (i) and individuals described in clause (ii).

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

     

    “Change
      in Law”
means
      (a) the adoption of any law, rule or regulation after the date of this
      Agreement, (b) any change in any law, rule or regulation or in the
      interpretation or application thereof by any Governmental Authority after the
      date of this Agreement or (c) compliance by any Lender or any Issuing
      Lender (or, for purposes of Section 2.14(b), by any lending office of such
      Lender or by such Lender’s or any Issuing Lender’s holding company, if any) with
      any request, guideline or directive (whether or not having the force of law)
      of
      any Governmental Authority made or issued after the date of this
      Agreement.

     

    “Class”
has
      the
      meaning set forth in Section 1.04.

     

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

     

    “Collateral”
means
      all of the assets and property of any Obligor, whether real, personal or mixed,
      with respect to which a Lien is granted as security for any of the Secured
      Obligations. 

     

    “Collateral
      Account”
has
      the
      meaning set forth in Section 4.01 of the Security Agreement.

     

    “Collateral
      Agent”
means
      CS, in its capacity as collateral agent for the Administrative Agent and the
      Lenders under the Security Documents.

     

    “Commitment”
means
      a
      Revolving Credit Commitment, a Term Loan Commitment, an Incremental Facility
      Commitment (if any) or any combination thereof (as the context
      requires).

     

    “Consolidated
      EBITDA”
means
      the sum of the following, calculated on a consolidated basis in accordance
      with
      GAAP for the Financial Test Group, for the relevant fiscal period: Consolidated
      Net Income plus,
      (i) to
      the extent deducted in determining Consolidated Net Income, (a) Depreciation
      and
      Amortization, (b) Consolidated Interest Expense less
      Consolidated Interest Income, (c) income tax expense, (d) extraordinary (it
      being understood that for the purposes of this clause (d), “extraordinary” shall
      not mean extraordinary as determined in accordance with GAAP) professional
      fees
      and expenses (including legal fees and Kroll fees (including any success fee,
      the cash portion of which was permitted by Section 7.07(g))), (e) store closure
      costs (including lease termination costs), and (f) costs, fees and expenses
      incurred in connection with the shareholder litigations, SEC investigation
      and
      the other Disclosed Matters (including settlement and judgment costs),
      (g) the aggregate amount of all other non-cash charges reducing
      Consolidated Net Income (excluding any non-cash charge that results in an
      accrual of a reserve for cash charges in any future period) for such period
      and
      (h) fees and expenses incurred in connection with the Transactions
      (including (x) in connection with the delivery of the Mortgages following the
      Effective Date and (y) fees and expenses associated with terminating the
      Existing Credit Agreement and the termination of any Hedging Agreements in
      connection therewith) less
      (ii) the
      aggregate amount of all non-cash items increasing Consolidated Net Income (other
      than the accrual of revenue or recording of receivables in the ordinary course
      of business) for such period. 

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    

     

    “Consolidated
      Interest Coverage Ratio”
means,
      for any Test Period, the ratio of (a) Consolidated EBITDA for such Test
      Period to (b) Consolidated Interest Expense less
      Consolidated Interest Income for such Test Period.

     

    “Consolidated
      Interest Expense”
means,
      for any period, interest, whether expensed or capitalized, in respect of
      Indebtedness of any member of the Financial Test Group outstanding during such
      period; provided
      that
      Consolidated Interest Expense shall (i) exclude the write-off of deferred
      financing charges as a result of the Transactions and the amortization of
      deferred financing charges arising from the Transactions and (ii) be calculated
      after giving effect to Hedging Agreements (including associated costs), but
      excluding unrealized gains and losses with respect to Hedging
      Agreements.

     

    “Consolidated
      Interest Income”
means,
      for any period, interest income of any member of the Financial Test Group during
      such period.

     

    “Consolidated
      Leverage Ratio”
means,
      for any Test Period, the ratio of (a) Consolidated Total Debt on the last day
      of
      such Test Period to (b) Consolidated EBITDA for such Test Period.

     

    “Consolidated
      Net Income”
means,
      for any period, the Net Income of the Financial Test Group determined on a
      consolidated basis in accordance with GAAP, but (without duplication),
      excluding, but only to the extent otherwise included in the calculation of
      Net
      Income, (i) the income (or deficit) of any Person accrued prior to the date
      it
      became a Subsidiary of the Parent Guarantor or is merged into or consolidated
      with the Parent Guarantor or any of its Subsidiaries, (ii) the income (or
      deficit) of any Person (other than members of the Financial Test Group) in
      which
      the Parent Guarantor or any of its Subsidiaries has an ownership interest,
      except to the extent that any such income is actually received by a member
      of
      the Financial Test Group in the form of cash dividends or cash distributions,
      (iii) the undistributed positive earnings of any Subsidiary of the Parent
      Guarantor to the extent that the declaration or payment of dividends or similar
      distributions by such Subsidiary is not at the time permitted by the terms
      of
      any contract or agreement binding on such Subsidiary (other than under any
      Loan
      Document), any constitutive document of such Subsidiary or any law, regulation
      or other legal restriction applicable to such Subsidiary, (iv) unrealized
      gains and losses with respect to obligations under Hedging Agreements for such
      period, (v) gains and losses from the early extinguishment of Indebtedness
      and (vi) gains or losses on Dispositions.

     

    “Consolidated
      Subsidiary”
means
      a
      Subsidiary, the accounts of which are customarily consolidated with those of
      the
      Parent Guarantor in accordance with GAAP for the purpose of reporting to
      stockholders of the Parent Guarantor or, in the case of a Subsidiary acquired
      after the Effective Date, the accounts of which would, in accordance with GAAP,
      be so consolidated for that purpose.

     

    “Consolidated
      Total Debt”
means
      at
      any date the aggregate principal amount of all Indebtedness of the Financial
      Test Group (excluding obligations of the Financial Test Group with respect
      to
      (x) Hedging Agreements and (y) Specified Contingent Obligations), determined
      on
      a consolidated basis in accordance with GAAP as of such date.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    

     

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

     

    “Conversion
      Date”
has
      the
      meaning set forth in Section 2.05(f).

     

    “Corporate
      Ratings”
has
      the
      meaning set forth in the definition of “Applicable Margin.”

     

    “CS”
means
      Credit Suisse, acting through one or more of its branches, and any Affiliate
      thereof.

     

    “CS
      Securities”
means
      Credit Suisse Securities (USA) LLC, acting through one or more of its branches,
      and any Affiliate thereof.

     

    “Current
      Disposition”
has
      the
      meaning set forth in Section 2.10(c)(iv).

     

    “Debt
      Incurrence”
means
      the incurrence by any member of the Financial Test Group after the Effective
      Date of any Indebtedness, other than Indebtedness incurred as permitted by
      any
      of paragraphs (a) through (k) of Section 7.01.

     

    “Default”
means
      any event or condition which constitutes an Event of Default or which upon
      notice, lapse of time or both would, unless cured or waived, become an Event
      of
      Default.

     

    “Depreciation
      and Amortization”
means
      for any period the sum of all depreciation and amortization expense of the
      Financial Test Group for such period, as determined in accordance with
      GAAP.

     

    “Disclosed
      Matters”
means
      the actions, suits, investigations and proceedings disclosed in Schedule V
      and the environmental matters disclosed in Schedule VI.

     

    “Disposition”
means
      any sale, assignment, transfer or other disposition of any property (whether
      now
      owned or hereafter acquired) by any member of the Financial Test Group (other
      than an Inactive Company) to any other Person including any Equity Issuance
      by a
      Subsidiary of the Parent Guarantor and excluding any sale, assignment, transfer
      or other disposition of any property permitted by Section 7.03 (other than
      pursuant to clauses (d), (f) or (g) thereof).

     

    “Dollars”
or
      “$”
refers
      to lawful money of the United States of America.

     

    “Domestic
      Subsidiaries”
means
      all Subsidiaries other than Foreign Subsidiaries.

     

    “Effective
      Date”
means
      the date on which the conditions specified in Section 5.01 are satisfied
      (or waived in accordance with Section 10.02).

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    

     

    “Environmental
      Claim”
means
      any claim, action, suit or notice by or from any Person as a result of or in
      connection with any violation of or liability under any Environmental
      Law.

     

    “Environmental
      Laws”
means
      all laws (including all common law), rules, regulations, codes, ordinances,
      orders, decrees, judgments, injunctions, notices or binding agreements issued,
      promulgated or entered into by any Governmental Authority, relating in any
      way
      to pollution, the environment, health and safety (as relating to exposure to
      Hazardous Materials), and the preservation or reclamation of natural resources,
      including without limitation any of the foregoing relating to the management,
      use, disposal, arrangement for disposal, Release or threatened Release of any
      Hazardous Materials.

     

    “Environmental
      Liability”
means
      any liability, contingent or otherwise (including any liability for damages,
      costs of environmental remediation, fines, penalties or indemnities, and
      including any Lien filed against any property covered by the Mortgages
      thereunder in favor of any governmental entity), resulting from or based upon
      (a) a violation of any Environmental Law, (b) arising under any Environmental
      Law with respect to (i) the generation, use, handling, transportation, storage,
      treatment, arrangement for disposal or disposal of any Hazardous Materials,
      (ii)
      exposure to any Hazardous Materials, or (iii) the Release or threatened Release
      of any Hazardous Materials or (c) any contract, agreement or other consensual
      arrangement pursuant to which liability under any Environmental Law is assumed
      or imposed with respect to any of the foregoing.

     

    “Equity
      Issuance”
means
      (a) any issuance or sale by the Parent Guarantor after the Effective Date
      of (i) any of its capital stock, (ii) any warrants or options (other
      than convertible Indebtedness) exercisable in respect of its capital stock
      (other than any warrants or options issued to directors, officers or employees
      of the Parent Guarantor or any of its Subsidiaries pursuant to employee benefit
      plans established in the ordinary course of business and any capital stock
      of
      the Parent Guarantor issued upon the exercise of such warrants or options)
      or
      (iii) any other security or instrument representing an equity interest (or
      the right to obtain any equity interest) in the Parent Guarantor (b) the
      receipt by the Parent Guarantor after the Effective Date of any capital
      contribution (whether or not evidenced by any equity security issued by the
      recipient of such contribution). The term “Equity Issuance” shall not include
      any such issuance or sale to the Parent Guarantor or any of its Subsidiaries
      or
      the receipt of any capital contribution from the Parent Guarantor or any of
      its
      Subsidiaries.

     

    “Equity
      Rights”
means,
      with respect to any Person, any subscriptions, options, warrants, commitments,
      preemptive rights or agreements of any kind (including any shareholders’ or
      voting trust agreements) for the issuance, sale, registration or voting of,
      or
      securities convertible into, any additional shares of capital stock of any
      class, or partnership or other ownership interests of any type in, such
      Person.

     

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

     

    “ERISA
      Affiliate”
means
      any trade or business (whether or not incorporated) that, together with the
      Borrower and/or the Parent Guarantor, is treated as a single employer under
      

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    Section 414(b)
      or (c) of the Code, or, solely for purposes of Section 302 of ERISA
      and Section 412 of the Code, is treated as a single employer under
      Section 414 of the Code.

     

    “ERISA
      Event”
means
      (a) any “reportable event”, as defined in Section 4043 of ERISA or the
      regulations issued thereunder with respect to a Plan (other than an event for
      which the 30-day notice period is waived); (b) the existence with respect
      to any Plan of an “accumulated funding deficiency” (as defined in
      Section 412 of the Code or Section 302 of ERISA), whether or not
      waived; (c) the filing pursuant to Section 412(d) of the Code or
      Section 303(d) of ERISA of an application for a waiver of the minimum
      funding standard with respect to any Plan; (d) the incurrence by the Parent
      Guarantor or any of its ERISA Affiliates of any liability under Title IV of
      ERISA with respect to the termination of any Plan; (e) the receipt by the
      Parent Guarantor or any its ERISA Affiliates from the PBGC or a plan
      administrator of any notice relating to an intention to terminate any Plan
      or
      Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
      the Parent Guarantor, the Borrower or any of their ERISA Affiliates of any
      liability with respect to the withdrawal or partial withdrawal from any Plan
      or
      Multiemployer Plan; or (g) the receipt by the Parent Guarantor, the
      Borrower or any their ERISA Affiliates of any notice, or the receipt by any
      Multiemployer Plan from the Parent Guarantor, the Borrower or any their ERISA
      Affiliates of any notice, concerning the imposition of Withdrawal Liability
      or a
      determination that a Multiemployer Plan is, or is expected to be, insolvent
      or
      in reorganization, within the meaning of Title IV of ERISA.

     

    “Eurodollar”,
      when
      used in reference to any Loan or Borrowing, means that such Loan, or the Loans
      constituting such Borrowing, are bearing interest at a rate determined by
      reference to the Adjusted LIBO Rate.

     

    “Event
      of Default”
has
      the
      meaning set forth in Article VIII.

     

    “Excess
      Cash Flow”
means,
      for any period, the result of the following calculation for such period
      determined on a consolidated basis for the Financial Test Group without
      duplication in accordance with GAAP: (a) Consolidated EBITDA minus
      (b)
      Capital Expenditures (except to the extent financed with Indebtedness)
minus
      (c) all
      regularly scheduled payments or prepayments of principal of Indebtedness
      (including the principal component of any payments in respect of Capital Lease
      Obligations) made during such period minus
      (d) Consolidated Interest Expense for such period minus (e) the aggregate
      amount of Investments made in cash during such period pursuant to Section
      7.05(i) and (o) minus (f) taxes of the Parent Guarantor and its Subsidiaries
      payable in cash for such period minus (g) to the extent added to determine
      Consolidated EBITDA, those items set forth in clauses (d), (e), (f) and (h)
      of the definition of "Consolidated EBITDA" to the extent such items were paid
      in
      cash by the Parent Guarantor or any of its Subsidiaries on a consolidated basis
      during such period.

     

    “Excess
      Funding Guarantor”
has
      the
      meaning set forth in Section 3.08.

     

    “Excess
      Payment”
has
      the
      meaning set forth in Section 3.08.

     

    “Excluded
      Disposition”
means
      a
      Disposition the Net Available Proceeds of which are less than
      $100,000.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    

     

    “Excluded
      Real Property”
means
      real property interests of the Obligors in the property identified in Schedule
      VIII as Excluded Real Property. 

     

    “Excluded
      Taxes”
means,
      with respect to the Administrative Agent, the Collateral Agent, any Issuing
      Lender, any Lender or any other recipient of any payment to be made by or on
      account of any obligation of the Borrower hereunder, (a) taxes measured by
      net income, net profits or overall gross receipts, capital or net worth
      (including, without limitation, branch profits or similar taxes) by the United
      States of America, or by any jurisdiction, that are imposed solely as a result
      of (I) the Administrative Agent, the Collateral Agent, any Issuing Lender or
      any
      Lender (as the case may be) being or having been organized or resident in,
      having or having had an office in, or doing or having done business in such
      jurisdiction (other than a business that is or was deemed to arise solely by
      reason of the Transactions) and (II) the Borrower being organized or resident,
      maintaining an office or conducting business in such jurisdiction) and
      (b) in the case of a Foreign Lender (other than an assignee pursuant to a
      request by the Borrower under Section 2.18(b)), any withholding tax that is
      imposed pursuant to a law in effect at the time such Foreign Lender becomes
      a
      party to this Agreement except to the extent that such Foreign Lender’s assignor
      (if any) was entitled, at the time of assignment, to receive additional amounts
      from the Borrower with respect to such withholding tax pursuant to
      Section 2.16(a) or is attributable to such Foreign Lender’s failure or
      inability (other than as a result of a Change in Law after such Lender becomes
      a
      party to this Agreement) to comply with Section 2.16(e).

     

    “Existing
      Credit Agreements”
means
      the Existing First Lien Credit Agreement and the Existing Second Lien Credit
      Agreement.

     

    “Existing
      First Lien Credit Agreement”
means
      the first lien credit agreement dated as of April 1, 2005, as amended, among
      the
      Borrower, the lenders party thereto, CS (formerly known as Credit Suisse First
      Boston), as administrative agent and issuing lender and Wells Fargo Foothill,
      Inc., as collateral agent, issuing lender, swingline lender, and syndication
      agent, CS Securities, as sole bookrunner and sole lead arranger, and the
      co-arranger and documentation agent referred to therein. 

     

    “Existing
      Letters of Credit”
means
      those letters of credit identified on Schedule I.

     

    “Existing
      Second Lien Credit Agreement”
means
      the second lien credit agreement dated as of the April 1, 2005 among the
      Borrower, the other obligors set forth therein, the lenders set forth therein,
      CS (formerly known as Credit Suisse First Boston), as administrative agent
      and
      paying agent for the second lien lenders, as collateral agent for such lenders,
      and as fronting bank, including any replacement thereof.

     

    “Federal
      Funds Effective Rate”
means,
      for any day, the weighted average of the rates on overnight federal funds
      transactions with members of the Federal Reserve System arranged by federal
      funds brokers, as published on the next succeeding Business Day by the Federal
      Reserve Bank of New York, or, if such rate is not so published for any day
      that
      is a Business Day, the average (rounded upwards, if necessary, to the next
      1/100
      of 1%) of the quotations for such day for such transactions received by the
      Administrative Agent from three federal funds brokers of recognized standing
      selected by it.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    

     

    “Financial
      Officer”
means,
      with respect to any Obligor, the chief financial officer, principal accounting
      officer, treasurer or controller of such Obligor.

     

    “Financial
      Test Group”
      means the
      Parent Guarantor and the Consolidated Subsidiaries. In determining the Financial
      Test Group for any date or period of time, only entities that are members of
      the
      Financial Test Group as of such date or during such period of time, as the
      case
      may be, shall be included. “Fiscal
      Quarter”
means
      a
      fiscal quarter of the Parent Guarantor.

     

    “Fiscal
      Year”
means
      a
      fiscal year of the Parent Guarantor.

     

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

     

    “Foreign
      Subsidiary”
means
      any Subsidiary that is organized under the laws of a jurisdiction outside the
      United States of America.

     

    “GAAP”
means
      generally accepted accounting principles in the United States of
      America.

     

    “Governmental
      Authority”
means
      the government of the United States of America, or of any other nation, or
      any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government.

     

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

     

    “Guarantee
      Assumption Agreement”
means
      a
      Guarantee Assumption Agreement substantially in the form of Exhibit C by an
      entity that, pursuant to Section 6.10(a) is required to become a
“Subsidiary Guarantor” hereunder in favor of the Administrative
      Agent.

     

    “Guaranteed
      Obligations”
has
      the
      meaning set forth in Section 3.01.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    

     

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

     

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

     

    “Hedging
      Agreement”
means
      any interest rate protection agreement, foreign currency exchange agreement,
      commodity price protection agreement or other interest or currency exchange
      rate
      or commodity price hedging arrangement. The amount of any Indebtedness or Other
      Pari Passu Obligations arising from obligations of any Person under any Hedging
      Agreement at any time shall be the maximum aggregate amount (giving effect
      to
      any netting agreements) that such Person would be required to pay if such
      Hedging Agreement were terminated at such time.

     

    “Immaterial
      Subsidiary”
means
      (x) any Subsidiary of Borrower that owns assets constituting no more than 2.5%
      of the book value of the assets of the Parent Guarantor and its Consolidated
      Subsidiaries, taken as a whole; provided
      that any
      Subsidiary that, when such Subsidiary’s assets are aggregated with those of all
      other Immaterial Subsidiaries as to which (i) any event described in clause
      (g),
      (h), (i), (j), (k) or (l) of Article VIII has occurred and is continuing or
      (ii)
      their Guarantees are being or have been released in accordance with Section
      10.02(b)(vii), would collectively own aggregate assets constituting more than
      5.0% of the book value of the assets of the Parent Guarantor and its
      Consolidated Subsidiaries, taken as a whole, shall not be considered an
      Immaterial Subsidiary, (y) any Prohibited Subsidiary and (z) any Inactive
      Company.

     

    “Inactive
      Company”
means
      any Person that conducts no business activity (other than any unwinding or
      liquidation activities), has no income and has assets with a value that does
      not
      exceed $1,000.

     

    “Included
      Subsidiaries”
means
      all Consolidated Subsidiaries, except that no Inactive Company shall be an
      Included Subsidiary. 

     

    “Increasing
      Revolving Credit Lender”
has
      the
      meaning set forth in Section 2.08(e)(i).

     

    “Increasing
      Term Loan Lender”
has
      the
      meaning set forth in Section 2.08(f)(i).

     

    “Incremental
      Facility Agreement”
shall
      have the meaning assigned to such term in Section 2.01(c). 

     

    “Incremental
      Facility Commitments”
means
      the Incremental Facility Revolving Credit Commitments and the Incremental
      Facility Term Loan Commitments. 

     

    “Incremental
      Facility Lenders”
means
      the Incremental Facility Revolving Credit Lenders and the Incremental Facility
      Term Loan Lenders. 

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    

     

    “Incremental
      Facility Loans”
means
      the Incremental Facility Revolving Credit Loans and the Incremental Facility
      Term Loans.

     

    “Incremental
      Facility Revolving Credit Commitment”
means,
      for each Incremental Facility Revolving Credit Lender, and for any Series
      thereof, the commitment of such Incremental Facility Revolving Credit Lender
      to
      make Incremental Facility Revolving Credit Loans of such Series, expressed
      as an
      amount representing the maximum aggregate amount of such Lender’s Incremental
      Facility Revolving Credit Exposure (as the same may be reduced from time to
      time
      pursuant to Section 2.08, 2.09 or 2.10 or increased or reduced from time to
      time pursuant to assignments permitted under Section 10.04). The amount of
      each Lender’s Incremental Facility Revolving Credit Commitment of any Series
      shall be determined in accordance with the provisions of Section 2.01(c).

     

    “Incremental
      Facility Revolving Credit Exposure”
means,
      with respect to any Lender at any time, the outstanding principal amount of
      such
      Lender’s Incremental Facility Revolving Credit Loans at such time.

     

    “Incremental
      Facility Revolving Credit Lenders”
means,
      in respect of any Series of Incremental Facility Revolving Credit Loans, a
      Lender with an Incremental Facility Revolving Credit Commitment of such Series
      or, if the Incremental Facility Revolving Credit Commitments of such Series
      have
      terminated or expired, a Lender with Incremental Facility Revolving Credit
      Exposure.

     

    “Incremental
      Facility Revolving Credit Loans”
means
      revolving credit loans provided for pursuant to an Incremental Facility
      Agreement entered into pursuant to Section 2.01(c), which may be ABR Loans
      and/or Eurodollar Loans.

     

    “Incremental
      Facility Term Loan Commitment”
means,
      for each Incremental Facility Term Loan Lender, and for any Series thereof,
      the
      obligation of such Incremental Facility Term Loan Lender to make Incremental
      Facility Term Loans of such Series (as the same may be reduced from time to
      time
      pursuant to Section 2.08, 2.09 or 2.10 or increased or reduced from time to
      time pursuant to assignments permitted under Section 10.04). The amount of
      each Lender’s Incremental Facility Term Loan Commitment of any Series shall be
      determined in accordance with the provisions of Section 2.01(c).

     

    “Incremental
      Facility Term Loan Lenders”
means
      a
      Lender with an Incremental Facility Term Loan Commitment or an outstanding
      Incremental Facility Term Loan.

     

    “Incremental
      Facility Term Loans”
means
      term loans provided for pursuant to an Incremental Facility Agreement entered
      into pursuant to Section 2.01(c), which may be ABR Loans and/or Eurodollar
      Loans.

     

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

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    price
      of
      property or services (excluding current accounts payable incurred in the
      ordinary course of business), (f) all Indebtedness of others secured by (or
      for which the holder of such Indebtedness has an existing right, contingent
      or
      otherwise, to be secured by) any Lien on property owned or acquired by such
      Person, whether or not the Indebtedness secured thereby has been assumed,
      (g) all Guarantees by such Person of Indebtedness of others, giving effect
      to any limitations upon such Person’s liability for such Indebtedness of others
      as may be set forth in such Guarantee, (h) all Capital Lease Obligations of
      such Person, (i) all obligations, contingent or otherwise, of such Person
      as an account party in respect of letters of credit and letters of guaranty,
      (j) all obligations, contingent or otherwise, of such Person in respect of
      bankers’ acceptances, (k) all Redeemable Preferred Stock of such Person (in the
      event that such Person is a corporation), (l) all obligations of such Person
      with respect to Hedging Agreements, (m) all obligations which are payable
      prior to the Term Loan Maturity Date in respect of unsecured structured
      settlements of Disclosed Matters and (n) all obligations of such Person to
      purchase securities or other property prior to the Term Loan Maturity Date
      arising out of or in connection with the sale of the same or substantially
      similar securities or property. The Indebtedness of any Person shall include
      the
      Indebtedness of any other entity (including any partnership in which such Person
      is a general partner) to the extent such Person is liable therefor as a result
      of such Person’s ownership interest in or other relationship with such entity,
      except to the extent the terms of such Indebtedness provide that such Person
      is
      not liable therefor.

     

    “Indemnified
      Taxes”
means
      Taxes imposed on or incurred by any Agent, any Issuing Lender or any Lender
      with
      respect to any payment under any Loan Document other than Excluded
      Taxes.

     

    “Indemnitee”
has
      the
      meaning set forth in Section 10.03(b).

     

    “Information”
has
      the
      meaning set forth in Section 10.12(b).

     

    “Intellectual
      Property”
has
      the
      meaning set forth in the Security Agreement.

     

    “Interest
      Election Request”
means
      a
      request by the Borrower to convert or continue a Syndicated Borrowing in
      accordance with Section 2.07.

     

    “Interest
      Payment Date”
means
      (a) with respect to any Syndicated ABR Loan and any Swingline Loan,
      each Quarterly Date and (b) with respect to any Eurodollar Loan, the last
      day of each Interest Period therefor and, in the case of any Interest Period
      of
      more than three months’ duration, each day prior to the last day of such
      Interest Period that occurs at three-month intervals after the first day of
      such
      Interest Period.

     

    “Interest
      Period”
means,
      for any Eurodollar Loan or Borrowing, the period commencing on the date of
      such
      Loan or Borrowing and ending on the numerically corresponding day in the
      calendar month that is one, two, three or six months thereafter, as specified
      in
      the applicable Request for Loan or Interest Election Request; provided
      that
      (i) if any Interest Period would end on a day other than a Business Day,
      such Interest Period shall be extended to the next succeeding Business Day
      unless such next succeeding Business Day would fall in the next calendar month,
      in which case such Interest Period shall end on the immediately preceding
      Business Day, and (ii) any Interest Period that commences on the last
      Business Day of 

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    a
      calendar
      month (or on a day for which there is no numerically corresponding day in the
      last calendar month of such Interest Period) shall end on the last Business
      Day
      of the last calendar month of such Interest Period. For purposes hereof, the
      date of a Loan initially shall be the date on which such Loan is made and
      thereafter shall be the effective date of the most recent conversion or
      continuation of such Loan, and the date of a Syndicated Borrowing comprising
      Loans that have been converted or continued shall be the effective date of
      the
      most recent conversion or continuation of such Loans.

     

    “Investment”
means
      any investment in any Person, whether by means of: (a) the acquisition
      (whether for cash, property, services or securities or otherwise) of capital
      stock, bonds, notes, debentures, partnership or other ownership interests or
      other securities of any other Person or any agreement to make any such
      acquisition (including any “short sale” or any sale of any securities at a time
      when such securities are not owned by the Person entering into such sale);
      (b) the making of any deposit with, or advance, loan or other extension of
      credit to, any other Person (including the purchase of property from another
      Person subject to an understanding or agreement, contingent or otherwise, to
      resell such property to such Person), but excluding any such advance, loan
      or
      extension of credit having a term not exceeding 90 days arising in connection
      with the sale of inventory or supplies by such Person in the ordinary course
      of
      business; (c) the entering into of any Guarantee of, or other contingent
      obligation with respect to, Indebtedness or other liability of any other Person
      and (without duplication) any amount committed to be advanced, lent or extended
      to such Person; provided
      that the
      making of any payment in accordance with the terms of any Guarantee or other
      contingent obligation permitted under this Agreement shall not be considered
      an
      Investment; (d) the entering into of any Hedging Agreement; (e) any
      purchase or other acquisition of Indebtedness or the assets of such Person,
      (f)
      any capital contribution to such Person; or (g) any other direct or indirect
      investment in such Person, including any acquisition by way of a merger or
      consolidation, and any arrangement pursuant to which the investor incurs
      Indebtedness of the type referred to in clause (g) of the definition of
“Indebtedness” in respect of such Person. The amount of any Investment shall be
      the amount actually invested, less any return of capital, without adjustment
      for
      subsequent increases or decreases in the market value of such
      Investment.

     

    “Issuing
      Lender”
means
      CS
      or Wells Fargo Foothill, Inc. (or Wells Fargo Bank, NA on its behalf), as
      applicable, in their respective capacities as the issuer of Letters of Credit
      hereunder (including the Existing Letters of Credit, for which CS is the Issuing
      Lender), and their successors in such capacity as provided in
      Section 2.05(j).

     

    “Joint
      Venture”
means
      any entity in which the Parent Guarantor, the Borrower or any of their
      Subsidiaries has made any Investment that would be, in conformity with GAAP,
      set
      forth opposite the caption “Investment in equity method franchisees” (or any
      like caption) on a consolidated balance sheet of the Financial Test
      Group.

     

    “Kroll”
means
      Kroll Zolfo Cooper LLC.

     

    “LC Disbursement”
means
      a
      payment made by any Issuing Lender pursuant to a Letter of Credit.

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    

     

    “LC Exposure”
means,
      at any time, the sum of (a) the aggregate undrawn amount of all outstanding
      Letters of Credit at such time plus
      (b) the aggregate amount of all LC Disbursements that have not yet
      been reimbursed by or on behalf of the Borrower at such time. The
      LC Exposure of any Revolving Credit Lender at any time shall be its
      Applicable Percentage of the total LC Exposure at such time.

     

    “Lenders”
means
      the Persons listed on Schedule II and any other Person that shall have
      become a party hereto pursuant to an Assignment and Acceptance, other than
      any
      such Person that ceases to be a party hereto pursuant to an Assignment and
      Acceptance. Unless the context otherwise requires, the term “Lenders” includes
      the Swingline Lender and any Incremental Facility Lenders.

     

    “Letter
      of Credit”
means
      any letter of credit issued pursuant to this Agreement and shall include the
      Existing Letters of Credit.

     

    “Letter
      of Credit Documents”
means,
      with respect to any Letter of Credit, collectively, any application therefor
      and
      any other agreements, instruments, guarantees or other documents (whether
      general in application or applicable only to such Letter of Credit) governing
      or
      providing for (a) the rights and obligations of the parties concerned or at
      risk with respect to such Letter of Credit or (b) any collateral security
      for any of such obligations, each as the same may be modified and supplemented
      and in effect from time to time.

     

    “LIBO
      Rate”
means,
      with respect to any LIBOR Borrowing for any Interest Period, the rate per annum
      determined by the Administrative Agent at approximately 11:00 a.m. (London
      time) on the date that is two Business Days prior to the beginning of the
      relevant Interest Period by reference to the British Bankers’ Association
      Interest Settlement Rates for deposits in Dollars (as set forth by the Bloomberg
      Information Service or any successor thereto or any other service selected
      by
      the Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
      such rates) for a period equal to such Interest Period; provided
      that, to
      the extent that an interest rate is not ascertainable pursuant to the foregoing
      provisions of this definition, the “LIBO Rate” shall be the interest rate per
      annum determined by the Administrative Agent to be the average of the rates
      per
      annum at which deposits in Dollars are offered for such relevant Interest Period
      to major banks in the London interbank market in London, England by the
      Administrative Agent at approximately 11:00 a.m. (London time) on the date
      that is two Business Days prior to the beginning of such Interest
      Period.

     

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

     

    “Loan
      Documents”
means,
      collectively, this Agreement, the Letter of Credit Documents, any Incremental
      Facility Agreement and the Security Documents and each other agreement or
      written undertaking delivered to the Administrative Agent, the Collateral Agent,
      

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    any
      Issuing Lender or any other Lender, acting in such capacities, in furtherance
      or
      pursuant to any of the foregoing.

     

    “Loans”
means
      the loans made by the Lenders to the Borrower pursuant to this
      Agreement.

     

    “Margin
      Stock”
means
      “margin stock” within the meaning of Regulations T, U and X of the
      Board.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the business, assets, operations, prospects
      or condition, financial or otherwise, of the Financial Test Group taken as
      a
      whole, (b) the ability of any Obligor to perform any of its obligations
      under this Agreement or any of the other Loan Documents to which it is a party
      or (c) the rights of or benefits available to the Lenders under this
      Agreement or any of the other Loan Documents.

     

    “Material
      Indebtedness”
means
      Indebtedness (other than the Loans and Letters of Credit) of the Borrower,
      the
      Parent Guarantor or any Subsidiary Guarantor in an aggregate principal amount
      exceeding $5,000,000.

     

    “Montana
      Mills”
means
      Montana Mills Bread Co., Inc., a Delaware corporation.

     

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

     

    “Mortgage”
means
      an
      instrument of Mortgage or Deed of Trust, Assignment of Rents, Security Agreement
      and Fixture Filing or other similar instrument, satisfactory in form and
      substance to the Collateral Agent and the Administrative Agent, executed by
      an
      Obligor in favor of the Collateral Agent, granting a mortgage over the
      respective properties identified therein to secure the obligations of such
      Obligor under the Loan Documents to which it is a party.

     

    “MTHM”
has
      the
      meaning set forth in Section 5.01.

     

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

     

    “Net
      Available Proceeds”
      means:

     

    (a)
      in the
      case of any Disposition, the aggregate amount of all cash payments received
      by
      the Parent Guarantor and/or any of its Included Subsidiaries directly or
      indirectly in connection with such Disposition; provided
      that
      (i) Net Available Proceeds shall be net of (x) the amount of any
      legal, title and recording tax expenses, commissions and other fees and expenses
      paid by the Parent Guarantor and/or any of its Included Subsidiaries in
      connection with such Disposition, (y) any federal, state, foreign and local
      income or other taxes estimated to be payable by the Parent Guarantor and/or
      any
      of its Included Subsidiaries as a result of such Disposition, and (z) reserves
      set aside on its books with respect thereto in accordance with GAAP and
      (ii) Net Available Proceeds shall be net of any repayments by the Parent
      Guarantor and/or any of its Included Subsidiaries of Indebtedness (including
      interest and any premiums or penalties), to the 

     

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    extent
      that such Indebtedness is secured by a Lien on the property that is the subject
      of such Disposition;

     

    (b)
      in the
      case of any Casualty Event, the aggregate amount of proceeds of insurance,
      condemnation awards and other compensation received by the Parent Guarantor
      and/or any of its Included Subsidiaries in respect of such Casualty Event net
      of
      (i) reasonable expenses incurred by the Parent Guarantor and/or any of its
      Included Subsidiaries in connection therewith, (ii) contractually required
      repayments of Indebtedness (including interest and any premiums or penalties),
      to the extent secured by a Lien on such property and any income and transfer
      taxes payable by the Parent Guarantor and/or any of its Included Subsidiaries
      in
      respect of such Casualty Event and (iii) reserves set aside on its books with
      respect thereto in accordance with GAAP;

     

    (c)
      in the
      case of any Equity Issuance, the aggregate amount of all cash received by the
      Parent Guarantor and/or any of its Included Subsidiaries in respect of such
      Equity Issuance net of customary fees, commissions and other expenses including
      reserves set aside on its books with respect thereto in accordance with GAAP
      incurred by the Parent Guarantor and/or any of its Subsidiaries in connection
      therewith; and

     

    (d)
      in the
      case of any Debt Incurrence, the aggregate amount of all cash received by the
      Parent Guarantor and/or any of its Included Subsidiaries in respect of such
      Debt
      Incurrence net of customary fees, commissions and other expenses including
      reserves set aside on its books with respect thereto in accordance with GAAP
      incurred by the Parent Guarantor and/or any of its Subsidiaries in connection
      therewith.

     

    “Net
      Income”
means,
      as applied to any Person for any period, the aggregate amount of net income
      of
      such Person, after taxes, for such period, as determined in accordance with
      GAAP.

     

    “Non-Consenting
      Lender”
has
      the
      meaning set forth in Section 2.18(b).

     

    “Obligations”
means,
      collectively, the obligations of the Obligors to pay the principal of and
      interest on the Loans, reimbursement obligations with respect to LC
      Disbursements and all fees, indemnification payments and other amounts
      whatsoever, whether direct or indirect, absolute or contingent, now or hereafter
      from time to time owing to the Lenders, any Issuing Lender, the Administrative
      Agent, the Collateral Agent or any of them under the Loan
      Documents.

     

    “Obligors”
means
      the Borrower and the Guarantors.

     

    “Other
      Pari Passu Obligations”
means,
      as at any date, the aggregate outstanding amount of all net obligations of
      any
      Obligor owing on such date to any Lender, the Arranger, or any Affiliate of
      any
      Lender or the Arranger in respect of any Hedging Agreement to the extent that
      such obligations are secured pursuant to the Security Documents.

     

    “Other
      Taxes”
means
      any and all present or future stamp or documentary taxes or any other excise
      or
      property taxes, charges or similar levies arising from any payment made

     

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    under
      any
      Loan Document or from the execution, delivery or enforcement of, or otherwise
      with respect to, any Loan Document.

     

    “Parent
      Guarantor”
has
      the
      meaning set forth in the recital of parties hereto.

     

    “Participant”
has
      the
      meaning set forth in Section 10.04(e).

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation referred to and defined in ERISA and
      any successor entity performing similar functions.

     

    “Permitted
      Encumbrances”
      means:

     

    (a)
      Liens
      imposed by law for taxes, assessments or other governmental charges that are
      not
      yet due, payable or delinquent or are being contested in compliance with
      Section 6.04;

     

    (b)
      carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s
      and other like Liens imposed by law, arising in the ordinary course of business
      and securing obligations that are not overdue by more than 30 days or are being
      contested in compliance with Section 6.04;

     

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

     

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

     

    (e)
      judgment Liens in respect of judgments that do not constitute an Event of
      Default under clause (l) of Article VIII;

     

    (f)
      easements,
      zoning and other restrictions, rights-of-way, covenants and encroachments,
      Liens
      in favor of any landlord and similar encumbrances on real property imposed
      by
      law or arising in the ordinary course of business that do not secure any
      monetary obligations and do not materially detract from the value of the
      affected property or interfere with the ordinary conduct of business of the
      Parent Guarantor or any of its Included Subsidiaries;

     

    (g)
      Liens
      constituting leasehold interests made by the Parent Guarantor or any of its
      Included Subsidiaries as lessor entered into in the ordinary course of business;
      

     

    (h)
      any
      right, title and interest of a landlord (including with respect to association
      dues, maintenance fees and other similar items) under any lease pursuant to
      which the Parent Guarantor or any of its Included Subsidiaries has a leasehold
      interest in any property or assets and any Liens that have been placed by such
      landlord on property over which the Parent Guarantor or any of its Included
      Subsidiaries has any real property interest; 

     

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    

     

    (i)
      Liens
      on goods the purchase price of which is financed by a documentary letter of
      credit issued for the account of the Parent Guarantor or any of its Included
      Subsidiaries, where such Lien secures the related reimbursement obligation
      owing
      to the issuer of such letter of credit;

     

    (j)
      Liens
      created in the ordinary course of business in favor of banks and other
      institutions over credit balances of any bank accounts of the Parent Guarantor
      and its Included Subsidiaries to facilitate the operation of cash pooling,
      recoupment and set-off related to store-level credit card transactions or
      similar arrangements in respect of such bank accounts in the ordinary course
      of
      business;

     

    (k)
      Liens
      arising solely by virtue of any statutory or common law provisions relating
      to
      (i) banker’s liens, (ii) liens in favor of securities intermediaries, or (iii)
      rights of setoff or similar rights and remedies as to deposit accounts or
      securities accounts or other funds maintained with depository institutions
      or
      securities intermediaries; and

     

    (l)
      restrictions on pledges or transfers of capital stock imposed by partnership
      agreements, shareholders’ agreements, limited liability company agreements,
      joint venture agreements and similar agreements in existence on the Effective
      Date or similar restrictions in amendments or restatements thereof which are
      no
      more onerous than those included in such agreements on the Effective
      Date.

     

    “Permitted
      Investments”
      means:

     

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

     

    (b)
      marketable direct obligations issued by any State of the United States of
      America or any political subdivision of any such State or any public
      instrumentality thereof maturing within one year from the date of acquisition
      thereof and, at the time of acquisition, having one of the two highest ratings
      obtainable from either S&P or Moody’s; (c) investments in commercial paper
      maturing within 270 days from the date of acquisition thereof and having, at
      such date of acquisition, the highest credit rating obtainable from S&P or
      from Moody’s;

     

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

     

    (e)
      fully
      collateralized repurchase agreements with a term of not more than 90 days
      for securities described in clause (a) of this definition and entered into
      with a financial institution satisfying the criteria described in
      clause (d) of this definition; and

     

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    

     

    (f)
      investments in money market funds which invest substantially all their assets
      in
      securities of the types described in clauses (a) through (e)
      above.

     

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

     

    “Phase
      I”
means
      an
      environmental site assessment.

     

    “Plan”
means
      any employee pension benefit plan (other than a Multiemployer Plan) subject
      to
      the provisions of Title IV of ERISA or Section 412 of the Code or
      Section 302 of ERISA, and in respect of which the Parent Guarantor, the
      Borrower or any of their ERISA Affiliates is (or, if such plan were terminated,
      would under Section 4069 of ERISA be deemed to be) an “employer” as defined
      in Section 3(5) of ERISA.

     

    “Post-Closing
      Actions”
has
      the
      meaning set forth in Section 5.01(f).

     

    “Prime
      Rate”
means
      the rate of interest per annum announced from time to time by CS as its prime
      rate in effect at its principal office in New York City; each change in the
      Prime Rate shall be effective from and including the date such change is
      announced as being effective.

     

    “Principal
      Facilities”
means
      the mixing facility of the Borrower located in Effingham, Illinois and the
      mixing facility and manufacturing plant of the Borrower, each located in
      Winston-Salem, North Carolina.

     

    “Principal
      Payment Dates”
means
      (a) in the case of Term Loans, the Quarterly Dates of each year, commencing
      with
      April 30, 2007, through and including the Term Loan Maturity Date and (b) in
      the
      case of Incremental Facility Loans of any Series, such dates as shall have
      been
      agreed upon between the Borrower and the respective Incremental Facility Lenders
      of such Series pursuant to Section 2.01(c) at the time such Lenders become
      obligated to make such Incremental Facility Loans hereunder.

     

    “Pro
      Rata Share”
has
      the
      meaning set forth in Section 3.08.

     

    “Prohibited
      Subsidiary”
means
      (i) at the time of determination, a Subsidiary (other than a Wholly Owned
      Subsidiary) that is prohibited by its organizational documents or any agreement
      governing its Indebtedness from becoming an Obligor hereunder and (ii) PRIZ
      Doughnuts, LP.

     

    “Projections”
means
      the financial projections of the Borrower and its Consolidated Subsidiaries
      dated January 25, 2007 heretofore delivered by the Borrower to the
      Administrative Agent.

     

    “Property
      Designated For Sale”
means
      real property and improvements specifically designated as such and itemized
      on
      Schedule VIII.

     

    “Quarterly
      Dates”
means
      the last Business Day of January, April, July and October in each year, the
      first of which shall be the first such day after the date hereof.

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    

     

    “Real
      Property”
has
      the
      meaning set forth in Section 4.17.

     

    “Redeemable
      Preferred Stock”
of
      any
      Person means any preferred stock issued by such Person which is at any time
      prior to the date falling six months after the Term Loan Maturity Date either
      (i) mandatorily redeemable (by sinking fund or similar payments or otherwise)
      or
      (ii) redeemable at the option of the holder thereof.

     

    “Refinanced
      Term Loans”
has
      the
      meaning set forth in Section 10.02(c).

     

    “Register”
has
      the
      meaning set forth in Section 10.04(c).

     

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

     

    “Release”
means
      any release, spill, emission, leaking, pumping, injection, deposit, disposal,
      discharge, dispersal, leaching or migration into the indoor or outdoor
      environment, including the movement of Hazardous Materials through ambient
      air,
      soil, surface water, ground water, wetlands, land or subsurface
      strata.

     

    “Replacement
      Term Loans”
has
      the
      meaning set forth in Section 10.02(c).

     

    “Request
      for Loan”
means
      an
      executed request for loan substantially in the form of Exhibit D hereto with
      all
      blanks completed by the Borrower.

     

    “Required
      Lenders”
means,
      at any time, Lenders having Revolving Credit Exposures, Incremental Facility
      Revolving Credit Exposures, outstanding Term Loans, outstanding Incremental
      Facility Term Loans and unused Commitments representing more than 50% of the
      sum
      of the total Revolving Credit Exposures, Incremental Facility Revolving Credit
      Exposures, outstanding Term Loans, outstanding Incremental Facility Term Loans
      and unused Commitments at such time. The “Required
      Lenders”
of
      a
      particular Class of Loans means Lenders having Revolving Credit Exposures,
      Incremental Facility Revolving Credit Exposures, outstanding Term Loans,
      Incremental Facility Term Loans and unused Commitments of such Class
      representing more than 50% of the total Revolving Credit Exposures, Incremental
      Facility Revolving Credit Exposures, outstanding Term Loans, Incremental
      Facility Term Loans and unused Commitments of such Class, as the case may be,
      at
      such time.

     

    “Restricted
      Payment”
means
      (a) any dividend or other distribution (whether in cash, securities or other
      property) with respect to any shares of any class of capital stock of the Parent
      Guarantor or any of its Subsidiaries, or any payment (whether in cash,
      securities or other property), including any sinking fund or similar deposit,
      on
      account of the purchase, redemption, retirement, acquisition, cancellation
      or
      termination of any such shares of capital stock of the Parent Guarantor or
      any
      of its Subsidiaries or any option, warrant or other right to acquire any such
      shares of capital stock of the Parent Guarantor or any of its Subsidiaries
      or
      (b) any payment made by the Parent Guarantor or any of its Subsidiaries to
      purchase, redeem, retire or otherwise acquire for value, or set apart any money
      for a sinking, defeasance or other analogous fund for the purchase, redemption,
      retirement or other acquisition of, or make any voluntary payment or prepayment
      of the principal of or interest on, or any other amount owing in respect of,
      any

     

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

    Subordinated
      Indebtedness, except for regularly scheduled payments, prepayments or
      redemptions of principal and interest in respect thereof required pursuant
      to
      the instruments evidencing such Indebtedness.

     

    “Revolving
      Credit”,
      when
      used in reference to any Loan or Borrowing, refers to whether such Loan, or
      the
      Loans constituting such Borrowing, are made pursuant to
      Section 2.01(a).

     

    “Revolving
      Credit Availability Period”
means
      the period from and including the Effective Date to but excluding the earlier
      of
      the Revolving Credit Commitment Termination Date and the date of termination
      of
      the Revolving Credit Commitments.

     

    “Revolving
      Credit Commitment”
means,
      with respect to each Lender, the commitment, if any, of such Lender to make
      Revolving Credit Loans and to acquire participations in Letters of Credit and
      Swingline Loans hereunder, expressed as an amount representing the maximum
      aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
      commitment may be (a) reduced from time to time pursuant to
      Section 2.08, 2.09 or 2.10 or (b) increased from time to time,
      subject to certain limitations, pursuant to Section 2.08(e) or (c) reduced
      or
      increased from time to time pursuant to assignments by or to such Lender
      pursuant to Section 10.04. The initial amount of each Lender’s Revolving
      Credit Commitment is set forth on Schedule II, or in the Assignment and
      Acceptance pursuant to which such Lender shall have assumed its Revolving Credit
      Commitment, as applicable. The initial aggregate amount of the Lenders’
Revolving Credit Commitments is $50,000,000.

     

    “Revolving
      Credit Commitment Increase”
has
      the
      meaning set forth in Section 2.08(e)(i).

     

    “Revolving
      Credit Commitment Increase Effective Date”
has
      the
      meaning set forth in Section 2.08(e)(i).

     

    “Revolving
      Credit Commitment Termination Date”
means
      the sixth anniversary of the date hereof.

     

    “Revolving
      Credit Exposure”
means,
      with respect to any Lender at any time, the sum of the outstanding principal
      amount of such Lender’s Revolving Credit Loans and its LC Exposure and
      Swingline Exposure at such time.

     

    “Revolving
      Credit Lender”
means
      a
      Lender with a Revolving Credit Commitment or, if the Revolving Credit
      Commitments have terminated or expired, a Lender with Revolving Credit
      Exposure.

     

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

     

    “Secured
      Obligations”
means,
      collectively, (i) the Obligations and (ii) all obligations of the Obligors
      to
      make payments under Hedging Agreements relating to interest with any or all
      of
      the Administrative Agent, any Issuing Lender, the Arranger, any Lender or any
      Affiliate of the Administrative Agent, any Issuing Lender, the Arranger or
      any
      Lender, whether 

     

    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

    direct
      or
      indirect, absolute or contingent. For purposes hereof, it is understood that
      any
      Secured Obligations to any Person arising under an agreement entered into at
      a
      time such Person (or an Affiliate thereof) is party hereto as the Administrative
      Agent, any Issuing Lender or a Lender shall continue to constitute Secured
      Obligations, notwithstanding that such Person (or its Affiliate) has ceased
      to
      be the Administrative Agent, any Issuing Lender or a Lender, as the case may
      be,
      party hereto (by assigning all of its Commitment, Revolving Credit Exposure,
      Incremental Facility Revolving Credit Exposure and other interests herein,
      or
      otherwise) at the time a claim is to be made in respect of such Secured
      Obligations.

     

    “Security
      Agreement”
means
      a
      Security Agreement substantially in the form of Exhibit B among the
      Borrower, the Parent Guarantor, the Subsidiary Guarantors and the Collateral
      Agent, as the same shall be modified and supplemented and in effect from time
      to
      time.

     

    “Security
      Documents”
means
      the Security Agreement, the Mortgages and all Uniform Commercial Code financing
      statements permitted by the Security Agreement, the Mortgages to be filed with
      respect to the security interests in personal property and fixtures created
      pursuant to the Security Agreement or the Mortgages, and any other agreement,
      document, instrument or other writing providing collateral for the Obligations
      whether now or hereafter in existence.

     

    “Series”
has
      the
      meaning set forth in Section 2.01(c).

     

    “Specified
      Contingent Obligations”
means
      the obligations listed on Schedule X, together with all other obligations of
      a
      similar nature binding on any Obligor and all obligations of a similar nature
      that replace or supplement a Specified Contingent Obligation in connection
      with
      a transaction that results in a net reduction of Specified Contingent
      Obligations, from time to time outstanding. The amount of any Specified
      Contingent Obligation shall be the maximum amount that the Obligors upon which
      such Specified Contingent Obligation is binding could be required to pay
      thereunder.

     

    “Specified
      Information”
has
      the
      meaning set forth in Section 10.12(b).

     

    “Statutory
      Reserve Rate”
means,
      for the Interest Period for any Eurodollar Borrowing, a fraction (expressed
      as a
      decimal), the numerator of which is the number one and the denominator of which
      is the number one minus
      the
      arithmetic mean, taken over each day in such Interest Period, of the aggregate
      of the maximum reserve percentages (including any marginal, special, emergency
      or supplemental reserves) expressed as a decimal established by the Board to
      which the Administrative Agent is subject for eurocurrency funding (currently
      referred to as “Eurocurrency liabilities” in Regulation D of the Board).
      Such reserve percentages shall include those imposed pursuant to such
      Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
      funding and to be subject to such reserve requirements without benefit of or
      credit for proration, exemptions or offsets that may be available from time
      to
      time to any Lender under such Regulation D or any comparable regulation.
      The Statutory Reserve Rate shall be adjusted automatically on and as of the
      effective date of any change in any reserve percentage.

     

    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

    

     

    “Subordinated
      Indebtedness”
means
      Indebtedness (a) for which the Parent Guarantor is directly and primarily
      liable, (b) in respect of which none of its Subsidiaries is contingently or
      otherwise obligated and (c) that is subordinated to the obligations of the
      Parent Guarantor hereunder (including in respect of its Guarantee under
      Article III) on terms, and pursuant to documentation containing other terms
      (including interest, amortization, covenants and events of default), in form
      and
      substance satisfactory to the Required Lenders.

     

    “Subsidiary”
means,
      with respect to any Person (the “parent”)
      at any
      date, any corporation, limited liability company, partnership, association
      or
      other entity the accounts of which would be consolidated with those of the
      parent in the parent’s consolidated financial statements if such financial
      statements were prepared in accordance with GAAP as of such date, as well as
      any
      other corporation, limited liability company, partnership, association or other
      entity (a) of which securities or other ownership interests representing
      more than 50% of the equity or more than 50% of the ordinary voting power or,
      in
      the case of a partnership, more than 50% of the general partnership interests
      are, as of such date, owned, controlled or held, or (b) that is, as of such
      date, otherwise Controlled, by the parent or one or more subsidiaries of the
      parent or by the parent and one or more subsidiaries of the parent. “Subsidiary”
shall not include any Person to the extent such Person is or is required to
      be
      included in the consolidated financial statements of the Parent Guarantor solely
      as a result of the application of Revised Interpretation No. 46, “Consolidation
      of Variable Interest Entities” issued by the Financial Accounting Standards
      Board in December 2003. Unless otherwise specified, “Subsidiary” means a
      Subsidiary of the Parent Guarantor. 

     

    “Subsidiary
      Guarantor”
means
      each of the Subsidiaries of the Borrower identified under the caption
“GUARANTORS” on the signature pages hereto and each Subsidiary of the Borrower
      that becomes a “Subsidiary Guarantor” after the date hereof pursuant to
      Section 6.10(a).

     

    “Swingline
      Exposure”
means,
      at any time, the aggregate principal amount of all Swingline Loans outstanding
      at such time. The Swingline Exposure of any Revolving Credit Lender at any
      time
      shall be its Applicable Percentage of the total Swingline Exposure at such
      time.

     

    “Swingline
      Lender”
means
      CS, in its capacity as lender of Swingline Loans hereunder.

     

    “Swingline
      Loan”
means
      a
      Loan made pursuant to Section 2.04.

     

    “Syndicated”,
      when
      used in reference to any Loan or Borrowing (including any Incremental Facility
      Loan), refers to whether the Class of such Loan or Borrowing is Revolving Credit
      (including any Incremental Facility Revolving Credit Loan) or Term (including
      any Incremental Facility Term Loan), as opposed to Swingline.

     

    “Synthetic
      Lease”
means
      any synthetic lease, tax retention operating lease, or off-balance sheet
      financing product where such transaction is considered borrowed money
      indebtedness for tax purposes but which is classified as an operating lease
      pursuant to GAAP.

     

    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

    

     

    “Taxes”
means
      any and all present or future taxes, levies, imposts, duties, deductions,
      charges or withholdings imposed by any Governmental Authority.

     

    “Term”,
      when
      used in reference to any Loan or Borrowing, refers to whether such Loan, or
      the
      Loans constituting such Borrowing, are made pursuant to
      Section 2.01(b).

     

    “Term
      Loan Commitment”
means,
      with respect to each Lender, the commitment, if any, of such Lender to make
      one
      or more Term Loans hereunder on the Effective Date, expressed as an amount
      representing the maximum aggregate principal amount of the Term Loans to be
      made
      by such Lender hereunder, as such commitment may be (a) reduced from time
      to time pursuant to Section 2.08, 2.09 or 2.10(c), (b) increased from
      time to time, subject to certain limitations, pursuant to Section 2.08(f) and
      (c) reduced or increased from time to time pursuant to assignments by or to
      such
      Lender pursuant to Section 10.04. The initial amount of each Lender’s Term
      Loan Commitment is set forth on Schedule II, or in the Assignment and
      Acceptance pursuant to which such Lender shall have assumed its Term Loan
      Commitment, as applicable. The initial aggregate amount of the Lenders’ Term
      Loan Commitments is $110,000,000.

     

    “Term
      Loan Commitment Increase”
has
      the
      meaning set forth in Section 2.08(f)(i).

     

    “Term
      Loan Commitment Increase Effective Date”
has
      the
      meaning set forth in Section 2.08(f)(i).

     

    “Term
      Loan Lender”
means
      a
      Lender with a Term Loan Commitment or an outstanding Term Loan.

     

    “Term
      Loan Maturity Date”
means
      the seventh anniversary of the date hereof.

     

    “Test
      Period”
      means,
      on
      any date of determination, the period of four consecutive Fiscal Quarters (taken
      as one accounting period) ending with the latest Fiscal Quarter or the Fiscal
      Year for which financial statements pursuant to Section 6.01(a) or (b) have
      been, or should have been, delivered.

     

    “Title
      Companies”
      has
      the
      meaning set forth in Section 5.01(f)(iii).

     

    “Transactions”
means
      the execution, delivery and performance by each Obligor of this Agreement and
      the other Loan Documents to which such Obligor is intended to be a party, the
      borrowing of Loans hereunder, the use of the proceeds thereof and the issuance
      of Letters of Credit hereunder.

     

    “Type”,
      when
      used in reference to any Loan or Borrowing, refers to whether the rate of
      interest on such Loan, or on the Loans constituting such Borrowing, is
      determined by reference to the Adjusted LIBO Rate or the Alternate Base
      Rate.

     

    “Wholly
      Owned Subsidiary”
means
      any Subsidiary all of the shares of capital stock or other ownership interests
      of which (except directors’ qualifying shares) are at the time directly or
      indirectly owned by the Parent Guarantor.

     

    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

    

     

    “Withdrawal
      Liability”
means
      liability to a Multiemployer Plan as a result of a complete or partial
      withdrawal from such Multiemployer Plan, as such terms are defined in Part
      I of
      Subtitle E of Title IV of ERISA.

     

    SECTION
      1.02.  Terms
      Generally.
      The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
      phrase “without limitation”. The word “will” shall be construed to have the same
      meaning and effect as the word “shall”. Unless the context requires otherwise
      (a) any definition of or reference to any agreement, instrument or other
      document herein shall be construed as referring to such agreement, instrument
      or
      other document as from time to time amended, supplemented or otherwise modified
      (subject to any restrictions on such amendments, supplements or modifications
      set forth herein), (b) any reference herein to any Person shall be
      construed to include such Person’s successors and assigns, (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
      construed to refer to this Agreement in its entirety and not to any particular
      provision hereof, (d) all references herein to Articles, Sections, Exhibits
      and Schedules shall be construed to refer to Articles and Sections of, and
      Exhibits and Schedules to, this Agreement and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
      to any and all tangible and intangible assets and properties, including cash,
      securities, accounts and contract rights. Any reference to “Issuing Lender”
shall mean any one, or all, of the Issuing Lenders, as applicable.

     

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

     

    SECTION
      1.04.  Classification
      of Loans and Borrowings.
      Loans
      hereunder are distinguished by “Class” and by “Type”. The “Class” of a Loan (or
      of a Commitment to make a Loan) refers to whether such Loan is a Revolving
      Credit Loan, a Term Loan, an Incremental Facility Revolving Credit Loan or
      an
      Incremental Facility Term Loan of any Series, each of which constitutes a Class.
      The “Type” of a Loan refers to whether such Loan is an ABR Loan or a Eurodollar
      Loan, each of which constitutes a Type. Loans may be identified by both Class
      and Type. Incremental Facility Loans and Incremental Facility Commitments shall
      also be classified by Series, each of which shall be considered a separate
      Class. Borrowings may also be classified and referred to by Class (e.g. a
“Revolving Credit Borrowing”), by Type (e.g. an “ABR Borrowing”) or by Class and
      Type (e.g. a “Revolving Credit ABR Borrowing”). 

     

    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

     

     

    ARTICLE
      II

     

    THE
      CREDITS

     

    SECTION
      2.01.  The
      Commitments.

     

    (a)  Revolving
      Credit Loans.
      Subject
      to the terms and conditions set forth herein, each Revolving Credit Lender
      agrees to make Revolving Credit Loans to the Borrower from time to time during
      the Revolving Credit Availability Period in an aggregate principal amount that
      will not result in (a) such Lender’s Revolving Credit Exposure exceeding
      such Lender’s Revolving Credit Commitment or (b) the total Revolving Credit
      Exposures exceeding the total Revolving Credit Commitments. Within the foregoing
      limits and subject to the terms and conditions set forth herein, the Borrower
      may borrow, prepay and reborrow Revolving Credit Loans.

     

    (b)  Term
      Loans.
      Subject
      to the terms and conditions set forth herein, each Term Loan Lender agrees
      to
      make a single Term Loan to the Borrower on the Effective Date in a principal
      amount not exceeding its Term Loan Commitment. Amounts prepaid or repaid in
      respect of Term Loans may not be reborrowed.

     

    (c)  Incremental
      Facility Loans.
      In
      addition to borrowings of Term Loans and Revolving Credit Loans provided above,
      the Borrower may at any time, but on no more than two occasions (counted to
      include each Revolving Credit Commitment Increase and each Term Loan Commitment
      Increase), request that the Lenders (or additional financial institutions that
      will become Lenders hereunder) enter into commitments to make Incremental
      Facility Revolving
      Credit
      Loans or
      Incremental Facility Term Loans of one or more Series under this Agreement.
      In
      the event that one or more Lenders (which term, as used in this
      paragraph (c) shall include such additional financial institutions) enter
      into such commitments, and such Lenders, the Borrower and the Administrative
      Agent agree pursuant to an instrument in writing (the form and substance of
      which shall be satisfactory, and a copy of which shall be delivered, to the
      Administrative Agent and the Lenders making such Loans (any such instrument
      for
      any Series of Incremental Facility Loans being herein called an “Incremental
      Facility Agreement”
for
      such
      Series)) as to the amount of such commitments that shall be allocated to the
      respective Lenders, the up front fees (if any) to be payable by the Borrower
      in
      connection therewith and the amortization and Applicable Margin to be applicable
      thereto, such Lenders shall become obligated to make Incremental Facility Loans
      under this Agreement in an amount equal to the amount of their respective
      Incremental Facility Commitments. The Incremental Facility Loans to be made
      pursuant to any Incremental Facility Agreement in response to any such request
      by the Borrower shall be deemed to be a separate “Series” of Incremental
      Facility Loans for all purposes of this Agreement.

     

    Anything
      herein to the contrary notwithstanding, the following additional provisions
      shall be applicable to Incremental Facility Commitments and Incremental Facility
      Loans:

     

    (i)
      any
      additional financial institution that is not already a Lender hereunder that
      will provide all or any portion of the Incremental Facility Commitment of any
      Series 

     

    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

    shall
      (x)
      be approved by the Borrower and the Administrative Agent (which approval shall
      not be unreasonably withheld) and (y) deliver to the Administrative Agent,
      on or
      prior to 11:00 a.m., New York City time on the date such Incremental
      Facility Commitment becomes effective (or on or prior to a time on an earlier
      date specified by the Administrative Agent), a completed Administrative
      Questionnaire and applicable tax forms, if any, requested by the Administrative
      Agent, and

     

    (ii)
      the
      aggregate amount, cumulative of all Incremental Facility Commitments of all
      Series (together with Term Loan Commitment Increases and Revolving Credit
      Commitment Increases) established after the date hereof shall not exceed
      $25,000,000, 

     

    (iii)
      in
      no event shall the final maturity date for the Incremental Facility Term Loans
      of any Series be earlier than Term Loan Maturity Date, or the final commitment
      termination date of any Incremental Facility Revolving
      Credit
      Commitments of any Series be earlier than the Revolving
      Credit
      Commitment Termination Date,

     

    (iv)
      the
      Incremental Facility Term Loans shall have a weighted average life at least
      as
      long as the weighted average life of the Term Loans and the Incremental Facility
      Revolving Credit Commitments shall have a weighted average life at least as
      long
      as the weighted average life of the Revolving Credit Commitments,
      and

     

    (v)
      except
      for the amortization and Applicable Margin to be applicable thereto and any
      up
      front fees to be paid in connection therewith, the Incremental Facility Loans
      of
      any Series shall have the same terms applicable to the Revolving
      Credit
      Loans and
      Term Loans (as the case may be) hereunder.

     

    Following
      execution and delivery by the Borrower, one or more Incremental Facility Lenders
      and the Administrative Agent as provided above of an Incremental Facility
      Agreement with respect to any Series, subject to the terms and conditions set
      forth herein:

     

    (x)
      if
      such Incremental Facility Loans are to be Incremental Facility Revolving Credit
      Loans, each Incremental Facility Lender of such Series agrees to make
      Incremental Facility Revolving Credit Loans of such Series to the Borrower
      from
      time to time during the availability period for such Loans as set forth in
      such
      Incremental Facility Agreement in an aggregate amount that will not result
      in
      such Lender’s Incremental Facility Revolving Credit Loans of such Series
      exceeding such Lender’s Incremental Facility Revolving Credit Commitment of such
      Series; and within the foregoing limits and subject to the terms and conditions
      set forth herein, the Borrower may borrow, prepay and reborrow Incremental
      Facility Revolving Credit Loans of such Series; and

     

    (y)
      if
      such Incremental Facility Loans are to be Incremental Facility Term Loans,
      each
      Incremental Facility Term Loan Lender of such Series agrees to make Incremental
      Facility Term Loans of such Series to the Borrower from time to time during
      the
      availability period for such Loans set forth in such Incremental Facility
      Agreement, in a principal amount up to but not exceeding such Lender’s
      Incremental Facility Term Loan Commitment of such Series.

     

    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

    

     

    Proceeds
      of Incremental Facility Loans hereunder shall be available for any use permitted
      under Section 6.08.

     

    SECTION
      2.02.  Loans
      and Borrowings.

     

    (a)  Obligations
      of Lenders.
      Each
      Syndicated Loan shall be made as part of a Borrowing consisting of Loans of
      the
      same Class and Type made by the Lenders ratably in accordance with their
      respective Commitments of the applicable Class. The failure of any Lender to
      make any Loan required to be made by it shall not relieve any other Lender
      of
      its obligations hereunder; provided that the Commitments of the Lenders are
      several and no Lender shall be responsible for any other Lender’s failure to
      make Loans as required.

     

    (b)  Type
      of
      Loans.
      Subject
      to Section 2.13, each Syndicated Borrowing shall be constituted entirely of
      ABR Loans or of Eurodollar Loans as the Borrower may request in accordance
      herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at its option
      may make any Eurodollar Loan by causing any domestic or foreign branch or
      Affiliate of such Lender to make such Loan; provided that any exercise of such
      option shall not affect the obligation of the Borrower to repay such Loan in
      accordance with the terms of this Agreement.

     

    (c)  Minimum
      Amounts; Limitation on Number of Borrowings.
      Each
      Eurodollar Borrowing shall be in an aggregate amount of $1,000,000 or a larger
      multiple of $1,000,000. Each Syndicated ABR Borrowing shall be in an
      aggregate amount equal to $1,000,000 or a larger multiple of $1,000,000;
provided
      that a
      Syndicated ABR Borrowing may be in any lesser aggregate amount that is
      equal to the entire unused then available balance of the total Commitments
      of
      the applicable Class. Each Swingline Loan shall be in an amount equal to
      $500,000 or a larger multiple of $250,000; provided
      that a
      Swingline Borrowing may be in a lesser amount that is equal to the entire unused
      available balance of the total Revolving Credit Commitments then in effect.
      Borrowings of more than one Class and Type may be outstanding at the same time;
      provided that there shall not at any time be more than a total of eight
      Eurodollar Borrowings outstanding.

     

    (d)  Limitations
      on Interest Periods.
      Notwithstanding any other provision of this Agreement, the Borrower shall not
      be
      entitled to request (or to elect to convert to or continue as a Eurodollar
      Borrowing): (i) any Revolving Credit Borrowing if the Interest Period requested
      therefor would end after the Revolving Credit Commitment Termination Date (or
      any Incremental Facility Revolving Credit Loan if the Interest Period requested
      therefor would end after the commitment termination date agreed therefor) or
      (ii) any Term Borrowing if the Interest Period requested therefor would end
      after the Term Loan Maturity Date (or any Incremental Facility Term Loan if
      the
      Interest Period requested therefor would end after the maturity date agreed
      therefor).

     

    SECTION
      2.03.  Requests
      for Syndicated Borrowings.

     

    (a)  Notice
      by the Borrower.
      To
      request a Syndicated Borrowing, the Borrower shall notify the Administrative
      Agent of such request by telephone (i) in the case of a Eurodollar
      Borrowing, not later than 11:00 a.m., New York City time, three Business
      Days 

     

    
      
         

      

      
        -30-

        
          

        

      

      
         

      

    

    before
      the
      date of the proposed Borrowing or (ii) in the case of a Syndicated
      ABR Borrowing, not later than 11:00 a.m., New York City time, one
      Business Day before the date of the proposed Borrowing; provided that any such
      notice of a Revolving Credit ABR Borrowing to finance the reimbursement of
      an LC Disbursement as contemplated by Section 2.05(f) may be given not
      later than 10:00 a.m., New York City time, on the date of the proposed
      Borrowing. Each such telephonic request for a Loan shall be irrevocable and
      shall be confirmed promptly by hand delivery or telecopy to the Administrative
      Agent of a Request for Loan signed by the Borrower.

     

    (b)  Content
      of Request for Loans.
      Each
      telephonic request for a Loan and written Request for Loan shall specify the
      following information in compliance with Section 2.02:

     

    (i)
      the
      Class of the requested Borrowing;

     

    (ii)
      the
      aggregate amount of such Borrowing;

     

    (iii)
      the
      date of such Borrowing, which shall be a Business Day;

     

    (iv)
      whether such Borrowing is to be an ABR Borrowing or a Eurodollar
      Borrowing;

     

    (v)
      in the
      case of a Eurodollar Borrowing, the Interest Period therefor, which shall be
      a
      period contemplated by the definition of the term “Interest Period” and
      permitted under Section 2.02(d); and

     

    (vi)
      the
      location and number of the Borrower’s account to which funds are to be
      disbursed, which shall comply with the requirements of
      Section 2.06.

     

    (c)  Notice
      by the Administrative Agent to the Lenders.
      Promptly
      following receipt of a Request for Loan in accordance with this Section, the
      Administrative Agent shall advise each relevant Lender of the details thereof
      and of the amount of such Lender’s Loan to be made as part of the requested
      Borrowing.

     

    (d)  Failure
      to Elect.
      If no
      election as to the Type of a Syndicated Borrowing is specified, then the
      requested Borrowing shall be an ABR Borrowing. If no Interest Period is
      specified with respect to any requested Eurodollar Borrowing, then the Interest
      Period shall be one month.

     

    SECTION
      2.04.  Swingline
      Loans.

     

    (a)  Agreement
      to Make Swingline Loans.
      Subject
      to the terms and conditions set forth herein, the Swingline Lender agrees to
      make Swingline Loans to the Borrower from time to time during the Revolving
      Credit Availability Period, in an aggregate principal amount at any time
      outstanding that will not result in (i) the aggregate principal amount of
      outstanding Swingline Loans exceeding $5,000,000 or (ii) the total Revolving
      Credit Exposures exceeding the Revolving Credit Commitments then in effect;
      provided
      that the
      Swingline Lender shall not be required to make a Swingline Loan to refinance
      an
      outstanding 

     

    
      
         

      

      
        -31-

        
          

        

      

      
         

      

    

    Swingline
      Loan. Within the foregoing limits and subject to the terms and conditions set
      forth herein, the Borrower may borrow, prepay and reborrow Swingline
      Loans.

     

    (b)  Notice
      of Swingline Loans by the Borrower.
      To
      request a Swingline Loan, the Borrower shall notify the Swingline Lender of
      such
      request by telephone (confirmed by telecopy of a Request for Loan to the
      Swingline Lender with an information copy to the Administrative Agent), not
      later than 12:00 noon, New York City time, on the day of a proposed Swingline
      Loan. Each such notice shall be irrevocable and shall specify the requested
      date
      (which shall be a Business Day) and the amount of the requested Swingline Loan.
      The Swingline Lender shall make such Swingline Loan available to the Borrower
      by
      wire transfer to an account designated by the Borrower (or, in the case of
      a
      Swingline Loan made to finance the reimbursement of an LC Disbursement as
      provided in Section 2.05(f), by remittance to the relevant Issuing Lender)
      by
      3:00 p.m. New York City time, on the requested date of such Swingline Loan.
      

     

    (c)  Participation
      by Lenders in Swingline Loans.
      The
      Swingline Lender may by written notice given to the Administrative Agent not
      later than 10:00 a.m., New York City time, on any Business Day require the
      Lenders to acquire participations on such Business Day in all or a portion
      of
      the Swingline Loans outstanding. Such notice to the Administrative Agent shall
      specify the aggregate amount of Swingline Loans in which Lenders will
      participate. Promptly upon receipt of such notice, the Administrative Agent
      will
      give notice thereof to each Lender, specifying in such notice such Lender’s
      Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
      absolutely and unconditionally agrees, upon receipt of notice as provided above
      in this paragraph, to pay to the Administrative Agent, for the account of the
      Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or
      Loans. Each Lender acknowledges and agrees that its obligation to acquire
      participations in Swingline Loans pursuant to this paragraph is absolute and
      unconditional and shall not be affected by any circumstance whatsoever,
      including the occurrence and continuance of a Default or reduction or
      termination of the Commitments, and that each such payment shall be made without
      any offset, abatement, withholding or reduction whatsoever. Each Lender shall
      comply with its obligation under this paragraph by wire transfer of immediately
      available funds, in the same manner as provided in Section 2.06 with respect
      to
      Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis,
      to
      the payment obligations of the Lenders), and the Administrative Agent shall
      promptly pay to the Swingline Lender the amounts so received by it from the
      Lenders. The Administrative Agent shall notify the Borrower of any
      participations in any Swingline Loan acquired pursuant to this paragraph, and
      thereafter payments in respect of such Swingline Loan shall be made to the
      Administrative Agent and not to the Swingline Lender. Any amounts received
      by
      the Swingline Lender from the Borrower (or other party on behalf of the
      Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
      of the proceeds of a sale of participations therein shall be promptly remitted
      to the Administrative Agent; any such amounts received by the Administrative
      Agent shall be promptly remitted by the Administrative Agent to the Lenders
      that
      shall have made their payments pursuant to this paragraph and to the Swingline
      Lender, as their interests may appear. The purchase of participations in a
      Swingline Loan pursuant to this paragraph shall not relieve the Borrower of
      any
      default in the payment thereof. Notwithstanding the foregoing, a Lender shall
      not have any obligation to acquire a participation in a Swingline Loan pursuant
      to this paragraph if a Default shall have occurred and be continuing at the
      time
      such Swingline Loan was made and such 

     

    
      
         

      

      
        -32-

        
          

        

      

      
         

      

    

    Lender
      shall have notified the Swingline Lender in writing, at least one Business
      Day
      prior to the time such Swingline Loan was made, that such Default has occurred
      and that such Lender will not acquire participations in Swingline Loans made
      while such Default is continuing. 

     

    SECTION
      2.05.  Letters
      of Credit.

     

    (a)  General.
      Subject
      to the terms and conditions set forth herein, in addition to the Loans provided
      for in Section 2.01, the Borrower may request that an Issuing Lender issue,
      and such Issuing Lender shall issue, at any time and from time to time during
      the period commencing on the Effective Date and ending on the date that is
      30
      days prior to the Revolving Credit Commitment Termination Date, Letters of
      Credit for its own account in such form as is acceptable to such Issuing Lender
      in its reasonable determination (including, without limitation, “auto-renewal”
letters of credit); provided
      that (a)
      no Issuing Lender shall be under any obligation to issue any Letter of Credit
      if
      the issuance of such Letter of Credit would violate one or more policies of
      such
      Issuing Lender generally applicable to the issuance of letters of credit and
      (b)
      the aggregate principal amount of all Letters of Credit outstanding shall not
      (i) exceed $30,000,000 or (ii) result in the total Revolving Credit Exposures
      exceeding the Revolving Credit Commitments then in effect. All Letters of Credit
      issued hereunder by any Issuing Lender shall be issued for the account of the
      Borrower as the named account party thereon; provided
      that
      Letters of Credit may, in addition to showing the Borrower as account party,
      show any Guarantor as a favoree under such Letter of Credit. Letters of Credit
      issued hereunder shall constitute utilization of the Revolving Credit
      Commitments. The parties hereto agree that the Existing Letters of Credit shall
      be deemed Letters of Credit for all purposes of this Agreement, without any
      further action by the Borrower.

     

    (b)  Notice
      of Issuance, Amendment, Renewal or Extension.
      To
      request the issuance of a Letter of Credit (or the amendment, renewal or
      extension of an outstanding Letter of Credit), the Borrower shall hand deliver
      or telecopy (or transmit by electronic communication, if arrangements for doing
      so have been approved by the relevant Issuing Lender) to the relevant Issuing
      Lender selected by Borrower and to the Administrative Agent (not later than
      11:00 a.m. on the fourth Business Day preceding the requested date of issuance,
      amendment, renewal or extension a notice requesting the issuance of a Letter
      of
      Credit, or identifying the Letter of Credit to be amended, renewed or extended,
      and specifying the date of issuance, amendment, renewal or extension (which
      shall be a Business Day), the date on which such Letter of Credit is to expire
      (which shall comply with paragraph (d) of this Section), the amount of such
      Letter of Credit, the name and address of the beneficiary thereof and such
      other
      information as shall be necessary to prepare, amend, renew or extend such Letter
      of Credit. If requested by such Issuing Lender, the Borrower also shall submit
      a
      letter of credit application on such Issuing Lender’s standard form in
      connection with any request for a Letter of Credit. In the event of any
      inconsistency between the terms and conditions of this Agreement and the terms
      and conditions of any form of letter of credit application or other agreement
      submitted by the Borrower to, or entered into by the Borrower with, any Issuing
      Lender relating to any Letter of Credit, the terms and conditions of this
      Agreement shall control. Each Issuing Lender shall promptly notify the
      Administrative Agent of any Letters of Credit issued, amended, renewed or
      extended by it hereunder and shall deliver a report (in form and substance
      reasonably acceptable to the Administrative Agent) on the last Business Day
      of
      each month after the Effective Date detailing such Issuing Lender’s letter of
      credit activity under this Agreement; provided
      that if
      the 

     

    
      
         

      

      
        -33-

        
          

        

      

      
         

      

    

    last
      Business Day of such month coincides with the end of a Fiscal Quarter, such
      report shall be delivered five Business Days prior to the last day of such
      Fiscal Quarter, and each Issuing Lender shall promptly provide an update report
      to the Administrative Agent of any letter of credit activity under this
      Agreement during such five Business Day period.

     

    (c)  Limitations
      on Amounts.
      A Letter
      of Credit shall be issued, amended, renewed or extended only if (and upon
      issuance, amendment, renewal or extension of each Letter of Credit the Borrower
      shall be deemed to represent and warrant that), after giving effect to such
      issuance, amendment, renewal or extension, the total Revolving Credit Exposures
      shall not exceed the total Revolving Credit Commitments then in
      effect.

     

    (d)  Expiration
      Date.
      Each
      Letter of Credit shall expire (or provide that any Issuing Lender shall have
      the
      option to refuse to renew such Letter of Credit) at or prior to the close of
      business on the earlier of (i) the date twelve months after the date of the
      issuance of such Letter of Credit (or, in the case of any renewal or extension
      thereof, twelve months after the then-current expiration date of such Letter
      of
      Credit, so long as such renewal or extension occurs within three months of
      such
      then-current expiration date) and (ii) the date that is five Business Days
      prior to the Revolving Credit Commitment Termination Date.

     

    (e)  Participations.
      By the
      issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing
      the amount thereof) by any Issuing Lender, and without any further action on
      the
      part of such Issuing Lender or the Lenders, such Issuing Lender hereby grants
      to
      each Revolving Credit Lender, and each Revolving Credit Lender hereby acquires
      from such Issuing Lender, a participation in such Letter of Credit equal to
      such
      Lender’s Applicable Percentage of the aggregate amount available to be drawn
      under such Letter of Credit. Each Revolving Credit Lender acknowledges and
      agrees that its obligation to acquire participations pursuant to this paragraph
      in respect of Letters of Credit is absolute and unconditional and shall not
      be
      affected by any circumstance whatsoever, including any amendment, renewal or
      extension of any Letter of Credit or the occurrence and continuance of a Default
      or reduction or termination of the Commitments.

     

    In
      consideration and in furtherance of the foregoing, each Revolving Credit Lender
      hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
      for the account of each Issuing Lender, such Lender’s Applicable Percentage of
      each LC Disbursement made by such Issuing Lender promptly upon the request
      of such Issuing Lender at any time from the time of such LC Disbursement
      until such LC Disbursement is reimbursed by the Borrower or at any time
      after any reimbursement payment is required to be refunded to the Borrower
      for
      any reason. Such payment shall be made without any offset, abatement,
      withholding or reduction whatsoever. Each such payment shall be made in the
      same
      manner as provided in Section 2.06 with respect to Loans made by such
      Lender (and Section 2.06 shall apply, mutatis mutandis,
      to the
      payment obligations of the Revolving Credit Lenders), and the Administrative
      Agent shall promptly pay to the relevant Issuing Lender the amounts so received
      by it from the Revolving Credit Lenders. Promptly following receipt by the
      Administrative Agent of any payment from the Borrower pursuant to the next
      following paragraph, the Administrative Agent shall distribute such payment
      to
      the relevant Issuing Lender or, to the extent that the Revolving Credit Lenders
      have made payments pursuant to this paragraph to reimburse such Issuing Lender,
      then to such Lenders and such Issuing Lender as their interests may appear.
      Any
      payment made by a Lender 

     

    
      
         

      

      
        -34-

        
          

        

      

      
         

      

    

    pursuant
      to this paragraph to reimburse any Issuing Lender for any LC Disbursement
      shall not constitute a Loan and shall not relieve the Borrower of its obligation
      to reimburse such LC Disbursement.

     

    (f)  Reimbursement.
      If any
      Issuing Lender shall make any LC Disbursement in respect of a Letter of
      Credit, then either (x) the Borrower shall directly reimburse such Issuing
      Lender in respect of such LC Disbursement by paying to the Administrative
      Agent for the account of such Issuing Lender an amount equal to such
      LC Disbursement no later than 1:00 p.m., New York City time, on the
      Business Day following the day that the LC Disbursement is made (the
“Conversion
      Date”)
      or (y)
      if such LC Disbursement is not directly reimbursed prior to the applicable
      Conversion Date, then upon the occurrence of the applicable Conversion Date,
      the
      Borrower shall be irrevocably deemed to have requested that the Revolving Credit
      Lenders make Revolving Credit ABR Loans in the amount of their respective
      Applicable Percentages for the purpose of repaying such LC Disbursement;
provided
      that if
      Borrower is not eligible to request a Revolving Credit ABR Loan, each Revolving
      Credit Lender shall perform its participation obligations in favor of such
      Issuing Lender pursuant to Section 2.05(e) of this Agreement.

     

    (g)  Obligations
      Absolute.
      The
      Borrower’s obligation to reimburse LC Disbursements as provided in
      paragraph (f) of this Section shall be absolute, unconditional and
      irrevocable, and shall be performed strictly in accordance with the terms of
      this Agreement under any and all circumstances whatsoever and irrespective
      of
      (i) any lack of validity or enforceability of any Letter of Credit, or any
      term or provision therein, (ii) any draft or other document presented under
      a Letter of Credit proving to be forged, fraudulent or invalid in any respect
      or
      any statement therein being untrue or inaccurate in any respect,
      (iii) payment by any Issuing Lender under a Letter of Credit against
      presentation of a draft or other document that does not comply strictly with
      the
      terms of such Letter of Credit, and (iv) any other event or circumstance
      whatsoever, whether or not similar to any of the foregoing, that might, but
      for
      the provisions of this Section, constitute a legal or equitable discharge of
      the
      Borrower’s obligations hereunder.

     

    Neither
      the Administrative Agent, the Lenders nor any Issuing Lender, nor any of their
      Related Parties, shall have any liability or responsibility by reason of or
      in
      connection with the issuance or transfer of any Letter of Credit by any Issuing
      Lender or any payment or failure to make any payment thereunder (irrespective
      of
      any of the circumstances referred to in the preceding sentence), or any error,
      omission, interruption, loss or delay in transmission or delivery of any draft,
      notice or other communication under or relating to any Letter of Credit
      (including any document required to make a drawing thereunder), any error in
      interpretation of technical terms or any consequence arising from causes beyond
      the control of any Issuing Lender; provided
      that the
      foregoing shall not be construed to excuse any Issuing Lender from liability
      to
      the Borrower to the extent of any direct damages (as opposed to consequential
      damages, claims in respect of which are hereby waived by the Borrower to the
      extent permitted by applicable law) suffered by the Borrower that are caused
      by
      such Issuing Lender’s gross negligence or willful misconduct when determining
      whether drafts and other documents presented under a Letter of Credit comply
      with the terms thereof. The parties hereto expressly agree that:

     

    
      
         

      

      
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    (i)
      any
      Issuing Lender may accept documents that appear on their face to be in
      substantial compliance with the terms of a Letter of Credit without
      responsibility for further investigation, regardless of any notice or
      information to the contrary, and may make payment upon presentation of documents
      that appear on their face to be in substantial compliance with the terms of
      such
      Letter of Credit;

     

    (ii)
      any
      Issuing Lender shall have the right, in its sole discretion, to decline to
      accept such documents and to make such payment if such documents are not in
      strict compliance with the terms of such Letter of Credit; and

     

    (iii)
      this
      sentence shall establish the standard of care to be exercised by the Issuing
      Lenders when determining whether drafts and other documents presented under
      a
      Letter of Credit comply with the terms thereof (and the parties hereto hereby
      waive, to the extent permitted by applicable law, any standard of care
      inconsistent with the foregoing).

     

    (h)  Disbursement
      Procedures.
      Each
      Issuing Lender shall, within a reasonable time following its receipt thereof,
      examine all documents purporting to represent a demand for payment under a
      Letter of Credit. Such Issuing Lender shall promptly after such examination
      notify the Administrative Agent and the Borrower by telephone (confirmed by
      telecopy) of such demand for payment and whether such Issuing Lender has made
      or
      will make an LC Disbursement thereunder; provided
      that any
      failure to give or delay in giving such notice shall not relieve the Borrower
      of
      its obligation to reimburse such Issuing Lender and the Revolving Credit Lenders
      with respect to any such LC Disbursement.

     

    (i)  Interim
      Interest.
      If any
      Issuing Lender shall make any LC Disbursement, then, unless the Borrower
      shall reimburse (including through a Borrowing of Syndicated ABR Loans) such
      LC Disbursement in full on the date such LC Disbursement is made, the
      unpaid amount thereof shall bear interest, for each day from and including
      the
      date such LC Disbursement is made to but excluding the date that the
      Borrower reimburses such LC Disbursement, at the rate per annum then
      applicable to Syndicated ABR Loans; provided
      that, if
      the Borrower fails to reimburse such LC Disbursement when due pursuant to
      paragraph (f) of this Section, then Section 2.12(c) shall apply.
      Interest accrued pursuant to this paragraph shall be for the account of the
      relevant Issuing Lender, except that interest accrued on and after the date
      of
      payment by any Lender pursuant to paragraph (e) of this Section to
      reimburse such Issuing Lender shall be for the account of such Lender to the
      extent of such payment.

     

    (j)  Replacement
      of any Issuing Lender.
      Any
      Issuing Lender may be replaced at any time by written agreement between the
      Borrower, the Administrative Agent, the replaced Issuing Lender and the
      successor Issuing Lender. The Administrative Agent shall notify the Lenders
      of
      any such replacement of an Issuing Lender. At the time any such replacement
      shall become effective, the Borrower shall pay all unpaid fees accrued for
      account of the replaced Issuing Lender pursuant to Section 2.11(b). From
      and after the effective date of any such replacement, (i) the successor
      Issuing Lender shall have all the rights and obligations of the replaced Issuing
      Lender under this Agreement with respect to Letters of Credit to be issued
      thereafter and (ii) references herein to the term “Issuing Lender” shall be
      deemed to refer to such 

     

    
      
         

      

      
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    successor
      or to any previous Issuing Lender, or to such successor and all previous Issuing
      Lenders, as the context shall require. After the replacement of an Issuing
      Lender hereunder, the replaced Issuing Lender shall remain a party hereto and
      shall continue to have all the rights and obligations of an Issuing Lender
      under
      this Agreement with respect to Letters of Credit issued by it prior to such
      replacement, but shall not be required to issue additional Letters of
      Credit.

     

    (k)  Cash
      Collateralization.
      If
      either (i) an Event of Default shall occur and be continuing and the
      Borrower receives notice from the Administrative Agent or the Required Lenders
      (or, if the maturity of the Loans has been accelerated, Lenders with
      LC Exposure representing more than 50% of the total LC Exposure)
      demanding the deposit of cash collateral pursuant to this paragraph, or
      (ii) the Borrower shall be required to provide cover for LC Exposure
      pursuant to Section 2.10(b), the Borrower shall immediately deposit into
      the Collateral Account an amount in cash equal to, in the case of an Event
      of
      Default, 105% of the LC Exposure as of such date plus
      any
      accrued and unpaid interest thereon and, in the case of cover pursuant to
      Section 2.10(b), the amount required under Section 2.10(b), as the
      case may be; provided
      that the
      obligation to deposit such cash collateral shall become effective immediately,
      and such deposit shall become immediately due and payable, without demand or
      other notice of any kind, upon the occurrence of any Event of Default with
      respect to the Borrower described in clause (i) or (j) of
      Article VIII. Such deposit shall be held by the Administrative Agent in the
      Collateral Account as collateral in the first instance for the LC Exposure
      under this Agreement and thereafter for the payment of the other Secured
      Obligations. 

     

    SECTION
      2.06.  Funding
      of Borrowings.

     

    (a)  Funding
      by Lenders.
      Each
      Lender shall make each Loan to be made by it hereunder on the proposed date
      thereof by wire transfer of immediately available funds by 12:00 noon, New
      York City time, to the account of the Administrative Agent most recently
      designated by it for such purpose by notice to the Lenders; provided
      that
      Swingline Loans shall be made as provided in Section 2.04. The Administrative
      Agent will make such Loans available to the Borrower by promptly transferring
      by
      wire transfer to an account designated by the Borrower in the applicable Request
      for Loan; provided
      that
      Revolving Credit ABR Borrowings made to finance the reimbursement of an
      LC Disbursement as provided in Section 2.05(f) shall be remitted by
      the Administrative Agent to the relevant Issuing Lender.

     

    (b)  Presumption
      by the 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 paragraph (a) of this Section 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 such Lender,
      the Federal Funds Effective Rate or (ii) in the case of the Borrower, the
      interest rate applicable to 

     

    
      
         

      

      
        -37-

        
          

        

      

      
         

      

    

    ABR Loans.
      If such Lender pays such amount to the Administrative Agent, then such amount
      shall constitute such Lender’s Loan included in such Borrowing.

     

    SECTION
      2.07.  Interest
      Elections.

     

    (a)  Elections
      by the Borrower for Syndicated Borrowings.
      The
      Loans constituting each Syndicated Borrowing initially shall be of the Type
      specified in the applicable Request for Loan and, in the case of a Eurodollar
      Borrowing, shall have the Interest Period specified in such Request for Loan.
      Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing
      of a
      different Type or to continue such Borrowing as a Borrowing of the same Type
      and, in the case of a Eurodollar Borrowing, may elect the Interest Period
      therefor, all as provided in this Section. The Borrower may elect different
      options with respect to different portions of the affected Borrowing, in which
      case each such portion shall be allocated ratably among the Lenders holding
      the
      Loans constituting such Borrowing, and the Loans constituting each such portion
      shall be considered a separate Borrowing. This Section shall not apply to
      Swingline Borrowings, which may not be converted or continued.

     

    (b)  Notice
      of Elections.
      To make
      an election pursuant to this Section, the Borrower shall notify the
      Administrative Agent of such election by telephone by the time that a Request
      for Loan would be required under Section 2.03 if the Borrower were
      requesting a Syndicated Borrowing of the Type resulting from such election
      to be
      made on the effective date of such election. Each such telephonic Interest
      Election Request shall be irrevocable and shall be confirmed promptly by hand
      delivery or telecopy to the Administrative Agent of a written Interest Election
      Request substantially in the form of Exhibit E and signed by the
      Borrower.

     

    (c)  Content
      of Interest Election Requests.
      Each
      telephonic and written Interest Election Request shall specify the following
      information in compliance with Section 2.02:

     

    (i)
      the
      Borrowing to which such Interest Election Request applies and, if different
      options are being elected with respect to different portions thereof, the
      portions thereof to be allocated to each resulting Borrowing (in which case
      the
      information to be specified pursuant to clauses (iii) and (iv) of this
      paragraph shall be specified for each resulting Borrowing);

     

    (ii)
      the
      effective date of the election made pursuant to such Interest Election Request,
      which shall be a Business Day;

     

    (iii)
      whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
      Borrowing; and

     

    (iv)
      if
      the resulting Borrowing is a Eurodollar Borrowing, the Interest Period therefor
      after giving effect to such election, which shall be a period contemplated
      by
      the definition of the term “Interest Period” and permitted under
      Section 2.02(d).

     

    (d)  Notice
      by the Administrative Agent to the Lenders.
      Promptly
      following receipt of an Interest Election Request, the Administrative Agent
      shall advise each Lender of the details thereof and of such Lender’s portion of
      each resulting Borrowing.

     

    
      
         

      

      
        -38-

        
          

        

      

      
         

      

    

    

     

    (e)  Failure
      to Elect; Events of Default.
      If the
      Borrower fails to deliver a timely and complete Interest Election Request with
      respect to a Eurodollar Borrowing prior to the end of the Interest Period
      therefor, then, unless such Borrowing is repaid as provided herein, at the
      end
      of such Interest Period such Borrowing shall be converted to a Syndicated
      ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event
      of Default has occurred and is continuing and the Administrative Agent, at
      the
      request of the Required Lenders, so notifies the Borrower, then, so long as
      an
      Event of Default is continuing (i) no outstanding Syndicated Borrowing may
      be converted to or continued as a Eurodollar Borrowing and (ii) unless
      repaid, each Eurodollar Borrowing shall be converted to a Syndicated
      ABR Borrowing at the end of the Interest Period therefor.

     

    SECTION
      2.08.  Termination,
      Reduction and Increase of the Commitments.

     

    (a)  Scheduled
      Termination.
      Unless
      previously terminated, (i) the Term Loan Commitments shall terminate at
      5:00 p.m., New York City time, on the Effective Date, (ii) the
      Revolving Credit Commitments shall terminate on the Revolving Credit Commitment
      Termination Date and (iii) the aggregate amount of the Incremental Facility
      Commitments of any Series shall be automatically reduced to zero on the date
      specified at the time the Incremental Facility Commitments of such Series are
      established.

     

    (b)  Voluntary
      Termination or Reduction.
      The
      Borrower may at any time terminate, or from time to time reduce, the Commitments
      of any Class; provided
      that
      (i) each reduction of the Commitments of any Class pursuant to this Section
      shall be in an amount that is $1,000,000 or a larger multiple of $1,000,000
      (or,
      if less, the entire remaining aggregate amount of Commitments), (ii) the
      Borrower shall not terminate or reduce the Revolving Credit Commitments if,
      after giving effect to any concurrent prepayment of the Revolving Credit Loans
      in accordance with Section 2.10, the total Revolving Credit Exposures would
      exceed the aggregate of total Revolving Credit Commitments and (iii) the
      Borrower shall not terminate or reduce the Incremental Facility Revolving Credit
      Commitments of any Series if, after giving effect to any concurrent prepayment
      of the Incremental Facility Revolving Credit Loans of such Series in accordance
      with Section 2.10, the total Incremental Facility Revolving Credit
      Exposures of such Series would exceed the aggregate of total Incremental
      Facility Revolving Credit Commitments of such Series.

     

    (c)  Notice
      of Voluntary Termination or Reduction.
      The
      Borrower shall notify the Administrative Agent of any election to terminate
      or
      reduce the Commitments of any Class under paragraph (b) of this Section at
      least three Business Days prior to the effective date of such termination or
      reduction, specifying such election and the effective date thereof. Promptly
      following receipt of any notice, the Administrative Agent shall advise the
      Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
      to this Section shall be irrevocable; provided
      that a
      notice of termination of the Commitments delivered by the Borrower may state
      that such notice is conditioned upon the issuance of securities or the
      effectiveness of other credit facilities, in which case such notice may be
      revoked by the Borrower (by notice to the Administrative Agent on or prior
      to
      the specified effective date) if such condition is not satisfied.

     

    
      
         

      

      
        -39-

        
          

        

      

      
         

      

    

    

     

    (d)  Effect
      of Termination or Reduction.
      Any
      termination or reduction of the Commitments shall be permanent. Each reduction
      of the Commitments of any Class shall be made ratably among the Lenders in
      accordance with their respective Commitments of such Class. 

     

    (e)  Increase
      of the Revolving Credit Commitments.

     

    (i)
      Requests
      for Increase by Borrower.
      The
      Borrower may, at any time prior to the Revolving Credit Commitment Termination
      Date, on not more than two occasions on or after the Effective Date (counted
      to
      include each occasion of establishment of Incremental Facility Commitments
      and
      each Term Loan Commitment Increase), propose that the Revolving Credit
      Commitments be increased (each such proposed increase being a “Revolving
      Credit Commitment Increase”)
      by
      notice to the Administrative Agent, specifying each existing Revolving Credit
      Lender (each an “Increasing
      Revolving Credit Lender”)
      and/or
      each additional lender (each an “Assuming Revolving
      Credit Lender”)
      that
      shall have agreed to an additional Revolving Credit Commitment and the date
      on
      which such increase is to be effective (the date on which all the conditions
      set
      forth in this Section 2.08(e) have been satisfied, the “Revolving
      Credit Commitment Increase Effective Date”),
      which
      shall be a Business Day at least three Business Days after delivery of such
      notice and 30 days prior to the Revolving Credit Commitment Termination Date;
      provided
      that:

     

    (A)
      the
      aggregate amount, cumulative of any such Revolving Credit Commitment Increase,
      together with the aggregate amount of all Incremental Facility Commitments
      of
      all Series and any Term Loan Commitment Increase established after the date
      hereof, shall not exceed $25,000,000;

     

    (B)
      the
      Borrower shall have delivered to the Administrative Agent a certificate of
      the
      Borrower stating on such Revolving Credit Commitment Increase Effective Date
      that (i) no Default has occurred and is continuing and (ii) the
      representations and warranties contained in this Agreement are true and correct
      in all material respects as if made on and as of such date (or, if any such
      representation or warranty is expressly stated to have been made as of a
      specific date, as of such specific date); and

     

    (C)
      each
      Assuming Revolving Credit Lender shall be reasonably acceptable to the
      Administrative Agent and each Issuing Lender.

     

    (ii)
      Effectiveness
      of Revolving Credit Commitment Increase.
      Each
      Assuming Revolving Credit Lender, if any, shall become a Revolving Credit Lender
      hereunder as of such Revolving Credit Commitment Increase Effective Date and
      the
      Revolving Credit Commitment of any Increasing Revolving Credit Lender and such
      Assuming Revolving Credit Lender shall be increased as of such Revolving Credit
      Commitment Increase Effective Date; provided
      that:

     

    (x)
      the
      Administrative Agent shall have received on or prior to 11:00 a.m., New
      York City time, on such Revolving Credit Commitment Increase 

     

    
      
         

      

      
        -40-

        
          

        

      

      
         

      

    

    Effective
      Date (or on or prior to a time on an earlier date specified by the
      Administrative Agent) a certificate of a duly authorized officer of the Borrower
      stating that each of the applicable conditions to such Revolving Credit
      Commitment Increase set forth in the foregoing paragraph (i)(B) has been
      satisfied; 

     

    (y)
      each
      Assuming Revolving Credit Lender or Increasing Revolving Credit Lender shall
      have delivered to the Administrative Agent, on or prior to 11:00 a.m., New
      York City time on such Revolving Credit Commitment Increase Effective Date
      (or
      on or prior to a time on an earlier date specified by the Administrative Agent),
      an agreement, in form and substance reasonably satisfactory to the Borrower
      and
      the Administrative Agent, pursuant to which such Lender shall, effective as
      of
      such date when each of the conditions set forth in this Section 2.08(e) have
      been satisfied, undertake a Revolving Credit Commitment or an increase of
      Revolving Credit Commitment duly executed by such Assuming Revolving Credit
      Lender and/or Increasing Revolving Credit Lender and the Borrower and
      acknowledged by the Administrative Agent; and

     

    (z)
      each
      Assuming Revolving Credit Lender shall have delivered to the Administrative
      Agent, on or prior to 11:00 a.m., New York City time on such Revolving
      Credit Commitment Increase Effective Date (or on or prior to a time on an
      earlier date specified by the Administrative Agent), a completed Administrative
      Questionnaire and applicable tax forms, if any, requested by the Administrative
      Agent.

     

    Promptly
      following satisfaction of such conditions, the Administrative Agent shall notify
      the Revolving Credit Lenders (including any Assuming Revolving Credit Lenders)
      thereof and of the occurrence of the Revolving Credit Commitment Increase
      Effective Date by facsimile transmission or electronic messaging
      system.

     

    (iii)
      Recordation
      into Register.
      Upon its
      receipt of an agreement referred to in clause (ii)(y) above executed by an
      Assuming Revolving Credit Lender or any Increasing Lender, together with the
      certificate referred to in clause (ii)(x) above, the Administrative Agent
      shall, if such agreement has been completed, (x) accept such agreement,
      (y) record the information contained therein in the Register and
      (z) give prompt notice thereof to the Borrower.

     

    (iv)
      Adjustments
      of Borrowings.
      On the
      Revolving Credit Commitment Increase Effective Date, the Borrower shall
      (A) prepay in full the outstanding Revolving Credit Loans (if any) made to
      them, (B) simultaneously borrow new Revolving Credit Loans hereunder in an
      amount equal to such prepayment and (C) pay to the Revolving Credit Lenders
      the amounts, if any, payable under Section 2.15
      as a
      result of any such prepayment; provided
      that
      (x) the prepayment to, and borrowing from, any existing Lender shall be
      effected by book entry to the extent that any portion of the amount prepaid
      to
      such Lender will be subsequently borrowed from such Lender and (y) the
      existing Lenders, the Increasing Revolving Credit Lenders and the Assuming
      Revolving Credit Lenders shall make and receive payments among themselves,
      in a
      manner 

     

    
      
         

      

      
        -41-

        
          

        

      

      
         

      

    

    acceptable
      to the Administrative Agent, so that, after giving effect thereto, the Revolving
      Credit Loans are held ratably by the Revolving Credit Lenders in accordance
      with
      the respective Revolving Credit Commitments of the Revolving Credit Lenders
      (after giving effect to such Revolving Credit Commitment Increase). Concurrently
      therewith, the Revolving Credit Lenders shall be deemed to have adjusted their
      participation interests in any outstanding Letters of Credit so that such
      interests are held ratably in accordance with their Revolving Credit Commitments
      as so increased.

     

    (f)  Increase
      of the Term Loan Commitments.

     

    (i)
      Requests
      for Increase by Borrower.
      The
      Borrower may, at any time prior to the Term Loan Maturity Date, on not more
      than
      two occasions on or after the Effective Date (counted to include each occasion
      of establishment of Incremental Facility Commitments and each Revolving Credit
      Commitment Increase) propose that the Term Loan Commitments be increased (each
      such proposed increase being a “Term
      Loan Commitment Increase”)
      by
      notice to the Administrative Agent, specifying each existing Term Loan Lender
      (each an “Increasing
      Term Loan Lender”)
      and/or
      each additional lender (each an “Assuming Term
      Loan Lender”)
      that
      shall have agreed to an additional Term Loan Commitment and the date on which
      such increase is to be effective (the date on which all the conditions set
      forth
      in this Section 2.08(f) have been satisfied, the “Term
      Loan Commitment Increase Effective Date”),
      which
      shall be a Business Day at least three Business Days after delivery of such
      notice and 30 days prior to the Term Loan Maturity Date; provided
      that:

     

    (A)
      the
      aggregate amount, cumulative of any such Term Loan Commitment Increase, together
      with the aggregate amount of all Incremental Facility Commitments of all Series
      and any Revolving Credit Commitment Increase established after the date hereof,
      shall not exceed $25,000,000, 

     

    (B)
      the
      Borrower shall have delivered to the Administrative Agent a certificate of
      the
      Borrower stating on such Term Loan Commitment Increase Date that (i) no Default
      has occurred and is continuing and (ii) the representations and warranties
      contained in this Agreement are true and correct in all material respects as
      if
      made on and as of such date (or, if any such representation or warranty is
      expressly stated to have been made as of a specific date, as of such specific
      date), and

     

    (C)
      each
      Assuming Term Loan Lender shall be reasonably acceptable to the Administrative
      Agent.

     

    (ii)
      Effectiveness
      of Term Loan Commitment Increase.
      Each
      Assuming Term Loan Lender, if any, shall become a Term Loan Lender hereunder
      as
      of such Term Loan Commitment Increase Date and the Term Loan Commitment of
      any
      Increasing Term Loan Lender shall be increased as of the Term Loan Commitment
      Increase Date; provided
      that:

     

    
      
         

      

      
        -42-

        
          

        

      

      
         

      

    

    

     

    (x)
      the
      Administrative Agent shall have received on or prior to 11:00 a.m., New
      York City time, on such Term Loan Commitment Increase Date (or on or prior
      to a
      time on an earlier date specified by the Administrative Agent) a certificate
      of
      a duly authorized officer of the Borrower stating that each of the applicable
      conditions to such Term Loan Commitment Increase set forth in the foregoing
      paragraph (i)(B) has been satisfied; 

     

    (y)
      each
      Assuming Term Loan Lender or Increasing Term Loan Lender shall have delivered
      to
      the Administrative Agent, on or prior to 11:00 a.m., New York City time on
      such Term Loan Commitment Increase Date (or on or prior to a time on an earlier
      date specified by the Administrative Agent), an agreement, in form and substance
      reasonably satisfactory to the Borrower and the Administrative Agent, pursuant
      to which such Lender shall, effective as of such Term Loan Commitment Increase
      Effective Date, make additional Term Loans under the existing Term Facility
      with
      identical terms thereof in a principal amount not exceeding the Term Loan
      Commitment Increase, duly executed by the Assuming Term Loan Lenders and/or
      Increasing Term Loan Lenders and the Borrower and acknowledged by the
      Administrative Agent; and

     

    (z)
      each
      Assuming Term Loan Lender shall have delivered to the Administrative Agent,
      on
      or prior to 11:00 a.m., New York City time on such Term Loan Commitment
      Increase Effective Date (or on or prior to a time on an earlier date specified
      by the Administrative Agent), a completed Administrative Questionnaire and
      applicable tax forms, if any, requested by the Administrative
      Agent.

     

    Promptly
      following satisfaction of such conditions, the Administrative Agent shall notify
      the Term Loan Lenders (including any Assuming Term Loan Lenders) thereof and
      of
      the occurrence of the Term Loan Commitment Increase by facsimile transmission
      or
      electronic messaging system.

     

    (iii)
      Recordation
      into Register.
      Upon its
      receipt of an agreement referred to in clause (ii)(y) above executed by an
      Increasing Term Loan Lender, together with the certificate referred to in
      clause (ii)(x) above, the Administrative Agent shall, if such agreement has
      been completed, (x) accept such agreement, (y) record the information
      contained therein in the Register and (z) give prompt notice thereof to the
      Borrower.

     

    (iv)
      Borrowing
      of Additional Term Loans.
      On the
      Term Loan Commitment Increase Effective Date, following the satisfaction of
      the
      conditions set forth in this paragraph (f), each Assuming Term Loan Lender
      and/or Increasing Term Loan Lender agrees to make a Term Loan to the Borrower
      in
      a principal amount not exceeding its Term Loan Commitment Increase.

     

    SECTION
      2.09.  Repayment
      of Loans; Evidence of Debt.

     

    (a)  Repayment.
      The
      Borrower hereby unconditionally promises to pay the Loans as
      follows:

     

    
      
         

      

      
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    (i)
      to the
      Administrative Agent for account of the Revolving Credit Lenders the outstanding
      principal amount of the Revolving Credit Loans on the Revolving Credit
      Commitment Termination Date,

     

    (ii)
      to
      the Administrative Agent for the account of each Incremental Facility Revolving
      Credit Lender the entire outstanding principal amount of such Lender’s
      Incremental Facility Revolving Credit Loans of each Series on the commitment
      termination date for such Series specified at the time the Incremental Facility
      Revolving Credit Commitments of such Series are established,

     

    (iii)
      to
      the Administrative Agent for account of the Term Loan Lenders (x) on each
      Principal Payment Date prior to the Term Loan Maturity Date, 0.25% of the
      original aggregate amount of the Term Loans (subject to adjustment pursuant
      to
      paragraph (b) of this Section) and (y) on the Term Loan Maturity Date, the
      outstanding principal amount of the Term Loans,

     

    (iv)
      to
      the Administrative Agent for the account of the Incremental Facility Term Loan
      Lenders of each Series the principal of the Incremental Facility Term Loans
      of
      such Series on the respective Principal Payment Dates agreed upon between the
      Borrower and such Incremental Facility Term Loan Lenders specified for such
      Series at the time the Incremental Facility Term Loan Commitments of such Series
      are established, and 

     

    (v)
      to the
      Swingline Lender the then unpaid principal amount of each Swingline Loan on
      the
      earlier of (a) the Revolving Credit Commitment Termination Date or (b) the
      date
      of demand for repayment by the Swingline Lender of such Swingline Loan;
provided
      that on
      each date that a Revolving Credit Borrowing is made, the Borrower shall, to
      the
      extent of the proceeds of such Revolving Credit Borrowing, repay all Swingline
      Loans then outstanding.

     

    (b)  Adjustment
      of Amortization Schedule.
      Upon
      each Borrowing of additional Term Loans under Section 2.08(f) pursuant to each
      Term Loan Commitment Increase, the aggregate principal amount of such additional
      Term Loans shall be applied to increase the principal payments of Term Loans
      required by Section 2.09(a)(iii) to be made on each Principal Payment Date
      and
      on the Term Loan Maturity Date pro rata in accordance with amounts of such
      required principal payments.

     

    (c)  Manner
      of Payment.
      Prior to
      any repayment or prepayment of any Borrowings of any Class hereunder, the
      Borrower shall select the Borrowing or Borrowings of the applicable Class to
      be
      paid and shall notify the Swingline Lender or Administrative Agent, as
      applicable, by telephone (confirmed by telecopy to the Administrative Agent
      and
      if applicable the Swingline Lender) of such selection in accordance with Section
      2.10(d); provided
      that each
      repayment of Borrowings of any Class shall be applied to repay any outstanding
      ABR Borrowings of such Class before any other Borrowings of such Class. If
      the Borrower fails to make a timely selection of the Borrowing or Borrowings
      to
      be repaid or prepaid, such payment shall be applied, first, to pay any
      outstanding ABR Borrowings of such Class and, second, to other Borrowings
      of such Class in the order of the remaining duration of their respective
      Interest Periods (the Borrowing with the shortest remaining Interest Period
      to
      be 

     

    
      
         

      

      
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    repaid
      first). Each payment of a Syndicated Borrowing shall be applied ratably to
      the
      Loans included in such Borrowing.

     

    (d)  Maintenance
      of Records by Lenders.
      Each
      Lender shall maintain in accordance with its usual practice records evidencing
      the indebtedness of the Borrower to such Lender resulting from each Loan made
      by
      such Lender, including the amounts of principal and interest payable and paid
      to
      such Lender from time to time hereunder.

     

    (e)  Maintenance
      of Records by the Administrative Agent.
      The
      Administrative Agent shall maintain records in which it shall record
      (i) the amount of each Loan made hereunder, the Class and Type thereof and
      each Interest Period therefor, (ii) the amount of any principal or interest
      due and payable or to become due and payable from the Borrower to each Lender
      hereunder and (iii) the amount of any sum received by the Administrative
      Agent hereunder for account of the Lenders and each Lender’s share
      thereof.

     

    (f)  Effect
      of Entries.
      The
      entries made in the records maintained pursuant to paragraph (d)
      or (e) of this Section shall be prima facie
      evidence
      of the existence and amounts of the obligations recorded therein; provided
      that the
      failure of any Lender or the Administrative Agent to maintain such records
      or
      any error therein shall not in any manner affect the obligation of the Borrower
      to repay the Loans in accordance with the terms of this Agreement.

     

    (g)  Promissory
      Notes.
      Any
      Lender may request that Loans of any Class made by it be evidenced by a
      promissory note. In such event, the Borrower shall prepare, execute and deliver
      to such Lender a promissory note payable to such Lender (or, if requested by
      such Lender, to such Lender and its registered assigns) and in substantially
      the
      same form as Exhibit F
      or G, as
      applicable.

     

    SECTION
      2.10.  Prepayment
      of Loans.

     

    (a)  Optional
      Prepayments.
      The
      Borrower shall have the right at any time and from time to time to prepay any
      Borrowing in whole or in part, subject to the requirements of this Section.
      Any
      prepayment of the Term Loans or Incremental Facility Term Loans pursuant to
      this
      paragraph shall be applied pro rata to the installments thereof.

     

    (b)  Mandatory
      Prepayments - Revolving Credit Loans.
      The
      Borrower will from time to time prior to the Revolving Credit Commitment
      Termination Date prepay the Revolving Credit Loans, Swingline Loans and/or
      provide cover for LC Exposure as specified in Section 2.05(k)) in such
      amounts as shall be necessary so that at all times the total Revolving Credit
      Exposures shall not exceed the Revolving Credit Commitment. The Borrower will
      from time to time prior to the commitment termination date of any Incremental
      Facility Revolving Credit Loans of any Series prepay Incremental Facility
      Revolving Credit Loans of such Series in such amounts as shall be necessary
      so
      that at all times the total outstanding Incremental Facility Revolving Credit
      Exposures of such Series shall not exceed the Incremental Facility Revolving
      Credit Commitment of such Series. Any prepayment pursuant to this paragraph
      shall (x) in the case of Revolving Credit Loans (i) be applied, first, to
      Swingline Loans outstanding, second, to Revolving Credit Loans outstanding,
      and
      third, as cover for LC Exposure and (ii) not 

     

    
      
         

      

      
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    permanently
      reduce the then existing Revolving Credit Commitment and (y) in the case of
      Incremental Facility Revolving Credit Loans of any Series be applied to
      Incremental Facility Revolving Credit Loans of such Series outstanding and
      (ii)
      not permanently reduce the then existing Incremental Facility Revolving Credit
      Commitment of such Series. 

     

    (c)  Mandatory
      Prepayments - Term Loans.
      The
      Borrower will prepay the Term Loans and Incremental Facility Term Loans, as
      follows:

     

    (i)
      Casualty
      Events.
      Within
      five Business Days of the receipt by the Parent Guarantor or any of its Included
      Subsidiaries of the proceeds of insurance, condemnation award or other
      compensation in respect of any Casualty Event affecting any property of the
      Parent Guarantor or any of its Subsidiaries, the Borrower shall prepay the
      Term
      Loans and Incremental Facility Term Loans, in aggregate amount equal to 100%
      of
      the Net Available Proceeds of such Casualty Event, such prepayment to be
      effected in each case in the manner and to the extent specified in clause (vi)
      of this paragraph; provided
      that,
      notwithstanding the foregoing, the Borrower shall not be required to make a
      prepayment under this clause (i) to the extent that:

     

    (A) the
      Borrower advises the Administrative Agent within five Business Days of the
      relevant Casualty Event that it intends to use such Net Available Proceeds
      to
      reinvest the proceeds thereof into the business of the Parent Guarantor and
      its
      Subsidiaries; and 

     

    (B) such
      Net
      Available Proceeds are in fact so applied to such reinvestment within 365 days
      of such Casualty Event (it being understood that, in the event Net Available
      Proceeds from more than one Casualty Event are held by the Borrower, such Net
      Available Proceeds shall be deemed to be utilized in the same order in which
      such Casualty Event occurred and, accordingly, any such Net Available Proceeds
      so held for more than 365 days shall be forthwith applied to the prepayment
      of
      Loans as provided above).

     

    (ii)
      Equity
      Issuance.
      Within
      five Business Days of any Equity Issuance, the Borrower shall prepay the Term
      Loans and Incremental Facility Term Loans in an aggregate amount equal to 50%
      of
      the Net Available Proceeds thereof, such prepayment to be effected in each
      case
      in the manner and to the extent specified in clause (vi) of this
      paragraph.

     

    (iii)
      Excess
      Cash Flow.
      Not
      later than the date 90 days after the end of each Fiscal Year (or, if earlier,
      30 days after the delivery of the audited financial statements for such Fiscal
      Year pursuant to Section 6.01(a) hereof), commencing with the Fiscal Year
      ending on, February 9, 2008, the Borrower shall prepay the Term Loans and
      Incremental Facility Term Loans in an aggregate amount equal to the excess
      of
      (A) 50% of Excess Cash Flow for such Fiscal Year over (B) the
      aggregate amount of voluntary prepayments of Term Loans and Incremental Facility
      Term Loans made during such Fiscal Year pursuant to Section 2.10(a) hereof
      (other than that portion, if any, of such prepayments applied to installments
      of
      the Term Loans and Incremental Facility Term Loans falling due in such Fiscal
      Year), such prepayment to be effected in each case in the manner and

     

    
      
         

      

      
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    to
      the
      extent specified in clause (vi) of this paragraph; provided
      that (x)
      if as at the last day of such Fiscal Year the Consolidated Leverage Ratio was
      less than or equal to 2.5 to 1.0, then the percentage referenced in clause
      (A)
      above shall be reduced to 25% and (y) the provisions of this
      paragraph (iii) shall not apply if as at the last day of such Fiscal Year
      the Consolidated Leverage Ratio was less than or equal to 2.0 to
      1.0.

     

    (iv)
      Sale
      of
      Assets.
      Without
      limiting the obligation of the Borrower to obtain the consent of the Required
      Lenders pursuant to Section 7.03 to any Disposition not otherwise permitted
      hereunder, in the event that the Net Available Proceeds of any Disposition
      (herein, the “Current
      Disposition”),
      and of
      all such prior Dispositions (in each case including, for avoidance of doubt,
      Properties Designated for Sale, but excluding Excluded Dispositions) as to
      which
      a prepayment has not yet been made under this paragraph, shall exceed $3,000,000
      then, within five Business Days of the day the Current Disposition occurs,
      the
      Borrower will deliver to the Lenders a statement, certified by a Financial
      Officer of the Borrower, in form and detail satisfactory to the Administrative
      Agent, of the amount of the Net Available Proceeds of the Current Disposition
      and of all such prior Dispositions and will prepay the Term Loans and
      Incremental Facility Term Loans in an aggregate amount equal to 100% of the
      Net
      Available Proceeds of the Current Disposition and such prior Dispositions,
      such
      prepayment to be effected in each case in the manner and to the extent specified
      in clause (vi) of this paragraph; provided
      that,
      notwithstanding the foregoing, the Borrower shall not be required to make a
      prepayment under this clause (iv) to the extent that

     

    (A) the
      Borrower advises the Administrative Agent within five Business Days of the
      relevant Disposition that it intends to use such Net Available Proceeds to
      reinvest the proceeds thereof into the business of the Borrower and its
      Subsidiaries; and 

     

    (B) such
      Net
      Available Proceeds are in fact so applied to such reinvestment within 365 days
      of such Disposition (it being understood that, in the event Net Available
      Proceeds from more than one Disposition are held by the Borrower, such Net
      Available Proceeds shall be deemed to be utilized in the same order in which
      such Dispositions occurred and, accordingly, any such Net Available Proceeds
      so
      held for more than 365 days shall be forthwith applied to the prepayment of
      Loans as provided above).

     

    (v)
      Debt
      Incurrence.
      Within
      five Business Days of any Debt Incurrence, the Borrower shall prepay the Term
      Loans and Incremental Facility Term Loans in an aggregate amount equal to 100%
      of the Net Available Proceeds thereof, such prepayment to be effected in each
      case in the manner and to the extent specified in clause (vi) of this
      paragraph.

     

    (vi)
      Application.
      Prepayments pursuant to this paragraph shall be applied to prepay Term Loans
      and
      Incremental Facility Term Loans, ratably to the remaining installments thereof.
      It is acknowledged and agreed that the Revolving Credit Commitments and
      Incremental Facility Revolving Credit Commitments are not required to be reduced
      by reason of any event requiring a prepayment under this
      Section 2.10.

     

    
      
         

      

      
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    (d)  Notices,
      Etc.
      The
      Borrower shall notify the Administrative Agent (and, in the case of prepayment
      of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)
      of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
      Borrowing, not later than 11:00 a.m., New York City time, three Business
      Days before the date of prepayment, (ii) in the case of prepayment of a
      Syndicated ABR Borrowing, not later than 11:00 a.m., New York City
      time, one Business Day before the date of prepayment or (iii) in the case of
      prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
      on the date of prepayment; provided
      that
      notice of a prepayment pursuant to Section 2.10(c)(iii) shall be delivered
      substantially simultaneously with such prepayment. Each such notice shall be
      irrevocable and shall specify the prepayment date, the principal amount of
      each
      Borrowing or portion thereof to be prepaid and, in the case of a mandatory
      prepayment, a reasonably detailed calculation of the amount of such prepayment;
      provided
      that, if
      a notice of prepayment is given in connection with a conditional notice of
      termination of the Commitments as contemplated by Section 2.08, then such
      notice of prepayment may be revoked if such notice of termination is revoked
      in
      accordance with Section 2.08. Promptly following receipt of any such notice
      relating to a Syndicated Borrowing, the Administrative Agent shall advise the
      Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
      be in an amount that would be permitted in the case of a Borrowing of the same
      Type as provided in Section 2.02, except as necessary to apply fully the
      required amount of a mandatory prepayment. Each prepayment of a Syndicated
      Borrowing shall be applied ratably to the Loans included in the prepaid
      Borrowing. Prepayments shall be accompanied by accrued interest to the extent
      required by Section 2.12 and shall be made in the manner specified in
      Section 2.09(c). 

     

    SECTION
      2.11.  Fees.

     

    (a)  Commitment
      Fee.
      The
      Borrower agrees to pay to the Administrative Agent for the account of each
      Lender a commitment fee, which shall accrue at a rate per annum equal to the
      Applicable Commitment Fee Rate on the average daily unused amount of the
      Revolving Credit Commitment and Incremental Facility Revolving Credit Commitment
      of such Lender during the period from and including the date hereof to but
      excluding the earlier of the date such Commitment terminates and the Revolving
      Credit Commitment Termination Date or the commitment termination date for the
      Incremental Facility Revolving Credit Commitments of the relevant Series (as
      the
      case may be). Accrued commitment fees shall be payable on each Quarterly Date
      and on the earlier of the date the relevant Commitment terminates and the
      Revolving Credit Commitment Termination Date or the commitment termination
      date
      for the Incremental Facility Revolving Credit Commitments of the relevant Series
      (as the case may be). All commitment fees shall be computed on the basis of
      a
      year of 360 days and shall be payable for the actual number of days elapsed
      (including the first day but excluding the last day). For purposes of computing
      commitment fees, (i) the Revolving Credit Commitment of a Revolving Credit
      Lender shall be deemed to be used to the extent of the outstanding Revolving
      Credit Loans and LC Exposure of such Lender (and the Swingline Exposure of
      such Revolving Credit Lender shall be disregarded for such purpose) and (ii)
      the
      Incremental Facility Revolving Credit Commitment of an Incremental Facility
      Revolving Credit Lender shall be deemed to be used to the extent of the
      outstanding Incremental Facility Revolving Credit Loans of such
      Lender.

     

    
      
         

      

      
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    (b)  Letter
      of Credit Fees.
      The
      Borrower agrees to pay (i) to the Administrative Agent for the account of
      each Revolving Credit Lender a participation fee with respect to its
      participations in Letters of Credit, which shall accrue at a rate per annum
      equal to the Applicable Margin applicable to interest on Revolving Credit
      Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
      (excluding any portion thereof attributable to unreimbursed
      LC Disbursements) during the period from and including the Effective Date
      to but excluding the later of the date on which such Lender’s Revolving Credit
      Commitment terminates and the date on which such Lender ceases to have any
      LC Exposure, and (ii) to each Issuing Lender a fronting fee, which
      shall accrue at the rate or rates per annum separately agreed upon between
      the
      Borrower and each Issuing Lender on the average daily amount of the
      LC Exposure (excluding any portion thereof attributable to unreimbursed
      LC Disbursements) during the period from and including the Effective Date
      to but excluding the later of the date of termination of the Revolving Credit
      Commitments and the date on which there ceases to be any LC Exposure, as
      well as such Issuing Lender’s standard fees with respect to the issuance,
      amendment, renewal or extension of any Letter of Credit or processing of
      drawings thereunder. Participation fees and fronting fees accrued through but
      excluding each Quarterly Date shall be payable on such Quarterly Date;
provided
      that all
      such fees shall be payable on the date on which the Revolving Credit Commitments
      terminate and any such fees accruing after the date on which the Revolving
      Credit Commitments terminate shall be payable on demand. Any other fees payable
      to any Issuing Lender pursuant to this paragraph shall be payable within 10
      days
      after demand. All participation fees and fronting fees shall be computed on
      the
      basis of a year of 360 days and shall be payable for the actual number of days
      elapsed (including the first day but excluding the last day).

     

    (c)  Administrative
      Agent and Collateral Agent Fees.
      The
      Borrower agrees to pay to the Administrative Agent and the Collateral Agent,
      for
      their own accounts, fees payable in the amounts and at the times separately
      agreed upon between the Borrower and each of the Collateral Agent or the
      Administrative Agent.

     

    (d)  Payment
      of Fees.
      All fees
      payable hereunder shall be paid on the dates due, in immediately available
      funds, to the Administrative Agent (or to any Issuing Lender, in the case of
      fees payable to it) for distribution, in the case of commitment fees and
      participation fees, to the Lenders entitled thereto. Fees paid shall not be
      refundable under any circumstances.

     

    SECTION
      2.12.  Interest.

     

    (a)  ABR Loans.
      The
      Loans constituting each ABR Borrowing (including each Swingline Loan) shall
      bear interest at a rate per annum equal to the Alternate Base Rate plus
      the
      Applicable Margin.

     

    (b)  Eurodollar
      Loans.
      The
      Loans constituting each Eurodollar Borrowing shall bear interest at a rate
      per
      annum equal to the Adjusted LIBO Rate for the Interest Period for such Borrowing
      plus
      the
      Applicable Margin.

     

    (c)  Default
      Interest.
      Notwithstanding the foregoing, if all or a portion of (i) the principal amount
      of any Loan, (ii) any interest payable thereon or (iii) any fee or other amount
      payable by any Obligor hereunder shall not be paid when due (whether at the
      stated 

     

    
      
         

      

      
        -49-

        
          

        

      

      
         

      

    

    maturity,
      by acceleration or otherwise), such overdue amount shall bear interest at a
      rate
      per annum which is, in the case of overdue principal or interest, the rate
      that
      would otherwise be applicable to such Loan plus
      2% or, in
      the case of overdue fees or other amounts, the Alternate Base Rate plus
      Applicable Margin for ABR Loans plus
      2%, in
      each case from the date of such non-payment until such amount is paid in full
      (both before and after judgment).

     

    (d)  Payment
      of Interest.
      Accrued
      interest on each Loan shall be payable in arrears on each Interest Payment
      Date
      for such Loan and, in the case of Revolving Credit Loans, upon termination
      of
      the Revolving Credit Commitments and, in the case of Incremental Facility
      Revolving Credit Loans, the commitment termination date for the Incremental
      Facility Revolving Credit Commitments of the same Series; provided
      that
      (i) interest accrued pursuant to paragraph (c) of this Section shall
      be payable on demand, (ii) in the event of any repayment or prepayment of
      any Loan (other than a prepayment of a Revolving Credit ABR Loan or
      Swingline Loan prior to the Revolving Credit Commitment Termination Date or
      a
      prepayment of an Incremental Facility Revolving Credit ABR Loan prior to the
      commitment termination date specified for such Loan), accrued interest on the
      principal amount repaid or prepaid shall be payable on the date of such
      repayment or prepayment and (iii) in the event of any conversion of any
      Eurodollar Borrowing prior to the end of the Interest Period therefor, accrued
      interest on such Borrowing shall be payable on the effective date of such
      conversion.

     

    (e)  Computation.
      All
      interest hereunder shall be computed on the basis of a year of 360 days (or
      365
      or 366 days, as the case may be, in the case of ABR Loans based on the Prime
      Rate), and shall be payable for the actual number of days elapsed (including
      the
      first day but excluding the last day). The applicable Alternate Base Rate or
      Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
      determination shall be conclusive absent manifest error.

     

    SECTION
      2.13.  Alternate
      Rate of Interest.
      If prior
      to the commencement of the Interest Period for any Eurodollar
      Borrowing:

     

    (a) the
      Administrative Agent determines (which determination shall be conclusive absent
      manifest error) that adequate and reasonable means do not exist for ascertaining
      the Adjusted LIBO Rate for such Interest Period; or

     

    (b)
      if
      such Borrowing is of a particular Class of Loans, the Administrative Agent
      is
      advised by the Required Lenders of such Class that the Adjusted LIBO Rate for
      such Interest Period will not adequately and fairly reflect the cost to such
      Lenders of making or maintaining their respective Loans included in such
      Borrowing for such Interest Period;

     

    then
      the
      Administrative Agent shall give notice thereof to the Borrower and the Lenders
      by telephone or telecopy as promptly as practicable thereafter and, until the
      Administrative Agent notifies the Borrower and the Lenders that the
      circumstances giving rise to such notice no longer exist, (i) any Interest
      Election Request that requests the conversion of any Syndicated Borrowing to,
      or
      the continuation of any Syndicated Borrowing as, a Eurodollar Borrowing shall
      be

     

    
      
         

      

      
        -50-

        
          

        

      

      
         

      

    

    ineffective
      and such Syndicated Borrowing (unless prepaid) shall be continued as, or
      converted to, a Syndicated ABR Borrowing and (ii) if any Request for
      Loan requests a Eurodollar Borrowing, such Borrowing shall be made as a
      Syndicated ABR Borrowing.

     

    SECTION
      2.14.  Increased
      Costs.

     

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

     

    (i)
      impose, modify or deem applicable any reserve, special deposit or similar
      requirement against assets of, deposits with or for account of, or credit
      extended by, any Lender (except any such reserve requirement reflected in the
      Adjusted LIBO Rate) or any Issuing Lender; or

     

    (ii)
      impose on any Lender or Issuing Lender or the London interbank market any other
      condition affecting this Agreement or Eurodollar Loans made by such Lender
      or
      any Letter of Credit or participation therein;

     

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

     

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

     

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

     

    (d)  Delay
      in Requests.
      Failure
      or delay on the part of any Lender or Issuing Lender to demand compensation
      pursuant to this Section shall not constitute a waiver of such Lender’s or
      Issuing Lender’s right to demand such compensation; provided
      that the

     

    
      
         

      

      
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    Borrower
      shall not be required to compensate a Lender or Issuing Lender pursuant to
      this
      Section for any increased costs or reductions incurred more than six months
      prior to the date that such Lender or 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 Issuing Lender’s intention to claim
      compensation therefor; provided further
      that, if
      the Change in Law giving rise to such increased costs or reductions is
      retroactive, then the six-month period referred to above shall be extended
      to
      include the period of retroactive effect thereof.

     

    (e)  Application
      to Taxes.
      Notwithstanding anything to the contrary in this Section 2.14, this Section
      2.14
      shall not apply to Taxes which shall be governed exclusively by Section 2.16
      hereof.

     

    SECTION
      2.15.  Break
      Funding Payments.
      In the
      event of (a) the payment of any principal of any Eurodollar Loan other than
      on the last day of an Interest Period therefor (including as a result of an
      Event of Default), (b) the conversion of any Eurodollar Loan other than on
      the last day of an Interest Period therefor, (c) the failure to borrow,
      convert, continue or prepay any Syndicated Loan on the date specified in any
      notice delivered pursuant hereto (regardless of whether such notice is permitted
      to be revocable under Section 2.10(d) and is revoked in accordance
      herewith), or (d) the assignment as a result of a request by the Borrower
      pursuant to Section 2.18(b) of any Eurodollar Loan other than on the last
      day of an Interest Period therefor, then, in any such event, the Borrower shall
      compensate each Lender for the loss, cost and expense attributable to such
      event. In the case of a Eurodollar Loan, the loss to any Lender attributable
      to
      any such event may, at the option of such Lender, be deemed to include an amount
      determined by such Lender to be equal to the excess, if any, of (i) the
      amount of interest that such Lender would pay for a deposit equal to the
      principal amount of such Loan for the period from the date of such payment,
      conversion, failure or assignment to the last day of the then current Interest
      Period for such Loan (or, in the case of a failure to borrow, convert or
      continue, the duration of the Interest Period that would have resulted from
      such
      borrowing, conversion or continuation) if the interest rate payable on such
      deposit were equal to the Adjusted LIBO Rate for such Interest Period, over
      (ii) the amount of interest that such Lender would earn on such principal
      amount for such period if such Lender were to invest such principal amount
      for
      such period at the interest rate that would be bid by such Lender (or an
      Affiliate of such Lender) for Dollar deposits from other banks in the eurodollar
      market at the commencement of such period. A certificate of any Lender setting
      forth any amount or amounts that such Lender is entitled to receive pursuant
      to
      this Section shall be delivered to the Borrower and shall be conclusive absent
      manifest error. The Borrower shall pay such Lender the amount shown as due
      on
      any such certificate within 10 days after receipt thereof.

     

    SECTION
      2.16.  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
      deduction for any Indemnified Taxes or Other Taxes; provided
      that if
      the Borrower shall be required to deduct any Indemnified Taxes or 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 

     

    
      
         

      

      
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    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 pay the full amount deducted to the relevant Governmental Authority in
      accordance with applicable law.

     

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

     

    (c)  Indemnification
      by the Borrower.
      The
      Borrower shall indemnify the Administrative Agent, the Collateral Agent, each
      Lender and each Issuing Lender, within 10 days after written demand therefor,
      for the full amount of any Indemnified Taxes or Other Taxes (including
      Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
      amounts payable under this Section) paid by the Administrative Agent, the
      Collateral Agent, such Lender or 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 or Other Taxes were correctly
      or
      legally imposed or asserted by the relevant Governmental Authority; provided
      that if
      the Borrower reasonably believes that such Taxes or Other Taxes were not
      correctly or legally asserted, the Administrative Agent, the Collateral Agent
      or
      such Lender, as the case may be, will use reasonable efforts to cooperate with
      the Borrower (at the Borrower’s expense) to obtain a refund of such Taxes or
      Other Taxes (in cash or as an offset against another existing tax liability),
      the benefit of which refund shall be returned to the Borrower to the extent
      provided in Section 2.16(f). The Administrative Agent, the Collateral Agent
      or
      any Lender agree to promptly notify the Borrower of any claim under this Section
      2.16(c) of which they become aware; provided
      that any
      failure to provide such notice shall in no way impair the rights of such party
      to demand and receive compensation under this Section 2.16(c). A certificate
      as
      to the amount of such payment or liability delivered to the Borrower by a Lender
      or Issuing Lender, or by the Administrative Agent on its own behalf or on behalf
      of a Lender or Issuing Lender, or by the Collateral Agent, 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)  Foreign
      Lenders.
      Any
      Foreign Lender that is entitled to an exemption from or reduction of any
      withholding tax that is an Indemnified Tax, with respect to payments under
      this
      Agreement shall deliver to the Borrower (with a copy to the Administrative
      Agent), at the time or times prescribed by applicable law or reasonably
      requested by the Borrower, such properly completed and executed documentation
      prescribed by applicable law as will permit such payments to be made without
      withholding or at a reduced rate. In addition, each Foreign Lender agrees that
      from time to time, when a lapse in time or change in circumstances renders
      the
      previous documentation obsolete or inaccurate in any material respect, it will,
      to the extent legally able to do so (but only upon request of the Borrower,
      unless such event relates solely to changed circumstances relating solely to
      such Foreign Lender), deliver to the Borrower such properly completed and
      executed documentation prescribed by applicable law as will 

     

    
      
         

      

      
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    permit
      such payments to be continued to be made without withholding or at a reduced
      rate, or notify the Borrower and the Administrative Agent that it is unable
      to
      do so.

     

    (f)  Treatment
      of Certain Refunds.
      If the
      Administrative Agent or a Lender (or an assignee) determines in its sole
      discretion that it has actually received the benefit of a refund (in cash or
      as
      an offset against another existing tax liability) of any Indemnified Taxes
      or
      Other Taxes as to which it has been indemnified by Borrower or with respect
      to
      which Borrower has paid additional amounts pursuant to this Section 2.16, it
      shall pay over such refund to Borrower (but only to the extent of indemnity
      payments made, or additional amounts paid, by Borrower under this Section 2.16
      with respect to the Indemnified Taxes or the Other Taxes giving rise to such
      refund), net of all out-of-pocket expenses of the Administrative Agent or such
      Lender (or assignee) as determined in the Administrative Agent’s or such
      Lender’s reasonable discretion and without interest (other than any interest
      paid by the relevant Governmental Authority with respect to such refund);
provided,
      however,
      that
      Borrower upon the request of the Administrative Agent or such Lender (or
      assignee), agrees to repay the amount paid over to Borrower to the
      Administrative Agent or such Lender (or assignee) in the event that the
      Administrative Agent or such Lender (or assignee) is required to repay such
      refund to such Governmental Authority. Nothing contained in this Section 2.16(f)
      shall require the Administrative Agent or any Lender (or assignee) to make
      available its tax returns to Borrower or any other person. For avoidance of
      doubt, nothing in this Section 2.16(f) is intended to, nor shall anything in
      this Section 2.16(f) be construed to, require the Administrative Agent or any
      Lender to alter or supplement any policy, procedure or system with respect
      to
      the identification, tracking and allocation of tax refunds and neither the
      Administrative Agent nor any Lender shall have any liability to the Borrower
      or
      any Guarantor by reason of its non-identification of any such
      refund.

     

    SECTION
      2.17.  Payments
      Generally; Pro Rata Treatment; Sharing of Set-offs.

     

    (a)  Payments
      by the Obligors.
      Each
      Obligor shall make each payment required to be made by it hereunder (whether
      of
      principal, interest, fees or reimbursement of LC Disbursements, or under
      Section 2.14, 2.15 or 2.16, or otherwise) or under any other Loan Document
      (except to the extent otherwise provided therein) prior to 12:00 noon, New
      York City time, on the date when due, in immediately available funds, without
      set-off or counterclaim. Any amounts received after such time on any date may,
      in the discretion of the Administrative Agent, be deemed to have been received
      on the next succeeding Business Day for purposes of calculating interest
      thereon. All such payments shall be made to the Administrative Agent at its
      offices at 11 Madison Avenue, New York, New York, 10010, except as otherwise
      expressly provided in the relevant Loan Document and except payments to be
      made
      directly to any Issuing Lender as expressly provided herein and payments
      pursuant to Sections 2.14, 2.15, 2.16 and 10.03, which shall be made
      directly to the Persons entitled thereto. The Administrative Agent shall
      distribute any such payments received by it for account of any other Person
      to
      the appropriate recipient promptly following receipt thereof. If any payment
      hereunder shall be due on a day that is not a Business Day, the date for payment
      shall be extended to the next succeeding Business Day and, in the case of any
      payment accruing interest, interest thereon shall be payable for the period
      of
      such extension. All payments hereunder or under any other Loan Document (except
      to the extent otherwise provided therein) shall be made in Dollars.

     

    
      
         

      

      
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    (b)  Application
      of Insufficient Payments.
      If at
      any time insufficient funds are received by and available to the Administrative
      Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
      interest and fees then due hereunder, such funds shall be applied
      (i) first, to pay interest and fees then due hereunder, ratably among the
      parties entitled thereto in accordance with the amounts of interest and fees
      then due to such parties, and (ii) second, to pay principal and
      unreimbursed LC Disbursements then due hereunder, ratably among the parties
      entitled thereto in accordance with the amounts of principal and unreimbursed
      LC Disbursements then due to such parties.

     

    (c)  Pro
      Rata Treatment.
      Except
      to the extent otherwise provided herein: (i) each Syndicated Borrowing of a
      particular Class shall be made from the relevant Lenders, each payment of
      commitment fee under Section 2.11 shall be made for account of the relevant
      Lenders, and each termination or reduction of the amount of the Commitments
      of a
      particular Class under Section 2.08 shall be applied to the respective
      Commitments of such Class of the relevant Lenders, pro rata according to the
      amounts of their respective Commitments of such Class; (ii) each Syndicated
      Borrowing of any Class shall be allocated pro rata among the relevant Lenders
      according to the amounts of their respective Commitments of such Class (in
      the
      case of the making of Syndicated Loans) or their respective Loans of such Class
      that are to be included in such Borrowing (in the case of conversions and
      continuations of Loans); (iii) each payment or prepayment of principal of
      Revolving Credit Loans and Term Loans by the Borrower shall be made for account
      of the relevant Lenders pro rata in accordance with the respective unpaid
      principal amounts of the Syndicated Loans of such Class held by them; and
      (iv) each payment of interest on Revolving Credit Loans and Term Loans by
      the Borrower shall be made for account of the relevant Lenders pro rata in
      accordance with the amounts of interest on such Loans then due and payable
      to
      the respective Lenders.

     

    (d)  Sharing
      of Payments by Lenders.
      If any
      Lender shall, by exercising any right of set-off or counterclaim or otherwise,
      obtain payment in respect of any principal of or interest on any of its
      Syndicated Loans or participations in LC Disbursements or Swingline Loans
      resulting in such Lender receiving payment of a greater proportion of the
      aggregate amount of its Syndicated Loans and participations in
      LC Disbursements and Swingline Loans and accrued interest thereon then due
      than the proportion received by any other Lender, then the Lender receiving
      such
      greater proportion shall purchase (for cash at face value) participations in
      the
      Syndicated Loans and participations in LC Disbursements and Swingline Loans
      of other Lenders to the extent necessary 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 Syndicated
      Loans
      and participations in LC Disbursements and Swingline Loans; provided
      that
      (i) 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 (ii) the provisions of this paragraph shall not be construed
      to apply to any payment made by any Obligor pursuant to and in accordance with
      the express terms of this Agreement or 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 LC Disbursements to any assignee or participant,
      other than to the Parent Guarantor or any Subsidiary or Affiliate thereof (as
      to
      which the provisions of this paragraph shall apply). Each Obligor 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 

     

    
      
         

      

      
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    arrangements
      may exercise against such Obligor rights of set-off and counterclaim with
      respect to such participation as fully as if such Lender were a direct creditor
      of such Obligor in the amount of such participation.

     

    (e)  Presumptions
      of Payment.
      Unless
      the Administrative Agent shall have received notice from the Borrower prior
      to
      the date on which any payment is due to the Administrative Agent for account
      of
      the Lenders or Issuing Lenders hereunder that the Borrower will not make such
      payment, the Administrative Agent may assume that the Borrower has made such
      payment on such date in accordance herewith and may, in reliance upon such
      assumption, distribute to the Lenders or Issuing Lenders, as the case may be,
      the amount due. In such event, if the Borrower has not in fact made such
      payment, then each of the Lenders or Issuing Lenders, as the case may be,
      severally agrees to repay to the Administrative Agent forthwith on demand the
      amount so distributed to such Lender or Issuing Lender with interest thereon,
      for each day from and including the date such amount is distributed to it to
      but
      excluding the date of payment to the Administrative Agent, at the Federal Funds
      Effective Rate.

     

    (f)  Certain
      Deductions by the Administrative Agent.
      If any
      Lender shall fail to make any payment required to be made by it pursuant to
      Section 2.04(c), 2.05(e), 2.06(b) or 2.17(e), then the Administrative Agent
      may, in its discretion (notwithstanding any contrary provision hereof), apply
      any amounts thereafter received by the Administrative Agent for account of
      such
      Lender to satisfy such Lender’s obligations under such Sections until all such
      unsatisfied obligations are fully paid.

     

    SECTION
      2.18.  Mitigation
      Obligations; Replacement of Lenders. 

     

    (a)  Designation
      of a Different Lending Office.
      If any
      Lender requests compensation under Section 2.14, or if the Borrower is
      required to pay any additional amount to any Lender or any Governmental
      Authority for account of any Lender pursuant to Section 2.16, 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 2.14 or 2.16, as the case
      may be, in the future and (ii) would not subject such Lender to any
      unreimbursed cost or expense and would not otherwise be disadvantageous to
      such
      Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
      incurred by any Lender in connection with any such designation or
      assignment.

     

    (b)  Replacement
      of Lenders.
      If any
      Lender requests compensation under Section 2.14, or if the Borrower is
      required to pay any additional amount to any Lender or any Governmental
      Authority for account of any Lender pursuant to Section 2.16, or if any
      Lender defaults in its obligation to fund Loans hereunder, or any Lender does
      not consent (each, a “Non-Consenting
      Lender”)
      to a
      proposed amendment, modification or waiver of this Agreement or any other Loan
      Document requested by the Borrower which requires the consent of all of the
      Lenders to become effective or all of the Lenders directly affected thereby
      (and
      which is approved by at least the Required Lenders), the Borrower may, at its
      sole expense and effort (including with respect to the processing and
      recordation fee referred to in Section 10.04(b)), upon notice to such
      Lender and the Administrative Agent, require such Lender 

     

    
      
         

      

      
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    to
      transfer and assign, without recourse (in accordance with and subject to the
      restrictions contained in Section 10.04), all of its interests, rights and
      obligations under this Agreement to an assignee reasonably acceptable to the
      Borrower, such acceptance not to be unreasonably withheld or delayed, that
      shall
      assume such assigned obligations (which assignee may be another Lender, if
      a
      Lender accepts such assignment); provided
      that
      (i) the Borrower shall have received the prior written consent of the
      Administrative Agent (and, if a Revolving Credit Commitment is being assigned,
      such Issuing Lender and the Swingline Lender), which consent or consents, as
      the
      case may be, shall not unreasonably be withheld, (ii) such Lender shall
      have received payment of an amount equal to the outstanding principal of its
      Loans and participations in LC Disbursements and Swingline Loans, accrued
      interest thereon, accrued fees and all other amounts payable to it hereunder
      (including any amounts payable under Section 2.14 and Section 2.16),
      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 2.14 or payments required to be made pursuant to
      Section 2.16, such assignment will result in a reduction in such
      compensation or payments and (iv) such assignment shall not conflict with
      any law, rule or regulation or order of any court or other Governmental
      Authority having jurisdiction. In connection with any such replacement, if
      the
      replaced Lender does not execute and deliver to the Administrative Agent a
      duly
      completed Assignment and Acceptance reflecting such replacement within five
      Business Days of the date on which the replacement Lender executes and delivers
      such Assignment and Acceptance to the replaced Lender, then such replaced Lender
      shall be deemed to have executed and delivered such Assignment and Acceptance.
      A
      Lender shall not be required to make any such assignment and 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.
      For the
      avoidance of doubt, if a Lender is a Non-Consenting Lender solely because it
      refused to consent to an amendment, modification or waiver that required the
      consent of all Lenders directly affected thereby (which amendment, modification
      or waiver did not accordingly require the consent of all Lenders), the Loans
      and
      Commitments of such Non-Consenting Lender that are subject to the assignments
      required by this subsection 2.18 shall include only those Loans and Commitments
      directly affected by the amendment, modification or waiver to which such
      Non-Consenting Lender refused to provide its consent.

     

     

    ARTICLE
      III

     

    GUARANTEE

     

    SECTION
      3.01.  The
      Guarantee.
      The
      Guarantors hereby jointly and severally guarantee to each Lender, the
      Administrative Agent, the Collateral Agent and their respective successors
      and
      assigns the prompt payment in full when due (whether at stated maturity, by
      acceleration or otherwise) of the principal of and interest on the Loans made
      by
      the Lenders to the Borrower and all other amounts from time to time owing to
      the
      Lenders, the Administrative Agent or the Collateral Agent by the Borrower under
      this Agreement and by any Obligor under any of the other Loan Documents, and
      all
      obligations of any Obligor to the Administrative Agent, the Arranger or any
      Lender (or any Affiliate of the Administrative Agent, the Arranger or any
      Lender) in respect of any Hedging Agreement, in each case strictly in accordance
      with the terms thereof (such obligations being herein collectively called the
      “Guaranteed Obligations”). The Guarantors hereby further jointly and severally
      agree that if the Borrower shall fail to pay in 

     

    
      
         

      

      
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    full
      when
      due (whether at stated maturity, by acceleration or otherwise) any of the
      Guaranteed Obligations, the Guarantors will promptly pay the same, without
      any
      demand or notice whatsoever, and that in the case of any extension of time
      of
      payment or renewal of any of the Guaranteed Obligations, the same will be
      promptly paid in full when due (whether at extended maturity, by acceleration
      or
      otherwise) in accordance with the terms of such extension or
      renewal.

     

    For
      purposes hereof, it is understood that any Guaranteed Obligations to any Person
      arising under an agreement entered into at a time such Person (or an Affiliate
      thereof) is party hereto as the Administrative Agent or a Lender shall continue
      to constitute Guaranteed Obligations, notwithstanding that such Person (or
      its
      Affiliate) has ceased to be the Administrative Agent or a Lender, as the case
      may be, party hereto (by assigning all of its Commitments, Revolving Credit
      Exposure, Incremental Facility Revolving Credit Exposure and other interests
      herein, or otherwise) at the time a claim is to be made in respect of such
      Guaranteed Obligations.

     

    SECTION
      3.02.  Obligations
      Unconditional.
      The
      obligations of the Guarantors under Section 3.01 are absolute and
      unconditional, joint and several, irrespective of the value, genuineness,
      validity, regularity or enforceability of the obligations of the Borrower under
      this Agreement or any other agreement or instrument referred to herein, or
      any
      substitution, release or exchange of any other guarantee of or security for
      any
      of the Guaranteed Obligations, and, to the fullest extent permitted by
      applicable law, irrespective of any other circumstance whatsoever that might
      otherwise constitute a legal or equitable discharge or defense of a surety
      or
      guarantor, it being the intent of this Section that the obligations of the
      Guarantors hereunder shall be absolute and unconditional, joint and several,
      under any and all circumstances. Without limiting the generality of the
      foregoing, it is agreed that the occurrence of any one or more of the following
      shall not alter or impair the liability of the Guarantors hereunder, which
      shall
      remain absolute and unconditional as described above:

     

    (i)
      at any
      time or from time to time, without notice to the Guarantors, the time for any
      performance of or compliance with any of the Guaranteed Obligations shall be
      extended, or such performance or compliance shall be waived;

     

    (ii)
      any
      of the acts mentioned in any of the provisions of this Agreement or any other
      agreement or instrument referred to herein shall be done or
      omitted;

     

    (iii)
      the
      maturity of any of the Guaranteed Obligations shall be accelerated, or any
      of
      the Guaranteed Obligations shall be modified, supplemented or amended in any
      respect, or any right under this Agreement or any other agreement or instrument
      referred to herein shall be waived or any other guarantee of any of the
      Guaranteed Obligations or any security therefor shall be released or exchanged
      in whole or in part or otherwise dealt with;

     

    (iv)
      any
      Lien or security interest granted to, or in favor of, the Collateral Agent,
      the
      Administrative Agent or any Lender or Lenders as security for any of the
      Guaranteed Obligations shall fail to be perfected; or

     

    
      
         

      

      
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    (v)
      any
      amount of Guaranteed Obligations shall not be allowed as a post-petition claim
      in any case of which the Borrower or any of its properties is the subject under
      any bankruptcy, insolvency, receivership or similar law.

     

    The
      Guarantors hereby expressly waive diligence, presentment, demand of payment,
      protest and all notices whatsoever, and any requirement that the Administrative
      Agent, the Collateral Agent or any Lender exhaust any right, power or remedy
      or
      proceed against the Borrower under this Agreement or any other agreement or
      instrument referred to herein, or against any other Person under any other
      guarantee of, or security for, any of the Guaranteed Obligations.

     

    SECTION
      3.03.  Reinstatement.
      The
      obligations of the Guarantors under this Article shall be automatically
      reinstated if and to the extent that for any reason any payment by or on behalf
      of the Borrower in respect of the Guaranteed Obligations is rescinded or must
      be
      otherwise restored by any holder of any of the Guaranteed Obligations, whether
      as a result of any proceedings in bankruptcy or reorganization or otherwise,
      and
      the Guarantors jointly and severally agree that they will indemnify the
      Administrative Agent, the Collateral Agent and each Lender on demand for all
      reasonable costs and expenses (including fees of counsel) incurred by the
      Administrative Agent, the Collateral Agent or such Lender in connection with
      such rescission or restoration, including any such costs and expenses incurred
      in defending against any claim alleging that such payment constituted a
      preference, fraudulent transfer or similar payment under any bankruptcy,
      insolvency or similar law.

     

    SECTION
      3.04.  Subrogation.
      The
      Guarantors hereby jointly and severally agree that until the payment and
      satisfaction in full of all Guaranteed Obligations and the expiration and
      termination of the Commitments of the Lenders under this Agreement they shall
      not exercise any right or remedy arising by reason of any performance by them
      of
      their guarantee in Section 3.01, whether by subrogation or otherwise,
      against the Borrower or any other guarantor of any of the Guaranteed Obligations
      or any security for any of the Guaranteed Obligations.

     

    SECTION
      3.05.  Remedies.
      The
      Guarantors jointly and severally agree that, as between the Guarantors and
      the
      Lenders, the obligations of the Borrower under this Agreement may be declared
      to
      be forthwith due and payable as provided in Article VIII (and shall be
      deemed to have become automatically due and payable in the circumstances
      provided in Article VIII) for purposes of Section 3.01 notwithstanding
      any stay, injunction or other prohibition preventing such declaration (or such
      obligations from becoming automatically due and payable) as against the Borrower
      and that, in the event of such declaration (or such obligations being deemed
      to
      have become automatically due and payable), such obligations (whether or not
      due
      and payable by the Borrower) shall forthwith become due and payable by the
      Guarantors for purposes of Section 3.01.

     

    SECTION
      3.06.  Instrument
      for the Payment of Money.
      Each
      Guarantor hereby acknowledges that the guarantee in this Article constitutes
      an
      instrument for the payment of money, and consents and agrees that any Lender,
      the Collateral Agent or the Administrative Agent, at its sole option, in the
      event of a dispute by such Guarantor in the payment of any moneys due hereunder,
      shall have the right to proceed by motion for summary judgment in lieu of
      complaint pursuant to N.Y. Civ. Prac. L&R § 3213.

     

    
      
         

      

      
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    SECTION
      3.07.  Continuing
      Guarantee.
      The
      guarantee in this Article is a continuing guarantee, and shall apply to all
      Guaranteed Obligations whenever arising.

     

    SECTION
      3.08.  Rights
      of
      Contribution.
      The
      Subsidiary Guarantors hereby agree, as between themselves, that if any
      Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below)
      by reason of the payment by such Subsidiary Guarantor of any Guaranteed
      Obligations, each other Subsidiary Guarantor shall, on demand of such Excess
      Funding Guarantor (but subject to the next sentence), pay to such Excess Funding
      Guarantor an amount equal to such Subsidiary Guarantor’s Pro Rata Share (as
      defined below and determined, for this purpose, without reference to the
      properties, debts and liabilities of such Excess Funding Guarantor) of the
      Excess Payment (as defined below) in respect of such Guaranteed Obligations.
      The
      payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor
      under this Section shall be subordinate and subject in right of payment to
      the
      prior payment in full of the obligations of such Subsidiary Guarantor under
      the
      other provisions of this Article and such Excess Funding Guarantor shall not
      exercise any right or remedy with respect to such excess until payment and
      satisfaction in full of all of such obligations.

     

    For
      purposes of this Section, (i) “Excess
      Funding Guarantor”
means,
      in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid
      an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii)
      “Excess
      Payment”
means,
      in respect of any Guaranteed Obligations, the amount paid by an Excess Funding
      Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and
      (iii) “Pro
      Rata Share”
means,
      for any Subsidiary Guarantor, the ratio (expressed as a percentage) of
      (x) the amount by which the aggregate present fair saleable value of all
      properties of such Subsidiary Guarantor (excluding any shares of stock of any
      other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities
      of such Subsidiary Guarantor (including contingent, subordinated, unmatured
      and
      unliquidated liabilities, but excluding the obligations of such Subsidiary
      Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
      have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by
      which the aggregate fair saleable value of all properties of all of the
      Subsidiary Guarantors exceeds the amount of all the debts and liabilities
      (including contingent, subordinated, unmatured and unliquidated liabilities,
      but
      excluding the obligations of the Borrower and the Subsidiary Guarantors
      hereunder and under the other Loan Documents) of all of the Subsidiary
      Guarantors, determined (A) with respect to any Subsidiary Guarantor that is
      a party hereto on the Effective Date, as of the Effective Date, and
      (B) with respect to any other Subsidiary Guarantor, as of the date such
      Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.

     

    SECTION
      3.09.  General
      Limitation on Guarantee Obligations.
      In any
      action or proceeding involving any state corporate law, or any state or federal
      bankruptcy, insolvency, reorganization or other law affecting the rights of
      creditors generally, if the obligations of any Subsidiary Guarantor under
      Section 3.01 would otherwise, taking into account the provisions of
      Section 3.08, be held or determined to be void, invalid or unenforceable,
      or subordinated to the claims of any other creditors, on account of the amount
      of its liability under Section 3.01, then, notwithstanding any other
      provision hereof to the contrary, the amount of such liability shall, without
      any further action by such Subsidiary Guarantor, any Lender, the Administrative
      Agent, the Collateral Agent or any other Person, be automatically limited and
      reduced to the highest 

     

    
      
         

      

      
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    amount
      that is valid and enforceable and not subordinated to the claims of other
      creditors as determined in such action or proceeding.

     

    SECTION
      3.10.  No
      Reliance.
      Each
      Guarantor represents and warrants that, in executing and delivering this
      Agreement, such Guarantor has (a) without reliance on any Lender or either
      Agent, or on any information received from any Lender or either Agent, and
      based
      upon such documents and information it deems appropriate, made an independent
      investigation of the transactions contemplated hereby and the Borrower, the
      Borrower’s business, assets, operations, prospects and condition, financial or
      otherwise, and any circumstances which may bear upon such transactions, the
      Borrower or the obligations and risks undertaken herein with respect to the
      Guaranteed Obligations; (b) adequate means to obtain from the Borrower on a
      continuing basis information concerning the Borrower; (c) full and complete
      access to the Loan Documents and any other documents executed in connection
      with
      the Loan Documents; and (d) not relied and will not rely upon any
      representations or warranties of any Lender, the Arranger or either Agent or
      any
      acts heretofore or hereafter taken by any Lender, the Arranger or either Agent
      (including but not limited to any review by any Lender, the Arranger or either
      Agent of the affairs of the Borrower).

     

    SECTION
      3.11.  Release
      of
      Subsidiary Guarantors.
      The
      obligations of a Subsidiary Guarantor under this Agreement and the other Loan
      Documents shall be automatically released upon any sale or disposition of such
      Subsidiary Guarantor (whether by way of sale of capital stock or assets, lease,
      transfer, merger, consolidation or otherwise) to any Person other than the
      Parent Guarantor or a Subsidiary in a transaction that complies with Section
      7.03 and, upon request of the Borrower, the Administrative Agent shall, at
      the
      Borrower’s expense, execute and deliver such instruments and releases as may be
      reasonably necessary in order to evidence the release of such Subsidiary
      Guarantor under the Loan Documents.

     

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Each
      of
      the Borrower and the Parent Guarantor represents and warrants to the Lenders
      that:

     

    SECTION
      4.01.  Organization;
      Powers.
      Each of
      the Parent Guarantor and its Included Subsidiaries is duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization, has all requisite corporate or other organizational power and
      authority to carry on its business as now conducted and, except where the
      failure to do so, individually or in the aggregate, could not reasonably be
      expected to result in a Material Adverse Effect, is qualified to do business
      in,
      and is in good standing in, every jurisdiction where such qualification is
      required.

     

    SECTION
      4.02.  Authorization;
      Enforceability.
      The
      Transactions are within each Obligor’s power and authority and have been duly
      authorized by all necessary action. This Agreement has been duly executed and
      delivered by each Obligor and constitutes, and each of the other Loan Documents
      to which it is a party when executed and delivered by such Obligor 

     

    
      
         

      

      
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    will
      constitute, a legal, valid and binding obligation of such Obligor, enforceable
      against each Obligor in accordance with its terms, except as such enforceability
      may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or
      similar laws of general applicability affecting the enforcement of creditors’
rights and (b) the application of general principles of equity (regardless
      of whether such enforceability is considered in a proceeding in equity or at
      law).

     

    SECTION
      4.03.  Governmental
      Approvals; No Conflicts.
      The
      Transactions (a) do not require any consent or approval of, registration or
      filing with, or any other action by, any Governmental Authority, except for
      (i) such as have been obtained or made and are in full force and effect and
      (ii) filings and recordings in respect of the Liens created pursuant to the
      Security Documents, (b) will not violate any applicable law or regulation
      or the charter, by-laws or other organizational documents of the Parent
      Guarantor or any of its Subsidiaries or any order of any Governmental Authority,
      (c) will not violate or result in a default under any indenture, agreement
      or other instrument binding upon the Parent Guarantor or any of its Subsidiaries
      or assets, or give rise to a right thereunder to require any payment to be
      made
      by any such Person, and (d) except for the Liens created pursuant to the
      Loan Documents, will not result in the creation or imposition of any Lien on
      any
      asset of the Parent Guarantor or any of its Subsidiaries, except, in each case,
      as could not reasonably be expected to result in a Material Adverse
      Effect.

     

    SECTION
      4.04.  Financial
      Condition; No Material Adverse Change.

     

    (a)  Financial
      Condition.
      The
      Projections are a good faith presentation of the information contained therein
      and based on reasonable assumptions and estimates.

     

    (b)  No
      Material Adverse Change.
      Since
      January 29, 2006, except for Disclosed Matters, there has been no material
      adverse change in the business, assets, operations, prospects or condition,
      financial or otherwise, of the Parent Guarantor and its Included Subsidiaries,
      taken as a whole.

     

    SECTION
      4.05.  Properties.

     

    (a)  Property
      Generally.
      Except
      as set forth on Schedule XIII, each of the Parent Guarantor and its Included
      Subsidiaries has good title to, or valid leasehold interests in all its real
      and
      personal property material to its business, subject only to Liens permitted
      by
      Section 7.02 and except for minor defects in title that do not interfere
      with its ability to conduct its business as currently conducted or to utilize
      such properties for their intended purposes.

     

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

     

    
      
         

      

      
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    SECTION
      4.06.  Litigation.

     

    (a)  Actions,
      Suits and Proceedings.
      There
      are no actions, suits, investigations or proceedings by or before any arbitrator
      or Governmental Authority now pending against or, to the knowledge of the
      Borrower or the Parent Guarantor, threatened against or affecting the Parent
      Guarantor or any of its Included Subsidiaries (i) as to which there is a
      reasonable possibility of an adverse determination and that, if adversely
      determined, could reasonably be expected, individually or in the aggregate,
      to
      result in a Material Adverse Effect (other than any Disclosed Matters) or
      (ii) that involve this Agreement or the Transactions.

     

    (b)  Disclosed
      Matters.
      Since
      the date of this Agreement, there has been no change in the status of the
      Disclosed Matters (other than those identified with an “*” on Schedule V) that,
      individually or in the aggregate, has resulted in, or materially increased
      the
      likelihood of, a Material Adverse Effect.

     

    SECTION
      4.07.  Environmental
      Matters.

     

    (a)  Neither
      the Parent Guarantor nor any of its Subsidiaries (i) currently has any
      Environmental Liability which would reasonably be expected to have a Material
      Adverse Effect, (ii) has received notice that it is in non-compliance with
      or
      has a liability or potential liability under any Environmental Laws (except
      for
      any non-compliance or other Environmental Liabilities which would not reasonably
      be expected to have a Material Adverse Effect) or (iii) or has been designated
      as a potentially responsible party under CERCLA or under any state statute
      similar to CERCLA, and none of the Real Property or assets of the Parent
      Guarantor or any of its Subsidiaries located in the United States and owned,
      leased or operated by the Parent Guarantor or any of its Subsidiaries has been
      identified on the current or, to the Borrower’s and the Parent Guarantor’s
      actual knowledge any proposed, (x) National Priorities List under 40 C.F.R.
      Section 300, (y) CERCLIS list or (z) any similar list arising from a state
      statute similar to CERCLA.

     

    (b)  Except
      as
      set forth in Schedule VI, no Hazardous Materials have been arranged for
      disposal, generated, stored, disposed of, managed, Released or otherwise handled
      at, or shipped or transported to or from any of the Real Property of the Parent
      Guarantor or any of its Subsidiaries or are otherwise present at, on, in or
      under any of the Real Property, or to the best of the Borrower’s and the Parent
      Guarantor’s actual knowledge, at or from any adjacent site or facility in a
      manner that would reasonably be expected to affect the Real Property of the
      Parent Guarantor or any of its Subsidiaries, except for (i) Hazardous Materials,
      such as cleaning chemicals, pesticides and other materials used, produced,
      manufactured, processed, treated, recycled, generated, stored, disposed of,
      managed, or otherwise handled in the ordinary course of business in compliance
      with Environmental Laws or (ii) any such disposal, generation, storage,
      arrangement for disposal, disposal, management, Release, handling, shipment,
      transport or presence that would not reasonably be expected to have a Material
      Adverse Effect.

     

    (c)  Each
      of
      the Parent Guarantor and its Subsidiaries (i) are in compliance with all
      applicable Environmental Laws in connection with the operation of its respective
      facilities, businesses and other assets and properties, and there are no
      unresolved notices of violation or non-compliance with respect thereto, and
      (ii)
      have obtained and maintain 

     

    
      
         

      

      
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    in
      full
      force and effect all material permits, licenses, certificates and approvals
      required for their respective facilities and operations under any Environmental
      Laws and comply with all such permits, licenses, certificates and approvals,
      except in the case of (i) and (ii) above for any non-compliance or failure
      to
      obtain or maintain in full force and effect that would not reasonably be
      expected to have a Material Adverse Effect. 

     

    SECTION
      4.08.  Compliance
      with Laws and Agreements.
      Except
      as to matters covered by Section 4.07 (which shall be governed by such Section),
      each of the Parent Guarantor and its Included Subsidiaries is in compliance
      with
      all laws, regulations and orders of any Governmental Authority applicable to
      it
      or its property and all indentures, agreements and other instruments binding
      upon it or its property, except (i) with respect to the Disclosed Matters and
      (ii) where the failure to do so, individually or in the aggregate, could not
      reasonably be expected to result in a Material Adverse Effect. No Default has
      occurred and is continuing.

     

    SECTION
      4.09.  Investment
      Company Status.
      Neither
      the Parent Guarantor nor any of its Included Subsidiaries is an “investment
      company” as defined in, or subject to regulation under, the Investment Company
      Act of 1940.

     

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

     

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

     

    SECTION
      4.12.  Disclosure.
      As of
      the Effective Date, the Borrower and the Parent Guarantor have disclosed to
      the
      Lenders all agreements, instruments and corporate or other restrictions to
      which
      it or any of its respective Included Subsidiaries are subject, and all other
      matters known to it, that, individually or in the aggregate, could reasonably
      be
      expected to result in a Material Adverse Effect. As of the Effective Date,
      the
      written reports, financial statements, certificates and other written
      information furnished by or on behalf of the Obligors to the Lenders on or
      prior
      to the Effective Date in connection with the negotiation of this Agreement
      and
      the other Loan Documents or delivered hereunder or thereunder (as modified
      or

     

    
      
         

      

      
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    supplemented
      by other information so furnished on or prior to the Effective Date), when
      taken
      as a whole, do not contain any material misstatement of fact or omit to state
      any material fact necessary to make the statements therein, in the light of
      the
      circumstances under which they were made, not misleading; provided that with
      respect to projected financial information, the Borrower and the Parent
      Guarantor represent only that such information was prepared in good faith and
      based upon assumptions believed to be reasonable at the time.

     

    SECTION
      4.13.  Use
      of
      Credit.
      Neither
      the Parent Guarantor nor any of its Included Subsidiaries is engaged
      principally, or as one of its important activities, in the business of extending
      credit for the purpose, whether immediate, incidental or ultimate, of buying
      or
      carrying Margin Stock, and no part of the proceeds of any extension of credit
      hereunder will be used to buy or carry any Margin Stock.

     

    SECTION
      4.14.  Material
      Agreements and Liens.

     

    (a)  Material
      Agreements.
      Part A
      of Schedule III is a complete and correct list of each credit agreement,
      loan agreement, indenture, purchase agreement, guarantee, letter of credit
      or
      other arrangement providing for or otherwise relating to any Indebtedness or
      any
      extension of credit (or commitment for any extension of credit) to, or guarantee
      by, the Parent Guarantor or any of its Included Subsidiaries outstanding on
      the
      date hereof the aggregate principal or face amount of which equals or exceeds
      (or may equal or exceed) $250,000, and the aggregate principal or face amount
      outstanding or that may become outstanding under each such arrangement is
      correctly described in Part A of Schedule III.

     

    (b)  Liens.
      Part B
      of Schedule III is a complete and correct list of each Lien securing
      Indebtedness of any Person outstanding on the date hereof the aggregate
      principal or face amount of which equals or exceeds (or may equal or exceed)
      $100,000, and covering any property of the Parent Guarantor or any of its
      Included Subsidiaries and the property covered by each such Lien is correctly
      summarized in Part B of Schedule III.

     

    SECTION
      4.15.  Inactive
      Companies.
      As of
      the Effective Date, each of the following Persons and each of such Person’s
      Subsidiaries are Inactive Companies: Montana Mills, Kremeko Inc., Glazed
      Investments LLC, New England Dough, LLC and Freedom Rings, LLC.

     

    SECTION
      4.16.  Subsidiaries
      and Investments.

     

    (a)  Subsidiaries.
      Set
      forth in Part A of Schedule VII is a complete and correct list of all of
      the Subsidiaries of the Parent Guarantor as of the date hereof, together with,
      for each such Subsidiary, (i) the jurisdiction of organization of such
      Subsidiary, (ii) each Person holding ownership interests in such Subsidiary
      and (iii) the nature of the ownership interests held by each such Person
      and the percentage of ownership of such Subsidiary represented by such ownership
      interests. Except as disclosed in Part A of Schedule VII, (x) the
      Parent Guarantor and each of its Subsidiaries owns, free and clear of Liens
      (other than Liens created pursuant to the Security Documents or otherwise
      permitted pursuant to Section 7.02), and has the unencumbered right to vote,
      all
      outstanding ownership interests in each Person shown to be held by it in Part
      A
      of Schedule VII, (y) all of the issued and outstanding capital stock
      of each such Person organized 

     

    
      
         

      

      
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    as
      a
      corporation is validly issued, fully paid and nonassessable and (z) there
      are no outstanding Equity Rights with respect to such Person.

     

    (b)  Investments.
      Set
      forth in Part B of Schedule VII is a complete and correct list of each
      Investment (other than Investments disclosed in Part A of Schedule VII and
      other than Investments of the types referred to in clauses (b), (c), (d),
      (e), (f), (g) and (m) of Section 7.05) held by the Parent Guarantor or any
      of its Included Subsidiaries in any Person on the date hereof (other than
      Investments, the aggregate outstanding amount of which do not exceed $100,000)
      and, for each such Investment, (x) the identity of the Person or Persons
      holding such Investment and (y) the nature of such Investment. Except as
      disclosed in Part B of Schedule VII, each of the Parent Guarantor and its
      Subsidiaries owns, free and clear of all Liens (other than Liens created
      pursuant to the Security Documents or otherwise permitted pursuant to Section
      7.02), all such Investments.

     

    (c)  Restrictions
      on Included Subsidiaries.
      Except
      as disclosed on Schedule
      IV,
      none of
      the Included Subsidiaries of the Parent Guarantor is, on the date hereof,
      subject to any indenture, agreement, instrument or other arrangement of the
      type
      described in Section 7.08.

     

    SECTION
      4.17.  Real
      Property.
      Set
      forth on Schedule VIII is a true, correct and complete list, as of the date
      hereof, of all of the owned and leased real property interests held by each
      Obligor (“Real Property”), indicating in each case whether the respective
      property is owned or leased, the identity of the owner or lessee and the
      location of the respective property. Except as set forth on Schedule VIII
      hereto, each Obligor has good, sufficient and legal title to all of the owned
      Collateral (as defined in the Security Agreement) (and any other material
      properties and assets, if any) indicated on such Schedule as being owned by
      it
      and will have good, sufficient and legal title of all after-acquired Collateral
      (as defined in the Security Agreement) (and any other after-acquired material
      properties and assets, if any), in each case, free and clear of all Liens except
      for the Permitted Encumbrances and minor defects in title that do not interfere
      with its ability to conduct its business as currently conducted or to utilize
      such properties for its intended purposes. Each Obligor has valid leasehold
      interests in the real property and personal property leased by such Obligor
      (other than with respect to those properties listed on Schedule XIII), subject
      to Permitted Encumbrances and minor defects in title that do not interfere
      with
      its ability to conduct its business as currently conducted or to utilize such
      properties for its intended purposes. The Collateral Agent has, as of the
      Effective Date, a valid, and upon the filing or other recordation of Uniform
      Commercial Code financing statements and other documents delivered by the
      Obligors to the Collateral Agent on the Effective Date, perfected Liens on
      the
      Collateral (to the extent such Lien is required to be perfected on the Effective
      Date), subject only to Permitted Encumbrances (provided, (x) solely with respect
      to Copyrights and Patents (as such terms are defined in the Security Agreement),
      of and to the extent that such priority and perfection may be achieved by the
      filing of Uniform Commercial Code financing statements and appropriate documents
      with the United States Copyright Office and the United States Patent and
      Trademark Office, (y) solely with respect to real property, to the extent that
      such priority and perfection is achieved by delivering and recording a Mortgage
      in the appropriate county filing office and (z) solely with respect to fixtures,
      to the extent that such fixtures are affixed to real property covered by a
      duly
      recorded Mortgage or duly filed Uniform Commercial Code fixture filing),
      securing the payment of the Secured Obligations, and such Liens are entitled
      to
      all of the 

     

    
      
         

      

      
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    rights,
      priorities and benefits afforded by the Uniform Commercial Code or other
      applicable law as enacted in any relevant jurisdiction which relates to
      perfected Liens. For avoidance of doubt, the proviso contained in the
      immediately preceding sentence does not limit any representation or warranty
      made in any Mortgage. No Mortgage encumbers any portion of Real Property which
      is located in an area that has been identified as an area having special flood
      hazards and in which flood insurance has been made available under the National
      Flood Insurance Act of 1968, except as set forth on Schedule VIII.

     

    SECTION
      4.18.  Solvency.
      As of
      the date hereof, after giving effect on a pro forma basis to the extensions
      of
      credit hereunder and to the other transactions contemplated hereby, (i) the
      aggregate value of all properties of the Parent Guarantor and its Included
      Subsidiaries at their present fair saleable value (i.e., the amount that may
      be
      realized within a reasonable time, considered to be six to eighteen months,
      either through collection or sale at the regular market value, conceiving the
      latter as the amount that could be obtained for the properties in question
      within such period by a capable and diligent businessperson from an interested
      buyer who is willing to purchase under ordinary selling conditions), exceeds
      the
      amount of all the debts and liabilities (including contingent, subordinated,
      unmatured and unliquidated liabilities) of the Parent Guarantor and its Included
      Subsidiaries, (ii) the Parent Guarantor and its Included Subsidiaries will
      not,
      on a consolidated basis, have unreasonably small capital with which to conduct
      their business operations as heretofore conducted and (iii) the Parent Guarantor
      and its Included Subsidiaries will have, on a consolidated basis, sufficient
      cash flow to enable them to pay their debts as they mature.

     

    SECTION
      4.19.  Labor
      Matters.
      Except
      as set forth on Schedule IX, (a) neither the Parent Guarantor nor any of
      its Included Subsidiaries is subject to any collective bargaining agreement,
      (b)
      no petition for certification or union election is pending with respect to
      the
      employees of the Parent Guarantor or any of its Included Subsidiaries and no
      union or collective bargaining unit has sought such certification or recognition
      with respect to the employees of the Parent Guarantor or any of its Included
      Subsidiaries and (c) there are no strikes, slowdowns or work stoppages pending
      or, to the knowledge of the Parent Guarantor or any of its Included
      Subsidiaries, threatened between the Parent Guarantor or any of its Included
      Subsidiaries and its respective employees, other than employee grievances
      arising in the ordinary course of business which could not reasonably be
      expected to have, either individually or in the aggregate, a Material Adverse
      Effect. Except as set forth on Schedule IX, neither the Parent Guarantor nor
      any
      of its Included Subsidiaries is subject to an employment contract.

     

     

    ARTICLE
      V

     

    CONDITIONS

     

    SECTION
      5.01.  Effective
      Date.
      The
      obligations of the Lenders to make Loans and of any Issuing Lender to issue
      Letters of Credit hereunder shall not become effective until the date on which
      the Administrative Agent shall have received each of the following documents,
      each of which shall be satisfactory to the Administrative Agent (and to the
      extent specified below, to each Lender) in form and substance (or such condition
      shall have been waived in accordance with Section 10.02):

     

    
      
         

      

      
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    (a)
      Executed
      Counterparts.
      From
      each party hereto either (i) a counterpart of this Agreement signed on
      behalf of such party or (ii) written evidence satisfactory to the
      Administrative Agent (which may include telecopy transmission of a signed
      signature page to this Agreement) that such party has signed a counterpart
      of
      this Agreement.

     

    (b)
      Opinions
      of Counsel to the Obligors.
      Favorable written opinions (addressed to the Agents and the Lenders and dated
      the Effective Date) of Cahill Gordon & Reindel LLP, special New York counsel
      to the Obligors; Charles Blixt, general counsel of the Borrower; Kilpatrick
      Stockton, LLP, special North Carolina and Intellectual Property counsel to
      the
      Obligors; Pestalozzi Lachenal Patry, special Swiss counsel to the Obligors;
      Stites & Harbison PLLC, special Kentucky counsel to the Obligors; and
      Andrews Kurth LLP, special Texas counsel to the Obligors.

     

    (c)
      Corporate
      Documents.
      Such
      documents and certificates as the Administrative Agent or its counsel may
      reasonably request relating to the organization, existence and good standing
      of
      each Obligor, the authorization of the Transactions and any other legal matters
      relating to the Obligors, this Agreement or the Transactions, all in form and
      substance reasonably satisfactory to the Administrative Agent and its
      counsel.

     

    (d)
      Officer’s
      Certificate.
      A
      certificate, dated the Effective Date and signed by the President, a Vice
      President or a Financial Officer of the Borrower, (i) confirming compliance
      with the conditions set forth in the lettered clauses of the first sentence
      of
      Section 5.02, (ii) as to the matters set forth in Section 4.18 and (iii)
      confirming that the Consolidated Leverage Ratio (calculated for the Test Period
      ended October 29, 2006 but (i) with Consolidated Total Debt calculated as at
      the
      Effective Date after giving effect to the proposed borrowing requested on the
      Effective Date and use of proceeds thereof and (ii) excluding obligations in
      respect of letters of credit) does not exceed 3.0 to 1.

     

    (e)
      Security
      Agreement.
      The
      Security Agreement, duly executed and delivered by each Obligor and the
      Collateral Agent and the certificates identified under the name of such Obligor
      in Annex 3 thereto, in each case accompanied by undated stock powers
      executed in blank. In addition, each Obligor shall have taken such other action
      (including delivering to the Collateral Agent, for filing, appropriately
      completed copies of Uniform Commercial Code financing statements and taking
      any
      necessary action in connection therewith) as the Collateral Agent shall have
      reasonably requested in order to perfect the security interests created pursuant
      to the Security Agreement.

     

    (f)
      Mortgages
      and Title Insurance.
      The
      following documents, each of which shall be executed (and, where appropriate,
      acknowledged) by Persons satisfactory to the Administrative Agent; provided
      that
      to the extent that any such documents are not delivered on the Effective Date,
      the delivery of such documents shall be deemed to be post-closing actions
      (“Post-Closing
      Actions”)
      and
      shall not constitute conditions precedent under this Section 5.01:

     

    (i)
      one or
      more Mortgages covering the Real Property set forth on Schedule VIII (other
      than
      Excluded Real Property and Property Designated For Sale), in each case duly
      executed and delivered by the Borrower in recordable 

     

    
      
         

      

      
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    form
      (in
      such number of copies as the Administrative Agent shall have reasonably
      requested);

     

    (ii)
      favorable written legal opinions from local counsel in the respective states
      in
      which the properties covered by the Mortgage(s) are located reasonably
      satisfactory in form and substance to the Administrative Agent;

     

    (iii)
      one
      or more mortgagee policies of title insurance on forms of and issued by one
      or
      more title companies reasonably satisfactory to the Administrative Agent (the
      “Title
      Companies”),
      insuring the validity and priority of the Liens created under the Mortgages
      covering the Real Property set forth on Schedule VIII (other than Excluded
      Real
      Property and Property Designated For Sale) for and in amounts equal to at least
      one hundred fifteen percent (115%) of the appraised value of each of the Real
      Property set forth on Schedule VIII (other than Excluded Real Property and
      Property Designated For Sale), subject only to such exceptions as are reasonably
      satisfactory to the Administrative Agent and, to the extent necessary under
      applicable law, for filing in the appropriate county land offices, Uniform
      Commercial Code financing statements covering fixtures, in each case
      appropriately completed and duly executed;

     

    (iv)
      as-built surveys of recent date of each of the Principal Facilities, other
      than
      those Principal Facilities located at 1814 Ivy Avenue, Winston-Salem, NC and
      3190 Center Park Boulevard, Winston-Salem, NC, showing such matters as may
      be
      required by the Administrative Agent, which surveys shall be in form and content
      reasonably acceptable to the Administrative Agent, shall be certified to the
      Administrative Agent, the Collateral Agent and the Title Companies, and shall
      have been prepared by a registered surveyor acceptable to the Administrative
      Agent (it being understood that such surveys delivered in connection with the
      Existing Credit Agreements are acceptable to the Administrative Agent);
      and

     

    (v)
      certified copies of permanent and unconditional certificates of occupancy for
      the Real Property set forth on Schedule VIII (other than Excluded Real Property
      and Property Designated For Sale) (or if it is not the practice to issue
      certificates of occupancy in the jurisdiction in which such respective Real
      Property is located, then such other evidence reasonably satisfactory to the
      Administrative Agent that the fully functioning operation and occupancy of
      such
      Real Property is permitted) (other than for the Principal Facility located
      at
      1814 Ivy Avenue, Winston-Salem, NC) permitting the fully functioning operation
      and occupancy of such Real Property and of such other permits necessary for
      the
      use and operation of such Real Property issued by the respective governmental
      authorities having jurisdiction over such Real Property.

     

    In
      addition, the Borrower shall have paid to the Title Companies all expenses
      and
      premiums of the Title Companies in connection with the issuance of such policies
      and in addition shall have paid to the Title Companies an amount equal to the
      recording and stamp taxes payable in connection with recording the Mortgages
      and
      Uniform Commercial Code fixture filings, if applicable, in the appropriate
      county land offices.

     

    
      
         

      

      
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    (g)
      Insurance.
      Certificates of insurance evidencing the existence of all insurance required
      to
      be maintained by the Parent Guarantor pursuant to Section 6.05(a) and the
      designation of the Collateral Agent as the loss payee or additional named
      insured thereunder. In addition, the Borrower shall have delivered a certificate
      of the president, a vice-president, or a Financial Officer of the Borrower
      stating that the insurance described in the certificates referred to in the
      preceding sentence is in full force and effect and that all premiums then due
      and payable thereon have been paid.

     

    (h)
      Repayment
      of Existing Indebtedness.
      Evidence
      that the principal of and interest on, and all other amounts owing in respect
      of, the Indebtedness (including any contingent or other amounts payable in
      respect of letters of credit) outstanding under the Existing Credit Agreements
      shall have been (or shall be simultaneously) paid in full, that any commitments
      to extend credit under the Existing Credit Agreements shall have been canceled
      or terminated and that all Guarantees in respect of, and all Liens securing,
      any
      such Indebtedness shall have been released (or arrangements for such release
      satisfactory to the Required Lenders shall have been made).

     

    (i)
      Certain
      Regulatory Matters.
      All
      documentation requested by either Agent or any Lender under applicable “know
      your customer” and anti-money laundering rules and regulations, including
      without limitation under the USA PATRIOT Act (Title III of Pub. L. 107-56
      (signed into law October 26, 2001).

     

    (j)
      Lien
      Results.
      The
      Administrative Agent shall have received the results of a recent lien search
      in
      each relevant jurisdiction with respect to the Obligors, and such search shall
      reveal no Liens on any of the assets of any Obligor except for Liens permitted
      by Section 7.02 or Liens to be discharged on or prior to the Effective
      Date.

     

    (k)
      Other
      Documents.
      Such
      other documents as the Administrative Agent or any Lender or special New York
      counsel to CS may reasonably request.

     

    The
      obligation of each Lender to make its initial extension of credit hereunder
      is
      also subject to the payment by the Borrower of (i) such fees as the Borrower
      shall have agreed to pay to any Lender or the Administrative Agent in connection
      herewith, and (ii) the reasonable fees and expenses of Milbank, Tweed, Hadley
      & McCloy LLP (“MTHM”), special New York counsel to CS, in connection with
      the negotiation, preparation, execution and delivery of this Agreement and
      the
      other Loan Documents, the extensions of credit hereunder and otherwise in
      connection with the Transactions (to the extent that statements for such fees
      and expenses have been delivered to the Borrower). Borrower agrees that any
      prior writings with respect to the fees and expenses of MTHM that are the
      subject of this paragraph are superseded by the Borrower’s Obligation under this
      paragraph.

     

    The
      Administrative Agent shall notify the Borrower and the Lenders of the Effective
      Date, and such notice shall be conclusive and binding. Notwithstanding the
      foregoing, the obligations of the Lenders to make Loans and of the Issuing
      Lenders to issue Letters of Credit hereunder shall not become effective unless
      each of the foregoing conditions is satisfied (or waived pursuant to
      Section 10.02) on or prior to 3:00 p.m., New York City time, on
      February 

     

    
      
         

      

      
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    16,
      2007
      (and, in the event such conditions are not so satisfied or waived, the
      Commitments shall terminate at such time).

     

    SECTION
      5.02.  Each
      Credit Event.
      The
      obligation of each Lender to make any Loan, and of any Issuing Lender to issue,
      amend, renew or extend any Letter of Credit, is additionally subject to the
      satisfaction of the following conditions:

     

    (a)
      the
      representations and warranties of the Borrower and the Parent Guarantor set
      forth in this Agreement, and of each Obligor in each of the other Loan Documents
      to which it is a party, shall be true and correct in all material respects
      on
      and as of the date of such Loan or the date of issuance, amendment, renewal
      or
      extension of such Letter of Credit, as applicable (unless any such
      representation or warranty expressly relates to an earlier date, in which case
      such representation or warranty shall be true and correct in all material
      respects as of such earlier date);

     

    (b)
      at the
      time of and immediately after giving effect to such Loan or the issuance,
      amendment, renewal or extension of such Letter of Credit, as applicable, no
      Default shall have occurred and be continuing; and 

     

    (c)
      for
      each borrowing of a Loan, Borrower shall have delivered a completed and signed
      Request for Loan and for each issuance of a Letter of Credit, Borrower shall
      have provided the information required by Section 2.05(b). 

     

    Each
      Borrowing and each issuance, amendment, renewal or extension of a Letter of
      Credit shall be deemed to constitute a representation and warranty by the
      Borrower on the date thereof as to the matters specified in the preceding
      sentence.

     

     

    ARTICLE
      VI

     

    AFFIRMATIVE
      COVENANTS

     

    Until
      the
      Commitments have expired or been terminated and the principal of and interest
      on
      each Loan and all fees payable hereunder shall have been paid in full and all
      Letters of Credit shall have expired or terminated and all LC Disbursements
      shall have been reimbursed, each of the Borrower and the Parent Guarantor
      covenants and agrees with the Lenders that:

     

    SECTION
      6.01.  Financial
      Statements and Other Information.
      The
      Parent Guarantor will furnish to the Administrative Agent for distribution
      to
      each Lender:

     

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

     

    
      
         

      

      
        -71-

        
          

        

      

      
         

      

    

    Parent
      Guarantor and its Consolidated Subsidiaries on a consolidated basis in
      accordance with GAAP consistently applied;

     

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

     

    (c)
      within
      30 days after the end of each of the first two fiscal months of each Fiscal
      Quarter, the consolidated balance sheet and related statements of operations
      of
      the Parent Guarantor and its Consolidated Subsidiaries as of the end of and
      for
      such fiscal month and the then elapsed portion of the Fiscal Quarter, all
      certified by a Financial Officer of the Parent Guarantor as presenting fairly
      in
      all material respects the financial condition and results of operations of
      the
      Parent Guarantor and its Consolidated Subsidiaries on a consolidated basis
      in
      accordance with GAAP consistently applied, subject to normal quarterly and
      year-end audit adjustments and the absence of footnotes;

     

    (d)
      concurrently with any delivery of financial statements under clause (a) or
      (b) of this Section, a certificate of a Financial Officer of the Parent
      Guarantor (i) certifying as to whether a Default has occurred and, if a
      Default has occurred, specifying the details thereof and any action taken or
      proposed to be taken with respect thereto, (ii) setting forth reasonably
      detailed calculations demonstrating compliance with Section 7.09 and such
      portions of Sections 7.01, 7.02, 7.03 and 7.05 requiring compliance with certain
      specified limits, and (iii) stating whether any material change in GAAP
      used in preparing such financial statements or in the application thereof has
      occurred since the date of the most recently delivered audited financial
      statements pursuant to Section 6.01(a) and, if any such change has
      occurred, specifying the effect of such change on the financial statements
      accompanying such certificate;

     

    (e)
      concurrently with any delivery of financial statements under clause (a) of
      this Section, a certificate of the accounting firm that reported on such
      financial statements stating whether it obtained knowledge during the course
      of
      its examination of such financial statements of any Default (which certificate
      may be limited to the extent required by accounting rules or
      guidelines);

     

    (f) 
      within 60 days after the commencement of each Fiscal Year commencing after
      the
      Effective Date, the annual operating plan for the Financial Test Group,
      including an annual budget for the Financial Test Group, forecasts of the income
      statement, the balance sheet and cash flow statement for the immediately
      succeeding year;

     

    
      
         

      

      
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    (g)
      promptly after the same become publicly available, copies of all periodic and
      other reports, proxy statements and other materials filed by the Parent
      Guarantor or any of its Subsidiaries with the Securities and Exchange
      Commission, or any Governmental Authority succeeding to any or all of the
      functions of the Securities and Exchange Commission, or with any national
      securities exchange (it being understood that the Parent Guarantor shall be
      deemed to satisfy this requirement to the extent any such document is filed
      electronically with the Securities and Exchange Commission through (and is
      publicly available on) the Securities and Exchange Commission’s Electronic Data
      Gathering, Analysis and Retrieval System (or any successor system));
      and

     

    (h)
      promptly following any request therefor, such other information regarding the
      operations, business affairs and financial condition of the Parent Guarantor
      or
      any of its Included Subsidiaries, or compliance with the terms of this Agreement
      and the other Loan Documents, as the Administrative Agent or any Lender (through
      the Administrative Agent) may reasonably request.

     

    Information
      required to be delivered pursuant to Sections 6.01(a), 6.01(b) and 6.01(g)
      above
      shall be deemed to have been delivered on the date on which the Parent Guarantor
      provides notice to the Administrative Agent that such information has been
      posted on the Parent Guarantor’s website on the internet or at another website
      identified in such notice and accessible by the Administrative Agent and the
      Lenders without charge; provided
      that (i)
      such notice may be included in the certificate delivered pursuant to Section
      6.01(d) and (ii) the Parent Guarantor shall deliver, or cause to be delivered,
      paper copies of the information referred to in Sections 6.01(a), 6.01(b) and
      6.01(g) above to the Administrative Agent upon any request for such
      delivery.

     

    SECTION
      6.02.  Notices
      of Material Events.
      The
      Borrower (for itself and on behalf of the Parent Guarantor) will furnish to
      the
      Administrative Agent and each Lender written notice of the
      following:

     

    (a)
      promptly after obtaining knowledge of any Default, the occurrence of such
      Default;

     

    (b)
      within
      ten (10) Business Days after discovery by Borrower, the filing or commencement
      of any action, suit or proceeding by or before any arbitrator or Governmental
      Authority against or affecting the Parent Guarantor or any of its Subsidiaries
      that, if adversely determined, could reasonably be expected to result in a
      Material Adverse Effect;

     

    (c)
      within
      ten (10) Business Days after discovery by Borrower, the occurrence of any ERISA
      Event that, alone or together with any other ERISA Events that have occurred,
      could reasonably be expected to result in a Material Adverse
      Effect;

     

    (d)
      within
      ten (10) Business Days after discovery by Borrower, the assertion of any
      Environmental Claim by any Person against, or with respect to the activities
      of,
      the Parent Guarantor or any of its Subsidiaries and any alleged violation of
      or
      non-compliance with any Environmental Laws or any permits, licenses or
      authorizations, 

     

    
      
         

      

      
        -73-

        
          

        

      

      
         

      

    

    other
      than
      any Environmental Claim or alleged violation that, if adversely determined,
      would not (either individually or in the aggregate) have a Material Adverse
      Effect; and

     

    (e)
      within
      ten (10) Business Days after discovery by Borrower, any other development that
      results in, or could reasonably be expected to result in, a Material Adverse
      Effect.

     

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

     

    SECTION
      6.03.  Existence;
      Conduct of Business.
      The
      Parent Guarantor will, and, subject to Section 7.03, will cause each of its
      Included Subsidiaries to, do or cause to be done all things necessary to
      preserve, renew and keep in full force and effect its legal existence and the
      rights, licenses, permits, privileges and franchises material to the conduct
      of
      its business; provided that the foregoing shall not prohibit any merger,
      consolidation, liquidation or dissolution permitted under
      Section 7.03.

     

    SECTION
      6.04.  Payment
      of
      Obligations.
      The
      Parent Guarantor will, and will cause each of its Included Subsidiaries to,
      pay
      its obligations, including tax liabilities, that, if not paid, could result
      in a
      Material Adverse Effect before the same shall become delinquent or in default,
      except where (a) the validity or amount thereof is being contested in good
      faith by appropriate proceedings, (b) the Parent Guarantor or such Included
      Subsidiary has set aside on its books adequate reserves with respect thereto
      if
      required by and in accordance with GAAP and (c) the failure to make payment
      pending such contest could not reasonably be expected to result in a Material
      Adverse Effect.

     

    SECTION
      6.05.  Maintenance
      of Properties; Insurance.

     

    (a)  Except
      to
      the extent that such obligations are express obligations of any landlord under
      a
      lease, the Parent Guarantor will, and will cause each of its Included
      Subsidiaries to, (i) keep and maintain all property material to the conduct
      of its business in good working order and condition, ordinary wear and tear
      and
      Casualty Events excepted, and (ii) maintain, with financially sound and
      reputable insurance companies, insurance in such amounts and against such risks
      as are customarily maintained by companies engaged in the same or similar
      businesses operating in the same or similar locations.

     

    (b)  Compromise,
      Adjustment or Settlement.
      The
      Administrative Agent shall be
      entitled at its option to participate in any compromise, adjustment or
      settlement in connection with any claims for loss, damage or destruction under
      any policy or policies of insurance, in excess of $2,000,000, and if the
      Administrative Agent so shall elect to participate in such compromise,
      adjustment or settlement, the Parent Guarantor shall, and shall cause each
      of
      its Included Subsidiaries to, within five Business Days after request therefor
      reimburse the Administrative Agent for all out-of-pocket expenses (including
      reasonable attorneys’ fees and disbursements) incurred by the Administrative
      Agent in connection with such participation. Neither the Parent Guarantor nor
      any of its Included Subsidiaries shall make any compromise, 

     

    
      
         

      

      
        -74-

        
          

        

      

      
         

      

    

    adjustment
      or settlement in connection with any such claim, in respect of which the
      Administrative Agent elected to participate, without the approval of the
      Administrative Agent, which will not be unreasonably withheld, delayed or
      conditioned.

     

    SECTION
      6.06.  Books
      and Records; Inspection Rights.
      The
      Parent Guarantor will, and will cause each of its Included Subsidiaries to,
      keep
      proper books of record and account in which full, true and correct entries
      are
      made of all dealings and transactions in relation to its business and
      activities. The Parent Guarantor will, and will cause each of its Included
      Subsidiaries to, permit any representatives designated by the Administrative
      Agent or any Lender (at such Lender’s sole expense except during the continuance
      of an Event of Default), upon reasonable prior notice, to visit and inspect
      its
      properties, to examine and make extracts from its books and records, and to
      discuss its affairs, finances and condition with its officers and independent
      accountants, all at such reasonable times and as often as reasonably
      requested.

     

    SECTION
      6.07.  Compliance
      with Laws.

     

    (a)  The
      Parent
      Guarantor will, and will cause each of its Included Subsidiaries to, comply
      with
      all laws, rules, regulations and orders of any Governmental Authority (including
      Environmental Laws) applicable to it or its property, except where the failure
      to do so, individually or in the aggregate, could not reasonably be expected
      to
      result in a Material Adverse Effect.

     

    (b)  Notification
      of Notices and Orders.
      The
      Borrower shall notify the Administrative Agent and the Collateral Agent promptly
      of any material notice, order, claim or demand that such party receives from
      any
      Governmental Authority or any other Person with respect to the Borrower’s
      compliance with or liability under any laws or regulations (including
      Environmental Laws) applicable to the Real Property and promptly take any and
      all actions to challenge such notice, order, claim or demand in accordance
      with
      accepted practices and such other actions reasonably necessary to bring its
      operations at such Real Property into compliance with such laws or regulations,
      other than where the failure to comply with or the liability under such laws
      or
      regulations could not reasonably be expected to cause or result in a Material
      Adverse Effect. A material notice, order, claim or demand from any Governmental
      Authority pursuant to an Environmental Law means any such item that could
      reasonably be expected to result in fines or penalties, exclusive of interest
      and costs, of $500,000 or more.

     

    (c)  Right
      to Cure Non-Compliance with Environmental Laws.
      After
      the occurrence and during the continuance of any Event of Default with respect
      to a breach of Section 4.07 or this Section 6.07, the Administrative Agent
      or
      the Collateral Agent, at its election and in its sole discretion may, without
      obligation to do so, and upon reasonable notice to the Borrower (except in
      an
      emergency), may cure any failure on the part of the Borrower to comply with
      Environmental Laws or respond to any Environmental Liability to the extent
      required under any Environmental Laws. Any partial exercise by the
      Administrative Agent or the Collateral Agent of the remedies hereinafter set
      forth, or any partial undertaking on the part of the Administrative Agent or
      the
      Collateral Agent to cure the Borrower’s failure to comply with any Environmental
      Law, shall not obligate the Administrative Agent or the Collateral Agent to
      complete the actions taken or require the Administrative Agent or the Collateral
      Agent to expend further sums to cure the Borrower’s noncompliance; nor shall the
      exercise of any such remedies 

     

    
      
         

      

      
        -75-

        
          

        

      

      
         

      

    

    operate
      to
      place upon the Administrative Agent or the Collateral Agent any responsibility
      for the operation, control, care, management or repair of the Real Property,
      nor
      will the Borrower or the Parent Guarantor assert that any such actions make
      the
      Administrative Agent or Collateral Agent the “operator” of such Real Property
      under CERCLA or any other Environmental Laws. 

     

    Any
      amount
      paid or costs incurred by the Administrative Agent or the Collateral Agent
      as a
      result of the exercise by the Administrative Agent or the Collateral Agent
      of
      any of the rights hereinabove set forth, together with interest thereon at
      the
      default rate specified herein, shall be immediately due and payable by the
      Borrower to the Administrative Agent or the Collateral Agent, as the case may
      be, and until paid shall be added to and become a part of the Obligations;
      and
      the Administrative Agent or the Collateral Agent, by making any such payment
      or
      incurring any such costs, shall be subrogated to any rights of the Borrower
      to
      seek reimbursement from any third parties, including, without limitation, a
      predecessor-in-interest to the Borrower’s title who may be a “responsible party”
or otherwise liable under any Environmental Law.

     

    (d)  Environmental
      Assessment.
      If after
      the occurrence and during the continuance of any Event of Default with respect
      to a breach of Section 4.07 or this Section 6.07, the Administrative Agent
      or
      the Collateral Agent desires that an environmental assessment with respect
      to
      the Real Properties that are at issue in the Event of Default be prepared,
      the
      Borrower agrees to supply such an assessment by an environmental consultant
      selected by the Borrower and reasonably satisfactory to the Administrative
      Agent
      and the Collateral Agent, in form and detail reasonably satisfactory to the
      Administrative Agent and the Collateral Agent (including, where appropriate,
      test borings of the ground and chemical analyses of air, water and waste
      discharges), identifying alternatives and associated costs to address the
      subject matter of the Event of Default to the extent required under applicable
      Environmental Laws.

     

    (e)  Indemnity.
      The
      Borrower shall indemnify and hold the Administrative Agent, the Collateral
      Agent, any Issuing Lender and each Lender harmless from and against any and
      all
      losses, liabilities, claims, damages or expenses (including any reasonable
      attorney or expert fees and any Lien filed against the Real Property in favor
      of
      any governmental entity, but excluding any loss, liability, claim, damage or
      expense to the extent incurred by reason of the gross negligence or willful
      misconduct of the Person to be indemnified) to the extent arising under any
      Environmental Law as the result of the operations of Borrower (or any
      predecessor-in-interest to the Borrower) at the Real Property, or the condition
      of the Real Property, or any presence, Release or threatened Release of any
      Hazardous Materials at or from the Real Property (excluding any such Release
      or
      threatened Release that shall occur during any period when the Administrative
      Agent, the Collateral Agent, any Issuing Lender or any of the Lenders shall
      be
      in possession of the Real Property following the exercise by the Administrative
      Agent or the Collateral Agent of any of its rights and remedies hereunder,
      but
      including any such Release or threatened Release occurring during such period
      that is a continuation of conditions previously in existence, or of practices
      employed by the Borrower, at the Real Property).

     

    SECTION
      6.08.  Use
      of
      Proceeds and Letters of Credit.
      The
      proceeds of the Loans will be used to refinance the loans outstanding under
      the
      Existing Credit Agreements and for working capital and other general corporate
      purposes, including without limitation to pay fees, costs and other transaction
      expenses incurred in connection with the financings 

     

    
      
         

      

      
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    contemplated
      by the Loan Documents. No part of the proceeds of any Loan will be used, whether
      directly or indirectly, for any purpose that entails a violation of any of
      the
      Regulations of the Board, including Regulations U and X. Letters of
      Credit will be issued only to support payment obligations incurred for general
      corporate purposes of the Parent Guarantor and its Included
      Subsidiaries.

     

    SECTION
      6.09.  Hedging
      Agreements.
      The
      Borrower will within 90 days of the Effective Date enter into, and thereafter
      maintain in full force and effect, one or more Hedging Agreements with one
      or
      more of the Lenders, the Arranger or Affiliates of any Lender or the Arranger
      (and/or with a bank or other financial institution having capital, surplus
      and
      undivided profits of at least $500,000,000), that effectively enables the
      Borrower (in a manner reasonably satisfactory to the Administrative Agent)
      to
      protect itself against three-month London interbank offered rates exceeding
      a
      rate per annum reasonably acceptable to the Administrative Agent as to a
      notional principal amount at least equal to 50%, of the aggregate principal
      amount of Term Loans from time to time outstanding, for a period of at least
      three years measured from the Effective Date.

     

    SECTION
      6.10.  Certain
      Obligations Respecting Subsidiaries; Further Assurances.

     

    (a)  Subsidiary
      Guarantors.
      The
      Parent Guarantor will take such action, and will cause each of its Included
      Subsidiaries to take such action, from time to time as shall be necessary to
      ensure that each Domestic Subsidiary (other than a Domestic Subsidiary that,
      at
      the time of determination, is a Prohibited Subsidiary or an Inactive Company)
      is
      a “Subsidiary Guarantor” hereunder. Without limiting the generality of the
      foregoing, in the event that the Borrower or any of its Included Subsidiaries
      shall hereafter form or acquire any Person that shall constitute a Domestic
      Subsidiary (other than a Domestic Subsidiary that, at the time of determination,
      is a Prohibited Subsidiary or an Inactive Company) of the Borrower, the Parent
      Guarantor and its Included Subsidiaries will cause such Person to:

     

    (i)
      become
      a “Subsidiary Guarantor” hereunder, and a “Securing Party” under the Security
      Agreement pursuant to a Guarantee Assumption Agreement,

     

    (ii)
      cause
      such Subsidiary to take such action (including delivering such shares of stock,
      delivering such Uniform Commercial Code financing statements and executing
      and
      delivering mortgages or deeds of trust covering the real property and fixtures
      owned or leased by such Subsidiary) as shall be necessary to, subject to the
      thresholds set forth in clause (c) below with respect to Real Property and
      subject to the applicable exceptions in the Security Agreement, create and
      perfect valid and enforceable first priority Liens on substantially all of
      the
      property of such new Subsidiary (other than (x) voting stock of any Foreign
      Subsidiary to the extent that all voting stock of such Foreign Subsidiary
      subject to such Lien would exceed 65% of the issued and outstanding voting
      stock
      of such Foreign Subsidiary and (y) equity interests in any Joint Venture to
      the
      extent the pledge of such equity interests under the Security Agreement is
      prohibited by its organizational documents, joint venture agreement, operating
      agreement or an agreement governing its Indebtedness) as collateral security
      for
      the obligations of such new Subsidiary hereunder and

     

    
      
         

      

      
        -77-

        
          

        

      

      
         

      

    

    

     

    (iii)
      deliver such proof of corporate action, incumbency of officers, opinions of
      counsel and other documents with respect to such Subsidiary Guarantor as is
      consistent with those delivered by each Obligor pursuant to Section 5.01 on
      the Effective Date or as the Administrative Agent shall have reasonably
      requested.

     

    (b)  Ownership
      of Subsidiaries.
      In the
      event that any additional shares of stock shall be issued by any Subsidiary
      to
      any Obligor (other than (x) voting stock of any Foreign Subsidiary to the extent
      that all voting stock of such Foreign Subsidiary subject to the Lien of the
      Security Agreement would exceed 65% of the issued and outstanding voting stock
      of such Foreign Subsidiary and (y) equity interests in any Joint Venture to
      the
      extent the pledge of such equity interests under the Security Agreement is
      prohibited by its organizational documents, joint venture agreement, operating
      agreement or an agreement governing its Indebtedness), such Obligor agrees
      forthwith to deliver to the Collateral Agent in accordance with and subject
      to
      the terms of the Security Agreement the certificates, if any, evidencing such
      shares of stock, accompanied by undated stock powers executed in blank and
      to
      take such other action as the Collateral Agent shall request to perfect the
      security interest created therein pursuant to the Security Agreement.
      Notwithstanding the foregoing or any other provision herein to the contrary,
      the
      Parent Guarantor shall have no Subsidiaries other than the Borrower and
      Subsidiaries of the Borrower.

     

    (c)  Further
      Assurances.
      The
      Parent Guarantor will, and will cause each of its Included Subsidiaries to,
      take
      such action from time to time as shall reasonably be requested by the
      Administrative Agent to effectuate the purposes and objectives of this
      Agreement. Without limiting the generality of the foregoing, the Parent
      Guarantor will, and will cause each other Obligor to, take such action from
      time
      to time (including filing appropriate Uniform Commercial Code financing
      statements and executing and delivering such assignments, security agreements,
      account control agreements and other instruments) as shall be reasonably
      requested by the Collateral Agent to create and maintain, in favor of the
      Collateral Agent for the benefit of the Lenders (and any Affiliate of any Lender
      or of the Arranger that is a party to any Hedging Agreement entered into with
      the Borrower) and the Administrative Agent, perfected security interests and
      Liens in substantially all of the property of such Obligor (other than Excluded
      Real Property) as collateral security for its obligations hereunder;
provided
      that any
      such security interest or Lien shall be subject to the relevant requirements
      of
      the Security Documents.

     

    SECTION
      6.11.  Ownership
      of the Borrower.
      The
      Parent Guarantor will at all times cause the Borrower to be its Wholly Owned
      Subsidiary.

     

    SECTION
      6.12.  Ratings.
      The
      Borrower will use commercially reasonable efforts to obtain and maintain ratings
      for the Loans from S&P and from Moody’s.

     

    SECTION
      6.13.  Separateness.
      The
      Parent Guarantor will, and will cause each of its Included Subsidiaries to,
      conduct its management, business and affairs, and maintain its books and
      records, in such manner so that each such Person shall be treated as a corporate
      entity distinct from each other such Person.

     

    
      
         

      

      
        -78-

        
          

        

      

      
         

      

    

    

     

    SECTION
      6.14.  Post-Closing
      Actions
      and Other Matters Regarding Real Property.

     

    (a)  Post-Closing
      Actions.
      The
      Borrower will complete all Post-Closing Actions within 60 days after the
      Effective Date; provided
      that (i)
      the Administrative Agent in its sole discretion may extend such period by means
      of two successive 30 day extensions and (ii) if consented to by the Required
      Lenders, the Administrative Agent may agree to any additional extensions
      thereafter.

     

    (b)  Encumbrance
      of Property Designated for Sale.
      The
      Borrower shall, with respect to the Property Designated for Sale owned by the
      Borrower on the Effective Date, not later than 180 days after the Effective
      Date
      (it being understood that any Property Designated For Sale that is sold prior
      to
      such time shall not be subject to the requirements of this paragraph) execute
      and deliver in favor of the Collateral Agent a Mortgage appropriate for the
      jurisdiction in which such respective Real Property is situated, pursuant to
      which the Borrower will create a Lien upon such Real Property (and improvements)
      in favor of the Collateral Agent for the benefit of the Lenders (and any
      Affiliate of any Lender or of the Arranger that is a party to any Hedging
      Agreement entered into with the Borrower) and the Administrative Agent as
      collateral security for the obligations of the Borrower under this Agreement
      and
      will deliver such certificates of occupancy (or, if it is not the practice
      to
      issue certificates of occupancy in the jurisdiction in which such Real Property
      is located, then such other evidence reasonably satisfactory to the
      Administrative Agent that the fully functioning operation and occupancy of
      such
      Real Property is permitted), opinions of counsel and title insurance policies
      as
      the Administrative Agent shall reasonably request in connection therewith
      (provided
      that a
      legal opinion substantially in the form of the legal opinions addressing certain
      real estate matters delivered pursuant to Section 5.01(b) on the Effective
      Date,
      with such modifications as are necessary for the relevant jurisdictions, shall
      be deemed to be satisfactory in form and substance to the Administrative Agent),
      including payment for all such title insurance policies and recording and stamp
      taxes payable in connection with recording all Mortgages and Uniform Commercial
      Code fixture filings, if applicable, in the appropriate county land
      offices.

     

    (c)  After
      Acquired Fee Interests in Real Property.
      If any
      Obligor shall acquire any real property interest, including improvements (but
      excluding leasehold interests and improvements thereon and any real property
      interest situated on land not owned in fee), after the date hereof that (i)
      consists of a retail store or (ii) that is not a retail store and that has
      a
      fair market value of $1,000,000 or more (or shall make improvements upon any
      existing real property interest (excluding leasehold interests and improvements
      thereon and any real property interest situated on land not owned in fee and
      the
      Excluded Real Property) resulting in the fair market value of such interest
      together with such improvements being equal to $1,000,000 or more), then the
      Parent Guarantor will (or, as applicable, will cause the respective Obligor
      holding such real property interest to), subject to the last sentence of this
      paragraph, within 30 days of the acquisition of or improvements upon such
      property interest by such Obligor (unless the Borrower requests that the
      Administrative Agent not, and the Administrative Agent in its sole and absolute
      discretion based upon the costs and benefits of doing so agrees not to, encumber
      such property as Collateral) (A) execute and deliver in favor of the Collateral
      Agent a Mortgage appropriate for the jurisdiction in which such respective
      real
      property is situated, pursuant to which such Obligor will create a Lien upon
      such real property (and improvements) in favor of 

     

    
      
         

      

      
        -79-

        
          

        

      

      
         

      

    

    the
      Collateral Agent for the benefit of the Lenders (and any Affiliate of any Lender
      or of the Arranger that is a party to any Hedging Agreement entered into with
      the Borrower) and the Administrative Agent as collateral security for the
      obligations of such Obligor under this Agreement or, as applicable, under the
      respective Guarantee Assumption Agreement to which such Obligor is a party,
      (B)
      obtain or deliver a current Phase I (with respect to a property, a “current
      Phase I” means a Phase I prepared within three years of the acquisition of such
      property) for such property and (C) deliver such certificates of occupancy
      (or,
      if it is not the practice to issue certificates of occupancy in the jurisdiction
      in which such real property is located, then such other evidence reasonably
      satisfactory to the Administrative Agent that the fully functioning operation
      and occupancy of such real property is permitted), opinions of counsel and
      title
      insurance policies as the Administrative Agent shall reasonably request in
      connection therewith, including payment for all such title insurance policies
      and recording and stamp taxes payable in connection with recording all Mortgages
      and Uniform Commercial Code fixture filings, if applicable, in the appropriate
      county land offices.

     

     

    ARTICLE
      VII

     

    NEGATIVE
      COVENANTS

     

    Until
      the
      Commitments have expired or terminated and the principal of and interest on
      each
      Loan and all fees payable hereunder have been paid in full and all Letters
      of
      Credit have expired or terminated and all LC Disbursements shall have been
      reimbursed, each of the Borrower and the Parent Guarantor covenants and agrees
      with the Lenders that:

     

    SECTION
      7.01.  Indebtedness.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, create, incur, assume or permit to exist any Indebtedness,
      except:

     

    (a)
      Indebtedness created hereunder;

     

    (b)
      Indebtedness existing on the date hereof and set forth in or permitted pursuant
      to this Agreement to be excluded from Part A of Schedule III or Part B
      of Schedule VII (excluding, however, following the making of the initial Loans
      hereunder, the Indebtedness under the Existing Credit Agreements) and
      extensions, renewals, refinancings and replacements (“refinancing”) of any such
      Indebtedness that do not increase the outstanding principal amount thereof
      (other than to cover the amount of all accrued and unpaid interest thereon,
      plus
      the stated amount of any premium and other payments required to be paid in
      connection with such refinancing and the amount of reasonable expenses incurred
      in connection with such refinancing);

     

    (c)
      Indebtedness owing by any Obligor to any other Obligor;

     

    (d)
      Guarantees by any Obligor of Indebtedness of any other Obligor;

     

    (e)
      Indebtedness of the Parent Guarantor or any of its Included Subsidiaries
      incurred to finance the acquisition, construction or improvement of any fixed
      or
      capital assets, including Capital Lease Obligations and any Indebtedness assumed
      in connection with the acquisition of any such assets or secured by a Lien
      on
      any such assets prior to 

     

    
      
         

      

      
        -80-

        
          

        

      

      
         

      

    

    the
      acquisition thereof, and refinancings of any such Indebtedness that do not
      increase the outstanding principal amount thereof beyond the amount necessary
      to
      capitalize accrued interest, fees, and transactional expenses incurred in
      respect of such refinancings any such Indebtedness; provided
      that
      (i) such Indebtedness is incurred prior to or within 90 days after such
      acquisition or the completion of such construction or improvement and
      (ii) the aggregate principal amount of Indebtedness permitted by this
      clause (e) shall not exceed $3,000,000 at any time
      outstanding;

     

    (f)
      Guarantees by any Obligor in respect of Indebtedness incurred by Joint Ventures
      constituting Investments permitted by Section 7.05(i) and 7.05(k);

     

    (g)
      Indebtedness under Hedging Agreements permitted by Section 7.05(e);

     

    (h)
      overdrafts in operating accounts at banks incurred in the ordinary course of
      business and in an aggregate amount not exceeding $500,000 outstanding at any
      time, provided
      that no
      such overdraft shall remain outstanding for more than three Business
      Days;

     

    (i)
      bankers acceptances opened in the ordinary course of business for the importing
      or exporting of goods in an aggregate amount not exceeding $500,000 at any
      time;

     

    (j)
      unsecured structured settlements relating to Disclosed Matters; and

     

    (k)
      other
      unsecured Indebtedness (other than Guarantees of Indebtedness incurred by Joint
      Ventures) in an aggregate principal amount not exceeding $10,000,000 at any
      time
      outstanding.

     

    SECTION
      7.02.  Liens.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, create, incur, assume or permit to exist any Lien on any property or asset
      now owned or hereafter acquired by it, or assign or sell any income or revenues
      (including accounts receivable) or rights in respect of any thereof,
      except:

     

    (a)
      Liens
      created pursuant to the Security Documents;

     

    (b)
      Permitted Encumbrances;

     

    (c)
      any
      Lien on any property or asset of the Parent Guarantor or any of its Included
      Subsidiaries existing on the date hereof and set forth in or permitted by this
      Agreement to be excluded from Part B of Schedule III (excluding,
      however, following the making of the initial Loans hereunder, Liens securing
      Indebtedness under the Existing Credit Agreements); provided
      that
      (i) no such Lien shall extend to any other property or asset of the Parent
      Guarantor or any of its Included Subsidiaries and (ii) any such Lien shall
      secure only those obligations which it secures on the date hereof and
      refinancings thereof that do not increase the outstanding principal amount
      thereof, except as permitted by Section 7.01(b);

     

    
      
         

      

      
        -81-

        
          

        

      

      
         

      

    

    

     

    (d)
      Liens
      on fixed or capital assets acquired, constructed or improved by the Parent
      Guarantor or any Included Subsidiary; provided
      that
      (i) such security interests secure Indebtedness permitted by
      clause (e) of Section 7.01, (ii) such security interests and the
      Indebtedness secured thereby are incurred prior to or within 90 days after
      such
      acquisition or the completion of such construction or improvement,
      (iii) the Indebtedness secured thereby does not exceed 100% of the cost of
      acquiring, constructing or improving such fixed or capital assets and
      (iv) such security interests shall not apply to any other property or
      assets of the Parent Guarantor or any Included Subsidiary; 

     

    (e)
      Liens
      on cash posted as margin in an aggregate amount not exceeding $1,000,000 at
      any
      time to secure obligations of the Parent Guarantor or any of its Included
      Subsidiaries under commodity Hedging Agreements permitted by Section
      7.05(e);

     

    (f)
      Liens
      on assets of any Subsidiary that is not an Obligor; and

     

    (g)
      other
      Liens on assets securing obligations in an aggregate amount not to exceed
      $1,000,000 at any time outstanding.

     

    SECTION
      7.03.  Fundamental
      Changes.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, enter into any transaction of merger or consolidation or amalgamation,
      or
      liquidate, wind up or dissolve itself (or suffer any liquidation or
      dissolution). The Parent Guarantor will not, nor will it permit any of its
      Included Subsidiaries to, acquire any business or property from, or capital
      stock of, or be a party to any acquisition of, any Person except for purchases
      of inventory and other property to be sold or used in the ordinary course of
      business, Investments permitted under Section 7.05 and Capital Expenditures
      permitted under Section 7.09(c). The Parent Guarantor will not, nor will
      they permit any of its Included Subsidiaries to, convey, sell, lease, transfer
      or otherwise dispose of, in one transaction or a series of transactions, any
      part of its business or property, whether now owned or hereafter acquired
      (including receivables and leasehold interests, but excluding (x) obsolete
      or worn-out property, tools or equipment no longer used or useful in its
      business and (y) any inventory or other property sold or disposed of in the
      ordinary course of business and on ordinary business terms).

     

    Notwithstanding
      the foregoing provisions of this Section:

     

    (a)
      any
      Included Subsidiary of the Borrower may be merged or consolidated with or into
      the Borrower or any other such Included Subsidiary or dissolved and its affairs
      wound up; provided
      that (i)
      if any such transaction shall be between a Included Subsidiary that is not
      an
      Obligor and an Obligor, the Obligor shall be the continuing or surviving
      corporation and (ii) if any such transaction shall be between a Included
      Subsidiary that is not a Wholly Owned Subsidiary and a Wholly Owned Subsidiary,
      the Wholly Owned Subsidiary shall be the continuing or surviving
      corporation;

     

    (b)
      any
      Included Subsidiary of the Borrower may sell, lease, transfer or otherwise
      dispose of any or all of its property (upon voluntary liquidation or otherwise)
      to the Borrower or any Wholly Owned Subsidiary; provided
      that, if
      the transferor in any such transaction shall be an Obligor, the transferee
      shall
      be an Obligor;

     

    
      
         

      

      
        -82-

        
          

        

      

      
         

      

    

    

     

    (c)
      the
      capital stock of any Included Subsidiary of the Borrower may be sold,
      transferred or otherwise disposed of to the Borrower or any Wholly Owned
      Subsidiary ; provided
      that, if
      the transferor in any such transaction shall be an Obligor, the transferee
      shall
      be an Obligor; 

     

    (d)
      unless
      a Default has occurred and is continuing, the Borrower or any of its Included
      Subsidiaries may sell Property Designated For Sale for cash and for fair market
      value as determined by the Board of Directors;

     

    (e)
      the
      Borrower or any of its Subsidiaries may dispose of obsolete or surplus equipment
      to the extent that (i) such equipment is exchanged for credit against the
      purchase price of similar replacement equipment or (ii) the proceeds of such
      dispositions are reasonably promptly applied to the purchase price of such
      replacement equipment; 

     

    (f)
      unless
      a Default has occurred and is continuing, the Parent Guarantor or any of its
      Included Subsidiaries may sell all or any portion of its equity interests or
      other Investments in any Joint Venture for fair market value, subject to the
      conditions that (a) if the fair market value thereof is greater than $500,000,
      75% of the consideration therefor shall be received in cash (the cancellation
      or
      reduction of a Guarantee by the Parent Guarantor or any of its Included
      Subsidiaries in support of obligations of such Joint Venture being deemed to
      constitute cash for the purposes of this clause (a)), (b) if the aggregate
      amount of such consideration exceeds $2,000,000, the amount of consideration
      to
      be received by the Parent Guarantor or such Included Subsidiary (including
      the
      amount of any Guarantee theretofore issued by the Parent Guarantor or such
      Included Subsidiary to be cancelled in connection with such sale) has been
      determined by the Board of Directors to be fair to the Parent Guarantor or
      such
      Included Subsidiary, (c) if the aggregate amount of such consideration exceeds
      $10,000,000, the Board of Directors shall have received a fairness opinion
      in
      connection with such sale rendered by a recognized institution with established
      expertise in valuing transactions of such type and (d) in connection with such
      sale, all Guarantees theretofore issued by the Parent Guarantor or any of its
      Included Subsidiaries in support of obligations of such Joint Venture shall
      be
      cancelled or reduced at least in proportion to the percentage of interests
      sold;

     

    (g)
      unless
      a Default has occurred and is continuing, the Parent Guarantor and its Included
      Subsidiaries may sell other property for cash for fair market value for
      consideration not exceeding $10,000,000 in any Fiscal Year;

     

    (h)
      leases
      and subleases of property in the ordinary course of business;

     

    (i)
      non-exclusive licenses of Intellectual Property in the ordinary course of
      business; 

     

    (j)
      the
      Parent Guarantor and its Included Subsidiaries may sell assets to the extent
      permitted by Section 7.10;

     

    (k)
      all or
      any portion of any capital stock in any Inactive Company may be sold;
      and

     

    
      
         

      

      
        -83-

        
          

        

      

      
         

      

    

    

     

    (l)
      the
      Borrower may acquire stores or other assets from franchisees in an amount not
      to
      exceed (x) $10,000,000 less (y) the amount used for Investments pursuant to
      Section 7.05(i), in any Fiscal Year. 

     

    The
      Collateral Agent agrees to execute such UCC termination statements or partial
      release statements, as applicable, and other Lien release documents as the
      Borrower reasonably requests to evidence the release of the Collateral Agent’s
      Lien in respect of property conveyed, sold, transferred or otherwise disposed
      of
      in compliance with this Section 7.03; provided
      that the
      Borrower shall provide to the Collateral Agent evidence of such transaction’s
      compliance with this Section 7.03 as the Collateral Agent may reasonably
      request.

     

    SECTION
      7.04.  Lines
      of Business.
      The
      Parent Guarantor and the Borrower will not, nor will they permit any of their
      Included Subsidiaries to, engage to any material extent in any business other
      than the business of manufacturing, distributing, franchising, licensing and
      selling (i) doughnuts, (ii) equipment to manufacture doughnuts and (iii) related
      products.

     

    SECTION
      7.05.  Investments.
      The
      Parent Guarantor and the Borrower will not, nor will they permit any of their
      Included Subsidiaries to, make or permit to remain outstanding any Investments
      except:

     

    (a)
      Investments outstanding on the date hereof and identified in or permitted
      pursuant to this Agreement to be excluded from Schedule VII or Part A of
      Schedule III;

     

    (b)
      operating deposit accounts with banks;

     

    (c)
      Permitted Investments;

     

    (d)
      Investments by the Parent Guarantor or any of its Included Subsidiaries in
      any
      of its Included Subsidiaries that is an Obligor or that becomes an Obligor
      contemporaneously with the making of such Investment;

     

    (e)
      Hedging Agreements entered into by the Parent Guarantor or its Included
      Subsidiaries in the ordinary course of its or their financial planning and
      not
      for speculative purposes;

     

    (f)
      Investments consisting of security deposits with government agencies, utilities
      and other like Persons made in the ordinary course of business;

     

    (g)
      Investments consisting of advances to employees for reasonable business and
      travel expenses incurred in the ordinary course of business;

     

    (h)
      Investments consisting of loans or advances to employees not exceeding
      $1,000,000 in the aggregate principal amount outstanding at any time, in each
      case made in the ordinary course of business and consistent with practices
      existing on the Effective Date; 

     

    (i)
      Investments in Joint Ventures, loans or advances to Krispy Kreme franchisees
      or
      doughnut and bakery store operators, or Guarantee obligations at any of the
      foregoing 

     

    
      
         

      

      
        -84-

        
          

        

      

      
         

      

    

    under
      leases or Synthetic Leases, in each case made in the ordinary course of
      business, in an amount not to exceed (x) $10,000,000 less (y) the amount used
      for acquisitions pursuant to Section 7.03(l), in any Fiscal Year;

     

    (j)
      any
      acquisition pursuant to a collateral repurchase agreement that has been
      identified as a Specified Contingent Obligation in favor of any Krispy Kreme
      franchisee or its lenders; 

     

    (k)
      Investments in Joint Ventures (either directly or indirectly through one or
      more
      Subsidiaries) made after the date hereof in the form of Guarantees, loans or
      cash issued in exchange for the cancellation or reduction of Guarantees by
      the
      Parent Guarantor or any of its Included Subsidiaries outstanding on the date
      hereof of Indebtedness of the respective Joint Ventures, provided that the
      amount of each such Investment made after the date hereof shall not exceed
      the
      amount of the Guarantee so cancelled or the reduction of the Guarantee so
      reduced, as the case may be;

     

    (l)
      Investments in securities or property of trade creditors or customers in the
      ordinary course of business received upon foreclosure or pursuant to any plan
      or
      organization or liquidation or similar arrangement upon the bankruptcy or
      insolvency of such trade creditors or customers;

     

    (m)
      Investments (i) for utilities, security deposits, leases and similar prepaid
      expenses incurred in the ordinary course of business and (ii) trade accounts
      created, or prepaid expenses accrued, in the ordinary course of business;

     

    (n)
      Investments by a Subsidiary that is not an Obligor in any other Subsidiary
      that
      is not an Obligor; and

     

    (o)
      additional Investments (other than in Joint Ventures) up to but not exceeding
      $5,000,000 in the aggregate at any one time outstanding.

     

    SECTION
      7.06.  Restricted
      Payments.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, declare or make, or agree to pay or make, directly or indirectly, any
      Restricted Payment, except that (a) any Wholly Owned Subsidiary may declare
      and
      make Restricted Payments to any other Wholly Owned Subsidiary, (b) any other
      Included Subsidiary may declare and make dividends or other distributions on
      its
      common equity interests ratably to all of its equity holders (i) if no Event
      of
      Default has occurred and is occurring or (ii) (in the case of any such other
      Included Subsidiary that is treated as a partnership for tax purposes) to the
      extent necessary to enable its equity holders to pay income taxes arising from
      the income of such other Included Subsidiary, (c) the Borrower may declare
      and
      make dividends to the Parent Guarantor at such times and in such amounts as
      are
      necessary to enable the Parent Guarantor to pay taxes and operating expenses,
      (d) provided that no Event of Default has occurred and is occurring, the
      Borrower may declare and make dividends to the Parent Guarantor at such times
      and in such amounts as are necessary to enable the Parent Guarantor to pay
      judgment or settlement costs in connection with any action, suit, proceeding,
      inquiry or investigations involving the Parent Guarantor (i) that is an
      exception to Section 4.06 or (ii) that is based on substantially the same
      underlying facts and circumstances as any action, suit, proceeding, inquiry
      or
      investigation described in clause (i) above, (e) provided that no Event of
      Default has occurred and is occurring, the Borrower may declare and make
      dividends to the Parent Guarantor at such times and in such amounts as are
      necessary to enable the Parent Guarantor to pay judgment or settlement costs
      in
      connection with any other action, suit, 

     

    
      
         

      

      
        -85-

        
          

        

      

      
         

      

    

    proceeding,
      inquiry or investigations involving the Parent Guarantor not exceeding
      $1,000,000 in the aggregate in any Fiscal Year and (f) the Borrower may
      declare and make dividends to the Parent Guarantor at such times and in such
      amounts as are necessary to enable the Parent Guarantor to make payments on
      Indebtedness of the Parent Guarantor permitted by
      Section 7.11.

     

    SECTION
      7.07.  Transactions
      with Affiliates.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, sell, lease or otherwise transfer any property or assets to, or purchase,
      lease or otherwise acquire any property or assets from, or otherwise engage
      in
      any other transactions with, any of its Affiliates, except (a) transactions
      in the ordinary course of business at prices and on terms and conditions not
      less favorable to the Parent Guarantor or such Included Subsidiary, as the
      case
      may be, than could be reasonably obtained on an arm’s-length basis from
      unrelated third parties, (b) transactions between or among the Parent
      Guarantor and/or one or more of its Wholly Owned Subsidiaries, not involving
      any
      other Affiliate, (c) any Restricted Payment permitted by Section 7.06,
      (d) transactions listed on Schedule XI, (e) Investments permitted by
      Section 7.05 (including Permitted Investments), and (f) issuances of
      capital stock (other than Redeemable Preferred Stock) and Equity Rights (other
      than Equity Rights for Redeemable Preferred
      Stock) by
      the Parent Guarantor.

     

    SECTION
      7.08.  Restrictive
      Agreements.
      The
      Parent Guarantor will not, and will not permit any of its Included Subsidiaries
      to, directly or indirectly, enter into, incur or permit to exist any agreement
      or other arrangement that prohibits, restricts or imposes any condition upon
      (a) the ability of the Parent Guarantor or any Included Subsidiary to
      create, incur or permit to exist any Lien upon any of its property or assets,
      or
      (b) the ability of any Included Subsidiary to pay dividends or other
      distributions with respect to any shares of its capital stock or to make or
      repay loans or advances to the Parent Guarantor or any other Included Subsidiary
      or to Guarantee Indebtedness of the Parent Guarantor or any other Included
      Subsidiary; provided that:

     

    (i)
      the
      foregoing shall not apply to (1) restrictions and conditions imposed by law
      or by the Loan Documents, (2) restrictions and conditions existing on the date
      hereof identified on Schedule IV (and contained in any extension or renewal
      of, or any amendment or modification of the relevant documentation except to
      the
      extent expanding the scope of, any such restriction or condition),
      (3) customary restrictions and conditions contained in agreements relating
      to the sale of a Included Subsidiary pending such sale, provided such
      restrictions and conditions apply only to the Included Subsidiary that is to
      be
      sold and such sale is permitted hereunder, (4) restrictions and conditions
      in
      any agreement of an Included Subsidiary in effect at the time such Included
      Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement
      was
      not entered into in connection with or in contemplation of such person becoming
      a Subsidiary of the Borrower (and contained in any extension or renewal of,
      or
      any amendment or modification of the relevant documentation except to the extent
      expanding the scope of, any such restriction or condition) and (5) restrictions
      on cash or other deposits or net 

     

    
      
         

      

      
        -86-

        
          

        

      

      
         

      

    

    worth
      imposed by suppliers, landlords, merchants or similar Persons under contracts
      entered into in the ordinary course of business; and

     

    (ii)
      clause (a) of the foregoing shall not apply to (x) restrictions or
      conditions imposed by any agreement relating to secured Indebtedness permitted
      by this Agreement if such restrictions or conditions apply only to the property
      or assets securing such Indebtedness, (y) customary provisions in leases
      and other contracts restricting the assignment thereof and (z) restrictions
      with
      respect to the capital stock of an entity imposed by any joint venture
      agreement, limited liability operating company agreement, partnership agreement
      or similar agreement governing the operation of such entity with respect to
      which no Obligor holds a controlling interest.

     

    SECTION
      7.09.  Certain
      Financial Covenants.

     

    (a)  Consolidated
      Leverage Ratio.
      The
      Parent Guarantor will not permit the Consolidated Leverage Ratio to exceed
      the
      following respective ratios for any Test Period in any of the following
      respective periods:

     

    
      	
              Period

            	
              Ratio

               

            
	 	 
	
              First
                Fiscal Quarter of 2008 Fiscal Year 

               

            	
              4.50
                to 1.00

               

            
	
              Second
                and Third Fiscal Quarters of 2008 Fiscal Year 

               

            	
              4.25
                to 1.00

               

            
	
              Fourth
                Fiscal Quarter of 2008 Fiscal Year 

               

            	
              4.00
                to 1.00

               

            
	
              First
                Fiscal Quarter of 2009 Fiscal Year

               

            	
              3.75
                to 1.00

               

            
	
              Second,
                Third and Fourth Fiscal Quarters of 2009 Fiscal Year 

               

            	
              3.50
                to 1.00

               

            
	
              2010
                Fiscal Year 

               

            	
              3.25
                to 1.00

               

            
	
              2011
                and 2012 Fiscal Years

               

            	
              3.00
                to 1.00

               

            
	
              2013
                Fiscal Year and Thereafter

               

            	
              2.75
                to 1.00

               

            

    

    

    
      
         

      

      
        -87-

        
          

        

      

      
         

      

    

    

    (b)  Consolidated
      Interest Coverage Ratio.
      The
      Parent Guarantor will not permit the Consolidated Interest Coverage Ratio to
      be
      less than the following respective ratios for any Test Period in any of the
      following respective periods:

     

    
      	
              Period

            	
              Ratio

            
	 	 
	
              First
                Fiscal Quarter of 2008 Fiscal Year 

               

            	
              2.75
                to 1.00

               

            
	
              Second
                and Third Fiscal Quarters of 2008 Fiscal Year 

               

            	
              3.00
                to 1.00

               

            
	
              Fourth
                Fiscal Quarter of 2008 Fiscal Year 

               

            	
              3.25
                to 1.00

               

            
	
              First
                Fiscal Quarter of 2009 Fiscal Year

               

            	
              3.50
                to 1.00

               

            
	
              Second
                and Third Fiscal Quarters of 2009 Fiscal Year 

               

            	
              3.75
                to 1.00

               

            
	
              Fourth
                Fiscal Quarter of 2009 Fiscal Year

               

            	
              4.00
                to 1.00

               

            
	
              2010
                Fiscal Year 

               

            	
              4.25
                to 1.00

               

            
	
              2011
                Fiscal Year and Thereafter

               

            	
              4.50
                to 1.00

               

            

    

    

    (c)  Capital
      Expenditures.
      The
      Parent Guarantor will not permit the aggregate amount of Capital Expenditures
      by
      the Parent Guarantor and its Included Subsidiaries to exceed the following
      respective amounts for the following respective periods:

     

    
      	
              Period

            	
              Amount

            
	 	 
	
              2008
                Fiscal Year

               

            	
              $15,000,000

               

            
	
              2009
                Fiscal Year

               

            	
              $17,500,000

               

            
	
              2010
                Fiscal Year and each

              Fiscal
                Year thereafter

               

            	
              $20,000,000

               

            

    

    

    If
      the
      aggregate amount of Capital Expenditures for any Fiscal Year shall be less
      than
      the amount permitted by the table above to be made in such Fiscal Year, then
      50%
      of the shortfall shall be added to the amount of Capital Expenditures permitted
      for the immediately succeeding (but not any other) Fiscal Year and, for purposes
      hereof, the amount of Capital Expenditures made during any Fiscal Year shall
      be
      deemed to have been made first from the 

     

    
      
         

      

      
        -88-

        
          

        

      

      
         

      

    

    amount
      permitted by the table above to be made in such Fiscal Year and last from
      carryover from the preceding Fiscal Year.

     

    SECTION
      7.10.  Sale-Leasebacks;
      Synthetic Leases.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to engage in any sale-leaseback, Synthetic Lease or similar transaction
      involving any of its assets; provided that the following shall be permitted:
      a
      sale of real or personal property made for cash consideration in an amount
      not
      less than the cost of such real or personal property and consummated within
      90
      days after the Parent Guarantor or any Included Subsidiary acquires or completes
      the construction of such property.

     

    SECTION
      7.11.  Parent
      Guarantor as Holding Company.
      Notwithstanding anything contained herein to the contrary, the Parent Guarantor
      will not (a) create, incur, assume or permit to exist any Indebtedness other
      than Indebtedness under the Loan Documents, (until the Effective Date) its
      Guarantee of the obligations of the Borrower under the Existing Credit
      Agreements and
      Indebtedness permitted by Section 7.01(b), (c), (d), (e), (f),
      (g), (h)
      and (j), (b) create, incur, assume or permit to exist any Lien on any of its
      properties other than Permitted Encumbrances and Liens created by the Loan
      Documents, (c) own any Investments (other than Investments permitted by
      Section 7.05 to be owned or made by the Parent Guarantor) or any material
      properties other than shares of stock of the Borrower and of Montana Mills
      or
      (d) engage in any business or transactions other than those ancillary to
      its status as a publicly traded holding company, including issuances of capital
      stock and Equity Rights.

     

    SECTION
      7.12.  Limitations
      on Voluntary Prepayments of Certain Other Indebtedness.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, purchase, redeem, retire or otherwise acquire for value, or set apart any
      money for a sinking, defeasance or other analogous fund for the purchase,
      redemption, retirement or other acquisition of, or make any voluntary payment
      or
      prepayment (each of the foregoing actions being referred to herein as a
“Voluntary Prepayment”) of the principal of or interest on, or any other amount
      owing in respect of, any Indebtedness incurred as permitted by Section 7.01(k),
      unless, on the date of such Voluntary Prepayment, both before and after giving
      effect to such Voluntary Prepayment (and for purposes of determining whether
      or
      not the financial covenants set forth herein are satisfied, after giving pro
      forma effect to such Voluntary Prepayment for the relevant Test Period), no
      Default shall have occurred and be continuing. 

     

    SECTION
      7.13.  Modifications
      of Certain Documents.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, consent to any modification, supplement or waiver of any of the provisions
      of any agreement or instrument governing or evidencing Subordinated Indebtedness
      in any manner that is materially adverse to the Borrower or the Lenders without
      the prior consent of the Administrative Agent (with the approval of the Required
      Lenders). 

     

    SECTION
      7.14.  Change
      in
      Fiscal Year; Accounting Policies; Capital Stock.
      The
      Parent Guarantor will not, nor will it permit any of its Included Subsidiaries
      to, (i) change its Fiscal Year, (ii) change their accounting policies except
      as
      required by GAAP or otherwise permitted under Section 1.03 or (iii) change
      their
      capital structure including any revision of the terms of their outstanding
      capital stock or other equity interests, from the Fiscal Year, the accounting
      policies and the capital structure in existence on the date hereof without
      the
      prior 

     

    
      
         

      

      
        -89-

        
          

        

      

      
         

      

    

    consent
      of
      the Administrative Agent; provided that the Parent Guarantor may issue
      additional capital stock and Equity Rights without such consent.

     

     

    ARTICLE
      VIII

     

    EVENTS
      OF DEFAULT

     

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

     

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

     

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

     

    (c)
      subject to the proviso set forth in Section 4.12, any representation or warranty
      made or deemed made by or on behalf of any Affiliated Party in or in connection
      with this Agreement or any other Loan Document or any amendment or modification
      hereof or thereof, or in any report, certificate, financial statement or other
      document furnished pursuant to or in connection with this Agreement or any
      other
      Loan Document or any amendment or modification hereof or thereof, shall prove
      to
      have been incorrect in any material respect when made or deemed
      made;

     

    (d)
      the
      Borrower or the Parent Guarantor (as applicable) shall fail to observe or
      perform any covenant, condition or agreement contained in Section 6.02,
      6.03 (with respect to the Borrower’s or the Parent Guarantor’s existence), 6.08
      or 6.11 or in Article VII, or any Obligor shall default in the performance
      of any of its obligations contained in Section 5.02 of the Security
      Agreement; 

     

    (e)
      the
      Borrower or its Parent Guarantor (as applicable) shall fail to observe or
      perform any covenant, condition or agreement contained in Section 6.01(c) and
      such failure shall continue unremedied for a period of 30 or more
      days;

     

    (f)
      any
      Obligor shall fail to observe or perform any covenant, condition or agreement
      contained in this Agreement (other than those specified in this Article) or
      any
      other Loan Document and such failure shall continue unremedied for a period
      of
      30 or more days after notice thereof from the Administrative Agent (given at
      the
      request of any Lender) to the Borrower;

     

    (g)
      any
      Affiliated Party other than an Immaterial Subsidiary shall fail to make any
      payment (whether of principal or interest and regardless of amount) in respect
      of any Material Indebtedness (other than Specified Contingent Obligations),
      when
      and as the same shall become due and payable;

     

    
      
         

      

      
        -90-

        
          

        

      

      
         

      

    

    

     

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

     

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

     

    (j)
      any
      Affiliated Party other than an Immaterial Subsidiary shall (i) voluntarily
      commence any proceeding or file any petition seeking liquidation, reorganization
      or other relief under any federal, state or foreign bankruptcy, insolvency,
      receivership or similar law now or hereafter in effect, (ii) consent to the
      institution of, or fail to contest in a timely and appropriate manner, any
      proceeding or petition described in clause (l) of this Article,
      (iii) apply for or consent to the appointment of a receiver, trustee,
      custodian, sequestrator, conservator or similar official for any Affiliated
      Party other than an Immaterial Subsidiary or for a substantial part of its
      assets, (iv) file an answer admitting the material allegations of a
      petition filed against it in any such proceeding, (v) make a general
      assignment for the benefit of creditors or (vi) take any action for the
      purpose of effecting any of the foregoing;

     

    (k)
      any
      Affiliated Party other than an Immaterial Subsidiary shall become unable, admit
      in writing its inability or fail generally to pay its debts as they become
      due;

     

    (l)
      one or
      more judgments for the payment of money in an aggregate amount in excess of
      $5,000,000 shall be rendered against any Affiliated Party other than an
      Immaterial Subsidiary or any combination thereof and the same shall remain
      undischarged, unsatisfied, unstayed and unbonded for a period of 30 consecutive
      days, or any action shall be legally taken by a judgment creditor to attach
      or
      levy upon any assets of any Affiliated Party to enforce any such
      judgments;

     

    (m)
      an
      ERISA Event shall have occurred that, when taken together with all other ERISA
      Events that have occurred, would reasonably be expected to result in a Material
      Adverse Effect;

     

    
      
         

      

      
        -91-

        
          

        

      

      
         

      

    

    

     

    (n)
      a
      reasonable basis shall exist for the assertion against the Parent Guarantor
      or
      any of its Included Subsidiaries, or any predecessor in interest of the Parent
      Guarantor or any of its Included Subsidiaries, of (or there shall have been
      asserted against the Parent Guarantor or any of its Included Subsidiaries)
      an
      Environmental Claim that, in the judgment of the Required Lenders, is reasonably
      likely to be determined adversely to the Parent Guarantor or any of its Included
      Subsidiaries, and the amount thereof (either individually or in the aggregate)
      is reasonably likely to have a Material Adverse Effect (insofar as such amount
      is payable by the Parent Guarantor or any of its Included Subsidiaries but
      after
      deducting any portion thereof that is reasonably expected to be paid by other
      creditworthy Persons jointly and severally liable therefor);

     

    (o)
      a
      Change in Control shall occur; or

     

    (p)
      the
      Liens created by the Security Documents shall at any time not constitute a
      valid
      and perfected Lien on collateral having a fair market value in excess of
      $5,000,000 in the aggregate, intended to be covered thereby (to the extent
      perfection by filing, registration, recordation or possession is required herein
      or therein) in favor of the Collateral Agent (except as a result of the gross
      negligence or willful misconduct of the Collateral Agent in taking or failing
      to
      take any action), free and clear of all other Liens (other than Liens permitted
      under Section 7.02), or, except for expiration or termination in accordance
      with its terms, any of the Security Documents shall for whatever reason be
      terminated or cease to be in full force and effect, or the enforceability
      thereof shall be contested by any Obligor;

     

    then,
      and
      in every such event (other than an event with respect to the Borrower described
      in clause (i) or (j) of this Article), and at any time thereafter
      during the continuance of such event, the Administrative Agent may, and at
      the
      request of the Required Lenders shall, by notice to the Borrower, take either
      or
      both of the following actions, at the same or different times:
      (i) terminate the Commitments, and thereupon the Commitments shall
      terminate immediately, and (ii) declare the Loans then outstanding to be
      due and payable in whole (or in part, in which case any principal not so
      declared to be due and payable may thereafter be declared to be due and
      payable), and thereupon the principal of the Loans so declared to be due and
      payable, together with accrued interest thereon and all fees and other
      obligations of the Obligors accrued hereunder, shall become due and payable
      immediately, without presentment, demand, protest or other notice of any kind,
      all of which are hereby waived by each Obligor; and in case of any event with
      respect to the Borrower described in clause (i) or (j) of this
      Article, the Commitments shall automatically terminate and the principal of
      the
      Loans then outstanding, together with accrued interest thereon and all fees
      and
      other obligations of the Obligors accrued hereunder, shall automatically become
      due and payable, without presentment, demand, protest or other notice of any
      kind, all of which are hereby waived by each Obligor.

     

    
      
         

      

      
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    ARTICLE
      IX

     

    THE
      ADMINISTRATIVE AGENT, COLLATERAL AGENT,

    LENDERS
      AND ARRANGER

     

    Each
      of
      the Lenders and Issuing Lenders hereby irrevocably appoints the Administrative
      Agent as its agent hereunder and under the other Loan Documents and the
      Collateral Agent as its agent under the Security Documents and authorizes each
      Agent to take such actions on its behalf and to exercise such powers as are
      delegated to such Agent by the applicable Loan Documents, together with such
      actions and powers as are reasonably incidental thereto.

     

    Each
      Person serving as an Agent 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
      an Agent, and such Person and its Affiliates may accept deposits from, lend
      money to and generally engage in any kind of business with the Parent Guarantor
      or any Subsidiary or other Affiliate thereof as if it were not an
      Agent.

     

    Neither
      Agent shall have any duties or obligations except those expressly set forth
      herein and in the other Loan Documents. Without limiting the generality of
      the
      foregoing, (a) neither Agent shall be subject to any fiduciary or other
      implied duties, regardless of whether a Default has occurred and is continuing,
      (b) neither Agent shall 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 such Agent
      is
      required to exercise in writing by the Required Lenders, and (c) except as
      expressly set forth herein and in the other Loan Documents, neither Agent shall
      have any duty to disclose, and shall not be liable for the failure to disclose,
      any information relating to the Parent Guarantor or any of its Subsidiaries
      that
      is communicated to or obtained by the Person serving as Agent or any of their
      Affiliates in any capacity. Neither Agent shall be liable for any action taken
      or not taken by it with the consent or at the request of the Required Lenders
      or
      in the absence of its own gross negligence or willful misconduct. Neither Agent
      shall be deemed to have knowledge of any Default unless and until written notice
      thereof is given to such Agent by the Borrower or a Lender, and the Agent shall
      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,
      (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 V or elsewhere herein or therein, other than to confirm receipt of
      items expressly required to be delivered to such Agent.

     

    Each
      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 believed by it to be genuine and to have been signed or sent
      by
      the proper Person. Each Agent also may rely upon any statement made to it orally
      or by telephone and believed by it to be made by the proper Person, and shall
      not incur any liability for relying thereon. Each Agent 

     

    
      
         

      

      
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    may
      consult with legal counsel (who may be counsel for an Obligor), 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.

     

    Each
      Agent
      may perform any and all its duties and exercise its rights and powers by or
      through any one or more sub-agents appointed by such Agent. Each Agent and
      any
      such sub-agent may perform any and all its duties and exercise its rights and
      powers through their respective Related Parties. The exculpatory provisions
      of
      the preceding paragraphs shall apply to any such sub-agent and to the Related
      Parties of the Agents 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 Agent.

     

    Each
      Agent
      may resign at any time by notifying the Lenders, each Issuing Lender, the
      Borrower and the Parent Guarantor. Upon any such resignation, the Required
      Lenders shall have the right, in consultation with the Borrower (unless an
      Event
      of Default has occurred and is continuing, in which case the Borrower need
      not
      be consulted), to appoint a successor. If no successor shall have been so
      appointed for the retiring Administrative Agent by the Required Lenders and
      shall have accepted such appointment within 30 days after such retiring Agent
      gives notice of its resignation, then such retiring Agent’s resignation shall
      nonetheless become effective and (1) such retiring Agent shall be
      discharged from its duties and obligations hereunder and (2) the Required
      Lenders shall perform the duties of such Agent (and all payments and
      communications provided to be made by, to or through the Administrative Agent
      shall instead be made by or to each Lender directly) until such time as the
      Required Lenders appoint a successor agent as provided for above in this
      paragraph. The Collateral Agent’s resignation shall not be effective until a
      successor Collateral Agent shall have been appointed by the Required Lenders
      and
      shall have accepted such appointment. Upon the acceptance of its appointment
      as
      an Agent hereunder by a successor, such successor shall succeed to and become
      vested with all the rights, powers, privileges and duties of the retiring (or
      retired) Agent, and the retiring Agent, shall be discharged from its duties
      and
      obligations hereunder (if not already discharged therefrom as provided above
      in
      this paragraph). The fees payable by the Borrower to a successor Agent shall
      be
      the same as those payable to its predecessor unless otherwise agreed between
      the
      Borrower and such successor. After an Agent’s resignation hereunder, the
      provisions of this Article and Section 10.03 shall continue in effect for
      its benefit in respect of any actions taken or omitted to be taken by it while
      it was acting as Agent.

     

    Each
      Lender acknowledges that it has, independently and without reliance upon either
      Agent, CS Securities in its capacities as Sole Bookrunner and Sole Lead
      Arranger, CS in its capacity as Syndication Agent or any other Lender and based
      on such documents and information as it has deemed appropriate, made its own
      credit analysis and decision to enter into this Agreement. Each Lender also
      acknowledges that it will, independently and without reliance upon either Agent,
      CS Securities in its capacities as Sole Bookrunner and Sole Lead Arranger,
      CS in
      its capacity as Syndication Agent or any other Lender 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.

     

    
      
         

      

      
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    Each
      Lender acknowledges that CS Securities has no obligation, responsibility or
      liability to such Lender by reason of any of CS Securities’ roles as sole
      bookrunner and sole lead arranger for the financing contemplated
      hereby.

     

     

    ARTICLE
      X

     

    MISCELLANEOUS

     

    SECTION
      10.01.  Notices;
      Electronic Communications.

     

    (a)  Except
      in
      the case of notices and other communications expressly permitted to be given
      by
      telephone, all notices and other communications provided for herein shall be
      in
      writing and shall be delivered by hand or overnight courier service, mailed
      by
      certified or registered mail or sent by telecopy, as follows:

     

    (i)
      if to
      the Borrower or any Guarantor, to it at 370 Knollwood St., Suite 500, Winston
      Salem, NC 27103, Attention of Michael Phalen
      (Telecopy No. 336-733-3791, Telephone No. 336-733-3707); with a copy
      to Cahill Gordon & Reindel llp,
      80 Pine
      Street, New York, NY 10005, Attention of Gerald S. Tanenbaum, Esq. (Telecopy
      No.
      212-269-5420, Telephone No. 212-701-3000);

     

    (ii)
      if to
      the Administrative Agent, to Credit Suisse, 11 Madison Avenue, New York, New
      York 10010, Attention of Manager, Agency Department, (Telecopy No. (212)
      538-8304; Telephone No. (212) 325-9205); 

     

    (iii)
      if
      to the
      Collateral Agent, to
      Credit
      Suisse, 11 Madison Avenue, New York, New York 10010, Attention of David Dodd,
      (Telecopy No. (212) 743-1846; Telephone No. (212) 325-5541);

     

    (iv)
      if to
      Credit Suisse, as Issuing Lender, to it at 11 Madison Avenue, New York, New
      York
      10010, Attention of Emma Artun, (Telecopy No. (212) 325-8315; Telephone No.
      (212) 538-1370);

     

    (v)
      if
      to
      Wells Fargo Foothill, Inc., as Issuing Lender, to it at Letters of Credit
      Department, 2450 Colorado Avenue, Suite 3000 West, Santa Monica, CA  90404,
      Attention of Lisa Gonzales, (Telecopy No. (310) 453-7422; Telephone No. (310)
      453-7269; email: lettersofcredit@wffoothill.com) and Susan Knapp (Telephone
      No.
      (310) 453-8260);

     

    (vi)
      if to
      the Swingline Lender, to it at Credit
      Suisse, 11 Madison Avenue, New York, New York 10010, Attention of Manager,
      Agency Department, (Telecopy No. (212) 538-8304; Telephone No. (212)
      325-9205);
      and

     

    (vii)
      if
      to a Lender, to it at its address (or telecopy number) set forth in its
      Administrative Questionnaire.

     

    Any
      party
      hereto may change its address or telecopy number for notices and other
      communications hereunder by notice to the other parties hereto (or, in the
      case
      of any such 

     

    
      
         

      

      
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    change
      by
      a Lender, by notice to the Borrower and the Administrative Agent). All notices
      and other communications given to any party hereto in accordance with the
      provisions of this Agreement shall be deemed to have been given on the date
      of
      receipt. Notices delivered through electronic communications to the extent
      provided in paragraph (b) below, shall be effective as provided in said
      paragraph (b).

     

    (b)  Electronic
      Communications. 
      Notices and other communications to the Lenders and the Issuing Bank hereunder
      may be delivered or furnished by electronic communication (including e-mail
      and
      Internet or intranet websites) pursuant to procedures approved by the
      Administrative Agent, provided
      that the
      foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant
      to Section 2.05 if such Lender or the Issuing Bank, as applicable, has notified
      the Administrative Agent that it is incapable of receiving notices under such
      Section by electronic communication.  The Administrative Agent or the
      Borrower may, in its discretion, agree to accept notices and other
      communications to it hereunder by electronic communications pursuant to
      procedures approved by it, provided
      that
      approval of such procedures may be limited to particular notices or
      communications.

     

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

     

    SECTION
      10.02.  Waivers;
      Amendments.

     

    (a)  No
      Deemed Waivers; Remedies Cumulative.
      No
      failure or delay by either Agent, any Issuing Lender or any Lender in exercising
      any right or power under any Loan Document shall operate as a waiver thereof,
      nor shall any single or partial exercise of any such right or power, or any
      abandonment or discontinuance of steps to enforce such a right or power,
      preclude any other or further exercise thereof or the exercise of any other
      right or power. The rights and remedies of the Agents, any Issuing Lender and
      the Lenders under the Loan Documents are cumulative and are not exclusive of
      any
      rights or remedies that they would otherwise have. No waiver of any provision
      of
      this Agreement or consent to any departure by any Obligor therefrom shall in
      any
      event be effective unless the same shall be permitted by paragraph (b) of
      this Section, and then such waiver or consent shall be effective only in the
      specific instance and for the purpose for which given. Without limiting the
      generality of the foregoing, the making of a Loan or issuance of a Letter of
      Credit shall not be construed as a waiver of any Default, regardless of whether
      either Agent, any Lender or any Issuing Lender may have had notice or knowledge
      of such Default at the time.

     

    (b)  Amendments.
      Neither
      this Agreement nor any provision hereof may be waived, amended or modified
      except pursuant to an agreement or agreements in writing 

     

    
      
         

      

      
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    entered
      into by the Borrower and the Required Lenders or by the Borrower and the
      Administrative Agent with the consent of the Required Lenders; provided
      that no
      such agreement shall

     

    (i)
      increase any Commitment of any Lender without the written consent of each Lender
      affected thereby,

     

    (ii)
      reduce the principal amount of any Loan or LC Disbursement or reduce the
      rate of interest thereon, or reduce any fees payable hereunder, without the
      written consent of each Lender affected thereby,

     

    (iii)
      postpone the scheduled date of payment of the principal amount of any Loan
      or
      LC Disbursement under Section 2.05(f) or Section 2.09(a) (as the case may
      be), or any interest thereon, or any fees payable hereunder, or reduce the
      amount of, waive or excuse any such payment, or postpone the scheduled date
      of
      expiration of any Commitment, without the written consent of each Lender
      affected thereby,

     

    (iv)
      change Section 2.17(d) without the consent of each Lender adversely
      affected thereby,

     

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

     

    (vi)
      release all or substantially all of the Collateral, or

     

    (vii)
      release any Guarantor that is not an Immaterial Subsidiary from its guarantee
      obligations under Article III without the written consent of each
      Lender;

     

    and
      provided further that (x) no such agreement shall amend, modify or
      otherwise affect the rights or duties of the Administrative Agent, the
      Collateral Agent, any Issuing Lender or the Swingline Lender hereunder without
      the prior written consent of the Administrative Agent, the Collateral Agent,
      such Issuing Lender or the Swingline Lender, as the case may be, and
      (y) that any modification or supplement of Article III shall require
      the consent of each Guarantor.

     

    Except
      as
      otherwise provided in this Section 10.02(b) with respect to this Agreement,
      the Administrative Agent or the Collateral Agent may, with the prior consent
      of
      the Required Lenders (but not otherwise), consent to any modification,
      supplement or waiver under any of the Loan Documents, provided that, without
      the
      prior consent of each Lender, the Collateral Agent shall not (except as
      permitted herein or in the Security Documents) release all or substantially
      all
      of the collateral or otherwise terminate all or substantially all of the Liens
      under any Security Document providing for collateral security, agree to
      additional obligations being secured by all or substantially all of such
      collateral security (unless the Lien for such additional obligations shall
      be
      junior to the Lien in favor of the other obligations secured by such Security
      Document, in which event the Collateral Agent may consent to such junior Lien
      provided that it obtains the consent of the Required Lenders thereto), alter
      the
      relative priorities 

     

    
      
         

      

      
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    of
      the
      obligations entitled to the benefits of the Liens created under the Security
      Documents with respect to all or substantially all of such collateral, except
      that no such consent shall be required, and the Collateral Agent is hereby
      authorized, to release any Lien covering property that is the subject of either
      a disposition of property permitted hereunder or a disposition to which the
      Required Lenders have consented.

     

    Anything
      in this Agreement to the contrary notwithstanding, no waiver or modification
      of
      any condition precedent in Section 5.02 to any Revolving Credit Borrowing may
      be
      effected without the written consent of the Required Lenders with respect to
      the
      Revolving Credit Loans. No waiver or modification of any provision of this
      Agreement or any other Loan Document that could reasonably be expected to
      adversely affect the Lenders of any Class in a manner that does not affect
      all
      Classes equally shall be effective against the Lenders of such Class unless
      the
      Required Lenders of such Class shall have concurred with such waiver or
      modification.

     

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

     

    SECTION
      10.03.  Expenses;
      Indemnity; Damage Waiver.

     

    (a)  Costs
      and Expenses.
      The
      Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
      the Administrative Agent, the Collateral Agent and their Affiliates, including
      the reasonable fees, charges and disbursements of one special counsel for the
      Administrative Agent and the Collateral Agent in connection with the syndication
      of the credit facilities provided for herein, the preparation 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
      out-of-pocket expenses incurred by any Issuing Lender in connection with the
      issuance, amendment, renewal or extension of any Letter of Credit or any demand
      for payment thereunder, (iii) all out-of-pocket expenses incurred by the
      Administrative Agent, the Collateral Agent, any Issuing Lender, or any Lender,
      including the fees, charges and disbursements of any counsel for the
      Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender
      in
      connection with the enforcement or protection of its rights (x) in connection
      with this Agreement and the 

     

    
      
         

      

      
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    other
      Loan
      Documents, including its rights under this Section, or (y) in connection with
      the Loans made or Letters of Credit issued hereunder, including in connection
      with any workout or restructuring or negotiations in respect of any workout
      or
      restructuring and (iv) and all costs, expenses, taxes, assessments and
      other charges incurred in connection with any filing, registration, recording,
      perfection or release of any security interest contemplated by any Security
      Document or any other document referred to therein.

     

    (b)  Indemnification
      by the Borrower.
      The
      Borrower shall indemnify the Administrative Agent, the Collateral Agent, any
      Issuing Lender and each 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,
      damages, liabilities and related expenses, including the fees, charges and
      disbursements of any counsel for any Indemnitee, incurred by or asserted against
      any Indemnitee by any third party, the Parent Guarantor or any of its
      Subsidiaries arising out of, in connection with, or as a result of (i) the
      execution or delivery of this Agreement or any agreement or instrument
      contemplated hereby, the performance by the parties hereto of their respective
      obligations hereunder, or in connection herewith, or the consummation of the
      Transactions or any other transactions contemplated hereby, (ii) any Loan
      or Letter of Credit or the use of the proceeds therefrom (including any refusal
      by any 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), any payments that the Collateral
      Agent
      is required to make under any indemnity issued to any bank referred to in the
      Security Agreement to which remittances in respect of Accounts, as defined
      therein, are to be made, (iii) any actual or alleged presence or release of
      Hazardous Materials on or from any property owned or operated by the Parent
      Guarantor or any of its Subsidiaries, or any Environmental Liability related
      in
      any way to the Parent Guarantor or any of its Subsidiaries, or (iv) any
      actual or prospective claim, litigation, investigation or proceeding relating
      to
      any of the foregoing, whether based on contract, tort or any other theory,
      whether brought by any third party or the Parent Guarantor or any of its
      Subsidiaries, and regardless of whether any Indemnitee is a party thereto;
      provided
      that such
      indemnity shall not, as to any Indemnitee, be available to the extent that
      such
      losses, claims, damages, liabilities or related expenses 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
      its Related Parties.

     

    (c)  Reimbursement
      by Lenders.
      To the
      extent that the Borrower fails to pay any amount required to be paid by it
      to
      the Administrative Agent, the Collateral Agent, any Issuing Lender or the
      Swingline Lender under paragraph (a) or (b) of this Section, each
      Lender severally agrees to pay to the Administrative Agent, the Collateral
      Agent, any Issuing Lender or the Swingline Lender, as the case may be, such
      Lender’s Applicable Percentage (determined as of the time that the applicable
      unreimbursed expense or indemnity payment is sought) of such unpaid amount;
      provided
      that the
      unreimbursed expense or indemnified loss, claim, damage, liability or related
      expense, as the case may be, was incurred by or asserted against the
      Administrative Agent, the Collateral Agent, any Issuing Lender or the Swingline
      Lender in its capacity as such.

     

    (d)  Waiver
      of Consequential Damages, Etc.
      To the
      extent permitted by applicable law, no Obligor shall assert, and each Obligor
      hereby waives, any claim against 

     

    
      
         

      

      
        -99-

        
          

        

      

      
         

      

    

    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 or any agreement or
      instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
      or the use of the proceeds thereof.

     

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

     

    SECTION
      10.04.  Successors
      and Assigns.

     

    (a)  Assignments
      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 no Obligor may assign or otherwise transfer any of its rights or
      obligations hereunder without the prior written consent of each Lender (and
      any
      attempted assignment or transfer by any Obligor without such consent 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 and, to the extent expressly
      contemplated hereby, the Related Parties of each of the Administrative Agent,
      the Collateral Agent, the Issuing Lenders 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 assign to one or more assignees who are in the business of making,
      in
      the case of an assignment of any Revolving Credit Exposure or Incremental
      Facility Revolving Credit Exposure, revolving loans and, in the case of any
      assignment of any other exposure, loans, all or a portion of its rights and
      obligations under this Agreement (including all or a portion of its Commitments
      and the Loans at the time owing to it); provided
      that

     

    (i)
      each
      Issuing Lender and, except in the case of an assignment to a Lender or an
      Affiliate (or an Approved Fund) of a Lender, the Administrative Agent (and
      (A)
      in the case of an assignment of all or a portion of a Commitment or any Lender’s
      obligations in respect of its Swingline Exposure, the Swingline Lender and
      (B)
      unless an Event of Default or a payment or bankruptcy Default shall have
      occurred and be continuing, the Borrower) must give its prior written consent
      to
      such assignment (which consents shall not be unreasonably withheld or
      delayed),

     

    (ii)
      except in the case of an assignment to a Lender or an Affiliate (or an Approved
      Fund) of a Lender or an assignment of the entire remaining amount of the
      assigning Lender’s Commitment, the amount of the Commitment of the assigning
      Lender subject to each such assignment (determined as of the date the Assignment
      and Acceptance with respect to such assignment is delivered to the
      Administrative Agent) shall not be less than $1,000,000 unless the
      Administrative Agent otherwise consents,

     

    (iii)
      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,

     

    (iv)
      the
      parties to each such assignment shall execute and deliver to the Administrative
      Agent an Assignment and Acceptance (such Assignment and Acceptance 

     

    
      
         

      

      
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    to
      be (A)
      electronically executed and delivered to the Administrative Agent via an
      electronic settlement system then acceptable to the Administrative Agent, which
      shall initially be the settlement system of ClearPar, LLC, or (B) manually
      executed and delivered together with a processing and recordation fee of
      $3,500), and

     

    (v)
      the
      assignee, if it shall not be a Lender, shall deliver to the Administrative
      Agent
      an Administrative Questionnaire and any applicable tax forms as may be requested
      by the Administrative Agent.

     

    Upon
      acceptance and recording pursuant to paragraph (d) of this Section, from
      and after the effective date specified in each Assignment and Acceptance, the
      assignee thereunder shall be a party hereto and, to the extent of the interest
      assigned by such Assignment and Acceptance, 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 Acceptance, be released
      from its obligations under this Agreement (and, in the case of an Assignment
      and
      Acceptance 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 2.14, 2.15, 2.16 and 10.03
      and shall continue to be obligated pursuant to Section 10.12). 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 (e) of this Section.

     

    (c)  Maintenance
      of Register by the Administrative Agent.
      The
      Administrative Agent, acting for this purpose as an agent of the Borrower,
      shall
      maintain at one of its offices in New York City a copy of each Assignment and
      Acceptance delivered to it and a register for the recordation of the names
      and
      addresses of the Lenders, and the Commitments of, and principal amount of the
      Loans and LC Disbursements owing to, each Lender pursuant to the terms
      hereof from time to time (the “Register”).
      The
      entries in the Register shall be conclusive, and the Borrower, the
      Administrative Agent, the Issuing Lenders and the Lenders shall 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,
      any Issuing Lender and any Lender, at any reasonable time and from time to
      time
      upon reasonable prior notice.

     

    (d)  Effectiveness
      of Assignments.
      Upon its
      receipt of a duly completed Assignment and Acceptance executed by an assigning
      Lender and an assignee, the assignee’s completed Administrative Questionnaire
      and applicable tax forms, if any, requested by the Administrative Agent (unless
      the assignee shall already be a Lender hereunder), the processing and
      recordation fee referred to in paragraph (b) of this Section (if required)
      and any written consents to such assignment required by paragraph (b) of
      this Section, the Administrative Agent shall accept such Assignment and
      Acceptance and record the information contained therein in the Register. No
      assignment shall be effective for purposes of this Agreement unless it has
      been
      recorded in the Register as provided in this paragraph.

     

    (e)  Participations.
      Any
      Lender may, without the consent of the Borrower, the Administrative Agent,
      any
      Issuing Lender or the Swingline Lender, sell participations to one or more
      banks
      or other entities (a “Participant”)
      in all
      or a portion of such 

     

    
      
         

      

      
        -101-

        
          

        

      

      
         

      

    

    Lender’s
      rights and obligations under this Agreement and the other Loan Documents
      (including all or a portion of its Commitments and the Loans owing to it);
      provided
      that
      (i) such Lender’s obligations under this Agreement and the other Loan
      Documents shall remain unchanged, (ii) such Lender shall remain solely
      responsible to the other parties hereto for the performance of such obligations
      and (iii) the Borrower, the Administrative Agent, the Collateral Agent, any
      Issuing 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 and the other Loan Documents. 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 the other
      Loan
      Documents and to approve any amendment, modification or waiver of any provision
      of this Agreement or any other Loan Document; 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
      described in the first proviso to Section 10.02(b) that affects such
      Participant. Subject to paragraph (f) of this Section, the Borrower agrees
      that each Participant shall be entitled to the benefits of Sections 2.14,
      2.15 and 2.16 (subject to the requirements of those sections) to the same
      extent as if it were a Lender and had acquired its interest by assignment
      pursuant to paragraph (b) of this Section.

     

    (f)  Limitations
      on Rights of Participants.
      A
      Participant shall not be entitled to receive any greater payment under
      Section 2.14 or 2.16 than the applicable Lender would have been
      entitled to receive with respect to the participation sold to such Participant.
      A Participant that would be a Foreign Lender if it were a Lender shall not
      be
      entitled to the benefits of Section 2.16 unless the Borrower consents to
      the participation sold to such Participant and such Participant agrees, for
      the
      benefit of the Borrower, to comply with Section 2.16(e) as though it were a
      Lender.

     

    (g)  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 any such pledge or assignment to a Federal Reserve Bank, and this
      Section shall not apply to any such pledge or assignment of a security interest;
      provided
      that no
      such pledge or assignment of a security interest shall release a Lender from
      any
      of its obligations hereunder or substitute any such assignee for such Lender
      as
      a party hereto.

     

    (h)  No
      Assignments to the Obligors or Affiliates.
      Anything
      in this Section to the contrary notwithstanding, no Lender may assign or
      participate any interest in any Loan or LC Exposure held by it hereunder to
      the Parent Guarantor or any of its Affiliates or Subsidiaries without the prior
      consent of each Lender.

     

    SECTION
      10.05.  Survival.
      All
      covenants, agreements, representations and warranties made by the Obligors
      herein and in the certificates or other instruments delivered in connection
      with
      or pursuant to this Agreement shall be considered to have been relied upon
      by
      the other parties hereto and shall survive the execution and delivery of this
      Agreement and the making of any Loans and issuance of any Letters of Credit,
      regardless of any investigation made by any such other party or on its behalf
      and notwithstanding that the Administrative Agent, the Collateral Agent, any
      Issuing Lender or any Lender may have had notice or knowledge of any

     

    
      
         

      

      
        -102-

        
          

        

      

      
         

      

    

    Default
      or
      incorrect representation or warranty at the time any credit is extended
      hereunder, and shall continue in full force and effect as long as the principal
      of or any accrued interest on any Loan or any fee or any other amount payable
      under this Agreement is outstanding and unpaid or any Letter of Credit is
      outstanding and so long as the Commitments have not expired or terminated.
      The
      provisions of Sections 2.14, 2.15, 2.16, 3.03 and 10.03 and Article IX
      shall survive and remain in full force and effect regardless of the consummation
      of the transactions contemplated hereby, the repayment of the Loans, the
      expiration or termination of the Letters of Credit and the Commitments or the
      termination of this Agreement or any provision hereof.

     

    SECTION
      10.06.  Counterparts;
      Integration; Effectiveness.
      This
      Agreement may be executed in counterparts (and by different parties hereto
      on
      different counterparts), each of which shall constitute an original, but all
      of
      which when taken together shall constitute a single contract. This Agreement
      and
      any separate letter agreements with respect to fees payable to the
      Administrative Agent or the Collateral Agent constitute the entire contract
      between and among the parties relating to the subject matter hereof and
      supersede any and all previous agreements and understandings, oral or written,
      relating to the subject matter hereof. Except as provided in Section 5.01,
      this Agreement shall become effective when it shall have been executed by the
      Administrative Agent and when the Administrative Agent shall have received
      counterparts hereof which, when taken together, bear the signatures of each
      of
      the other parties hereto, and thereafter shall be binding upon and inure to
      the
      benefit of the parties hereto and their respective successors and assigns.
      Delivery of an executed counterpart of a signature page to this Agreement by
      telecopy shall be effective as delivery of a manually executed counterpart
      of
      this Agreement.

     

    SECTION
      10.07.  Severability.
      Any
      provision of this Agreement held to be invalid, illegal or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such invalidity, illegality or unenforceability without affecting the validity,
      legality and enforceability of the remaining provisions hereof; and the
      invalidity of a particular provision in a particular jurisdiction shall not
      invalidate such provision in any other jurisdiction.

     

    SECTION
      10.08.  Right
      of
      Setoff.
      If an
      Event of Default shall have occurred and be continuing, each Lender is hereby
      authorized at any time and from time to time, to the fullest extent permitted
      by
      law, to set off and apply any and all deposits (general or special, time or
      demand, provisional or final) at any time held and other indebtedness at any
      time owing by such Lender to or for the credit or the account of any Obligor
      against any of and all the obligations of any Obligor now or hereafter existing
      under this Agreement held by such Lender, irrespective of whether or not such
      Lender shall have made any demand under this Agreement and although such
      obligations may be unmatured. The rights of each Lender under this Section
      are
      in addition to other rights and remedies (including other rights of setoff)
      which such Lender may have.

     

    SECTION
      10.09.  Governing
      Law; Jurisdiction; Etc.

     

    (a)  Governing
      Law.
      This
      Agreement shall be construed in accordance with and governed by the law of
      the
      State of New York.

     

    (b)  Submission
      to Jurisdiction.
      Each
      party hereto hereby irrevocably and unconditionally submits, for itself and
      its
      property, to the nonexclusive jurisdiction of the Supreme Court of the State
      of
      New York sitting in New York County and of the United States District Court
      of
      the Southern District of New York, and any appellate court from any thereof,
      in

     

    
      
         

      

      
        -103-

        
          

        

      

      
         

      

    

    any
      action
      or proceeding arising out of or relating to this Agreement, or for recognition
      or enforcement of any judgment, and each of the parties hereto hereby
      irrevocably and unconditionally agrees that all claims in respect of any such
      action or proceeding may be heard and determined in such New York State or,
      to
      the extent permitted by law, in such federal court. Each of the parties hereto
      agrees that a final judgment in any such action or proceeding shall be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any other manner provided by law. Nothing in this Agreement shall affect
      any
      right that the Administrative Agent, the Collateral Agent, any Issuing Lender
      or
      any Lender may otherwise have to bring any action or proceeding relating to
      this
      Agreement against any Obligor or its properties in the courts of any
      jurisdiction.

     

    (c)  Waiver
      of Venue.
      Each
      party hereto hereby irrevocably and unconditionally waives, to the fullest
      extent it may legally and effectively do so, any objection which it may now
      or
      hereafter have to the laying of venue of any suit, action or proceeding arising
      out of or relating to this Agreement in any court referred to in the first
      sentence of paragraph (b) of this Section. Each of the parties hereto
      hereby irrevocably waives, to the fullest extent permitted by law, the defense
      of an inconvenient forum to the maintenance of such action or proceeding in
      any
      such court.

     

    (d)  Service
      of Process.
      Each
      party to this Agreement irrevocably consents to service of process in the manner
      provided for notices in Section 10.01. Nothing in this Agreement will
      affect the right of any party to this Agreement to serve process in any other
      manner permitted by law.

     

    SECTION
      10.10.  WAIVER
      OF JURY TRIAL.
      EACH
      PARTY HERETO HEREBY 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 THE TRANSACTIONS
      CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
      EACH
      PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
      OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
      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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
      CERTIFICATIONS IN THIS SECTION.

     

    SECTION
      10.11.  Headings.
      Article
      and Section headings and the Table of Contents used herein are for convenience
      of reference only, are not part of this Agreement and shall not affect the
      construction of, or be taken into consideration in interpreting, this
      Agreement.

     

    SECTION
      10.12.  Treatment
      of Certain Information; Confidentiality.

     

    (a)  Treatment
      of Certain Information.
      Each of
      the Borrower and the Parent Guarantor acknowledges that from time to time
      financial advisory, investment banking and other services may be offered or
      provided to the Borrower, the Parent Guarantor or one or more of their
      Subsidiaries (in connection with this Agreement or otherwise) by any Lender
      or
      by 

     

    
      
         

      

      
        -104-

        
          

        

      

      
         

      

    

    one
      or
      more subsidiaries or Affiliates of such Lender and each of the Borrower and
      the
      Parent Guarantor hereby authorizes each Lender to share any information
      delivered to such Lender by the Borrower, the Parent Guarantor and their
      Subsidiaries pursuant to this Agreement, or in connection with the decision
      of
      such Lender to enter into this Agreement, to any such subsidiary or Affiliate,
      it being understood that any such subsidiary or Affiliate receiving such
      information shall be bound by the provisions of paragraph (b) of this
      Section as if it were a Lender hereunder. Such authorization shall survive
      the
      repayment of the Loans, the expiration or termination of the Letters of Credit
      and the Commitments or the termination of this Agreement or any provision
      hereof.

     

    (b)  Confidentiality.
      Each of
      the Administrative Agent, the Collateral Agent, the Issuing Lenders and the
      Lenders agrees to maintain the confidentiality of the Information (as defined
      below), except that Information may be disclosed (i) 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), (ii) to
      the extent requested by any regulatory authority having jurisdiction over such
      Person, (iii) to the extent required by applicable laws or regulations or
      by any subpoena or similar legal process; provided
      that the
      Administrative Agent or such Lender, unless prohibited by applicable law, shall
      use reasonable efforts to notify the Borrower in advance of any disclosure
      pursuant to this clause (iii) but only to the extent reasonably practicable
      under the circumstances and on the understanding that neither the Administrative
      Agent nor any Lender shall incur any liability for failure to give such notice,
      (iv) to any other party to this Agreement, (v) in connection with the
      exercise of any remedies hereunder or under any other Loan Document or any
      suit,
      action or proceeding relating to this Agreement or any other Loan Document
      or
      the enforcement of rights hereunder or thereunder, (vi) subject to an
      agreement containing provisions substantially the same as those of this
      paragraph, to (A) any assignee of or Participant in, or any prospective
      assignee of or Participant in, any of its rights or obligations under this
      Agreement or (B) any actual or prospective counterparty (or its advisors)
      to any Hedging Agreement relating to the Borrower and its obligations,
      (vii) with the consent of the Borrower or the Parent Guarantor or
      (viii) to the extent such Information (A) becomes publicly available
      other than as a result of a breach of this paragraph or (B) becomes
      available to the Administrative Agent, the Collateral Agent, any Issuing Lender
      or any Lender on a nonconfidential basis from a source other than an Obligor.
      For the purposes of this paragraph, “Information”
means
      all information received from any Obligor relating to any Obligor or its
      business, other than any such information that is available to the
      Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender
      on
      a nonconfidential basis prior to disclosure by an Obligor; including all
      information provided pursuant to Section 6.01(c) and (f) and all Projections
      (the “Specified
      Information”);
      provided
      that, in
      the case of information received from an Obligor after the date hereof (other
      than any Specified Information), 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.

     

    
      
         

      

      
        -105-

        
          

        

      

      
         

      

    

    

     

    SECTION
      10.13.  USA
      PATRIOT Act.
      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)), it is required to obtain, verify and record
      information that identifies the Borrower, which information includes the name
      and address of the Borrower and other information that will allow such Lender
      to
      identify the Borrower in accordance with said Act.

     

    

     

    
      
         

      

      
        -106-

        
          

        

      

      
         

      

    

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

    

    [SIGNATURE
      PAGES TO FOLLOW]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    KRISPY
      KREME DOUGHNUT CORPORATION

    

    

    By:
      /s/
      Daryl G. Brewster

    Name:
      Daryl G. Brewster

    Title:
      President & CEO

    

    GUARANTORS:

    

    KRISPY
      KREME DOUGHNUTS, INC.

    

    KRISPY
      KREME MOBILE STORE COMPANY

    

    KRISPY
      KREME CANADA, INC.

    

    HD
      CAPITAL
      CORPORATION

    

    HDN
      DEVELOPMENT CORPORATION

    

    GOLDEN
      GATE DOUGHNUTS, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT 
CORPORATION, 

            

    

                       
      as authorized Manager

    

    PANHANDLE
      DOUGHNUTS, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME MANAGEMENT I, LLC, 

            

    

                       
      an authorized Manager

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME MANAGEMENT II, LLC, 

            

    

                       
      an authorized Manager

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member of Krispy Kreme 
Management I, LLC and Krispy Kreme
                
Management II, LLC

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NORTH
      TEXAS DOUGHNUTS, L.P.

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT
 CORPORATION, 

            

    

                       
      its General Partner

    

    KK
      CANADA
      HOLDINGS, INC.

    

    KRISPY
      KREME BRAND FUND CORPORATION

    

    KRISPY
      KREME MANAGEMENT I, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member

            

    

    

    KRISPY
      KREME MANAGEMENT II, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member

            

    

    

    KRISPY
      KREME MANAGEMENT III, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member

            

    

    

    SOUTHERN
      DOUGHNUTS, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME MANAGEMENT I, LLC, 

            

    

                       
      as authorized Manager

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT
 CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SOUTHWEST
      DOUGHNUTS, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME MANAGEMENT I, LLC, 

            

    

                        as
      authorized Manager

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member

            

    

    

    NORTHEAST
      DOUGHNUTS, LLC

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME MANAGEMENT I, LLC, 

            

    

                       
      as authorized Manager

    

    
      	 	 	
              By:

            	
              KRISPY
                KREME DOUGHNUT
 CORPORATION,

            

    

    
      	 	 	 	
              as
                authorized Member

            

    

    

    

    By:
      /s/
      Michael C. Phalen

    Name:
      Michael C. Phalen

    Title:
      Authorized Officer

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    LENDERS

    

    CREDIT
      SUISSE,

    CAYMAN
      ISLANDS BRANCH,

    individually
      and as Administrative Agent, Collateral 
Agent, Issuing Lender and Swingline
      Lender

    

    

    By
      /s/
      David Dodd

    Name:
      David Dodd

    Title:
      Vice President

    

    

    By
      /s/
      Denise L. Alvarez

    Name:
      Denise L. Alvarez

    Title:
      Associate

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WELLS
      FARGO FOOTHILL, INC.

    a
      Revolving Credit Lender

    

    

    By
      /s/
      Kevin S. Fong

    Name:
      Kevin S. Fong

    Title:
      Vice President

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Carolina
      First Bank

    a
      Revolving Credit Lender

    

    

    By
      /s/
      Kevin M. Short

    Name:
      Kevin M. Short

    Title:
      Senior Vice President

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Wachovia
      Bank, N.A.,

    a
      Revolving Credit Lender

    

    

    By
      /s/
      R.
      Alan Proctor

    Name:
      R.
      Alan Proctor

    Title:
      Senior Vice President

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