Document:

exv10w2

 

Exhibit 10.2

Water Supply Contract

Alexa Springs Water Company, referred to in this Contract as “Seller,” located
at 118 Cottonwood, Coppell, Texas, 75019 and Alexa Springs, Inc., referred to
in this Contract as “Purchaser,” located at 652 Southwestern Blvd, Coppell, TX
75019, in mutual consideration of the following provisions, agree as follows:

	 	 	Whereas, Alexa Springs Water Company is the owner of the Alexa Springs
located at 1055 Owley Road, Mt. Ida, Arkansas, 71957.
	 
	 	 	Whereas, Alexa Springs, Inc. is a bottling operation and desires to
bottle and sell the water emanating from the Alexa Springs.
	 
	 	 	Whereas Alexa Springs, Inc. desires to lease the buildings housing the
Alexa Springs from Alexa Springs Water Company located at 1055 Owley
Road, Mt. Ida, Arkansas, 71957 .

1) From and after the effective date of this Contract, December 1, 2004
(“Effective Date”),
Purchaser will have the exclusive right to withdraw spring water from the Alexa
Springs, in
Montgomery County, Arkansas, at a point described and depicted in Exhibit A
attached to and
incorporated into this Contract by reference.

2) This Contract will be for an initial term of ten (10) years (“Initial
Term”), with an automatically renewing option for an additional ten (10) year
term (“Additional Term”), unless terminated as otherwise provided in this
Contract. Written notice of Purchaser’s election not to automatically renew for
an Additional Term is due between the sixth and fourth month prior to the
expiration of the Initial Term.

3) Purchaser covenants to pay Seller after the Effective Date of this Contract,
the following schedule of Royalties on gallons of water produced by the Alexa
Springs:

	 	 	 
	Months 1-12

	 	$0.00083 per gallon
	Months 13-24

	 	$0.00166 per gallon
	Months 25-60

	 	$0.0025 per gallon

Thereafter, Purchaser shall pay Seller at rate, to be determined between
Purchaser and Seller, based upon the then prevailing fair market value of
similar natural spring water producing
wells in the area.

4) Any notice, request, claim, instruction or other document must be sent by
fax and certified mail return receipt requested, and payments mailed to the
following addresses of Seller and Purchaser

	 	 	 
	Seller : Alexa Springs Water Company
	

	 	118 Cottonwood
	

	 	Coppel, Texas 75019
	

	 	972-462-5896 fax

	 	 	 
	Purchaser: Alexa Springs, Inc.
	

	 	652 Southwestern Blvd.
	

	 	Coppell, Texas 75019
	

	 	972-462-7764 fax

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5) Purchaser will furnish and bear expense of pumping facilities of a type
approved by Seller.

6) To measure the quantity of water withdrawn, Purchaser agrees to install, at
Purchaser’s expense, at the location described and depicted in Exhibit A, any
meters and recording devices that are approved by the Seller. The meters and
recording devices will permit the accurate determination of quantities of raw
water withdrawn pursuant to this Contract in units of gallons. Purchaser will
maintain all meters and recording devices in operating condition and will
recalibrate, at Purchaser’s own expense, all metering and recording equipment
from time to time, if required by Seller.

7) Purchaser will cause the meters and recording devices to be read on the last
day of each month by Purchaser’s representative. A representative of the Seller
may be present at the readings at all reasonable times. Within 15 days of each
reading, Purchaser will furnish Seller a copy of the results of each monthly
meter reading.

8) Seller will furnish Purchaser invoices, which lists the amounts due Seller
for water withdrawn, and Purchaser shall remit such amounts to Seller within 30
days of receiving the statements.

9) Purchaser represents to Seller, and Seller relies on such representation,
that all water withdrawn from the Alexa Springs will be used for bottling and
selling to the public.

10) Seller makes no guarantee that water will be available at any particular
time or place or that the Alexa Springs will be retained at any specific level
at any particular time. It is fully understood by both parties to this Contract
that the level of the Alexa Springs water will vary and that this instrument is
merely an Contract to allow withdrawal of water from the Alexa Springs when and
if water is present and available. Purchaser will have a right to pump all the
available water. In consideration of that right, Purchaser agrees to purchase
all the water the Alexa Springs produces.

11) There will be no obligation on Seller to maintain any waters at any
specified level. Purchaser releases Seller and agrees to hold Seller harmless
from any and all claims that Purchaser, its customers or users has or may have
against Seller for any reason whatever resulting from the treated or untreated
waters of the Alexa Springs. Seller makes no representation as to the quality
of the water.

12) Purchaser will indemnify and hold Seller harmless from any and all claims
or demands whatsoever to which Seller may be subject by reason of any injury to
any person or damage to any property resulting from or in any way connected
with any and all actions and activities (or failure to act) of Purchaser under
this Contract. Purchaser’s pumping and related facilities will be solely
responsible for obtaining permits or easements for the use of the land or
interests owned by others, including the United States government, necessary
for the installation, operation, and maintenance of pumps, pipelines, and other
facilities for the diversion and transportation of water. Nothing in this
Contract will be construed as authorizing Purchaser to install any equipment or
improvements on property owned by Seller. These authorizations are rights
conferred in a definitive lease agreement for the buildings and property
(“Lease Agreement”) where the Alexa Springs is located, to be executed by and
between Seller and Purchaser.

2

 

13) Purchaser agrees that in Purchaser’s operation under this Contract,
Purchaser will not pollute the waters of Alexa Springs and that Purchaser will
not withdraw water in any manner that under any circumstances might cause
pollution of Alexa Springs.

14) Purchaser agrees to comply with all local, state, and federal laws
concerning water and water rights applicable to this transaction.

15) This Contract may be terminated immediately at Seller’s option if Purchaser
at any time fails to comply with any of the covenants contained in this
Contract after notice of default in accordance with paragraph 4, and a ten (10)
day opportunity to cure. Following termination of this Contract, regardless of
how it is terminated, Seller will have the right within 30 days following the
date of termination to remove any and all equipment left by Purchaser on or
near the Alexa Springs, and the action will not cause Seller to incur any
liability for damages.

16) If the Lessee terminates the Lease Agreement under its paragraph15,
Purchaser may terminate this Contract with ten (10) days notice in accordance
with paragraph 4. This Contract may be terminated with ten (10) days notice in
accordance with paragraph 4 at Seller’s option, if the Lease Agreement is
terminated for any other reason.

17) This Contract is subject to the execution of the Lease Agreement, and the
Additional Term is subject to the automatic renewal of the Lease Agreement’s
additional ten year term.

18) If any provision of this Contract or the application of any such
provision to a person or circumstances shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof and this Contract shall remain in force and be effectuated as if such
illegal, invalid or unenforceable provision is not a part of this Contract and
there shall be added an enforceable provision, similar to the unenforceable
one.

19) No delay or omission of Seller in exercising any right hereunder shall
operate as a waiver of such right or of any right under this Contract. A
waiver on one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion. The rights and
remedies granted to Seller in this Contract, in the event of Purchaser’s
default, are cumulative, and the exercise of such rights shall be without
prejudice to the enforcement of any other right or remedy authorized by law or
this Contract.

20) Neither this Contract nor any of the rights, interests or obligations
hereunder shall be assigned by Purchaser (whether by operation of law or
otherwise) without the prior written consent of Seller. Subject to the
preceding sentence, this Contract shall be binding upon and shall inure to the
benefit of the Parties and their respective successors and assigns.
Notwithstanding anything contained in this Contract to the contrary, nothing in
this Contract, express or implied, is intended to confer on any Person other
than the Parties or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Contract.

21) This Contract shall be construed under and in accordance with the laws of
the State of Arkansas. The parties agree to jurisdiction and venue in Dallas
County, Texas and Montgomery County, Arkansas.

22) Any legal action is brought by either of the parties hereto, it is
expressly agreed that the prevailing party in such legal action shall be
entitled to recover from the other party reasonable attorney’s fees in addition
to any other relief that may be awarded. For the purposes of this

3

 

clause, the prevailing party is the party in whose favor final judgment is entered. In the
event that declaratory or injunctive relief alone is granted, the parties
receiving such relief shall be considered to be the prevailing party. The
amount of reasonable attorney’s fees shall be determined by the court, in the
trial of such action or in a separate action brought for that purpose.
Attorney’s fees awarded under the provisions of this paragraph shall be in
addition to any other relief that may be awarded.

23) This Contract shall not be modified or otherwise amended except pursuant to
an instrument in writing executed and delivered by each of the Parties

24) THIS CONTRACT CONTAINS THE ENTIRE UNDERSTANDING OF THE PARTIES AND
SUPERSEDES ALL PREVIOUS VERBAL AND WRITTEN AGREEMENTS, REPRESENTATION OR
WARRANTIES. The Parties have not relied upon any statements, promises or
representations, written or oral, express or implied, other than those
explicitly set forth in this Contract.

25) This Contract may be executed in any number of counterparts, each of which,
when executed, shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument. A facsimile copy of these
signatures shall be considered as effective and valid as the original.

Executed this 1st day of December 2004.

Alexa Springs Water Company

	 	 	 
	By:

	 	/s/ Kay Bloom

	Title:

	 	Secretary

	 
	 	 
	Alexa Springs, Inc
	 
	 	 
	By:

	 	/s/ Marshall Sorokwasz

	Title:

	 	President

4exv10w4

 

EXHIBIT 10.4

EXECUTION COPY

THIRD AMENDMENT

TO

REVOLVING CREDIT AGREEMENT

     Third Amendment to Revolving Credit Agreement, dated as of October 6, 2004
(this “Third Amendment”), by and among MICHAELS STORES, INC., a Delaware
corporation (the “Borrower”) and FLEET NATIONAL BANK and the other lending
institutions listed on Schedule 1 to the Credit Agreement (as hereinafter
defined) (collectively, the “Banks”) and FLEET NATIONAL BANK in its capacity as
administrative agent for the Banks (the “Agent”). Terms not otherwise defined
herein which are defined in the Revolving Credit Agreement, dated as of May 1,
2001 (as amended and in effect from time to time, the “Credit Agreement”), by
and among the Borrower, the Banks and the Agent, shall have the respective
meanings herein assigned to such terms in the Credit Agreement.

     WHEREAS, the Borrower has requested that the Banks and the Agent modify
certain provisions of the Credit Agreement; and

     WHEREAS, the Banks and the Agent have agreed to honor such requests upon
the terms and subject to the conditions contained herein;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

     §1. Amendment to §1.1 of The Credit Agreement. Section 1.1 of the Credit
Agreement is hereby amended as follows:

     (a) The definition of “Revolving Credit Loan Maturity Date” is hereby
amended by deleting such definition in its entirety and restating it as
follows:

     “Revolving Credit Loan Maturity Date. April 30, 2006.”

     (b) The definition of “Senior Notes Indenture” is hereby amended by
deleting such definition in its entirety and restating it as follows:

“Senior Notes Indenture. That certain Indenture, dated as of July
6, 2001, between the Borrower and The Bank of New York, as
Trustee, as the same shall be amended, restated, modified,
extended, renewed or replaced.”

     (c) The definition of “Senior Notes” is hereby amended by deleting such
definition in its entirety and restating it as follows:

 

 

-2-

“Senior Notes. Those certain 9 1/4% Senior Notes due 2009, in a
face amount of $200,000,000 as of July 6, 2001, issued pursuant to
the Senior Notes Indenture, as each shall be amended, restated,
modified, extended, renewed or replaced.”

     (d) Section 1.1 is further amended by inserting the following definition
in the appropriate alphabetical order:

“Liquidity. At any time, the sum of (a) cash and Cash Equivalents
plus (b) the Total Commitment minus the Total Outstanding.”

     §2. Amendments to §9 of the Credit Agreement. Section 9 of the Credit
Agreement is hereby amended as follows:

     (a) Section 9.4 of the Credit Agreement is hereby amended by deleting such
section in its entirety and restating it as follows:

          “9.4. Distributions. The Borrower and its Subsidiaries will not
make any Distributions, provided, however, (a) in addition to the
Distributions permitted by clauses (b)-(d) below, the Borrower may
declare or pay Distributions so long as the aggregate amount of
Distributions paid after the Closing Date do not exceed in the aggregate
an amount equal to the sum of (i) $70,000,000 plus (ii) fifty percent
(50%) of Consolidated Net Income of the Borrower and its Subsidiaries
with respect to the period (treated as one accounting period) from the
Closing Date to the end of the most recent fiscal quarter, plus (iii) an
amount equal to the aggregate amount of cash proceeds received by the
Borrower after February 3, 2001, in connection with the proceeds received
from the issuance of equity, (b) Subsidiaries of the Borrower may make
Distributions to the Borrower and to Subsidiaries of the Borrower that
have executed a Guaranty, (c) the Borrower and its Subsidiaries may make
Distributions of stock and options to acquire stock pursuant to the terms
of their stock option plans, and (d) Michaels Procurement and Michaels
Finance may make Distributions contemplated by §8.13 hereof. The
Borrower will not hold repurchased shares of its common stock as treasury
stock and, upon the Borrower’s repurchase of shares of its common stock,
it will immediately cancel and retire such stock.”

     (b) Section 9.5 of the Credit Agreement is hereby amended by deleting such
section in its entirety and restating it as follows:

          “9.5. Payments and Modifications of Senior Notes. The Borrower will
not and will not permit any of its Subsidiaries to amend, supplement or
otherwise modify the terms of the Senior Notes that would result in (a)
an increase in the outstanding principal amount of the Senior Notes, (b)
an increase in any principal, interest, fees, or other amounts payable
under the Senior Notes Indenture or the
Senior Notes, (c) a change in any date fixed for any payment of
principal, interest, fees, or other amounts payable under the Senior
Notes Indenture or the Senior Notes (including, without limitation, as a
result of any redemption, defeasance or

 

 

-3-

otherwise), (d) a change in any
percentage of holders of the Senior Notes under the Senior Notes
Indenture required under the terms of such documents to take (or refrain
from taking) any action, (e) a change that grants or permits the granting
of any security interest or Lien on any asset or property of the Borrower
or any Subsidiary to secure the Senior Notes, or (f) it being more
difficult for the Borrower to comply with the covenants contained in such
document. Notwithstanding anything contained herein to the contrary, the
Borrower and any of its Subsidiaries shall be permitted to prepay, redeem
or repurchase, in full (but not in part), the Senior Notes, provided,
that, (a) immediately prior to any prepayment, redemption or repurchase,
the Borrower has Liquidity of not less than $300,000,000, and (b)
immediately after giving effect to the prepayment, redemption or
repurchase, no Default or Event of Default then exists or would result
from such prepayment, redemption or repurchase.”

     §3. Amendment to §10.4 of the Credit Agreement. Section 10.4 of the
Credit Agreement is hereby amended by deleting such section in its entirety and
restating it as follows:

          “10.4. Capital Expenditures. The Borrower will not make, or permit
any Subsidiary of the Borrower to make, Capital Expenditures in any
Fiscal Year set forth in the table below that exceed, in the aggregate,
the amount set forth opposite such fiscal year in such table:

	 	 	 	 	 
	Fiscal Year
	 	Amount

	2003
	 	$	190,000,000	 
	2004
	 	$	165,000,000	 
	2005
	 	$	200,000,000	 
	2006
	 	$	100,000,000	 

provided, however, that, if during any Fiscal Year, the amount of
Capital Expenditures permitted for that Fiscal Year in the table
above is not so utilized, twenty five percent (25%) of such
unutilized amount may be utilized in the next succeeding fiscal
year but not in any subsequent Fiscal Year.”

     §4. Amendment to Exhibit G to the Credit Agreement. Exhibit G to the
Credit Agreement is hereby amended by deleting Appendix I attached thereto and
replacing such Appendix I in the form attached hereto as Annex A.

 

 

-4-

     §5. Amendment Fee. The Borrower hereby agrees to pay to each Bank that
executes this Third Amendment a fee in an amount equal to 0.05% of the
Commitment of each such Bank (the “Amendment Fee”).

     §6. Conditions to Effectiveness. This Third Amendment shall not become
effective until the Agent receives the following:

          (a) a counterpart of this Third Amendment, executed by the
Borrower, the Guarantor and the Banks;

          (b) payment to the Agent of the Amendment Fee for the account of
each Bank; and

          (c) evidence satisfactory to the Agent that all corporate or other
similar action has been taken by the Borrower and the Guarantor to
authorize the transactions contemplated hereby.

     §7. Representations and Warranties; No Default; Authorization. The
Borrower hereby represents and warrants to the Banks and the Agent as follows:

          (a) After giving effect to this Third Amendment, each of the
representations and warranties made by the Borrower in the Credit
Agreement was true in all material respects as of the date as of which
it was made and is true in all material respects as and at the date of
this Third Amendment (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of
business that in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an
earlier date), and no Default or Event of Default has occurred and is
continuing as of the date of this Third Amendment; and

          (b) This Third Amendment has been duly authorized, executed and
delivered by the Borrower and is in full force and effect, and the
agreements and obligations of the Borrower contained herein and in the
Credit Agreement, respectively constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting generally the enforcement of creditors’
rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding therefor may be brought.

     §8. Ratification, etc. Except as expressly amended hereby, the Credit
Agreement and all documents, instruments and agreements related thereto are
hereby ratified and confirmed in all respects. All references in the Credit
Agreement or any related agreement or instrument to the Credit Agreement shall
hereafter refer to the Credit Agreement as amended hereby.

 

 

-5-

     §9. No Implied Waiver. Except as expressly provided herein, nothing
contained herein shall constitute a waiver of, impair or otherwise affect any
Obligations, or any right of any of the Banks or the Agent consequent thereon.

     §10. Counterparts. This Third Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.

     §11. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (EXCLUDING
THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW OTHER THAN GENERAL
OBLIGATIONS LAW §5-1401 AND §5-1402).

[Remainder of Page Intentionally Left Blank]

[Signature Page to Follow]

 

 

     IN WITNESS WHEREOF, the undersigned have duly executed this Third
Amendment as a sealed instrument as of the date first above written.

	 	 	 	 	 
	 	MICHAELS STORES, INC.

 	 
	 	By:  	/s/ David R. Keepes
 	 
	 	 	Name:  	David R. Keepes 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	 	FLEET NATIONAL BANK, individually and

as Agent

 	 
	 	By:  	/s/ Dan M. Killian
 	 
	 	 	Name:  	Dan M. Killian 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	/s/ Linda G. Davis
 	 
	 	 	Name:  	Linda G. Davis 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	LASALLE BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ June Courtney
 	 
	 	 	Name:  	June Courtney 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

 

	 	 	 	 	 
	 	NATIONAL CITY BANK

 	 
	 	By:  	/s/ Michael J. Durbin
 	 
	 	 	Name:  	Michael J. Durbin 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	US BANK NATIONAL ASSOCIATION 

(successor by merger to FIRSTAR, N.A.)

 	 
	 	By:  	/s/ Jennifer L. Thurston
 	 
	 	 	Name:  	Jennifer L. Thurston 	 
	 	 	Title:  	Assistant Vice President 	 
	 

	 	 	 	 	 
	 	WACHOVIA BANK NATIONAL ASSOCIATION

(successor by merger to FIRST UNION

NATIONAL BANK)

 	 
	 	By:  	/s/ Susan T. Vitale
 	 
	 	 	Name:  	Susan T. Vitale 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	COMPASS BANK, an Alabama state bank

 	 
	 	By:  	/s/ R. Bruce Frey
 	 
	 	 	Name:  	R. Bruce Frey 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK

 	 
	 	By:  	/s/ Lucille Madden
 	 
	 	 	Name:  	Lucille Madden 	 
	 	 	Title:  	Vice President 	 
	 

 

 

RATIFICATION OF GUARANTY

     The undersigned Guarantor hereby acknowledges and consents to the
foregoing Third Amendment as of October 6, 2004, and agrees that the applicable
Guarantee from such Guarantor dated as of May 1, 2001 in favor of the Agent for
the benefit of the Agent and the Banks and all other Loan Documents to which
the Guarantor is a party remain in full force and effect, and the Guarantor
confirms and ratifies all of its obligations thereunder.

	 
	AARON BROTHERS, INC.

	By: /s/ David R. Keepes

	

	     Name: David R. Keepes

	     Title: Treasurer

	 

	Address:

	c/o Michaels Stores, Inc.

	8000 Bent Brach Drive

	Irving, TX 75063

 

 

ANNEX A

APPENDIX I TO EXHIBIT G

MICHAELS STORES, INC.

COMPLIANCE CERTIFICATE WORKSHEET

AS OF _______ __, ____

	 	 	 	 	 
	Section
	 	Calculation

	10.1. Maximum Adjusted Balance Sheet Leverage Ratio
	 	 	 	 
	A. Consolidated Funded Debt (sum of (1) through (3))
	 	$	—	 
	(1) Outstanding principal amount of the Loans
	 	$	—	 
	(2) plus Indebtedness with respect to Capitalized Leases
	 	$	—	 
	(3) plus all other Indebtedness subject to payment of
interest
	 	$	—	 
	B. Six (6) times Consolidated Rental Expense for the four consecutive
fiscal quarters just ended
	 	$	—	 
	(a) All rental expense of the Borrower and its
subsidiaries for such period determined on a
consolidated basis in accordance with GAAP
	 	$	—	 
	 
	 	 	x 6	 
	 
	 	$	—	 
	C. Sum of A. plus B.
	 	$	—	 
	D. Total Capital (Item (1) plus Item (2) below)
	 	$	—	 
	(1) Consolidated Net Worth (Item (a) minus Item (b))
	 	$	—	 
	(a) Consolidated Total Assets
	 	$	—	 
	(b) Consolidated Total Liabilities
(minus any subscriptions receivable)
	 	$	—	 
	(2) Consolidated Funded Debt (Item A. above)
	 	$	—	 
	E. Item B above (Six (6) times Consolidated Rental Expense for the
four consecutive fiscal quarters just ended)
	 	$	—	 
	F. Sum of D. plus E.
	 	$	—	 
	G. Ratio of C. to F.
	 	 	—	 
	Ratio not to exceed 0.75 to 1.00
	 	 	 	 

 

 

	 	 	 	 	 
	10.2. Minimum Cash Flow Coverage Ratio
	 	 	 	 
	A. Consolidated EBITDAR (sum of (1) through (6))
(all amounts calculated for any period of 4 consecutive fiscal quarters)
	 	$	—	 
	(1) Consolidated Net Income of the Borrower and its Subsidiaries
	 	$	—	 
	(2) plus income taxes
	 	$	—	 
	(3) plus Consolidated Total Interest Expense
	 	$	—	 
	(4) plus depreciation and amortization
	 	$	—	 
	(5) plus Consolidated Rental Expense
	 	$	—	 
	(6) plus noncash charges
	 	$	—	 
	B. Fixed Charges (sum of (1) through (3))
(all amounts calculated for the trailing 4 quarters period)
	 	$	—	 
	(1) Consolidated Total Interest Expense
	 	$	—	 
	(2) plus scheduled principal amortization on Indebtedness (including
amortization related to Capitalized Leases)
	 	$	—	 
	(3) plus Consolidated Rental Expense
	 	$	—	 
	C. Ratio of A. to B.
	 	 	—	 
	Ratio must be at least 2.15 : 1.00
	 	 	 	 
	10.3. Cash Flow Leverage Ratio
	 	 	 	 
	A. Consolidated Funded Debt (sum of (1) through (3))
	 	$	—	 
	(1) Outstanding principal amount of the Loans
	 	$	—	 
	(2) plus Indebtedness with respect to Capitalized Leases
	 	$	—	 
	(3) plus all other Indebtedness subject to payment of interest
	 	$	—	 
	B. Consolidated EBITDA for such period
	 	$	—	 
	(1) Consolidated Net Income of the Borrower and its Subsidiaries
	 	$	—	 
	(2) plus income taxes
	 	$	—	 
	(3) plus Consolidated Total Interest Expense
	 	$	—	 
	(4) plus depreciation and amortization
	 	$	—	 
	(5) plus noncash charges
	 	$	—	 
	C. Ratio of A. to B.
	 	 	—	 
	Ratio cannot exceed 1.50 to 1.00
	 	 	 	 

2

 

	 	 	 	 	 
	10.4 Capital Expenditures
	 	 	 	 
	A. Aggregate Capital Expenditures of Borrower and its Subsidiaries made year-to-date
	 	$	—	 
	B. Aggregate Capital Expenditures of Borrower and its Subsidiaries calculated for the
period of four consecutive fiscal quarters just ended
	 	$	—	 
	C. Capital Expenditures Permitted in current fiscal year (see table below)
	 	$	—	 
	D. Capital Expenditures permitted but not spent in prior fiscal year (carryover amount)
	 	$	—	 
	E. Item D. multiplied by .25
	 	$	—	 

     Amount in line A. not to exceed sum of lines C. and D.

	 	 	 	 	 
	Fiscal Year
	 	Capital Expenditures

	2003
	 	$	190,000,000	 
	2004
	 	$	165,000,000	 
	2005
	 	$	200,000,000	 
	2006
	 	$	100,000,000	 

	 	 	 	 	 
	9.4. Distributions
	 	 	 	 
	A. Aggregate Distributions made by the Borrower after the Closing Date
	 	$	—	 
	B. $70,000,000
	 	$	70,000,000	 
	C. Consolidated Net Income for Borrower and its Subsidiaries for the period after the
Closing Date to the end of the most recent fiscal quarter
	 	$	—	 
	D. Item C. multiplied by .50
	 	$	—	 
	E. Aggregate amount of cash proceeds received by the Borrower after February 3, 2001
in connection with the issuance of equity.
	 	$	—	 
	F. Item B. plus Item D. plus Item E.
	 	$	—	 
	Item A. not to exceed Item F. for compliance
	 	 	 	 

3

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