Document:

Exhibit 10.3

 

CREDIT AGREEMENT,

 

dated as of March 15, 2010,

 

among

 

REDDY ICE CORPORATION,

as the Borrower,

 

VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS

FROM TIME TO TIME PARTIES HERETO,

as the Lenders,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as the Administrative Agent,

 

 

J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead Arranger

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
  DEFINITIONS AND ACCOUNTING TERMS

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
  Defined Terms

  	
  1

  
	
  SECTION 1.2.

  	
  Use of Defined Terms

  	
  32

  
	
  SECTION 1.3.

  	
  Cross-References

  	
  32

  
	
  SECTION 1.4.

  	
  Accounting and Financial Determinations

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  COMMITMENTS, BORROWING AND ISSUANCE

  
	
  PROCEDURES, NOTES AND LETTERS OF CREDIT

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
  Commitments

  	
  33

  
	
  SECTION 2.2.

  	
  Reductions in Commitment Amounts

  	
  33

  
	
  SECTION 2.3.

  	
  Borrowing Procedures

  	
  35

  
	
  SECTION 2.4.

  	
  Continuation and Conversion Elections

  	
  37

  
	
  SECTION 2.5.

  	
  Funding

  	
  37

  
	
  SECTION 2.6.

  	
  Reallocation of Revolving Loans

  	
  38

  
	
  SECTION 2.7.

  	
  Register; Notes

  	
  38

  
	
  SECTION 2.8.

  	
  Incremental Facility

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
  REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
  Repayments and Prepayments; Application

  	
  40

  
	
  SECTION 3.2.

  	
  Interest Provisions

  	
  43

  
	
  SECTION 3.3.

  	
  Fees

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
  CERTAIN LIBO RATE AND OTHER PROVISIONS

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
  LIBO Rate Lending Unlawful

  	
  45

  
	
  SECTION 4.2.

  	
  Deposits Unavailable

  	
  45

  
	
  SECTION 4.3.

  	
  Increased LIBO Rate Loan Costs, etc.

  	
  46

  
	
  SECTION 4.4.

  	
  Funding Losses

  	
  46

  
	
  SECTION 4.5.

  	
  Increased Capital Costs

  	
  47

  
	
  SECTION 4.6.

  	
  Taxes

  	
  47

  
	
  SECTION 4.7.

  	
  Payments, Computations, etc.

  	
  51

  
	
  SECTION 4.8.

  	
  Sharing of Payments

  	
  52

  
	
  SECTION 4.9.

  	
  Setoff

  	
  52

  
	
  SECTION 4.10.

  	
  Replacement of Lenders

  	
  53

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 4.11.

  	
  Mitigation of Claims

  	
  54

  

 

ARTICLE V

CONDITIONS TO EFFECTIVENESS

 

	
  SECTION 5.1.

  	
  Initial Credit Extension

  	
  54

  
	
  SECTION 5.2.

  	
  All Credit Extensions

  	
  57

  

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

	
  SECTION 6.1.

  	
  Organization, etc.

  	
  58

  
	
  SECTION 6.2.

  	
  Due
  Authorization, Non-Contravention, etc.

  	
  58

  
	
  SECTION 6.3.

  	
  Government Approval, Regulation, etc.

  	
  59

  
	
  SECTION 6.4.

  	
  Validity, etc.

  	
  59

  
	
  SECTION 6.5.

  	
  Financial Information

  	
  59

  
	
  SECTION 6.6.

  	
  No Material Adverse Effect; Solvency

  	
  59

  
	
  SECTION 6.7.

  	
  Litigation, Labor Controversies, etc.

  	
  60

  
	
  SECTION 6.8.

  	
  Subsidiaries

  	
  60

  
	
  SECTION 6.9.

  	
  Ownership of Properties

  	
  60

  
	
  SECTION 6.10.

  	
  Taxes

  	
  60

  
	
  SECTION 6.11.

  	
  Pension and Welfare Plans

  	
  60

  
	
  SECTION 6.12.

  	
  Environmental Warranties

  	
  61

  
	
  SECTION 6.13.

  	
  Accuracy of Information

  	
  62

  
	
  SECTION 6.14.

  	
  Regulations T, U and X

  	
  62

  
	
  SECTION 6.15.

  	
  Absence of Any Undisclosed Liabilities

  	
  62

  
	
  SECTION 6.16.

  	
  Mortgages

  	
  63

  
	
  SECTION 6.17.

  	
  Amounts of Other Debt

  	
  63

  

 

ARTICLE VII

COVENANTS

 

	
  SECTION 7.1.

  	
  Affirmative Covenants

  	
  63

  
	
  SECTION 7.2.

  	
  Negative Covenants

  	
  70

  

 

ARTICLE VIII

EVENTS OF DEFAULT

 

	
  SECTION 8.1.

  	
  Listing of Events of Default

  	
  82

  
	
  SECTION 8.2.

  	
  Action if Bankruptcy

  	
  85

  
	
  SECTION 8.3.

  	
  Action if
  Other Event of Default

  	
  85

  

 

ii

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
  THE ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
  Actions

  	
  85

  
	
  SECTION 9.2.

  	
  Funding Reliance, Etc.

  	
  86

  
	
  SECTION 9.3.

  	
  Exculpation

  	
  86

  
	
  SECTION 9.4.

  	
  Successor

  	
  87

  
	
  SECTION 9.5.

  	
  Loans by Administrative Agent

  	
  87

  
	
  SECTION 9.6.

  	
  Credit Decisions

  	
  87

  
	
  SECTION 9.7.

  	
  Copies, Etc.

  	
  88

  
	
  SECTION 9.8.

  	
  Reliance by Administrative Agent

  	
  88

  
	
  SECTION 9.9.

  	
  Defaults

  	
  88

  
	
  SECTION 9.10.

  	
  Syndication Agent

  	
  88

  
	
  SECTION 9.11.

  	
  Withholding Taxes

  	
  89

  
	
  SECTION 9.12.

  	
  Intercreditor Agreements

  	
  89

  

 

ARTICLE X

MISCELLANEOUS PROVISIONS

 

	
  SECTION 10.1.

  	
  Waivers, Amendments, Etc.

  	
  89

  
	
  SECTION 10.2.

  	
  Notices; Time

  	
  91

  
	
  SECTION 10.3.

  	
  Payment of Costs and Expenses

  	
  91

  
	
  SECTION 10.4.

  	
  Indemnification

  	
  92

  
	
  SECTION 10.5.

  	
  Survival

  	
  93

  
	
  SECTION 10.6.

  	
  Severability

  	
  93

  
	
  SECTION 10.7.

  	
  Headings

  	
  93

  
	
  SECTION 10.8.

  	
  Execution in Counterparts, Effectiveness, Etc.

  	
  93

  
	
  SECTION 10.9.

  	
  Governing Law; Entire Agreement

  	
  94

  
	
  SECTION 10.10.

  	
  Successors and Assigns

  	
  94

  
	
  SECTION 10.11.

  	
  Sale and Transfer of Credit Extensions; Participations in
  Credit Extensions

  	
  94

  
	
  SECTION 10.12.

  	
  Other Transactions

  	
  98

  
	
  SECTION 10.13.

  	
  Forum Selection and Consent to Jurisdiction

  	
  98

  
	
  SECTION 10.14.

  	
  Waiver of Jury Trial

  	
  99

  
	
  SECTION 10.15.

  	
  Limitation on Interest

  	
  99

  
	
  SECTION 10.16.

  	
  Confidentiality

  	
  100

  
	
  SECTION 10.17.

  	
  USA PATRIOT Act Notice

  	
  101

  

 

iii

 

	
  SCHEDULE I

  	
  —

  	
  Disclosure Schedule

  	
   

  
	
  SCHEDULE
  II

  	
  —

  	
  Percentages;
  LIBOR Office; Domestic Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  A-1

  	
  —

  	
  Form of
  Revolving Note

  	
   

  
	
  EXHIBIT
  A-2

  	
  —

  	
  Form of
  Swing Line Note

  	
   

  
	
  EXHIBIT
  B

  	
  —

  	
  Form of
  Borrowing Request

  	
   

  
	
  EXHIBIT
  C

  	
  —

  	
  Form of
  Continuation/Conversion Notice

  	
   

  
	
  EXHIBIT
  D

  	
  —

  	
  Form of
  Lender Assignment Agreement

  	
   

  
	
  EXHIBIT
  E

  	
  —

  	
  Form of
  Compliance Certificate

  	
   

  
	
  EXHIBIT
  F-1

  	
  —

  	
  Form of
  Non-Bank Tax Certificate

  	
   

  
	
  EXHIBIT
  F-2

  	
  —

  	
  Form of
  Non-Bank Tax Certificate

  	
   

  
	
  EXHIBIT
  F-3

  	
  —

  	
  Form of
  Non-Bank Tax Certificate

  	
   

  
	
  EXHIBIT
  F-4

  	
  —

  	
  Form of
  Non-Bank Tax Certificate

  	
   

  
	
  EXHIBIT
  G

  	
  —

  	
  Form of
  Guaranty

  	
   

  
	
  EXHIBIT
  H

  	
  —

  	
  [Reserved]

  	
   

  
	
  EXHIBIT
  I

  	
  —

  	
  Form of
  Pledge and Security Agreement

  	
   

  
	
  EXHIBIT
  J

  	
  —

  	
  Form of
  Closing Date Certificate

  	
   

  
	
  EXHIBIT
  K

  	
  —

  	
  Form of
  Solvency Certificate

  	
   

  
	
  EXHIBIT
  L

  	
  —

  	
  Form of
  First Lien Intercreditor Agreement

  	
   

  
	
  EXHIBIT
  M

  	
  —

  	
  Form of
  Junior Lien Intercreditor Agreement

  	
   

  
	
  EXHIBIT N

  	
  —

  	
  Form of Mortgage

  	
   

  

 

iv

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT, dated
as of March 15, 2010, is among REDDY ICE CORPORATION, a Nevada corporation
(the “Borrower”), the various financial institutions and other Persons
from time to time parties hereto (collectively, the “Lenders”) and
JPMORGAN CHASE BANK, N.A. (“JPMorgan”), as the administrative agent for
the Lenders (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS,
the Borrower will, on the Closing Date, (i) repay in full all borrowings
and terminate all commitments under the Amended and Restated Credit Agreement,
dated as of August 9, 2005 (as amended, supplemented, amended and restated
or otherwise modified prior to the date hereof, the “Existing Credit
Agreement”), among the Borrower, the lenders party thereto, Credit Suisse,
as administrative agent, and the other agents and arrangers party thereto, (ii) issue
New Notes (as defined below) and (iii) pay all fees, commissions and
expenses in connection with each of the foregoing;

 

WHEREAS, the Borrower has
requested that the Lenders make available for the purposes specified in this
Agreement, revolving credit loans and swing line loans; and

 

WHEREAS, the Lenders are
willing to make available to the Borrower such revolving credit loans and swing
line loans upon the terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and the covenants and agreements contained
herein, the parties hereto hereby agree as follows:

 

ARTICLE
I

DEFINITIONS
AND ACCOUNTING TERMS

 

SECTION 1.1.                                          Defined Terms.  The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

 

“Administrative Agent”
is defined in the preamble and includes each other Person appointed as
the successor Administrative Agent pursuant to Section 9.4.

 

“Affected Lender” is
defined in Section 4.10.

 

“Affiliate” of any
Person means any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person.  “Control” of a Person means the power,
directly or indirectly, (a) to vote 10% or more of the Capital Securities
(on a fully diluted basis) of such Person having ordinary voting power for the
election of directors, managing members or general partners (as applicable) or (b) to
direct or cause the direction of the management and policies of such Person
(whether by contract or otherwise).

 

 

“Agreement” means, on
any date, this Credit Agreement, as the same may thereafter from time to time
be amended, supplemented, amended and restated or otherwise modified and in effect
on such date.

 

“Alternate Base Rate”
means, on any date and with respect to all Base Rate Loans, a fluctuating rate
of interest per annum equal to the greatest of (a) the Base Rate in effect
on such day, (b) the Federal Funds Rate in effect on such day plus
1⁄2 of 1% and (c) except during a LIBO Rate Unavailability Period, the sum
of 1.0% plus the LIBO Rate (Reserve Adjusted) for a one month Interest
Period beginning on such day (or if such day is not a Business Day, the
immediately preceding Business Day), provided that, for the avoidance of
doubt, the LIBO Rate (Reserve Adjusted) for any day shall be based on the rate
appearing on the Reuters Screen LIBOR01 Page (or any successor or
substitute page) at approximately 11:00 a.m. London time on such day
(without any rounding).  Any change in
the Alternate Base Rate due to a change in the Base Rate, the Federal Funds
Rate or the LIBO Rate (Reserve Adjusted) shall be effective from and including
the effective date of such change in the Base Rate, the Federal Funds Rate or
the LIBO Rate (Reserve Adjusted), respectively. 
The Administrative Agent will give notice promptly to the Borrower and
the Lenders of changes in the Alternate Base Rate; provided that the
failure to give such notice shall not affect the Alternate Base Rate in effect
after such change.

 

“Applicable Margin”
means for Base Rate Loans and for LIBO Rate Loan, the amount set forth opposite
the applicable Level according to the Net Leverage Ratio:

 

	
  Net Leverage Ratio

  	
   

  	
  Applicable Margin on

  LIBO Rate Loans

  	
   

  	
  Applicable Margin

  on Base Rate Loans

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
  Level I

  >5.0 to 1.0

  	
   

  	
  4.75

  	
  %

  	
  3.75

  	
  %

  	
  0.875

  	
  %

  
	
  Level II

  <5.0 to 1.0 and >4.0 to 1.0

  	
   

  	
  4.25

  	
  %

  	
  3.25

  	
  %

  	
  0.75

  	
  %

  
	
  Level III

  <4.0 to 1.0 and >3.0 to 1.0

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  	
  0.625

  	
  %

  
	
  Level IV

  <3.0 to 1.0

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  	
  0.50

  	
  %

  

 

Each change in the Applicable
Margin or Applicable Percentage resulting from a change in the Net Leverage
Ratio shall be effective with respect to all outstanding Loans on and after the
fifth Business Day after the date of delivery to the Administrative Agent of
the financial statements and certificates required by Section 7.1.1(a),
(b) and (c), respectively, indicating such change until the
fifth Business Day after the next date of delivery of such financial statements
and certificates indicating another such change; provided that until the
first time that the financial statements and certificates required by Section 7.1.1(a),
(b) and (c), respectively, have been delivered following the
Closing Date, Level I shall apply. 
Notwithstanding the foregoing, the Net Leverage Ratio shall be deemed to
be in Level I (i) at any time during which the Borrower has 

 

2

 

failed
to deliver the financial statements and certificates required by Section 7.1.1(a),
(b) or (c), respectively, and (ii) at any time during
the existence of an Event of Default.

 

In the event that any
financial statement or Compliance Certificate delivered pursuant to Section 7.1.1
is shown to be inaccurate (regardless of whether this Agreement or the Commitments
are in effect when such inaccuracy is discovered), and such inaccuracy, if
corrected, would have led to a higher Applicable Margin or Applicable
Percentage for any period (an “Applicable
Period”) than the Applicable Margin or Applicable Percentage applied
for such Applicable Period, then (i) the Borrower shall immediately
deliver to the Administrative Agent a correct Compliance Certificate for such
Applicable Period, (ii) the Applicable Margin or Applicable Percentage
shall be determined by reference to the corrected Compliance Certificate (but
in no event shall the Lenders owe any amounts to the Borrower), and (iii) the
Borrower shall immediately pay to the Administrative Agent the additional
interest or fees owing as a result of such increased Applicable Margin for such
Applicable Period, which payment shall be promptly applied by the Administrative
Agent in accordance with the terms hereof. 
This paragraph shall not limit the rights of the Administrative Agent
and the Lenders hereunder.

 

“Applicable Percentage”
means the percentage indicated in the column entitled “Applicable Percentage”
in the grid contained in the definition of “Applicable Margin” above.

 

“Applicable Period” is defined in the definition of “Applicable
Margin”.

 

“Approved Fund” means
any Person (other than a natural Person) that (a) is or will be engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business, and (b) is
administered, advised or managed by a Lender, an Affiliate of a Lender or an
entity or an Affiliate of an entity that administers, advises or manages a
Lender.

 

“Asset Swap” means a
Disposition of assets in exchange for the substantially contemporaneous receipt
of assets of a similar nature and to be used by the Borrower or a Subsidiary in
accordance with Section 7.2.1, in each case having a Fair Market
Value comparable to the Fair Market Value of the assets Disposed; provided
that if the Borrower or a Subsidiary Guarantor Disposes of such assets,
Borrower or a Subsidiary Guarantor must receive such assets in the exchange.

 

“Audited Financial
Statements” is defined in clause (b) of Section 7.1.1.

 

“Authorized Officer”
means, relative to any Obligor, those of its officers, general partners or
managing members (as applicable) whose signatures and incumbency shall have
been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.1.

 

“Available
Cash” means, for any Fiscal Quarter ending on or after June 30, 2010,
for the Borrower and its Subsidiaries, the sum (which may be negative) of:

 

(a)                                  EBITDA for such
Fiscal Quarter; plus

 

3

 

(b)                                 to the extent
not included in Net Income used in determining such EBITDA, the cash amount
realized in respect of extraordinary, non-recurring or unusual gains, in each
case during such Fiscal Quarter; minus

 

(c)                                  the sum of: to
the extent included in or added to Net Income in determining such EBITDA, (A) Interest
Expense actually paid in cash by the Borrower or such Subsidiary, (B) income
taxes actually paid in cash, (C) the cash cost of any extraordinary,
non-recurring or unusual losses and (D) payments made in cash on account
of non-cash losses or non-cash charges expensed, in each case, during such Fiscal
Quarter.

 

“Average Life” means,
as of the date of determination, with respect to any Indebtedness, the quotient
obtained by dividing:

 

(1)                                  the sum of the products of the numbers of
years from the date of determination to the dates of each successive scheduled
principal payment of or redemption or similar payment with respect to such
Indebtedness multiplied by the amount of such payment by

 

(2)                                  the sum of all
such payments.

 

“Base Rate” means, at
any time, the rate of interest per annum publicly announced from time to time
by the Administrative Agent in New York as its prime rate; each change in the
Base Rate shall be effective from and including the date such change is
publicly announced as being effective. 
The Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Administrative Agent in connection with extensions
of credit.

 

“Base Rate Loan”
means a Loan bearing interest at a fluctuating rate determined by reference to
the Alternate Base Rate.

 

“Borrower” is defined
in the preamble.

 

“Borrowing” means the
Loans of the same type and, in the case of LIBO Rate Loans, having the same
Interest Period made by all Lenders required to make such Loans on the same
Business Day and pursuant to the same Borrowing Request in accordance with Section 2.3.

 

“Borrowing Request”
means a Loan request and certificate duly executed by an Authorized Officer of
the Borrower substantially in the form of Exhibit B hereto.

 

“Business Day” means (a) any
day which is neither a Saturday or Sunday nor a legal holiday on which banks
are authorized or required to be closed in New York, New York and (b) relative
to the making, continuing, prepaying or repaying of any LIBO Rate Loans, any
day which is a Business Day described in clause (a) above and which
is also a day on which dealings in Dollars are carried on in the London
interbank Eurodollar market.

 

“Capital Expenditures”
means, for any period, the aggregate amount of (a) all expenditures of the
Borrower and its Subsidiaries for fixed or capital assets made during such
period 

 

4

 

which,
in accordance with GAAP, would be classified as capital expenditures and (b) Capitalized
Lease Liabilities incurred by the Borrower and its Subsidiaries during such
period.  The term Capital Expenditures
shall not include any expenditures for Permitted Acquisitions otherwise
permitted hereunder.

 

“Capital Securities”
means, with respect to any Person, all shares, interests, participations or
other equivalents (however designated, whether voting or non-voting) of such
Person’s equity capital, whether now outstanding or issued after the Closing
Date, including common shares, preferred shares, membership interests in a
limited liability company, limited or general partnership interests in a
partnership or any other equivalent of such ownership interest.

 

“Capitalized Lease
Liabilities” means, with respect to any Person, all monetary obligations of
such Person and its Subsidiaries under any leasing or similar arrangement which
have been (or, in accordance with GAAP, should be) classified as capitalized
leases, and for purposes of each Loan Document the amount of such obligations
at any time shall be the capitalized amount thereof at such time, determined in
accordance with GAAP, and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a premium or a penalty.

 

“Cash Equivalent
Investment” means, at any time:

 

(a)                                  any direct
obligation of (or obligation unconditionally guaranteed by) the United States
(or any agency thereof, to the extent such obligations are supported by the
full faith and credit of the United States), in each case maturing not more
than one year after such time;

 

(b)                                 any direct
obligation of (or obligation unconditionally guaranteed by) a State of the
United States, a political subdivision thereof or a taxing authority thereof,
to the extent such obligations are rated investment grade by both Moody’s and
S&P and do not mature more than one year after such time;

 

(c)                                  commercial
paper maturing not more than 360 days from the date of issue, which is issued
by (i) a corporation (other than an Affiliate of any Obligor) organized under
the laws of any State of the United States or of the District of Columbia and
rated “A-1” or higher by S&P or “P-1” or higher by Moody’s, or (ii) any
Lender (or its holding company) other than a Designated Lender;

 

(d)                                 any certificate
of deposit, time deposit or bankers acceptance, maturing not more than one year
after its date of issuance, which is issued by either (i) any bank
organized under the laws of the United States (or any State thereof) and which
has (x) a credit rating of “A2” or higher from Moody’s or “A” or higher
from S&P and (y) a combined capital and surplus greater than
$500,000,000, or (ii) any Lender;

 

5

 

(e)                                  any repurchase
agreement having a term of 90 days or less entered into with any Lender or any
commercial banking institution satisfying the criteria set forth in clause
(c)(i); or

 

(f)                                    shares of any
mutual fund whose investment guidelines restrict substantially all of such fund’s
investments to investments of the type specified in clauses (a) through
(e) above.

 

“Cash Management Obligations”  means
obligations owed by the Company or any Subsidiary Guarantor to a Person who was
a Lender or an Affiliate of a Lender at the time of entry of such obligations
under this Agreement in respect of any overdraft and related liabilities
arising from treasury, depository, credit and debit card and cash management
services or any automated clearing house transfers of funds.

 

“Casualty Event”
means the damage, destruction or condemnation, as the case may be, of property
of any Person or any of its Subsidiaries.

 

“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended.

 

“CERCLIS” means the
Comprehensive Environmental Response, Compensation and Liability Information
System List.

 

“Change
in Control” means:

 

(a)                                  any person or
group (within the meaning of Sections 13(d) and 14(d) under the
Exchange Act) shall become the ultimate “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 30% of
the outstanding Voting Securities of Parent, collectively, beneficially and of
record on a fully diluted basis; or

 

(b)                                 the failure of
Parent at any time to directly own beneficially and of record on a fully
diluted basis 100% of the outstanding Capital Securities of the Borrower; or

 

(c)                                  during any
period of 24 consecutive months, individuals who at the beginning of such
period constituted the Board of Directors of Parent (together with any new
directors whose election to such Board or whose nomination for election by the
stockholders of Parent was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of Parent
then in office; or

 

(d)                                 the occurrence
of a “change of control” (or similarly defined term) under any of the
indentures, agreements or other instruments governing the New Notes, any Pari
Passu Lien Indebtedness or any Refinancing Indebtedness in respect thereof.

 

6

 

“Closing Date” means
the date on which all the conditions precedent set forth in Section 5.1
shall be satisfied or waived.

 

“Closing Date Certificate”
means the certificate executed and delivered by an Authorized Officer of the
Borrower pursuant to the terms of this Agreement, substantially in the form of Exhibit J
hereto.

 

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

 

“Collateral” shall mean, collectively, all of the “Collateral”
under the Security Agreement, the Mortgaged Property and all other property of
whatever kind and nature subject or purported to be subject from time to time
to a Lien under any Collateral Document.

 

“Collateral Documents” shall mean the Security Agreement, the
Mortgages, the Guaranty and each other security document or pledge agreement
delivered in accordance with applicable local or foreign law to grant a valid,
perfected security interest in any property as collateral for the Obligations,
and all Uniform Commercial Code or other financing statements or instruments of
perfection required by this Agreement, the Security Agreement, any Mortgage or
any other such security document or pledge agreement to be filed with respect
to the security interests in property and fixtures created pursuant to the
Security Agreement or any Mortgage and any other document or instrument
utilized to pledge or grant or purport to pledge or grant a security interest
or lien on any property as collateral for the Obligations.

 

“Commitment” means,
as the context may require, the Revolving Loan Commitment or the Swing Line
Loan Commitment.

 

“Commitment Amount”
means, as the context may require, the Revolving Loan Commitment Amount or the
Swing Line Loan Facility Amount.

 

“Commitment Termination
Event” means:

 

(a)                                  the occurrence
of any Event of Default with respect to the Borrower described in clauses (a) through
(d) of Section 8.1.9; or

 

(b)                                 the occurrence
and continuance of any other Event of Default and either

 

(i)                           the declaration
of all or any portion of the Loans to be due and payable pursuant to Section 8.3,
or

 

(ii)                        the giving of
notice by the Administrative Agent, acting at the direction of the Required
Lenders, to the Borrower that the Commitments have been terminated pursuant to Section 8.3.

 

“Compliance Certificate”
means a certificate duly completed and executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit E hereto.

 

7

 

“Contingent Liability”
means any agreement, undertaking or arrangement by which any Person guarantees,
endorses or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the Indebtedness of any other Person (other than by
endorsements of instruments in the course of collection or deposit), or
guarantees the payment of dividends or other distributions upon the Capital
Securities of any other Person.  The
amount of any Person’s obligation under any Contingent Liability shall (subject
to any limitation set forth therein) be deemed to be the outstanding principal
amount of the debt, obligation or other liability guaranteed thereby.

 

“Continuation/Conversion
Notice” means a notice of continuation or conversion and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit C hereto.

 

“Controlled Group”
means all members of a controlled group of corporations and all members of a
controlled group of trades or businesses (whether or not incorporated) under common
control which, together with the Borrower, are treated as a single employer
under Sections 414(b) or 414(c) of the Code or Section 4001 of
ERISA.

 

“Copyright Security
Agreement” means any Copyright Security Agreement executed and delivered by
any Obligor, in substantially the form of Exhibit C to any Security
Agreement, as amended, supplemented, amended and restated or otherwise modified
from time to time.

 

“Credit Extension”
means the making of a Loan by a Lender.

 

“Credit Parties”
means, collectively, the Lenders, the Administrative Agent, the Syndication
Agent and, in each case, each of their respective successors, transferees and assigns.

 

“Cumulative
Available Cash” means, for the Borrower and its Subsidiaries as of any time
for any proposed use of Cumulative Available Cash, the sum of:

 

(a)                                  $65,000,000; plus

 

(b)                                 the aggregate amount of
Available Cash for each Fiscal Quarter ended during the most recently completed
Reference Period, beginning with the Fiscal Quarter ending on June 30,
2010;

 

plus

 

(c)                                  Net Equity
Proceeds received by Parent in respect of issuances or sales of its Capital
Securities (other than Disqualified Capital Securities) after the Closing Date,
to the extent such Net Equity Proceeds are at such time contributed to the
Borrower in cash for common equity;

 

8

 

minus

 

(d)                                 the aggregate
amount, from and after the Closing Date and prior to or at such time (including
such proposed use (and any other simultaneous use) of Cumulative Available
Cash) of (without duplication):

 

(i)                                     cash and Cash
Equivalent Investment amounts applied to Capital Expenditures, excluding any
Capital Expenditures to the extent financed with the proceeds (A) of
Indebtedness (other than the Loans) permitted hereunder and identified pursuant
to clause (c) of Section 7.1.1 as having been applied
to finance Capital Expenditures, (B) from a Disposition of assets pursuant
to clause (c) of Section 7.2.10 or (C) received as
a result of Casualty Events (except, in the case of clauses (B) and
(C), to the extent such sale of assets or Casualty Events shall have resulted
in an increase in Available Cash pursuant to clause (a) or (b) of
the definition thereof), in each case to the extent the amounts in clauses
(A), (B) and (C) above did not finance Permitted
Acquisitions as referenced in clause (ii) below;

 

(ii)                                  cash and Cash
Equivalent Investment amounts applied to Permitted Acquisitions pursuant to clause
(b) of Section 7.2.9 plus fees and expenses incurred in
connection therewith, excluding any such Permitted Acquisitions to the extent
financed with the proceeds (A) of Indebtedness (other than the Loans)
permitted hereunder and identified pursuant to clause (c) of Section 7.1.1
as having been applied to finance Permitted Acquisitions, (B) from
Disposition of assets pursuant to clause (c) of Section 7.2.10
or (C) received as a result of Casualty Events (except, in the case of clauses
(B) and (C), to the extent such sale of assets or Casualty
Events shall have resulted in an increase in Available Cash pursuant to clause
(a) or (b) of the definition thereof), in each case to the
extent the amounts in clause (A), (B) and (C) above
did not finance Capital Expenditures as referenced in clause (i) above;

 

(iii)                               all cash and
Cash Equivalent Investment amounts applied pursuant to clause (i), (k) or
(m) of Section 7.2.5 (in the case of clause (m) of
Section 7.2.5 and with respect to Investments made in Persons that
are not Borrower or a Subsidiary, net of any dividends, distributions or other
payments received in cash in respect of such Investment received by Borrower or
any Subsidiary), clause (b), (c), (f) or (g) of
Section 7.2.6 or Section 7.2.17;

 

(iv)                              other
prepayments (or scheduled payments) of Indebtedness by Borrower and its
Subsidiaries, except to the extent made with the proceeds of other Indebtedness
incurred pursuant to Section 7.2.2 (other than the Loans); and

 

(v)                                 the DOJ Costs,
except to the extent (x) previously deducted from EBITDA pursuant to clause
(vii) of the definition of EBITDA or (y) reimbursed in cash from
the proceeds of insurance.

 

9

 

“Default” means any
Event of Default or any condition, occurrence or event which, after notice or
lapse of time or both, would constitute an Event of Default.

 

“Defaulting Lender”
means any Lender, as determined by the Administrative Agent, that (a) has
not made available to the Administrative Agent such Lender’s ratable portion of
a requested borrowing within three Business Days of the date required to be
funded by it hereunder or has not reimbursed the Swing Line Lender for such
Lender’s ratable portion of the amount of Swing Line Loans, in each case in
accordance with Sections 2.3.1 and 2.3.2, respectively; (b) has
notified the Borrower or the Administrative Agent or any Lender in writing that
it does not intend to comply with its obligations under Section 2.3.1
or 2.3.2 or has made a public statement to the effect that it does not
intend to comply with its obligations under Section 2.3.1 or 2.3.2
or under other agreements in which it commits to extend credit; (c) has
not, within three Business Days after request by the Administrative Agent, confirmed
that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding
Swing Line; (d) has otherwise failed to pay over to the Administrative
Agent or any other Lender any other amount required to be paid by it hereunder
within five Business Days of the date when due, unless the subject of a good
faith dispute; (e) has become or is insolvent or has a parent company that
has become or is insolvent; or (f) is the subject of, or is a Subsidiary
of a Person that is the subject of, a bankruptcy, insolvency or similar
proceeding or has had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or custodian, appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.

 

“Designated Lender”
means a Defaulting Lender or a Downgraded Lender.

 

“Disclosure Schedule”
means the Disclosure Schedule attached hereto as Schedule I, as it may
be amended, supplemented, amended and restated or otherwise modified from time
to time by the Borrower with the written consent of the Required Lenders.

 

“Disposition” (or
similar words such as “Dispose”) means any sale, transfer, lease, contribution
or other conveyance (including by way of merger) of, or the granting of
options, warrants or other rights to, any Person’s or such Person’s
Subsidiaries’ assets (including accounts receivable and Capital Securities of such
Person’s Subsidiaries) to any other Person in a single transaction or series of
transactions.

 

“Disqualified Capital
Securities” means, with respect to any Person, Capital Securities which by
their terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder) or upon the happening
of any event:

 

10

 

(1)                                  mature or are
mandatorily redeemable (other than redeemable only for a Capital Securities of
such Person which is not itself a Disqualified Capital Security) pursuant to a
sinking fund obligation or otherwise;

 

(2)                                  are convertible
or exchangeable at the option of the holder for Indebtedness or Disqualified
Capital Securities; or

 

(3)                                  are mandatorily
redeemable or must be purchased upon the occurrence of any event, in whole or
in part,

 

in each case on or prior to
the first anniversary of the Stated Maturity Date.

 

“DOJ Costs” means
non-recurring fees, expenses and amounts paid in defense of, or to discharge
judgments, pursuant to settlements or as fines or penalties arising from or
related to, lawsuits, governmental proceedings or regulatory actions or investigations
related to or in connection with, the DOJ Investigation.

 

“DOJ Investigation”
means the investigation pending on the Closing Date by the Antitrust Division
of the United States Department of Justice into possible antitrust violations
in the packaged ice industry by Parent and its Subsidiaries.

 

“Dollar” and the sign
“$” mean lawful money of the United States.

 

“Domestic Office”
means the office of a Lender designated as its “Domestic Office” on Schedule
II hereto or in a Lender Assignment Agreement, or such other office within
the United States as may be designated from time to time by notice from such
Lender to the Administrative Agent and the Borrower.

 

“Downgraded Lender”
means any Lender that has a non-investment grade rating from Moody’s, S&P
or another nationally recognized rating agency.

 

“EBITDA” means, for
any applicable period, the sum of (a) Net Income, plus (b) in
each case without duplication, to the extent deducted in determining Net Income
for such period, the sum of (i) amounts attributable to depreciation and
amortization, (ii) income tax expense, (iii) Interest Expense, (iv) any
other non-cash charges (less non-cash income) for which no cash reserves
(or receivables) have been or will be set aside (or created), including non-cash
compensation expenses, (v) any loss from the extinguishment of Indebtedness;
(vi) non-recurring fees, charges and expenses directly related to the
Transactions in an aggregate amount during the term of this Agreement not to
exceed $15,000,000 (to the extent such fees, charges and expenses are not
capitalized or otherwise deferred), (vii) non-recurring DOJ Costs not in
excess of $15,000,000 in the aggregate during the term of this Agreement; provided
that at the time such DOJ Costs were paid, there was Cumulative Available Cash
that was not applied or utilized toward any other purpose set forth herein; and
(viii) all fees and expenses incurred in connection with Permitted
Acquisitions to the extent accounted for as expenses.

 

11

 

“EBITDAR” means, for
any applicable period, EBITDA for such period plus Rental Expense.

 

“Eligible Assignee”
means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund or (d) any other Person (other than a natural Person) other
than the Borrower or any of its Affiliates; provided that (x) in
the case of clauses (b), (c) and (d), such Affiliate
of a Lender, Approved Fund or Person is approved by the Swing Line Lender and
the Administrative Agent and (y) in the case of clause (d), unless
a Default has occurred and is continuing, the Borrower shall approve of such
Person.  Each approval referred to in
this definition shall not be unreasonably withheld or delayed.

 

“Environment” means
ambient air, indoor air, surface water, groundwater, drinking water, land
surface and subsurface strata and natural resources.

 

“Environmental Laws”
means all applicable foreign, federal, state or local statutes, laws (including
common law), ordinances, codes, rules, regulations and final orders of a
Governmental Authority (including consent decrees and administrative orders)
relating to pollution and the protection of the environment and human health
(to the extent related to exposure to Hazardous Material).

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute thereto of similar import, together with the regulations thereunder, in
each case as in effect from time to time. 
References to sections of ERISA also refer to any successor sections thereto.

 

“Event of Default” is
defined in Section 8.1.

 

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

 

“Exchange Offer”
means the exchange offer made to the holders of the Existing Parent Notes to
exchange such Existing Parent Notes for the Second Lien Notes upon the terms
set forth in the Offer to Purchase, as such exchange offer may be amended or
extended in any manner not materially adverse to the interests of the Lenders.

 

“Excluded Taxes”
means, with respect to any payment to be made by or on account of any
obligation of any Obligor hereunder or under any other Loan Document, (i) any
Taxes imposed on (or measured by) its overall gross income or net income by the
jurisdiction under the laws of which the Credit Party receiving the payment is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (ii) any Taxes
in the nature of the branch profits tax imposed by Section 884(a) of
the Code that is imposed by any jurisdiction described in clause (a) above;
(iii) any other Taxes imposed by a jurisdiction as a result of any other
present or former connection with such jurisdiction (excluding any connection
with such jurisdiction arising solely from such recipient having executed, delivered,
enforced, become a party to, performed its obligations under, received payments
under, received or perfected a security interest under, and/or engaged in any
other transaction pursuant 

 

12

 

to,
any Loan Document), (iv) in the case of a Non-U.S. Credit Party, any U.S.
federal withholding Tax that is imposed pursuant to any laws in effect at the
time such Non-U.S. Credit Party becomes a party to this Agreement (or
designates a new lending office), except to the extent that such Non-U.S.
Credit Party (or its assignor, if any) was entitled, immediately prior to
designation of a new lending office (or assignment), to receive additional
amounts from an Obligor with respect to any such withholding Tax pursuant to clause
(a) of Section 4.6 and (v) any withholding Tax that
is attributable to a Credit Party’s failure to comply with clause (e) of
Section 4.6.

 

“Exemption Certificate”
is defined in clause (e) of Section 4.6.

 

“Existing Credit Agreement”
is defined in the recitals.

 

“Existing Parent Notes”
means the 101⁄2% Senior Discount Notes of Parent due 2012.

 

“Fair Market Value”
means, with respect to any asset, the price (after taking into account any
liabilities relating to such asset) that would be negotiated in an arm’s-length
transaction for cash between a willing seller and a willing and able buyer,
neither of which is under any compulsion to complete the transaction, as such
price is determined in good faith by management of the Borrower or by the Board
of Directors of the Borrower or a duly authorized committee thereof.  Fair Market Value (other than of any asset
with a public trading market) in excess of $5,000,000 shall be determined by
the Board of Directors of the Borrower acting reasonably and in good faith and
shall be evidenced by a board resolution delivered to the Administrative Agent.

 

“Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period to (a) the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) 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 (b) if such rate is not so published for any
day which is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day on such transactions received
by the Administrative Agent from three federal funds brokers of recognized
standing selected by it.

 

“Fee Letters” means (i) the
confidential fee letter, dated March 15, 2010, from the Administrative
Agent to the Borrower, as amended, supplemented, amended and restated or otherwise
modified from time to time and (ii) each other fee letter, dated the
Closing Date, between the Borrower and any Lender.

 

“Filing Statements”
means all UCC financing statements or other similar financing statements and
UCC termination statements required pursuant to the Loan Documents.

 

“First Lien Intercreditor Agreement” means that certain first
lien intercreditor agreement dated the Closing Date, among the Administrative
Agent and the collateral agent for the First Lien Notes.

 

“First Lien Notes”
means the 11.25% First Lien Notes due 2015 of Borrower.

 

13

 

“Fiscal Quarter”
means a quarter ending on the last day of March, June, September or
December.

 

“Fiscal Year” means
any period of twelve consecutive calendar months ending on December 31;
references to a Fiscal Year with a number corresponding to any calendar year (e.g.,
the “2010 Fiscal Year”) refer to the Fiscal Year ending on December 31 of
such calendar year.

 

“Fixed Charge Coverage Ratio” means, as of the last day of any
Fiscal Quarter, the ratio computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters (in all
cases without duplication) of (a) (i) EBITDAR (for all such Fiscal
Quarters), minus (ii) income taxes paid in cash minus (iii) any
amounts distributed to Parent, including, without limitation, distributions to
pay interest on the Existing Parent Notes (for all such Fiscal Quarters), minus
(iv) Maintenance Capital Expenditures (for all such Fiscal Quarters),
which Maintenance Capital Expenditures for all such Fiscal Quarters shall be
deemed to be $12,000,000 (if the date of determination of the Fixed Charge
Coverage Ratio is on or before December 31, 2011) and $15,000,000 (if the
date of determination of the Fixed Charge Coverage Ratio is after December 31,
2011), regardless of the actual level of such Maintenance Capital Expenditures
to (b) the sum, for such period, without duplication, of (i) Interest
Expense (for all such Fiscal Quarters) other than amortization of debt issuance
costs or debt discount, plus (ii) the principal amount of all
scheduled payments on all Indebtedness (including the principal component of
all Capitalized Lease Liabilities) of Borrower and its Subsidiaries for all
such Fiscal Quarters (as determined on the first day of the respective period),
plus (iii) Rental Expense (for all such Fiscal Quarters).

 

“Foreign Pledge Agreement”
means any supplemental pledge agreement governed by the laws of a jurisdiction
other than the United States, the District of Columbia or a State thereof
executed and delivered by the Borrower or any of its Subsidiaries pursuant to
the terms of this Agreement, in form and substance reasonably satisfactory to
the Administrative Agent, as may be necessary or desirable under the laws of
organization or incorporation of a Subsidiary to further protect or perfect the
Lien on and security interest in any Collateral (as defined in the Security
Agreement).

 

“Foreign Subsidiary”
means any Subsidiary that is not a U.S. Subsidiary.

 

“F.R.S. Board” means
the Board of Governors of the Federal Reserve System or any successor thereto.

 

“GAAP” means (a) subject
to clause (b) below, with respect to the interpretation of all
accounting terms used herein and in each other Loan Document, the calculation
of all accounting determinations and computations required to be made hereunder
or thereunder (including under Section 7.2.4 and in respect of any
defined terms used herein or in any other Loan Document), those U.S. generally
accepted accounting principles applied in the preparation of the Borrower’s audited
consolidated financial statements for the Fiscal Year ended December 31,
2009 and (b) with respect to the financial statements of the Borrower
required to be delivered pursuant to clauses (a) and (b) of
Section 7.1.1 or any similar financial statements of the Borrower
or any of 

 

14

 

its
Subsidiaries required to be delivered hereunder or under any other Loan Document,
U.S. generally accepted accounting principles in effect at the time (or for the
period) to which such financial statements relate.  Notwithstanding the foregoing, the treatment
of operating leases under GAAP will, for purposes of this Agreement, be deemed
to be what such treatment is on the Closing Date.

 

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

 

“Governmental Real Property Disclosure Requirements” shall mean
any requirement of law of any Governmental Authority requiring notification of
the buyer, lessee, mortgagee, assignee or other transferee of any real
property, facility, establishment or business, or notification, registration or
filing to or with any Governmental Authority, in connection with the sale,
lease, mortgage, assignment or other transfer (including any transfer of
control) of any real property, facility, establishment or business, of the
actual or threatened presence or release in or into the environment, or the
use, disposal or handling of Hazardous Material on, at, under or near the real
property, facility, establishment or business to be sold, leased, mortgaged,
assigned or transferred.

 

“Granting Lender” is
defined in clause (i) of Section 10.11.

 

“Guarantor” means
Parent and each Subsidiary Guarantor.

 

“Guaranty” means the
Guaranty executed and delivered by an Authorized Officer of Parent and each
U.S. Subsidiary pursuant to the terms of this Agreement, substantially in the
form of Exhibit G hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with the terms
hereof and thereof.

 

“Hazardous Material”
shall mean any material or substance that (a) constitutes a “hazardous
substance” as defined by CERCLA, “hazardous waste” as defined by the Resource
Conservation and Recovery Act, as amended, or a “pollutant”, “contaminant”, “hazardous
material”, “hazardous chemical”, or “regulated substance” within the meaning of
any applicable Environmental Laws, or (b) is otherwise regulated by, or
that otherwise gives rise to liability under, any applicable Environmental
Laws.  Without limiting the generality of
the foregoing, Hazardous Material shall include any substance that contains any
ammonia, ammonia hydroxide, asbestos, polychlorinated biphenyls, or petroleum,
or that is flammable, explosive, radioactive or corrosive.

 

“Hedging Obligations”
means, with respect to any Person, all liabilities of such Person under
currency exchange agreements, interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, commodity price swaps, caps and
collars and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates, 

 

15

 

currency
exchange rates, prices of diesel fuel and the impact of weather on such Person’s
business.

 

“herein”, “hereof”,
“hereto”, “hereunder” and similar terms contained in any Loan
Document refer to such Loan Document as a whole and not to any particular
Section, paragraph or provision of such Loan Document.

 

“Impermissible
Qualification” means any qualification or exception to the opinion or certification
of any independent public accountant as to any financial statement of the Borrower

 

(a)                                  which is of a “going
concern” or similar nature;

 

(b)                                 which relates
to the limited scope of examination of matters relevant to such financial
statement; or

 

(c)                                  which relates
to the treatment or classification of any item in such financial statement and
which, as a condition to its removal, would require an adjustment to such item
the effect of which would be to cause the Borrower to be in Default.

 

“including” and “include”
means including without limiting the generality of any description preceding
such term, and, for purposes of each Loan Document, the parties hereto agree
that the rule of ejusdem  generis shall not be applicable to
limit a general statement, which is followed by or referable to an enumeration
of specific matters, to matters similar to the matters specifically mentioned.

 

“Increase Effective Date”
is defined in clause (a) of Section 2.8.

 

“Increase Joinder” is
defined in clause (c) of Section 2.8.

 

“Indebtedness”
of any Person means:

 

(a)                                  all obligations
of such Person for borrowed money or advances and all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments;

 

(b)                                 all
obligations, contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn, and banker’s acceptances issued for
the account of such Person;

 

(c)                                  all Capitalized
Lease Liabilities of such Person;

 

(d)                                 for purposes of
Section 8.1.5 only, all other items which, in accordance with GAAP,
would be included as liabilities on the balance sheet of such Person as of the
date at which Indebtedness is to be determined;

 

(e)                                  net Hedging
Obligations of such Person;

 

16

 

(f)                                    whether or not
so included as liabilities in accordance with GAAP, all obligations of such Person
to pay the deferred purchase price of property or services (excluding trade
accounts payable in the ordinary course of business which are not overdue for a
period of more than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person), and indebtedness secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien on property owned or being acquired by such
Person (including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;

 

(g)                                 obligations
arising under Synthetic Leases;

 

(h)                                 all Contingent
Liabilities of such Person in respect of any of the foregoing; and

 

(i)                                     all
Disqualified Capital Securities of such Person.

 

The Indebtedness of any
Person shall include the Indebtedness of any other Person (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 Person, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Liabilities”
is defined in Section 10.4.

 

“Indemnified Parties”
is defined in Section 10.4.

 

“Indemnified Taxes”
means any Taxes other than Excluded Taxes.

 

“Intercreditor Agreements”
shall mean the collective reference to the First Lien Intercreditor Agreement
and the Junior Lien Intercreditor Agreement, substantially in the form of Exhibit L
and Exhibit M hereto, respectively, as the same may be amended, modified
or otherwise changed in accordance with the terms hereof and thereof.

 

“Interest Expense”
means, for any applicable period, the aggregate interest expense, including the
portion of any cash payments made or accrued in respect of Capitalized Lease Liabilities
allocable to interest expense, net of interest income, of the Borrower and its
Subsidiaries for such applicable period determined in accordance with GAAP.

 

“Interest Period”
means, relative to any LIBO Rate Loan, the period beginning on (and including)
the date on which such LIBO Rate Loan is made or continued as, or converted
into, a LIBO Rate Loan pursuant to Sections 2.3 or 2.4 and shall
end on (but exclude) the day which numerically corresponds to such date one,
two, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as the Borrower may
select in its relevant notice pursuant to Sections 2.3 or 2.4; provided
that:

 

17

 

(a)                                  the Borrower
shall not be permitted to select Interest Periods to be in effect at any one
time which have expiration dates occurring on more than ten different dates;

 

(b)                                 if such
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next following Business Day (unless such next
following Business Day is the first Business Day of a calendar month, in which
case such Interest Period shall end on the Business Day next preceding such
numerically corresponding day); and

 

(c)                                  no Interest Period
for any Loan may end later than the Stated Maturity Date for such Loan.

 

“Investment” means,
relative to any Person,

 

(a)                                  any loan,
advance or extension of credit made by such Person to any other Person,
including the purchase by such Person of any bonds, notes, debentures or other
debt securities of any other Person;

 

(b)                                 Contingent
Liabilities in favor of any other Person; and

 

(c)                                  any Capital
Securities held by such Person in any other Person.

 

The amount of any Investment
shall be the original principal or capital amount thereof less all
returns of principal or equity thereon and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an
original principal or capital amount equal to the fair market value of such
property at the time of such Investment.

 

“JPMorgan” is defined
in the preamble.

 

“Junior Lien Intercreditor Agreement” means that certain junior
lien intercreditor agreement dated the Closing Date, among the Administrative
Agent, the collateral agent for the First Lien Notes and the collateral agent
for the Second Lien Notes.

 

“Lead Arranger” means
each of (a) the Administrative Agent and (b) to the extent party to
this Agreement, each “Lead Arranger” as defined in the Existing Credit
Agreement.

 

“Lender Assignment
Agreement” means an assignment agreement substantially in the form of Exhibit D
hereto.

 

“Lenders” is defined
in the preamble.

 

“Lender’s Environmental
Liability” means any and all losses, liabilities, obligations, penalties,
claims, litigation, demands, defenses, costs, judgments, suits, proceedings,
damages (including consequential damages), reasonable disbursements or expenses
of any kind or nature whatsoever, whether or not based on strict liability
(including reasonable attorneys’ fees at trial 

 

18

 

and
appellate levels; reasonable experts’ fees and disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
matter, claim or proceeding; and reasonable consultant fees, disbursements and
expenses) which may at any time be imposed upon, incurred by or asserted or
awarded against the Administrative Agent or any Lender or any of such Person’s
Affiliates, shareholders, directors, officers, employees, and agents in
connection with or arising from:

 

(a)                                  the Release,
threatened Release or presence of any Hazardous Material at, from, on, in,
under or affecting all or any portion of any property owned now or formerly,
operated or used by the Borrower or any of its Subsidiaries, or their
respective predecessors in interest, or resulting from activities of the
Borrower or any of its Subsidiaries or any of their respective predecessors;

 

(b)                                 any
misrepresentation, inaccuracy or breach of any warranty, contained or referred
to in Section 6.12 or the breach of any covenant in Section 7.1.6;

 

(c)                                  any actual or
alleged violation by the Borrower or any of its Subsidiaries of any Environmental
Laws; or

 

(d)                                 the imposition
of any lien for damages caused by or for the recovery of any costs for the
cleanup, Release or threatened Release of Hazardous Material by the Borrower or
any of its Subsidiaries, or in connection with any Release or threatened Release
of Hazardous Material at, on, under or from any property owned or operated at
any time by the Borrower or any of its Subsidiaries.

 

“Leverage Ratio”
means, as of the last day of any Fiscal Quarter, the ratio of (a) Total
Debt outstanding on the last day of such Fiscal Quarter to (b) EBITDA
computed for the period consisting of such Fiscal Quarter and each of the three
immediately preceding Fiscal Quarters, giving effect to any adjustments (if
any) referred to in clause (b) of Section 1.4.

 

“LIBO Rate” means,
with respect to any LIBO Rate Loan for any Interest Period, the rate appearing
on Reuters Screen LIBOR01 Page (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing
rate quotations comparable to those currently provided on such page of
such Service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such
rate is not available at such time for any reason, then the “LIBO Rate” with
respect to such LIBO Rate Loan for such Interest Period shall be the rate at
which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m. London time, two Business Days prior to
the commencement of such Interest Period.

 

19

 

“LIBO Rate Loan”
means a Loan bearing interest, at all times during an Interest Period applicable
to such Loan, at a rate of interest determined by reference to the LIBO Rate
(Reserve Adjusted).

 

“LIBO Rate (Reserve
Adjusted)” means, relative to any Loan to be made, continued or maintained
as, or converted into, a LIBO Rate Loan for any Interest Period, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the LIBOR Reserve
Percentage.  The LIBO Rate (Reserve Adjusted)
for any Interest Period for LIBO Rate Loans will be determined by the
Administrative Agent on the basis of the LIBOR Reserve Percentage in effect two
Business Days before the first day of such Interest Period.

 

“LIBO Rate Unavailability
Period” means any period of time during which a notice delivered to the
Borrower in accordance with Section 4.2(a), (b) or (c) shall
remain in force and effect.

 

“LIBOR Office” means
the office of a Lender designated as its “LIBOR Office” on Schedule II
hereto or in a Lender Assignment Agreement, or such other office designated
from time to time by notice from such Lender to the Borrower and the
Administrative Agent, whether or not outside the United States, which shall be
making or maintaining the LIBO Rate Loans of such Lender.

 

“LIBOR Reserve Percentage”
means, relative to any Interest Period for LIBO Rate Loans, the reserve
percentage (expressed as a decimal) equal to the maximum aggregate reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under regulations issued
from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including “Eurocurrency Liabilities”, as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.

 

“Lien” means any
security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or otherwise), charge against or interest in
property, or other priority or preferential arrangement of any kind or nature
whatsoever, in each case to secure payment of a debt or performance of an
obligation.

 

“Loan” means, as the
context may require, a Revolving Loan or a Swing Line Loan of any type.

 

“Loan Documents”
means, collectively, this Agreement, the Notes, each Fee Letter, each Guaranty,
each Collateral Document and each other agreement, certificate, document or
instrument delivered in connection with any Loan Document, whether or not specifically
mentioned herein or therein; provided that for purposes of any agreement
pursuant to which the Administrative Agent is granted a Lien to secure the
Obligations, the term “Loan Document” shall include the documentation related
to Cash Management Obligations.

 

20

 

“Maintenance Capital
Expenditures” means, for any period, the aggregate amount of Capital
Expenditures made in respect of repair, maintenance and upkeeping of any
existing fixed or capital assets of the Borrower and its Subsidiaries.

 

“Material Adverse Effect”
means a material adverse effect on (a) the condition (financial or otherwise),
business, operations, assets, liabilities (contingent or otherwise) or
properties of the Borrower and its Subsidiaries taken as a whole, (b) the
rights and remedies of any Secured Party under the Loan Documents taken as a
whole or (c) the ability of Parent, the Borrower or any Significant
Subsidiary to perform its Obligations under any Loan Document.

 

“Minimum Liquidity” means, at any
time, the sum of (i) the amount of the Borrower’s and the Subsidiary
Guarantors’ unrestricted cash and Cash Equivalent Investments at such time and (ii) the
difference between (x) the Revolving Loan Commitment Amount at such time
and (y) the aggregate outstanding Revolving Loans and Swing Line Loans at
such time.

 

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

 

“Mortgage” means an
agreement, a mortgage, deed of trust or any other document creating or
evidencing a Lien on Mortgaged Property (which Lien secured thereby shall be in
a maximum amount of either (x) if such Mortgaged Property is situated in
Alabama, Florida, Georgia, Oklahoma, Virginia or any other state/commonwealth
that imposes a tax/levy on the recordation of a mortgage, deed of trust or any
other document creating or evidencing a lien on real property, 115% of the book
value or cost (whichever is higher) of such Mortgaged Property or (y) if
such Mortgaged Property is situated in Arizona, Colorado, Louisiana, North
Carolina, Texas, West Virginia or any other state/commonwealth that does not
impose a tax/levy on the recordation of a mortgage, deed of trust or any other
document creating or evidencing a lien on real property, the maximum principal
amount of the Loan) executed, acknowledged and delivered by each Obligor that
is the owner of the respective Mortgaged Property in favor of the Administrative
Agent for the benefit of the Secured Parties, substantially in the form
attached hereto as Exhibit N, subject to modification necessary for
recording in the recording office of each applicable political subdivision (i.e. county) where each such Mortgaged Property is situated,
as amended, supplemented, amended and restated or otherwise modified from time
to time.

 

“Mortgaged Property”
means (a) all real property owned by any Obligor on the Closing Date with
a book value or cost (whichever is higher) of at least $1,500,000 (which
properties owned as of the Closing Date are described in Item 6.9(b) of
the Disclosure Schedule) and (b) all other real property, if any, which
shall be subject to a Mortgage delivered pursuant to clause (j) of Section 5.1.5
and Section 7.1.8.

 

“Net Casualty Proceeds”
means, with respect to any Casualty Event, the amount of any insurance proceeds
or condemnation awards (net of any taxes actually paid or estimated by the
Borrower to be payable in cash) received by the Borrower or any of its
Subsidiaries in connection with such Casualty Event (net of all reasonable
collection expenses thereof), but excluding any proceeds or awards required to
be paid to a creditor (other than the Lenders) which holds a Lien permitted by Section 7.2.3
on the property which is the subject of such Casualty Event; 

 

21

 

provided that if the
amount of any estimated taxes exceeds the amount of taxes actually required to
be paid in cash in respect of such Casualty Event within 12 months of such
Casualty Event, the aggregate amount of such excess shall constitute Net
Casualty Proceeds.

 

“Net Debt Proceeds”
means, with respect to each of (a) the incurrence, sale or issuance by the
Borrower or any of its Subsidiaries after the Closing Date of any Indebtedness
which is not expressly permitted by Section 7.2.2, or (b) the
issuance by the Borrower of any of its Subsidiaries of Disqualified Capital
Securities, the excess of (x) the gross cash proceeds actually received by
such Person from such incurrence, sale or issuance, less (y) all
reasonable arranging or underwriting fees and commissions, and all legal,
investment banking, brokerage and accounting and other professional fees, sales
commissions and disbursements and other reasonable closing costs and expenses,
in each case, actually incurred and paid in cash in connection with such incurrence,
sale or issuance.

 

“Net
Equity Proceeds” means, with respect of the issuance or sale by Holdings of
Capital Securities, the excess of (x) the gross cash proceeds actually
received by Holdings from such issuance or sale, less (y) all
reasonable arranging or underwriting fees and commissions, and all legal,
investment banking, brokerage and accounting and other professional fees, sales
commissions and disbursements and other reasonable closing costs and expenses,
in each case, actually incurred and paid in cash in connection with such issuance
or sale.

 

“Net Disposition Proceeds”
means the gross cash proceeds actually received by the Borrower or its U.S.
Subsidiaries from any Disposition pursuant to clause (c) of Section 7.2.10
and any cash payment actually received in respect of promissory notes or other
non-cash consideration delivered to the Borrower or its U.S. Subsidiaries in
respect of such specified Dispositions, minus the sum of (a) all
reasonable legal, investment banking, brokerage and accounting fees and
expenses incurred in connection with such Disposition, (b) all reasonable
expenses to prepare such asset for sale and all transportation costs in
connection with such sale, (c) all taxes actually paid or estimated by the
Borrower to be payable in cash within the next 12 months in connection with
such Disposition, (d) payments made by the Borrower or its U.S.
Subsidiaries to retire Indebtedness (other than the Credit Extensions) where
payment of such Indebtedness is required in connection with such Disposition
and (e) the amount of any reserves established by the Borrower or any of
the U.S. Subsidiaries to fund contingent liabilities reasonably estimated to be
payable during the 12 month period following such event that such Person’s
chief financial officer determined in good faith are directly attributable to such
event; provided that if the amount of any estimated taxes pursuant to clause
(c) exceeds the amount of taxes actually required to be paid in cash
in respect of such Disposition or the amount of any estimated reserves pursuant
to clause (e) above exceeds the amount of reserves actually
required to be paid in cash in respect of such Disposition, in each case within
12 months of such Disposition, the aggregate amount of such excess shall
thereupon constitute Net Disposition Proceeds.

 

“Net Income” means, for
any period, the aggregate of all amounts (exclusive of all amounts in respect
of any extraordinary gains or losses) which would be included as net income on
the consolidated financial statements of the Borrower and its Subsidiaries for
such period.

 

22

 

“Net Leverage Ratio”
means, as of the last day of any Fiscal Quarter, the ratio of (a) Total
Debt outstanding on the last day of such Fiscal Quarter minus unrestricted cash
and Cash Equivalent Investments of Borrower and Subsidiary Guarantors as of
such date (without giving duplicative effect to amounts in the Proceeds
Account) to (b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.

 

“New Notes” means the
collective reference to the First Lien Notes and the Second Lien Notes.

 

“Non-U.S. Credit Party”
means any Credit Party that is not a “United States person”, as defined under Section 7701(a)(30)
of the Code.

 

“Note” means, as the
context may require, a Revolving Note or a Swing Line Note.

 

“Obligations” means
all obligations (monetary or otherwise, whether absolute or contingent, matured
or unmatured) of the Borrower and each other Obligor arising under or in connection
with a Loan Document or any Cash Management Obligations, including the
principal of and interest (including interest accruing during the pendency of
any proceeding of the type described in Section 8.1.9, whether or
not allowed in such proceeding) on the Loans and any fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of Borrower and the other
Obligors  under this Agreement and the
other Loan Documents.

 

“Obligor” means, as
the context may require, Parent, the Borrower, Subsidiary Guarantors  and each other Person (other than a Secured
Party) obligated under any Loan Document.

 

“Offer to Purchase”
means the offer to purchase dated February 22, 2010 issued by the Borrower
in connection with the Exchange Offers, as the same may be amended or extended
in any manner not materially adverse to the interests of the Lenders.

 

“Organic Document”
means, relative to any Obligor, as applicable, its certificate of incorporation,
by laws, certificate of partnership, partnership agreement, certificate of
formation, limited liability agreement, operating agreement and all shareholder
agreements, voting trusts and similar arrangements applicable to any of such
Obligor’s Capital Securities.

 

“Other Taxes” means
any and all present or future stamp, documentary or similar excise Taxes or
levies that arise on account of any payment made or required to be made under
any Loan Document or from the execution, delivery, registration, recording or
enforcement of, or otherwise with respect to any Loan Document.

 

“Parent” means Reddy
Ice Holdings, Inc., a Delaware corporation.

 

“Pari Passu Lien
Indebtedness” shall have the meaning assigned thereto in the First Lien
Intercreditor Agreement.

 

23

 

“Participant” is
defined in clause (d) of Section 10.11.

 

“Participant Register”
is defined in clause (d) of Section 10.11.

 

“Patent Security
Agreement” means any Patent Security Agreement executed and delivered by
any Obligor, in substantially the form of Exhibit A to the Security
Agreement, as amended, supplemented, amended and restated or otherwise modified
from time to time.

 

“Patriot Act” is
defined in Section 10.17.

 

“PBGC” means the
Pension Benefit Guaranty Corporation and any Person succeeding to any or all of
its functions under ERISA.

 

“Pension Plan” means
a “pension plan”, as such term is defined in Section 3(2) of 

ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan
as defined in Section 4001(a)(3) of ERISA), and to which the Borrower
or any corporation, trade or business that is, along with the Borrower, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being deemed
to be a contributing sponsor under Section 4069 of ERISA.

 

“Percentage” means
any Lender’s Revolving Loan Percentage.

 

“Permitted Acquisition”
means an acquisition (whether pursuant to an acquisition of Capital Securities,
assets or otherwise) by the Borrower or any Subsidiary of a business, a line of
business or an operating lease from any Person in which the following
conditions are satisfied:

 

(a)                                  immediately
before and after giving effect to such acquisition, no Default shall have occurred
and be continuing or would result therefrom (including under Section 7.2.1);

 

(b)                                 the Borrower
shall have delivered to the Administrative Agent a Compliance Certificate for
the period of the most recently completed four full Fiscal Quarters immediately
preceding such acquisition (prepared in good faith and in a manner and using
such methodology which is consistent with the most recent financial statements
delivered pursuant to Section 7.1.1) giving pro  forma
effect to the consummation of such acquisition and evidencing compliance with
the covenants set forth in Section 7.2.4 for the immediately
preceding test date;

 

(c)                                  if such
acquisition is being made with Cumulative Available Cash, the Borrower shall
have delivered to the Administrative Agent a certificate certifying the amount
of Cumulative Available Cash immediately before and after giving effect to such
acquisition;

 

(d)                                 the Revolving
Loan Commitment Amount less the aggregate outstanding principal
amount of Revolving Loans and Swing Line Loans on the date such acquisition 

 

24

 

is
consummated (after giving effect to such acquisition and any financing in
connection therewith) shall be at least $5,000,000;

 

(e)                                  the business,
line of business or operating lease to be acquired shall be held by the
Borrower or a Subsidiary Guarantor (or a Person that becomes a Subsidiary Guarantor
upon such acquisition); and

 

(f)                                    to the extent a
Person is acquired in such acquisition, such Person shall be Solvent and comply
with Section 7.1.8.

 

“Person” means any
natural person, corporation, limited liability company, partnership, joint
venture, association, trust or unincorporated organization, Governmental
Authority or any other legal entity, whether acting in an individual, fiduciary
or other capacity.

 

“Pledged Subsidiary”
means each Subsidiary in respect of which the Administrative Agent has been
granted a security interest in or a pledge of (a) any of the Capital
Securities of such Subsidiary or (b) any intercompany notes of such Subsidiary
owing to the Borrower or another Subsidiary.

 

“Priority Payment Lien
Obligations” has the meaning set forth in the First Lien Intercreditor
Agreement.

 

“Proceeds Account” is
defined in clause (d) of Section 3.1.1.

 

“Quarterly Payment Date”
means the last Business Day of March, June, September and December.

 

“Reddy Ice Corporation”
means Reddy Ice Corporation, a Nevada corporation.

 

“Reference Period”
means, as at any date, the period commencing on April 1, 2010 and ending
on the last day of the most recent Fiscal Quarter for which a Compliance
Certificate pursuant to clause (c) of Section 7.1.1 has
been delivered by the Borrower prior to such date.

 

“Refinance” means, in
respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay,
redeem, purchase, defease or retire, or to issue other Indebtedness in exchange
or replacement for, such Indebtedness.  “Refinanced”
and “Refinancing” shall have correlative meanings.

 

“Refinancing Indebtedness”
means Indebtedness that Refinances any Indebtedness of the Borrower or any
Subsidiary of the Borrower existing on the Closing Date or incurred in compliance
with this Agreement, including Indebtedness that Refinances Refinancing
Indebtedness; provided, however, that:

 

(1)                                  such Refinancing Indebtedness has a stated
maturity no earlier than the stated maturity of the Indebtedness being
Refinanced;

 

25

 

(2)                                  such Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced;

 

(3)                                  such Refinancing Indebtedness has an
aggregate principal amount (or if incurred with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate principal
amount (or if incurred with original issue discount, the aggregate accreted
value) then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Indebtedness being Refinanced;

 

(4)                                  if the Indebtedness being Refinanced is
subordinated in right of payment to the Obligations, such Refinancing
Indebtedness is subordinated in right of payment to the Obligations at least to
the same extent as the Indebtedness being Refinanced; and

 

(5)                                  the covenants, events of default, interest
rates, yield, events of default and remedies relating thereto shall not be
materially less favorable to the Lenders than those contained in the
Indebtedness being Refinanced;

 

provided  further,
however, that Refinancing Indebtedness shall not include Indebtedness of
a Subsidiary that is not a Guarantor that Refinances Indebtedness of the
Borrower or a Guarantor.

 

“Refunded Swing Line
Loans” is defined in clause (b) of Section 2.3.2.

 

“Register” is defined
in clause (a) of Section 2.7.

 

“Release” means any
spilling, emitting, leaking, pumping, pouring, injecting, escaping, emptying,
discharging, leaching, dumping or disposing into or through the indoor or
outdoor Environment.

 

“Rental Expense”
means, for any applicable period, the aggregate rental expense with respect to
real property leases and operational leases of the Borrower and its
Subsidiaries for such applicable period determined in accordance with GAAP.

 

“Replacement Lender”
is defined in clause (g) of Section 10.11.

 

“Replacement Notice”
is defined in Section 4.10.

 

“Required Lenders”
means, at any time, Lenders holding more than 50% of the Total Exposure Amount.

 

“Resource Conservation
and Recovery Act” means the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., as
amended.

 

26

 

“Restricted Payment”
means the declaration or payment of any dividend (other than dividends payable
solely in Capital Securities (other than Disqualified Capital Securities) of
the Borrower or any Subsidiary) on, or the making of any payment or
distribution on account of, or setting apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of any class of Capital Securities of the Borrower or any Subsidiary
or any warrants or options to purchase any such Capital Securities of the
Borrower or such Subsidiary, whether now or hereafter outstanding, or the
making of any other distribution in respect thereof, either directly or
indirectly, whether in cash or property, obligations of the Borrower or any
Subsidiary or otherwise (other than distributions payable solely in Capital
Securities (other than Disqualified Capital Securities) of the Borrower or any
of its Subsidiaries).

 

“Revolving Loan
Commitment” means, relative to any Lender, such Lender’s obligation (if
any) to make Revolving Loans pursuant to clause (a) of Section 2.1.1,
as the same may be increased pursuant to Section 2.8.

 

“Revolving Loan Commitment
Amount” means $35,000,000, as such amount may be reduced from time to time
pursuant to Section 2.2 or increased pursuant to Section 2.8.

 

“Revolving Loan
Commitment Termination Date” means the earliest of

 

(a)                                  the Stated
Maturity Date;

 

(b)                                 the date on
which the Revolving Loan Commitment Amount is terminated in full or reduced to
zero pursuant to the terms of this Agreement; and

 

(c)                                  the date on
which any Commitment Termination Event occurs.

 

Upon the occurrence of any
event described above, the Revolving Loan Commitments shall terminate
automatically and without any further action.

 

“Revolving Loan Lender”
is defined in clause (a) of Section 2.1.1.

 

“Revolving Loan
Percentage” means, relative to any Lender, the applicable percentage
relating to Revolving Loans set forth opposite its name on Schedule II
hereto under the Revolving Loan Commitment column or set forth in a Lender
Assignment Agreement under the Revolving Loan Commitment column, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreements executed by such Lender and its assignee Lender and delivered pursuant
to Section 10.11.  A Lender
shall not have any Revolving Loan Commitment if its percentage under the
Revolving Loan Commitment column is zero.

 

“Revolving Loans” is
defined in clause (a) of Section 2.1.1.

 

“Revolving Note”
means a promissory note of the Borrower payable to any Revolving Loan Lender,
in the form of Exhibit A-1 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Revolving Loan Lender resulting
from outstanding Revolving Loans, and also 

 

27

 

means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.

 

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

 

“SEC” means the
Securities and Exchange Commission.

 

“Second Lien Notes”
means the 13.25% Second Lien Notes due 2015 of Borrower.

 

“Secured Parties”
means, collectively, the Lenders (including the Swing Line Lender), the
Administrative Agent, each Person that is owed any obligations by the Borrower
or any of its Subsidiaries in respect of Cash Management Obligations, and, in
each case, each of their respective successors, transferees and assigns.

 

“Security Agreement”
means the Pledge and Security Agreement substantially in the form of Exhibit I
hereto, as the same may be amended, modified or otherwise changed in accordance
with the terms hereof and thereof.

 

“Significant Subsidiary”
means each Subsidiary of the Borrower that (a) accounted for at least 3%
of the consolidated gross revenues of the Borrower and its Subsidiaries or (b) has
assets which represent at least 3% of the consolidated gross assets of the
Borrower and its Subsidiaries, in each case, as of the last day of the most
recently completed Fiscal Quarter with respect to which, pursuant to clauses
(a) and (b) of Section 7.1.1, financial
statements have been, or are required to have been, delivered by the Borrower
on or before the date as of which any such determination is made, as reflected
in such financial statements.

 

“Solvent” means, with
respect to any Person and its Subsidiaries on a particular date, that on such
date (a) the fair value of the property of such Person and its
Subsidiaries on a consolidated basis is greater than the total amount of
liabilities, including contingent liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value
of the assets of such Person and its Subsidiaries on a consolidated basis is
not less than the amount that will be required to pay the probable liability of
such Person and its Subsidiaries on a consolidated basis on its debts as they
become absolute and matured, (c) such Person does not intend to, and does
not believe that it or its Subsidiaries will, incur debts or liabilities beyond
the ability of such Person and its Subsidiaries to pay as such debts and liabilities
mature, and (d) such Person and its Subsidiaries on a consolidated basis
are not engaged in a business or a transaction, and such Person and its
Subsidiaries on a consolidated basis are not about to engage in a business or a
transaction, for which the property of such Person and its Subsidiaries on a
consolidated basis would constitute an unreasonably small capital.  The amount of Contingent Liabilities at any
time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, can reasonably be expected to become an
actual or matured liability.

 

“SPC” is defined in clause
(i) of Section 10.11.

 

28

 

“Stated Maturity Date”
means with respect to all Revolving Loans and Swing Line Loans, January 31,
2014.

 

“Subsidiary” means,
with respect to any Person, any other Person of which more than 50% of the
outstanding Voting Securities of such other Person (irrespective of whether at
the time Capital Securities of any other class or classes of such other Person
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned or controlled by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person. 
Unless the context otherwise specifically requires, the term “Subsidiary”
shall be a reference to a Subsidiary of the Borrower.

 

“Subsidiary Guarantor”
means each Subsidiary that executes the Guaranty following the Closing Date, pursuant
to Section 7.1.8 or otherwise.

 

“Substitute Lender”
is defined in Section 4.10.

 

“Survey” shall mean a survey of any Mortgaged Property (and all
improvements thereon) which is (a) (i) prepared by a surveyor or
engineer licensed to perform surveys in the jurisdiction where such Mortgaged
Property is located, (ii) dated (or redated) not earlier than three years
prior to the date of delivery thereof unless there shall have occurred to
Borrower’s knowledge within three years prior to such date of delivery (x) any
material exterior construction on the site of such Mortgaged Property or (y) any
easement, right of way or other interest in the Mortgaged Property has been
granted or become effective through operation of law or otherwise with respect
to such Mortgaged Property which, in either case, can be graphically depicted
on a survey, in which events, as applicable, such survey shall be dated (or
redated) after the completion of such construction or if such construction
shall not have been completed as of such date of delivery, or after the grant
or effectiveness of any such easement, right of way or other interest in the
Mortgaged Property, (iii) certified (which such certification may be
provided in the form of a separate stand-alone survey certification) by the
surveyor (in a manner reasonably acceptable to the Administrative Agent) to the
Administrative Agent, and the Title Company, (iv) complying in all
respects with the minimum detail requirements of the American Land Title Association
as such requirements are in effect on the date of preparation of such survey
and (v) sufficient for the Title Company to remove all standard survey
exceptions from the Title Policy (or commitment) relating to such Mortgaged
Property and issue the endorsements of the type required by Section 7.1.9(c),
(b) Express Maps prepared by First American Title Insurance Company or (c) otherwise
reasonably acceptable to the Administrative Agent.

 

“Swing Line Lender”
means, subject to the terms of this Agreement, JPMorgan.

 

“Swing Line Loan Facility
Amount” means, on any date, $5,000,000, as such amount may be reduced from
time to time pursuant to Section 2.2.

 

“Swing Line Loans” is
defined in clause (b) of Section 2.1.1.

 

29

 

“Swing Line Note”
means a promissory note of the Borrower payable to the Swing Line Lender, in
the form of Exhibit A-2 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to the Swing Line Lender resulting from
outstanding Swing Line Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.

 

“Syndication Agent”
means JPMorgan.

 

“Synthetic Lease”
means, as applied to any Person, any lease (including leases that may be terminated
by the lessee at any time) of any property (whether real, personal or mixed) (a) that
is not a capital lease in accordance with GAAP and (b) in respect of which
the lessee retains or obtains ownership of the property so leased for federal
income tax purposes, other than any such lease under which that Person is the
lessor.

 

“Tax Returns” means
any return, report or similar statement required to be filed with respect to
any Tax (including any attached schedules) including any informational return,
claim for refund, amended return or declaration of estimated Tax.

 

“Tax Sharing Agreement”
means the tax sharing agreement, dated as of the Closing Date, among Parent and
the Borrower, in form and substance reasonably satisfactory to the Lead Arranger,
as amended, supplemented, amended and restated or otherwise modified from time
to time.

 

“Taxes” means all
income, stamp or other taxes, duties, levies, imposts, charges, assessments, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, and all interest, penalties
or similar liabilities with respect thereto.

 

“Termination Date”
means the date on which all Obligations have been paid in full in cash, all
Cash Management Obligations have been paid in full and all Commitments have
terminated.

 

“Title Company” shall mean any title insurance company as shall
be retained by Borrower and reasonably acceptable to the Administrative Agent.

 

“Title Policy” shall have the meaning assigned to such term in clause
(c) of Section 7.1.9.

 

“Total Debt” means,
on any date, (x) the outstanding principal amount of all Indebtedness of
the Borrower and its Subsidiaries of the type referred to in clause (a) (which,
in the case of the Revolving Loans and Swing Line Loans, shall be deemed to
equal the average daily amount of the Revolving Loans and Swing Line Loans
outstanding for the Fiscal Quarter ending on or immediately preceding the date
of determination), clause (c) and clause (g), in each case
of the definition of “Indebtedness” (exclusive of intercompany Indebtedness
between the Borrower and its Subsidiaries) and, without duplication, any
Contingent Liability in respect of any of the 

 

30

 

foregoing
less amounts on deposit in the Proceeds Account on such date plus (y) the
aggregate principal amount of the Existing Parent Notes.

 

“Total Exposure Amount”
means, on any date of determination (and without duplication), the outstanding
principal amount of all Loans and the unfunded amount of the Commitments.

 

“Trademark Security
Agreement” means any Trademark Security Agreement executed and delivered by
any Obligor, in substantially in the form of Exhibit B to any
Security Agreement, as amended, supplemented, amended and restated or otherwise
modified from time to time.

 

“Transactions” means (i) repayment
and termination of the Existing Credit Agreement, (ii) the issuance of the
New Notes on the Closing Date, (iii) the Exchange Offer and (iv) the
entering into of this Agreement on the Closing Date.

 

“type” means,
relative to any Loan, the portion thereof, if any, being maintained as a Base
Rate Loan or a LIBO Rate Loan.

 

“UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York; provided
that if, with respect to any Filing Statement or by reason of any provisions of
law, the perfection or the effect of perfection or non perfection of the
security interests granted to the Administrative Agent pursuant to the
applicable Loan Document is governed by the Uniform Commercial Code as in
effect in a jurisdiction of the United States other than New York, then “UCC”
means the Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions of each Loan Document and any
Filing Statement relating to such perfection or effect of perfection or non
perfection.

 

“Unaudited Quarterly
Financial Statements” is defined in clause (a) of Section 7.1.1.

 

“United States” or “U.S.”
means the United States of America, its fifty states and the District of
Columbia.

 

“U.S. Subsidiary”
means any Subsidiary that is incorporated or organized under the laws of the
United States or a state thereof or the District of Columbia.

 

“Voting Securities”
means, with respect to any Person, Capital Securities of any class or kind
ordinarily having the power to vote for the election of directors, managers or
other voting members of the governing body of such Person.

 

“wholly owned Subsidiary”
means any Subsidiary all of the outstanding Capital Securities of which (other
than any director’s qualifying shares or investments by foreign nationals
mandated by applicable laws) are owned directly or indirectly by the Borrower.

 

31

 

SECTION 1.2.                                               Use of Defined
Terms.  Unless otherwise defined or
the context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and
the Disclosure Schedule.

 

SECTION 1.3.                                               Cross-References.  Unless otherwise specified, references in a
Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section or
definition.

 

SECTION 1.4.                                               Accounting and
Financial Determinations.

 

(a)                                  Unless
otherwise specified, all accounting terms used in each Loan Document shall be
interpreted, and all accounting determinations and computations thereunder (including
under Section 7.2.4 and the definitions used in such calculations)
shall be made, in accordance with GAAP. 
Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for the Borrower and
its Subsidiaries, in each case without duplication.

 

(b)                                 As of any date
of determination, for purposes of determining the Leverage Ratio or Net
Leverage Ratio (and any financial calculations required to be made or included
within the Leverage Ratio, or required for purposes of preparing any Compliance
Certificate to be delivered pursuant to clause (b) of the
definition of “Permitted Acquisition”), the calculation of the Leverage Ratio
or Net Leverage Ratio and other financial calculations shall include or
exclude, as the case may be, the effect of any business, line of business or
operating lease that has been acquired or disposed of by the Borrower or any of
its Subsidiaries as permitted by the terms hereof (including through mergers or
consolidations) as of such date of determination, as determined by the Borrower
on a pro forma basis, which determination
may include one-time adjustments or reductions in costs, if any, directly
attributable to any such disposition or acquisition, as the case may be, in
each case (i) calculated in accordance with Regulation S-X of the
Securities Act of 1933, as amended, for the period of four Fiscal Quarters
ended on or immediately prior to the date of determination of any Leverage
Ratio or Net Leverage Ratio and (ii) giving effect to any such acquisition
or disposition as if it had occurred on the first day of such four Fiscal
Quarter period.

 

(c)                                  If the Borrower
or any Lead Arranger determines that a change in GAAP has altered the treatment
of certain financial data to its (or the Lenders’) detriment under this Agreement,
such party may, by written notice to the Lead Arrangers not later than 60 days
after the end of the Fiscal Quarter during which such change in GAAP becomes
effective, request renegotiation of the financial covenants affected by such
change.  If the Borrower and the Required
Lenders have not agreed on revised covenants within thirty days after delivery
of such notice, then, for purposes of this Agreement, GAAP will have the
meaning set forth in clause (a) of the definition of “GAAP”.  Notwithstanding any other provision contained
herein, all terms of an accounting or financial nature used herein shall be
construed, and all computations of amounts and ratios referred to herein shall
be made, without giving effect to any election under Statement of Financial
Accounting Standards 159 (or any other Financial Accounting Standard having a
similar 

 

32

 

result
or effect) to value any Indebtedness or other liabilities of Parent, the
Borrower or any Subsidiary at “fair value”, as defined therein.

 

ARTICLE II

COMMITMENTS, BORROWING AND
ISSUANCE

PROCEDURES, NOTES AND
LETTERS OF CREDIT

 

SECTION 2.1.                                               Commitments.  On the terms and subject to the conditions of
this Agreement, the Lenders severally agree to make Credit Extensions as set
forth below.

 

SECTION 2.1.1.  Revolving Loans and Swing Line Loans.  From time to time on any Business Day
occurring from and after the Closing Date until five Business Days prior to the
Revolving Loan Commitment Termination Date,

 

(a)                          each Lender
that has a Revolving Loan Commitment (referred to as a “Revolving Loan
Lender”) agrees that it will make loans (relative to such Lender, its “Revolving
Loans”) to the Borrower (i) equal to such Lender’s Revolving Loan
Percentage of the aggregate amount of each Borrowing of the Revolving Loans
requested by the Borrower to be made on such day and (ii) otherwise, in
accordance with clause (a) of Section 2.7; and

 

(b)                         the Swing Line
Lender, in reliance upon the agreements of the Revolving Loan Lenders set forth
in Section 2.3.2, but nonetheless in its sole and absolute discretion,
will make loans (its “Swing Line Loans”) to the Borrower equal to the
principal amount of the Swing Line Loan requested by the Borrower to be made on
such day.

 

On the terms and subject to
the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Revolving Loans and Swing Line Loans.

 

No Revolving Loan Lender
shall be permitted or required to make any Revolving Loan if, after giving
effect thereto, the aggregate outstanding principal amount of all Revolving
Loans of such Revolving Loan Lender, together with such Lender’s Revolving Loan
Percentage of the aggregate amount of all Swing Line Loans, would exceed such
Lender’s Revolving Loan Percentage of the then existing Revolving Loan
Commitment Amount.  Furthermore, the
Swing Line Lender shall not be permitted or required to make Swing Line Loans
if, after giving effect thereto, (i) the aggregate outstanding principal
amount of all Swing Line Loans would exceed the then existing Swing Line Loan
Commitment Amount or (ii) unless otherwise agreed to by the Swing Line Lender,
in its sole discretion, the sum of all Swing Line Loans and Revolving Loans
made by the Swing Line Lender would exceed the Swing Line Lender’s Revolving
Loan Percentage of the then existing Revolving Loan Commitment Amount.

 

SECTION 2.2.                                               Reductions in
Commitment Amounts.  The
Commitment Amounts are subject to reduction from time to time as set forth below.

 

33

 

SECTION 2.2.1.  Reductions.  The Borrower may, from time to time on any
Business Day occurring after Closing Date, voluntarily reduce the amount of the
Revolving Loan Commitment Amount or the Swing Line Loan Facility Amount on the
Business Day so specified by the Borrower; provided that all such
reductions shall require at least one Business Day’s prior notice to the
Administrative Agent (which notice may be telephonic so long as such notice is
confirmed in writing within 24 hours thereafter) and be permanent, and any
partial reduction of any Commitment Amount shall be in a minimum amount of
$5,000,000 and in an integral multiple of $1,000,000.  Any optional or mandatory reduction of the
Revolving Loan Commitment Amount pursuant to the terms of this Agreement which
reduces the Revolving Loan Commitment Amount below the Swing Line Loan Facility
Amount shall result in an automatic and pro  rata reduction of the
Swing Line Loan Facility Amount (as directed by the Borrower in a notice to the
Administrative Agent delivered together with the notice of such voluntary
reduction in the Revolving Loan Commitment Amount) to an aggregate amount not
in excess of the Revolving Loan Commitment Amount, as so reduced, without any
further action on the part of the Swing Line Lender.

 

SECTION 2.2.2.  [Reserved]

 

SECTION 2.2.3.  Defaulting/Designated Lenders.  Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

 

(a)                          Fees shall
cease to accrue on the unfunded portion of the Revolving Loan Commitment of
such Defaulting Lender pursuant to Section 3.3.

 

(b)                         The Commitments
and Revolving Loans of such Defaulting Lender shall not be included in
determining whether all Lenders or the Required Lenders have taken or may take
any action hereunder (including any consent to any amendment or waiver pursuant
to Section 10.1), provided that any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender.

 

(c)                          If any Swing
Line Loan is outstanding at the time a Lender becomes a Defaulting Lender then:

 

(i)                                all or any part
of such Swing Line Loan shall be reallocated among the non-Defaulting Lenders
in accordance with their respective applicable Revolving Loan Percentages but
only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving
Loans plus such Defaulting Lender’s Swing Line Loans does not exceed the total
of all non-Defaulting Lenders’ Revolving Loan Commitments and (y) the
conditions set forth in Section 5.2 are satisfied at such time; and

 

34

 

(ii)                             if the
reallocation described in clause (i) above cannot, or can only partially,
be effected, the Borrower shall within one Business Day following notice by the
Administrative Agent prepay such Swing Line Loan.

 

(d)                         The Swing Line
Lender shall not be required to fund any Swing Line Loan unless it is satisfied
that the related exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders, and participating interests in any such newly made
Swing Line Loan shall be allocated among non-Defaulting Lenders in a manner
consistent with Section 2.2.3(c)(i) (and Defaulting Lenders
shall not participate therein).

 

(e)                          In the event
and on the date that each of the Administrative Agent, the Borrower and the
Swing Line Lender agrees that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the Swing Line
Loans of the Lenders shall be readjusted to reflect the inclusion of such
Lender’s Revolving Loan Commitments and on such date such Lender shall purchase
at par such of the Loans of the other Lenders (other than Swing Line Loans) as
the Administrative Agent shall determine may be necessary in order for such
Lender to hold such Loans in accordance with its applicable Revolving Loan Percentage.

 

(f)                            All parties
hereto agree to any and all amendments to Schedule II hereto to reflect
any and all adjustments to Commitments, Commitment Amounts and Revolving Loan
Percentages referenced in this Section.

 

SECTION 2.3.                                               Borrowing
Procedures.  Loans
(other than Swing Line Loans) shall be made by the Lenders in accordance with Section 2.3.1,
and Swing Line Loans shall be made by the Swing Line Lender in accordance with Section 2.3.2.

 

SECTION 2.3.1.  Borrowing Procedure.  In the case of Loans other than Swing Line
Loans, by telephonic notice to the Administrative Agent on or before 12:00 noon
on a Business Day (followed (within one Business Day) by the delivery of a
confirming Borrowing Request, the Borrower may from time to time irrevocably
request, on the same Business Day in the case of Base Rate Loans or on not less
than three Business Days’ notice in the case of LIBO Rate Loans, and in either
case not more than five Business Days’ notice, that a Borrowing be made, in the
case of LIBO Rate Loans, in a minimum amount of $2,000,000 and an integral
multiple of $1,000,000, or in the case of Base Rate Loans, in a minimum amount
of $1,000,000 and an integral multiple of $500,000 or, in either case, in the
unused amount of the applicable Commitment. 
On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of Loans, and shall be made on the
Business Day, specified in such Borrowing Request.  In the case of Loans other than Swing Line
Loans, on or before 3:00 p.m. on such Business Day each Lender that has a
Commitment to make the Loans being requested shall deposit with the Administrative
Agent same day funds in an amount equal to such Lender’s Percentage of the
requested Borrowing.  Such deposit will
be made to an account which the Administrative Agent shall specify from time to
time by notice to the Lenders.  To the
extent funds are received from the Lenders, the Administrative Agent shall make
such funds available to the Borrower by wire transfer to the accounts the
Borrower shall have specified in its Borrowing 

 

35

 

Request.  No Lender’s obligation to make any Loan shall
be affected by any other Lender’s failure to make any Loan.

 

SECTION 2.3.2.  Swing Line Loans; Participations, etc.  Subject to the terms and conditions set forth
herein, the Swing Line Lender may, in reliance upon the agreements of the Revolving
Loan Lenders set forth in this Section 2.3.2, but nonetheless in
its sole and absolute discretion, make Swing Line Loans and the Borrower may
request Swing Line Loans as follows:

 

(a)                          By telephonic
notice to the Swing Line Lender on or before 12:00 noon on a Business Day
(followed (within one Business Day) by the delivery of a confirming Borrowing
Request), the Borrower may from time to time irrevocably request that Swing
Line Loans be made by the Swing Line Lender in an aggregate minimum principal
amount of $250,000 and an integral multiple of $50,000.  All Swing Line Loans shall be made as Base
Rate Loans and shall not be entitled to be converted into LIBO Rate Loans.  The proceeds of each Swing Line Loan shall be
made available by the Swing Line Lender to the Borrower by wire transfer to the
account the Borrower shall have specified in its notice therefor by the close
of business on the Business Day telephonic notice is received by the Swing Line
Lender.  Upon the making of each Swing
Line Loan, and without further action on the part of the Swing Line Lender or
any other Person, each Revolving Loan Lender (other than the Swing Line Lender)
shall be deemed to have irrevocably purchased, to the extent of its Revolving
Loan Percentage, a participation interest in such Swing Line Loan, and such
Revolving Loan Lender shall, to the extent of its Revolving Loan Percentage, be
responsible for reimbursing within one Business Day of receiving notice thereof
the Swing Line Lender for Swing Line Loans which have not been reimbursed by
the Borrower in accordance with the terms of this Agreement.

 

(b)                         If (x) any
Swing Line Loan shall be outstanding for more than four Business Days, (y) any
Swing Line Loan is or will be outstanding on a date when the Borrower requests
that a Revolving Loan be made or (z) any Default shall occur and be continuing,
then each Revolving Loan Lender (other than the Swing Line Lender) irrevocably
agrees that it will, at the request of the Swing Line Lender, make a Revolving
Loan (which shall initially be funded as a Base Rate Loan) in an amount equal
to such Lender’s Revolving Loan Percentage of the aggregate principal amount of
all such Swing Line Loans then outstanding (such outstanding Swing Line Loans
hereinafter referred to as the “Refunded Swing Line Loans”).  On or before 11:00 a.m. on the first
Business Day following receipt by each Revolving Loan Lender of a request to
make Revolving Loans as provided in the preceding sentence, each Revolving Loan
Lender shall deposit in an account specified by the Swing Line Lender the
amount so requested in same day funds and such funds shall be applied by the
Swing Line Lender to repay the Refunded Swing Line Loans.  At the time the Revolving Loan Lenders make
the above referenced Revolving Loans, the Swing Line Lender shall be deemed to
have made, in consideration of the making of the Refunded Swing Line Loans,
Revolving Loans in an amount equal to the Swing Line Lender’s Revolving Loan
Percentage of the aggregate principal amount of the Refunded Swing Line
Loans.  Upon the making (or deemed
making, in the case of the Swing Line Lender) of any Revolving Loans pursuant
to this clause, the amount so 

 

36

 

funded
shall become an outstanding Revolving Loan and shall no longer be owed as a
Swing Line Loan.  All interest payable
with respect to any Revolving Loans made (or deemed made, in the case of the
Swing Line Lender) pursuant to this clause shall be appropriately adjusted to
reflect the period of time during which the Swing Line Lender had outstanding
Swing Line Loans in respect of which such Revolving Loans were made.  Each Revolving Loan Lender’s obligation to
make the Revolving Loans referred to in this clause shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, any Obligor or any Person for any reason
whatsoever; (ii) the occurrence or continuance of any Default; (iii) any
adverse change in the condition (financial or otherwise) of any Obligor; (iv) the
acceleration or maturity of any Obligations or the termination of any Commitment
after the making of any Swing Line Loan; (v) any breach of any Loan
Document by any Person; or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

 

SECTION 2.4.                                               Continuation
and Conversion Elections.  By
telephonic notice to the Administrative Agent on or before 12:00 noon on a
Business Day (followed (within one Business Day) by the delivery of a
confirming Continuation/Conversion Notice), the Borrower may from time to time
irrevocably elect, on not less than one Business Day’s notice in the case of
Base Rate Loans, or three Business Days’ notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days’ notice, that all, or any
portion in an aggregate minimum amount of $2,000,000 and an integral multiple
of $500,000 be, in the case of Base Rate Loans, converted into LIBO Rate Loans
or be, in the case of LIBO Rate Loans, converted into Base Rate Loans or
continued as LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan at least three Business Days (but not
more than five Business Days) before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided that (x) each
such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders that have made such Loans, and (y) no
portion of the outstanding principal amount of any Loans may be continued as,
or be converted into, LIBO Rate Loans when any Default has occurred and is
continuing.

 

SECTION 2.5.                                               Funding.  Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided
that such LIBO Rate Loan shall nonetheless be deemed to have been made and to
be held by such Lender, and the obligation of the Borrower to repay such LIBO
Rate Loan shall nevertheless be to such Lender for the account of such foreign
branch, Affiliate or international banking facility.  In addition, the Borrower hereby consents and
agrees that, for purposes of any determination to be made for purposes of Sections
4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed
that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits
in its LIBOR Office’s interbank eurodollar market.

 

37

 

SECTION 2.6.                                               Reallocation of
Revolving Loans.  With
respect to any Revolving Lender, on any date on which

 

(a)                          the aggregate
outstanding principal amount of all Revolving Loans of such Revolving Loan
Lender, together with such Lender’s Revolving Loan Percentage of the aggregate
amount of all Swing Line Loans, is less than such Lender’s Revolving Loan
Percentage of the then Revolving Loan Commitment Amount, such Revolving Loan Lender
shall make a Revolving Loan to the Borrower in an amount of such deficiency; provided
that the proceeds of such Revolving Loans shall not be funded to the Borrower,
but instead shall be applied by the Administrative Agent to make mandatory
repayments required under clause (b) below; and

 

(b)                         the aggregate
outstanding principal amount of all Revolving Loans of such Revolving Loan
Lender, together with such Lender’s Revolving Loan Percentage of the aggregate
amount of all Swing Line Loans, exceeds such Lender’s Revolving Loan Percentage
of the then existing Revolving Loan Commitment Amount, the Borrower shall make
a mandatory repayment of such Revolving Loan Lender’s Revolving Loans in an
amount equal to such excess (and if there is more than one Lender that this clause
(b) applies to, such payments shall be made to all such Lenders on a pro
rata basis).

 

SECTION 2.7.                                               Register; Notes.

 

(a)                                  The Borrower
hereby designates the Administrative Agent to serve as the Borrower’s agent,
solely for the purpose of this clause, to maintain a register (the “Register”)
on which the Administrative Agent will record each Lender’s Commitment, the
Loans made by each Lender (and related interest amount) and each repayment in
respect of the principal amount of the Loans, annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to Section 10.11.  Failure to make any recordation, or any error
in such recordation, shall not affect any Obligor’s Obligations.  The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan is registered as the owner thereof for the purposes of all Loan Documents,
notwithstanding notice or any provision herein to the contrary.  Any assignment or transfer of a Commitment or
the Loans made pursuant hereto shall be registered in the Register only upon
delivery to the Administrative Agent of a Lender Assignment Agreement that has been
executed by the requisite parties pursuant to Section 10.11.  No assignment or transfer of a Lender’s
Commitment or Loans shall be effective unless such assignment or transfer shall
have been recorded in the Register by the Administrative Agent as provided in
this Section.

 

(b)                                 The Borrower
agrees that, upon the request of any Lender, the Borrower will execute and
deliver to such Lender a Note evidencing the Loans made by, and payable to such
Lender in a maximum principal amount equal to such Lender’s Revolving Loan Percentage
of the original applicable Commitment Amount. 
The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender’s Note
(or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, 

 

38

 

the
date of, the outstanding principal amount of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby.  Such notations shall, to the extent not
inconsistent with notations made by the Administrative Agent in the Register,
be conclusive and binding on each Obligor absent manifest error; provided
that the failure of any Lender to make any such notations or any error in such
notations shall not limit or otherwise affect any Obligations of any Obligor.

 

SECTION 2.8.                               Incremental
Facility.

 

(a)                                  The Borrower
may by written notice to the Administrative Agent elect to request, prior to
the Stated Maturity Date, an increase to the existing Revolving Loan Commitment
Amount by an aggregate amount not in excess of the difference between (x) $50,000,000
minus all previous such increases to the Revolving Loan Commitment Amount pursuant
to this Section 2.8 and (y) $35,000,000.  Each such notice shall specify (i) the
date (each, an “Increase Effective
Date”) on which Borrower proposes that the increased or new
Revolving Loan Commitment shall be effective, which shall be a date not less
than 10 Business Days after the date on which such notice is delivered to the
Administrative Agent and (ii) the identity of each Person to whom Borrower
proposes any portion of such increased Revolving Loan Commitments be allocated
(which Person would have qualified as an Eligible Assignee) and the amounts of
such allocations; provided
that any existing Lender approached to provide all or a portion of the
increased Revolving Loan Commitments may elect or decline, in its sole
discretion, to provide such increased Revolving Loan Commitments.

 

(b)                                 The increased
or new Commitments shall become effective, as of such Increase Effective Date; provided that:

 

(i)                                     each of the
conditions set forth in Section 5.2 shall be satisfied as of such
Increase Effective Date;

 

(ii)                                  the Borrower
shall have delivered to the Administrative Agent a Compliance Certificate for
the period of the most recently completed four full Fiscal Quarters immediately
preceding such Increase Effective Date (prepared in good faith and in a manner
and using such methodology which is consistent with the most recent financial
statements delivered pursuant to Section 7.1.1) evidencing
compliance with the covenants set forth in Section 7.2.4 for the
immediately preceding test date;

 

(iii)                               Borrower shall
make any payments required pursuant to Section 4.4 in connection
with any adjustment of Revolving Loans pursuant to clause (d) of
this Section 2.8; and

 

(iv)                              Borrower shall
deliver or cause to be delivered any legal opinions or other documents
reasonably requested by the Administrative Agent in connection with any such
transaction.

 

(c)                                  Except as to
original issue discount or up-front fees payable to the Lenders providing such
new Revolving Loan Commitments  in an
amount not to exceed the amount set forth 

 

39

 

on Item 2.8(c) of
the Disclosure Schedule, the terms and provisions of the new Revolving Loan
Commitments shall be identical to the already-existing Revolving Loan
Commitments.

 

The
increased or new Revolving Loan Commitments shall be effected by a joinder
agreement (the “Increase Joinder”)
executed by Borrower, the Administrative Agent and each Lender making such
increased Revolving Loan Commitments, in form and substance satisfactory to
each of them.  The Increase Joinder may,
without the consent of any other Lenders, effect such amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the opinion of the Administrative Agent, to effect the provisions of this Section 2.8.  In addition, unless otherwise specifically
provided herein, all references in Loan Documents to Revolving Loan
Commitments, Revolving Lender, Revolving Loans Revolving Loan Commitment Amount
shall be deemed, unless the context otherwise requires, to include such
increased amounts.

 

(d)                                 If there are,
at any Increase Effective Date, any Revolving Loans outstanding, each Revolving
Loan Lender that is acquiring a new or additional Revolving Loan Commitment on
the Increase Effective Date shall make a Revolving Loan, the proceeds of which
will be used to prepay the Revolving Loans of the other Revolving Loan Lenders
immediately prior to such Increase Effective Date, so that, after giving effect
thereto, the Revolving Loans outstanding are held by the Revolving Loan Lenders
pro  rata based on their Revolving Loan Commitments after giving effect
to such Increase Effective Date.  If
there is a new borrowing of Revolving Loans on such Increase Effective Date,
the Revolving Loan Lenders after giving effect to such Increase Effective Date
shall make such Revolving Loans in accordance with Section 2.1.1.

 

(e)                                  The new Revolving Loans and
Revolving Loan Commitments established pursuant to this paragraph shall
constitute Revolving Loans and Revolving Loan Commitments under, and shall be
entitled to all the benefits afforded by, this Agreement and the other Loan Documents,
and shall, without limiting the foregoing, benefit equally and ratably from the
Guaranty and security interests created by the Collateral Documents.  The Obligors shall take any actions reasonably
required by the Administrative Agent to ensure and/or demonstrate that the Lien
and security interests granted by the Collateral Documents continue to be
perfected under the UCC or otherwise after giving effect to the establishment
of any such any such new Revolving Loans or Revolving Loan Commitments.

 

ARTICLE III

REPAYMENTS, PREPAYMENTS,
INTEREST AND FEES

 

SECTION 3.1.                                               Repayments and
Prepayments; Application.  The
Borrower agrees that the Loans shall be repaid and prepaid pursuant to the
following terms.

 

SECTION 3.1.1.  Repayments and Prepayments.  The Borrower shall repay in full the unpaid
principal amount of each Loan upon the applicable Stated Maturity Date
therefor.  Prior thereto, payments and prepayments
of the Loans shall or may be made as set forth below.

 

40

 

(a)                          From time to
time on any Business Day, the Borrower may make a voluntary prepayment, in
whole or in part, of the outstanding principal amount of any

 

(i)                                Loans (other
than Swing Line Loans); provided that (A) any such prepayment of
Revolving Loans shall be made pro  rata among the Revolving Loans
of the same type and, if applicable, having the same Interest Period of all
Lenders that have made such Revolving Loans; (B) all such voluntary prepayments
shall require, in the case of Base Rate Loans at least one Business Day’s prior
notice (such notice to be delivered before noon on such day), and in the case
of LIBO Rate Loans at least three Business Day’s prior notice (such notice to
be delivered before noon on such day), and in either case not more than five
Business Days’ prior irrevocable notice to the Administrative Agent (which
notice may be telephonic so long as such notice is confirmed in writing within
24 hours thereafter and such notice to be delivered before noon on such day);
and (C) all such voluntary partial prepayments shall be, in the case of
LIBO Rate Loans, in an aggregate minimum amount of $2,000,000 and an integral
multiple of $1,000,000 and, in the case of Base Rate Loans, in an aggregate
minimum amount of $1,000,000 and an integral multiple of $500,000; and

 

(ii)                             Swing Line
Loans; provided that (A) all such voluntary prepayments shall
require prior telephonic notice to the Swing Line Lender on or before 1:00 p.m.
on the day of such prepayment (such notice to be confirmed in writing within 24
hours thereafter); and (B) all such voluntary partial prepayments shall be
in an aggregate minimum amount of $250,000 and an integral multiple of $50,000.

 

Each notice of prepayment
sent pursuant to this clause shall specify the prepayment date and the principal
amount of each Borrowing (or portion thereof) to be prepaid.  Each such notice shall be irrevocable and
shall commit the Borrower to prepay such Borrowing by the amount stated therein
on the date stated therein; provided that a notice of prepayment may
state that such notice is conditioned upon 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. All prepayments under this clause (other than
prepayments of Revolving Loans that are Base Rate Loans that are not made in
connection with the termination or permanent reduction of the Revolving Loan
Commitment) shall be accompanied by accrued and unpaid interest on the
principal amount to be prepaid to but excluding the date of payment.

 

(b)                         (i)  On
each date when the aggregate outstanding principal amount of all Revolving
Loans and Swing Line Loans exceeds the Revolving Loan Commitment Amount (as it
may be reduced from time to time pursuant to this Agreement), the Borrower
shall make a mandatory prepayment of Revolving Loans or Swing Line Loans (or
both).

 

41

 

(ii)  The Borrower shall also make
mandatory repayments in accordance with clause (b) of Section 2.6.

 

(c)                          Concurrently
with the receipt by the Borrower or any of its Subsidiaries of any Net Debt
Proceeds, the Borrower shall (or shall cause such Subsidiary to) make a
mandatory prepayment of the Loans in an amount equal to 100% of such Net Debt
Proceeds, to be applied as set forth in Section 3.1.2.

 

(d)                         In the event
the Borrower or any of its Subsidiaries receives any Net Disposition Proceeds
or Net Casualty Proceeds, the Borrower shall (subject to the proviso hereto),
within 5 Business Days of such receipt, deliver to the Administrative Agent a
calculation of the amount of such Net Disposition Proceeds or Net Casualty
Proceeds, and, to the extent the aggregate amount of such proceeds received by
the Borrower and their respective Subsidiaries in any Fiscal Year exceeds
$1,000,000, the Borrower shall (or shall cause such Subsidiary to) make a
mandatory prepayment of the Loans in an amount equal to 100% of such excess; provided
that, upon written notice by the Borrower to the Administrative Agent not more
than 5 Business Days following receipt of any Net Disposition Proceeds or Net
Casualty Proceeds, such proceeds may be retained by the Borrower and its
Subsidiaries (and be excluded from the prepayment requirements of this clause)
if (A) the Borrower informs the Administrative Agent in such notice of its
good faith intention to apply (or cause one or more of its Subsidiaries to
apply) such Net Disposition Proceeds or Net Casualty Proceeds to the
acquisition of other assets or properties in the U.S. consistent with the
businesses permitted to be conducted pursuant to Section 7.2.1
(including by way of merger or Investment), and (B) within 365 days
following the receipt of such Net Disposition Proceeds or Net Casualty
Proceeds, such proceeds are applied or committed to such acquisition.  The amount of such Net Disposition Proceeds
or Net Casualty Proceeds unused or uncommitted after such 365 day period shall
be applied to prepay the Loans as set forth in Section 3.1.2; provided
that in the event the Borrower or such Subsidiary has not applied such
committed but unused Net Disposition Proceeds or Net Casualty Proceeds for such
acquisition within eighteen months following the receipt of such Net Disposition
Proceeds or Net Casualty Proceeds, all of such committed but unused Net
Disposition Proceeds or Net Casualty Proceeds shall be applied to prepay the
Loans as set forth in Section 3.1.2 at the end of such
eighteen-month period.  At any time after
receipt of any such Net Disposition Proceeds or Net Casualty Proceeds in excess
of $2,500,000 during any Fiscal Year (individually or in the aggregate) but
prior to the application thereof to a mandatory prepayment or the acquisition
of other assets or properties as described above, the Borrower shall deposit
(or cause to be deposited) an amount equal to such excess into a cash collateral
account (the “Proceeds Account”) maintained with (and subject to
documentation reasonably satisfactory to) the Administrative Agent for the
benefit of the Secured Parties (and over which the Administrative Agent shall
have a first priority perfected Lien that benefits from the priorities
established for Priority Payment Lien Obligations under the First Lien
Intercreditor Agreement) pending such application as a prepayment or to be
released as requested by the Borrower in respect of such acquisition.  Amounts deposited in such cash collateral
account shall be invested in Cash Equivalent Investments, as directed by the
Borrower.

 

42

 

(e)                          Immediately
upon any acceleration of the Stated Maturity Date of any Loans pursuant to Sections
8.2 or 8.3, the Borrower shall repay all the Loans, unless, pursuant
to Section 8.3, only a portion of all the Loans is so accelerated
(in which case the portion so accelerated shall be so repaid).

 

Each prepayment of any Loans
made pursuant to this Section shall be without premium or penalty, except
as may be required by Section 4.4. 
In lieu of making any mandatory prepayment pursuant to clauses (c),
(d), or (e) of this Section in respect of any LIBO Rate
Loan other than on the last day of the Interest Period therefor, so long as no
Default shall have occurred and be continuing, the Borrower at its option may
deposit with the Administrative Agent an amount equal to the amount of the LIBO
Rate Loan to be prepaid and such LIBO Rate Loan shall be repaid on the last day
of the Interest Period therefor in the required amount.  Such deposit shall be held by the
Administrative Agent in a corporate time deposit account established on terms
reasonably satisfactory to the Administrative Agent (including that the
Administrative Agent has been granted a Lien over such deposit that benefits
from the priorities established for Priority Payment Lien Obligations under the
First Lien Intercreditor Agreement), earning interest at the then-customary
rate for accounts of such type.  Such
deposit shall cash collateralize the applicable Obligations; provided
that (A) the Borrower may at any time direct that such deposit be applied
to make the applicable payment required pursuant to this Section, subject to
the provisions of Section 4.4 and (B) upon the occurrence of
an Event of Default, such amounts on deposit may be applied by the
Administrative Agent to prepay the Loans.

 

SECTION 3.1.2.  Application.  Amounts prepaid pursuant to Section 3.1.1
shall be applied as set forth in this Section.

 

(a)                          Subject to clause
(b) below, each prepayment or repayment of the principal of the Loans
shall be applied, to the extent of such prepayment or repayment, first,
to the principal amount thereof being maintained as Base Rate Loans, and second,
subject to the terms of the last paragraph of Section 3.1.1 and Section 4.4,
to the principal amount thereof being maintained as LIBO Rate Loans.

 

(b)                         Each prepayment
of the Loans made pursuant to clauses (c), (d) or (e) of
Section 3.1.1 shall be applied to a reduction of the Revolving Loan
Commitment Amount in accordance with Section 2.2.1 and clause (b) of
Section 2.6 shall simultaneously be complied with.

 

SECTION 3.2.                                               Interest
Provisions.  Interest on
the outstanding principal amount of the Loans shall accrue and be payable in
accordance with the terms set forth below.

 

SECTION 3.2.1.  Rates. 
Pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, the Borrower may elect that the Loans
comprising a Borrowing accrue interest at a rate per annum:

 

(a)                          on that portion
maintained from time to time as a Base Rate Loan, equal to the sum of the
Alternate Base Rate from time to time in effect plus the Applicable 

 

43

 

Margin;
provided that all Swing Line Loans shall always accrue interest at a
rate per annum equal to the Alternate Base Rate from time to time in effect plus
the then effective Applicable Margin for Revolving Loans maintained as Base
Rate Loans; and

 

(b)                         on that portion
maintained as a LIBO Rate Loan, during each Interest Period applicable thereto,
equal to the sum of the LIBO Rate (Reserve Adjusted) for such Interest Period plus
the Applicable Margin,

 

but in no event in excess of
the maximum nonusurious interest rate permitted by applicable law.  All LIBO Rate Loans shall bear interest from
and including the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such LIBO Rate Loan. 
Interest on Base Rate Loans shall be calculated from and including the
first day of the Borrowing of such Base Rate Loan to (but not including) the
date interest is required to be paid on such Base Rate Loan pursuant to Section 3.2.3.

 

SECTION 3.2.2.  Post-Maturity Rates.  After the date any principal amount of any
Loan is due and payable (whether on the Stated Maturity Date, upon acceleration
or otherwise), or after any other monetary Obligation of the Borrower shall
have become due and payable, and such Obligation shall not have been paid, the
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at a rate per annum equal to (a) in
the case of overdue principal on any Loan, the rate of interest that otherwise
would be applicable to such Loan plus 2% per annum; and (b) in the case
of overdue interest, fees and other monetary Obligations, the Alternate Base
Rate plus 2% per annum, but in no event in excess of the maximum
nonusurious interest rate permitted by applicable law.

 

SECTION 3.2.3.  Payment Dates.  Interest accrued on each Loan shall be
payable, without duplication:

 

(a)                          on the Stated
Maturity Date;

 

(b)                         on the date of
any payment or prepayment, in whole or in part, of principal outstanding on
such Loan (other than Swing Line Loans and Base Rate Loans) on the principal amount
so paid or prepaid;

 

(c)                          with respect to
Base Rate Loans (including Swing Line Loans), on each Quarterly Payment Date
occurring after the Closing Date;

 

(d)                         with respect to
LIBO Rate Loans, on the last day of each applicable Interest Period (and, if such
Interest Period shall exceed three months, on each Quarterly Payment Date
occurring after the first day of such Interest Period); and

 

(e)                          on that portion
of any Loans the Stated Maturity Date of which is accelerated pursuant to Sections
8.2 or 8.3, immediately upon such acceleration.

 

44

 

Interest accrued on Loans or
other monetary Obligations after the date such amount is due and payable
(whether on the Stated Maturity Date, upon acceleration or otherwise) shall be
payable upon demand.

 

SECTION 3.3.                                               Fees.  The Borrower agrees to pay the fees set forth
below.  All such fees shall be non refundable.

 

SECTION 3.3.1.  Commitment Fee.  The Borrower agrees to pay to the
Administrative Agent for the account of each Lender (to be applied pro  rata
in accordance with each such Lender’s Revolving Loan Percentage of the then
existing Revolving Loan Commitment Amount) with a Revolving Loan Commitment,
for the period (including any portion thereof when any of its Commitments are
suspended by reason of the Borrower’s inability to satisfy any condition of Article V)
commencing on the Closing Date and continuing through the Revolving Loan Commitment
Termination Date, a commitment fee in an amount per annum equal to the Applicable
Percentage, in each case of such Lender’s Percentage of the sum of the average
daily unused portion of the Revolving Loan Commitment Amount.  All commitment fees payable pursuant to this Section shall
be calculated on a year comprised of 360 days and payable by the Borrower on
each Quarterly Payment Date, commencing with the first Quarterly Payment Date
following the Closing Date, and on the Revolving Loan Commitment Termination
Date.  The making of Swing Line Loans
shall not constitute usage of the Revolving Loan Commitment with respect to the
calculation of commitment fees to be paid by the Borrower to the Lenders.

 

SECTION 3.3.2.  Other Fees.  The Borrower agrees to pay the fees in the
amounts and on the dates set forth in each Fee Letter.

 

ARTICLE
IV

CERTAIN
LIBO RATE AND OTHER PROVISIONS

 

SECTION 4.1.                                               LIBO Rate
Lending Unlawful.  If any
Lender shall determine (which determination shall, upon notice thereof to the
Borrower and the Administrative Agent, be conclusive and binding on the
Borrower) that the introduction of or any change in or in the interpretation of
any law makes it unlawful, or any Governmental Authority asserts that it is
unlawful, for such Lender to make or continue any Loan as, or to convert any
Loan into, a LIBO Rate Loan, the obligations of such Lender to make, continue
or convert any such LIBO Rate Loan shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, and all outstanding LIBO
Rate Loans payable to such Lender shall automatically convert into Base Rate
Loans at the end of the then current Interest Periods with respect thereto or
sooner, if required by such law or assertion.

 

SECTION 4.2.                                               Deposits
Unavailable.  If the
Administrative Agent shall have determined that

 

(a)                          Dollar deposits
in the relevant amount and for the relevant Interest Period are not available
to it in its relevant market;

 

45

 

(b)                         by reason of
circumstances affecting its relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO Rate Loans; or

 

(c)                          the LIBO Rate
for any requested Interest Period with respect to a proposed LIBO Rate Loan or
in connection with a LIBO Rate Loan does not adequately and fairly reflect the
cost to such Lenders of funding such Loan;

 

then, upon notice from the
Administrative Agent to the Borrower and the Lenders, the obligations of all
Lenders under Sections 2.3 and 2.4 to make or continue any Loans
as, or to convert any Loans into, LIBO Rate Loans shall forthwith be suspended
until the Administrative Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist.

 

SECTION 4.3.                                               Increased LIBO
Rate Loan Costs, etc.  The
Borrower agrees to reimburse each Lender for any increase in the cost to such
Lender of, or any reduction in the amount of any sum receivable by such Person
in respect of, such Person’s Commitments and the making of Credit Extensions
hereunder (including the making, continuing or maintaining (or of its
obligation to make or continue) any Loans as, or of converting (or of its
obligation to convert) any Loans into, LIBO Rate Loans) that arise in
connection with any change in, or the introduction, adoption, effectiveness,
change in interpretation, reinterpretation or phase in after the Closing Date
of, any law or regulation, directive, guideline, decision or request (whether
or not having the force of law) of any Governmental Authority, except for such
changes with respect to increased capital costs and Taxes which are governed by
Sections 4.5 and 4.6, respectively.  Each affected Lender shall promptly notify
the Administrative Agent and the Borrower in writing of the occurrence of any
such event, stating the reasons therefor and the additional amount required
fully to compensate such Person for such increased cost or reduced amount.  Such additional amounts shall be payable by
the Borrower directly to such Lender within five days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower. 
Notwithstanding the foregoing, no Lender shall be entitled to compensation
under this Section for any costs incurred or reductions suffered with
respect to any date that it has such costs unless it shall have notified the
Borrower that it will demand compensation for such costs not more than 180 days
after the date on which it shall have become aware of such costs.

 

SECTION 4.4.                                               Funding Losses.  In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make or
continue any portion of the principal amount of any Loan as, or to convert any
portion of the principal amount of any Loan into, a LIBO Rate Loan) as a result
of

 

(a)                          any conversion
or repayment or prepayment of the principal amount of any LIBO Rate Loan on a
date other than the scheduled last day of the Interest Period applicable
thereto, whether pursuant to Article III or otherwise;

 

46

 

(b)                         any Loans not
being made as LIBO Rate Loans in accordance with the Borrowing Request therefor;
or

 

(c)                          any Loans not
being continued as, or converted into, LIBO Rate Loans in accordance with the
Continuation/Conversion Notice therefor;

 

then, upon the written
notice of such Lender to the Borrower (with a copy to the Administrative
Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense.  Such written notice shall, in the absence of
manifest error, be conclusive and binding on the Borrower.

 

SECTION 4.5.                                               Increased
Capital Costs.  If, after
the Closing Date, any change in, or the introduction, adoption, effectiveness,
change in interpretation, reinterpretation or phase in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any Governmental Authority affects or would increase the amount of capital
required or expected to be maintained by any Credit Party or any Person
controlling such Credit Party, and such Credit Party determines (in good faith
but in its sole and absolute discretion) that the rate of return on its or such
controlling Person’s capital as a consequence of the Commitments or the Credit
Extensions made by such Credit Party is reduced to a level below that which
such Credit Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon prompt notice from time to time
by such Credit Party to the Borrower, the Borrower shall within five days
following receipt of such notice pay directly to such Credit Party additional
amounts sufficient to compensate such Credit Party or such controlling Person
for such reduction in rate of return.  A
statement of such Credit Party as to any such additional amount or amounts
shall, in the absence of manifest error, be conclusive and binding on the Borrower.  In determining such amount, such Credit Party
may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable. 
Notwithstanding the foregoing, no Credit Party shall be entitled to
compensation under this Section for any additional amounts with respect to
any date unless it shall have notified the Borrower that it will demand
compensation hereunder not more than 180 days after the date on which it shall
have become aware of such increased costs.

 

SECTION 4.6.                                               Taxes.  The Obligors covenant and agree as follows
with respect to Taxes.

 

(a)                          Any and all
payments by any Obligor under any Loan Document shall be made free and clear
of, and without deduction or withholding for or on account of, any Taxes,
unless required by law (as determined by the applicable withholding
agent).  In the event that any Indemnified
Taxes or Other Taxes are imposed and required to be deducted or withheld from
any payment under any Loan Document, then:

 

(i)                  the amount of
such payment shall be increased by the applicable Obligor as may be necessary
so that such payment is made, after withholding or deduction for or on account
of such Taxes (including any such Taxes attributable 

 

47

 

to
the payments under this Section 4.6), in an amount that is not less
than the amount provided for in such Loan Document; and

 

(ii)               the applicable
withholding agent shall withhold the full amount of such Taxes from such
payment (including any such Taxes attributable to the payments under this Section 4.6)
and shall pay such amount to the Governmental Authority imposing such Taxes in
accordance with applicable law.

 

(b)                         In addition,
the Borrower shall pay all Other Taxes imposed (without duplication if any
other Taxes are paid under Section 4.6(a)) to the relevant
Governmental Authority imposing such Other Taxes in accordance with applicable
law.

 

(c)                          As promptly as
practicable after the payment of Indemnified Taxes or Other Taxes by an
Obligor, and in any event within 45 days of any such payment being made, the
relevant Obligor shall furnish to the Administrative Agent a copy of an
official receipt (or a certified copy thereof) evidencing the payment of such
Indemnified Taxes or Other Taxes.  The
Administrative Agent shall make copies thereof available to any relevant Credit
Party upon request therefor.

 

(d)                         Subject to clause
(f) below, the Borrower shall indemnify and hold harmless each Credit
Party for any Indemnified Taxes and Other Taxes (including any such Taxes
attributable to the payments under this Section 4.6), levied,
imposed or assessed on (and whether or not paid directly by) such Credit Party
whether or not such Indemnified Taxes or Other Taxes are correctly or legally
asserted by the relevant Governmental Authority. Promptly upon having knowledge
that any such Indemnified Taxes or Other Taxes have been levied, imposed or
assessed, and promptly upon notice thereof by any Credit Party (which notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrower), the Borrower shall pay such Indemnified Taxes or Other Taxes directly
to the relevant Governmental Authority, provided that the Borrower shall
not be obligated to so indemnify each Credit Party in respect of interest or
penalties attributable to any Indemnified Taxes or Other Taxes:  (i) to the extent that such interest or
penalties resulted solely from the failure of the Administrative Agent or such
other Credit Party as applicable, to notify the Borrower of the imposition of
such Indemnified Taxes or Other Taxes within 120 days after the Administrative
Agent or such other Credit Party (as the case may be) actually received written
notice of such imposition from the applicable taxing authority or (ii) such
interest or penalties resulted solely from the gross negligence or willful
misconduct of the Administrative Agent or such Credit Party.  With respect to indemnification for
Indemnified Taxes and Other Taxes actually paid by any Credit Party or the
indemnification provided in the immediately preceding sentence, such indemnification
shall be made within 30 days after the date such Credit Party makes written demand
therefor.  The Borrower acknowledges that
any payment made to any Credit Party or to any Governmental Authority in
respect of the indemnification obligations of the Borrower provided in this
clause shall constitute a payment in respect of which the provisions of clause
(a) and this clause shall apply.

 

48

 

(e)         (i) Any Credit
Party (which, for purposes of this clause (e) of Section 4.6,
shall exclude the Administrative Agent in its capacity as the Administrative
Agent) that is entitled to an exemption from or reduction of withholding Tax
(including backup withholding Tax) under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to any payment under this Agreement shall deliver to the Borrower
and the Administrative Agent at any time or times reasonably requested by the
Borrower or the Administrative Agent, such properly completed and executed
documentation as may be prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent to permit such payments to be made
without such withholding Tax or at a reduced rate; provided, that no Credit Party shall have any obligation
under this paragraph (e) with
respect to any withholding Tax imposed by any jurisdiction other than the U.S.
federal government if in the reasonable judgment of such Credit Party such
compliance would subject such Credit Party to any material unreimbursed cost or
expense or would otherwise be disadvantageous to such Credit Party in any
material respect.

 

(ii) Without limiting
the generality of the foregoing, any Non-U.S. Credit Party shall, to the extent
it is legally eligible to do so, deliver to the Borrower and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Non-U.S. Credit Party becomes a Credit Party
under this Agreement (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent, but only if such Non-U.S. Credit Party is
legally eligible to do so), whichever of the following is applicable:

 

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

 

(II)           duly completed copies of Internal Revenue Service Form W-8ECI
(or any successor forms),

 

(III)         in the case of a Non-U.S. Credit Party claiming the benefits
of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate, in substantially the form of Exhibit F-1, or
any other form approved by the Administrative Agent, to the effect that such
Non-U.S. Credit Party is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, (B) a “10 percent shareholder” of the applicable Borrower within
the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code,
and that no payments in connection with the Loan Documents are effectively
connected with such Non-U.S. Credit Party’s conduct of a U.S. trade or business
and (y) duly completed copies of Internal Revenue Service Form W-8BEN
(or any successor forms),

 

(IV)         to the extent a Non-U.S. Credit Party is not the beneficial
owner (for example, where the Non-U.S. Credit Party is a partnership, or a participating

 

49

 

Lender granting a typical
participation), an Internal Revenue Service Form W-8IMY, accompanied by a Form W-8ECI,
W-8BEN, a certificate in substantially the form of Exhibit F-2, Exhibit F-3
or Exhibit F-4, as applicable, Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that, if the Non-U.S. Credit Party is a partnership
(and not a participating Lender) and one or more partners of such Non-U.S.
Credit Party are claiming the portfolio interest exemption, such Non-U.S.
Credit Party shall provide a certificate, in substantially the form of Exhibit F-3,
on behalf of such beneficial owner(s) (in
lieu of requiring each beneficial owner to provide such certificate); and

 

(V) any other form
prescribed by applicable laws as a basis for claiming exemption from or a
reduction in U.S. federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable requirements of
law to permit the applicable Borrower and the Administrative Agent to determine
the withholding or deduction required to be made.

 

(iii) Each Non-U.S.
Credit Party shall, from time to time after the initial delivery by such
Non-U.S. Credit Party of the forms described above, whenever a lapse in time or
change in such Lender’s circumstances renders such forms, certificates or other
evidence so delivered obsolete or inaccurate, promptly (1) deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) renewals, amendments or additional or successor
forms, properly completed and duly executed by such Non-U.S. Credit Party,
together with any other certificate or statement of exemption required in order
to confirm or establish such Non-U.S. Credit Party’s status or that such
Non-U.S. Credit Party is entitled to an exemption from or reduction in any
applicable withholding tax or (2) notify Administrative Agent and the
Borrower of its inability to deliver any such forms, certificates or other
evidence.

 

(iv) Any Credit Party
that is a “United States person” (within the meaning of Section 7701(a)(30)
of the Code) shall deliver to the Borrower and the Administrative Agent on or
prior to the date on which such Credit Party becomes a Credit Party under this
Agreement (and from time to time thereafter as prescribed by applicable law or
upon the request of the Borrower or the Administrative Agent), duly executed
and properly completed copies of Internal Revenue Service Form W-9
certifying that it is not subject to U.S. federal backup withholding.

 

(f)         If and to the extent
that any Credit Party determines (in good faith) that it has actually realized
a refund of a Tax in respect to which an Obligor paid any additional amounts to
such Credit Party pursuant to clause (a)(i) or clause (d) above,
such Credit Party shall, to the extent such Credit Party determines in good
faith that such Credit Party may do so without prejudice to the retention of
such refund and without any other adverse Tax consequences to such Credit
Party, pay to the Obligor an amount it determines to be the proportion of the
refund as will leave it, after such payment, in no better or 

 

50

 

worse
financial position than had the Tax giving rise to the additional amounts not
been imposed and had the additional amounts giving rise to such refund never
been paid in the first place.  If any
refund resulting in a payment by a Credit Party to the Obligor under this
clause is ultimately disallowed (in whole or in part, and including, as a
result of a settlement with an applicable Governmental Authority), the Obligor
shall, within ten days after receiving written notice from such Credit Party,
return to such Credit Party the portion of the payment previously made to the
Obligor by such Credit Party (plus interest for the relevant period(s) at
the applicable rate(s)) as such Credit Party shall determine (in such Credit
Party’s sole discretion exercised in good faith) to be due and owning in accordance
with this clause. This Section shall not be construed to require any
Credit Party to make available its Tax Returns (or any other information
relating to its Taxes which it deems confidential) to an Obligor or any other
person.

 

SECTION 4.7.          Payments, Computations, etc.

 

(a)           Unless otherwise
expressly provided in a Loan Document, all payments by the Borrower pursuant to
each Loan Document shall be made by the Borrower to the Administrative Agent
for the pro  rata account of the Credit Parties entitled to
receive such payment.  All payments shall
be made without setoff, deduction or counterclaim not later than noon on the
date due in same day or immediately available funds to such account as the
Administrative Agent shall specify from time to time by notice to the
Borrower.  Funds received after that time
shall be deemed to have been received by the Administrative Agent on the next
succeeding Business Day.  The
Administrative Agent shall promptly remit in same day funds to each Credit
Party its share, if any, of such payments received by the Administrative Agent
for the account of such Credit Party. 
All interest (including interest on LIBO Rate Loans) and fees shall be
computed on the basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which such interest or
fee is payable over a year comprised of 360 days (or, in the case of interest
on a Base Rate Loan (calculated at other than the Federal Funds Rate), 365 days
or, if appropriate, 366 days).  Except as
otherwise provided herein, payments due on a day other than a Business Day
shall (except as otherwise required by clause (b) of the definition
of “Interest Period”) be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees in connection
with that payment.

 

(b)           Except as otherwise
expressly set forth therein, all payments made under any Loan Document shall be
applied upon receipt (i) first, to the payment of all Obligations (other
than Loans or interest thereon) owing to the Administrative Agent, in its
capacity as the Administrative Agent (including the reasonable fees and
expenses of counsel to the Administrative Agent), (ii) second, after payment
in full in cash of the amounts specified in clause (b)(i), to the
ratable payment of all interest and fees owing and due and payable with respect
to the Credit Extensions and all costs and expenses owing to the Secured
Parties pursuant to the terms of this Agreement, until paid in full in cash, (iii) third,
after payment in full in cash of the amounts specified in clauses (b)(i) and
(b)(ii), to the ratable payment of the principal amount of the Loans
then outstanding and due and payable, and, if such payment resulted from the
proceeds of collateral (or a payment under a Guaranty), to amounts owing to
Secured Parties under Cash Management Obligations then due and payable, (iv) fourth,
after payment in full in cash of the 

 

51

 

amounts
specified in clauses (b)(i) through (b)(iii), to the ratable
payment of all other Obligations owing to the Secured Parties and due and
payable, and (v) fifth, after payment in full in cash of the amounts
specified in clauses (b)(i) through (b)(iv), to each
applicable Obligor or any other Person lawfully entitled to receive such
surplus pursuant to an order of a Governmental Authority.

 

SECTION 4.8.                Sharing of Payments.  If any Credit Party shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Credit Extension (other than pursuant to the terms
of Sections 4.3, 4.4,  4.5 or 4.6) in excess of its pro
rata share of payments obtained by all Credit Parties, such Credit Party
shall purchase from the other Credit Parties such participations in Credit
Extensions made by them as shall be necessary to cause such purchasing Credit
Party to share the excess payment or other recovery ratably (to the extent such
other Credit Parties were entitled to receive a portion of such payment or
recovery) with each of them; provided that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Credit Party, the purchase shall be rescinded and each Credit Party which has
sold a participation to the purchasing Credit Party shall repay to the
purchasing Credit Party the purchase price to the ratable extent of such
recovery together with an amount equal to such selling Credit Party’s ratable
share (according to the proportion of (a) the amount of such selling
Credit Party’s required repayment to the purchasing Credit Party to (b) total
amount so recovered from the purchasing Credit Party) of any interest or other
amount paid or payable by the purchasing Credit Party in respect of the total
amount so recovered; provided that for the avoidance of doubt, it is
understood that Credit Extension shall not include any obligations secured by
Liens granted pursuant to clause (e) or (g) of Section 7.2.3
or any Cash Management Obligations or Hedging Obligations permitted by clause
(i) of Section 7.2.2. 
The Borrower agrees that any Credit Party purchasing a participation
from another Credit Party pursuant to this Section may, to the fullest
extent permitted by law, exercise all its rights of payment (including pursuant
to Section 4.9) with respect to such participation as fully as if
such Credit Party were the direct creditor of the Borrower in the amount of
such participation.  If under any applicable
bankruptcy, insolvency or other similar law any Credit Party receives a secured
claim in lieu of a setoff to which this Section applies, such Credit Party
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Credit Parties
entitled under this Section to share in the benefits of any recovery on
such secured claim.

 

SECTION 4.9.                Setoff.  Each Credit Party may, upon the occurrence
and during the continuance of any Event of Default described in clauses (a) through
(d) of Section 8.1.9 or, with the consent of the
Required Lenders, upon the occurrence and during the continuance of any other
Event of Default, appropriate and apply to the payment of the Obligations owing
to it (whether or not then due), and (as security for such Obligations) the
Borrower hereby grants to each Secured Party a continuing security interest in,
any and all balances, credits, deposits, accounts or moneys of the Borrower
then or thereafter maintained with such Secured Party (excluding deposits held
by the Borrower as a fiduciary for others); provided that any such appropriation
and application shall be subject to the provisions of Section 4.8.  Each Credit Party agrees promptly to notify
the Borrower and the Administrative Agent after any such appropriation and
application made by such Credit Party; provided that the failure to give
such notice shall not affect the 

 

52

 

validity of such setoff and application.  The rights of each Credit Party under this Section are
in addition to other rights and remedies (including other rights of setoff
under applicable law or otherwise) which such Credit Party may have.

 

SECTION 4.10.              Replacement of Lenders.  If any Lender (an “Affected Lender”) (a) fails
to vote in favor of a modification to this Agreement that is otherwise approved
by the requisite number of Lenders (which, in the case of a modification
requiring the consent of all Lenders or all Lenders of a particular class,
means all Lenders or all Lenders of such class, as applicable, other than such
non-consenting Lender), (b) makes a demand upon the Borrower for (or if
the Borrower is otherwise required to pay) amounts pursuant to Section 4.3,
4.5 or 4.6 (and the payment of such amounts are, and are likely
to continue to be, more onerous in the reasonable judgment of the Borrower than
with respect to the other Lenders) or (c) gives notice pursuant to Section 4.1
requiring a conversion of such Affected Lender’s LIBO Rate Loans to Base Rate
Loans or suspending such Lender’s obligation to make Loans as, or to convert
Loans into, LIBO Rate Loans (unless such Lender, when taken together with all
other Lenders giving such notices at substantially the same time, constitute
the Required Lenders), the Borrower may, within 30 days of the failure to
consent or receipt by the Borrower of such demand or notice, as the case may
be, give notice (a “Replacement Notice”) in writing to the
Administrative Agent and such Affected Lender of its intention to replace such
Affected Lender with a financial institution or other Person (a “Substitute
Lender”) designated in such Replacement Notice; provided that no
Replacement Notice may be given by the Borrower if (i) such replacement conflicts
with any applicable law or regulation, (ii) any Event of Default shall
have occurred and be continuing at the time of such replacement, (iii) such
Lender consents to such modification, or, if applicable, (iv) prior to any
such replacement, such Lender shall have taken any necessary action under Section 4.5
or 4.6 (if applicable) so as to eliminate the continued need for payment
of amounts owing pursuant to Section 4.5 or 4.6.  If the Administrative Agent shall, in the
exercise of its reasonable discretion and within 30 days of its receipt of such
Replacement Notice, notify the Borrower and such Affected Lender in writing
that the Substitute Lender is satisfactory to the Administrative Agent (such
consent not to be unreasonably withheld and not being required where the
Substitute Lender is already a Lender or an Affiliate of a Lender), then such
Affected Lender shall, subject to the payment of any amounts due pursuant to Section 4.4,
assign, in accordance with Section 10.11, all of its Commitments,
Loans, Notes (if any) and other rights and obligations under this Agreement and
all other Loan Documents to such Substitute Lender; provided that (i) such
assignment shall be made pursuant to a Lender Assignment Agreement, (ii) the
purchase price paid by such Substitute Lender shall be in the amount of such
Affected Lender’s Loans, together with all accrued and unpaid interest and fees
in respect thereof, plus all other amounts (including the amounts
demanded and unreimbursed under Sections 4.3, 4.5 and 4.6),
owing to such Affected Lender hereunder and (iii) the Borrower shall pay
to the Affected Lender and the Administrative Agent all reasonable
out-of-pocket expenses incurred by the Affected Lender and the Administrative
Agent in connection with such assignment and assumption (including the
processing fees described in Section 10.11).  Upon the effective date of an assignment described
above, the Substitute Lender shall become a “Lender” for all purposes under the
Loan Documents.

 

53

 

SECTION 4.11.              Mitigation of Claims.  Each Lender agrees that if it makes any demand
for payment under Section 4.3, 4.4, 4.5, or 4.6,
or if any adoption or change of the type described in Section 4.1
shall occur with respect to it, it will use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office (at the Borrower’s cost) if
the making of such a designation would reduce or obviate the need for the
Borrower to make payments under Section 4.3, 4.4, 4.5,
or 4.6, or would eliminate or reduce the effect of any adoption or
change described in Section 4.1.

 

ARTICLE V

CONDITIONS TO EFFECTIVENESS

 

SECTION 5.1.                Initial Credit Extension.  The effectiveness of this Agreement and the
obligations of the Lenders hereunder shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this Article.

 

SECTION 5.1.1.  Resolutions, etc.  The Administrative Agent shall have received
from each Obligor, as applicable, (i) a copy of a good standing
certificate (to the extent applicable), dated a date reasonably close to the
Closing Date, for each such Person and (ii) a certificate, dated the
Closing Date duly executed and delivered by such Person’s Secretary or
Assistant Secretary, managing member or general partner, as applicable, as to

 

(a)         resolutions of each
such Person’s Board of Directors (or other managing body, in the case of an
entity other than a corporation) then in full force and effect authorizing the
execution, delivery and performance of each Loan Document to be executed by
such Person and the transactions contemplated hereby and thereby;

 

(b)        the incumbency and
signatures of those of its officers, managing member or general partner, as
applicable, authorized to act with respect to each Loan Document to be executed
by such Person; and

 

(c)         the full force and
validity of each Organic Document of such Person and copies thereof;

 

upon which certificates each
Credit Party may conclusively rely until it shall have received a further
certificate of the Secretary, Assistant Secretary, managing member or general
partner, as applicable, of any such Person canceling or amending the prior
certificate of such Person.

 

SECTION 5.1.2.  Closing Date Certificate.  The Administrative Agent shall have received
the Closing Date Certificate, dated the Closing Date and duly executed and
delivered by an Authorized Officer of the Borrower, in which certificate the
Borrower shall agree and acknowledge that the statements made therein shall be
deemed to be true and correct representations and warranties of the Borrower as
of such date, and, at the time each such certificate is delivered, such
statements shall in fact be true and correct. 
All documents and agreements required 

 

54

 

to
be appended to the Closing Date Certificate shall be in form and substance
satisfactory to the Administrative Agent.

 

SECTION 5.1.3.  Delivery of Notes.  The Administrative Agent shall have received,
for the account of each Lender that has requested a Note, such Lender’s Notes
duly executed and delivered by an Authorized Officer of the Borrower.

 

SECTION 5.1.4.  Solvency, etc.  The Administrative Agent shall have received
a solvency certificate, in substantially the form of Exhibit K,
duly executed and delivered by the chief financial or accounting Authorized
Officer of the Borrower, dated as of the Closing Date.

 

SECTION 5.1.5.  Closing Documents.  The Administrative Agent shall have received
the following:

 

(a)           opinions, dated the Closing Date and addressed to the Lead
Arrangers and all Lenders, from (i) DLA Piper LLP (US), New York counsel
to the Obligors and (ii) Brownstein Hyatt Farber Schreck, LLP, Nevada
counsel to the Borrower, each in form and substance reasonably satisfactory to
the Administrative Agent;

 

(b)           certificates of insurance, naming the Administrative
Agent, on behalf of the Lenders, as an additional insured or loss payee, as the
case may be, under all insurance policies maintained with respect to the assets
and properties of the Obligors that constitutes Collateral;

 

(c)           the Administrative Agent, Parent, the Borrower and each Subsidiary
Guarantor shall have executed and delivered each of the Guaranty and the
Security Agreement;

 

(d)           proper Financing
Statements in form appropriate for filing under the Uniform Commercial
Code of all jurisdictions that the Administrative Agent reasonably requests in
order to perfect the Liens created under the Collateral Documents, covering the
Collateral described in the Collateral Documents;

 

(e)           all certificates, agreements or instruments representing
or evidencing the Collateral consisting of securities or instruments
accompanied by instruments of transfer and stock powers undated and endorsed in
blank have been delivered to the Administrative Agent;

 

(f)            patent and trademark short form assignments in form
appropriate for filing with the United States Patent and Trademark Office and
United States Copyright Office and such other documents under applicable
requirements of law in each jurisdiction as may be reasonably requested by the
Administrative Agent, in order to perfect the Liens created, or purported to be
created, by the Collateral Documents;

 

(g)           certified copies of Uniform Commercial Code, United States
Patent and Trademark Office and United States Copyright Office, tax and
judgment lien searches, or equivalent reports or searches, each of a recent
date listing all effective financing 

 

55

 

statements, lien notices or comparable
documents that name any Obligor as debtor and that are filed in those state and
county jurisdictions in which any Obligor is organized or maintains its
principal place of business and such other searches that are required by the
Perfection Certificate or that the Administrative Agent  reasonably deems necessary and such searches
or reports shall reveal no Liens on any of the Collateral except for Liens
permitted by Section 7.2.3 or to be discharged on or prior to the Closing
Date pursuant to a pay-off letter or other documentation reasonably
satisfactory to the Administrative Agent;

 

(h)           evidence of the completion of all other actions,
recordings and filings of or with respect to the Collateral Documents that the
Administrative Agent may reasonably deem necessary in order to perfect the
Liens created thereby;

 

(i)            all information requested by any Lender in order to
comply with the Patriot Act (in adequate time for the Administrative Agent to
provide that information to such Lender);

 

(j)            a Mortgage encumbering each Mortgaged Property together
with such certificates, affidavits, questionnaires or returns as shall be
required in connection with the recording or filing thereof to create a lien
under applicable requirements of law, and such financing statements and any
other instruments necessary to grant a mortgage lien under the laws of any
applicable jurisdiction, all of which shall be in form and substance reasonably
satisfactory to Administrative Agent;

 

(k)           a completed “Life-of-Loan”
Federal Emergency Management Agency Standard Flood Hazard Determination with
respect to each Mortgaged Property (together with a notice about special flood hazard area status and flood disaster assistance
duly executed by the Borrower and each applicable Subsidiary relating thereto);
and

 

(l)            a favorable opinion of
local counsel to the Obligors (a) shall be addressed to the
Administrative Agent and each of the Secured Parties, (b) shall cover the
due authorization, execution, delivery and enforceability of the respective
Mortgage and such other matters incident to the transactions contemplated
herein as Administrative Agent may reasonably request and (c) shall be in
form and substance reasonably satisfactory to Administrative Agent.

 

SECTION 5.1.6.  Fees, Expenses, etc.  Each party to each Fee Letter shall have
received for its own account, or for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to Section 3.3
and, if then invoiced, Section 10.3.

 

SECTION 5.1.7.  Notes Offering.  The terms of the First Lien Notes and the
Second Lien Notes shall be reasonably satisfactory to the Administrative Agent
and the Lenders.

 

SECTION 5.1.8.  Intercreditor Agreements.  The Administrative Agent shall have received
executed counterparts of the Intercreditor Agreements, which shall be originals
or facsimiles 

 

56

 

(followed promptly by originals) unless otherwise specified, in form
and substance reasonably satisfactory to the Administrative Agent and each of
the Lenders

 

SECTION 5.1.9.  Existing Credit Agreement.  The Existing Credit Agreement shall have been
repaid and terminated, and all Liens granted in connection therewith shall have
been terminated, and the Administrative Agent shall have received such pay off
and release documents as reasonably requested in connection therewith.

 

SECTION 5.1.10.  Other Indebtedness.  After giving effect to the Transaction,
Parent and its Subsidiaries shall have no outstanding Indebtedness other than (i) up
to $15,000,000 of letters of credit incurred pursuant to clause (g) of
Section 7.2.2 (plus letters of credit that have been fully
collateralized by a letter of credit referred to in such clause (g)), (ii) up
to $465,500,000 in aggregate principal amount of New Notes and Existing Parent
Notes and (iii) the Indebtedness identified in Item 7.2.2(c) of
the Disclosure Schedule.

 

SECTION 5.1.11.  Balance Sheet Cash.  After giving effect to the Transactions and
all payments to be made in connection therewith, Borrower shall have on its
balance sheet at least (i) $37,500,000 of net cash proceeds from the
issuance of the New Notes and (ii) $20,000,000 in other existing cash.

 

SECTION 5.1.12.  Consents.  The Lenders shall be satisfied that all
requisite Governmental Authorities, third parties and shareholders shall have
approved or consented to the Transactions, and there shall be no governmental
or judicial action, actual or threatened, that has or would have, singly or in
the aggregate, a reasonable likelihood of restraining, preventing or imposing
burdensome conditions on the Transactions or the other transactions
contemplated hereby.

 

SECTION 5.1.13.  Litigation.  There shall be no litigation, public or
private, or administrative proceedings, governmental investigation or other
legal or regulatory developments, actual or threatened, that, singly or in the
aggregate, could materially and adversely affect the ability of the parties to
consummate the financings contemplated hereby or the other Transactions.

 

SECTION 5.1.14.  No Material Adverse Effect.  Since December 31, 2009, there has been
no event, change, circumstance or occurrence that, individually or in the
aggregate, has had or would reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 5.2.                All Credit Extensions.  The obligation of each Lender to make any
Credit Extension shall be subject to the satisfaction of each of the conditions
precedent set forth below.

 

SECTION 5.2.1.  Compliance with Warranties, No Default,
etc.  Both before and after giving
effect to any Credit Extension the following statements shall be true and
correct:

 

57

 

(a)         the representations
and warranties set forth in each Loan Document shall, in each case, be true and
correct in all material respects (except that any representation and warranty
that is qualified as to “materiality” or “Material Adverse Effect” shall be
true and correct in all respects) with the same effect as if then made (unless
stated to relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date); and

 

(b)        no Default shall have
then occurred and be continuing.

 

SECTION 5.2.2.  Credit Extension Request, etc.  Subject to Section 2.3.2, the
Administrative Agent shall have received a Borrowing Request if Loans are being
requested.  Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of such Credit
Extension shall constitute a representation and warranty by the Borrower that
on the date of such Credit Extension (both immediately before and after giving
effect to such Credit Extension and the application of the proceeds thereof)
the statements made in Section 5.2.1 are true and correct in all
material respects.

 

SECTION 5.2.3.  Satisfactory Legal Form.  All documents executed or submitted pursuant
hereto by or on behalf of any Obligor shall be reasonably satisfactory in form
and substance to the Administrative Agent and its counsel, and the
Administrative Agent and its counsel shall have received all information,
approvals, documents or instruments as the Administrative Agent or its counsel
may reasonably request in connection with such Credit Extension.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

In order to induce each
Credit Party to enter into this Agreement and to make Credit Extensions
hereunder, the Borrower represents and warrants to each Credit Party on the
Closing Date, on each other date required pursuant to the terms of any Loan
Document as set forth in this Article and on the date of any Credit
Extension (except to the extent expressly relating only to an earlier date,
then as of such earlier date):

 

SECTION 6.1.                Organization, etc.  Each Obligor is validly organized and
existing and in good standing (to the extent applicable) under the laws of the
state or jurisdiction of its incorporation or organization, is duly qualified
to do business and is in good standing as a foreign entity in each jurisdiction
where the nature of its business requires such qualification, except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect, and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform
its Obligations under each Loan Document to which it is a party, to own and
hold under lease its property and to conduct its business substantially as
currently conducted by it, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

 

SECTION 6.2.                Due Authorization, Non-Contravention, etc.  The execution, delivery and
performance by each Obligor of each Loan Document executed or to be executed by
it,

 

58

 

each Obligor’s participation in the
consummation of all aspects of the Transaction, and the execution, delivery and
performance by the Borrower or (if applicable) any Obligor of the agreements
executed and delivered by it in connection with the Transaction are in each
case within such Person’s powers, have been duly authorized by all necessary
action, and do not

 

(a)         contravene any (i) Obligor’s
Organic Documents, (ii) court decree or order binding on or affecting any
Obligor or (iii) law or governmental regulation binding on or affecting
any Obligor; or

 

(b)        result in (i) or
require the creation or imposition of, any Lien on any Obligor’s properties
(except as permitted by this Agreement) or (ii) a default under any material
contractual restriction binding on or affecting any Obligor.

 

SECTION 6.3.                Government Approval,
Regulation, etc.  No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority (other than those that have been, or on the Closing Date will be,
duly obtained or made and which are, or on the Closing Date will be, in full
force and effect) is required for the consummation of the Transaction or the
due execution, delivery or performance by any Obligor of any Loan Document to
which it is a party.  Neither the
Borrower nor any of its Subsidiaries is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

 

SECTION 6.4.                Validity, etc.  Each Loan Document that constitutes a
contract to which any Obligor is a party, assuming due authorization, execution
and delivery by the other parties thereto, constitutes the legal, valid and binding
obligations of such Obligor, enforceable against such Obligor in accordance
with their respective terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally and by principles of equity).

 

SECTION 6.5.                Financial Information.  The financial statements of Parent and its
respective Subsidiaries furnished to the Administrative Agent and each Lender
pursuant to clause (a) of Section 7.1.1 have been
prepared in accordance with GAAP consistently applied, and present fairly in
all material respects the consolidated financial condition of the Persons
covered thereby as at the dates thereof and the results of their operations for
the periods then ended.  All balance
sheets, all statements of income and of cash flow and all other financial information
of Parent and its Subsidiaries and/or the Borrower and its Subsidiaries, as
applicable, furnished pursuant to Section 7.1.1 have been and will
for periods following the Closing Date be prepared in accordance with GAAP
consistently applied and do or will present fairly in all material respects the
consolidated financial condition of the Persons covered thereby as at the dates
thereof and the results of their operations for the periods then ended.

 

SECTION 6.6.                No Material Adverse Effect;
Solvency.  Since December 31,
2009, there has been no event, change, circumstance or occurrence that,
individually or in the aggregate, has had or would reasonably be expected to
result in a Material Adverse Effect. 
Each of the Borrower and each Subsidiary Guarantor, both before and
after giving effect to each Credit Extension, is Solvent.

 

59

 

SECTION 6.7.                Litigation, Labor Controversies,
etc.  There is no pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened litigation,
action, proceeding or labor controversy

 

(a)         except as disclosed in
Item 6.7 of the Disclosure Schedule, affecting the Borrower, any of its
Subsidiaries or any other Obligor, or any of their respective properties,
businesses, assets or revenues, which could reasonably be expected to have a
Material Adverse Effect, and no materially adverse development has occurred in
any labor controversy, litigation, arbitration or governmental investigation or
proceeding disclosed in Item 6.7 of the Disclosure Schedule; or

 

(b)        which purports to
affect the legality, validity or enforceability of any Loan Document or the
Transaction.

 

SECTION 6.8.                Subsidiaries.  The Borrower has no Subsidiaries, except
those Subsidiaries which are identified in Item 6.8 of the Disclosure
Schedule, or which are permitted to have been organized or acquired in
accordance with Sections 7.2.5 or 7.2.9.

 

SECTION 6.9.                Ownership of Properties.  The Borrower and each of its Subsidiaries
owns (i) in the case of owned real property, good and indefeasible fee
title to, free and clear of all Liens except for (x) Liens permitted
pursuant to Section 7.2.3 and/or (y) where the failure to do
so could not reasonably be expected to have a Material Adverse Effect, and (ii) in
the case of owned personal property, good and valid title to, or, in the case
of leased real or personal property, valid and enforceable leasehold interests
(as the case may be) in, all of its properties and assets, tangible and intangible,
of any nature whatsoever, free and clear in each case of all Liens, except for (x) Liens
permitted pursuant to Section 7.2.3 and/or (y) except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect.  The real property listed
in Item 6.9(a) of the Disclosure Schedule constitutes, as of the
Closing Date, all of the real property owned or leased by the Borrower and each
of its Subsidiaries as of the Closing Date.

 

SECTION 6.10.              Taxes.  The Borrower and each of its Subsidiaries has
(i) filed all material Tax Returns and reports required by law to have
been filed by it and all such Tax Returns and reports are true, correct and
complete in all material respects and (ii) has paid all material Taxes
thereby shown to be due and owing (including in its capacity as a withholding
agent), except any such Taxes which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on the books of the Borrower or the
applicable Subsidiary.

 

SECTION 6.11.              Pension and Welfare Plans.  During the twelve-consecutive-month period
prior to the Closing Date and prior to the date of any Credit Extension hereunder,
no steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f) of ERISA on the assets of the Borrower
or any of its Subsidiaries.  No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could reasonably be expected to result in the 

 

60

 

incurrence by the Borrower or any member of the Controlled Group of any
material liability, fine or penalty that would have a Material Adverse Effect.

 

SECTION 6.12.        Environmental Warranties.  Except as set forth in Item 6.12 of
the Disclosure Schedule:

 

(a)         the Borrower and each
of its Subsidiaries are, and for the past three years have been, in compliance
with all Environmental Laws except such noncompliance that, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect;

 

(b)        there are no pending
or, to the knowledge of the Borrower, threatened (i) claims, complaints,
notices or requests for information received by the Borrower or any of its
Subsidiaries with respect to any alleged violation of any Environmental Law, or
(ii) complaints, notices or inquiries to the Borrower or any of its
Subsidiaries with respect to potential liability under any Environmental Law,
in each case, that could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;

 

(c)         there have been no
Releases of Hazardous Materials at, on, from or under any property now or, to
the knowledge of the Borrower, previously owned, operated or leased by the
Borrower or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;

 

(d)        the Borrower and its
Subsidiaries have been issued and are in compliance with all permits,
certificates, approvals, licenses and other authorizations under Environmental
Laws that are necessary to own or operate their properties and facilities, and
for their businesses as currently conducted, in each case, except that
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect;

 

(e)         other than properties
identified as “no further remedial action planned” or as having similar status,
no property now or, to the knowledge of the Borrower, previously owned,
operated or leased by the Borrower or any of its Subsidiaries is listed or
proposed for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar published,
final state list of sites requiring investigation or clean-up, in each case,
that could individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;

 

(f)         there are no
underground storage tanks, active or abandoned, including petroleum storage
tanks, on or under any property now or, to the knowledge of the Borrower,
previously owned, operated, used or leased by the Borrower or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;

 

(g)        to the knowledge of the
Borrower, neither the Borrower nor any Subsidiary has disposed of, whether
directly or indirectly, any Hazardous Material in a manner 

 

61

 

which
could reasonably be expected to lead to claims against the Borrower or such Subsidiary
for any investigation or cleanup work, damage to natural resources or personal
injury, or any other liability under Environmental Laws, including claims under
CERCLA, that could reasonably be expected to have a Material Adverse Effect;

 

(h)        there are no
polychlorinated biphenyls, hexavalent chromium or asbestos present at any
property now or, to the knowledge of the Borrower, previously owned, operated
or leased by the Borrower or any Subsidiary that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect; and

 

(i)          no conditions exist
at, on or under any property now or, to the knowledge of the Borrower,
previously owned, operated or leased by the Borrower, any of its Subsidiaries
or any predecessor thereof that, with or without the passage of time, or the giving
of notice or both, could reasonably be expected to give rise to liability under
any Environmental Law of the Borrower or any of its Subsidiaries, in each case,
that could reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.13.              Accuracy of Information.  None of the factual information (excluding
projections) heretofore or contemporaneously furnished in writing to any Credit
Party by or on behalf of any Obligor in connection with any Loan Document or
any transaction contemplated hereby (including the Transaction) contains any
untrue statement of a material fact, or omits to state any material fact
necessary to make any information therein, under the circumstances under which
it is made, not misleading, and no factual information (excluding projections)
hereafter furnished in connection with any Loan Document by or on behalf of any
Obligor to any Credit Party will contain any untrue statement of a material
fact or will omit to state any material fact necessary to make any information
not misleading on the date as of which such information is dated or
certified.  All projections that have
been or will be made available to any Credit Party by the Borrower have been or
will be prepared in good faith based upon reasonable assumptions (it being
understood that such projections are subject to significant uncertainties and
contingencies beyond the Borrower’s control).

 

SECTION 6.14.              Regulations T, U and X.  No Obligor is engaged in the business of
extending credit for the purpose of buying or carrying margin stock, and no
proceeds of any Credit Extension will be used to purchase or carry margin stock
or otherwise for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulations T, U or X. 
Terms for which meanings are provided in F.R.S. Board Regulations T, U
or X or any regulations substituted therefor, as from time to time in effect,
are used in this Section with such meanings.

 

SECTION 6.15.              Absence of Any Undisclosed
Liabilities.  There are no material liabilities
of any Obligor of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than those liabilities provided
for or disclosed in the most recently delivered financial statements or those
liabilities that have been disclosed to the Lead Arrangers or are otherwise not
prohibited from being incurred hereunder.

 

62

 

SECTION 6.16.              Mortgages.  Each Mortgage is effective to create, in
favor of the Administrative Agent, for its benefit and the benefit of the
Secured Parties, legal, valid and enforceable first priority Liens on, and
security interests in, all of the respective Obligor’s right, title and
interest in and to the Mortgaged Properties thereunder and the proceeds
thereof, subject only to the Liens set forth in Section 7.2.3 or
other Liens acceptable to the Administrative Agent, and when the Mortgages are
filed in the offices specified on Schedule 6 to the perfection certificate
dated the Closing Date (or, in the case of any Mortgage executed and delivered
after the date thereof in accordance with the provisions of Section 7.1.8,
when such Mortgage is filed in the offices specified in the local counsel
opinion delivered with respect thereto in accordance with the provisions of Section 7.1.8),
the Mortgages shall constitute fully perfected Liens on, and security interests
in, all right, title and interest of the respective Obligor in the Mortgaged
Properties and the proceeds thereof, in each case prior and superior in right
to any other person, other than Liens permitted hereunder.

 

SECTION 6.17.              Amounts of Other Debt.  As of the Closing Date, there are outstanding
(x) $300,000,000 in aggregate principal amount of First Lien Notes, (y) $137,571,000
in aggregate principal amount of Second Lien Notes and (z) $13,572,000 in
aggregate principal amount of Existing Parent Notes.

 

ARTICLE VII

COVENANTS

 

SECTION 7.1.                Affirmative Covenants.  The Borrower agrees with each Credit Party
that on and after the Closing Date until the Termination Date has occurred, the
Borrower will, and will cause its Subsidiaries to, perform or cause to be
performed the obligations set forth below.

 

SECTION 7.1.1.  Financial Information, Reports, Notices, etc.  The Borrower
will furnish the Administrative Agent (which will distribute to each Lender)
copies of the following financial statements, reports, notices and information:

 

(a)         as soon as available
and in any event within the earlier of (x) 45 days after the end of each
of the first three Fiscal Quarters of each Fiscal Year and (y) if Parent
or the Borrower is a public reporting company at such time, such earlier date
as the SEC requires the filing of such information (or if Parent or the
Borrower is required to file such information on a Form 10-Q with the SEC,
promptly following such filing), an unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter and
consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for such Fiscal Quarter and for the period commencing at the end
of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and
including, in comparative form the figures for the corresponding Fiscal Quarter
in, and year to date portion of, the immediately preceding Fiscal Year, in each
case, certified as in accordance with GAAP consistently applied (subject to
normal year-end audit adjustments and the omission of footnotes for the monthly
financial statements) presenting fairly in all material respects the
consolidated financial condition of the Persons covered thereby as at the date 

 

63

 

thereof
and the results of their operations for the periods then ended by the chief
financial or accounting Authorized Officer of the Borrower (collectively, the “Unaudited
Quarterly Financial Statements”); provided that in the event Parent
files quarterly financial statements with the SEC, the Borrower may elect to
deliver consolidated unaudited quarterly financial statements for Parent and
its Subsidiaries in lieu of Unaudited Quarterly Financial Statements for the
Borrower so long as such financial statements are accompanied by a
consolidating schedule thereto for the Borrower and its Subsidiaries delivered
to the Administrative Agent together therewith;

 

(b)        as soon as available
and in any event within the earlier of (x) 90 days after the end of each
Fiscal Year and (y) if Parent or the Borrower is a public reporting company
at such time, such earlier date as the SEC requires the filing of such
information (or if Parent or the Borrower is required to file such information
on a Form 10-K with the SEC, promptly following such filing), a copy of
the consolidated balance sheet of the Borrower and its Subsidiaries, and the
related consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for such Fiscal Year, setting forth in comparative form the
figures for the immediately preceding Fiscal Year, audited (without any
Impermissible Qualification) by nationally recognized independent public
accountants (collectively, the “Audited Financial Statements”); provided
that in the event Parent is required or desires to file audited financial
statements with the SEC, the Borrower may elect to deliver consolidated audited
financial statements for Parent and its Subsidiaries in lieu of Audited
Financial Statements for the Borrower so long as such financial statements are
accompanied by a consolidating schedule for the Borrower and its Subsidiaries
(which shall not be required to be audited) thereto delivered to the
Administrative Agent together therewith;

 

(c)         concurrently with the
delivery of the financial information pursuant to clauses (a) and (b) for
each Fiscal Quarter ending after the Closing Date, a Compliance Certificate,
executed by the chief financial or accounting Authorized Officer of the Borrower,
showing (i) compliance with the financial covenants set forth in Section 7.2.4
for the period of four consecutive Fiscal Quarters then ended (or such shorter
period as has elapsed since the Closing Date), (ii) (A) the amount of
Available Cash during such Fiscal Quarter and Cumulative Available Cash at the
end of such Fiscal Quarter and (B) the aggregate amount of Capital
Expenditures and acquisitions, including any Permitted Acquisitions, financed
with the proceeds of Indebtedness permitted hereunder and identifying the
clause of Section 7.2.2 that such Indebtedness is permitted under,
and whether or not such Indebtedness constitutes Revolving Loans, (iii) reasonably
detailed calculations demonstrating compliance with Sections 7.2.2, 7.2.5,
7.2.6, 7.2.10 and 7.2.16, (iv) the amount of
Restricted Payments, if any, that the Borrower intends to pay to Parent pursuant
to clause (f) of Section 7.2.6 on the immediately
succeeding date on which Parent’s dividend policy provides for the payment of a
dividend (it being understood that the amount actually paid may differ from
such amount reported), and (v) stating that no Default has occurred and is
continuing (or, if a Default has occurred, specifying the details of such
Default and the action that the Borrower or an Obligor has taken or proposes to
take with respect thereto);

 

64

 

(d)        as soon as possible and
in any event within five days after the Borrower or any other Obligor obtains
knowledge of the occurrence of a Default, a statement of an Authorized Officer
of the Borrower setting forth details of such Default and the action which the
Borrower or such Obligor has taken and proposes to take with respect thereto;

 

(e)         as soon as possible
and in any event within five days after the Borrower or any other Obligor
obtains knowledge of (i) the occurrence of any material adverse development
with respect to any litigation, action, proceeding or labor controversy
described in Item 6.7 of the Disclosure Schedule, (ii) the
commencement of any litigation, action, proceeding or labor controversy of the
type and materiality described in Section 6.7, or (iii) any
event that could reasonably be expected to have a Material Adverse Effect, notice
thereof and, to the extent any Lead Arranger reasonably requests, copies of all
documentation relating thereto;

 

(f)         promptly after the
sending or filing thereof, copies of all reports, notices, prospectuses and
registration statements which any Obligor files with the SEC or any national
securities exchange;

 

(g)        promptly upon becoming
aware of (i) the institution of any steps by any Person to terminate any
Pension Plan, (ii) the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien under Section 302(f) of
ERISA on the assets of the Borrower or any of its Subsidiaries, (iii) the
taking of any action with respect to a Pension Plan which could reasonably be
expected to result in the requirement that any Obligor furnish a bond or other
security to the PBGC or such Pension Plan, or (iv) the occurrence of any
event with respect to any Pension Plan which could reasonably be expected to
result in the incurrence by any Obligor of any material liability, fine or
penalty, notice thereof and copies of all documentation relating thereto;

 

(h)        promptly upon receipt
thereof, copies of all “management letters” submitted to the Borrower or any
other Obligor by the independent public accountants referred to in clause (b) in
connection with each audit made by such accountants;

 

(i)          as soon as possible
and in any event within five days after receipt thereof by any Obligor or any
Subsidiary thereof, copies of all default notices and fully executed
amendments, waivers and other modifications received under or pursuant to any
documentation governing any of the New Notes or any Pari Passu Lien
Indebtedness (or any Refinancing Indebtedness in respect of the New Notes and
Pari Passu Lien Indebtedness); and

 

(j)          such other financial
and other information as any Lender through the Administrative Agent may from
time to time reasonably request (including information and reports in such
detail as the Administrative Agent may reasonably request with respect to the
terms of and information provided pursuant to the Compliance Certificate).

 

65

 

SECTION 7.1.2.  Maintenance of Existence; Compliance with
Laws, etc.  The Borrower will, and
will cause each of its Subsidiaries to, preserve and maintain its legal
existence (except as otherwise permitted by Section 7.2.9), and
comply in all material respects with (i) the terms of (and shall perform
or cause the applicable Subsidiary to perform) its obligations under all
material agreements to which it is a party, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect and (ii) all
applicable laws, rules, regulations and orders, including the payment (before
the same become delinquent), of all Taxes, imposed upon the Borrower or each of
Subsidiaries or upon their property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside on the books of the
Borrower or such Subsidiary, as applicable, except where the failure to do so
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

SECTION 7.1.3.  Maintenance of Properties.  The Borrower will, and will cause each of its
Subsidiaries to, pay and perform its obligations under all material leases,
maintain, preserve, protect and keep its and their respective Mortgaged
Properties in good repair, working order and condition (ordinary wear and tear
excepted), and make necessary repairs, renewals and replacements so that the
business carried on by the Borrower and its Subsidiaries may be conducted at
all times, unless the failure to do so would not give rise to material
liabilities under Environmental Laws or the reasonable likelihood of harm to
the public, or the Borrower or such Subsidiary determines in good faith that
the continued maintenance and/or preservation of such property is no longer
economically desirable, necessary or useful to the business of the Borrower or
any of its Subsidiaries or the Disposition of such property is otherwise
permitted by Section 7.2.9 or 7.2.10, or would not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 7.1.4.  Insurance.  The Borrower will, and will cause each of its
Subsidiaries to maintain:

 

(a)         insurance on its
Mortgaged Properties with financially sound and reputable insurance companies
against loss and damage in at least the amounts (and with only those
deductibles) customarily maintained, and against such risks (including fire and
other risks insured against by extended coverage) as are typically insured
against in the same general area of such property, by Persons of comparable
size engaged in the same or similar business as the respective Obligor owning
such property;

 

(b)        liability insurance in
customary amounts for similar companies;

 

(c)         all worker’s
compensation, employer’s liability insurance or similar insurance as may be
required under the laws of any state or jurisdiction in which it may be engaged
in business; and

 

(d)        if any improved portion
of any Mortgaged Property is at any time located in an area identified by the
Federal Emergency Management Agency (or any successor agency) as a Special
Flood Hazard Area  with respect to which
flood insurance has been made available under the National Flood Insurance Act
of 1968 (as now or hereafter in 

 

66

 

effect
or successor act thereto), flood insurance with a financially sound and
reputable insurer in an amount and otherwise sufficient to comply with all
applicable rules and regulations promulgated pursuant to the Flood
Insurance Laws and deliver to the Administrative Agent evidence of such
compliance in form and substance reasonably acceptable to the Administrative
Agent.

 

Without limiting the
foregoing, all insurance policies covering collateral required pursuant to this
Section shall name the Administrative Agent on behalf of the Secured
Parties as mortgagee or lender loss payee, as the case may be (in the case of
property insurance), or additional insured and loss payee (in the case of
liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without at least thirty days’ prior
written notice (or such shorter period as the Administrative Agent may approve)
to the Administrative Agent.

 

SECTION 7.1.5.  Books and Records.  The Borrower will, and will cause each of its
Subsidiaries to, keep books and records in accordance with GAAP which
accurately reflect in all material respects all of its business affairs and
transactions and permit each Credit Party or any of their respective
representatives, at reasonable times and intervals upon reasonable notice to
the Borrower, to visit each Obligor’s offices, to discuss such Obligor’s
financial matters with its officers and members of management, and its
independent public accountants (and the Borrower hereby authorizes such
independent public accountant to discuss each Obligor’s financial matters with
each Credit Party or their representatives) and to examine (and photocopy
extracts from) any of the Borrower’s books and records.  The Borrower shall pay any fees of such independent
public accountant incurred in connection with any Credit Party’s exercise of
its rights pursuant to this Section.

 

SECTION 7.1.6.  Environmental Law Covenant.  The Borrower will, and will cause each of its
Subsidiaries to,

 

(a)         use and operate all of
its and their facilities and properties in compliance with all Environmental
Laws, maintain all permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
compliance therewith, handle all Hazardous Materials in compliance with all
applicable Environmental Laws, take timely action to resolve any non-compliance
with or potential liability under Environmental Laws and keep its owned
property free of any Lien imposed by any Environmental Law (unless such
non-compliance, liability or Lien is being contested in good faith and
consistent with GAAP or could not reasonably be expected to result in a
Material Adverse Effect); and

 

(b)        promptly notify the
Administrative Agent of any potential non-compliance with or liability under
any Environmental Law involving a potential loss to the Borrower or any of its
Subsidiaries of greater than $1,000,000, individually or $2,500,000 in the
aggregate and promptly provide to the Administrative Agent upon its request any
written claim, complaint, report, notice, inquiry or other document relating
thereto.

 

67

 

SECTION 7.1.7.  Use of
Proceeds.  The Borrower will apply
the proceeds of the Credit Extensions as follows:

 

(a)     in the case of the Revolving Loans,
for working capital and general corporate purposes of the Borrower and the
Subsidiary Guarantors; and

 

(b)     in the case of the Swing Line Loans,
for working capital and general corporate purposes of the Borrower and the
Subsidiary Guarantors.

 

SECTION 7.1.8.  Future Guarantors, Security, etc.  The Borrower will, and will cause each U.S.
Subsidiary to, execute any documents, Filing Statements, agreements and instruments,
and take all further action (including within 90 days of the acquisition
thereof, filing Mortgages with respect to any owned real property having a cost
or book value (whichever is higher) of at least $1,500,000) that may be
required under applicable law, or that the Administrative Agent may reasonably
request, in order to effectuate the transactions contemplated by the Loan Documents
and in order to grant, preserve, protect and perfect the validity and first
priority (subject to (including as to priority) Liens permitted by Section 7.2.3)
of the Liens created or intended to be created by the Loan Documents.  The Borrower will cause any subsequently
acquired or organized U.S. Subsidiary to execute the Guaranty (or supplement
thereto) and the Security Agreement (or supplement thereto) and each other
applicable Loan Document pursuant to which such U.S. Subsidiary grants to the
Administrative Agent in favor of the Secured Parties a security interest in, or
Mortgage on, substantially all of its owned assets.  Such Liens will be created under the Loan Documents
in form and substance reasonably satisfactory to the Administrative Agent in
consultation with the Borrower, and the Borrower shall deliver or cause to be
delivered to the Administrative Agent all such instruments and documents (including
legal opinions, Mortgages, Title Policies, Surveys, life of loan flood hazard
determinations and lien searches) as the Administrative Agent shall reasonably
request to evidence compliance with this Section.  Notwithstanding anything to the contrary in
this Section, so long as no Event of Default has occurred and is continuing,
the Borrower shall not be required to deliver a Foreign Pledge Agreement with respect
to a Foreign Subsidiary unless such Foreign Subsidiary is a Significant
Subsidiary.

 

SECTION 7.1.9.  Mortgaged Property Requirements.  The Administrative Agent shall have received
the following within ninety (90) days after the Closing Date,
unless extended by the Administrative Agent in its sole discretion:

 

(i)     with
respect to each Mortgaged Property, such consents, approvals or tenant
subordination agreements as shall reasonably be deemed necessary by the Administrative
Agent in order for the owner of such Mortgaged Property to grant the Lien contemplated
by the Mortgage with respect to such Mortgaged Property;

 

(ii)     with
respect to each Mortgage, a policy of title insurance (or marked up title
insurance commitment having the effect of a policy of title insurance) insuring
the Lien of such Mortgage as a valid first mortgage Lien on the respective
Mortgaged Property and fixtures described therein in the amount equal to 115%
of the book value or cost (whichever is higher) of such Mortgaged Property (it
being understood that such policy 

 

68

 

or policies may include a so-called “pro
tanto” endorsement effectively causing such policy or policies to be issued
concurrently with the policy or policies issued to the collateral agent for the
First Lien Notes and/or the collateral agent for the Second Lien Notes insuring
its/their respective Lien on the Mortgaged Property), which policy (or such
marked-up commitment) (each, a “Title Policy”) shall (A) be issued
by the Title Company, (B) to the extent necessary, include such
reinsurance arrangements (with provisions for direct access, if necessary) as
shall be reasonably acceptable to the Administrative Agent, (C) contain a “tie-in”
or “cluster” endorsement, if available under applicable law (i.e., policies
which insure against losses regardless of location or allocated value of the
insured property up to a stated maximum coverage amount), (D) have been
supplemented by endorsements (to the extent applicable and available under
local/state law at commercially reasonable rates) on matters relating to usury,
first loss, last dollar, zoning (or in lieu thereof, reports from zoning report
companies or zoning letters as may be reasonably acceptable to the Administrative
Agent), contiguity, revolving credit, doing business, waiver of arbitration
non-imputation, public road access, survey, variable rate, environmental lien,
subdivision, mortgage recording tax, separate tax lot, revolving credit, and
so-called comprehensive coverage over covenants and restrictions, and (E) contain
no exceptions to title other than Liens permitted pursuant to Section 7.2.3
and exceptions reasonably acceptable to the Administrative Agent;

 

(iii)     with
respect to each Mortgaged Property, such affidavits, certificates, information
(including financial data) and instruments of indemnification (including a
so-called “gap” indemnification) as shall be required to induce the Title
Company to issue the Title Policy/ies and endorsements contemplated above;

 

(iv)     evidence
reasonably acceptable to the Administrative Agent of payment by Borrower of all
Title Policy premiums, search and examination charges, escrow charges and
related charges, mortgage recording taxes, fees, charges, costs and expenses
required for the recording of the Mortgages and issuance of the Title Policies
referred to above;

 

(v)     with
respect to each Mortgaged Property, copies of all leases in which Borrower or
any Subsidiary holds the lessor’s interest or other agreements relating to
possessory interests, if any.  To the
extent any of the foregoing affect any Mortgaged Property, such agreement shall
be subordinate to the Lien of the Mortgage to be recorded against such
Mortgaged Property, either expressly by its terms or, if such agreement shall
not be so subordinate, then Borrower or such Subsidiary shall use commercially
reasonable efforts to obtain a subordination, non-disturbance and attornment
agreement from such tenant, which agreement shall be reasonably acceptable to
the Administrative Agent;

 

(vi)     with
respect to each Mortgaged Property, each Obligor shall have made all
notifications, registrations and filings, to the extent required by, and in
accordance with, all Governmental Real Property Disclosure Requirements
applicable to such Mortgaged Property;

 

69

 

(vii)     Surveys
with respect to each Mortgaged Property; and

 

(viii)     an
amendment to the Mortgage (or to the extent requested by the Administrative Agent,
a new Mortgage) duly authorized, executed and acknowledged, in recordable form
and otherwise in form and substance reasonably acceptable to the Administrative
Agent with respect to each Mortgaged Property sufficient for the owner of such
Mortgaged Property to (x) grant to the Administrative Agent and/or confirm
the Administrative Agent’s Mortgage Lien on and security interests in such
Mortgaged Property, (y) confirm such owner’s valid and indefeasible title
thereto and (z) to confirm the Mortgaged Property intended to be
encumbered thereby.

 

SECTION 7.2.                                                    Negative
Covenants.  The
Borrower covenants and agrees with each Lender and the Administrative Agent
that on and after the Closing Date until the Termination Date has occurred, the
Borrower will, and will cause its Subsidiaries to, perform or cause to be
performed the obligations set forth below.

 

SECTION 7.2.1.  Business
Activities.  The Borrower will not,
and will not permit any of its Subsidiaries to, engage in any business activity
except those business activities engaged in on the Closing Date and business
activities that are reasonably related, ancillary or complementary thereto or a
reasonable extension, development or expansion thereof.

 

SECTION 7.2.2.  Indebtedness.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, other than:

 

(a)                          Indebtedness in
respect of the Obligations;

 

(b)                         Indebtedness of
Borrower and the Guarantors under the First Lien Notes, Pari Passu Lien Indebtedness,
the Second Lien Notes and Refinancing Indebtedness in respect of such First
Lien Notes, Second Lien Notes and Pari Passu Lien Indebtedness, in an aggregate
principal amount for all such Indebtedness incurred or outstanding under this clause
(b) not to exceed at any time (x) $451,300,000 minus (y) the
aggregate principal amount of Existing Parent Notes (or any refinancing
Indebtedness issued in exchange therefor that is not Indebtedness of Borrower
or any Subsidiary) at such time;

 

(c)                          Indebtedness
existing as of the Closing Date (other than pursuant to clause (b) of
this Section 7.2.2) which is identified in Item 7.2.2(c) of
the Disclosure Schedule, and Refinancing Indebtedness in respect thereof;

 

(d)                         unsecured
Indebtedness (i) incurred in the ordinary course of business of the
Borrower and its Subsidiaries (including open accounts extended by suppliers on
normal trade terms in connection with purchases of goods and services which are
not overdue for a period of more than 90 days or, if overdue for more than 90
days, as to which a dispute exists and adequate reserves in conformity with
GAAP have been established on the books of the Borrower or such Subsidiary) and
(ii) in respect of performance, surety or appeal bonds provided in the
ordinary course of business, but excluding 

 

70

 

(in
each case) Indebtedness incurred through the borrowing of money or Contingent Liabilities
in respect thereof;

 

(e)                          Indebtedness (i) in
respect of industrial revenue bonds or other similar governmental or municipal
bonds, (ii) evidencing the deferred purchase price of newly acquired
property or incurred to finance the acquisition of equipment of the Borrower or
its Subsidiaries (pursuant to purchase money mortgages or otherwise, whether
owed to the seller or a third party) used in the ordinary course of business of
the Borrower or its Subsidiaries and any Indebtedness assumed in connection
with such acquisition (provided that such Indebtedness is incurred
within 90 days of the acquisition of such property or equipment), (iii) in
respect of Capitalized Lease Liabilities and (iv) refinancing of Indebtedness
referred to in clauses (i) through (iii); provided
that the aggregate amount of all Indebtedness outstanding pursuant to this clause
(e) shall not at any time exceed $10,000,000;

 

(f)                            Indebtedness of
any Subsidiary owing to the Borrower or any other Subsidiary and Indebtedness
of the Borrower owing to any Subsidiary, which Indebtedness

 

(i)                  shall, if
payable to the Borrower or a Subsidiary Guarantor, and if evidenced by one or
more promissory notes, such promissory notes shall be, duly executed and
delivered in pledge to the Administrative Agent pursuant to a Loan Document and
if payable by the Borrower or any Subsidiary Guarantor, be subordinated to the
Obligations on terms and conditions reasonably acceptable to the Administrative
Agent; and

 

(ii)               if incurred by
a Subsidiary that is not a Subsidiary Guarantor owing to the Borrower or a
Subsidiary Guarantor, shall not (when aggregated with the amount of Investments
made by the Borrower and the Subsidiary Guarantors in Subsidiaries that are not
Subsidiary Guarantors under clause (e)(i) of Section 7.2.5)
exceed $5,000,000 in the aggregate;

 

(g)                         Indebtedness of
the Borrower and its Subsidiaries arising from letters of credit issued for the
account of the Borrower or such Subsidiary by a Lender in an aggregate stated
amount at any time outstanding (as determined by aggregating the stated amount
of all such letters of credit and all reimbursement obligations with respect
thereto) not to exceed $15,000,000;

 

(h)                         Indebtedness of
a Person existing at the time such Person became a Subsidiary of the Borrower
in connection with a Permitted Acquisition, but only if such Indebtedness was
not created or incurred in contemplation of such Person becoming a Subsidiary,
and Refinancing Indebtedness in respect thereof;

 

(i)                             Hedging
Obligations entered into in the ordinary course of business and not for
speculative purposes;

 

71

 

(j)                             Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided that such Indebtedness is extinguished
within five Business Days of its incurrence;

 

(k)                          (A) obligations
in respect of performance bonds, bankers’ acceptances, workers’ compensation
claims, surety, bid or appeal bonds, completion guarantees and payment
obligations in connection with self-insurance or similar obligations provided
by the Borrower or any Subsidiary in the ordinary course of business and (B) obligations
owed to (including in respect of letters of credit for the benefit of) any
Person in connection with workers’ compensation, health, disability or other
employee benefits or property, casualty or liability insurance provided by such
Person to the Borrower or any Subsidiary pursuant to reimbursement or
indemnification obligations to such Person, in each case, incurred in the
ordinary course of business;

 

(l)                             Indebtedness
arising from agreements of the Borrower or any Subsidiary of the Borrower
providing for indemnification, adjustment of purchase price or similar obligations,
in each case, incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or a Subsidiary
for the purpose of financing such acquisition; and

 

(m)                       other Indebtedness
of the Borrower and its Subsidiaries (other than Indebtedness of Subsidiaries
that are not Subsidiary Guarantors owing to the Borrower or Subsidiary
Guarantors) in an aggregate amount at any time outstanding not to exceed
$25,000,000;

 

provided that (A) no
Indebtedness otherwise permitted by clauses (e) or (f)(ii) shall
be assumed, created or otherwise incurred if a Default has occurred and is then
continuing or would result therefrom and (B) in the event that an item of
Indebtedness (or any portion thereof) meets the criteria of more than one of
the types of Indebtedness described above, the Borrower, in its sole
discretion, will classify such item of Indebtedness (or any portion thereof) at
the time of incurrence and will only be required to include the amount and type
of such Indebtedness in one of the above clauses.

 

SECTION 7.2.3.  Liens. 
The Borrower will not, and will not permit any of its Subsidiaries to,
create, incur, assume or permit to exist any Lien upon any of its property
(including Capital Securities of any Person), revenues or assets, whether now
owned or hereafter acquired, except:

 

(a)                          Liens securing
payment of the Obligations;

 

(b)                         Liens on
Collateral securing First Lien Notes, Second Lien Notes, Pari Passu Lien
Indebtedness or Refinancing Indebtedness in respect thereof incurred pursuant
to clause (b) or clause (m) of Section 7.2.2,
so long as, in each case, such Liens (x) in the 

 

72

 

case
of First Lien Notes and Pari Passu Lien Indebtedness and Refinancing
Indebtedness in respect thereof (except to the extent such Refinancing
Indebtedness consists of Second Lien Notes, in which case the immediately
following clause (y) will apply), are subject to the First Lien
Intercreditor Agreement and (y) in the case of Second Lien Notes or any
Refinancing Indebtedness in respect thereof (except to the extent such
Refinancing Indebtedness consists of First Lien Notes or Pari Passu Lien
Indebtedness, in which case the immediately following clause (x) will
apply), are subject to the Junior Lien Intercreditor Agreement;

 

(c)                          Liens existing
as of the Closing Date and disclosed in Item 7.2.3(c) of the
Disclosure Schedule securing Indebtedness described in clause (c) of
Section 7.2.2, and Refinancing Indebtedness in respect of
Indebtedness outstanding pursuant to such clause (c); provided
that no such Lien shall encumber any additional property;

 

(d)                         Liens securing
Indebtedness incurred pursuant to clause (e) of Section 7.2.2;
provided that (i) such Lien is granted within 90 days after such
Indebtedness is incurred, (ii) the Indebtedness secured thereby does not
exceed the cost or the fair market value of the applicable property,
improvements or equipment at the time of such acquisition (or construction) and
(iii) such Lien attaches only to the assets that are the subject of the
Indebtedness referred to in such clause and proceeds thereof and additions and
accessions thereto;

 

(e)                          Liens on cash
collateral in an amount not to exceed $15,000,000 securing standby letters of
credit issued by a Lender pursuant to clause (g) of Section 7.2.2;

 

(f)                            Liens securing
Indebtedness incurred pursuant to clause (h) of Section 7.2.2;
provided that such Liens existed prior to such Person becoming a
Subsidiary, were not created in anticipation thereof and attach only to the
assets of such Person acquired (to the extent such assets were owned by such
Person immediately prior to the related acquisition);

 

(g)                         Liens on cash
collateral in an amount not to exceed $5,000,000 securing Hedging Obligations
incurred in compliance with clause (i) of Section 7.2.2;

 

(h)                         Liens in favor
of carriers, warehousemen, mechanics, suppliers, repairmen, materialmen and
landlords and other Liens imposed by law or granted in the ordinary course of
business for amounts not overdue or being diligently contested in good faith by
appropriate proceedings;

 

(i)                             Liens incurred
or deposits made in the ordinary course of business in connection with worker’s
compensation, unemployment insurance or other forms of governmental insurance
or benefits, or to secure performance of tenders, statutory obligations, bids,
leases or other similar obligations (other than for borrowed money) entered
into in the ordinary course of business or to secure obligations on surety and
appeal bonds or performance bonds;

 

73

 

(j)                             judgment Liens
in existence for less than 45 days after the entry thereof or with respect to
which execution has been stayed or the payment of which is covered in full
(subject to a customary deductible) by insurance maintained with reputable
insurance companies and which do not otherwise result in an Event of Default
under Section 8.1.6;

 

(k)                          easements,
rights-of-way, zoning restrictions, restrictive covenants, minor defects or
irregularities in title and other similar encumbrances not interfering in any material
respect with the value or use of the property to which such Lien is attached;

 

(l)                                     Liens for Taxes
not at the time delinquent or thereafter payable without penalty or being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;

 

(m)                               Liens resulting
from operation of law with respect to any judgments, awards or orders to the
extent that such judgments, awards or orders do not cause or constitute a
Default under this Agreement; provided that if any such Liens are on
Collateral, such Liens are being diligently contested in good faith by
appropriate proceedings;

 

(n)                                 Liens in the
form of licenses, leases or subleases granted or created by the Borrower or any
Subsidiary, which licenses, leases or subleases do not interfere, individually
or in the aggregate, in any material respect with the business of the Borrower
or such Subsidiary or individually or in the aggregate materially impair the
use (for its intended purpose) or the value of the property subject thereto;

 

(o)                                 Liens on
fixtures or personal property held by or granted to landlords pursuant to
leases to the extent that such Liens are not yet due and payable; and

 

(p)                                 other Liens
securing obligations in an aggregate amount not to exceed at any time
outstanding (x) $5,000,000 minus (y) the amount of Indebtedness
incurred under clause (m) of Section 7.2.2 that is
secured by Liens granted pursuant to clause (b) of this Section 7.2.3
at such time.

 

SECTION 7.2.4.  Financial
Condition and Operations.  The
Borrower will not permit any of the events set forth below to occur:

 

(a)                          The Borrower
will not permit the Leverage Ratio as of the last day of any Fiscal Quarter
ending in any period indicated in the table below to exceed the ratio set forth
opposite such period in the table below:

 

	
  Period

  	
   

  	
  Leverage
  Ratio

  
	
  Closing Date - December 31, 2010

  	
   

  	
  7.75 to 1.00

  
	
  March 31,
  2011 - September 30, 2011

  	
   

  	
  7.25 to 1.00

  
	
  December 31,
  2011 - September 30, 2012

  	
   

  	
  5.75 to 1.00

  
	
  December 31,
  2012 - September 30, 2013

  	
   

  	
  5.00 to 1.00

  

 

74

 

(b)                         The Borrower
will not permit the Fixed Charge Coverage Ratio as of the last day of any
Fiscal Quarter in any period indicated in the table below to be less than the
ratio set forth opposite such period in the table below:

 

	
  Test Period

  	
   

  	
  Fixed
  Charge

  Coverage Ratio

  
	
  Closing Date - September 30, 2011

  	
   

  	
  1.00 to 1.00

  
	
  December 31,
  2011 and thereafter

  	
   

  	
  1.20 to 1.00

  

 

SECTION 7.2.5.  Investments.  The Borrower will not, and will not permit
any of its Subsidiaries to, purchase, make, incur, assume or permit to exist
any Investment in any other Person, except:

 

(a)                          Investments
existing on the Closing Date and identified in Item 7.2.5(a) of the
Disclosure Schedule;

 

(b)                         Cash Equivalent
Investments;

 

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

 

(d)                         Investments by
the Borrower and any Subsidiary of the Borrower constituting Capital
Expenditures on behalf of the Borrower or such Subsidiary to the extent permitted
pursuant to Section 7.2.16;

 

(e)                          Investments by
way of contributions to capital or purchases of Capital Securities (i) by
the Borrower in any Subsidiaries or by any Subsidiary in other Subsidiaries; provided
that the aggregate amount of intercompany loans made pursuant to clause (f)(ii) of
Section 7.2.2 and Investments under this clause made by the
Borrower and Subsidiary Guarantors in Subsidiaries that are not Subsidiary
Guarantors shall not exceed the amount set forth in clause (f)(ii) of
Section 7.2.2 at any time, or (ii) by any Subsidiary in the Borrower;

 

(f)                            Investments
constituting (i) accounts receivable arising, (ii) trade debt
granted, or (iii) deposits made in connection with the purchase price of
goods or services, in each case in the ordinary course of business;

 

(g)                         Investments by
way of the acquisition of Capital Securities permitted pursuant to clause (b) of
Section 7.2.9;

 

75

 

(h)                         Investments
consisting of any deferred portion of the sales price received by the Borrower
or any Subsidiary in connection with any Disposition permitted under Section 7.2.10;

 

(i)                             Investments
resulting from loans to employees in the ordinary course of business in an aggregate
amount not to exceed $1,000,000 at any one time outstanding;

 

(j)                             Investments
from receipt of non-cash consideration from a Disposition made in compliance
with Section 7.2.10;

 

(k)                          Investments in
Hedging Obligations incurred in compliance with Section 7.2.2;

 

(l)                             Contingent
Liabilities to the extent permitted by Section 7.2.2; and

 

(m)                       other
Investments in an aggregate amount not to exceed the then current amount of Cumulative
Available Cash, but in no event may (A) one Investment or series of
related Investments made pursuant to this clause (m) exceed
$5,000,000 (except that the limitation imposed by this clause (A) shall
not apply to the Investment identified on Item 7.2.5(m) of the Disclosure
Schedule, so long as the amount of such Investment does not increase beyond the
amount set forth in such Item) or (B) the aggregate amount of all
Investments made pursuant to this clause (m) exceed $25,000,000;

 

provided that all
clauses of this Section 7.2.5 shall be subject to the following:

 

(x)                                   any Investment
which when made complies with the requirements of the definition of the term “Cash
Equivalent Investment” may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements; and

 

(y)                                 no Investment
otherwise permitted by clauses (e)(i) (to the extent such Investment
constitutes an Investment by an Obligor in a Foreign Subsidiary), (g) or
(m) shall be permitted to be made if any Default has occurred and
is then continuing or would result therefrom.

 

SECTION 7.2.6.  Restricted Payments, etc.  The Borrower will not, and will not permit any
of its Subsidiaries to, declare or make a Restricted Payment, or make any
deposit for any Restricted Payment, other than:

 

(a)                          Restricted
Payments made by Subsidiaries to the Borrower or wholly-owned Subsidiaries;

 

(b)                         Restricted
Payments made by the Borrower to Parent (i) pursuant to the Tax Sharing
Agreement; provided that the amount of such Restricted Payment shall not
exceed the amount of income taxes that the Borrower would have been liable for
on a stand alone basis or a consolidated income tax return with its
Subsidiaries (reduced by any 

 

76

 

Taxes
directly paid by the Borrower or any of its Subsidiaries) and (ii) to pay
franchise taxes and other overhead expenses of Parent in an amount, and all
such Restricted Payments made pursuant to this clause (b)(ii) of
this Section 7.2.6 shall not exceed the then current amount of
Cumulative Available Cash; provided that in no event shall any expenditures
pursuant to this clause (b)(ii) exceed an aggregate of $1,000,000
in any Fiscal Year;

 

(c)                          repurchases of
Capital Securities from former employees, directors and officers of Parent and
its Subsidiaries in an amount not to exceed the then current amount of
Cumulative Available Cash; provided that in no event may the amount
expended on such repurchases exceed $1,000,000 in any Fiscal Year in the
aggregate; provided  further that, to the extent the amount of
repurchases permitted to be made in any Fiscal Year pursuant to the previous
proviso exceeds the aggregate amount of repurchases actually made by the
Borrower and its Subsidiaries during such Fiscal Year, the excess amount may be
carried forward to (but only to) the next succeeding Fiscal Year, and any such
amount carried forward to a succeeding Fiscal Year shall be deemed to be used
following the Borrower and its Subsidiaries using the amount of repurchases
permitted by such proviso in such succeeding Fiscal Year, without giving effect
to such carry-forward;

 

(d)                         non-cash
repurchases of Capital Securities deemed to occur upon exercise of stock
options to the extent such Capital Securities represents a portion of the
exercise price of such options;

 

(e)                          Restricted
Payments made by the Borrower to Parent in connection with the consummation of
the Transactions consisting of (i) interest payments due on the Closing
Date in respect of Existing Parent Notes exchanged in the Exchange Offer and (ii) the
cancellation by Borrower, or the distribution by Borrower to Parent for cancellation,
of Existing Parent Notes received by Borrower in the Exchange Offer;

 

(f)                            Restricted
Payments made by the Borrower to Parent after the Closing Date on or no earlier
than three Business Days prior to any interest payment date with respect to the
Existing Parent Notes in an amount not to exceed the lesser of (x) the
interest due on the then outstanding Existing Parent Notes on such interest
payment date and (y) the then current amount of the Cumulative Available
Cash, so long as Parent uses such Restricted Payments to pay such interest on
such interest payment date; provided that (A) the interest expense
on (and principal amount of) the Existing Parent Notes have not increased since
the Closing Date and (B) and the interest payment dates relating thereto
have not changed since the Closing Date;

 

(g)                         so long as no
Default has occurred and is continuing or would result therefrom, Restricted
Payments made by Borrower to Parent after the Closing Date, so long as such
Restricted Payments are used to simultaneously fund redemptions, repayments, prepayments,
repurchases or acquisitions for value of Existing Parent Notes; provided
that the aggregate amount of all Restricted Payments made pursuant to this clause
(g) may not 

 

77

 

exceed
the lesser of $10,000,000 and the then current amount of the Cumulative Available
Cash; and

 

(h)                         so long as no
Default has occurred and is continuing or would result therefrom, Restricted
Payments to the extent necessary to effect a refinancing of Existing Parent
Notes with Indebtedness incurred pursuant to clause (b) or clause
(m) of Section 7.2.2; provided that the maturity
and Average Life of such Indebtedness may not be earlier or shorter than that
of the First Lien Notes issued on the Closing Date and the terms thereof must
be, taken as a whole, no less favorable to the Borrower and its Subsidiaries
than those of the First Lien Notes issued on the Closing Date.

 

SECTION 7.2.7.   [Reserved]

 

SECTION 7.2.8.  Issuance of
Capital Securities.  The Borrower
will not, and will not permit any of its Subsidiaries to, issue any Capital
Securities (whether for value or otherwise) to any Person other than (a) in
the case of Subsidiaries, to the Borrower or another wholly owned Subsidiary or
(b) in the case of the Borrower, to Parent, so long as, in each case, such
Capital Securities are pledged and delivered to the Administrative Agent
pursuant to a Loan Document (to the extent required by Section 7.1.8).

 

SECTION 7.2.9.  Consolidation, Merger, Permitted Acquisitions, etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other Person, or purchase or otherwise acquire
all or substantially all of the assets of any Person (or any division thereof),
except

 

(a)                          any Subsidiary
may liquidate or dissolve voluntarily into, and may merge with and into, the Borrower
or any other Subsidiary (provided that a Guarantor may only liquidate or
dissolve into, or merge with and into, the Borrower or another Guarantor), and
the assets or Capital Securities of any Subsidiary may be purchased or
otherwise acquired by the Borrower or any other Subsidiary (provided
that the assets or Capital Securities of any Guarantor may only be purchased or
otherwise acquired by the Borrower or another Guarantor); provided that
in no event shall any Pledged Subsidiary consolidate with or merge with and
into any Subsidiary other than another Pledged Subsidiary unless after giving
effect thereto, the Administrative Agent shall have a perfected pledge of, and
security interest in and to, at least the same percentage of the issued and
outstanding interests of Capital Securities (on a fully diluted basis) of the
surviving Person as the Administrative Agent had immediately prior to such
merger or consolidation in form and substance satisfactory to the
Administrative Agent and its counsel, pursuant to such documentation and
opinions as shall be reasonably necessary in the opinion of the Administrative
Agent to create, perfect or maintain the collateral position of the Secured
Parties therein; and

 

(b)                         so long as no
Default has occurred and is continuing or would occur after giving effect
thereto, the Borrower or any of its Subsidiaries may consummate one or more
Permitted Acquisitions at any time; provided that (i) the aggregate
purchase price

 

78

 

 

(including
in such purchase price the assumption of Indebtedness and excluding consideration
to the extent consisting of Capital Securities (other than Disqualified Capital
Securities) of Parent) and all fees and expenses payable by Borrower or any of
its Subsidiaries in connection therewith for all such Permitted Acquisitions at
or prior to such time does not exceed an amount equal to the then current
amount of the Cumulative Available Cash; provided  further that in
no event may (x) such purchase price for any one Permitted Acquisition or
series of related Permitted Acquisitions exceed $25,000,000 or (y) such
aggregate purchase price for all Permitted Acquisitions since the Closing Date
exceed $125,000,000 in the aggregate and (ii) in the case of a Permitted
Acquisition of Capital Securities, such Permitted Acquisition shall result in
the acquisition of a wholly owned U.S. Subsidiary (by merger, stock purchase or
purchase of assets).

 

SECTION 7.2.10.  Permitted
Dispositions.  The Borrower will not,
and will not permit any of its Subsidiaries to, Dispose of any of the Borrower’s
or such Subsidiaries’ assets (including accounts receivable and Capital
Securities of Subsidiaries) to any Person in one transaction or series of
transactions unless such Disposition is:

 

(a)                          inventory or
obsolete, damaged, worn out, surplus or outdated property Disposed of in the
ordinary course of its business;

 

(b)                         pursuant to Section 7.2.9;

 

(c)                          (i) for
Fair Market Value and the consideration received consists of no less than 75% cash
and (ii) the Net Disposition Proceeds from such Disposition are applied
pursuant to Sections 3.1.1 and 3.1.2; provided that in no
event may (A) any one Disposition or series of related Dispositions made
pursuant to this clause (c) Dispose of assets with a Fair Market
Value in excess of $10,000,000 or (B) the aggregate Fair Market Value of
all assets Disposed of pursuant to this clause (c) exceed
$30,000,000 in the aggregate;

 

(d)                         from one
Obligor (other than Parent) to another Obligor (other than Parent); provided
that any property subject to such Disposition shall be transferred subject to
the Liens of the Collateral Documents;

 

(e)                          [Reserved]

 

(f)                            a Disposition
of Cash Equivalent Investments;

 

(g)                         a Disposition
to the extent such Disposition is necessary to effect a transaction undertaken
pursuant to Section 7.2.2, 7.2.3, 7.2.5 or 7.2.6;

 

(h)                         the grant in
the ordinary course of business of any non-exclusive license of patents,
trademarks, registrations thereof and other similar intellectual property;

 

(i)                             any release of
intangible claims or rights in connection with the loss or settlement of a bona
fide lawsuit, dispute or other controversy;

 

79

 

(j)                             an Asset Swap;

 

(k)                          leases and
subleases of assets or properties in the ordinary course of business not
interfering in any material respect with the business of the Borrower or any of
its Subsidiaries; and

 

(l)                             a sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof.

 

SECTION 7.2.11.  Modification
of Certain Agreements.  The Borrower
will not, and will not permit any of its Subsidiaries to, consent to any
amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in, the Organic Documents of the Borrower or any of its Subsidiaries
if the result thereof would have an adverse effect on the Lenders (it being
agreed that any modification of any such Organic Document would not have an
adverse effect on the Lenders if such modification is made to effectuate a
transaction otherwise permitted by the terms of any Loan Document).

 

SECTION 7.2.12.  Transactions with Affiliates.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into or cause or permit to exist any
arrangement, transaction or contract (including for the purchase, lease or
exchange of property or the rendering of services) with any of its Affiliates,
unless such arrangement, transaction or contract is on fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than it could obtain
in an arm’s-length transaction with a Person that is not an Affiliate, other
than:

 

(a)                          transactions
among the Borrower and its U.S. Subsidiaries;

 

(b)                         loans and
advances to employees in the ordinary course of business;

 

(c)                          any Restricted
Payment pursuant to Section 7.2.6 or any Investment pursuant to
clause (e), (g), (i) or (m) of Section 7.2.5;

 

(d)                         issuance and
sale of Capital Securities of the Borrower permitted by Section 7.2.8;

 

(e)                          any issuance of
securities, or other payments, awards or grants in cash, Capital Securities or
otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans, in the ordinary course of business and approved
in good faith by the Board of Directors of the Borrower and Parent;

 

(f)                            reasonable fees
and compensation paid to, or indemnity provided for the benefit of, officers, directors,
employees or consultants of the Borrower or any Subsidiary as determined in
good faith by the Borrower’s Board of Directors;

 

80

 

(g)                         any transaction
with a Subsidiary or joint venture or similar entity which would constitute a
transaction with an Affiliate solely because the Borrower or a Subsidiary owns
an equity interest in or otherwise controls such Subsidiary, joint venture or
similar entity; and

 

(h)                                 in connection
with the consummation of the Transactions.

 

SECTION 7.2.13.  Restrictive Agreements, Etc.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any agreement prohibiting:

 

(a)                          the creation or
assumption of any Lien upon its properties, revenues or assets, whether now
owned or hereafter acquired;

 

(b)                         the ability of
any Obligor to amend or otherwise modify any Loan Document or Intercreditor
Agreement; or

 

(c)                          the ability of
any Subsidiary to make any payments, directly or indirectly, to the Borrower,
including by way of dividends, advances, repayments of loans, reimbursements of
management and other intercompany charges, expenses and accruals or other returns
on investments.

 

The foregoing prohibitions
shall not apply to (i) any Loan Document or Intercreditor Agreement, (ii) in
the case of clause (a), (A) any agreement governing any
Indebtedness permitted by clause (e) of Section 7.2.2
as to the assets financed with the proceeds of such Indebtedness, (B) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest, (C) customary provisions restricting assignment of any
agreement entered into in the ordinary course of business, (D) any
restrictions by the holder of a Lien permitted by Section 7.2.3 on
the transfer of the asset or assets subject thereto, (E) customary
restrictions and conditions contained in any agreement relating to the sale of
any asset permitted under Section 7.2.10 pending the consummation
of such sale, (F) any agreement in effect at the time any Subsidiary
becomes a Subsidiary of the Borrower, so long as such agreement was not entered
into in contemplation of such person becoming a Subsidiary of the Borrower, (G) restrictions
on cash or other deposits or net worth requirements imposed by customers under
contracts entered into in the ordinary course of business, (H) in the case
of any joint venture (including any Subsidiary which is a joint venture) which
is not an Obligor, restrictions in such person’s organization or governing
documents or pursuant to any joint venture agreement or stockholders agreement
solely to the extent of the Capital Securities of or assets held in the subject
joint venture or other entity or (i) any agreement in effect on the Closing
Date and set forth on Item 7.2.13 of the Disclosure Schedule, (iii) in
the case of clauses (a) and (c), any agreement of a Foreign
Subsidiary governing the Indebtedness permitted by clause (f)(ii) of
Section 7.2.2, (iv) the Intercreditor Agreements and (v) agreements
pursuant to which the New Notes were issued (in the case of this clause (v),
as in effect on the Closing Date or as amended, modified, replaced, restated or
otherwise changed in a manner that is not, taken as a whole, materially less
favorable to the Lenders).

 

81

 

SECTION 7.2.14.  Sale and
Leaseback.  The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly enter
into any agreement or arrangement providing for the sale or transfer by it of
any property (now owned or hereafter acquired) to a Person and the subsequent
lease or rental of such property or other similar property from such Person
unless such transaction complies with Sections 7.2.2 and 7.2.10.

 

SECTION 7.2.15.  Fiscal Year.  The Borrower will not, and will not permit
any of its Subsidiaries to, modify or make any other change to its Fiscal Year.

 

SECTION 7.2.16.  Capital Expenditures.  The Borrower will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures (except for Capital
Expenditures to the extent financed with the proceeds (A) of Indebtedness
permitted hereunder (other than the Loans) and identified pursuant to clause
(c) of Section 7.1.1 as having been applied to finance Capital
Expenditures, (B) from a Disposition of assets pursuant to clause (c) of
Section 7.2.10 or (C) received as a result of Casualty
Events); in excess of (x) $12,000,000 in any Fiscal Year ending on or
prior to December 31, 2011 or (y) $15,000,000 in any Fiscal Year
ending after December 31, 2011, provided that the Borrower may, and
may permit its Subsidiaries to make Capital Expenditures in excess of such
amounts if such additional Capital Expenditures do not exceed the then current
amount of Cumulative Available Cash.

 

SECTION 7.2.17.  Prepayments and Amendments of Other
Indebtedness.  The Borrower will not,
and will not permit any of its Subsidiaries to, (A) make any redemptions,
repayments, prepayments, repurchases or acquisitions for value of any Indebtedness
incurred or outstanding pursuant to (x) clause (b) of Section 7.2.2
or (y) to the extent secured by Liens granted pursuant to clause (b) of
Section 7.2.3, clause (m) of Section 7.2.2,
in each case using consideration in excess of the then current amount of
Cumulative Available Cash; provided that in no event may (i) the
consideration used in such redemptions, repayments, prepayments, repurchases or
acquisitions for value exceed $10,000,000 in the aggregate and (ii) any
such redemptions, repayments, prepayments, repurchases or acquisitions be made
unless, both immediately prior to and immediately after giving effect thereto,
the Borrower then has at least $25,000,000 in Minimum Liquidity and (B) amend
or modify, or permit the amendment or modification of, any provision of any
document governing any Indebtedness 
referred to in the immediately preceding clause (A) in any
manner that is adverse in any material respect to the interests of the Lenders.

 

SECTION 7.2.18.  Exchange Offer.  The Borrower will not, and will cause Parent
and its Subsidiaries not to, amend or modify the Exchange Offer in any manner
that would be materially adverse to the interests of the Lenders.

 

ARTICLE
VIII

EVENTS
OF DEFAULT

 

SECTION 8.1.                                                    Listing of
Events of Default.  Each of the
following events or occurrences described in this Article shall constitute
an “Event of Default”.

 

82

 

SECTION 8.1.1.  Non-Payment of Obligations.  The Borrower shall default in the payment or
prepayment when due of:

 

(a)                          any principal
of any Loan; or

 

(b)                         any fee
described in Article III, any interest on any Loan or any other
monetary Obligation to the extent invoiced, and such default shall continue
unremedied for a period of five days after such amount was due.

 

SECTION 8.1.2.  Breach of Warranty.  Any representation or warranty of any Obligor
made or deemed to be made in any Loan Document (including any certificates
delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.

 

SECTION 8.1.3.  Non-Performance of Certain Covenants and
Obligations.  The Borrower shall
default in the due performance or observance of any of its obligations under (A) clauses
(d) and (e) of Section 7.1.1, Section 7.1.7
or Section 7.2 or (B) Section 7.1.1 (other than clauses
(d) and (e) thereof) or Section 7.1.9 and, in
the case of this clause (B) of this Section 8.1.3, such
default shall continue unremedied for a period of 5 days after the earlier to occur
of (i) notice thereof given to the Borrower by the Administrative Agent or
any Lender or (ii) the date on which any Obligor has knowledge of such default.

 

SECTION 8.1.4.  Non-Performance of Other Covenants and
Obligations.  Any Obligor shall
default in the due performance and observance of any other agreement contained
in any Loan Document executed by it, and such default shall continue unremedied
for a period of 30 days after the earlier to occur of (i) notice thereof
given to the Borrower by the Administrative Agent or any Lender or (ii) the
date on which any Obligor has knowledge of such default.

 

SECTION 8.1.5.  Default on Other Indebtedness.  (A) A default shall occur in the payment
of any amount when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any principal or stated amount of, or interest or
fees on, any Indebtedness (other than Indebtedness described in Section 8.1.1)
of the Borrower or any of its Subsidiaries or any other Obligor having a
principal or stated amount, individually or in the aggregate, in excess of
$7,500,000, or (B) a default shall occur in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or (C) any
such default shall continue unremedied for any applicable period of time
sufficient to permit the holder or holders of such Indebtedness, or any trustee
or agent for such holders, to cause or declare such Indebtedness to become due
and payable or to require such Indebtedness to be prepaid, redeemed, purchased
or defeased, or require an offer to purchase or defease such Indebtedness to be
made, prior to its expressed maturity.

 

SECTION 8.1.6.  Judgments.  Any final or non-appealable judgment or order
for the payment of money individually or in the aggregate in excess of
$7,500,000 (exclusive of any amounts fully covered by insurance (less
any applicable deductible) and as to which the insurer has not disputed its
responsibility to cover such judgment or order) shall be rendered against the 

 

83

 

Borrower or any of its
Subsidiaries or any other Obligor and such judgment shall not have been vacated
or discharged or stayed or bonded pending appeal within 60 days after the entry
thereof or enforcement proceedings shall have been commenced by any creditor
upon such judgment or order.

 

SECTION 8.1.7.  Pension Plans.  Any of the following events shall occur with
respect to any Pension Plan:

 

(a)                          the institution
of any steps by the Borrower, any member of its Controlled Group or any other
Person to terminate a Pension Plan if, as a result of such termination, the
Borrower or any of its Subsidiaries could reasonably be expected to be required
to make a contribution to such Pension Plan, or could reasonably expect to
incur a liability or obligation to such Pension Plan, in either case in excess
of $7,500,000; or

 

(b)                         a contribution
failure occurs with respect to any Pension Plan sufficient to give rise to a
Lien under Section 302(f) of ERISA on the assets of the Borrower or
any of its Subsidiaries.

 

SECTION 8.1.8.  Change in Control.  Any Change in Control shall occur.

 

SECTION 8.1.9.  Bankruptcy, Insolvency, Etc.  Parent, the Borrower or any Significant Subsidiary
shall:

 

(a)                          become
insolvent or generally fail to pay, or admit in writing its inability or
unwillingness generally to pay, its debts as they become due;

 

(b)                         apply for,
consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator
or other custodian for any substantial part of the property of any thereof, or
make a general assignment for the benefit of creditors;

 

(c)                          in the absence
of such application, consent or acquiesce to, or permit or suffer to exist, the
appointment of a trustee, receiver, sequestrator or other custodian for a
substantial part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days;

 

(d)                         permit or
suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law
or any dissolution, winding up or liquidation proceeding, in respect thereof,
and, if any such case or proceeding is not commenced by Parent, the Borrower or
any Significant Subsidiary, such case or proceeding shall be consented to or
acquiesced in by Parent, the Borrower or such Significant Subsidiary, as the
case may be, or shall result in the entry of an order for relief or shall
remain for 60 days undismissed; or

 

(e)                          take any action
authorizing, or in furtherance of, any of the foregoing.

 

84

 

SECTION 8.1.10.  Impairment of Security, Etc.  Any Loan Document or any Lien granted
thereunder shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of any Obligor party thereto; any Obligor or any other
party shall, directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability; or, except as permitted under any
Loan Document, any Lien securing any Obligation shall, in whole or in part,
cease to be a perfected first priority Lien (subject to (including with respect
to priority) Liens otherwise permitted hereunder).

 

SECTION 8.1.11.  DOJ Investigation.  The occurrence of any plea, non-appealable
judgment, settlement or fine in excess of $15,000,000 in connection with the
DOJ Investigation.

 

SECTION 8.1.12.  Intercreditor Agreements.  Any Intercreditor Agreement or any provision
thereof shall cease to be in full force and effect other than in accordance
with its terms.

 

SECTION 8.2.                                                    Action if
Bankruptcy.  If any
Event of Default described in clauses (a) through (d) of
Section 8.1.9 with respect to the Borrower shall occur, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand to any Person.

 

SECTION 8.3.                                                    Action if Other
Event of Default.  If any
Event of Default (other than any Event of Default described in Section 8.1.9
with respect to the Borrower) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Administrative Agent, upon the direction of
the Required Lenders, shall by notice to the Borrower declare all or any
portion of the outstanding principal amount of the Loans and other Obligations
to be due and payable and/or the Commitments (if not theretofore terminated) to
be terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate.

 

ARTICLE
IX

THE
ADMINISTRATIVE AGENT

 

SECTION 9.1.                                                    Actions.  Each Lender hereby appoints JPMorgan as its
Administrative Agent under and for purposes of each Loan Document.  Each Lender authorizes the Administrative
Agent to act on behalf of such Lender under each Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise provided
in this Section or as otherwise advised by counsel in order to avoid
contravention of applicable law), to exercise such powers hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto.  Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Administrative Agent, pro rata
according to such Lender’s proportionate Total Exposure Amount, from and 

 

85

 

against
any and all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against, the Administrative Agent in any way relating
to or arising out of any Loan Document (including reasonable attorneys’ fees),
and as to which the Administrative Agent is not reimbursed by the Borrower; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted from the Administrative Agent’s gross negligence or willful misconduct.  The Administrative Agent shall not be
required to take any action under any Loan Document, or to prosecute or defend
any suit in respect of any Loan Document, unless it is indemnified hereunder to
its satisfaction.  If any indemnity in
favor of the Administrative Agent shall be or become, in the Administrative
Agent’s determination, inadequate, the Administrative Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.  The Administrative Agent is authorized to
release collateral that is permitted to be sold or released pursuant to the
terms of the Loan Documents.

 

SECTION 9.2.                                                    Funding
Reliance, Etc.  Unless the
Administrative Agent shall have been notified in writing by any Lender by 3:00 p.m.
on the Business Day prior to a Borrowing that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing on
the date specified therefor, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent and, in
reliance upon such assumption, may (in its sole and absolute discretion) make
available to the Borrower a corresponding amount.  If and to the extent that such Lender shall
not have made such amount available to the Administrative Agent, such Lender
and the Borrower severally agree to repay the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date the Administrative Agent made such amount available to the
Borrower to the date such amount is repaid to the Administrative Agent, at the
interest rate applicable at the time to Loans comprising such Borrowing (in the
case of the Borrower) and (in the case of a Lender), at the Federal Funds Rate
(for the first two Business Days after which such amount has not been repaid),
and thereafter at the interest rate applicable to Loans comprising such
Borrowing.

 

SECTION 9.3.                                                    Exculpation.  Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall be liable to any Secured
Party for any action taken or omitted to be taken by it under any Loan
Document, or in connection therewith, except for its own willful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution
of any Loan Document, nor for the creation, perfection or priority of any Liens
purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by any Obligor of
its Obligations.  Any such inquiry which
may be made by the Administrative Agent shall not obligate it to make any
further inquiry or to take any action. 
The Administrative Agent shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Administrative Agent believes to be genuine and
to have been presented by a proper Person.

 

86

 

SECTION 9.4.                                                    Successor.  The Administrative Agent may resign as such
at any time upon at least 30 days’ prior notice to the Borrower and all
Lenders.  If the Administrative Agent at
any time shall resign, the Required Lenders may, with the consent of the
Borrower (not to be unreasonably withheld or delayed) so long as no Default
then exists, appoint another Lender as a successor Administrative Agent which
shall thereupon become the Administrative Agent hereunder.  If no successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent’s giving notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be one of the Lenders or a
commercial banking institution organized under the laws of the United States
(or any State thereof) or a United States branch or agency of a commercial
banking institution, and having a combined capital and surplus of at least
$250,000,000; provided that if such retiring Administrative Agent is
unable to find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth above, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor as provided for above. 
Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
be entitled to receive from the retiring Administrative Agent such documents of
transfer and assignment as such successor Administrative Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. 
After any retiring Administrative Agent’s resignation hereunder as the
Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Loan Documents, and Sections 10.3 and 10.4
shall continue to inure to its benefit.

 

SECTION 9.5.                                                    Loans by
Administrative Agent.  The
Administrative Agent shall have the same rights and powers with respect to (a) the
Credit Extensions made by it or any of its Affiliates, and (b) the Notes
held by it or any of its Affiliates as any other Lender and may exercise the
same as if it were not the Administrative Agent. The Administrative Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Administrative Agent hereunder.

 

SECTION 9.6.                                                    Credit
Decisions.  Each Lender
acknowledges that it has, independently of the Administrative Agent and each
other Lender, and based on such Lender’s review of the financial information of
the Borrower, the Loan Documents (the terms and provisions of which being
satisfactory to such Lender) and such other documents, information and investigations
as such Lender has deemed appropriate, made its own credit decision to extend
its Commitments.  Each Lender also
acknowledges that it will, independently of the Administrative Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under the Loan Documents.

 

87

 

 

SECTION 9.7.                                                    Copies, Etc.  The Administrative Agent shall use
commercially reasonable efforts to give prompt notice to each Lender of each
notice or request required or permitted to be given to the Administrative Agent
by the Borrower pursuant to the terms of the Loan Documents and the
Intercreditor Agreements (unless concurrently delivered to the Lenders by the
Borrower).  The Administrative Agent will
use commercially reasonable efforts to distribute to each Lender each document
or instrument received for its account and copies of all other communications
received by the Administrative Agent from the Borrower for distribution to the
Lenders by the Administrative Agent in accordance with the terms of the Loan
Documents and the Intercreditor Agreements. 
Each Lender agrees that no liability shall attach to the Administrative
Agent for any failure to comply with this Section 9.7.

 

SECTION 9.8.                                                    Reliance by
Administrative Agent.  The
Administrative Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telecopy, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Administrative Agent.  As to any matters
not expressly provided for by the Loan Documents, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
thereunder in accordance with instructions given by the Required Lenders or all
of the Lenders as is required in such circumstance, and such instructions of
such Lenders and any action taken or failure to act pursuant thereto shall be
binding on all Secured Parties.  For
purposes of applying amounts in accordance with this Section, the Administrative
Agent shall be entitled to rely upon any Secured Party that has entered into
Cash Management Obligations for a determination (which such Secured Party
agrees to provide or cause to be provided upon request of the Administrative
Agent) of the outstanding Obligations owed to such Secured Party under such
Cash Management Obligations.  Unless it
has actual knowledge evidenced by way of written notice from any such Secured
Party or the Borrower to the contrary, the Administrative Agent, in acting in
such capacity under the Loan Documents, shall be entitled to assume that no
Cash Management Obligations in respect thereof are in existence or outstanding
between any Secured Party and any Obligor.

 

SECTION 9.9.                                                    Defaults.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received a written notice from a Lender or the
Borrower specifying such Default and stating that such notice is a “Notice of Default”.  In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the Administrative Agent
shall give prompt notice thereof to the Lenders.  The Administrative Agent shall (subject to Section 10.1)
take such action with respect to such Default as shall be directed by the
Required Lenders; provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Secured Parties except to the extent that this Agreement expressly requires
that such action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders.

 

SECTION 9.10.                                              Syndication
Agent.  The Syndication Agent shall
not have any right, power, obligation, liability, responsibility or duty under
this Agreement (or any other Loan 

 

88

 

Document)
other than those applicable to all Lenders as such.  Without limiting the foregoing, the
Syndication Agent shall not have or be deemed to have any fiduciary
relationship with any other Lender.  Each
Lender acknowledges that it has not relied, and will not rely, on the Syndication
Agent in deciding to enter into this Agreement and each other Loan Document to
which it is a party or in taking or not taking action hereunder or thereunder.

 

SECTION 9.11.                                               Withholding
Taxes.  To the extent required by any
applicable law, the Administrative Agent may withhold from any payment to any
Lender or Swing Line Lender an amount equivalent to any applicable withholding
Tax.  Without limiting or expanding the
provisions of Section 4.6(a) or (c), each Lender or
Swing Line Lender shall, and does hereby, indemnify the Administrative Agent
against, and shall make payable in respect thereof within 30 days after demand
therefor, any and all Taxes and any and all related losses, claims, liabilities
and expenses (including fees, charges and disbursements of any counsel for the
Administrative Agent) incurred by or asserted against the Administrative Agent
by the Internal Revenue Service or any other Governmental Authority as a result
of the failure of the Administrative Agent to properly withhold Tax from
amounts paid to or for the account of any Lender or Swing Line Lender for any
reason (including, without limitation, because the appropriate form was not
delivered or not property executed, or because such Lender or Swing Line Lender
failed to notify the Administrative Agent of a change in circumstance that rendered
the exemption from, or reduction of withholding Tax ineffective).  A certificate as to the amount of such
payment or liability delivered to any Lender or Swing Line Lender by the
Administrative Agent shall be conclusive absent manifest error.  Each Lender or Swing Line Lender hereby authorizes
the Administrative Agent to set off and apply any and all amounts at any time
owing to such Lender or Swing Line Lender under this Agreement or any other
Loan Document against any amount due the Administrative Agent under this Section 9.11.  The agreements in this Section 9.11
shall survive the resignation and/or replacement of the Administrative Agent,
any assignment of rights by, or the replacement of, a Lender or Swing Line
Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all other Obligations.

 

SECTION 9.12.                                               Intercreditor
Agreements. 
Notwithstanding anything herein to the contrary, each Lender
acknowledges that the Lien and security interest granted to the Administrative
Agent pursuant to the Collateral Documents and the exercise of any right or
remedy by the Administrative Agent thereunder are subject to the provisions of
the Intercreditor Agreements.

 

ARTICLE X

MISCELLANEOUS PROVISIONS

 

SECTION 10.1.                                              Waivers,
Amendments, Etc.  The
provisions of each Loan Document (other than Cash Management Obligations and
the Fee Letters (which may be amended or otherwise modified in accordance with
the terms thereof)) may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and consented to by the Borrower
and the Required Lenders; provided, however, that no other such
amendment, modification or waiver shall:

 

89

 

(a)                          modify this Section or
change or waive any provision of Section 4.8 requiring pro  rata
treatment of the Lenders, or the sharing of payments by all Lenders, in each
case without the consent of all Lenders;

 

(b)                         increase the
aggregate amount of any Credit Extensions required to be made by a Lender
pursuant to its Commitments, extend the final Revolving Loan Commitment
Termination Date or extend the final Stated Maturity Date for any Lender’s
Loan, in each case without the consent of such Lender (it being agreed,
however, that any vote to rescind any acceleration made pursuant to Sections
8.2 and 8.3 of amounts owing with respect to the Loans and other
Obligations shall only require the vote of the Required Lenders);

 

(c)                          reduce the
principal amount of or rate of interest on any Lender’s Loan, reduce any fees
described in Article III payable to any Lender or extend the date
on which interest or fees are payable in respect of such Lender’s Loans, in
each case without the consent of such Lender;

 

(d)                         reduce the
percentage set forth in the definition of “Required Lenders” or modify any
requirement hereunder that any particular action be taken by all Lenders
without the consent of all Lenders;

 

(e)                          have the effect
of increasing the threshold amount set forth in Section 8.1.11
above $30,000,000;

 

(f)                            except as
otherwise expressly provided in a Loan Document, release (i) the Borrower
from its Obligations under the Loan Documents or any Guarantor from its obligations
under a Guaranty or (ii) all or substantially all of the collateral under
the Loan Documents, in each case without the consent of all Lenders; or

 

(g)                         affect
adversely the interests, rights or obligations of the Administrative Agent (in
its capacity as the Administrative Agent) or the Swing Line Lender (in its capacity
as Swing Line Lender), unless consented to by the Administrative Agent or the
Swing Line Lender, as the case may be.

 

Any
Intercreditor Agreement may be amended, modified or waived by the
Administrative Agent at the direction of the Required Lenders, and the consent
of the Borrower or any Guarantor shall be required only to the extent required
in such Intercreditor Agreement

 

No failure or delay on the
part of any Credit Party in exercising any power or right under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right.  No notice to or demand on any Obligor in any
case shall entitle it to any notice or demand in similar or other
circumstances.  No waiver or approval by
any Credit Party under any Loan Document shall, except as may be otherwise
stated in such waiver or approval, be 

 

90

 

applicable to subsequent
transactions.  No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.

 

SECTION 10.2.                                              Notices; Time.  All notices and other communications provided
under each Loan Document shall be in writing (including by facsimile) and
addressed, delivered or transmitted, if to the Borrower, the Administrative
Agent or a Lender to the applicable Person at its address or facsimile number
set forth on Schedule II hereto or set forth in a Lender Assignment
Agreement, or at such other address or facsimile number as may be designated by
such party in a notice to the other parties. 
Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any notice, if transmitted by facsimile, shall be deemed given
when the confirmation of transmission thereof is received by the
transmitter.  Electronic mail and
Internet and intranet websites may be used only to distribute routine communications,
such as financial statements and other information as provided in Section 7.1.1,
and to distribute Loan Documents for execution by the parties thereto, and may
not be used for any other purpose, except with the consent of the
Administrative Agent. The parties hereto agree that delivery of an executed counterpart
of a signature page to this Agreement and each other Loan Document by
facsimile shall be effective as delivery of an original executed counterpart of
this Agreement or such other Loan Document. 
Unless otherwise indicated, all references to the time of a day in a
Loan Document shall refer to New York time.

 

SECTION 10.3.                                              Payment of
Costs and Expenses.  The
Borrower agrees to pay on demand all reasonable expenses of the Administrative
Agent and Wells Fargo Bank, National Association (including the reasonable fees
and out-of-pocket expenses of Cahill Gordon & Reindel LLP, counsel to
the Administrative Agent, and of local counsel, if any, who may be retained by
or on behalf of the Administrative Agent) in connection with:

 

(a)                          the
negotiation, preparation, execution and delivery of each Loan Document,
including schedules and exhibits, and any amendments, waivers, consents, supplements
or other modifications to any Loan Document as may from time to time hereafter
be required, whether or not the transactions contemplated hereby are
consummated; and

 

(b)                         the filing or
recording of any Loan Document (including the Filing Statements) and all
amendments, supplements, amendments and restatements and other modifications to
any thereof, searches made following the Closing Date in jurisdictions where
Filing Statements (or other documents evidencing Liens in favor of the Secured
Parties) have been recorded and any and all other documents or instruments of
further assurance required to be filed or recorded by the terms of any Loan
Document; and

 

(c)                          the preparation
and review of the form of any document or instrument relevant to any Loan
Document.

 

The
Borrower further agrees to pay, and to save each Credit Party harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of each Loan Document, the Credit Extensions or the
issuance of any Notes.  The Borrower also

 

91

 

agrees
to reimburse each Lender, Lead Arranger and the Administrative Agent upon
demand for all reasonable out-of-pocket expenses (including reasonable
attorneys’ fees and legal expenses of one counsel (and any local counsel) to
the Lead Arrangers and one or, if and to the extent necessary as a result of
conflicts of interest, more counsel to the Lenders) incurred by any Lender,
Lead Arranger and the Administrative Agent in connection with (x) the
negotiation of any restructuring or “work-out” with the Borrower, whether or
not consummated, of any Obligations, (y) the enforcement of any
Obligations or (z) the exercise of any right or remedy under any Loan Document.

 

SECTION 10.4.                                              Indemnification.  In consideration of the execution and
delivery of this Agreement by each Credit Party, the Borrower shall indemnify,
exonerate, defend and hold each Credit Party and each of their respective
officers, directors, employees and agents and in the case of an Approved Fund,
its trustees and investment advisors (collectively, the “Indemnified Parties”)
free and harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages (whether or not based on strict
liability and including any special, indirect or consequential damages), and
expenses of any kind or nature whatsoever (irrespective of whether any such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys’ and consultants’ fees and
disbursements, whether incurred in connection with actions between or among the
parties hereto or the parties hereto and third parties (regardless of whether
caused in whole or in part by the simple (but not gross) negligence of any
indemnified party) (collectively, the “Indemnified Liabilities”),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to:

 

(a)                          any transaction
financed or to be financed in whole or in part, directly or indirectly, with
the proceeds of any Credit Extension, including all Indemnified Liabilities arising
in connection with the Transaction;

 

(b)                         the entering
into and performance of any Loan Document by any of the Indemnified Parties
(including any action brought by or on behalf of the Borrower as the result of
any determination by the Required Lenders pursuant to Article V not
to fund any Credit Extension; provided that any such action is resolved
in favor of such Indemnified Party);

 

(c)                          any
investigation, litigation or proceeding related to any acquisition or proposed
acquisition by any Obligor or any Subsidiary thereof of all or any portion of
the Capital Securities or assets of any Person, whether or not an Indemnified
Party is party thereto;

 

(d)                         the actual or
alleged presence, Release or threat of Release of any Hazardous Material at,
on, under, from or affecting any property now or formerly owned, operated or
leased  by any Obligor or any Subsidiary
thereof; or

 

(e)                          each Lender’s
Environmental Liability (the indemnification herein shall survive repayment of
the Obligations and any transfer of the property of any Obligor or its
Subsidiaries by foreclosure or by a deed in lieu of foreclosure for any Lender’s

 

92

 

Environmental
Liability, regardless of whether caused by, or within the control of, such Obligor
or such Subsidiary);

 

IN ALL CASES, WHETHER OR NOT
CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY
OR SOLE NEGLIGENCE OF THE INDEMNIFIED PARTY, except for Indemnified Liabilities
arising for the account of a particular Indemnified Party to the extent of the
relevant Indemnified Party’s material breach of a Loan Document, gross
negligence or willful misconduct as determined in a final and nonappealable judgment
by a court of competent jurisdiction. 
Each Obligor and its successors and assigns hereby waive, release and
agree not to make any claim or bring any cost recovery action against, any
Indemnified Party under any Environmental Law, including CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted.  It is expressly understood and agreed that to
the extent that any Indemnified Party is strictly liable under any
Environmental Laws, each Obligor’s obligation to such Indemnified Party under
this indemnity shall likewise be without regard to fault on the part of any
Obligor with respect to the violation or condition which results in liability
of an Indemnified Party; provided that this waiver and release shall not
apply to the extent that the Indemnified Liabilities arise for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party’s
material breach of a Loan Document, gross negligence or willful misconduct as
determined in a final and nonappealable judgment by a court of competent
jurisdiction.  If and to the extent that
the foregoing undertaking may be unenforceable for any reason, each Obligor
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.

 

SECTION 10.5.                                              Survival.  The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and
the obligations of the Lenders under Sections 9.1 and 10.16,
shall in each case survive any assignment from one Lender to another (in the
case of Sections 10.3 and 10.4) and the occurrence of the
Termination Date.  The representations
and warranties made by each Obligor in each Loan Document shall survive the
execution and delivery of such Loan Document.

 

SECTION 10.6.                                              Severability.  Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.

 

SECTION 10.7.                                              Headings.  The various headings of each Loan Document
are inserted for convenience only and shall not affect the meaning or
interpretation of such Loan Document or any provisions thereof.

 

SECTION 10.8.                                              Execution in
Counterparts, Effectiveness, Etc.  This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be an original and all of
which shall constitute together but one and the same agreement.  This Agreement shall become effective when
counterparts hereof executed on behalf of the Borrower, the Administrative
Agent and each Lender (or notice thereof satisfactory to the Administrative
Agent) shall 

 

93

 

have
been received by the Administrative Agent; provided, however,
that the provisions of this Agreement shall not become operative until the
satisfaction of the conditions in Section 5.1 shall have occurred.

 

SECTION 10.9.                                              Governing Law;
Entire Agreement.  EACH LOAN
DOCUMENT (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
ORAL AGREEMENTS AMONG THE PARTIES.  The
Loan Documents constitute the entire understanding among the parties hereto
with respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.

 

SECTION 10.10.                                        Successors and
Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns (in the case of assigns (but not successors)
in the case of Lenders, subject to Section 10.11); provided
that the Borrower may not assign or transfer its rights or obligations
hereunder without the consent of all Lenders.

 

SECTION 10.11.                                        Sale and
Transfer of Credit Extensions; Participations in Credit Extensions.  Each Lender may assign, or sell
participations in, its Loans and Commitments to one or more other Persons in accordance
with the terms set forth below:

 

(a)                          Any Lender may,
with the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed), assign to one or more Eligible Assignees 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)                  except in the
case of (A) an assignment of the entire remaining amount of the assigning
Lender’s Commitments and the Loans at the time owing to it or (B) an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Commitments (which for this purpose
includes Loans outstanding thereunder) or principal outstanding balance of the
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Lender Assignment Agreement with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000 (or,
if less, the entire remaining amount of such Lender’s Commitment or Loans of
the relevant tranche; provided that such minimum amount shall be
aggregated for two or more simultaneous assignments by or to two or more Related
Funds), unless the Administrative Agent and, so long as no Event of Default 

 

94

 

has
occurred and is continuing, the Borrower otherwise consent (each such consent
not to be unreasonably withheld or delayed);

 

(ii)     [Reserved]; and

 

(iii)    the parties to each assignment shall (A) electronically
execute and deliver to the Administrative Agent a Lender Assignment Agreement
via an electronic settlement system acceptable to the Administrative Agent) or (B) manually
execute and deliver to the Administrative Agent a Lender Assignment Agreement,
together, in the case of this clause (iii)(B), with a processing and
recordation fee of $3,500 and if the Eligible Assignee is not a Lender,
administrative details information with respect to such Eligible Assignee and
applicable tax forms.

 

(b)                         Subject to
acceptance and recording thereof by the Administrative Agent pursuant to clause
(c), from and after the effective date specified in each Lender Assignment
Agreement, (i) the Eligible Assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Lender Assignment
Agreement, have the rights and obligations of a Lender under this Agreement,
and (ii) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Lender Assignment Agreement, subject to Section 10.5,
be released from its obligations under this Agreement (and, in the case of a
Lender Assignment Agreement 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 any provisions of this
Agreement which by their terms survive the termination of this Agreement).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with clause (a) above
and this clause (b) 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 clause (d) below. 
If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment thresholds specified in this Section), the
Borrower shall be deemed to have given its consent ten Business Days after the
date notice thereof has been delivered by the assigning Lender (through the
Administrative Agent or ClearPar, LLC) unless such consent is expressly refused
by the Borrower prior to such tenth Business Day.

 

(c)                          The
Administrative Agent shall record each assignment made in accordance with this Section in
the Register pursuant to clause (a) of Section 2.7.  The Register shall be available for
inspection by the Borrower and any Lender (in the case of such Lender, such
right of inspection shall be with respect to its own interest only and not that
of any other Lender), at any reasonable time and from time to time upon reasonable
prior notice.

 

(d)                         Any Lender
(other than a Designated Lender) may, without the consent of, or notice to, the
Borrower or the Administrative Agent, and any Designated Lender may, with the
prior consent of each of the Borrower and Administrative Agent, sell participations
to one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its 

 

95

 

Commitments
and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent and
the other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver with respect to any of the items set forth in clauses (a) through
(d) or (f) of Section 10.1, in each case
except as otherwise specifically provided in a Loan Document.  Subject to clause (e) below, the
Borrower agrees that each Participant shall be entitled to the benefits of Sections
4.3, 4.4, 4.5, 4.6, 7.1.1,  10.3 and 10.4
(subject to the requirements and limitations therein, including providing documentation
pursuant to Section 4.6(e)) to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to clause (b).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 4.9
as though it were a Lender, provided such Participant agrees to be
subject to Section 4.8 as though it were a Lender. Each Lender that
sells a participation shall, acting solely for this purpose as a non-fiduciary
agent of the Borrower, maintain a register on which it enters the name and
address of each Participant and the principal and interest amount of each
Participant’s interest in the Loans held by it (the “Participant Register”).  The entries in the Participant Register shall
be conclusive, and such Lender shall treat each person whose name is recorded
in the Participant Register as the owner of the participation in question for
all purposes of this Agreement, notwithstanding notice to the contrary.

 

(e)                          A Participant
shall not be entitled to receive any greater payment under Sections 4.3,
4.4, 4.5, 4.6, 10.3 and 10.4 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent (not to be
unreasonably withheld or delayed).

 

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

 

(g)                         In the event
that any Lender becomes a Designated Lender, then the Borrower and the Swing
Line Lender shall each have the right, but not the obligation, upon notice to
such Revolving Loan Lender and the Administrative Agent, to replace such Revolving
Loan Lender with a financial institution (a “Replacement Lender”)
acceptable to the Borrower and the Administrative Agent (such consents not to
be unreasonably 

 

96

 

 

withheld
or delayed; provided that no such consent shall be required if the
Replacement Lender is an existing Revolving Loan Lender), and upon any Lender
becomes a Designated Lender, such Revolving Loan Lender hereby agrees to
transfer and assign (in accordance with this Section all of its
Commitments and other rights and obligations under the Loan Documents to such Replacement
Lender; provided that (i) such assignment shall be without
recourse, representation or warranty (other than that such Lender owns the
Commitments, Loans and Notes being assigned, free and clear of any Liens) and (ii) the
purchase price paid by the Replacement Lender shall be in the amount of such
Revolving Loan Lender’s Loans, together with all accrued and unpaid interest
and fees in respect thereof, plus all other amounts (other than the
amounts (if any) demanded and unreimbursed under Sections 4.2 through
(and including) 4.6, which shall be paid by the Borrower), owing to such
Revolving Loan Lender hereunder.  Upon
any such termination or assignment, such Revolving Loan Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of, and
subject to the obligations of, any provisions of this Agreement which by their
terms survive the termination of this Agreement.  The Borrower’s and Swing Line Lender’s
respective right to replace a Designated Lender pursuant to this Section is,
and shall be, in addition to, and not in lieu of, all other rights and remedies
available to the Borrower and the Swing Line Lender against such Designated
Lender under applicable law.

 

(h)                         Notwithstanding
anything else contained in this Section, no Lender may assign its Loans or
Commitments during the Primary Syndication other than (i) assignments by
the Administrative Agent, the Syndication Agent, any Lead Arranger and their
respective Affiliates or (ii) assignments by a Lender to its Affiliate or
Approved Fund.

 

(i)                             Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle (an “SPC”), identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part
of any Loan that such Granting Lender would otherwise be obligated to make to
the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if
an SPC elects not to exercise such option or otherwise fails to provide all or
any part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof.  The making
of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender.  Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender).  In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any
other person in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or
any State thereof.  In addition,
notwithstanding anything to the contrary contained in this clause, any SPC may (i) with
notice to, but without 

 

97

 

the
prior written consent of, the Borrower, the Administrative Agent or the Syndication
Agent and without paying any processing fee therefor, assign all or a portion
of its interests in any Loans to the Granting Lender or to any financial
institutions (consented to by the Borrower, the Syndication Agent and the
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii) disclose
on a confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. 
This Section may not be amended without the written consent of the
SPC.  The Borrower acknowledges and
agrees, subject to the next sentence, that, to the fullest extent permitted
under applicable law, each SPC, for purposes of Sections 4.3, 4.4,
4.5, 4.6, 4.8, 4.9, 10.3 and 10.4,
shall be considered a Lender.  The
Borrower shall not be required to pay any amount under Sections 4.3, 4.4,
4.5, 4.6, 10.3 and 10.4 that is greater than the
amount which it would have been required to pay had no grant been made by a
Granting Lender to an SPC unless the grant was made with the Borrower’s prior
written consent (not to be unreasonably withheld or delayed).

 

SECTION 10.12.                                        Other
Transactions.  Nothing
contained herein shall preclude the Administrative Agent or any other Lender
from engaging in any transaction, in addition to those contemplated by the Loan
Documents, with the Borrower or any of its Affiliates in which the Borrower or
such Affiliate is not restricted hereby from engaging with any other Person.

 

SECTION 10.13.                                        Forum Selection
and Consent to Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
ADMINISTRATIVE AGENT, THE LENDERS OR THE BORROWER IN CONNECTION HEREWITH OR
THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW
YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN
SECTION 10.2.  THE BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT
THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT 

 

98

 

IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

 

SECTION 10.14.                                        Waiver of Jury
Trial.  THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, SUCH LENDER OR THE BORROWER IN CONNECTION THEREWITH.  THE BORROWER ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND EACH LENDER
ENTERING INTO THE LOAN DOCUMENTS.

 

SECTION 10.15.                                        Limitation on
Interest.  The
Borrower, the Administrative Agent and the Lenders intend to contract in strict
compliance with applicable usury laws from time to time in effect.  In furtherance thereof such Persons stipulate
and agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay, for the use, forbearance
or detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in effect.  Neither the Borrower nor any present or
future Guarantors, endorsers or other Persons hereafter becoming liable for
payment of any Obligation shall ever be liable for unearned interest thereon or
shall ever be required to pay interest thereon in excess of the maximum amount
that may be lawfully contracted for, charged or received under applicable law
from time to time in effect, and the provisions of this Section shall
control over all other provisions of the Loan Documents that may be in conflict
or apparent conflict herewith.  The
Administrative Agent and the Lenders expressly disavow any intention to contract
for, charge or collect excessive unearned interest or finance charges in the
event the maturity of any Obligation is accelerated.  If (a) the maturity of any Obligation is
accelerated for any reason, (b) any Obligation is prepaid and as a result
any amounts held to constitute interest are determined to be in excess of the
legal maximum, or (c) the Administrative Agent or a Lender shall otherwise
collect moneys that are determined to constitute interest that would otherwise
increase the interest on any or all of the Obligations to an amount in excess
of that permitted to be charged by applicable law then in effect, then all sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related Obligations or, at the option of the Administrative Agent or such
Lender, as applicable, promptly returned to the Borrower upon such
determination.  In determining whether or
not the interest paid or payable, under any specific circumstance, exceeds the
maximum amount permitted under applicable law, the Administrative Agent and the
Lenders and the Borrower shall to the greatest extent permitted under
applicable law, (i) characterize any non-principal payment as an expense,
fee or premium rather than as interest, (ii) exclude 

 

99

 

voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate
and spread the total amount of interest throughout the entire contemplated term
of instruments evidencing the Obligations in accordance with the amounts
outstanding from time to time thereunder and the maximum legal rate of interest
from time to time in effect under applicable law in order to lawfully contract
for, charge, or receive the maximum amount of interest permitted under
applicable law.  In the event applicable
law provides for an interest ceiling under Chapter 303 of the Texas Finance
Code (the “Texas Finance Code”), as amended, for that day, the ceiling
shall be the “weekly ceiling” as defined in the Texas Finance Code; provided
that if any applicable law permits greater interest, the law permitting the
greatest interest shall apply.  As used
in this section the term “applicable law” means the laws of the State of Texas
or the laws of the United States, whichever allow the greater interest, as such
laws now exist or may be changed or amended or come into effect in the future.

 

SECTION 10.16.                                        Confidentiality.  The Lenders and the Administrative Agent
shall hold all non-public information obtained pursuant to or in connection
with this Agreement about Parent or any of its Subsidiaries in accordance with
their customary procedures for handling confidential information of this
nature, but may make disclosure to any of their examiners, Affiliates, their
and their Affiliate’s directors, officers, employees, agents, trustees and
representatives, outside auditors, counsel and other professional advisors or
to any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty’s professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section) in connection with this Agreement
or as reasonably required by any potential bona
fide pledgee under clause (f) of Section 10.11,
transferee, participant or assignee, or in connection with the exercise of
remedies under a Loan Document, or as requested by any governmental agency or
representative thereof or pursuant to legal process or to any quasi-regulatory
authority (including the National Association of Insurance Commissioners); provided
that

 

(a)                          unless
specifically prohibited by applicable law or court order, each Lender and the
Administrative Agent shall notify the Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection
with an examination of the financial condition of such Lender or its Affiliate
by such governmental agency) for disclosure of any such non-public information
prior to or within a reasonable time after disclosure of such information;

 

(b)                         prior to any
such disclosure pursuant to this Section, each Lender shall require any such bona
fide pledgee under clause (f) of Section 10.11,
transferee, participant and assignee receiving a disclosure of non-public
information to agree in writing (i)  to be bound by this Section; and (ii) to
require such Person to require any other Person to whom such Person discloses
such non-public information to be similarly bound by this Section; and

 

(c)                          except as may
be required by an order of a court of competent jurisdiction and to the extent
set forth therein, no Lender shall be obligated or required to return any
materials furnished by Parent, the Borrower or any Subsidiary.

 

100

 

SECTION 10.17.                                        USA PATRIOT Act
Notice.  Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby notify
the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), 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 or the Administrative Agent,
as applicable, to identify the Borrower in accordance with the Patriot Act.

 

101

 

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

 

	
   

  	
  REDDY
  ICE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Janusek

  
	
   

  	
   

  	
  Name:

  	
  Steven J. Janusek

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,
  Chief Financial Officer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  
	
   

  	
  as
  Administrative Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Martha Pruitt Matthews

  
	
   

  	
   

  	
  Name:

  	
  Martha
  Pruitt Matthews

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

S-1

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION 

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Real

  
	
   

  	
   

  	
  Name:

  	
  Michael
  Real

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

S-2Exhibit 10.4

 

FIRST LIEN NOTES PLEDGE AND SECURITY AGREEMENT

 

This FIRST LIEN NOTES PLEDGE AND SECURITY AGREEMENT,
dated as of March 15, 2010 (as amended, supplemented, amended and restated
or otherwise modified from time to time, this “Security Agreement”), is
made by REDDY ICE CORPORATION, a Nevada corporation (the “Company”),
REDDY ICE HOLDINGS, INC., a Delaware corporation (“Parent”) and each
Subsidiary of the Company (collectively, the “Subsidiary Grantors” and together
with the Company and Parent, the “Grantors”) from time to time a party
to this Security Agreement, in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Wells Fargo”), as collateral agent (together with its successor(s) thereto
in such capacity, the “Collateral Agent”) for each of the Secured
Parties (terms used herein have the meanings set forth in or incorporated by
reference in Article I).

 

W  I  T  N  E  S  S  E  T
H :

 

WHEREAS, pursuant to the Indenture, dated as of March 15,
2010  (as amended, supplemented, amended
and restated or otherwise modified from time
to time, the “Indenture”), among the Company, Parent, the Subsidiary
Guarantors, the Trustee and the Collateral Agent, the Company has issued the
Notes; and

 

WHEREAS, as a condition precedent to the issuance of
the Notes under the Indenture, each Grantor is required to execute and deliver
this Security Agreement;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Grantor
agrees, for the benefit of each Secured Party, as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1. 
Certain Terms.  The
following terms (whether or not underscored) when used in this Security
Agreement, including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the singular and plural
forms thereof):

 

“Collateral” is defined in Section 2.1.

 

“Collateral Account” is defined in clause (b) of
Section 4.3.

 

“Collateral Agent” is defined in the preamble.

 

“Company” is defined in the preamble.

 

“Computer Hardware and Software Collateral”
means:

 

(a)           all
computer and other electronic data processing hardware, integrated computer
systems, central processing units, memory units, display terminals, printers,

 

1

 

features, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral devices
and other related computer hardware;

 

(b)           all
software programs (including both source code, object code and all related
applications and data files), whether now owned, licensed or leased or
hereafter acquired by a Grantor, designed for use on the computers and
electronic data processing hardware described in clause (a) above;

 

(c)           all
firmware associated therewith;

 

(d)           all
documentation (including flow charts, logic diagrams, manuals, guides and
specifications) with respect to such hardware, software and firmware described
in preceding clauses (a) through (c); and

 

(e)           all
rights with respect to all of the foregoing, including any and all copyrights,
licenses, options, warranties, service contracts, program services, test
rights, maintenance rights, support rights, improvement rights, renewal rights
and indemnifications and any substitutions, replacements, additions or model
conversions of any of the foregoing.

 

“Control Agreement” means an agreement in
form and substance reasonably satisfactory to the Collateral Agent which
provides for the Collateral Agent to have “control” as defined in Section 8-106
of the UCC, as such term relates to investment property (other than certificated
securities or commodity contracts), or as used in Section 9-106 of the
UCC, as that term relates to Deposit Accounts or commodity contracts).

 

“Copyright Collateral” means all copyrights
of the Grantors, whether statutory or common law, registered or unregistered
and whether published or unpublished, now or hereafter in force throughout the
world including all of the Grantors’ rights, titles and interests in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world also including the copyrights referred to in Item A of Schedule
V hereto, and registrations and recordings thereof and all applications for
registration thereof, whether pending or in preparation of all copyright
licenses, including each copyright license referred to in Item B of Schedule
V hereto.

 

“Distributions” means all non-cash dividends
paid on Capital Stock constituting Collateral, non-cash liquidating dividends
paid on Capital Stock constituting Collateral shares of Capital Stock
constituting Collateral resulting from (or in connection with the exercise of)
stock splits, reclassifications, warrants, options, non-cash dividends,
mergers, consolidations, and all other non-cash distributions (whether similar
or dissimilar to the foregoing) on or with respect to any Capital Stock
constituting Collateral, but excluding Dividends.

 

“Dividends” means cash dividends and cash
distributions with respect to any Capital Stock constituting Collateral that
are not a liquidating dividend.

 

“Filing Statements” means all UCC financing
statements or other similar financing statements and UCC termination statements
required pursuant to the Notes Documents.

 

2

 

“First Lien Intercreditor Agreement” means that
certain first lien intercreditor agreement dated the Issue Date, among the
Collateral Agent and JP Morgan Chase Bank, National Association, as the
collateral agent under the Company’s Credit Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Foreign Pledge Agreement” means any
supplemental pledge agreement governed by the laws of a jurisdiction other than
the United States (or a State thereof) or the District of Columbia executed and
delivered by Parent, the Company or any of its Subsidiaries pursuant to the
terms of this Security Agreement or the Indenture, in form and substance
reasonably satisfactory to the Collateral Agent, as may be necessary or
desirable under the laws of organization or incorporation of a Subsidiary to
further protect or perfect the Lien on and security interest in any Collateral.

 

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

 

“Grantors” is defined in the preamble.

 

“Inchoate Liens” means Liens of the type set
forth in clause (2), (3), (9), (10), (12), (16) or (18) of the definition of
Permitted Liens (as defined in the Indenture).

 

“Indenture” is defined in the first
recital.

 

“Intellectual Property Collateral” means,
collectively, the Computer Hardware and Software Collateral, the Copyright
Collateral, the Patent Collateral, the Trademark Collateral and the Trade Secrets
Collateral.

 

“Intercreditor Agreements” means, collectively,
the First Lien Intercreditor Agreement and the Junior Lien Intercreditor
Agreement.

 

“Junior Lien Intercreditor Agreement” means
that certain junior lien intercreditor agreement dated the Issue Date, among
the Collateral Agent, JP Morgan Chase Bank, National Association, in its
capacity as collateral agent under the Company’s Credit Agreement and Wells
Fargo, in its capacity as collateral agent for the Company’s 13.25% Second Lien
Notes due 2015, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“Material Adverse Effect” means a material
adverse effect on (a) the condition (financial or otherwise), business,
operations, assets, liabilities (contingent or otherwise) or properties of the
Company and its Subsidiaries taken as a whole, (b) the rights and remedies
of any Secured Party under the Notes Documents taken as a whole or (c) the
ability of Parent, the Company or any Subsidiary Guarantor to perform its
Obligations under any Notes Document.

 

“Notes Documents” means the Notes, the
Indenture, the Collateral Documents, the First Lien Intercreditor Agreement and
the Junior Lien Intercreditor Agreement.

 

3

 

“Obligations”
means any principal, interest (including any interest accruing subsequent to
the filing of a petition in bankruptcy, reorganization or similar proceeding at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable state, federal or foreign
law), premium, penalties, fees, indemnifications, reimbursements (including
reimbursement obligations with respect to letters of credit and banker’s
acceptances), damages and other liabilities, and guarantees of payment of such
principal, interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities, payable by any Obligor under the Indenture, the Notes,
the First Lien Intercreditor Agreement, the Junior Lien Intercreditor Agreement
or any other Notes Document.

 

“Obligor” means, as the context may require,
Parent, the Company, Subsidiary Guarantors and each other Person (other than a
Secured Party) obligated under any Notes Document.

 

“Organic Document” means, relative to any
Grantor, as applicable, its certificate of incorporation, by laws, certificate
of partnership, partnership agreement, certificate of formation, limited
liability agreement, operating agreement and all shareholder agreements, voting
trusts and similar arrangements applicable to any of such Grantor’s Capital
Stock.

 

“Parent” is defined in the preamble hereto.

 

“Patent Collateral” means:

 

(a)           all
letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing and each patent and
patent application referred to in Item A of Schedule III hereto;

 

(b)           all
reissues, divisions, continuations, continuations-in-part, extensions, renewals
and reexaminations of any of the items described in clause (a); and

 

(c)           all
patent licenses, and other agreements providing a Grantor with the right to use
any items of the type referred to in clauses (a) and (b) above,
including each patent license referred to in Item B of Schedule III
hereto.

 

“Receivables” is defined in clause (c) of
Section 2.1.

 

“Related Contracts” is defined in clause (c) of
Section 2.1.

 

“Securities Act” is defined in clause (a) of
Section 6.2.

 

“Security Agreement” is defined in the preamble.

 

“Termination Date” means the date on which
all Obligations have been paid in full in cash.

 

“Trademark Collateral” means:

 

4

 

(a)           (i) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, certification marks,
collective marks, logos and other source or business identifiers, and all
goodwill of the business associated therewith, now existing or hereafter
adopted or acquired including those referred to in Item A of Schedule
IV hereto, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any office
or agency of the United States of America or any State thereof or any other
country or political subdivision thereof or otherwise, and all common-law
rights relating to the foregoing, and (ii) the right to obtain all reissues,
extensions or renewals of the foregoing (collectively referred to as the “Trademark”);

 

(b)           all
Trademark licenses for the grant by or to a Grantor of any right to use any
Trademark, including each Trademark license referred to in Item B of Schedule
IV hereto;

 

(c)           all
of the goodwill of the business connected with the use of, and symbolized by
the items described in, clause (a), and to the extent applicable clause (b);
and

 

(d)           the
right to sue third parties for past, present and future infringement of any
Trademark Collateral described in clause (a) and, to the extent
applicable, clause (b).

 

“Trade Secrets Collateral” means all common
law and statutory trade secrets and all other confidential, proprietary or
useful information and all know-how obtained by or used in or contemplated at
any time for use in the business of a Grantor (all of the foregoing being collectively
called a “Trade Secret”), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all
documents and things embodying, incorporating or referring in any way to such
Trade Secret, all Trade Secret licenses, including each Trade Secret licenses
referred to in Schedule VI hereto.

 

“Wells Fargo” is defined in the preamble.

 

SECTION 1.2. 
Indenture Definitions. 
Unless otherwise defined herein or the context otherwise requires, terms
used in this Security Agreement, including its preamble recitals, have the meanings
provided in the Indenture.

 

SECTION 1.3. 
UCC Definitions.  Unless
otherwise defined herein or in the Indenture or the context otherwise requires,
terms for which meanings are provided in the UCC are used in this Security
Agreement (whether or not capitalized herein), including its preamble and
recitals, with such meanings.

 

ARTICLE II

SECURITY INTEREST

 

SECTION 2.1. 
Grant of Security Interest. 
Each Grantor hereby grants to the Collateral Agent, for its benefit and
the ratable benefit of each other Secured Party, a continuing

 

5

 

security interest in all of
such Grantor’s following property, whether tangible or intangible, whether now
or hereafter existing, owned or acquired by such Grantor, and wherever located
(collectively, the “Collateral”):

 

(a)           (i) all
investment property in which such Grantor has an interest (including the
Capital Stock of each issuer of such Capital Stock described in Schedule I
hereto) and (ii) all other Capital Stock which are interests in limited
liability companies or partnerships in which such Grantor has an interest (including
the Capital Stock of each issuer of such Capital Stock described in Schedule
I hereto), in each case together with Dividends and Distributions payable
in respect of the Collateral described in the foregoing clauses (a)(i) and
(a)(ii);

 

(b)           all
goods, including all equipment and inventory in all of its forms;

 

(c)           all
accounts, contracts, contract rights, chattel paper, documents, instruments,
promissory notes and general intangibles (including tax refunds and all payment
intangibles), whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services, and all rights in and to all
security agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights, chattel
paper, documents, instruments, promissory notes, general intangibles and
payment intangibles (all of the foregoing collectively referred to as the “Receivables”,
and any and all such security agreements, guaranties, leases and other contracts
collectively referred to as the “Related Contracts”);

 

(d)           all
Intellectual Property Collateral;

 

(e)           all
Deposit Accounts;

 

(f)            all
letter of credit rights;

 

(g)           all
commercial tort claims in which such Grantor has rights (including as a plaintiff)
listed on Schedule VII;

 

(h)           the
Collateral Account, all cash, checks, drafts, notes, bills of exchange, money
orders, other like instruments and all investment property held in the
Collateral Account (or in any sub-account thereof) and all interest and earnings
in respect thereof;

 

(i)            all
books, records, writings, data bases, information and other property relating
to, used or useful in connection with, evidencing, embodying, incorporating or
referring to, any of the foregoing in this Section;

 

(j)            all
other property and rights of every kind and description and interests therein;
and

 

(k)           all
products, offspring, rents, issues, profits, returns, income, supporting
obligations and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in clauses
(a) through (j), and,

 

6

 

to the extent not otherwise
included, all payments under insurance (whether or not the Collateral Agent is
the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral).

 

Notwithstanding the foregoing, “Collateral”
shall not include (collectively, the “Excluded Property”) (i) any permit
or license or any contractual obligation entered into by Parent, the Company or
any Subsidiary Guarantor (A) that prohibits or requires the consent of any
Person other than the Company and its Affiliates which has not been obtained as
a condition to the creation by Parent, the Company or the applicable Subsidiary
Guarantor of a Lien on any right, title or interest in such permit, license or
contractual obligation or (B) to the extent that any requirement of law
applicable thereto prohibits the creation of a Lien thereon, but only, with
respect to the prohibition in clauses (A) and (B), to the extent, and
for as long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the Uniform Commercial Code or any other
requirement of law, (ii) property owned by the Company or any Subsidiary
Guarantor that is subject to a Lien permitted by clause (6) of the
definition of “Permitted Liens” (as defined in the Indenture) if the
contractual obligation pursuant to which such Lien is granted (or in the document
providing for such Lien) prohibits or requires the consent of any Person other
than the Company and its Affiliates which has not been obtained as a condition
to the creation of any other Lien on such item of property, (iii) any “intent
to use” trademark applications for which a statement of use has not been filed
(but only until such statement is filed), (iv) cash collateral for (A) letters
of credit in an amount not to exceed $15.0 million, it being understood
that on the Closing Date the Company designated account #796636298 at J.P.
Morgan Chase Bank, N.A. to maintain such cash and (B) Hedging Obligations
entered into in the ordinary course of business in an aggregate amount not to
exceed $5.0 million, (v) any general intangibles to the extent containing
an enforceable restriction against the granting of a security interest therein,
(vi) leasehold real property interests and (vii) investment property
consisting of voting Capital Stock of an issuer that is a Foreign Subsidiary
(other than a Foreign Subsidiary that (i) is treated as a partnership
under the Code or (ii) is not treated as an entity that is separate from (A) such
Grantor; (B) any Person that is treated as partnership under the Code or (C) any
“United States person” (as defined in Section 7701(a)(30) of the Code)) of
such Grantor, in excess of 65% of the total combined voting power of all
Capital Stock of each such Foreign Subsidiary; provided,
however, that “Excluded Property”
shall not include any proceeds, products, substitutions or replacements of
Excluded Property (unless such proceeds, products, substitutions or
replacements would otherwise constitute Excluded Property), which assets
subject to such Lien shall not constitute Collateral under any circumstance.

 

Notwithstanding anything to the contrary in this Section 2.1,
in the event that Rule 3-16 of Regulation S-X under the Securities
Act (as amended or modified from time to time) is interpreted by the SEC to
require (or is replaced with another rule or regulation, or any other law,
rule or regulation is adopted, which would require) the filing with the
SEC (or any other Governmental Authority) of separate financial statements of
any Subsidiary of the Company due to the fact that such Subsidiary’s Capital
Stock secures the Notes, then the Capital Stock of such Subsidiary shall
automatically be deemed not to be part of the Collateral but only to the extent
necessary to not be subject to such requirement (the “Rule 3-16 Exception”).
In such event, the Collateral Documents may be amended or modified, without the
consent of any Holder,

 

7

 

to the extent necessary to
release the Security Interests in favor of the Collateral Agent on the shares
of Capital Stock that are so deemed to no longer constitute part of the
Collateral. In the event that Rule 3-16 of Regulation S-X under the
Securities Act (as amended or modified from time to time) is interpreted by the
SEC to permit (or are replaced with another rule or regulation, or any
other law, rule or regulation is adopted, which would permit) such
Subsidiary’s Capital Stock to secure the Notes in excess of the amount then
pledged without the filing with the SEC (or any other Governmental Authority)
of separate financial statements of such Subsidiary, then the Capital Stock of
such Subsidiary shall automatically be deemed to be a part of the Collateral
but only to the extent necessary to not be subject to any such financial
statement requirement.

 

SECTION 2.2.  Security for Obligations.  This Security Agreement and the Collateral in
which the Collateral Agent for the benefit of the Secured Parties is granted a
security interest hereunder by the Grantors secure the payment of all
Obligations now or hereafter existing.

 

SECTION 2.3. 
Grantors Remain Liable. 
Anything herein to the contrary notwithstanding

 

(a)           the
Grantors will remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein, and will perform all of their duties
and obligations under such contracts and agreements to the same extent as if
this Security Agreement had not been executed;

 

(b)           the
exercise by the Collateral Agent of any of its rights hereunder will not
release any Grantor from any of its duties or obligations under any such
contracts or agreements included in the Collateral; and

 

(c)           no
Secured Party will have any obligation or liability under any contracts or
agreements included in the Collateral by reason of the security interests
granted by this Security Agreement, nor will any Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

 

SECTION 2.4. 
Security Interest Absolute, etc. 
This Security Agreement shall in all respects be a continuing, absolute,
unconditional and irrevocable grant of security interest and shall remain in
full force and effect until the Termination Date or until otherwise released in
accordance with Section 7.5. 
All rights of the Secured Parties and the security interests granted to
the Collateral Agent (for its benefit and the ratable benefit of each other
Secured Party) hereunder, and all obligations of the Grantors hereunder, shall,
in each case, be absolute, unconditional and irrevocable irrespective of:

 

(a)           any
lack of validity, legality or enforceability of any Notes Document;

 

(b)           the
failure of any Secured Party (i) to assert any claim or demand or to enforce
any right or remedy against any Obligor or any other Person (including any
other Guarantor) under the provisions of any Notes Document or otherwise, or (ii) to
exercise any right or remedy against any other guarantor (including any other
Guarantor) of, or collateral securing, any Obligations;

 

8

 

(c)           any
change in the time, manner or place of payment of, or in any other term of, all
or any part of the Obligations, or any other extension, compromise or renewal
of any Obligation;

 

(d)           any
reduction, limitation, impairment or termination of any Obligations for any
reason, including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to (and each Grantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations or otherwise;

 

(e)           any
amendment to, rescission, waiver, or other modification of, or any consent to
or departure from, any of the terms of any Notes Document;

 

(f)            any
addition, exchange or release of any collateral or of any Person that is (or
will become) a guarantor (including the Grantors hereunder) of the Obligations,
or any surrender or non-perfection of any collateral, or any amendment to or
waiver or release or addition to, or consent to or departure from, any other
guaranty held by any Secured Party securing any of the Obligations; or

 

(g)           any
other circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, any Obligor, any surety or any guarantor.

 

SECTION 2.5. 
Postponement of Subrogation. 
Each Grantor agrees that it will not exercise any rights which it may
acquire by way of rights of subrogation under any Notes Document to which it is
a party.  No Grantor shall seek or be
entitled to seek any contribution or reimbursement from any Obligor, in respect
of any payment made under any Notes Document or otherwise, until following the
Termination Date.  Any amount, paid to
such Grantor on account of any such subrogation rights prior to the Termination
Date shall be held in trust for the benefit of the Secured Parties and shall
immediately be paid and turned over to the Collateral Agent for the benefit of
the Secured Parties in the exact form received by such Grantor (duly endorsed
in favor of the Collateral Agent, if required), to be credited and applied
against the Obligations, whether matured or unmatured, in accordance with Section 6.1;
provided that if such Grantor has made payment to the Secured Parties of
all or any part of the Obligations and the Termination Date has occurred, then
at such Grantor’s request, the Collateral Agent (on behalf of the Secured
Parties) will, at the expense of such Grantor, execute and deliver to such
Grantor appropriate documents (without recourse and without representation or
warranty) necessary to evidence the transfer by subrogation to such Grantor of
an interest in the Obligations resulting from such payment.  In furtherance of the foregoing, at all times
prior to the Termination Date, such Grantor shall refrain from taking any
action or commencing any proceeding against any Obligor (or its successors or
assigns, whether in connection with a bankruptcy proceeding or otherwise) to
recover any amounts in respect of payments made under this Security Agreement
to any Secured Party.

 

9

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Secured Parties to enter into
the Indenture and issue Notes thereunder, the Grantors represent and warrant to
each Secured Party as set forth below.

 

SECTION 3.1. 
As to Capital Stock of Subsidiaries.  With respect to any Subsidiary of any Grantor
that is

 

(a)           a
corporation, business trust, joint stock company or similar Person, all Capital
Stock issued by such Subsidiary are duly authorized and validly issued, fully
paid and non-assessable, and represented by a certificate; and

 

(b)           a
partnership or limited liability company, no Capital Stock issued by such
Subsidiary (i) are dealt in or traded on securities exchanges or in
securities markets, (ii) expressly provide that such Capital Stock are a
security governed by Article 8 of the UCC or (iii) are held in a securities
account.

 

The percentage of the issued and outstanding
Capital Stock of each Subsidiary pledged by any Grantor hereunder are as set
forth on Schedule I hereto.

 

SECTION 3.2. 
Grantor Name, Location, etc. 
The jurisdiction in which each Grantor is located for purposes of
Sections 9-301 and 9-307 of the UCC is set forth in Item A of Schedule
II hereto.  During the five years
preceding the date hereof, no Grantor has been known by any legal name different
from the one set forth on the signature page hereto, no Grantor used any
other name on any filings with the IRS, nor has any such Grantor been the
subject of any merger, acquisition (including asset acquisition) or other
corporate reorganization, except as set forth in Item B of Schedule
II hereto.  The name set forth on the
signature page is the true and correct name of such Grantor.  Each Grantor’s organizational identification
number is (and, during the four months preceding the date hereof, such Grantor
has not had an organizational identification number different from that) set
forth in Item C of Schedule II hereto.  No Grantor is a party to any material
federal, state or local government contract except as set forth in Item D
of Schedule II hereto.  No Grantor
maintains any Deposit Accounts with any Person except as set forth in Item E
of Schedule II hereto. No Grantor has changed its jurisdiction of
incorporation or organization during the four months preceding the date hereof.

 

SECTION 3.3. 
Ownership, No Liens, etc. 
Such Grantor owns its Collateral free clear of any Lien, except for (a) Liens
created by this Security Agreement, (b) Inchoate Liens and, (c) in
the case of Collateral other than the Capital Stock of each Subsidiary pledged
hereunder, Liens permitted by Section 3.5 of the Indenture.  No effective financial statement or other
filing similar in effect covering any Collateral is on file in any record
office, except those filed in favor of the Collateral Agent relating to this
Security Agreement or those filed in connection with Liens permitted by Section 3.5
of the Indenture or as to which a duly executed termination statement relating
to such financing statement or other instrument has been delivered to the Collateral
Agent on the Issue Date.

 

10

 

SECTION 3.4. 
Possession of Inventory, etc. 
Except with respect to each Grantor’s automated ice production and
packaging system known under the Trademark “THE ICE FACTORY”, each Grantor’s
ice merchandisers located at certain of such Grantor’s customer locations and
each Grantor’s ice product inventory located at certain third-party warehouses,
each Grantor agrees that it will maintain exclusive possession of its goods,
instruments, promissory notes and inventory, other than (a) inventory in
transit in the ordinary course of business, (b) inventory which is in the
possession or control of a warehouseman, bailee agent or other Person (other
than a Person controlled by or under common control with such Grantor) that has
been notified of the security interest created in favor of the Secured Parties
pursuant to this Security Agreement, and has agreed to hold such inventory
subject to the Secured Parties’ Lien and waive any Lien held by it against such
inventory and (c) instruments or promissory notes that have been delivered
to the Collateral Agent pursuant to Section 3.5.

 

SECTION 3.5. 
Negotiable Documents, Instruments and Chattel Paper.  Such Grantor has delivered to the Collateral
Agent possession of all originals of all negotiable documents, instruments,
promissory notes and chattel paper owned or held by such Grantor on the Issue
Date with a value in excess of $500,000.

 

SECTION 3.6. 
Intellectual Property Collateral. 
With respect to any Intellectual Property Collateral the loss,
impairment or infringement of which could reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), business,
operations, assets, liabilities (contingent or otherwise) or properties of the
Obligors taken as a whole:

 

(a)           such
Intellectual Property Collateral is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part;

 

(b)           such
Intellectual Property Collateral is valid and enforceable;

 

(c)           such
Grantor has made all necessary filings and recordations to protect its interest
in such Intellectual Property Collateral, including recordations of all of its
interests in the Patent Collateral and Trademark Collateral in the United
States Patent and Trademark Office and (subject to the terms of the Indenture)
in corresponding offices throughout the world, and its claims to the Copyright
Collateral in the United States Copyright Office and (subject to the terms of
the Indenture) in corresponding offices throughout the world;

 

(d)           such
Grantor is the exclusive owner of the entire and unencumbered right, title and
interest in and to such Intellectual Property Collateral and no claim has been
made that the use of such Intellectual Property Collateral does or may violate
the asserted rights of any third party; and

 

(e)           such
Grantor has performed and will continue to perform all acts and has paid and
will continue to pay all required fees and taxes to maintain each and every
such item of Intellectual Property Collateral in full force and effect.

 

Except as would not have a Material Adverse
Effect, each Grantor owns directly or is entitled to use by license or
otherwise, all patents, Trademarks, Trade Secrets, copyrights, mask works,

 

11

 

licenses, technology, know-how, processes and
rights with respect to any of the foregoing used in, necessary for or of importance
to the conduct of such Grantor’s business.

 

SECTION 3.7. 
Validity, etc.  This
Security Agreement creates a valid security interest in the Collateral securing
the payment of the Obligations.  Each
Grantor has filed or caused to be filed all Filing Statements in the
appropriate offices therefor (or has authenticated and delivered to the
Collateral Agent Filing Statements suitable for filing in such offices) and has
taken all of the actions necessary to create perfected and (in the case of
Collateral consisting of the Capital Stock of each Subsidiary pledged
hereunder, subject to Inchoate Liens, and in case of all other Collateral,
subject to Section 3.5 of the Indenture) first-priority security interests
in the applicable Collateral (other than (i) Deposit Accounts, (ii) cash
and (iii) negotiable documents, instruments, promissory notes and chattel
paper with a value of less than $500,000).

 

SECTION 3.8. 
Authorization, Approval, etc. 
Except as have been, or on the Issue Date will be, obtained or made and
are, or on the Issue Date will be, in full force and effect, and except (i) with
respect to any securities issued by a Subsidiary of the Grantor, as may be required
in connection with a disposition of such securities by laws affecting the
offering and sale of securities generally and (ii) any “change of control”
or similar filings required by any Governmental Authority, no authorization,
approval or other action by, and no notice to or filing with, any Governmental
Authority is required either

 

(a)           for
the grant by the Grantors of the security interest granted hereby, the pledge
by the Grantors of any Collateral pursuant hereto or for the execution,
delivery and performance of this Security Agreement by the Grantors;

 

(b)           for
the perfection of the Collateral Agent of its rights hereunder (other than with
respect to filings for the perfection of security interests that will not be
made the Issue Date but delivered to the Collateral Agent for filing on the
Issue Date); or

 

(c)           for
the exercise by the Collateral Agent of the voting or other rights provided for
in this Security Agreement.

 

SECTION 3.9. 
Best Interests.  It is in
the best interests of such Grantor to execute this Security Agreement inasmuch
as such Grantor will, as a result of being a Subsidiary of the Borrower, derive
substantial direct and indirect benefits from the sale of the Notes pursuant to
the Indenture, and each Grantor agrees that the Secured Parties are relying on
this representation in agreeing to purchase the Notes.

 

ARTICLE
IV

COVENANTS

 

Each Grantor covenants and agrees that, until the
Termination Date, such Grantor will perform, comply with and be bound by the
obligations set forth below.

 

SECTION 4.1. 
As to Investment Property, etc.

 

12

 

SECTION 4.1.1. 
Capital Stock of Subsidiaries. 
No Grantor will allow any of its Subsidiaries that is

 

(a)           a
corporation, business trust, joint stock company or similar Person, to issue
uncertificated securities; and

 

(b)           a
partnership or limited liability company, to (i) issue Capital Stock that
are to be dealt in or traded on securities exchanges or in
securities markets, (ii) expressly provide in its Organic Documents that
its Capital Stock are securities governed by Article 8 of the UCC, or (iii) place
such Subsidiary’s Capital Stock in a securities account; provided that
such Grantor may allow any Subsidiaries to take any of the actions set forth in
clauses (i), (ii) or (iii) so long as the
Collateral Agent has received evidence satisfactory to it that it has a
perfected, first-priority security interest in such Capital Stock (subject to
Inchoate Liens).

 

SECTION 4.1.2. 
Investment Property (other than Certificated Securities).  With respect to any investment property
(other than certificated securities) owned by any Grantor (other than cash in
an aggregate amount not exceeding $250,000), such Grantor will cause a Control
Agreement relating to such investment property to be executed and delivered by
such Grantor and the applicable financial intermediary in favor of the
Collateral Agent at the time such investment property is acquired or established.

 

SECTION 4.1.3. 
Stock Powers, etc.  Each Grantor agrees that all certificated securities
delivered by such Grantor pursuant to this Security Agreement will be
accompanied by duly executed undated blank stock powers, or other equivalent
instruments of transfer reasonably acceptable to the Collateral Agent,

 

SECTION 4.1.4. 
Continuous Pledge.  Each
Grantor will (subject to the terms of the Indenture) deliver to the Collateral
Agent and at all times keep pledged to the Collateral Agent pursuant hereto, on
a first-priority (subject to Section 3.5 of the Indenture), perfected
basis all investment property constituting Collateral, all payment intangibles
to the extent they are evidenced by a document, instrument, promissory note or
chattel paper and, following an Event of Default, all interest and principal
with respect to such payment intangibles, all Dividends and Distributions with
respect to investment property constituting Collateral, and all proceeds and
rights from time to time received by or distributable to such Grantor in
respect of any of the foregoing Collateral. 
Each Grantor agrees that it will, promptly (and in any event within 30
days following receipt thereof), deliver to the Collateral Agent possession of
all originals of negotiable documents, instruments, promissory notes and
chattel paper with a value in excess of $500,000 that it acquires following the
Issue Date.

 

SECTION 4.1.5. 
Voting Rights; Dividends, etc. 
Each Grantor agrees:

 

(a)           promptly
upon receipt of notice of the occurrence and continuance of an Event of Default
from the Collateral Agent and without any request therefor by the Collateral
Agent, so long as such Event of Default shall continue, to deliver (properly endorsed
where required hereby or requested by the Collateral Agent) to the Collateral Agent
all Dividends and Distributions with respect to investment property, all
interest, principal,

 

13

 

other cash payments on
payment intangibles, and all proceeds of the Collateral, in each case
thereafter received by such Grantor, all of which shall be held by the Collateral
Agent as additional Collateral;

 

(b)           with
respect to Collateral consisting of general partner interests or limited
liability company interests, to use commercially reasonable efforts to permit
modifications to the respective Organic Documents to admit the Collateral
Agent, as a general partner or member, respectively, immediately upon the
occurrence and during the continuance of an Event of Default; and

 

(c)           so
long as the Collateral Agent has notified such Grantor of the Collateral Agent’s
intention to exercise its voting power under this clause,

 

(i)            that
the Collateral Agent may exercise (to the exclusion of such Grantor) the voting
power and all other incidental rights of ownership with respect to any
investment property constituting Collateral and such Grantor hereby grants the
Collateral Agent an irrevocable proxy, exercisable under such circumstances, to
vote such investment property; and

 

(ii)           to
promptly deliver to the Collateral Agent such additional proxies and other
documents as may be necessary to allow the Collateral Agent to exercise such voting
power.

 

All Dividends, Distributions, interest,
principal, cash payments, payment intangibles and proceeds which may at any
time and from time to time be held by such Grantor but which such Grantor is
then obligated to deliver to the Collateral Agent, shall, until delivery to
Collateral Agent, be held by such Grantor separate and apart from its other
property in trust for the Collateral Agent. 
The Collateral Agent agrees that unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given the notice
referred to in clause (c), such Grantor will have the exclusive voting
power with respect to any investment property constituting Collateral and the
Collateral Agent will, upon the written request of such Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by such Grantor which are necessary to allow such Grantor to exercise
that voting power; provided that no vote shall be cast, or consent,
waiver, or ratification given or action taken by such Grantor that would impair
any such Collateral or be inconsistent with or violate any provision of any
Notes Document.

 

SECTION 4.2. 
Name of Grantor.  No
Grantor will change its name or jurisdiction of incorporation or organization
or organizational identification number except upon 30 days’ prior written notice
(or such shorter period as may be agreed to by the Collateral Agent) to the
Collateral Agent and taking all actions necessary to ensure continued
perfection of the Collateral Agent’s security interest in the Collateral at all
times following any such change.  If any Grantor
is organized outside of the United States, it will not change its “location” as
determined in accordance with Sections 9-301 and 9-307 of the UCC and as set
forth in Item A of Schedule II hereto except upon 30 days’ prior
written notice (or such shorter period as may be agreed to by the Collateral
Agent) to the Collateral Agent.

 

14

 

SECTION 4.3.  As to Receivables.

 

(a)           Each
Grantor shall have the right to collect all Receivables so long as no Event of
Default shall have occurred and be continuing.

 

(b)           Upon
(i) the occurrence and continuance of an Event of Default and (ii) the
delivery of written notice by the Collateral Agent to each Grantor, all
proceeds of Collateral received by such Grantor shall be delivered in kind to
the Collateral Agent for deposit to a Deposit Account (the “Collateral
Account”) of such Grantor maintained with the Collateral Agent, and such
Grantor shall not commingle any such proceeds, and shall hold separate and
apart from all other property, all such proceeds in express trust for the
benefit of the Collateral Agent until delivery thereof is made to the
Collateral Agent.

 

(c)           Following
the delivery of notice pursuant to clause (b)(ii) of this Section,
the Collateral Agent shall have the right to apply any amount in the Collateral
Account to the payment of any Obligations which are due and payable.

 

(d)           With
respect to the Collateral Account, it is hereby confirmed and agreed that (i) deposits
in each Collateral Account are subject to a security interest as contemplated
hereby, (ii) each such Collateral Account shall be under the control of
the Collateral Agent and, (iii) the Collateral Agent shall have the sole
right of withdrawal over such Collateral Account.

 

SECTION 4.4.  As to Collateral.

 

(a)           Subject
to clause (b) of this Section, each Grantor (i) may in the ordinary
course of its business, at its own expense, sell, lease or
furnish under the contracts of service any of the inventory normally held by
such Grantor for such purpose, and use and consume, in the ordinary course of
its business, any raw materials, work in process or materials normally held by
such Grantor for such purpose, (ii) will, at its own expense, endeavor to
collect, as and when due, all amounts due with respect to any of the
Collateral, including the taking of such action with respect to such collection
as the Collateral Agent may reasonably request following the occurrence of an
Event of Default or, in the absence of such request, as such Grantor may deem
advisable, and (iii) may grant, in the ordinary course of business, to any party obligated
on any of the Collateral, any rebate, refund, or allowance to which such party
may be lawfully entitled, and may accept, in connection therewith, the return
of goods, the sale or lease of which shall have given rise to such Collateral.

 

(b)           At
any time following the occurrence and during the continuance of an Event of
Default, whether before or after the maturity of any of the Obligations, the
Collateral Agent may (i) revoke any or all of the rights of each Grantor
set forth in clause (a), (ii) notify any parties obligated on any
of the Collateral to make payment to the Collateral Agent of any amounts due or
to become due thereunder and (iii) enforce collection of any of the Collateral
by suit or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or not longer
than the original period) any indebtedness thereunder or evidenced thereby.

 

15

 

(c)           Upon
request of the Collateral Agent following the occurrence and during the
continuance of an Event of Default, each Grantor will, at its own expense
notify any parties obligated on any of the Collateral to make payment to the
Collateral Agent of any amounts due or to become due thereunder.

 

(d)           At
any time following the occurrence and during the continuation of an Event of
Default, the Collateral Agent may endorse, in the name of such Grantor, any
item, howsoever received by the Collateral Agent, representing any payment on
or other proceeds of any of the Collateral.

 

SECTION 4.5. 
As to Intellectual Property Collateral.  Each Grantor covenants and agrees to comply
with the following provisions as such provisions relate to any Intellectual
Property Collateral material to the condition (financial or otherwise),
business, operations, liabilities (contingent or otherwise) or properties of
the Obligors taken as a whole:

 

(a)           such
Grantor will not (i) do or fail to perform any act whereby any of the
Patent Collateral may lapse or become abandoned or dedicated to the public or
unenforceable, (ii) permit any of its licensees to (A) fail to continue
to use any of the Trademark Collateral in order to maintain all of the
Trademark Collateral in full force free from any claim of abandonment for
non-use, (B) fail to maintain as in the past quality of products and
services offered under all of the Trademark Collateral, (C) employ all of
the Trademark Collateral registered with any federal or state or foreign
authority with an appropriate notice of such registration, (D) adopt or
use any other Trademark which is confusingly similar or a colorable imitation
of any of the Trademark Collateral, (E) use any of the Trademark
Collateral registered with any federal, state or foreign authority except for
the uses for which registration or application for registration of all of the
Trademark Collateral has been made or (F) do or permit any act or
knowingly omit to do any act whereby any of the Trademark Collateral may lapse
or become invalid or unenforceable, or (iii) do or permit any act or
knowingly omit to do any act whereby any of the Copyright Collateral or any of
the Trade Secrets Collateral may lapse or become invalid or unenforceable or
placed in the public domain except upon expiration of the end of an unrenewable
term of a registration thereof, unless in the case of any of the foregoing
requirements in clauses (i), (ii) and (iii), such
Grantor either (x) reasonably and in good faith determine that any of such
Intellectual Property Collateral is of negligible economic value to such
Grantor, or (y) have a valid business purpose to do otherwise;

 

(b)           such
Grantor shall promptly notify the Collateral Agent if it knows or has reason to
know, that any application or registration relating to any material item of the
Intellectual Property Collateral may become abandoned or dedicated to the public or placed in the
public domain or invalid or unenforceable, or of any adverse determination or development
(including the institution of, or any such determination or develop in, any proceeding
in the United States Patent and Trademark Office, the United States Copyright Office or any foreign
counterpart thereof or any court) regarding such Grantor’s ownership of any of
the Intellectual Property Collateral, its right to register the same or to keep
and maintain and enforce the same;

 

16

 

(c)           such
Grantor will take all necessary steps, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office
or (subject to the terms of the Indenture) any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue any
application (and to obtain the relevant registration) filed with respect to,
and to maintain any registration of, the Intellectual Property Collateral,
including the filing of applications for renewal, affidavits of use, affidavits
of incontestability and opposition, interference and cancellation proceedings
and the payment of fees and taxes (except to the extent that dedication, abandonment
or invalidation is permitted under the foregoing clause (a) or (b));
and

 

(d)           on
the Issue Date (and thereafter upon the request of the Collateral Agent; provided
that, unless an Event of Default has occurred and is continuing, such request
shall be made no more than once in any period of 12 consecutive months) such
Grantor will promptly execute and deliver to the Collateral Agent (as
applicable) a Patent Security Agreement, Trademark Security Agreement and/or
Copyright Security Agreement, as the case may be, in the forms of Exhibit A,
Exhibit B and Exhibit C hereto following its obtaining
an interest in any such Intellectual Property, and shall execute and deliver to
the Collateral Agent any other document required to acknowledge or register or
perfect the Collateral Agent’s interest in any part of such item of
Intellectual Property Collateral unless the Grantor shall determine in good
faith (with the consent of the Collateral Agent, which consent shall not be
unreasonably withheld or delayed) that any Intellectual Property Collateral is
of negligible economic value to the Grantor.

 

SECTION 4.6.  Commercial Tort Claims.  Each Grantor shall notify the Collateral
Agent if such Grantor reasonably believes it is entitled to recover a commercial
tort claim the value of which is in excess of $1,000,000, and such Grantor
promptly (and in any event within 30 days of such acquisition) shall take all
such action reasonably necessary or requested by the Collateral Agent to grant
to the Collateral Agent and perfect a security interest in such commercial tort
claim.

 

SECTION 4.7. 
As to Deposit Accounts. 
With respect to any Deposit Accounts owned by any Grantor (other than
cash and cash equivalents not exceeding $250,000 in the aggregate and accounts
the entire balance of which is swept at least once every three business days to
an account described below), provided that, notwithstanding such threshold, a
Control Agreement shall always cover the Company’s and its Subsidiaries’ main
collection account, such Grantor will cause a Control Agreement relating to such
Deposit Account to be executed and delivered by such Grantor and the applicable
bank in favor of the Collateral Agent:

 

(a)           with respect to
Deposit Accounts maintained on the Issue Date, on the Issue Date; and

 

(b)           with
respect to Deposit Accounts established after the Issue Date, at the time such
Deposit Account is established.

 

SECTION 4.8. 
Further Assurances, etc. 
Each Grantor agrees that, from time to time at its own expense, it will
promptly execute and deliver all further instruments and documents, and take
all further action, that may be necessary or that the Collateral Agent may reasonably

 

17

 

request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral.  Without limiting the generality of the foregoing,
such Grantor will

 

(a)           from
time to time upon the request of the Collateral Agent, promptly deliver to the
Collateral Agent such stock powers, instruments and similar documents, reasonably
satisfactory in form and substance to the Collateral Agent, with respect to
such Collateral as the Collateral Agent may reasonably request and will, from
time to time upon the request of the Collateral Agent after the occurrence and
during the continuance of any Event of Default promptly transfer any securities
constituting Collateral into the name of any nominee designated by the Collateral
Agent; if any Collateral shall be evidenced by an instrument, negotiable
document, promissory note or chattel paper with a value in excess of $500,000,
deliver and pledge to the Collateral Agent hereunder such instrument,
negotiable document, promissory note or chattel paper duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Collateral Agent;

 

(b)           file
(or cause to be filed) such Filing Statements or continuation statements, or
amendments thereto, and such other instruments or notices (including assignment
of claim form under or pursuant to the federal assignment of claims statute 31
U.S.C. § 3726, any successor or amended version thereof or any regulation
promulgated under or pursuant to any version thereof) as are necessary, in
order to perfect and preserve the security interests and other rights granted
or purported to be granted to the Collateral
Agent hereby;

 

(c)           deliver
to the Collateral Agent and at all times keep pledged to the Collateral Agent
pursuant hereto, on a first-priority (subject to Section 3.5 of the
Indenture), perfected basis, at the reasonable request of the Collateral Agent,
all investment property constituting Collateral, all Distributions with respect
thereto, and after an Event of Default, all Dividends and all interest and
principal with respect to promissory notes, and all proceeds and rights from
time to time receive by or distributable to such Grantor in respect of any of
the foregoing Collateral;

 

(d)           furnish
to the Collateral Agent, from time to time at the Collateral Agent’s request,
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent
may reasonably request, all in reasonable detail; and

 

(e)           do
all things reasonably requested by the Collateral Agent in order to enable the
Collateral Agent to have control (as such term is defined in Article 8 and
Article 9 of any applicable Uniform Commercial Code relevant to the
creation, perfection or priority of Collateral consisting of Deposit Accounts,
accounts and letter of credit rights) over any Collateral;

 

With respect to the foregoing and the grant
of the security interest hereunder, each Grantor hereby authorizes the
Collateral Agent to file one or more financing or continuation statements, and

 

18

 

amendments thereto, relative to all or any
part of the Collateral including any financing statement describing the
collateral as “all assets,” or words of similar effect.  Each Grantor agrees that a carbon,
photographic or other reproduction of this Security Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.

 

ARTICLE V

THE COLLATERAL AGENT

 

SECTION 5.1. 
Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably appoints the
Collateral Agent its attorney-in-fact, with full authority in the place and
stead of such Grantor and in the name of such Grantor or otherwise, from time
to time in the Collateral Agent’s discretion, following the occurrence and
during the continuance of an Event of Default, to take any action and to
execute any instrument which the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Security Agreement, including:

 

(a)           to
ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;

 

(b)           to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) above;

 

(c)           to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Collateral; and

 

(d)           to
perform the affirmative obligations of such Grantor hereunder.

 

Each Grantor hereby acknowledges, consents
and agrees that the power of attorney granted pursuant to this Section is
irrevocable and coupled with an interest.

 

SECTION 5.2. 
Collateral Agent May Perform.  If any Grantor fails to perform any agreement
contained herein, upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent may itself perform, or cause performance of,
such agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Grantor pursuant to Article VII of the
Indenture.

 

SECTION .5.3. 
Collateral Agent Has No Duty. 
The powers conferred on the Collateral Agent hereunder are solely to
protect its interest (on behalf of the Secured Parties) in the Collateral and
shall not impose any duty on it to exercise any such powers.  Except for reasonable care of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Collateral Agent shall have no duty as to any Collateral or responsibility
for

 

19

 

(a)           ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any investment property, whether or not
the Collateral Agent has or is deemed to have knowledge of such matters, or

 

(b)           taking
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral.

 

SECTION 5.4. 
Reasonable Care.  The
Collateral Agent is required to exercise reasonable care in the custody and
preservation of any of the Collateral or Mortgaged Property in its possession; provided
that the Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral or Mortgaged Property, if
it takes such action for that purpose as Grantor reasonably requests in writing
at times other than upon the occurrence and during the  continuance of
any Event of Default, but failure of the Collateral Agent to comply with any
such request at any time shall not in itself be deemed a failure to exercise reasonable
care.

 

SECTION 5.5. 
Authority of Collateral Agent. 
Each Grantor acknowledges that the rights and responsibilities of the
Collateral Agent under this Security Agreement and the other Collateral
Documents with respect to any action taken by the Collateral Agent or the exercise
or non-exercise by the Collateral Agent of any option, right, request, judgment
or other right or remedy provided for herein or in any other Collateral
Document or resulting or arising out of this Security Agreement or any other
Collateral Document shall, as between the Collateral Agent and the Secured
Parties, be governed by the Indenture, the Intercreditor Agreements and by such
other agreements with respect thereto as may exist from to time among them
(including, without limitation, the other Notes Documents), but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and the Grantors shall not be under
any obligation, or have any entitlement, to make any inquiry respecting such
authority.  The Collateral Agent shall
have all of the rights and benefits afforded it under the Indenture, the First
Lien Intercreditor Agreement and the Junior Lien Intercreditor Agreement in the
administration of this Security Agreement and the other Collateral Documents,
as if such rights and benefits were specifically set forth herein, including,
but not limited to, the rights and benefits set forth in Article XI of the
Indenture.

 

ARTICLE VI 

REMEDIES

 

SECTION 6.1. 
Certain Remedies.  If any
Event of Default shall have occurred and be continuing:

 

(a)           The
Collateral Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC (whether or
not the UCC applies to the affected Collateral) and also may

 

(i)            require
each Grantor to, and each Grantor hereby agrees that it will, at its expense
and upon request of the Collateral Agent forthwith, assemble

 

20

 

all or part of the Collateral as directed by
the Collateral Agent and make it available to the Collateral Agent at a place
to be designated by the Collateral Agent which is reasonably convenient to both
parties, and

 

(ii)           without
notice except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Collateral Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercially reasonable.  Each Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days prior notice to such
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.  The Collateral Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been
given.  The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.

 

(b)           All
cash proceeds received by the Collateral Agent in respect of any sale of,
collection from, or other realization upon, all or any part of the Collateral
shall be applied by the Collateral Agent against, all or any part of the
Obligations as in Article VII of the Indenture.

 

(c)           The
Collateral Agent may

 

(i)            transfer
all or any part of the Collateral into the name of the Collateral Agent or its
nominee, with or without disclosing that such Collateral is subject to the Lien
hereunder,

 

(ii)           notify
the parties obligated on any of the Collateral to make payment to the
Collateral Agent of any amount due or to become due thereunder,

 

(iii)          enforce
collection of any of the Collateral by suit or otherwise, and surrender,
release or exchange  all or any part
thereof, or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party with
respect thereto,

 

(iv)          endorse
any checks, drafts, or other writings in any Grantor’s name to allow collection
of the Collateral,

 

(v)           take
control of any proceeds of the Collateral,
and

 

(vi)          execute (in the
name, place and stead of any Grantor) endorsements,
assignments, stock powers and other instruments of conveyance or transfer with
respect to all or any of the Collateral.

 

SECTION 6.2. 
Securities Laws.  If the
Collateral Agent shall determine to exercise its right to sell all or any of
the Capital Stock that are Collateral pursuant to Section 6.1,

 

21

 

each Grantor agrees that,
upon request of the Collateral Agent, such Grantor will, at its own expense,
use commercially reasonable efforts to:

 

(a)           execute
and deliver, and cause (or, with respect to any issuer which is not a
Subsidiary of such Grantor, use its best efforts to cause) each issuer of the
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the opinion of
the Collateral Agent, advisable to register the sale of such Capital Stock
under the provisions of the Securities Act of 1933, as from time to time
amended (the “Securities Act”), and cause the registration statement relating
thereto to become effective and to remain effective for such period as prospectuses
are required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the reasonable opinion of the
Collateral Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
SEC applicable thereto;

 

(b)           use
commercially reasonable efforts to qualify such Capital Stock for sale under
the state securities or “Blue Sky” laws and to obtain all necessary
governmental approvals for, the sale of such Capital Stock, as requested by the
Collateral Agent;

 

(c)           cause
(or, with respect to any issuer which is not a Subsidiary of such Grantor, use
its best efforts to cause) each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and

 

(d)           do
or cause to be done all such other acts and things as may be necessary to make
such sale of the Collateral or any part thereof valid and binding and in compliance
with applicable law.

 

SECTION 6.3. 
Compliance with Restrictions. 
Each Grantor agrees that in any sale of any of the Collateral whenever
an Event of Default shall have occurred and be continuing, the Collateral Agent
is hereby authorized to comply with any limitation or restriction it connection with
such sale as it may be advised by counsel is necessary in order to (i) avoid
any violation of applicable law (including compliance with such procedures as
may restrict the number of prospective bidders and purchasers, require that
such prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to Persons who will represent
and agree that they are purchasing for their own account for investment and not
with a view to the distribution or resale of such Collateral), or (ii) obtain
any required approval of the sale or of the purchaser by any Governmental
Authority or official and such Grantor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Collateral Agent be liable
nor accountable to such Grantor for any discount allowed by the reason of the
fact that such Collateral is sold in compliance with any such limitation or restriction.

 

SECTION 6.4. 
Protection of Collateral. 
The Collateral Agent may from time to time, at its option, perform any
act which any Grantor fails to perform after being requested in writing so to
perform (it being understood that no such request need be given after the occurrence

 

22

 

and during the continuance
of an Event of Default) and the Collateral Agent may from time to time take any
other action which the Collateral Agent reasonably deems necessary for the
maintenance, preservation or protection of any of the Collateral or of its
security interest therein.

 

ARTICLE VII

MISCELLANEOUS PROVISIONS

 

SECTION 7.1. 
Notes Document.  This
Security Agreement is a Notes Document executed pursuant to the Indenture and
shall (unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms
and provisions thereof.

 

SECTION 7.2. 
Intercreditor
Agreements.  Notwithstanding
anything herein to the contrary, the Liens and security interests granted to
the Collateral Agent pursuant to this Security Agreement, the exercise of any
right or remedy by the Collateral Agent hereunder and the obligations of the
Grantors hereunder, in each case, with respect to the Collateral are subject to
the limitations and provisions of the Intercreditor Agreements.  In the event of any conflict between the
terms of the Intercreditor Agreements and the terms of this Security Agreement,
the terms of the Intercreditor Agreements shall govern and control.  Prior to the Discharge of the Credit
Agreement Obligations (as such terms are defined in the First Lien
Intercreditor Agreement) any requirement of this Security Agreement to deliver possession
of Collateral to the Collateral Agent shall be deemed satisfied by delivery of
such Collateral to the Credit Agreement Collateral Agent (as defined in the
First Lien Intercreditor Agreement).

 

SECTION 7.3. 
Binding on Successors, Transferees and Assigns; Assignment.  This Security Agreement shall remain in full
force and effect until the Termination Date has occurred, shall be binding upon
the Grantors and their successors, transferees and assigns and shall inure to
the benefit of and be enforceable by each Secured Party and its successors,
transferees and assigns.

 

SECTION 7.4. 
Amendments, etc.  No
amendment to or waiver of any provision of this Security Agreement, nor consent
to any departure by any Grantor from its obligations under this Security
Agreement, shall in any event be effective
unless the same shall be in writing and signed by the Collateral Agent (on
behalf of the Holders pursuant to Article IX of the Indenture) and the
Grantors and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

SECTION 7.5. 
Notices.  All notices and
other communications provided for hereunder shall be in writing or by facsimile
and addressed, delivered or transmitted to the appropriate party at the address
or facsimile number of such party specified in the Indenture or at such other
address or facsimile number as may be designated by such party in a notice to the
other party.  Any notice or other communication,
if mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received; any
such notice or other communication, if
transmitted by facsimile, shall be deemed given when transmitted and electronically
confirmed.

 

SECTION 7.6. 
Release of Liens; Release of Grantor.  The lien and security interest in the
Collateral and any Grantor shall be released pursuant to the provisions of the
Indenture.

 

23

 

SECTION 7.7. 
Additional Guarantors. 
Upon the execution and delivery by any other Person of a supplement in
the form of Annex I hereto,
such Person shall become a “Grantor” hereunder with the same force and effect
as if it were originally a party to this Security Agreement and named as a “Grantor”
hereunder.  The execution and delivery of
such supplement shall not require the consent of any other Grantor hereunder,
and the rights and obligations of each Grantor, hereunder shall remain in full
force and effect notwithstanding the addition of any new Grantor as a party to this Security Agreement.

 

SECTION 7.8. 
No Waiver; Remedies.  No
failure on the part of any Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

SECTION 7.9. 
Headings.  The various
headings of this Security Agreement are inserted for convenience
only and shall not affect the meaning or interpretation of this Security
Agreement or any provisions thereof.

 

SECTION 7.10. 
Severability.  Any provision
of this Security Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Security Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

SECTION 7.11. 
Governing Law, Entire Agreement, etc.  THIS
SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.  This
Security Agreement and the other Notes Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and thereof and supersede any prior agreements, written or oral, with
respect thereto.

 

SECTION 7.12. 
Counterparts.  This
Security Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Security Agreement by facsimile or other electronic
means (such as Adobe PDF file) shall be effective as delivery of a manually
executed counterpart of this Security Agreement.

 

SECTION 7.13. 
Foreign Pledge Agreements. 
Without limiting any of the rights, remedies, privileges or benefits
provided hereunder to the Collateral Agent for its benefit and the ratable
benefit of the other Secured Parties, each Grantor and the Collateral Agent
hereby agree 

 

24

 

that the terms and
provisions of this Security Agreement in respect of any Collateral subject to
the pledge or other Lien of a Foreign Pledge Agreement are, and shall deemed to
be, supplemental and in addition to the rights, remedies, privileges and
benefits provided to the Collateral Agent and the other Secured Parties under
such Foreign Pledge Agreement and under applicable law to the extent consistent
with applicable law; provided that in the event that the terms of this
Security Agreement conflict or are inconsistent with the applicable Foreign
Pledge Agreement or applicable law governing such Foreign Pledge Agreement, (i) to
the extent that the provisions of such Foreign Pledge Agreement or applicable
foreign law are, under applicable foreign law, necessary for the creation,
perfection or priority of the security interests in the Collateral subject to
such Foreign Pledge Agreement, the terms of such Foreign Pledge Agreement or
such applicable law shall be controlling and (ii) otherwise, the terms
hereof shall be controlling.

 

25

 

IN WITNESS WHEREOF, each of the parties hereto has
caused this Security Agreement to be duly executed and delivered by its
Authorized Officer as of the date first above written.

 

	
   

  	
  REDDY
  ICE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Janusek

  
	
   

  	
   

  	
  Name:

  	
  Steven J. Janusek

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,
  Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer and
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REDDY
  ICE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Janusek

  
	
   

  	
   

  	
  Name:

  	
  Steven J. Janusek

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,
  Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer and Secretary

  

 

S-1

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick T. Giordano

  
	
   

  	
   

  	
  Name:
  Patrick T. Giordano

  
	
   

  	
   

  	
  Title: Vice President

  

 

S-2

 

EXHIBIT A

To First Lien Pledge and
Security Agreement

 

FIRST LIEN NOTES PATENT SECURITY AGREEMENT

 

This FIRST LIEN NOTES PATENT SECURITY AGREEMENT,
dated as of             
     , 200   (this “Agreement”), is made
by [NAME OF GRANTOR] a [STATE OF INCORPORATION] corporation (the “Grantor”),
in favor of WELLS FARGO BANK, N.A. (“Wells Fargo”), as collateral Agent
(together with its successor(s) thereto in such capacity, the “Collateral
Agent”) for each of the Secured Parties.

 

W  I  T
N  E  S  S  E  T  H :

 

WHEREAS, pursuant to the Indenture, dated as of March 15,
2010 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Indenture”), among Reddy Ice Corporation, a Nevada
corporation (the “Company”), the Trustee and the Collateral Agent, the
Company has issued the Notes;

 

WHEREAS, in connection with the Indenture, the
Grantor has executed and delivered a Pledge and Security Agreement, dated as of
March 15, 2010  (as amended, supplemented,
amended and restated or otherwise modified from time to time, “Security Agreement”);

 

WHEREAS, pursuant to the Indenture and pursuant to
clause (d) of Section 4.5 of the Security Agreement, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Patent Collateral (as defined
below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the
execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor
agrees, for the benefit of each Secured Party, as follows:

 

SECTION 1. 
Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Agreement, including its preamble and recitals, have the meaning provided in
the Security Agreement.

 

SECTION 2. 
Grant of Security Interest. 
The Grantor hereby grants to the Collateral Agent, for its benefit and
the ratable benefit of each other Secured Party, a continuing security interest
in all of the following property, whether now or hereafter existing or acquired
by the Grantor (the “Patent Collateral”):

 

(a)           all
of its letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing and each patent and
patent application referred to in Item A of Schedule I attached
hereto;

 

1

 

(b)           all
reissues, divisions, continuations, continuations-in-part, extensions, renewals
and reexaminations of any of the items described in clause (a);

 

(c)           all
of its patent licenses, and other agreements providing the Grantor with the
right to use any items of the type referred to in clauses (a) and (b) above,
including each patent license referred to in Item B of Schedule I
attached hereto; and

 

(d)           all
proceeds of, and rights associated with, the foregoing.

 

Notwithstanding the foregoing, “Patent
Collateral” shall not include (collectively, the “Patent Excluded Property”) (i) any
permit or license or any contractual obligation entered into by Parent, the
Company or any Subsidiary Guarantor (A) that prohibits or requires the
consent of any Person other than the Company and its Affiliates which has not
been obtained as a condition to the creation by Parent, the Company or the
applicable Subsidiary Guarantor of a Lien on any right, title or interest in
such permit, license or contractual obligation or (B) to the extent that
any requirement of law applicable thereto prohibits the creation of a Lien
thereon, but only, with respect to the prohibition in clauses (A) and
(B), to the extent, and for as long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the Uniform Commercial
Code or any other requirement of law or (ii) property owned by the Company
or any Subsidiary Guarantor that is subject to a Lien permitted by clause (6) of
the definition of “Permitted Liens” (as defined in the Indenture) if the
contractual obligation pursuant to which such Lien is granted (or in the
document providing for such Lien) prohibits or requires the consent of any
Person other than the Company and its Affiliates which has not been obtained as
a condition to the creation of any other Lien on such item of property,; provided, however,
that “Patent Excluded Property” shall not include any proceeds, products,
substitutions or replacements of Patent Excluded Property (unless such
proceeds, products, substitutions or replacements would otherwise constitute
Patent Excluded Property), which assets subject to such Lien shall not constitute
Patent Collateral under any circumstance.

 

SECTION 3. 
Security Agreement.  This
Agreement has been executed and delivered by the Grantor for the purpose of
registering the security interest of the Collateral Agent in the Patent
Collateral with the United States Patent and Trademark Office and corresponding
offices in other countries of the world. 
The security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the Collateral
Agent for its benefit and the ratable benefit of each other Secured Party under
the Security Agreement.  The Security
Agreement (and all rights and remedies of the Collateral Agent and each Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.

 

SECTION 4. 
Release of Liens; Release of Grantor.  The lien and security interest in the Patent
Collateral and any Grantor shall be released pursuant to the provisions of the
Indenture.

 

SECTION 5. 
Acknowledgment.  The
Grantor does hereby further acknowledge and affirm that the rights and remedies
of the Collateral Agent with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.

 

2

 

SECTION 6.  Notes Document.  This Agreement is a Notes Document executed pursuant to the
Indenture and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.

 

SECTION 7. 
Intercreditor Agreements.  Notwithstanding anything herein to the contrary, the
Liens and security interests granted to the Collateral Agent pursuant to this
Agreement, the exercise of any right or remedy by the Collateral Agent
hereunder and the obligations of the Guarantor hereunder, in each case, with
respect to the Collateral are subordinated and subject to the limitations and
provisions of the Intercreditor Agreements. 
In the event of any conflict between the terms of the Intercreditor
Agreements and the terms of this Agreement, the terms of the Intercreditor Agreements
shall govern and control.

 

SECTION 8. 
Counterparts.  This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

 

3

 

IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed and delivered by its Authorized
Officers as of the date first above written.

 

	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

SCHEDULE I

to Patent Security Agreement

 

Item
A.  Patents

 

Issued Patents

 

	
  Country

  	
   

  	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Inventor(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pending Patent Applications

 

	
  Country

  	
   

  	
  Serial No.

  	
   

  	
  Filing Date

  	
   

  	
  Inventor(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Patent Applications In Preparation

 

	
  Country

  	
   

  	
  Docket No.

  	
   

  	
  Expected

  Filing Date

  	
   

  	
  Inventor(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Item
B.  Patent Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  

  Licensor

  	
   

  	
  

  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  	
  Subject

  Matter

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

EXHIBIT B

to First Lien Pledge and Security Agreement

 

FIRST LIEN NOTES TRADEMARK SECURITY AGREEMENT

 

This FIRST LIEN NOTES TRADEMARK SECURITY AGREEMENT,
dated as of            ,
_, 200_ (this “Agreement”), is made by [NAME OF GRANTOR] a [STATE OF
INCORPORATION] corporation (the “Grantor”), in favor of WELLS FARGO
BANK, N.A. (“Wells Fargo”), as collateral Agent (together with its
successor(s) thereto in such capacity, the “Collateral Agent”) for
each of the Secured Parties.

 

W  I
T  N  E  S  S  E  T  H :

 

WHEREAS, pursuant to the Indenture, dated as of March 15,
2010 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Indenture”), among Reddy Ice Corporation, a Nevada
corporation (the “Company”), the Trustee and the Collateral Agent, the
Company has issued the Notes;

 

WHEREAS, in connection with the Indenture, the
Grantor has executed and delivered a Pledge and Security Agreement, dated as of
March 15, 2010 (as, amended, supplemented, amended and restated or
otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to the Indenture and pursuant to
clause (e) of Section 4.5 of the Security Agreement, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Trademark Collateral (as
defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the
execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor
agrees, for the benefit of each Secured Party, as follows:

 

SECTION 1. 
Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Agreement, including its preamble and recitals, have the meanings provided in
the Security Agreement.

 

SECTION 2. 
Grant of Security Interest. 
The Grantor hereby grants to the Collateral Agent, for its benefit and
the ratable benefit of each other Secured Party, a continuing security interest
in all of the following property, whether now or hereafter existing or acquired
by the Grantor (the “Trademark Collateral”):

 

(a)           (i) all
of its trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, certification 

 

1

 

marks, collective marks,
logos and other source or business identifiers, and all goodwill of the
business associated therewith, now existing or hereafter adopted or acquired including
those referred to in Item A of Schedule I hereto, whether
currently in use or not, all registrations and recordings thereof and all
applications in connection therewith whether pending or in preparation for
filing, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any other country or political subdivision
thereof or otherwise, and all common-law rights relating to the foregoing and (ii) the
right to obtain all reissues, extensions or renewals of the foregoing
(collectively referred to as the “Trademark”);

 

(b)           all
Trademark licenses for the grant by or to the Grantor of any right to use any
Trademark, including each Trademark license referred to in Item B of Schedule
I hereto;

 

(c)           all
of the goodwill of the business connected with the use of, and symbolized by
the items described in, clause (a), and to the extent applicable clause (b);

 

(d)           the
right to sue third parties for past, present and future infringements of any
Trademark Collateral described in clause (a) and, to the extent
applicable, clause (b) and

 

(e)           all
proceeds of, and rights associated with, the foregoing.

 

Notwithstanding the foregoing, “Trademark
Collateral” shall not include (collectively, the “Trademark Excluded Property”)
(i) any permit or license or any contractual obligation entered into by
Parent, the Company or any Subsidiary Guarantor (A) that prohibits or
requires the consent of any Person other than the Company and its Affiliates
which has not been obtained as a condition to the creation by Parent, the
Company or the applicable Subsidiary Guarantor of a Lien on any right, title or
interest in such permit, license or contractual obligation or (B) to the
extent that any requirement of law applicable thereto prohibits the creation of
a Lien thereon, but only, with respect to the prohibition in clauses (A) and
(B), to the extent, and for as long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the Uniform
Commercial Code or any other requirement of law, (ii) property owned by
the Company or any Subsidiary Guarantor that is subject to a Lien permitted by
clause (6) of the definition of “Permitted Liens” (as defined in the
Indenture) if the contractual obligation pursuant to which such Lien is granted
(or in the document providing for such Lien) prohibits or requires the consent
of any Person other than the Company and its Affiliates which has not been
obtained as a condition to the creation of any other Lien on such item of
property or (iii) any “intent to use” trademark applications for which a
statement of use has not been filed (but only until such statement is filed); provided, however,
that “Trademark Excluded Property” shall not include any proceeds, products,
substitutions or replacements of Trademark Excluded Property (unless such
proceeds, products, substitutions or replacements would otherwise constitute
Trademark Excluded Property), which assets subject to such Lien shall not
constitute Trademark Collateral under any circumstance.

 

2

 

SECTION 3. 
Security Agreement.  This
Agreement has been executed and delivered by the Grantor for the purpose of
registering the security interest of the Collateral Agent in the Trademark
Collateral with the United States Patent and Trademark Office and corresponding
offices in other countries of the world. 
The security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the Collateral
Agent for its benefit and the ratable benefit of each other Secured Party under
the Security Agreement.  The Security
Agreement (and all rights and remedies of the Collateral Agent and each Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.

 

SECTION 4. 
Release of Liens; Release of Grantor.  The lien and security interest in the
Trademark Collateral and any Grantor shall be released pursuant to the
provisions of the Indenture.

 

SECTION 5. 
Acknowledgment.  The Grantor
does hereby further acknowledge and affirm that the rights and remedies of the
Collateral Agent with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.

 

SECTION 6. 
Notes Document.  This
Agreement is a Notes Document executed pursuant to the Indenture and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.

 

SECTION 7. 
Intercreditor Agreements.  Notwithstanding anything herein to the contrary, the
Liens and security interests granted to the Collateral Agent pursuant to this
Agreement, the exercise of any right or remedy by the Collateral Agent
hereunder and the obligations of the Guarantor hereunder, in each case, with
respect to the Collateral are subordinated and subject to the limitations and
provisions of the Intercreditor Agreements. 
In the event of any conflict between the terms of the Intercreditor
Agreements and the terms of this Agreement, the terms of the Intercreditor Agreements
shall govern and control.

 

SECTION 8. 
Counterparts.  This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

 

3

 

IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed and delivered by Authorized Officer
as of the date first above written.

 

	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

SCHEDULE I

to Trademark Security Agreement

 

Item
A.  Trademarks

 

Registered Trademarks

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pending Trademark Applications

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Serial No.

  	
   

  	
  Filing Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Trademark Applications In Preparation

 

	
  Country

  	
   

  	
  

  Trademark

  	
   

  	
  

  Docket No.

  	
   

  	
  Expected

  Filing Date

  	
   

  	
  Products/

  Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Item
B.  Trademark Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  

  Licensor

  	
   

  	
  

  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  	
  Subject

  Matter

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

EXHIBIT C 

to First Lien Pledge and Security Agreement

 

FIRST LIEN NOTES COPYRIGHT SECURITY AGREEMENT

 

This FIRST LIEN NOTES COPYRIGHT SECURITY AGREEMENT,
dated as of             
    , 200_ (this “Agreement”), is made by [NAME OF
GRANTOR] a [STATE OF INCORPORATION] corporation (the “Grantor”), in
favor of WELLS FARGO BANK, N.A. (“Wells Fargo”), as Collateral Agent
(together with its successor(s) in such capacity, the “Collateral Agent”)
for each of the Secured Parties.

 

W  I
T  N  E  S  S  E  T  H :

 

WHEREAS, pursuant to the Indenture, dated as of March 15,
2010 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Indenture”), among Reddy Ice Corporation, a Nevada
corporation (the “Company”), the Trustee and the Collateral Agent, the
Company has issued the Notes;

 

WHEREAS, in connection with the Indenture, the
Grantor has executed a delivered a Subsidiary Pledge arid Security Agreement,
dated as of March 15, 2010  (as
amended, supplemented, amended and restated or otherwise modified from time to
time, “Security Agreement”);

 

WHEREAS, pursuant to the Indenture and pursuant to
and to clause (e) of Section 4.5 of the Security Agreement, the
Grantor is required to execute and deliver this Agreement and to grant to the
Collateral Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the
execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Grantor
agrees, for the benefit of each Secured Party, as follows:

 

SECTION 1. 
Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Agreement, including its preamble and recitals, have the meanings provided in
the Security Agreement.

 

SECTION 2. 
Grant of Security Interest. 
The Grantor hereby grants to the Collateral Agent, for its benefit and
the ratable benefit of each other Secured Party, a continuing security interest
in all of the following (the “Copyright Collateral”), whether now or
hereafter existing or acquired by the Grantor: 
all copyrights of the Grantor, whether statutory or common law,
registered or unregistered and whether published or unpublished, now or
hereafter in force throughout the world including all of the Grantor’s right,
title and interest in and to all copyrights registered in the United States Copyright
Office or anywhere else in the world and also including 

 

1

 

the copyrights referred to
in Item A of Schedule I hereto, and registrations and recordings
thereof and all applications for registration thereof, whether pending or in
preparation, and all copyright licenses, including each copyright license
referred to in Item B of Schedule I hereto and all proceeds of
the foregoing.

 

Notwithstanding the foregoing, “Copyright Collateral”
shall not include (collectively, the “Copyright Excluded Property”) (i) any
permit or license or any contractual obligation entered into by Parent, the
Company or any Subsidiary Guarantor (A) that prohibits or requires the
consent of any Person other than the Company and its Affiliates which has not
been obtained as a condition to the creation by Parent, the Company or the
applicable Subsidiary Guarantor of a Lien on any right, title or interest in
such permit, license or contractual obligation or (B) to the extent that
any requirement of law applicable thereto prohibits the creation of a Lien
thereon, but only, with respect to the prohibition in clauses (A) and
(B), to the extent, and for as long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the Uniform
Commercial Code or any other requirement of law or (ii) property owned by
the Company or any Subsidiary Guarantor that is subject to a Lien permitted by
clause (6) of the definition of “Permitted Liens” (as defined in the
Indenture) if the contractual obligation pursuant to which such Lien is granted
(or in the document providing for such Lien) prohibits or requires the consent
of any Person other than the Company and its Affiliates which has not been
obtained as a condition to the creation of any other Lien on such item of property,;
provided, however, that “Copyright Excluded Property”
shall not include any proceeds, products, substitutions or replacements of
Copyright Excluded Property (unless such proceeds, products, substitutions or replacements
would otherwise constitute Copyright Excluded Property), which assets subject
to such Lien shall not constitute Copyright Collateral under any circumstance.

 

SECTION 3. 
Security Agreement.  This
Agreement has been executed and delivered by the Grantor for the purpose of
registering the security interest of the Collateral Agent in the Copyright
Collateral with the United States Copyright Office and corresponding offices in
other countries of the world.  The
security interest granted hereby has been granted as a supplement to, and not
in limitation of, the security interest granted to the Collateral Agent for its
benefit and the ratable benefit of each other Secured Party under the Security
Agreement.  The Security Agreement (and
all rights and remedies of the Collateral Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.

 

SECTION 4. 
Release of Liens; Release of Grantor.  The lien and security interest in the
Copyright Collateral and any Grantor shall be released pursuant to the provisions
of the Indenture.

 

SECTION 5. 
Acknowledgment.  The
Grantor does hereby further acknowledge and affirm that the rights and remedies
of the Collateral Agent with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.

 

SECTION 6. 
Notes Document.  This
Agreement is a Notes Document executed pursuant to the Indenture and shall
(unless otherwise expressly indicated herein) be construed. administered and applied
in accordance with the terms and provisions thereof.

 

2

 

SECTION 7. 
Intercreditor Agreements.  Notwithstanding anything herein to the contrary, the
Liens and security interests granted to the Collateral Agent pursuant to this
Agreement, the exercise of any right or remedy
by the Collateral Agent hereunder and the
obligations of the Guarantor hereunder, in each case, with respect
to the Collateral are subordinated and subject to the limitations and
provisions of the Intercreditor Agreements. 
In the event of any conflict between the terms of the Intercreditor
Agreements and the terms of this Agreement, the terms of the Intercreditor Agreements
shall govern and control.

 

SECTION 8. 
Counterparts.  This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

 

3

 

IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed and delivered by its Authorized
Officer as of the date first above written.

 

	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

SCHEDULE I

to Copyright Security Agreement

 

Item
A.  Copyrights/Mask Works

 

Registered Copyrights/Mask Works

 

	
  Country

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  	
   

  	
  Author(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Copyright/Mask Work Pending Registration Applications

 

	
  Country

  	
   

  	
  Serial No.

  	
   

  	
  Filing Date

  	
   

  	
  Author(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Copyright/Mask Work Registration Applications In Preparation

 

	
  Country

  	
   

  	
  

  Docket No.

  	
   

  	
  Expected

  Filing Date

  	
   

  	
  

  Author(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Item
B.  Copyright/Mask Work Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  

  Licensor

  	
   

  	
  

  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

ANNEX I

to the First Lien Pledge and Security Agreement

 

SUPPLEMENT TO 

FIRST LIEN PLEDGE AND SECURITY AGREEMENT

 

This SUPPLEMENT, dated as of                         
    ,         (this
“Supplement”), is to the First Lien Pledge and Security Agreement, dated
as of March 15, 2010  (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Pledge and Security Agreement”), among the Grantors (such capitalized
term, and other terms used in this Supplement, to have the meanings set forth
in Article I of the Pledge and Security Agreement) from time to time party
thereto, in favor of WELLS FARGO BANK, N.A. (“Wells Fargo”), as collateral
Agent (together with its successor(s) thereto in such capacity, the “Collateral
Agent”) for each of the Secured Parties.

 

W  I
T  N  E  S  S  E  T  H :

 

WHEREAS, pursuant to the Indenture, dated as of March 15,
2010 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Indenture”), among Reddy Ice Corporation, a Nevada
corporation (the “Company”), Parent, the Subsidiary Guarantors, the Trustee
and the Collateral Agent, the Company has issued the Notes;

 

WHEREAS, pursuant to the provisions of Section 7.7
of the Pledge and Security Agreement, each of the undersigned is becoming a
Grantor under the Pledge and Security Agreement; and

 

WHEREAS, each of the undersigned
desires to become a “Grantor” under the Pledge and Security Agreement in order
to induce the Secured Parties to continue to hold the Notes;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, each of the
undersigned agrees, for the benefit of each Secured Party, as follows.

 

SECTION 1. 
Party to Pledge and Security Agreement, etc.  In accordance with the terms of the Pledge
and Security Agreement, by its signature below each of the undersigned hereby
irrevocably agrees to become a Grantor under the Pledge and Security Agreement
with the same force and effect as if it were an original signatory thereto and
each of the undersigned hereby (a) agrees to be bound by and comply with
all of the terms and provisions of the Pledge and Security Agreement applicable
to it as a Grantor, (b) grants to the Collateral Agent for the benefit of
the Secured Parties a security interest in the Collateral as security for the
Obligation, and (c) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct as of the
date hereof, unless stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and correct as of such earlier

 

1

 

date.  In furtherance of the foregoing, each
reference to a “Grantor” and/or “Grantors” in the Pledge and Security Agreement
shall be deemed to include each of the undersigned.

 

SECTION 2. 
Representations.  Each of
the undersigned Grantor hereby represents and warrants that (a) this
Supplement has been duly authorized, executed and delivered by it and that this
Supplement and the Pledge and Security Agreement constitute the legal, valid
and binding obligation of each of the undersigned, enforceable against it in
accordance with terms, and (b) attached hereto are all Schedules to the
Pledge and Security Agreement providing information with respect to the undersigned.

 

SECTION 3. 
Full Force of Pledge and Security Agreement.  Except as expressly supplemented hereby, the
Pledge and Security Agreement shall remain in full force and effect in accordance
with its terms.

 

SECTION 4. 
Severability.  Wherever
possible each provision of this Supplement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Supplement shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or, the remaining provisions of
this Supplement or the Pledge and Security Agreement.

 

SECTION 5. 
Governing Law, Entire Agreement, etc.  THIS
SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).  This
Supplement and the other Notes Documents constitute the entire understanding
among the parties hereto with respect to the subject matter thereof and
supersede any prior agreements, written or oral, with respect thereto.

 

SECTION 6. 
Counterparts.  This
Supplement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute together
but one and the same agreement.

 

2

 

IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed and delivered by its Authorized
Officer as of the date first above written.

 

	
   

  	
  [NAME
  OF ADDITIONAL SUBSIDIARY]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME
  OF ADDITIONAL SUBSIDIARY]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
  ACCEPTED
  AND AGREED FOR ITSELF

  	
   

  
	
  AND
  ON BEHALF OF THE SECURED PARTIES:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  
	
  as
  Collateral Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

3

 

SCHEDULE I

to Supplement No.     

to First Lien Pledge and Security Agreement

([Name of Additional Subsidiary])

 

Capital
Stock

 

	
   

  	
   

  	
  Common Stock

  	
   

  
	
  Issuer
  (corporate)

  	
   

  	
  Authorized

  Shares

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  % of Shares

  Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
  Limited Liability Company Interests

  	
   

  
	
  Issuer
  (limited liability company)

  	
   

  	
  % of Limited Liability

  Company Interests Pledged

  	
   

  	
  Type of Limited Liability

  Company Interests Pledged

  

  

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
  Partnership Interests

  	
   

  
	
  Issuer
  (partnership)

  	
   

  	
  % of Partnership

  Interests Owned

  	
   

  	
  % of Partnership

  Interests Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

SCHEDULE II

to Supplement No.     

to First Lien Pledge and Security Agreement

 

Item
A.  Locations of each Grantor:

 

	
  Name
  of Grantor:

  	
   

  	
  Location for purposes of UCC:

  
	
   

  	
   

  	
   

  
	
  [GRANTOR]

  	
   

  	
  [LOCATION]

  

 

Item
B.  Merger or other corporate
reorganization.

 

	
  Name
  of Grantor:

  	
   

  	
  Merger or other corporate reorganization:

  
	
   

  	
   

  	
   

  
	
  [GRANTOR]

  	
   

  	
   

  

 

Item
C.  Taxpayer ID numbers.

 

	
  Name of Grantor:

  	
   

  	
  Taxpayer ID numbers:

  
	
   

  	
   

  	
   

  
	
  [GRANTOR]

  	
   

  	
   

  

 

Item
D.  Government Contracts:

 

	
  Name
  of Grantor:

  	
   

  	
  Description of Contract:

  
	
   

  	
   

  	
   

  
	
  [GRANTOR]

  	
   

  	
   

  

 

1

 

Item
E.  Deposit Accounts:

 

	
  Name
  of Grantor:

  	
   

  	
  Description of Deposit Account:

  
	
   

  	
   

  	
   

  
	
  [GRANTOR]

  	
   

  	
   

  

 

2

 

SCHEDULE III

to Supplement No.     

to First Lien Pledge and Security Agreement

([Name of Additional Subsidiary])

 

Item
A.  Patents

 

Issued Patents

 

	
  Country

  	
   

  	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Inventor(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pending Patent Applications

 

	
  Country

  	
   

  	
  Serial No.

  	
   

  	
  Filing Date

  	
   

  	
  Inventor(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Patent Applications In Preparation

 

	
  Country

  	
   

  	
  Docket No.

  	
   

  	
  Expected

  Filing Date

  	
   

  	
  Inventor(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Item
B.  Patent Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  Licensor

  	
   

  	
  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  	
  Subject

  Matter

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

SCHEDULE IV

to Supplement No.     

to First Lien Pledge and Security Agreement

([Name of Additional Subsidiary])

 

Item
A.  Trademarks

 

Registered Trademarks

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pending Trademark Applications

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Serial No.

  	
   

  	
  Filing Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Trademark Applications In Preparation

 

	
  Country

  	
   

  	
  

  Trademark

  	
   

  	
  

  Docket No.

  	
   

  	
  Expected

  Filing Date

  	
   

  	
  Products/

  Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Item B.  Trademark Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  Licensor

  	
   

  	
  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  	
  Subject

  Matter

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

SCHEDULE V

to Supplement No.     

to First Lien Pledge and Security Agreement

([Name of Additional Subsidiary])

 

Item
A.  Copyrights/Mask Works

 

Registered Copyrights/Mask Works

 

	
  Country

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  	
   

  	
  Author(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Copyright/Mask Work Pending Registration Applications

 

	
  Country

  	
   

  	
  Serial No.

  	
   

  	
  Filing Date

  	
   

  	
  Author(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Copyright/Mask Work Registration Applications In Preparation

 

	
  Country

  	
   

  	
  Docket No.

  	
   

  	
  Expected

  Filing Date

  	
   

  	
  Author(s)

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Item
B.  Copyright/Mask Work Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  

  Licensor

  	
   

  	
  

  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  	
  Subject

  Matter

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

SCHEDULE VI

to Supplement No.     

to First Lien Pledge and Security Agreement

([Name of Additional Subsidiary]

 

Trade Secret or Know-How Licenses

 

	
  Country
  or

  Territory

  	
   

  	
  Licensor

  	
   

  	
  Licensee

  	
   

  	
  Effective

  Date

  	
   

  	
  Expiration

  Date

  	
   

  	
  Subject

  Matter

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]