Document:

exv10w18

 

Exhibit 10.18

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

by and among

comScore Networks, Inc.

(Parent),

comScore Acquisition Holding Company

(Merger Sub),

Denaro and Associates, Inc. doing business as Q2 Brand Intelligence,

Inc.

(Company),

and Lawrence Denaro

(Sole Shareholder)

Dated as of July 28, 2004

 

 

CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	ARTICLE I THE MERGER	 	 	1	 
	 

	 	 	1.1	 	 	The Merger
	 	 	1	 
	 

	 	 	1.2	 	 	Effective Time
	 	 	2	 
	 

	 	 	1.3	 	 	Merger Consideration
	 	 	5	 
	 

	 	 	1.4	 	 	Effect of the Merger
	 	 	5	 
	 

	 	 	1.5	 	 	Articles of Incorporation and Bylaws; Directors and Officers
	 	 	5	 
	 

	 	 	1.6	 	 	Company Capital Stock
	 	 	6	 
	 

	 	 	1.7	 	 	No Further Ownership Rights in Company Common Stock
	 	 	6	 
	 

	 	 	1.8	 	 	Tax Consequences
	 	 	6	 
	 

	 	 	1.9	 	 	Exemption from Registration
	 	 	7	 
	 

	 	 	1.10	 	 	Adjustment Amount
	 	 	7	 
	 

	 	 	1.11	 	 	Contingent Merger Consideration
	 	 	8	 
	 

	 	 	1.12	 	 	Stock Options for Designated Employees and Other Company
Employees
	 	 	10	 
	 

	 	 	1.13	 	 	Taking of Necessary Action; Further Action
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE 	 	 	 	 
	 	 	    SOLE STOCKHOLDER	 	 	11	 
	 

	 	 	2.1	 	 	Organization and Qualification of the Company
	 	 	11	 
	 

	 	 	2.2	 	 	Company Capital Structure
	 	 	12	 
	 

	 	 	2.3	 	 	Subsidiaries
	 	 	13	 
	 

	 	 	2.4	 	 	Authority
	 	 	13	 
	 

	 	 	2.5	 	 	No Conflict
	 	 	13	 
	 

	 	 	2.6	 	 	Consents
	 	 	13	 
	 

	 	 	2.7	 	 	Company Financial Statements
	 	 	14	 
	 

	 	 	2.8	 	 	No Undisclosed Liabilities
	 	 	14	 
	 

	 	 	2.9	 	 	Tax and Other Returns and Reports
	 	 	14	 
	 

	 	 	2.10	 	 	Restrictions on Business Activities
	 	 	16	 
	 

	 	 	2.11	 	 	Title of Properties; Absence of Encumbrances
	 	 	16	 
	 

	 	 	2.12	 	 	Intellectual Property
	 	 	17	 
	 

	 	 	2.13	 	 	Agreements, Contracts and Commitments
	 	 	18	 
	 

	 	 	2.14	 	 	Interested Party Transactions
	 	 	20	 
	 

	 	 	2.15	 	 	Compliance with Laws
	 	 	20	 
	 

	 	 	2.16	 	 	Governmental Authorization
	 	 	20	 
	 

	 	 	2.17	 	 	Litigation
	 	 	21	 
	 

	 	 	2.18	 	 	Bank Accounts; Accounts Receivable; Accounts Payable
	 	 	21	 
	 

	 	 	2.19	 	 	Insurance
	 	 	22	 
	 

	 	 	2.20	 	 	Minute Books and Records
	 	 	22	 
	 

	 	 	2.21	 	 	Environmental Matters
	 	 	22	 
	 

	 	 	2.22	 	 	Brokers’ and Finders’ Fees
	 	 	23	 
	 

	 	 	2.23	 	 	Employee Matters and Benefit Plans
	 	 	23	 
	 

	 	 	2.24	 	 	Major Customers
	 	 	28	 

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	 	 	2.25	 	 	Warranties; Indemnities
	 	 	28	 
	 

	 	 	2.27	 	 	Complete Copies of Materials
	 	 	29	 
	 

	 	 	2.28	 	 	Representations Complete
	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF SOLE SHAREHOLDER	 	 	29	 
	 

	 	 	3.1	 	 	Purchase Entirely for Own Account
	 	 	29	 
	 

	 	 	3.2	 	 	Disclosure of Information
	 	 	29	 
	 

	 	 	3.3	 	 	Investment Experience
	 	 	30	 
	 

	 	 	3.4	 	 	Accredited Investor
	 	 	30	 
	 

	 	 	3.5	 	 	Restricted Securities
	 	 	30	 
	 

	 	 	3.6	 	 	Further Limitations on Disposition
	 	 	30	 
	 

	 	 	3.7	 	 	Legends
	 	 	30	 
	 

	 	 	3.8	 	 	Ownership of Company Common Stock
	 	 	30	 
	 

	 	 	3.9	 	 	Authority
	 	 	31	 
	 

	 	 	3.10	 	 	No Conflict
	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB	 	 	31	 
	 

	 	 	4.1	 	 	Organization, Standing and Power
	 	 	31	 
	 

	 	 	4.2	 	 	Authority
	 	 	32	 
	 

	 	 	4.3	 	 	Capital Structure; Parent Common Stock
	 	 	32	 
	 

	 	 	4.4	 	 	Financial Information
	 	 	33	 
	 

	 	 	4.5	 	 	Litigation
	 	 	33	 
	 

	 	 	4.6	 	 	Compliance with Laws
	 	 	34	 
	 

	 	 	4.7	 	 	Brokers’ and Finders’ Fees
	 	 	34	 
	 

	 	 	4.9	 	 	Disclosure of Information; Investment Experience
	 	 	34	 
	 

	 	 	4.10	 	 	No Undisclosed Liabilities
	 	 	34	 
	 

	 	 	4.11	 	 	No Conflict
	 	 	34	 
	 

	 	 	4.12	 	 	Tax Matters
	 	 	35	 
	 

	 	 	4.13	 	 	Representations Complete
	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE V ADDITIONAL AGREEMENTS	 	 	35	 
	 

	 	 	5.1	 	 	Confidentiality
	 	 	35	 
	 

	 	 	5.2	 	 	Expenses
	 	 	35	 
	 

	 	 	5.3	 	 	Reasonable Efforts
	 	 	36	 
	 

	 	 	5.4	 	 	Additional Documents and Further Assurances
	 	 	36	 
	 

	 	 	5.5	 	 	Tax Matters
	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VI SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION	 	 	37	 
	 

	 	 	6.1	 	 	Survival of Representations and Warranties
	 	 	37	 
	 

	 	 	6.2	 	 	Indemnification
	 	 	38	 
	 

	 	 	6.3	 	 	Notice and Determination of Claims
	 	 	39	 
	 

	 	 	6.4	 	 	Handling of Third-Party Claims
	 	 	39	 

-ii-

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.5	 	 	Set-Off
	 	 	40	 
	 

	 	 	6.6	 	 	Threshold and Limitations
	 	 	41	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VII GENERAL PROVISIONS	 	 	42	 
	 

	 	 	7.1	 	 	Notices
	 	 	42	 
	 

	 	 	7.2	 	 	Amendment and Waiver
	 	 	43	 
	 

	 	 	7.3	 	 	Interpretation
	 	 	43	 
	 

	 	 	7.4	 	 	Counterparts
	 	 	44	 
	 

	 	 	7.5	 	 	Entire Agreement; Assignment
	 	 	44	 
	 

	 	 	7.6	 	 	Severability
	 	 	44	 
	 

	 	 	7.7	 	 	Other Remedies
	 	 	44	 
	 

	 	 	7.8	 	 	Governing Law
	 	 	44	 
	 

	 	 	7.9	 	 	Waiver of Trial By Jury
	 	 	45	 
	 

	 	 	7.10	 	 	Jurisdiction; Service of Process
	 	 	45	 
	 

	 	 	7.11	 	 	Rules of Construction
	 	 	45	 
	 

	 	 	7.12	 	 	Specific Performance
	 	 	45	 

-iii-

 

EXHIBITS

	 	 	 
	Exhibit A

	 	Denaro Employment Agreement
	 
	 	 
	Exhibit B

	 	Restricted Stock Agreement
	 
	 	 
	Exhibit C

	 	Reed Offer Letter
	 
	 	 
	Exhibit D

	 	Lynn Reed Waiver And Release
	 
	 	 
	Exhibit E

	 	Lynn Reed Option Cancellation Agreement
	 
	 	 
	Exhibit F

	 	Sole Shareholder Release
	 
	 	 
	Exhibit G

	 	Brad Bortner Waiver And Release
	 
	 	 
	Exhibit H

	 	Designated Employees
	 
	 	 
	Exhibit I

	 	Employment Nondisclosure, Assignment of Invention, and 
 Noncompetition Agreement
	 
	 	 
	Exhibit J

	 	Opinion Letter From Perkins Coie
	 
	 	 
	Exhibit K

	 	Certificate of the Secretary of the Company
	 
	 	 
	Exhibit L

	 	FIRPTA Certificate
	 
	 	 
	Exhibit M

	 	Certificate of the Secretary of the Parent
	 
	 	 
	Exhibit N

	 	Certificate of the Secretary of the Merger Sub
	 
	 	 
	Exhibit O

	 	Shareholder Bank Account Information
	 
	 	 
	Exhibit P

	 	Opinion Letter From Wilson Sonsini
	 
	 	 
	Exhibit Q

	 	Working Capital Example

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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

          This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this “Agreement”) is made and
entered into as of July 28, 2004 by and among comScore Networks, lnc., a Delaware corporation
(“Parent”), comScore Acquisition Holding Company, a Delaware corporation and a wholly-owned
subsidiary of Parent (“Merger Sub”), Denaro and Associates, Inc. doing business as Q2 Brand
Intelligence, a Washington corporation (the “Company”), and Lawrence Denaro (the “Sole
Shareholder”).

RECITALS

          A. Parent, Merger Sub and the Company intend to effect the transactions
described in Section 1.1 below (the “Transactions”).

          B. This Agreement has been approved by the respective board of directors of
Parent, Merger Sub and Company and by Sole Shareholder of Company.

          C. Pursuant to the Transactions, among other things, and subject to the terms
and conditions of this Agreement, all of the issued and outstanding shares of capital stock of
the Company (“Company Capital Stock”) and all outstanding options, warrants and other
rights to acquire or receive shares of Company Capital Stock shall be converted into the
right to receive the Merger Consideration (as defined in Section 1.3 below).

          D. The Company, Sole Shareholder, Parent and Merger Sub desire to make
certain representations and warranties and other agreements in connection with the
Transactions.

          NOW, THEREFORE, in consideration of the covenants, promises and representations set forth
herein, and for other good and valuable consideration, intending to be legally bound hereby the
parties agree as follows:

ARTICLE I

THE MERGER

1.1     The Merger

          At the Effective Time (as defined in Section 1.2 below) and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of the Delaware General
Corporation Law (“Delaware Corporate Law”) and the Washington Business Corporation Act (“Washington
Law”). Merger Sub shall be merged with and into Company (the “First Merger”), the separate
corporate existence of Merger Sub shall cease and Company shall continue as the surviving
corporation. Company as the surviving corporation after the First Merger is hereinafter sometimes
referred to as the “First-Step Corporation.” As soon as practicable, and subject to and
upon the terms and conditions of this Agreement and the applicable provisions of the Delaware
Corporate Law or the

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Delaware Limited Liability Company Act (“Delaware LLC Law” and together with Delaware
Corporate Law, “Delaware Law”) and Washington Law, and as part of a single overall transaction
with the First Merger and pursuant to an integrated plan, the First-Step Corporation shall be
merged with and into a wholly-owned subsidiary (which shall be a limited liability company)
(“Newco”) of Parent (the “Second Merger”). with Newco continuing as the ultimate surviving entity
(the First Merger and the Second Merger are referred to herein
together as the “Merger”). Newco as
the surviving entity after the Second Merger is hereinafter sometimes referred to as the
“Surviving Entity.” Within three (3) business days after the Effective Time (as defined in
Section 1.2 below) in order to consummate the Second Merger, Parent shall caused to be
filed a Certificate of Merger (or like instrument) and the accompanying officers’ certificates
with the Secretary of State of the State of Delaware and with the Secretary of State of the State
of Washington, in accordance with the applicable provisions of Delaware Law and Washington Law.

1.2     Effective Time

          (a) Subject to the terms and conditions hereof, the closing of the First Merger
(the “Closing”) shall be held at the offices of Parent, 11465 Sunset Hills Road, Suite 200,
Reston, Virginia 20190, unless another time and/or place is mutually agreed upon in writing
by Parent and the Company. The date upon which the Closing occurs shall be referred to
herein as the “Closing Date.” On the Closing Date, the parties hereto shall cause the First
Merger to be consummated by filing a Certificate of Merger (or like instrument) and the
accompanying officers’ certificates, each in the form reasonably satisfactory to Parent and
Company, with the Secretary of State of the State of Delaware and with the Secretary of
State of the State of Washington, in accordance with the applicable provisions of Delaware
Law and Washington Law (the time of acceptance by both the Secretary of State of the State
of Delaware and the Secretary of State of the State of Washington of such filings shall be
referred to herein as the “Effective Time”).

          (b) Subject to the terms and conditions hereof, at the Closing:

     (i) This Agreement and the Merger will have been approved and adopted by (A) the
respective Boards of Directors of Company, Merger Sub and Parent; (B) by Sole Shareholder,
and (C) by Parent as the sole stockholder of Merger Sub;

     ii) Company and Sole Shareholder will deliver to Parent the stock certificate(s) in
the name of Sole Shareholder representing all of the shares of Company Capital Stock;

     (iii) Company will deliver to Parent the consents, approvals and waivers from third
parties, governmental agencies and other parties set forth in Section 2.6 of the
Company Disclosure Schedule;

     (iv) Sole Shareholder and Parent will have executed and delivered the Employment
Agreement, in substantially the form attached hereto as Exhibit A (the “Denaro
Employment Agreement”) and the restricted stock agreement (which

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includes a put right equal to $2.50 per share to be effective for a ninety day period beginning on
the third anniversary of the Closing Date), in substantially the form attached hereto as Exhibit
B (the “Restricted Stock Agreement”);

     (v) Lynn Reed and Parent will have executed and delivered the offer letter, in substantially
the form attached hereto as Exhibit C and the waiver and release in substantially the form
attached hereto as Exhibit D;

     (vi) Lynn Reed, the Company and Sole Shareholder will have entered into the Option
Cancellation Agreement in substantially the form of Exhibit E hereto (the “Option Cancellation
Agreement”);

     (vii) Sole Shareholder will have delivered the waiver and release, in the form attached
hereto as Exhibit F (the “Release”);

     (viii) Brad Bortner will have executed and delivered the waiver and release, in substantially
the form attached hereto as Exhibit G;

     (ix) Each of the employees of Company listed on Exhibit H hereto (the “Designated
Employees”), will have entered into “at-will” employment or consulting arrangements with Parent
and/or Surviving Entity, shall have agreed to be employees of, or consultants to Parent and/or
Surviving Entity and shall be employees of the Company immediately prior to the Effective Time;

     (x) Each Designated Employee will have entered into the Parent’s standard employment
nondisclosure, assignment of invention, and noncompetition agreement, in substantially the form
attached hereto as Exhibit I;

     (xi) Company will deliver to Parent and Merger Sub (A) a copy of the articles of
incorporation, including all amendments thereto, of the Company, certified by the Secretary of
State of the State of Washington; and (B) a certificate, dated not more than five business days
prior to the Closing Date, from the Secretary of State of the State of Washington to the effect
that the Company is in good standing in such jurisdiction;

     (xii) Company will deliver to Parent and Merger Sub the written resignations of the officers
and directors of the Company;

     (xiii) Company will have delivered to Parent and Merger Sub 2003 financial statements and
written certification by Sole Shareholder reflecting that earnings before interest, tax
depreciation and amortization, calculated in the same way, using the same accounting principles,
practices, methodologies and policies, as used by the Company in preparing the Company Financials,
was a minimum of $450,000, with adjustments as mutually agreed to by Company and Parent;

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     (xiv) Company will use commercially reasonable efforts to obtain the consent of the
other party to Contracts listed in Section 2.13(b) to the Company Disclosure Schedule that
require such consent to assign such Contracts to Merger Sub;

     (xv) termination of Northwest Business Bank lien;

     (xvi)
Company will deliver to Parent and Merger Sub an opinion letter from Perkins Coie,
dated the Closing Date, in the form attached hereto as Exhibit J.

     (xvii) Company will deliver to Parent and Merger Sub a certificate of the Secretary of the
Company, in the form attached hereto as Exhibit K, certifying as to certain corporate matters,
together with all attachments thereto;

     (xviii) Company and Sole Shareholder will have satisfied and terminated the Promissory Note,
dated December 23, 2003, with Northwest Business Bank, principal amount of $300,000.00, maturing
December 26, 2005 and provide documentation to Parent and Merger Sub to that effect (the
“Company Line of Credit”);

     (xix) Company and Sole Shareholder will have satisfied and terminated the lease, dated July
15, 2002, for the 2002 Mercedes S430, with Mercedes Benz of Bellevue, including any penalties
related to early payoff, and provide documentation to Parent and Merger Sub to that effect (the
“Mercedes Lease”);

     (xx) Company will deliver to Parent a properly executed statement in substantially the form
of Exhibit L hereto for purposes of satisfying Parent’s obligations under Treasury Regulation
Section 1.1445-2(c)(3);

     (xxi) Parent and Merger Sub will deliver to Company and Sole Shareholder (A) a copy of the
certificate of incorporation including all amendments thereto, .for each of the Parent and Merger
Sub, respectively, certified by the Secretary of State of the State of Delaware; and (B)
certificates, dated not more than five business days prior to the Closing Date, from the Secretary
of State of the State of Delaware to the effect that the Parent and Merger Sub are is in good
standing in such jurisdiction;

     (xxii) Parent and Merger Sub will deliver to Company and Sole Shareholder certificates of the
Secretaries of the Parent and Merger Sub, in the forms attached hereto as Exhibit M and Exhibit N,
respectively, certifying as to certain corporate matters, together with all attachments thereto;

     (xxiii) Parent and Merger Sub will issue the stock certificate in the name of Sole
Shareholder in accordance with Sections 1.3(a) and 1.6 below; and

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     (xxiv) Parent will pay the cash Merger Consideration (as defined below) set forth in
Section 1.3(b) below to Sole Shareholder by wire transfer of immediately available
funds to the bank account of Shareholder described on Exhibit O.

     (xxv) Parent will deliver to Parent and Merger Sub an opinion letter from Wilson,
Sonsini Goodrich and Rosati, dated the Closing Date, in the form attached hereto as
Exhibit P.

1.3     Merger Consideration

          The consideration to be paid to Sole Shareholder pursuant to the Merger (the “Merger
Consideration”) shall be comprised of:

          (a) an aggregate of 1,060,000 shares of Common Stock of the Parent (“Parent
Common Stock”) issued at Closing and as more fully described in Section 1.6
below;

          (b) $775,000 in cash subject to increase or reduction by the Adjustment Amount
(as defined in Section 1.10 below) payable at Closing; and

          (c) the Contingent Merger Consideration (as defined in Section 1.11 below)
payable as set forth in Section 1.11 below. All of the Merger Consideration shall be
allocated to Sole Shareholder.

1.4      Effect of the Merger

          At the Effective Time, the effect of the First Merger shall be as provided by this
Agreement and in the applicable provisions of Delaware Law and Washington Law.

1.5     Articles of Incorporation and Bylaws; Directors and Officers

          At the Effective Time:

          (a) The articles of incorporation of the Company immediately prior to the
Effective Times shall be the articles of incorporation of the First-Step Corporation at the
Effective Time until thereafter amended in accordance with Washington Law and as
provided in such articles of incorporation.

          (b) The bylaws of the Company, as in effect immediately prior to the Effective
Time, shall be the bylaws of the First-Step Corporation at the Effective Time until thereafter
amended in accordance with Washington Law and as provided in the articles of
incorporation of the First-Step Corporation and such bylaws.

          (c) The directors and officers of Merger Sub immediately prior to the Effective
Time shall become the officers and directors of the First-Step Corporation and shall hold
office until their respective successors are duly elected or appointed and qualified in the
manner provided in the articles of incorporation and bylaws of First-Step Corporation.

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1.6 Company Capital Stock

     At the Effective Time, by virtue of the First Merger and without any further action on the
part of Parent, Merger Sub, Company or Sole Shareholder:

     (a) Company Common Stock. Shares of Company Common Stock issued and outstanding
immediately prior to the Effective Date and held by Sole Shareholder shall be cancelled and
retired and cease to exist and be converted automatically into the right to receive the Merger
Consideration.

     (b) Company Stock Options. The Company shall have caused any outstanding options,
convertible securities, subscriptions or other commitments or rights of any nature to acquire any
securities of the Company to be cancelled on or before the Closing Date.

     (c) Company Treasury Shares. Each share of Company Capital Stock held in Treasury of
the Company immediately prior to the Effective Time shall be cancelled and retired and cease to
exist.

     (d) Merger Sub Capital Stock. Each share of capital stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of Common Stock of the First-Step Corporation.

     (e) Surrender of Certificates. At the Closing, (a) Sole Shareholder and Company shall
deliver to Parent and Merger Sub the stock certificate(s) representing all of the outstanding
shares of Company Capital Stock and the stock certificate(s) so surrendered shall be cancelled and
Parent and Merger Sub will deliver to Sole Shareholder a stock certificate representing an
aggregate of 1,060,000 shares of Parent Common Stock.

1.7 No Further Ownership Rights in Company Common Stock

     All shares of Parent Common Stock issued upon the surrender for exchange of shares of Company
Capital Stock in accordance with the terms hereof (including any cash paid in respect thereof)
shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares
of Company Capital Stock, and there shall be no further registration of transfers on the records
of the Surviving Entity of shares of Company Capital Stock which were outstanding immediately
prior to the Effective Time.

1.8 Tax Consequences

     It is intended by the parties hereto that the First Merger and the Second Merger, taken
together and pursuant to which Company shall be deemed merged into Parent for federal income tax
purposes, shall constitute a reorganization within the meaning of Section 368(a)(I)(A) of the Code
(as defined in Section 2.23(a)(ii) below). The parties agree to so treat the Merger for
all Tax reporting purposes unless otherwise required by a contrary

6

 

“determination” within the meaning of Section 1313 of the Code. Each party has consulted with its
own tax advisor with respect to the tax consequences of the Merger.

1.9 Exemption from Registration

     Assuming the accuracy of the representations by Sole Shareholder contained in Article
III below, the shares of Parent Common Stock to be issued in connection with the Merger will
be issued in a transaction exempt from registration under the Securities Act of 1933, as amended
(the “Securities Act”), by reason of Section 4(2) thereof.

1.10 Adjustment Amount

     (a) Within 30 days after the Closing Date, Parent shall deliver to Sole Shareholder a
statement (the “Draft Closing Date Statement”) setting forth its calculation of the
Company’s Working Capital as of the close of business on the Closing Date based on the Current
Balance Sheet (as defined in Section 2.7 below) (the “Closing Working Capital”),
determined in accordance with the accounting principles, practices, methodologies and policies used
in preparation of the Company Financials (as defined in Section 2.7 below). The Draft
Closing Date Statement shall become final and binding on the parties (the “Final Working
Capital Statement”) upon the earliest of (i) the expiration of the 15 day period within which
Sole Shareholder may notify Parent of any objections thereto if no notice of objection has been
given, (ii) agreement between the Sole Shareholder and Parent that the Draft Working Capital
Statement, together with any modifications thereto agreed between the Sole Shareholder and Parent
in writing, constitutes the Final Working Capital Statement and (iii) the date of a binding court
order pursuant to Section 7.10 with respect to the Final Working Capital Statement.

     (b) The Merger Consideration set forth in Section 1.3(b) above shall be either
increased by the Adjustment Amount (as defined below) or decreased by the Adjustment Amount, as
applicable. Within three business days after the Final Working Capital Statement has been finally
determined in accordance herewith (i) if the Closing Working Capital reflected on the Final Working
Capital Statement is more than the Target Working Capital, Parent shall pay to Sole Shareholder the
Adjustment Amount for such excess, and (ii) if the Closing Working Capital reflected on the Final
Working Capital Statement is less than the Target Working Capital, Sole Shareholder shall pay to
Parent the Adjustment Amount for such shortfall. Any such payment hereunder shall be made by wire
transfer of immediately available funds to an account designated in writing by Sole Shareholder or
Parent, as the case may be.

     (c) The term “Working Capital” means Current Assets minus Current Liabilities. The
term “Current Assets” means the total current assets of the Company, and the term
“Current Liabilities” means the accounts payable and other accrued expenses and deferred
revenue of the Company, in each case calculated in the same way, using the same accounting
principles, practices, methodologies and policies, as the line items comprising total current
assets and accounts payable and other accrued expenses and deferred revenue,

7

 

respectively, in the Company Financials as reflected on Exhibit Q hereto. The term “Target
Working Capital” means $275,000. The term “Adjustment Amount” means the difference
between the Closing Working Capital and the Target Working Capital.

1.11 Contingent Merger Consideration.

     (a) Sole Shareholder shall be entitled to receive up to an additional $600,000 in cash of
Merger Consideration based on achievement of the Performance Criteria (set forth in Section
1.11(b) below) by Surviving Entity and Sole Shareholder over the two years immediately
following the Effective Date (the “Contingent Merger Consideration”). A target of
$300,000 of the Contingent Merger Consideration will be payable twelve (12) months following the
Effective Time (“Year One”) and a target of $300,000 of the Contingent Merger
Consideration will be payable twenty-four (24) months following the Effective Time (“Year
Two”), both such payments shall be based on achievement of the Performance Criteria. The
Contingent Merger Consideration consists of the Gross Revenue Consideration, the Gross Margin
Consideration, and the Profit Margin Consideration (as defined in Section 1.11(b)).

     (b) For the purposes hereof, “Performance Criteria” shall mean:

     (i) Gross Revenue Consideration. Up to forty percent (40%) of the Contingent
Merger Consideration (i.e., a target of $120,000 for each of Year One and Year Two,
respectively) (the “Gross Revenue Consideration”) may be deemed earned if a
minimum of 80% of each of the Surviving Entity Revenue Goal and the Other Gross Revenue
Goal set forth herein are met as defined below. Up to fifty percent (50%) of the Gross
Revenue Consideration (i.e., a target of $60,000 for each of Year One and Year Two,
respectively) shall be based upon Surviving Entity achieving: (A) for Year One gross
revenues (defined as revenue from the sale of any and all comScore products and services
made by the Surviving Entity organizational unit) of $5,250,000; and (B) for Year Two,
gross revenues of $5,500,000 (the “Surviving Entity Revenue Goal”). Up to another
fifty percent (50%) of the Gross Revenue Consideration (i.e., a target of $60,000 for Year
One and Year Two, respectively) shall be based on achievement of gross revenues as agreed
to by Sole Shareholder and Parent (the “Other Gross Revenue Goal”); however, the
percentage of the Gross Revenue Consideration attributable to the Surviving Entity Revenue
Goal shall be proportionately reduced and the percentage of the Gross Revenue
Consideration attributable to the Surviving Entity Revenue Goal shall be proportionately
increased to the extent that the Surviving Entity Revenue Goals are assigned for less than
twelve months in either of Year One or Year Two. For purposes of illustration only, if
Other Gross Revenue Goals are assigned to Sole Shareholder six (6) months from the
Effective Time, then for Year One, the Surviving Entity Revenue Goal shall account for up
to seventy-five percent (75%) of the Gross Revenue Consideration and the Other Gross
Revenue Goal shall account for up to twenty-five percent (25%) of the Gross Revenue
Consideration and for Year Two the Surviving Entity Revenue Goal shall account for fifty
percent (50%)

8

 

of the Gross Revenue Consideration and the Other Revenue Consideration shall account for fifty
percent (50%) of the Gross Revenue Consideration, Payment under each goal shall be made in
proportion to the percentage of the target earned but not to exceed $60,000 for Year One and Year
Two, respectively (as proportionately adjusted based on the Other Revenue Goal criteria); provided
that a minimum of 80% of the Surviving Entity Revenue Goal shall be required for the corresponding
Gross Revenue Consideration to be deemed earned and a minimum of 80% of the Other Revenue Goal must
be met shall be required for the corresponding Gross Revenue Consideration to be deemed earned. In
the event that the gross revenues earned in Year One exceeds the Surviving Entity Revenue Goal or
the Other Gross Revenue Goal, the excess shall be considered when calculating the results for Year
Two Surviving Entity Revenue Goal or the Other Gross Revenue Goal; provided that the cumulative
payout of Gross Revenue Consideration for Year One and Year Two, collectively, shall not exceed
$240,000.

     (ii) Gross Margin of Surviving Entity. Up to forty percent (40%) of the Contingent
Merger Consideration (i.e., a target of $120,000 for Year One and Year Two, respectively) (the
“Gross Margin Consideration”) may be earned if the Surviving Entity achieves or exceeds:
(A) for Year One, a gross margin percentage (defined as gross revenues less cost of goods sold
divided by gross revenues) equal to the gross margin percentage of Company as of the Closing Date
as reflected on the Company Financials (as defined in Section 2.7 below) (the “Year
One Margin”) (currently estimated to be approximately sixty-two percent (62%)); and (B) for
Year Two, a gross margin percentage equal to the Year One Margin plus two percent (2%). A minimum
of 85% of the Gross Margin Goal shall be required for any payment of Gross Margin Consideration to
be deemed earned. Sole Shareholder shall be entitled to a pro rated pay out of Gross Margin
Consideration if achieved gross margins either exceed or do not meet the target gross margins set
forth above; provided, that the cumulative payout of Gross Margin Consideration for Year One and
for Year Two, collectively, shall not exceed $240,000.

     (iii) Operating Profit of Surviving Entity. Up to twenty percent (20%) of the
Contingent Merger Consideration (i.e., a target of $60,000 for Year One and Year Two,
respectively) (the “Profit Margin Consideration”) may be earned if the Surviving Entity
achieves or exceeds: (A) for Year One, a profit margin (defined as (x) gross profit less all other
expenses except for interest and taxes and excluding any allocation of Parent overhead divided by
(y) gross revenues) of twelve percent (12%); and (B) for Year Two, total profit margin of fourteen
percent (14%). A minimum of 85% of the profit margin targets above shall be required for any
payment of Profit Margin Consideration to be deemed earned. Sole Shareholder shall be entitled to
a pro rated pay out of Profit Margin Consideration if achieved operating profit either exceeds or
does not meet the goal for the year; provided that the cumulative payout of Profit Margin
Consideration for Year One and for Year Two, collectively, shall not exceed $120,000.

9

 

     (iv) For the purpose of computing the Performance Criteria, gross revenue, gross
margin and operating profit shall be determined in accordance with the accounting
principles, practices, methodologies and policies used in the preparation of the Company
Financials. In addition, for purposes of calculation of both the gross margin under
Section 1.11(b)(ii) and operating profit under Section 1.1l(b)(iii), gross
revenues shall equal gross revenues as defined in Section 1.11(b)(i)(A).

     (v) The Performance Criteria shall be subject to review and mutually agreed
adjustment as set forth in writing by Parent and Sole Shareholder twelve (12) months
following the Effective Time.

     (c) The Contingent Merger Consideration shall be subject to acceleration and immediately and
fully payable, to the extent not already earned and paid and regardless of whether otherwise
earned, (i) on a Change of Control of Parent (as defined below) within twenty-four (24) months of
the Effective Time; or (ii) if Parent or any successor terminates Sole Stockholder’s employment
“without cause” within twenty-four (24) months of the Effective Time (as defined in the Denaro
Employment Agreement). For the purposes hereof, “Change of Control of Parent” shall mean
(i) the consummation of any transaction or series of related transactions (within any period of 90
consecutive days) (including without limitation any merger, consolidation or reorganization)
involving the acquisition of beneficial ownership of, or power to vote, in excess of 50% or more of
the outstanding voting shares of Parent by an acquiror or group of acquirors (except for a Change
of Control as a result of an Initial Public Offering as defined in Parent’s certificate of
incorporation); (ii) the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of Parent; or (iii) the adoption of a plan relating
to the liquidation or dissolution of Parent.

     (d) Parent shall use commercially reasonable efforts to allow the Surviving Entity to conduct
its business in a manner that allows it to achieve the Performance Criteria.

     (e) Subject to Section 6.5 below, any amounts owed under this Section 1.11
shall be paid as soon as practicable after determination but in no event more than 45 days
following the earlier of (i) an event causing acceleration under Section 1.11(c), or (ii) the
second anniversary of the Effective Time

1.12 Stock Options for Designated Employees and Other Company Employees

     Within thirty (30) days of Closing, Parent will grant options, which will be “incentive stock
options” (as defined under Section 422 Code) to the extent permitted under the Code, to purchase
up to 267,500 shares of Parent Common Stock to the Designated Employees and other employees of
Company to the extent each such employee accepts Parent’s offer of employment, in the amounts set
forth on Exhibit H hereto, subject to the

10

 

terms and conditions of Parent’s 1999 Stock Plan and related stock option agreement and at an
exercise price equal to the fair market value of such stock on the date of grant, as determined by
Parent’s Board of Directors, in its sole discretion. The shares governed by such options shall vest
in equal monthly installments over four (4) years, beginning one month after the optionee’s
employment start date (e.g., 1/
48th of the option shares shall vest two
months after the optionee’s employment start), provided that the optionee is still employed by
Parent on such vesting dates.

1.13 Taking of Necessary Action; Further Action

     If, at any time after the Effective Time, any such further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving Entity with full right, title
and possession to all assets, property, rights, privileges, powers and franchises of the Company
and Merger Sub, the officers and directors of Company, Parent and Merger Sub are fully authorized
in the name of their respective entities to take, and will take, all such lawful and necessary
action.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF

THE COMPANY AND THE SOLE STOCKHOLDER

     The Company and Sole Shareholder hereby jointly and severally represent and warrant to Parent
and Merger Sub, subject to such exceptions as are specifically disclosed in the disclosure schedule
(referencing the appropriate section and paragraph numbers) supplied by the Company and Sole
Shareholder to Parent and Merger Sub (the “Company Disclosure Schedule”) and dated as of
the date hereof, that on the date hereof and as of the Effective Time as though made at the
Effective Time as follows (except that the representations and warranties made as of a specified
date will be true and correct as of such date):

2.1 Organization and Qualification of the Company

     The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Washington. The Company has the corporate power to own, use, license and lease
its properties and assets, and to carry on its business as now being conducted and as currently
proposed to be conducted after the Effective Time. The Company is duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction in which the failure to be so
qualified would have a material adverse effect on the business, assets (including intangible
assets), condition (financial or otherwise), or results of operations of the Company (hereinafter
referred to as a “Material Adverse Effect”). The Company has delivered a true and correct
copy of its Articles of Incorporation and Bylaws, each as amended to date, to Parent. Section
2.1 of the Company Disclosure Schedule lists the directors and officers of the Company as of
the date hereof. The operations now being conducted by the Company are not now and have never been

11

 

conducted by the Company under any name other than “Denaro and Associates, Inc.”,“Q2 Brand
Intelligence”, “Q2 Brand”, “Q2 Intelligence”, “Q2” or some derivative thereof.

2.2 Company Capital Structure

     (a) The authorized Company Capital Stock consists of 400,000 (200,000 Class A and 200,000
Class B) shares of authorized Common Stock of which 80,000 (80,000 Class A and no Class B) shares
are issued and outstanding as of the date hereof. The Company has no other capital stock
authorized, issued or outstanding. All outstanding shares of Company Capital Stock are held by Sole
Shareholder and are duly authorized, validly issued, fully paid and non-assessable, are free of
Encumbrances (as defined in Section 2.1 l(a) below) created by statute, the Articles of
Incorporation or Bylaws of the Company or any agreement to which the Company or Sole Shareholder is
a party or by which it or he is bound, and have been issued in compliance with all applicable
federal, state and foreign securities laws. There are no declared or accrued but unpaid dividends
with respect to any shares of Company Capital Stock.

     (b) Except for the Denaro & Associates, Inc. 2000 Stock Incentive Plan (the “Company
Option Plan”), the Company has never adopted or maintained any stock option plan or other
plan providing for equity compensation of any person. The Company has reserved 50,000 shares of
Common Stock for issuance to employees, directors and consultants pursuant to the Company Option
Plan, of which no shares have been issued upon exercise of awards granted under the Company Option
Plan, no shares are subject to outstanding, unexercised options and shares remain available for
future grant. Any options previously issued under the Company Option Plan have been validly
terminated and were originally issued in compliance with all applicable federal, state and foreign
securities laws. There are no options, warrants, calls, rights, convertible securities,
commitments or agreements of any character, written or oral, to which the Company is a party or by
which it is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the
Company or obligating the Company to grant, extend, accelerate the vesting of, change the price
of, otherwise amend or enter into any such option, warrant, call, right, convertible security,
commitment or agreement. There are no outstanding or authorized stock appreciation, phantom stock,
profit participation, or other similar rights with respect to the Company. There are no voting
trusts, proxies, or other agreements or understandings with respect to the voting stock of the
Company.

     (c) Except for the repurchase of all of the shares of Company Capital Stock held by Michael
Murphy as further described in Section 2.2(c) of the Disclosure Schedule, the Company has
never repurchased, redeemed or otherwise reacquired any shares of capital stock or other
securities of the Company. All securities so reaquired by the Company were reacquired in
compliance with all requirements set forth in applicable restricted stock purchase agreements and
other applicable contracts.

12

 

2.3 Subsidiaries

     The Company does not have and has never had any subsidiaries or affiliated companies and does
not otherwise own and has never otherwise owned any shares of capital stock or any interest in, or
control, directly or indirectly, any other corporation, partnership, association, joint venture or
other business entity.

2.4 Authority

     The Company has all requisite power and authority to enter into this Agreement and any
Related Agreements (as hereinafter defined) to which it is a party, to perform its obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and any Related Agreements to which the Company is a
party and the consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company, and no further action is
required on the part of the Company to authorize the Agreement, any Related Agreements to which it
is a party and the transactions contemplated hereby and thereby. This Agreement and the Merger
have been unanimously approved by the Board of Directors of the Company and by Sole Shareholder.
This Agreement and any Related Agreements to which the Company is a party have been duly executed
and delivered by the Company and, assuming the due authorization, execution and delivery by the
other parties hereto and thereto, constitute the valid and binding obligation of the Company,
enforceable in accordance with their respective terms. The “Related Agreements” shall mean
all such ancillary agreements to be executed and delivered in connection with the transactions
contemplated hereby, including, without limitation, the Release, the Denaro Employment Agreement
and the Restricted Stock Agreement.

2.5 No Conflict

     The execution and delivery of this Agreement and any Related Agreements to which the Company
is a party do not, and, the consummation of the transactions contemplated hereby and thereby will
not, conflict with, or result in any violation of, or default under (with or without notice or
lapse of time, or both), or give rise to a right of termination, cancellation, modification or
acceleration of any obligation or loss of any benefit under (i) any provision of the Articles of
Incorporation and Bylaws of the Company, (ii) any mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise or license to which the Company or any of
its properties or assets are subject, or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or its respective properties or assets (any
such event, a “Conflict”).

2.6 Consents

     No consent, waiver, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other federal, state, county, local
or other foreign governmental authority, instrumentality, agency or commission (“Governmental Entity”) or any third party, including a party to any agreement

13

 

with the Company (so as not to trigger any Conflict), is required by or with respect to the
Company or Sole Shareholder in connection with the execution and delivery of this Agreement and
any Related Agreements to which the Company or Sole Shareholder is a party or the consummation of
the transactions contemplated hereby and thereby, except for (i) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as may be required
under applicable securities laws, and (ii) the filing of the Articles of Merger with the Secretary
of State of the State of Delaware and the Secretary of State of the State of Washington.

2.7 Company Financial Statements

     Section 2.7 of the Company Disclosure Schedule sets forth (i) the Company’s unaudited
balance sheet as of December 31, 2003 and the related unaudited statement of income for the
twelve-month period then ended; and (ii) the Company’s unaudited balance sheet as of the Closing
Date (the “Current Balance Sheet”) and the related unaudited statement of income for the
period January 1, 2004 through the Closing Date (collectively, the “Company Financials”).
The Company Financials are true and correct in all material respects, present fairly the financial
condition and operating results of the Company, and have been prepared reasonably and on a
consistent basis using the same accounting principles, practices, methodologies and policies for
and throughout the periods indicated therein (subject to normal year-end adjustments, which will
not be material in amount or significance in any individual case or in the aggregate).

2.8 No Undisclosed Liabilities

     The Company does not have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute, contingent, matured,
unmatured or other (whether or not required to be reflected in financial statements in accordance
with United States generally accepted accounting principles (“GAAP”)), which individually or in
the aggregate, exceeds $10,000 in value and either (a) has not been reflected in the Current
Balance Sheet or (b) will not be reflected in the Final Working Capital Statement.

2.9 Tax and Other Returns and Reports

     (a) Definition of Taxes. For the purposes of this Agreement, “Tax” or, collectively,
“Taxes”, means any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based upon or measured
by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes,
together with all interest, penalties and additions imposed with respect to such amounts and any
obligations under any agreements or arrangements with any other person with respect to such
amounts and including any liability for taxes of a predecessor entity.

14

 

     (b) Company has timely filed all Tax returns (“Returns” or “Tax Returns”),
estimates, information statements and reports required to be filed by or on behalf of the Company,
and such Returns are true and correct in all material respects and completed in accordance with
applicable law. Company has timely paid all Taxes it is required to pay. Company has not been
advised (i) that any of its Tax Returns have been or are being audited as of the date hereof, nor
has the Company been notified of any request for such audit or other examination, or (ii) of any
deficiency in assessment or proposed judgment to its Taxes. Company has no knowledge of any
liability of any Tax to be imposed upon its properties or assets as of the date of this Agreement
that is not adequately provided for. The Company has made available to Parent copies of all Tax
Returns for all periods since 2001.

     (c) The provision made for Taxes on the Company Balance Sheet is sufficient for the payment of
all Taxes and assessments, whether or not disputed at the time of the Company Balance Sheet Date,
and for all years and periods prior thereto. Since the Company Balance Sheet Date and unless
otherwise reflected on the Final Working Capital Statement, Company has not incurred any Taxes
other than Taxes incurred in the ordinary course of business consistent in type and amount with
past practices of Company. Company has duly withheld and paid all Taxes that it is required to
withhold and pay relating to salaries, wages and other compensation, remuneration or benefits paid
to the employees of Company and has timely paid over any withheld amounts to the appropriate taxing
authority. There are no claims or assessments pending with respect to any Return for any alleged
Tax deficiency relating to Company’s business and no material Tax issue has been raised by any
taxing authority or representative thereof with respect to any such Return.

     (d) Company has been a validly electing S corporation within the meaning of Sections 1361 and
1362 of the Code and for state law purposes (except in those states that do not recognize S
corporation status) at all times since incorporation and as filed all forms and taken all actions
necessary to maintain such status. Neither Company nor Sole Shareholder, or any other previous
stockholder of the Company, has taken any action prior to the Closing Date that could cause Company
to lose such status as an S corporation. Company has not, since inception, (i) acquired assets from
another corporation in a transaction in which Company’s Tax basis for the acquired assets was
determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other
property) in the hands of the transferor or (ii) acquired the stock of any corporation which is a
qualified subchapter S subsidiary.

     (e) No claim has ever been made by an authority in a jurisdiction where Company does not file
Returns that it is or may be subject to taxation by that jurisdiction.

     (f) There are (and immediately following the Effective Time there will be) no Encumbrance on
the assets of Company relating to or attributable to Taxes. There is no basis for the assertion of
any claim relating or attributable to Taxes that, if adversely determined, would result in any
Encumbrance for Taxes on the assets of Company.

15

 

     (g) Company has not engaged in a transaction that is the same as or substantially similar to
one of the types of transactions that the Internal Revenue Service has determined to be a tax
avoidance transaction and identified by notice, regulation, or other form of published guidance as
a listed transaction, as set forth in Treasury Regulation Section 1.601l-4(b)(2).

2.10 Restrictions on Business Activities

     There is no agreement (noncompete or otherwise), commitment, judgment, injunction, order or
decree to which the Company is a party or otherwise binding upon the Company which has or may have
the effect of materially prohibiting or impairing any business practice of the Company, any
acquisition of property (tangible or intangible) by the Company or the conduct of business by the
Company. Without limiting the foregoing, the Company has not entered into any agreement under
which the Company is restricted from providing services to, customers or potential customers or
any class of customers, in any geographic area, during any period of time or in any segment of the
market.

2.11 Title of Properties; Absence of Encumbrances

     (a) For the purposes of this Agreement, “Encumbrance,” or collectively
“Encumbrances,” shall mean any lien, pledge, hypothecation, charge, mortgage, security
interest, encumbrance, claim, infringement, interference, option, right of first refusal,
preemptive right, community property interest or restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of any security or
other asset, any restriction on the receipt of income derived from any asset, any restriction on
the use of any asset and any restriction on the possession, exercise or transfer of any other
attribute of ownership of any asset), other than liens for Taxes not yet due and payable or
restrictions on transfers arising under federal or state securities laws.

     (b) The Company owns no real property, nor has it ever owned any real property. Section
2.11(b) of the Company Disclosure Schedule sets forth a list of all real property currently, or
at any time in the past, leased by the Company, the name of the lessor, the date of the lease and
each amendment thereto and, with respect to any current lease, the aggregate annual rental and/or
other fees payable under any such lease. All such current leases are in full force and effect, are
valid and effective in accordance with their respective terms, and the Company is not, under any of
such leases, in any existing default or an event of default (or event which with notice or lapse of
time, or both, would constitute a default) nor, to the knowledge of the Company, is the landlord in
any such existing default or an event of default. All of the real property currently leased by the
Company is in good operating condition and repair, free from structural, physical and mechanical
defects, is maintained in a manner consistent with standards generally followed with respect to
similar properties, and is otherwise suitable for the conduct of the business as presently
conducted.

     (c) The Company has good and valid title to, or, in the case of leased properties and
assets, valid leasehold interests in, all of its tangible properties and assets, real, personal

16

 

and mixed, used or held for use in its business, free and clear of any Encumbrances, except as
reflected in the Current Balance Sheet and except for Encumbrances for Taxes not yet due and
payable and such imperfections of title and Encumbrances, if any, which, individually or in the
aggregate, are not material in character, amount or extent, and which do not detract from the
value, or interfere with the present use, of the property subject thereto or affected thereby.

     (d) Section 2.11(d) of the Company Disclosure Schedule lists all material items of
equipment (the “Equipment”) owned or leased by the Company and such Equipment is (i)
sufficient for the conduct of the business of the Company as currently conducted and (ii) in good
operating condition, regularly and properly maintained, subject to normal wear and tear.

2.12 Intellectual Property

     (a) Section 2.12(a) of the Company Disclosure Schedule contains an accurate and
complete list of all registered Company patents, trademarks, service marks, trade names, and
copyrights, if any. To the knowledge of the Company, Company owns or possesses sufficient legal
rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes (collectively, “Intellectual
Property Rights”) necessary for its business as now conducted, without any infringement of the
rights of others. The Company is not a party to outstanding options, licenses or agreements of any
kind relating to the foregoing, nor is Company bound by or a party to any options, licenses or
agreements of any kind with respect to Intellectual Property Rights of any other person or entity
other than such licenses or agreements arising from the purchase of “off the shelf” or standard
products.

     (b) Company has not received any communication alleging that Company has violated or, by
conducting its business as presently conducted or as presently proposed to be conducted, would
violate any of the Intellectual Property Rights of any other person or entity. Company has no
knowledge that any of its employees is obligated under any contract (including licenses, covenants
or commitments of any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to Company or that would
conflict with Company’s business as presently conducted or as presently proposed to be conducted.

     (c) To the Company’s knowledge, neither the execution nor delivery of this Agreement, nor the
carrying on of Company’s business by the employees of Company, nor the conduct of Company’s
business as presently conducted or as presently proposed to be conducted, will conflict with or
result in a breach of the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any employee is now obligated. To the knowledge of
the Company, it does not utilize in its business as presently conducted nor as presently proposed
to be conducted, any inventions, trade secrets or proprietary information of any of its employees
made prior to their employment by Company, except for inventions, trade secrets or proprietary information that have
been assigned to Company.

17

 

     (d) The Company has no knowledge that the Company Intellectual Property Rights are invalid or
unenforceable.

     (e) To the knowledge of the Company all of the Company’s Intellectual Property Rights will be
fully transferable, alienable or licensable by the Surviving Entity and/or Parent without
restriction and without payment of any kind to any third party.

     (f) Each of the Company’s Intellectual Property Rights is free of and clear of any
Encumbrances, except for non-exclusive licenses granted to customers in the ordinary course of
business.

     (g) To the knowledge of the Company, no person is infringing or misappropriating any of the
Company’s Intellectual Property Rights.

     (h) The Company has taken all steps that are reasonably required to protect the Company’s
rights in confidential information and trade secrets of the Company or provided by any other
person to the Company. Without limiting the foregoing, the Company has and enforces a policy
requiring each employee and consultant of the Company to execute a proprietary information and
inventions assignment agreement in the form provided to Parent, and all current and former
employees and consultants of Company who have created or modified any of the Company’s
intellectual property have executed such an agreement assigning all of such employees’ and
consultants’ rights in and to the Company’s Intellectual Property Rights to the Company.

2.13 Agreements, Contracts and Commitments

     (a) Except as set forth in Schedule 2.13(a), the Company does not have, is not a party to,
nor is it bound by:

     (i) any collective bargaining agreements;

     (ii) any agreements or arrangements that contain any change of control or severance
pay or post-employment liabilities or obligations;

     (iii) any bonus, deferred compensation, pension, profit sharing or retirement plans,
or any other employee benefit plans or arrangements;

     (iv) any employment or consulting agreement, contract or commitment with an employee
or individual consultant or salesperson or consulting or sales agreement, contract or
commitment with a firm or other organization;

     (v) any agreement or plan, including, without limitation, any stock option plan, stock
appreciation rights plan or stock purchase plan, any of the benefits of

18

 

which will be increased, or the vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the value of any
of the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement;

     (vi) any fidelity or surety bond or completion bond;

     (vii) any lease of personal property having a value individually in excess of $10,000;

     (viii) any agreement of indemnification or guaranty;

     (ix) any agreement, contract or commitment containing any covenant limiting the
freedom of the Company to engage in any line of business or to compete with any person;

     (x) any agreement, contract or commitment relating to capital expenditures and
involving future payments in excess of $20,000, either individually or in the aggregate;

     (xi) any agreement, contract or commitment relating to the disposition or acquisition
of assets or any interest in any business enterprise outside the ordinary course of the
Company’s business;

     (xii) any mortgages, indentures, loans or credit agreements, security agreements or
other agreements or instruments relating to the borrowing of money or extension of credit,
including guaranties referred to in clause (viii) hereof;

     (xiii) any purchase order or contract for the purchase of materials involving $25,000
or more, either individually or in the aggregate;

     (xiv) any construction contracts;

     (xv) any distribution, joint marketing or development agreement; or

     (xvi) any other agreement, contract or commitment that involves $25,000 or more or is
not cancelable without penalty within thirty (30) days.

     (b) Section 2.13(b) of the Company Disclosure Schedule contains a complete and
accurate list, and Company has delivered to Parent true and complete copies of each material
agreement, contract, covenant, instrument, lease, license or commitment to which the Company is a
party or by which it is bound (each, a “Contract” and collectively, the
“Contracts”). The Company is in compliance with and has not breached, violated or defaulted
under, or received notice that it has breached, violated or defaulted under, any of the terms or
conditions of any Contract, nor do the Company or Sole Shareholder have knowledge of any event that
would constitute such a breach, violation or default with the

19

 

lapse of time, giving of notice or both. Section 2.13(b) of the Company Disclosure
Schedule also denotes each Contract that needs consent from the other party thereto to assign
such Contract to Merger Sub. Section 2.13(b) of the Company Disclosure Schedule also
denotes each Contract with obligations that will need to be fulfilled by the Surviving Entity
after the Effective Time with a description of the remaining obligations under such Contracts.
Each Contract is a valid and binding agreement of the Company, is in full force and effect, and
is not subject to any default thereunder by any party obligated to the Company pursuant thereto.
The Company has obtained, or will obtain prior to the Closing Date, all necessary consents,
waivers and approvals of parties to any Contract as are required thereunder in connection with
the Merger or for such Contracts to remain in effect without modification after the Closing.

2.14 Interested Party Transactions

     No officer, director or stockholder of the Company (nor any ancestor, sibling, descendant or
spouse of any of such persons, or any trust, partnership or corporation in which any of such
persons has or has had an interest), has or has had, directly or indirectly, (i) an interest in
any entity which furnished or sold, or furnishes or sells, services, products, technology or
intellectual property that the Company furnishes or sells, or proposes to furnish or sell, or (ii)
any interest in any entity that purchases from or sells or furnishes to the Company any goods or
services or (iii) a beneficial interest in any Contract; provided, however, that ownership of no
more than one percent (1%) of the outstanding voting stock of a publicly traded corporation shall
not be deemed an “interest in any entity” for purposes of this Section 2.14.

2.15 Compliance with Laws

     The Company has complied with, is not in violation of, and has not received any notices of
violation with respect to, any applicable foreign, federal, state or local statute, law or
regulation, except where failure to comply would not have a Material Adverse Effect.

2.16 Governmental Authorization

     Section 2.16 of the Company Disclosure Schedule accurately lists each consent,
license, permit, grant or other authorization issued to the Company by a Governmental Entity (i)
pursuant to which the Company currently operates or holds any interest in any of their properties
or (ii) which is required for the operation of its business or the holding of any such interest
(herein collectively called “Company Authorizations”). The Company Authorizations are in
full force and effect and constitute all Company Authorizations required to permit the Company to
operate or conduct its business or hold any interest in its properties or assets, except where
failure to comply would not have a Material Adverse Effect.

20

 

2.17 Litigation

     (a) Section 2.17(a) of the Company Disclosure Schedule sets forth, with respect to any
pending or threatened action, suit, proceeding or investigation the Company has notice of, the
forum, the parties thereto, the subject matter thereof and the amount of damages claimed or other
remedy requested. Other than as disclosed in Section 2.17(a) of the Company Disclosure
Schedule, there is no action, suit or proceeding of any nature pending or to the Company’s
knowledge, threatened against the Company, its assets or properties or any of its officers or
directors, in their respective capacities as such; and the Company does not have any knowledge of
any facts or circumstances that would reasonably be expected to give rise to any successful action
or proceeding against, relating to, or affecting the Company or any of its assets or properties. To
the Company’s knowledge, there is no investigation pending or threatened against the Company, its
assets or properties or any of its officers or directors, in their respective capacities as such,
by or before any Governmental Entity. To the Company’s knowledge, no Governmental Entity has at any
time challenged or questioned the legal right of the Company to engage in its business as presently
conducted or to manufacture, offer or sell any of its products in the present manner or style
thereof.

     (b) Prior to the execution of this Agreement, the Company has delivered to Parent all
responses of counsel for the Company to auditors’ requests for information (together with any
updates provided by such counsel) regarding actions or proceedings pending or threatened against,
relating to or affecting the Company.

2.18 Bank Accounts; Accounts Receivable; Accounts Payable

     (a) Section 2.18(a) of the Company Disclosure Schedule provides the account number,
bank, and authorized signators with respect to each account maintained by or for the benefit of
Company at any bank or other financial institution.

     (b) Section 2.18(b) of the Company Disclosure Schedule contains an accurate and
complete list of all accounts receivable of the Company (“Accounts Receivable”) as of the
Effective Time along with a range of days elapsed since invoice. Except as reflected in the
Current Balance Sheet or the Final Working Capital Statement, all Accounts Receivable of the
Company arose from bona fide sales transactions in the ordinary course of business and are
collectible except to the extent of reserves therefor set forth in the Current Balance Sheet. No
person has any Encumbrance on any of such Accounts Receivable and no request or agreement for
deduction or discount has been made with respect to any of such Accounts Receivable.

     (c) Section 2.18(c) of the Company Disclosure Schedule contains an accurate and
complete list of all accounts payable of the Company as of the Effective Time.

21

 

2.19 Insurance

     Section 2.19 of the Company Disclosure Schedule contains an accurate summary of the
insurance policies currently maintained by the Company. The Company has obtained and maintained in
full force and effect insurance with responsible and reputable insurance companies or associations
in such amounts, on such terms and covering such risks, including fire and other risks insured
against by extended coverage, which (i) in light of the business, operations, assets and properties
of the Company, are to the Company’s knowledge reasonable and customary, both in scope and amount
of coverage, for persons engaged in similar businesses and operations and having similar assets and
properties and (ii) are, both in scope and amount of coverage, as required by any Contract to which
the Company is a party or by which any of its assets or properties is bound. With respect to the
insurance policies and fidelity bonds covering the assets, business, equipment, properties,
operations, employees, officers and directors of the Company, there is no claim by the Company
pending under any of such policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds. All premiums due and payable under all such
policies and bonds have been paid and the Company is otherwise in material compliance with the
terms of such policies and bonds (or other policies and bonds providing substantially similar
insurance coverage). The Company has not received notice of any threatened termination of, or
material premium increase with respect to, any of such policies. The insurance coverage provided by
the policies set forth in Section 2.19 of the Company Disclosure Schedule will not
terminate or lapse by reason of any of the transactions contemplated by this Agreement or any of
the Related Agreements.

2.20 Minute Books and Records

     (a) The minute books of the Company made available to counsel for Parent are the only minute
books of the Company and contain a reasonably accurate summary of all meetings of directors (or
committees thereof) and stockholders or actions by written consent since the time of incorporation
of the Company.

     (b) The Company has delivered to Parent for examination the following: (i) copies of its
charter documents; and (ii) a stock ledger and journal reflecting all issuances and transfers of
Company Capital Stock.

2.21 Environmental Matters

     (a) Hazardous Material. The Company has not: (i) operated any underground storage
tanks at any property that the Company has at any time owned, operated, occupied or leased; or
(ii) illegally released to the environment any material amount of any substance that has been
designated by any Governmental Entity or by applicable federal, state or local law to be
radioactive, toxic, hazardous or otherwise a danger to health or the environment, including,
without limitation, PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or defined as a hazardous

22

 

waste pursuant to the United States Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws (a “Hazardous Material”), but
excluding office and janitorial supplies properly and safely maintained. No Hazardous Materials
are present in violation of any applicable law, as a result of the deliberate actions of the
Company, or, to the Company’s knowledge, as a result of any actions of any third party or
otherwise, in, on or under any property, including the land and the improvements, ground water and
surface water thereof, that the Company has at any time owned, operated, occupied or leased.

     (b) Hazardous Materials Activities. The Company has not transported, stored, used,
manufactured, disposed of, released or exposed its employees or others to Hazardous Materials in
violation of any applicable law or regulation in effect on or before the Closing Date, and the
Company has not disposed of, transported, sold, or manufactured any product containing a Hazardous
Material in violation of any applicable law or regulation in effect on or before the Closing Date
(any or all of the foregoing being collectively referred to as “Hazardous Materials
Activities”).

     (c) Permits. The Company currently holds all environmental approvals, permits,
licenses, clearances and consents (the “Environmental Permits”) necessary for the conduct
of the Company’s Hazardous Material Activities and other businesses of the Company as such
activities and businesses are currently being conducted.

     (d) Environmental Liabilities. No action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to the Company’s knowledge,
threatened concerning any Environmental Permit, Hazardous Material or any Hazardous Materials
Activity of the Company.

2.22 Brokers’ and Finders’ Fees

     The Company has not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby.

2.23 Employee Matters and Benefit Plans

     (a) Definitions. With the exception of the definition of “Affiliate” set
forth in Section 2.23(a)(i) below (which definition shall apply only to this Section
2.23), for purposes of this Agreement, the following terms shall have the meanings set forth
below:

     (i) “Affiliate” shall mean any other person or entity under common control
with the Company within the meaning of Section 414(b), (c), (m) or (o) of the Code and the
regulations issued thereunder;

     (ii) “Code” shall mean the Internal Revenue Code of 1986, as amended;

23

 

     (iii) “Company Employee Plan” shall mean any plan, program, policy, practice,
contract, agreement or other arrangement providing for compensation, severance, termination pay,
deferred compensation, retirement benefits, performance awards, stock or stock-related awards,
fringe benefits or other employee benefits or remuneration of any kind, whether written or
unwritten or otherwise, funded or unfunded, including without limitation, each “employee benefit
plan,” within the meaning of Section 3(3) of ERISA which is maintained, contributed to, or
required to be contributed to, by the Company or any Affiliate for the benefit of any Employee, or
with respect to which the Company or any Affiliate has or may have any liability or obligation;

     (iv) “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended;

     (v) “DOL” shall mean the United States Department of Labor;

     (vi) “Employee” shall mean any current or former employee, consultant or director of
the Company or any Affiliate;

     (vii) “Employee Agreement” shall mean each management, employment, severance,
consulting, relocation, repatriation, expatriation, visa, work permit or other agreement, contract
or understanding between the Company or any Affiliate and any Employee;

     (viii) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended;

     (ix) “FMLA” shall mean the Family Medical Leave Act of 1993, as amended;

     (x) “International Employee Plan” shall mean each Company Employee Plan that has been
adopted or maintained by the Company or any Affiliate, whether informally or formally, or with
respect to which the Company or any Affiliate will or may have any material liability, for the
benefit of Employees who perform services outside the United States;

     (xi) “IRS” shall mean the Internal Revenue Service;

     (xii) “Multiemployer Plan” shall mean any “Pension Plan” (as defined below) which is
a “multiemployer plan,” as defined in Section 4001(a) (3) of ERISA; and

     (xiii) “Pension Plan” shall mean each Company Employee Plan which is an “employee
pension benefit plan,” within the meaning of Section 3(2) of ERISA.

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     (b) Schedule. Section 2.23(b) of the Company Disclosure Schedule contains an
accurate and complete list of each Company Employee Plan and each Employee Agreement. The Company
does not have any plan or commitment to establish or enter into any new Company Employee Plan or
Employee Agreement or to modify any existing Company Employee Plan or Employee Agreement (except
to the extent required by law or to conform any such Company Employee Plan or Employee Agreement,
in each case as previously disclosed in writing, to the requirements of any applicable law or as
required by this Agreement).

     (c) Documents. The Company has provided to Parent (i) correct and complete copies of
each Company Employee Plan and each Employee Agreement as currently in effect including (without
limitation) all material amendments thereto; (ii) the most recent annual actuarial valuations, if
any, prepared for each Company Employee Plan; (iii) the three (3) most recent annual reports (Form
Series 5500 and all schedules and financial statements attached thereto), if any, required under
ERISA or the Code in connection with each Company Employee Plan; (iv) if the Company Employee Plan
is funded, the most recent annual and periodic accounting, if any, of Company Employee Plan assets;
(v) the most recent summary plan description together with the summary(ies) of material
modifications thereto, if any, required under ERISA with respect to each Company Employee Plan;
(vi) the most recent IRS determination, opinion, notification and advisory letter, if any, issued
by the IRS with respect to any Company Employee Plan intended to be qualified under Section 401(a)
of the Code; (vii) all material written agreements and contracts relating to each Company Employee
Plan, including, but not limited to, administrative service agreements, trust agreements, group
annuity contracts and group insurance contracts; (viii) all communications material to any Employee
or Employees relating to any Company Employee Plan and any proposed Company Employee Plans, in each
case, relating to any amendments, terminations, establishments, increases or decreases in benefits,
acceleration of payments or vesting schedules or other events occurring since the end of the most
recent fiscal year included in the Company Financials which would result in any material liability
to the Company; (ix) all material correspondence to or from any Governmental Entity relating to any
Company Employee Plan; (x) samples of all COBRA administration forms and related notices; (xi) all
policies pertaining to fiduciary liability insurance covering the fiduciaries for each Company
Employee Plan; and (xii) all discrimination tests for each Company Employee Plan for the most
recent plan year.

     (d) Employee Plan Compliance. (i) The Company has performed in all material respects
all obligations required to be performed by it under each Company Employee Plan and each Company
Employee Plan has been established and maintained in all material respects in accordance with its
terms and in compliance with all applicable laws, statutes, orders, rules and regulations,
including but not limited to ERISA or the Code; (ii) each Company Employee Plan intended to qualify
under Section 401(a) of the Code has received or relies on a favorable determination, opinion,
notification or advisory letter from the IRS with respect to its qualified status under the Code,
including all amendments to the Code effected by the Tax Reform Act of 1986 and subsequent
legislation (or has remaining a period of time under the Code or applicable Treasury regulations or
IRS pronouncements in

25

 

which to request, and make any amendments necessary to obtain, such a letter from the IRS); (iii)
no “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407
of ERISA, and not otherwise exempt under Section 408 of ERISA (or an exemption issued thereunder)
has occurred with respect to any Company Employee Plan; (iv) there are no actions, suits or claims
pending, or, to the knowledge of the Company, threatened or reasonably anticipated (other than
routine claims for benefits) against any Company Employee Plan or against the assets of any Company
Employee Plan; (v) each Company Employee Plan can be amended, terminated or otherwise discontinued
after the Effective Time in accordance with its terms, without liability to the Parent or Surviving
Entity (other than ordinary administration and termination expenses); (vi) there are no audits,
inquiries or proceedings pending or, to the knowledge of the Company, threatened by the IRS or DOL
with respect to any Company Employee Plan; and (vii) neither the Company nor any Affiliate is
subject to any penalty or tax with respect to any Company Employee Plan under Section 502(i) of
ERISA or Sections 4975 through 4980 of the Code. The Company has satisfied all overdue liabilities,
including any fines and/or penalties owing to the IRS under the Q2 Retirement Savings Plan (Money
Purchase Plan) and the Q2 Retirement Savings Plan (401(k) Profit Sharing Plan) and has timely made
all contributions and other payments required by and due from it under the terms of each Company
Employee Plan. For each Company Employee Plan that is intended to be qualified under Section 401(a)
of the Code, to the knowledge of Company, there has been no event, condition or circumstance that
has adversely affected or is likely to adversely affect such qualified status.

     (e) Pension Plan. Neither the Company nor any Affiliate has ever maintained,
established, sponsored, participated in, or contributed to, any Pension Plan which is subject to
Title IV of ERISA or Section 412 of the Code. At no time has the Company or any Affiliate
contributed to or been obligated to contribute to any Multiemployer Plan. Neither the Company nor
any Affiliate has at any time ever maintained, established, sponsored, participated in or
contributed to any multiple employer plan (within the meaning of Section 413 of the Code).

     (f) No Self-Insured Plans. Neither the Company nor any Affiliate has ever maintained,
established sponsored, participated in or contributed to any self-insured plan that provides
welfare benefits (within the meaning of Section 3(1) of ERISA) to Employees (including, without
limitation, any such plan pursuant to which a stop-loss policy or contract applies) and with
respect to which it has any on-going liability.

     (g) No Post-Employment Obligations. No Company Employee Plan provides, or reflects or
represents any liability to provide, post-termination or retiree life insurance, health or other
employee welfare benefits(within the meaning of Section 3(1) of ERISA) to any person for any
reason, except as may be required by COBRA or other applicable statute, and the Company has never
represented, promised or contracted (whether in oral or written form) to any Employee (either
individually or to Employees as a group) or any other person that such Employee(s) or other person
would be provided with post-termination or retiree life insurance, health or other employee
welfare benefit, except to the extent required by statute.

26

 

     (h) COBRA etc. Neither the Company nor any Affiliate has, prior to the Effective Time
and in any material respect, violated any of the health care continuation requirements of COBRA,
the requirements of FMLA, the requirements of the Women’s Heath and Cancer Rights Act, the
requirements of the Newborns’ and Mothers’ Health Protection Act of 1996, or any similar
provisions of state law applicable to its Employees.

     (i) Effect of Transaction.

     (i) The execution of this Agreement and the consummation of the transactions
contemplated hereby will not (either alone or upon the occurrence of any additional or
subsequent events) constitute an event under any Company Employee Plan, Employee Agreement,
trust or loan that will result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee.

     (ii) No payment or benefit which has been, will be, or may be made by the Company or
its Affiliates under any Company Employee Plan or Employee Agreement with respect to any
Employee as a result of the transactions contemplated by this Agreement or otherwise will
be characterized as a “parachute payment,” within the meaning of Section 280G(b)(2) of the
Code (but without regard to clause (A)(ii) thereof).

     (j) Employment Matters. The Company: (i) is in compliance in all material respects
with all applicable foreign, federal, state and local laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment and wages and hours, in each
case, with respect to Employees; (ii) has withheld and reported all amounts required by law or by
agreement to be withheld and reported with respect to wages, salaries and other payments to
Employees; (iii) is not liable for any arrears of wages or any taxes or any penalty for failure to
comply with any of the foregoing; and (iv) is not liable for any payment to any trust or other
fund governed by or maintained by or on behalf of any Governmental Entity, with respect to
unemployment compensation benefits, social security or other benefits or obligations for Employees
(other than routine payments to be made in the normal course of business and consistent with past
practice). There are no pending, threatened or reasonably anticipated claims or actions against
the Company under any worker’s compensation policy or long-term disability policy. The Company has
no direct or indirect liability with respect to any misclassification of any person as an
independent contractor rather than as an employee, or with respect to any employee leased from
another employer.

     (k) Labor. No work stoppage or labor strike against the Company is pending,
threatened or reasonably anticipated. The Company does not have any knowledge of any activities or
proceedings of any labor union to organize any Employees. There are no actions, suits, claims,
labor disputes or grievances pending, or, to the knowledge of the Company, threatened or
reasonably anticipated relating to any labor, safety or discrimination

27

 

matters involving any Employee, including, without limitation, charges of unfair labor practices
or discrimination complaints. Neither the Company nor any of its subsidiaries has engaged in any
unfair labor practices within the meaning of the National Labor Relations Act. The Company is not
presently, nor has it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to Employees and no collective bargaining agreement is
being negotiated by the Company.

     (l) International Employee Plan. The Company does not now, nor has it ever had the
obligation to, maintain, establish, sponsor, participate in, or contribute to any International
Employee Plan.

2.24 Major Customers

     Section 2.24 of the Company Disclosure Schedule identifies, and provides a break down
of the revenues received from each customer or other person or entity that accounted for more than
$100,000 of the gross revenues of the Company since January 1, 2004 (the “Major
Customers”). The Company has not received any notice (written or oral) from any Major Customer
stating that such Customer will (i) cease doing business with the Company or (ii) significantly
reduce the volume of its business with the Company. To the knowledge of the Company, none of the
Major Customers listed on Section 2.24 of the Company Disclosure Schedule is threatened
with bankruptcy or insolvency.

2.25 Warranties; Indemnities.

     The Company has not given any warranties or indemnities relating to products or technology
sold or licensed or services rendered by the Company.

2.26 Certain Obligations. Company and/or Sole Shareholder have satisfied and
terminated the Company Line of Credit and the Mercedes Lease.

28

 

2.27 Complete Copies of Materials. The Company has delivered or made available accurate and
complete copies of each document (or summaries of same, if such summaries are deemed acceptable by
Parent) that has been requested by Parent or its counsel.

2.28 Representations CompleteSole Stockholder does not know, nor reasonably should know, of any
event that could reasonably (as of the date of this Agreement) be expected to have a material
adverse effect of $250,000 or more on the Parent that has not been disclosed in the Company
Disclosure Schedule.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF

SOLE SHAREHOLDER

     The Sole Shareholder hereby represents and warrants to Parent and Merger Sub, subject to
such exceptions as are specifically disclosed in the disclosure schedule (referencing the
appropriate section and paragraph numbers) supplied by Sole Shareholder to Parent and Merger Sub
(the “Sole Shareholder Disclosure Schedule”) and dated as of the date hereof, that on the
date hereof and as of the Effective Time as though made at the Effective Time as follows (except
that the representations and warranties made as of a specified date will be true and correct as of
such date):

3.1 Purchase Entirely for Own Account

     That the shares of Parent Common Stock to be received by Sole Shareholder, the stock options
provided in the Employee Agreement and related documents thereto and the Common Stock issuable upon
exercise of such options (collectively, the “Securities”) will be acquired for investment
for Sole Shareholder’s own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Sole Shareholder has no present intention of selling,
granting any participation in, or otherwise distributing the same. Sole Shareholder further
represents that he does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third person, with respect
to any of the Securities.

3.2 Disclosure of Information

     Sole Shareholder has had an opportunity to ask questions and receive answers from Parent and
Merger Sub regarding the terms and conditions of the Merger and the business, properties,
prospects and financial condition of Parent. The Sole Shareholder understands that an investment
in the Securities may involve a high degree of risk. The Sole Shareholder has sought such
accounting, legal and tax advice as he has considered necessary to make any informed investment
decision with respect to his acquisition of the Securities.

29

 

3.3 Investment Experience

     Sole Shareholder acknowledges that he is able to fend for himself, can bear the economic risk
of his investment, and has such knowledge and experience in financial or business matters that he
is capable of evaluating the merits and risks of the investment in the Securities.

3.4 Accredited Investor

     Sole Shareholder is an “accredited investor” within the meaning of Rule 501 of Regulation D
under the Securities Act, as presently in effect.

3.5 Restricted Securities

     Sole Shareholder understands that the Securities he is receiving are characterized as
“restricted securities” under the federal securities laws inasmuch as they are being acquired from
Parent in a transaction not involving a public offering and that under such laws and applicable
regulations such Securities may be resold without registration under the Act, only in certain
limited circumstances. In addition, Sole Shareholder understands the resale limitations imposed by
Rule 144A of the Securities Act and otherwise by the Securities Act. Sole Shareholder understands
that no public market presently exists for the Securities, and that there are no assurances that
any such market will be created.

3.6 Further Limitations on Disposition

     Without in any way limiting the above, Sole Shareholder further agrees not to make any
disposition of all or any portion of the Securities except in compliance with the Restricted Stock
Agreement.

3.7 Legends

     The certificate or certificates evidencing the Securities to be issued by Parent to Sole
Shareholder shall bear appropriate legends, as determined by the Parent.

3.8 Ownership of Company Common Stock

     The Sole Shareholder is the sole record and beneficial owner of the Company Common Stock.
Such Company Common Stock is not subject to any Encumbrances or to any rights of first refusal of
any kind, and Sole Shareholder has not granted any rights to purchase such Company Common Stock to
any other person or entity. The Sole Shareholder has the sole right to transfer such Company
Common Stock under this Agreement.

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3.9 Authority

     The Sole Shareholder has the legal capacity to enter into this Agreement and any Related
Agreement to which he is a party and to consummate the transactions contemplated hereby and
thereby. This Agreement and each of the Related Agreements to which Sole Shareholder is a party
has been duly executed and delivered by Sole Shareholder, and assuming the due authorization,
execution and delivery by the other parties hereto and thereto, constitute the valid and binding
obligations of Sole Shareholder, enforceable against each such party in accordance with their
respective terms.

3.10 No Conflict

     The execution and delivery by Sole Shareholder of this Agreement and any Related Agreement to
which he is a party and the consummation of the transactions contemplated hereby and thereby will
not, conflict with (a) any material mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise or license to which Sole Shareholder or any of his
assets or properties is subject, or (b) any law or order applicable to Sole Shareholder.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND

MERGER SUB

     Each of the Parent and Merger Sub jointly and severally represents and warrants to Company
and Sole Shareholder subject to such exceptions as are specifically disclosed in the disclosure
schedule (referencing the appropriate section and paragraph numbers) supplied by Parent to the
Company (the “Parent Disclosure Schedule”) and dated as of the date hereof, that on the
date hereof and as of the Effective Time as though made at the Effective Time, as follows
(except that the representations and warranties made as of a specified date will be true and
correct as of such date):

4.1 Organization, Standing and Power

     Parent is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware; it was formed solely to effect the
Merger and it has no assets or liabilities and has never conducted any business other than in
connection with the transactions contemplated by this Agreement. Each of Parent and Merger Sub
has the corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified to do business and is in good standing in each jurisdiction in
which the failure to be so qualified would have a material adverse effect on the ability of
Parent and Merger Sub to consummate the transactions contemplated hereby.

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4.2 Authority

     Parent and Merger Sub have all requisite corporate power and authority to enter into this
Agreement and each of the Related Agreements to which they are a party, to perform its obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each of the Related Agreements to which either Parent
and Merger Sub is a party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action on the part of Parent and Merger Sub. This
Agreement and each of the Related Agreements to which either Parent or Merger Sub is a party have
been duly executed and delivered by Parent and Merger Sub, as appropriate, and constitute the
valid and binding obligations of Parent and Merger Sub, enforceable in accordance with their
respective terms.

4.3 Capital Structure; Parent Common Stock

     (a) The authorized capital stock of Parent as of the date hereof is as follows:

     (i) 73,673,224 shares of Preferred Stock, (A) 9,187,500 of which have been designated
Series A Preferred, all of which are issued and outstanding, (B) 3,535,486 of which have
been designated Series B Preferred Stock, 3,479,241 of which are issued and outstanding,
(C) 13,355,052 of which have been designated Series C Preferred Stock, 13,236,018 of which
are issued and outstanding, (D) 357,144 of which have been designated Series C-l Preferred
Stock, all of which are issued and outstanding, (E) 22,238,042 of which have been
designated Series D Preferred Stock, 21,564,020 of which are issued and outstanding, and
(F) 25,000,000 of which have been designated Series E Preferred Stock, 24,005,548 of which
are issued and outstanding

     (ii) 125,000,000 shares of Common Stock, of
which [13,207,036]1 shares are issued and outstanding.

     (iii) Parent has reserved (A) 10,683,140 shares of Common Stock for issuance upon the
conversion of the Series A Preferred, (B) 7,013,717 shares of Common Stock for issuance
upon the conversion of the Series B Preferred and the Series B Preferred issuable upon
exercise of outstanding warrants, (C) 20,116,886 shares of Common Stock for issuance upon
the conversion of the Series C Preferred and the Series C Preferred issuable upon exercise
of outstanding warrants, (D) 423,730 shares of Common Stock for issuance upon the
conversion of the Series C-l Preferred, (E) 24,462,803 shares of Common Stock for issuance
upon the conversion of the Series D Preferred and the Series D Preferred issuable upon
exercise of outstanding warrants, (F) 24,005,548 shares of Common Stock for issuance upon
the conversion of the Series E Preferred, (G) 19,760,284 shares of its

 

		
	1 	To be updated immediately prior to Closing

32

 

Common Stock for issuance pursuant to the Company’s 1999 Stock Option Plan, of which
options to purchase approximately [17,434,000]2 shares have been granted and
are outstanding, (H) 56,245 shares of Series B Preferred for issuance pursuant to
outstanding warrants, (I) 61,765 shares of Series C Preferred for issuance pursuant to
outstanding warrants, (J) 190,363 shares of Series D Preferred for issuance pursuant to
outstanding warrants and (K) 242,100 shares of Common Stock for issuance pursuant to
outstanding warrants.

     (iv) All issued and outstanding shares of Parent have been duly authorized and
validly issued, are fully paid and nonassessable, and were issued in compliance with all
applicable state and federal laws concerning the issuance of securities.

     (b) The Parent Common Stock to be issued to the Sole Shareholder pursuant to this Agreement
will be upon issuance duly authorized, validly issued, fully paid and nonassessable, free and
clear of all Encumbrances, and not subject to of issued in violation of any purchase option, call
option, right of first refusal, preemptive right, subscription right or any similar right under
any provision of Delaware Law or Parent’s certificate of incorporation.

4.4 Financial Information

     Parent has provided to Company and Sole Shareholder the audited consolidated and
consolidating balance sheet and statements of income and cash flows for the year ended on January
31, 2003, and the unaudited consolidated and consolidating balance sheet and statement of income
for the year ended on January 31, 2004 and unaudited balance sheet (the “May 31 Parent
Balance Sheet”) and statement of income for the period ended May 31, 2004 (collectively, the
“Parent Financial Statements”). The Parent Financial Statements are true and correct in
all material respects and have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods indicated and with each other, except the unaudited financial
statements are subject to the absence of footnotes otherwise required. The Parent Financial
Statements present fairly the financial condition and operating results of Parent as of the dates
and for the periods indicated therein, except for normal year-end adjustments, which will not be
material in amount or significance. Parent maintains a standard system of accounting established
and administered in accordance with GAAP.

4.5 Litigation

     There is no litigation, action, suit, proceeding of any nature or governmental
investigation pending or, to the knowledge of Parent, threatened against Parent or affecting
any of Parent’s properties or assets or any of its officers or directors, in their respective
capacities as such and to the Parent’s knowledge, there is no investigation pending or

 

	 	
	2 	To be updated immediately prior to Closing

33

 

threatened against the Parent, its assets or properties or any of its officers or directors, in
their respective capacities as such, by or before any Governmental Entity that would have a
material adverse effect on the business, assets (including intangible assets), condition
(financial or otherwise), or results of operations of Parent. To Parent’s knowledge, no
Governmental Entity has at any time challenged or questioned the legal right of Parent to engage
in its business as presently conducted or to manufacture, offer or sell any of its products in
the present manner or style thereof.

4.6 Compliance with Laws

     Parent has complied with, is not in violation of, and has not received any notices of
violation with respect to, any applicable foreign, federal, state or local statute, law or
regulation, except where failure to comply would not have a Material Adverse Effect.

4.7 Brokers’ and Finders’ Fees

     Neither Parent nor Merger Sub has incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.

4.9 Disclosure of Information; Investment Experience

     Parent and Merger Sub have had an opportunity to ask questions and receive answers from
Company and Sole Shareholder regarding the terms and conditions of the Merger and the business,
properties, prospects and financial condition of the Company. Parent and Merger Sub acknowledge
that they are able to fend for themselves, can bear the economic risk of this investment, and
have such knowledge and experience in financial or business matters that they are capable of
evaluating the merits and risks of the investment in the Securities.

4.10 No Undisclosed Liabilities

     Parent and Merger Sub do not have any liabilities, indebtedness, obligations, expenses,
claims, deficiencies, guaranties or endorsements of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected in financial
statements in accordance with GAAP), which individually or in the aggregate, exceeds $250,000 in
value and has not been reflected in the May 31 Parent Balance Sheet.

4.11 No Conflict

     The execution and delivery of this Agreement and any Related Agreements to which the Parent
and Merger Sub are a party do not, and, the consummation of the transactions contemplated hereby
and thereby will not, conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of termination, cancellation,
modification or acceleration of any obligation or loss of any benefit under (i) any provision of
the Certificate of Incorporation and Bylaws of the Parent

34

 

or Merger Sub, (ii)any mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise or license to which the Parent or Merger Sub or any of its
properties or assets are subject, or (iii) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Parent or Merger Sub or their respective properties or
assets.

4.12 Tax Matters

     The sole member of Newco shall at all times up to the Second Merger be Parent. Newco will be
“disregarded as an entity” separate from Parent within the meaning of Treasury Regulations Section
1.7701-3(a).

4.13 Representations CompleteParent does not know, nor reasonably should know, of any event that
could reasonably (as of the date of this Agreement) be expected to have a material adverse effect
of $250,000 or more on the Parent that has not been disclosed in the Parent Disclosure Schedule.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 Confidentiality

     Each of the parties hereto hereby agrees that the information or knowledge obtained in any
investigation related to this transaction, or pursuant to the negotiation and execution of this
Agreement or the effectuation of the transactions contemplated hereby, shall be governed by Part
Two, Section 4 (the “Confidentiality Provision”) of the letter agreement, dated May 12,
2004, among the Company, Sole Shareholder and the Parent (the “Letter of Intent”), which
Confidentiality Provision shall continue in full force and effect in accordance with its terms. The
terms and conditions of this Agreement and the Related Agreements shall be considered Confidential
Information thereunder.

5.2 Expenses

     (a) Whether or not the Merger is consummated, all fees and expenses incurred in connection
with the Merger including, without limitation, all legal, accounting, financial advisory,
consulting and all other fees and expenses of third parties (“Third Party Expenses”)
incurred by a party in connection with the negotiation and effectuation of the terms and
conditions of this Agreement and the transactions contemplated hereby, shall be the obligation of
the respective party incurring such fees and expenses.

     (b) Any and all Third Party Expenses incurred by Company that are not paid by Company
immediately prior to Closing shall be the obligation of Sole Shareholder and shall not be
reflected as liabilities on the Draft Closing Working Capital Statement or Final Working Capital
Statement or otherwise increase or reduce the Adjustment Amount (the “Sole Shareholder Assumed
Expenses”).

35

 

5.3 Reasonable Efforts

     Subject to the terms and conditions provided in this Agreement, each of the parties hereto
shall use its reasonable efforts to take promptly, or cause to be taken, all actions, and to do
promptly, or cause to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated hereby to obtain all
necessary waivers, consents and approvals and to effect all necessary registrations and filings and
to remove any injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Agreement for the purpose of
securing to the parties hereto the benefits contemplated by this Agreement; provided that neither
party shall be required to agree to any divestiture by Parent or the Company or any of Parent’s
subsidiaries or affiliates of shares of capital stock or of any business, assets or property of
Parent or its subsidiaries or affiliates or the Company or its affiliates, or the imposition of any
material limitation on the ability of any of them to conduct their businesses or to own or exercise
control of such assets, properties and stock.

5.4 Additional Documents and Further Assurances

     Each party hereto, at the request of another party hereto, shall execute and deliver such
other instruments and do and perform such other acts and things as may be necessary or desirable
for effecting completely the consummation of this Agreement and the transactions contemplated
hereby.

5.5 Tax Matters

     (a) Maintenance of S Corporation Status. Company shall be a valid electing S
corporation (within the meaning of Sections 1361 and 1362 of the Code and for state Tax law
purposes) up to and including the Closing Date. Company and Sole Shareholder shall take all
necessary actions, and shall not omit to take any action, which action or omission could result in
Company’s loss of S Corporation status prior to the Closing.

     (b) Preparation of Returns: Periods Ending on or Before the Closing Date. The Sole
Shareholder shall prepare or cause to be prepared and file or cause to be filed any Tax Returns of
the Company relating to state or federal income Tax that include any period ending on or prior to
the Closing and that are required to be filed after the Closing Date. Such Returns shall be
prepared in accordance with applicable law and past practices consistently applied and shall be
subject to the review and approval of Parent, which approval shall not be unreasonably withheld,
conditioned or delayed. Such Returns, in substantially final form, shall be provided to Parent at
least 30 days prior to filing of such Returns.

     (c) Liability for Pre-Closing Taxes. The Sole Shareholder shall be liable for all
Taxes payable by the Company or relating to its operations and attributable to any taxable period
or portion of a period that begins on or before the Closing Date and ends on or before
the Closing Date except to the extent such Taxes are reflected on the Final Closing Statement.

36

 

     (d) Liability for Post-Closing Taxes. Parent shall be liable for all Taxes payable
by the Company or relating to its operations and attributable to any taxable period or portion
of a period beginning after the Closing Date.

     (e) Cooperation on Tax Matters.

     (i) Parent, Company and Sole Shareholder shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of any Tax Returns
pursuant to this Section 5.5 and any audit, litigation or other proceeding with respect
to Taxes of Company. Such cooperation shall include the retention and (upon the other
party’s request) the provision of records and information that are reasonably relevant to
any such audit, litigation or other proceeding and making employees available on a
mutually convenient basis. Parent and Company agree that Company will to retain all books
and records with respect to Tax matters pertinent to the Company relating to any taxable
period beginning before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Parent or Sole Shareholder, any extensions
thereof) of the respective taxable periods.

     (ii) Each of Parent, Company and Sole Shareholder further agree, upon request, to use
their commercially reasonable efforts to obtain any certificate or other document from any
governmental authority or any other person as may be necessaryto mitigate, reduce or
eliminate any Tax that could be imposed.

     (f) The Tax Returns for the taxable year of the Company that ends on the Closing Date shall
be prepared in accordance with Treasury Regulations Section 1.1502-76; provided, however, that
no election shall be made under paragraph (b)(2)(ii)(D) thereof, and the parties will treat the
taxable year of the Company as ending for income tax purposes at the end of the Closing Date.

ARTICLE VI

SURVIVAL OF REPRESENTATIONS AND WARRANTIES;

INDEMNIFICATION

6.1 Survival of Representations and Warranties

     Company’s and Sole Shareholder’s representations and warranties (each as modified by the
Company Disclosure Schedule) set forth in Sections 2.1, 2.2, 2.4, and 3.8 and the corresponding
obligations under Section 6.2(a) shall survive the Merger and any applicable statute of
limitations; (ii) Company’s and Sole Shareholder’s representations and warranties (each as
modified by the Company Disclosure Schedule) set forth in Sections 2.9, and 2.23 and the
corresponding obligations under Section 6.2(a) shall survive the Merger and

37

 

continue until 11:59 p.m. Delaware
time thirty (30) days after the last day of the relevant time
period set forth in the appropriate statute of limitations, at which point such representations
and warranties and obligations shall terminate; (iii) all other representations and warranties of
Company and Sole Shareholder in this Agreement or in any instrument delivered pursuant to this
Agreement (each as modified by the Company Disclosure Schedule) and the corresponding obligations
in Section 6.2(a) shall survive the Merger and continue until the 11:59 p.m. Delaware time on the
date which is eighteen (18) months following the Effective Time at which point such
representations and warranties and obligations shall terminate; (iv) Parent’s and Merger Sub’s
representations and warranties (each as modified by the Parent Disclosure Schedule) set forth in
Sections 4.1, 4.2, and 4.3 and the corresponding obligations under Section 6.2(b) shall survive
the Merger and any applicable statute of limitations; and, (v) all other representations and
warranties of Parent and Merger Sub in this Agreement or in any instrument delivered pursuant to
this Agreement (each as modified by the Parent Disclosure Schedule) and the corresponding
obligations under Section 6.2(b) shall survive the Merger and continue until the 11:59 p.m.
Delaware time on the date which is eighteen (18) months following the Effective Time at which
point such representations and warranties and obligations shall terminate. The obligations of the
parties hereunder with respect to their respective covenants and agreements contained herein shall
continue until such covenants and agreements have been performed.

6.2 Indemnification

     (a) The Sole Shareholder hereby agrees to indemnify and hold Parent and its officers,
directors, agents, representatives and affiliates harmless for any claims, losses, liabilities,
damages, deficiencies, costs and expenses, including reasonable attorneys’ fees and expenses, and
expenses of investigation and defense (hereinafter individually a “Loss” and collectively
“Losses”) incurred by Parent, Merger Sub, their respective officers, directors, agents,
representatives or affiliates (including the Surviving Entity) (collectively, the (“Parent
Group Members”) as a result of:

     (i) any inaccuracy or breach of any representation or warranty of the Company or Sole
Shareholder contained in this Agreement; or

     (ii) any failure by the Company or Sole Shareholder to perform or comply with any
covenant or agreement contained herein.

     (b) Parent hereby agrees to indemnify and hold Company and Sole Shareholder and their
respective officers, directors, agents, representatives and affiliates (the “Sole Shareholder
Group Members”) harmless for any Loss incurred by a Sole Shareholder Group Member directly or
indirectly as a result of

     (i) any inaccuracy or breach of a representation or warranty of Parent or Merger Sub
contained in this Agreement; or

38

 

     (ii) any failure by Parent or Merger Sub to perform or comply with any covenant or
agreement contained herein.

6.3 Notice and Determination of Claims

     (a) If a Parent Group Member or a Sole Shareholder Group Member believes that it has suffered
or incurred any Loss for which indemnity may be sought under this Article VI, such Parent
Group Member or Shareholder Group Member, as the case may be (the
“Indemnified Person”),
shall promptly so notify (the “Claim Notice”) the Sole Shareholder or Parent, as the case
may be (the “Indemnifying Person”), in writing describing such Loss, the amount thereof,
if known, and the method of computation of such Loss, all with reasonable particularity and
containing a reference to the provisions of this Agreement in respect of which such Loss shall
have occurred. The failure by the Indemnified Person to promptly give notice as provided herein
shall not relieve any indemnification obligation under this Article VI except to the
extent that the Indemnifying Person is materially and directly damaged as a result of such failure to give notice. If any action at Law or suit in
equity is instituted by or against a third party with respect to which any Indemnified Person
intends to claim any liability or expense as a Loss under this Article VI, such
Indemnified Person shall promptly notify the Indemnifying Person in writing of such action or suit
as specified in this Section 6.3. The Indemnified Person shall use reasonable efforts to
minimize any Loss for which indemnification is sought hereunder.

     (b) Within 15 calendar days after the Indemnified Person has delivered any Claim Notice
pursuant hereto the Indemnifying Person shall notify the Indemnified Person in writing whether or
not the claim, or the amount thereof, is disputed. If such notice states that the claim and the
amount are not disputed, or the Indemnifying Person fails to deliver any such notice within such 15
calendar day period, the claim shall be deemed to be in compliance with this Article VI,
and shall be immediately forwarded to the Indemnifying Party for payment as set forth in the Claim
Notice. If a claim or the amount thereof is disputed, the amount of indemnification to which an
Indemnified Person shall be entitled under this Article VI shall be determined: (i) by the
written agreement between the. Indemnified Person and the
Indemnifying Person; or (ii) by a
proceeding pursuant to Section 7.10 provided, however that no party shall initiate such a
proceeding until 30 days have passed from the time the Indemnifying Person delivered notice that it
disputed the Claim Notice pursuant to this Section 6.3(b).

6.4 Handling of Third-Party Claims

     In the event of any claim for indemnification by a party hereto (an “Indemnified
Person”) resulting from or in connection with any claim, action or legal proceeding by a third
party (a “Third Party Claim”), the Indemnified Person shall give such prompt written
notice of the Third Party Claim to Parent or the Sole Shareholder, as the case may be (the
“Indemnifying Person”) as soon as reasonably practicable after such Indemnified Person has
actual knowledge thereof; provided, however, that the failure by the Indemnified Person to give
prompt notice as provided herein shall not relieve the Indemnifying Person of any

39

 

indemnification obligation under this Article VI except to the extent that the
Indemnifying Person is materially prejudiced as a result of such failure to give prompt notice.
Subject to the rights of or duties to any insurer or other third party having potential liability
therefor, the Indemnifying Person shall have the right, upon written notice given to the
Indemnified Person within 30 days after receipt of the notice from the Indemnified Person of any
Third Party Claim, to assume the defense or handling of such Third Party Claim, at the
Indemnifying Person’s sole expense, in which case the provisions of Section 6.4(b) shall
govern.

     (b) The Indemnifying Person shall defend or handle the same in consultation with the
Indemnified Person and shall keep the Indemnified Person timely apprised of the status of such
Third Party Claim. The Indemnifying Person shall not, without the prior written consent of the
Indemnified Person, agree to a settlement of any Third Party Claim, which consent shall not be
unreasonably withheld, conditioned or delayed. The Indemnified Person shall cooperate with the
Indemnifying Person and shall be entitled to participate in the defense or handling of such Third
Party Claim with its own counsel and at its own expense.

     (c) If the Indemnifying Person does not give written notice to the Indemnified Person
pursuant to Section 6.4(a) within 30 days after receipt of the notice from the Indemnified
Person of any Third Party Claim of the Indemnifying Person’s election to assume the defense or
handling of such Third Party Claim, the provisions of this Section 6.4(c) shall govern. In
this case, the Indemnified Person may, at the Indemnifying Person’s expense (which shall be paid
from time to time by the Indemnifying Person as such expenses are incurred by the Indemnified
Person), select counsel in connection with conducting the defense or handling of such Third Party
Claim and defend or handle such Third Party Claim in such manner as it may deem appropriate;
provided, however that the Indemnified Person shall keep the Indemnifying Person timely apprised
of the status of such Third Party Claim and shall not settle such Third Party Claim without the
prior written consent of the Indemnifying Person, which consent shall not be unreasonably
withheld, conditioned or delayed. If the Indemnified Person defends or handles such Third Parry
Claim, the Indemnifying Person shall cooperate with the Indemnified
Person and shall be entitled
to participate in the defense or handling of such Third Party Claim with its own counsel and at
its own expense.

6.5 Set-Off

     Sole Shareholder, in his sole discretion, may elect to satisfy any indemnification obligation
under this Article VI in cash (including cash that has been earned but not disbursed to
Sole Shareholder by Parent) or Parent Common Stock (valued at $2.50 per share). In the event that
Sole Shareholder elects to satisfy its obligation in cash, Parent shall have the right, but not
the obligation, to collect indemnification from the Sole Shareholder by offsetting the Contingent
Merger Consideration or any amounts pursuant to the Put Right (as defined in the Restricted Stock
Agreement) to be paid to the Sole Shareholder, if any, upon the terms and subject to the
conditions contained in this Agreement.

40

 

6.6 Threshold and Limitations

     (a) The Indemnified Persons shall not be entitled to receive any indemnification payment with
respect to any claims for indemnification under this Article VI until the aggregate Loss
for which such Indemnified Persons would be otherwise entitled to receive indemnification exceeds
$50,000 (the “Threshold”), in which case the Indemnified Persons shall be entitled to
indemnification for the aggregate amount of all Losses, including those below the Threshold
(subject to the terms and conditions of this Article VI). Notwithstanding the foregoing,
the Threshold shall not apply to any liability(ies) arising from the Excluded Losses (defined in
Section 6.6(b) below).

     (b) Notwithstanding any other provision of this Agreement, other than an obligation for Losses
from a Third Party Claim (including obligations imposed by the Internal Revenue Service)
arising under: (i) a breach of any representation or warranty herein with respect to the Q2
Retirement Savings Plan (Money Purchase Plan) or the Q2 Retirement Savings Plan (401(k) Profit
Sharing Plan), provided that this clause (i) shall not apply to any Losses arising (or any increase
in Losses occurring) after Closing as a direct or indirect result of
(x) any action or
inaction by any Parent Group Member that is not commercially reasonable, (y) the
termination of the Q2 Retirement Savings Plan (Money Purchase Plan) or the Q2 Retirement Savings
Plan (401(k) Profit Sharing Plan) other than Losses related thereto which would have arisen had
such Plan been terminated prior to Closing, or (z) the merger of the Q2 Retirement Savings
Plan (Money Purchase Plan) or the Q2 Retirement Savings Plan (401(k) Profit Sharing Plan) into (or
the transfer or rollover of any accounts or assets from either such Plan to) any other plan; (ii) a
claim by Lynn Reed or Brad Bortner under their respective employment agreements with the Company
arising from a breach of any representation or warranty of Sole Shareholder hereunder; (iii) a
breach of Company’s and Sole Shareholder’s representations and warranties contained in Section
2.26; (iv) a breach of Sole Shareholder’s covenants contained in Section 5.2(b); or (v) a breach of
Company’s and Sole Shareholder’s representations and warranties contained in Section 2.2 (clauses
(i) through (iv) collectively, the “Excluded Losses”), the aggregate liability of the Sole
Shareholder pursuant to this Article VI shall be limited to twenty-five percent (25%) of
Merger Consideration received by Sole Shareholder. Furthermore, the aggregate liability of Sole
Shareholder pursuant to this Article VI (including, without limitation, under the Excluded
Losses and this clause (b)(v)) shall be limited to the Merger Consideration. Notwithstanding any
other provision of this Agreement, the aggregate liability of Parent pursuant to this Article
VI shall be limited to the Merger Consideration. For purposes of this Section 6.6(b),
liabilities or compliance issues in Sections 2.2(b), 2.2(c),
2.8, 2.9, 2.11(a), 2.13(a)(ii), 2.13(a)(y), 2.13(a)(xii), 2.23(d), 2.23(e), 2.23(h)(ii), of the Disclosure
Schedules and relating to Excluded Losses shall not be deemed to be disclosed on the
Company Disclosure Schedule.

     (c) Any Losses that are the subject of indemnification claims made under this Article VI
will, in each case, be net of any insurance proceeds and near-term net tax savings actually
received by an Indemnified Person (after taking into account the tax effect of the indemnity
payment) as a result of the incident that is the subject of the

41

 

indemnification claim; provided that the Indemnified Person shall be under no obligation to
maximize tax benefits.

     (d) Notwithstanding any other Section of this Agreement (including any Exhibit or Schedule
hereto) (collectively, the “Transaction Documents”) no party will be liable to any other
party in connection with any of the Transaction Documents, or any of the transactions contemplated
hereby or thereby, for any consequential, incidental or punitive damages. Each party hereby
expressly releases the other party, its Affiliates, and their respective directors, officers,
employees, agents and representatives from any such liability for consequential, incidental or
punitive damages.

     (e) This Article VI shall be the exclusive remedy for breaches of this Agreement
(including any covenant, obligation, representation or warranty contained in this Agreement or in
any certificate delivered pursuant to this Agreement) or otherwise in respect of the transactions
contemplated hereby. Any payments under this Article VI shall be treated as adjustments to the
Merger Consideration.

ARTICLE VII

GENERAL PROVISIONS

7.1 Notices

     All notices and other communications hereunder shall be in writing and shall be deemed given
if delivered personally or by commercial delivery service, or mailed by registered or certified
mail (return receipt requested) or sent via facsimile (with acknowledgment of complete
transmission) to the parties at the following addresses (or at such other address for a party as
shall be specified by like notice), with notice to be deemed effective when personally delivered,
three business days after mailing or one business day after transmittal by facsimile.

	 	(a)	 	if to Parent or Merger Sub, to:
	 
	 	 	 	comScore Network, Inc.
11465 Sunset
Hills Road, Suite 200
Reston, Virginia
20190
Attention: Chief Financial
Officer
Telephone No.: (703) 438-2000

Facsimile No.: (703) 438-2051

42

 

	 	 	 	with a copy to:
	 
	 	 	 	comScore Network, Inc.
11465 Sunset
Hills Road, Suite 200
Reston, Virginia
20190
Attention: Corporate Counsel

Telephone No.: (703) 438-2000

FacsimileNo.: (650) 438-2350
	 
	 	(b)	 	if to the Company, to:
	 
	 	 	 	Denaro & Associates, Inc.
100 West
Harrison
South Tower, Suite 500

Seattle, Washington 98119
Attention:
Chief Executive Officer
Telephone No.:
206.691.5206
Facsimile No.:   206.284.5131
	 
	 	 	 	with a copy to:
	 
	 	 	 	Perkins Coie

Attention: Benjamin Straughan

1201 Third Avenue, Suite 4800

Seattle, WA 98101-3099

7.2 Amendment and Waiver

     No modification, amendment or waiver of any provision of this Agreement shall be effective
unless in writing and signed by the party to be charged. No failure or delay by either party in
exercising any right, power, or remedy under this Agreement shall operate as a waiver of any such
right, power or remedy. No waiver that may be given by a party will be applicable except in the
specific instance for which it is given.

7.3 Interpretation

     The words “include,” “includes” and “including” when used herein shall be deemed in each case
to be followed by the words “without limitation.” The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. For purposes of this Agreement, any reference to “knowledge” of
the Company means Larry Denaro or Lynn Reed had actual knowledge or reasonably should have known,
the facts and circumstances with respect to the representation and warranty given by the Company.

43

 

7.4 Counterparts

     This Agreement may be executed in one or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

7.5 Entire Agreement; Assignment

     This Agreement, the schedules and Exhibits hereto, the Confidentiality Provision and the
documents and instruments and other agreements among the parties hereto referenced herein: (a)
constitute the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, including without limitation the Letter of
Intent (other than Part II, Sections 4), both written and oral, among the parties with respect to
the subject matter hereof; (b) are not intended to confer upon any other person (including,
without limitation, the Designated Employees) any rights or remedies hereunder; and (c) shall not
be assigned by operation of law or otherwise except as otherwise specifically provided, except
that Parent and Merger Sub may assign their respective rights and delegate their respective
obligations hereunder to their respective affiliates. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their successors and
assigns.

7.6 Severability

     In the
event that any provision of this Agreement or the application thereof, becomes or is
declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder
of this Agreement will continue in full force and effect and the application of such provision to
other persons or circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

7.7 Other Remedies

     Except as otherwise provided herein, any and all remedies herein expressly conferred upon a
party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.

7.8 Governing Law

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.

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7.9 Waiver of Trial By Jury

     EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

7.10 Jurisdiction; Service of Process

     Sole Shareholder and Company consent to the jurisdiction of the federal and state courts
located in the Commonwealth of Virginia (and the appropriate appellate courts therein) in an action
or proceeding brought by Parent or Merger Sub seeking to enforce any provision of, or based on any
right arising out, of this Agreement and each of the parties consent to the jurisdiction of such
courts in any such action or proceeding and waives any objection to venue laid therein. Parent and
Merger Sub consent to the jurisdiction of the federal and state courts located in the State of
Washington (and the appropriate appellate courts therein) in an action or proceeding brought by
Company or Sole Shareholder seeking to enforce any provision of, or based on any right arising out,
of this Agreement and each of the parties consent to the jurisdiction of such courts in any such
action or proceeding and waives any objection to venue laid therein. Process in any action or
proceeding referred to in the preceding sentence may be served on a party anywhere in the world.

7.11 Rules of Construction

     The parties hereto agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

7.12 Specific Performance

     The parties hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.

[SIGNATURE PAGE FOLLOWS]

45

 

     IN WITNESS WHEREOF, Parent, Merger Sub, Company and Sole Shareholder have caused this
Agreement to be executed and delivered as of the date first above written.

	 	 	 	 	 
	 	COMSCORE NETWORKS, INC.

 	 
	 	By:  	/s/
Magid Abraham
 	 
	 	 	Name:  	Magid Abraham	 
	 	 	Title:  	CEO 	 
	 
	 	MERGER SUB LLC

 	 
	 	By:  	/s/
Sheri Huston
 	 
	 	 	Name:  	Sheri Huston	 
	 	 	Title:  	CFO 	 
	 
	 	DENARO & ASSOCIATES, INC.

 	 
	 	By:  	/s/ Lawrence Denaro
 	 
	 	 	Name:  	Lawrence Denaro 	 
	 	 	Title:  	CEO 	 
	 
	 	SOLE SHAREHOLDER

 	 
	 	/s/ Lawrence Denaro
 	 
	 	Lawrence Denaro 	 
	 	Taxpayer ID Number       
               
                
             
             	 
	 

SPOUSAL CONSENT

     I, Anne Denaro, spouse of Lawrence Denaro, have read and approve the foregoing Agreement and
Plan of Merger and Reorganization (the “Agreement”) and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in the Agreement or any shares transferred or issued
pursuant thereto under the community property laws of the State of Washington or similar laws
relating to marital property in effect in the state of our residence.

	 	 	 	 	 
	 	 	 
	 	/s/ Anne Denaro
 	 
	 	Anne Denaro 	 
	 	Date: 7-27-2004 	 
	 

[Signature page to Q2/comScore Merger Agreement]exv10w2

 

EXHIBIT 10.2

EXHIBIT A

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE
TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS
(**).

 

Published CUSIP Number:                     

CREDIT AGREEMENT

Dated as of March 29, 2007

among

GROUP 1 REALTY, INC.,

as the Borrower,

GROUP 1 AUTOMOTIVE, INC.,

BANK OF AMERICA, N.A.,

as Administrative Agent,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	Section	 	Page	 
	ARTICLE I.

	DEFINITIONS AND ACCOUNTING TERMS

	1.01
	 	Defined Terms	 	 	1	 
	1.02
	 	Other Interpretive Provisions	 	 	21	 
	1.03
	 	Accounting Terms	 	 	22	 
	1.04
	 	Rounding	 	 	22	 
	1.05
	 	Times of Day	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE II.

	THE COMMITMENTS AND BORROWINGS

	2.01
	 	Loans	 	 	23	 
	2.02
	 	Borrowings, Conversions and Continuations of Loans	 	 	23	 
	2.03
	 	Prepayments	 	 	24	 
	2.04
	 	Termination or Reduction of Commitments	 	 	25	 
	2.05
	 	Repayment of Loans	 	 	25	 
	2.06
	 	Interest	 	 	25	 
	2.07
	 	Fees	 	 	26	 
	2.08
	 	Computation of Interest and Fees	 	 	26	 
	2.09
	 	Evidence of Debt	 	 	27	 
	2.10
	 	Payments Generally; Administrative Agent’s Clawback	 	 	27	 
	2.11
	 	Sharing of Payments by Lenders	 	 	29	 
	2.12
	 	Extension of Maturity Date	 	 	29	 
	2.13
	 	Increase in Commitments	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE III.

	TAXES, YIELD PROTECTION AND ILLEGALITY

	3.01
	 	Taxes	 	 	32	 
	3.02
	 	Illegality	 	 	35	 
	3.03
	 	Inability to Determine Rates	 	 	35	 
	3.04
	 	Increased Costs; Reserves on Eurodollar Rate Loans	 	 	36	 
	3.05
	 	Mitigation Obligations; Replacement of Lenders	 	 	37	 
	3.06
	 	Survival	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE IV.

	CONDITIONS PRECEDENT TO BORROWINGS

	4.01
	 	Conditions of Closing Date	 	 	38	 
	4.02
	 	Conditions to all Borrowings	 	 	39	 

i

 

	 	 	 	 	 	 	 
	 	 	Section	 	Page	 
	ARTICLE V.

	REPRESENTATIONS AND WARRANTIES

	5.01
	 	Organization; Corporate Powers	 	 	43	 
	5.02
	 	Authorization	 	 	43	 
	5.03
	 	Governmental Approval	 	 	43	 
	5.04
	 	Enforceability	 	 	44	 
	5.05
	 	Financial Statements	 	 	44	 
	5.06
	 	No Material Adverse Change	 	 	44	 
	5.07
	 	Title to Properties	 	 	44	 
	5.08
	 	Litigation; Compliance with Laws; Etc	 	 	44	 
	5.09
	 	Agreements; No Default	 	 	45	 
	5.10
	 	Federal Reserve Regulations	 	 	45	 
	5.11
	 	Taxes	 	 	45	 
	5.12
	 	Pension and Welfare Plans	 	 	45	 
	5.13
	 	No Material Misstatements	 	 	46	 
	5.14
	 	Investment Company Act	 	 	46	 
	5.15
	 	Maintenance of Insurance	 	 	46	 
	5.16
	 	Existing Liens	 	 	46	 
	5.17
	 	Environmental Matters	 	 	47	 
	5.18
	 	Subsidiaries	 	 	47	 
	5.19
	 	Engaged in Motor Vehicle Sales	 	 	48	 
	5.20
	 	Dealer Franchise Agreements and Manufacturer Framework Agreements	 	 	48	 
	5.21
	 	Use of Proceeds	 	 	48	 
	5.22
	 	Collateral	 	 	48	 
	5.23
	 	Location of Borrower	 	 	49	 
	5.24
	 	Leases	 	 	49	 
	5.25
	 	Security Interest	 	 	49	 
	5.26
	 	Solvency	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE VI.

	AFFIRMATIVE COVENANTS

	6.01
	 	Existence	 	 	49	 
	6.02
	 	Repair	 	 	50	 
	6.03
	 	Insurance	 	 	50	 
	6.04
	 	Obligations and Taxes	 	 	53	 
	6.05
	 	Financial Statements; Reports	 	 	53	 
	6.06
	 	Litigation and Other Notices	 	 	54	 
	6.07
	 	ERISA	 	 	55	 
	6.08
	 	Books, Records and Access	 	 	55	 
	6.09
	 	Use of Proceeds	 	 	56	 
	6.10
	 	Nature of Business	 	 	56	 
	6.11
	 	Compliance	 	 	56	 
	6.12
	 	Intentionally omitted	 	 	56	 
	6.13
	 	Intentionally omitted	 	 	56	 

ii

 

	 	 	 	 	 	 	 
	 	 	Section	 	Page	 
	6.14
	 	Intentionally omitted.	 	 	56	 
	6.15
	 	Further Assurances	 	 	56	 
	6.16
	 	Permitted Acquisitions; Subsidiary Guarantors	 	 	56	 
	6.17
	 	Ford Borrower and GM Borrower Dividends	 	 	57	 
	6.18
	 	Leases	 	 	57	 
	6.19
	 	Unimproved Real Property	 	 	58	 
	 
	 	 	 	 	 	 
	ARTICLE VII.

	NEGATIVE COVENANTS

	7.01
	 	Indebtedness	 	 	58	 
	7.02
	 	Liens	 	 	60	 
	7.03
	 	Consolidations and Mergers	 	 	60	 
	7.04
	 	Disposition of Assets	 	 	61	 
	7.05
	 	Investments	 	 	62	 
	7.06
	 	Transactions with Affiliates	 	 	63	 
	7.07
	 	Other Agreements	 	 	63	 
	7.08
	 	Fiscal Year; Accounting	 	 	63	 
	7.09
	 	Credit Standards	 	 	63	 
	7.10
	 	Pension Plans	 	 	63	 
	7.11
	 	Restricted Payments	 	 	64	 
	7.12
	 	Fixed Charge Coverage Ratio	 	 	64	 
	7.13
	 	Senior Secured Leverage Ratio	 	 	64	 
	7.14
	 	Disposition of Financed Properties	 	 	64	 
	7.15
	 	Lessor Subsidiaries	 	 	65	 
	7.16
	 	Collateral	 	 	65	 
	7.17
	 	Leases	 	 	65	 
	 
	 	 	 	 	 	 
	ARTICLE VIII.

	EVENTS OF DEFAULT AND REMEDIES

	8.01
	 	Events of Default	 	 	65	 
	8.02
	 	Remedies Upon Event of Default	 	 	67	 
	8.03
	 	Application of Funds	 	 	68	 
	 
	 	 	 	 	 	 
	ARTICLE IX.

	ADMINISTRATIVE AGENT

	9.01
	 	Appointment and Authority	 	 	69	 
	9.02
	 	Rights as a Lender	 	 	69	 
	9.03
	 	Exculpatory Provisions	 	 	69	 
	9.04
	 	Reliance by Administrative Agent	 	 	70	 
	9.05
	 	Delegation of Duties	 	 	70	 
	9.06
	 	Resignation of Administrative Agent	 	 	70	 
	9.07
	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	71	 
	9.08
	 	No Other Duties, Etc	 	 	71	 

iii

 

	 	 	 	 	 	 	 
	 	 	Section	 	Page	 
	9.09
	 	Administrative Agent May File Proofs of Claim	 	 	71	 
	9.10
	 	Collateral and Guaranty Matters	 	 	72	 
	 
	 	 	 	 	 	 
	ARTICLE X.

	MISCELLANEOUS

	10.01
	 	Amendments, Etc	 	 	73	 
	10.02
	 	Notices; Effectiveness; Electronic Communication	 	 	74	 
	10.03
	 	No Waiver; Cumulative Remedies	 	 	76	 
	10.04
	 	Expenses; Indemnity; Damage Waiver	 	 	76	 
	10.05
	 	Payments Set Aside	 	 	78	 
	10.06
	 	Successors and Assigns	 	 	78	 
	10.07
	 	Treatment of Certain Information; Confidentiality	 	 	81	 
	10.08
	 	Right of Setoff	 	 	82	 
	10.09
	 	Interest Rate Limitation	 	 	83	 
	10.10
	 	Counterparts; Effectiveness	 	 	83	 
	10.11
	 	Survival of Representations and Warranties	 	 	84	 
	10.12
	 	Severability	 	 	84	 
	10.13
	 	Replacement of Lenders	 	 	84	 
	10.14
	 	Governing Law; Jurisdiction; Etc	 	 	85	 
	10.15
	 	Waiver of Jury Trial	 	 	86	 
	10.16
	 	California Judicial Reference	 	 	86	 
	10.17
	 	No Advisory or Fiduciary Responsibility	 	 	86	 
	10.18
	 	USA PATRIOT Act Notice	 	 	87	 
	10.19
	 	Time of the Essence	 	 	87	 
	10.20
	 	ENTIRE AGREEMENT	 	 	87	 
	 
	 	 	 	 	 	 
	SIGNATURES	 	 	S-1	 

iv

 

SCHEDULES

	 	 	 
	1.01A	 	Leases

	2.01	 	Commitments and Applicable Percentages

	4.01(a)(iv)	 	Entities in Good Standing

	5.08(a)	 	Litigation

	5.12	 	ERISA Disclosures

	5.16(g)	 	Existing Liens

	5.18	 	Subsidiaries

	5.20	 	Dealer Franchise Agreements and Manufacturer Framework Agreements

	5.23	 	Borrower Information

	7.01(b)	 	Existing Indebtedness

	10.02	 	Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

	 	 	 
	 	 	Form of
	A	 	Loan Notice

	B	 	Note

	C	 	Compliance Certificate

	D	 	Assignment and Assumption

	E	 	Company Guaranty Agreement

	F	 	Subsidiary Guaranty Agreement

	G	 	Lessee Estoppel, Subordination and Attornment Agreement

	H	 	Letter of Undertaking

	I	 	Opinion Matters

v

 

CREDIT AGREEMENT

     This CREDIT AGREEMENT (“Agreement”) is entered into as of March 29, 2007, among GROUP
1 REALTY, INC., a Delaware corporation, as borrower (the “Borrower”), GROUP 1 AUTOMOTIVE,
INC., a Delaware corporation (the “Company”), each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA,
N.A., as Administrative Agent.

     The Borrower has requested that the Lenders provide a credit facility, and the Lenders are
willing to do so on the terms and conditions set forth herein.

     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings
set forth below:

     “Account” means any “account” as such term is defined in the UCC, now or hereafter
owned by the Company, the Borrower or any of their respective Restricted Subsidiaries, including
rights to payment for goods and services sold or leased, whether now in existence or arising in the
future.

     “Acquisition” means the acquisition by the Company or any of its Wholly Owned
Subsidiaries of (i) not less than one hundred percent (100%) of the capital stock or other evidence
of equity ownership (but excluding director qualifying shares) of an Auto Dealer, or (ii) all or
substantially all of the assets of an Auto Dealer.

     “Adjusted Senior Indebtedness” means, for any date of determination, for the Company
and its Restricted Subsidiaries on a consolidated basis, Adjusted Total Indebtedness minus
Subordinated Indebtedness.

     “Adjusted Total Indebtedness” means, as of any date of determination, for the Company
and its Restricted Subsidiaries, on a consolidated basis, the difference between (a) Indebtedness
and (b) the sum of (i) floor plan loans in respect of inventory of the Company and its Restricted
Subsidiaries, (ii) Excluded Capital Leases, and (iii) Retail Loan Guarantees not in excess of ten
percent (10%) of Stockholders’ Equity.

     “Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent appointed in accordance with
Section 9.06.

     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or account as
the Administrative Agent may from time to time notify to the Borrower and the Lenders.

1

 

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

     “Affiliate” of any Person means any other Person who directly or indirectly
beneficially owns or controls five percent (5%) or more of the total voting power of shares of
capital stock or other equity interests of such Person having the right to vote for directors under
ordinary circumstances, any Person controlling, controlled by or under common control with any such
Person (within the meaning of Rule 405 under the Securities Act of 1933), and any director or
executive officer of such Person.

     “Aggregate Commitments” means the Commitments of all the Lenders.

     “Agreement” means this Credit Agreement.

     “Applicable Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time. If the Commitment of each Lender to make Loans has been terminated
pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the Applicable
Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or
in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.

     “Applicable Rate” means a per annum rate equal to:

	 	(a)	 	with respect to Base Rate Loans, 0.00%;
	 
	 	(b)	 	with respect to Eurodollar Rate Loans, 1.05%; and
	 
	 	(c)	 	with respect to the Commitment Fee, 0.10%.

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.

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

     “Audited Financial Statements” means the audited consolidated balance sheet of the
Company and its Subsidiaries for the fiscal year ended December 31, 2006, and the related
consolidated statements of income or operations, shareholders’ equity and cash flows for such
fiscal year of the Company and its Subsidiaries, including the notes thereto.

2

 

     “Auto Dealer” has the meaning specified in the Closing Date Revolving Credit
Agreement.

     “Availability Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.04, and (c) the date of termination of the Commitment of each Lender
to make Loans pursuant to Section 8.02.

     “Bank of America” means Bank of America, N.A. and its successors.

     “Baron Development” means Baron Development Company L.L.C., a Kansas limited liability
company.

     “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a
rate set by Bank of America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.

     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.

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

     “Borrower” has the meaning specified in the introductory paragraph hereto.

     “Borrower Materials” has the meaning specified in Section 6.05.

     “Borrowing” means a borrowing consisting of simultaneous Loans of the same Type made
by each of the Lenders pursuant to Section 2.01.

     “Buildings”, as to any Financed Property, means the “Buildings” as defined in the
Mortgage related to such Financed Property.

     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office is located and Houston, Texas, and, if such day relates to
any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by
and between banks in the London interbank eurodollar market.

     “Capital Lease” means any lease required to be accounted for as a capital lease under
GAAP.

     “Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any
law,

3

 

rule, regulation or treaty or in the administration, interpretation or application thereof by
any Governmental Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

     “Change of Control” will be deemed to have occurred if either (a) the shares of the
Company cease to be publicly traded or (b) at any time after the Closing Date, individuals who were
either directors of the Company on the Closing Date or directors approved (by recommendation,
nomination, election or otherwise) by a majority of the directors cease to constitute a majority of
the members of the board of directors of the Company.

     “Closing Date” means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.

     “Closing Date Revolving Credit Agreement” means the Revolving Credit Agreement as in
effect on the Closing Date and (notwithstanding Section 1.02(a)(i) hereof) without giving effect to
any amendment, supplement or modification after the date hereof.

     “Code” means the Internal Revenue Code of 1986.

     “Collateral” means, collectively, the fee interests in real property and related real
property interests, including real property leases, rental and lease payments and other rights in
respect of such leases, fixtures, leasehold improvements, condemnation awards or insurance proceeds
relating to the foregoing and related items owned by the Borrower or a Subsidiary Lessor, in which
a Lien is granted or purported to be granted pursuant to the Security Instruments.

     “Collateral Substitution” means the removal of a Financed Property from the Property
Pool at the time of a Permitted Financed Property Disposition with respect to such Financed
Property (and the release of any Liens granted to the Administrative Agent in connection therewith)
substantially simultaneously with, and in any event on the same day as, the admission of a
different Financed Property into the Property Pool, provided that, (i) there shall exist no Default
or Event of Default at the time of any such Collateral Substitution, (ii) any such Collateral
Substitution shall be subject to terms and conditions reasonably satisfactory to the Administrative
Agent (including without limitation, those requirements set forth in Section 4.02) and be
subject to a Mortgage and Real Estate Support Documents, and (iii) the Borrower shall have paid all
fees set forth in the Fee Letter related to any such Collateral Substitution.

     “Commitment” means, as to each Lender, its obligation to make Loans to the Borrower
pursuant to Section 2.01, in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in any
Assignment and Assumption pursuant to which such Lender is a party, as applicable, as such amount
may be adjusted from time to time in accordance with this Agreement.

     “Commitment Fee” has the meaning specified in Section 2.07(a).

     “Company” has the meaning specified in the introduction to this Agreement.

4

 

     “Company Guaranty Agreement” means the Guaranty Agreement between the Company and the
Administrative Agent, substantially in the form of Exhibit E.

     “Compliance Certificate” means a certificate substantially in the form of Exhibit
C.

     “Consolidated EBITDA” means, for any period for which the amount thereof is to be
determined, Consolidated Net Income for such period, plus, to the extent deducted in the
determination of Consolidated Net Income and without duplication with items included in the
adjustments to Net Income under GAAP in the determination of Consolidated Net Income, (a)
provisions for income taxes, (b) Interest Expense, (c) depreciation and amortization expense, and
(d) other non-cash income or charges.

     “Consolidated Net Income” means the Net Income (or net losses) of the Company and its
Restricted Subsidiaries on a consolidated basis.

     “Consolidated Pro Forma EBITDA” means the Pro Forma EBITDA of the Company and its
Restricted Subsidiaries, determined on a consolidated basis.

     “Dealer/Manufacturer Agreement” has the meaning specified in Section 5.20.

     “Dealership” means any physical site or group of related physical sites at which any
Restricted Subsidiary of the Company operates Motor Vehicle dealerships. Such sites may include
showrooms, storage lots and repair and/or service facilities.

     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

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

     “Default Rate” means when used with respect to Obligations, an interest rate equal to
(i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans
plus (iii) 2% per annum; provided, however, that with respect to a
Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.

     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans required to be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder unless such failure has been cured, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be paid by it hereunder
within one Business Day of the date when due, unless the subject of a good faith dispute or unless
such failure has been cured, or (c) has been deemed insolvent or become the subject of a
receivorship, insolvency reorganization, bankruptcy or other similar insolvency proceeding.

5

 

     “Disposition” means the sale, lease, conveyance or other disposition of property.

     “Disposition Closing Costs” means, as to any Financed Property, customary and
reasonable costs paid to third parties which are not Affiliates of the Borrower or any Lessor
Subsidiary in connection with the sale of such Financed Property.

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

     “Earnings Available for Fixed Charges” means, for any period of determination, an
amount equal to (a) Consolidated EBITDA plus (b) lease expenses minus (c) cash income taxes in each
case for the Company and its Restricted Subsidiaries, determined on a consolidated basis as
reported in the annual audited and the quarterly unaudited financial statements of the Company
provided in accordance with Section 6.05(a) and 6.05(b).

     “EBITDA” means, for any Person, for any period, Net Income for such period, plus, to
the extent deducted in the determination of Net Income and without duplication with items included
in the adjustments under GAAP to Net Income in the determination of net income, (a) provisions for
income taxes, (b) Interest Expense, (c) depreciation and amortization expense and (d) other non
cash income or charges.

     “Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.06(b)(iii)).

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to Hazardous Materials, air emissions and discharges to waste or public systems.

     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Company, the Borrower, any other Loan Party or any of their respective Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other consensual arrangement
between any Loan Party and any Person other than the Administrative Agent, any Lender and/or any of
their Related Parties pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

     “ERISA Affiliate” means any corporation, trade or business that is, along with the
Company or the Borrower, a member of a controlled group of corporations or a controlled group of
trades or businesses, as described in Sections 414(b) and 414(c), respectively, of the Code or
Section 4001(a)(14) of ERISA.

6

 

     “Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate
Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source providing quotations of BBA LIBOR
as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.
If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate
at which deposits in Dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar market at their request
at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period. A Loan bearing interest at the Eurodollar Rate may be (a) borrowed on a day other
than the first day of the applicable Interest Period and (b) repaid or converted to a different
Type of Loan on a day other than the last day of an Interest Period without giving rise to any
additional payment for “break funding” costs.

     “Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

     “Event of Default” has the meaning specified in Section 8.01.

     “Excluded Capital Lease” means any lease originally recorded as an operating lease and
subsequently reclassified as a Capital Lease.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of the Company or the
Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction in which the Company or the Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under
Section 10.13), any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office)
or is attributable to such Foreign Lender’s failure or inability (other than as a result of a
Change in Law) to comply with Section 3.01(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office
(or assignment), to receive additional amounts from the Company or the Borrower with respect to
such withholding tax pursuant to Section 3.01(a).

     “Facility Termination Date” means the date as of which all of the following shall have
occurred: (a) the Borrower shall have permanently terminated the credit facilities under the Loan
Documents by final payment in full of all Outstanding Amounts, together with all accrued and

7

 

unpaid interest and fees thereon, (b) all Commitments shall have terminated or expired; (c)
the obligations and liabilities of the Borrower and each other Loan Party under all Related Swap
Contracts shall have been fully, finally and irrevocably paid and satisfied in full and the Related
Swap Contracts shall have expired or been terminated, or other arrangements satisfactory to the
applicable Related Swap Contract Providers shall have been made with respect thereto; and (d) the
Borrower and each other Loan Party shall have fully, finally and irrevocably paid and satisfied in
full all of their respective obligations and liabilities arising under the Loan Documents,
including with respect to the Borrower and the Obligations (except for future obligations
consisting of continuing indemnities and other contingent Obligations of the Borrower or any Loan
Party that may be owing to any of its Related Parties or any Lender pursuant to the Loan Documents
and expressly survive termination of the Credit Agreement or any other Loan Document).

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by the Administrative
Agent.

     “Fee Letter” means the letter agreement, dated January 22, 2007, among the Company,
the Borrower and Bank of America, as amended, supplemented or otherwise modified from time to time.

     “Financed Property” means a real property parcel (and improvements related thereto)
which (a) is owned in fee by the Borrower or a Lessor Subsidiary and located at or near a
Dealership or otherwise used or to be used by a Dealership in its business, (b) is located in any
state of the United States of America or the District of Columbia and (c) has been identified as a
Financed Property with respect to any Loans on the applicable Loan Notice.

     “FIRREA Appraisal” means an appraisal of a Financed Property that is commissioned by
the Administrative Agent and satisfies the requirement of the Federal Institutions Reform, Recovery
and Enforcement Act            or is otherwise acceptable to the Administrative Agent in its sole
discretion.

     “FIRREA Appraisal Value” means, with respect to a Financed Property, the value set
forth for such Financed Property in the FIRREA Appraisal.

     “Fixed Charge Coverage Ratio” means the ratio of (a) Earnings Available for Fixed
Charges to (b) Fixed Charges.

     “Fixed Charges” means, for any period of determination, without duplication, the sum
of (a) Interest Expense, (b) lease expense, (c) scheduled principal payments, (d) cash dividends
and

8

 

(e) Maintenance Capital Expenditures, in each case, for the Company and its Restricted
Subsidiaries, determined on a consolidated basis.

     “Floor Plan Indebtedness” means all secured Indebtedness of the Revolving Facility
Borrowers incurred to finance Motor Vehicles.

     “Floor Plan Interest Expense” means that component of the Company’s aggregate Interest
Expense, determined on a consolidated basis, attributable to Floor Plan Indebtedness.

     “FMV” has the meaning specified in the definition of Permitted Financed Property
Disposition.

     “Ford Borrower” has the meaning specified in the Closing Date Revolving Credit
Agreement.

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

     “Foreign Subsidiary” means any Subsidiary that is not organized under the laws of any
political subdivision of the United States.

     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its activities.

     “GAAP” means generally accepted accounting principles as in effect, as of the
applicable date of determination thereof, from time to time as set forth in the opinions,
statements and pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board applied on a consistent
basis.

     “GM Borrowers” has the meaning specified in the Closing Date Revolving Credit
Agreement.

     “Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).

     “Guarantee” by any Person means all obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness, dividend or other obligation of any
other Person (the “Primary Obligor”) in any manner, whether directly or indirectly,
including all obligations incurred through an agreement, contingent or otherwise, by such Person:

9

 

     (a) to purchase such Indebtedness or obligation or any property or assets constituting
security therefor,

     (b) (i) to advance or supply funds for the purchase or payment of such Indebtedness or
obligation or (ii) to maintain working capital or other balance sheet condition or otherwise
to maintain funds for the purchase or payment of such Indebtedness or obligation,

     (c) to lease property under a Capital Lease or any other lease, the lessee under which
is a Person other than the Company or a Wholly Owned Subsidiary or to purchase securities or
other property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the Primary Obligor to make payment of such
Indebtedness or perform such obligation, or

     (d) otherwise to assure the owner of such Indebtedness or such obligation of the
Primary Obligor against loss in respect thereof.

     “Guarantors” means, collectively, the Company and each Subsidiary Guarantor.

     “Guaranty Joinder Agreement” means each Guaranty Joinder Agreement, substantially in
the form attached to the Subsidiary Guaranty Agreement, executed and delivered by a Restricted
Subsidiary or any other Person to the Administrative Agent, for the benefit of the Secured Parties,
pursuant to Section 6.16(b).

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

     “Highest Lawful Rate” means, as to any Lender, the maximum non-usurious rate of
interest, if any, that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the aggregate principal amount of all Loans under the laws of the United
States of America and/or the laws of the State of Texas as may be applicable thereto and as applied
in accordance with Section 10.09 and that are presently in effect or, to the extent allowed
under such applicable law, which may hereafter be in effect and which allow a higher maximum
non-usurious interest rate than applicable law now allows.

     “Improved Real Property” shall mean (a) those properties which contain permanent
building structures with electrical, water and sewage hook-ups and which are usable (without
material modification) for Dealerships and related facilities, and (b) so long as a property
containing the building structure referenced in clause (a) above is financed hereunder, those
parking facilities and other property areas sharing a common boundary line and otherwise contiguous
with such property containing such building structure referenced in clause (a) above.

     “Indebtedness” of any Person means, without duplication:

10

 

     (a) any obligation of such Person for borrowed money, including any obligation of such
Person evidenced by bonds, debentures, notes, letter of credit reimbursement agreements or
other similar debt instruments,

     (b) all obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, regardless of whether any personal
liability exists in respect thereof,

     (c) any obligation of such Person for the deferred purchase price of any property or
services, regardless of whether any personal liability exists in respect thereof, except
accounts payable from time to time incurred in the ordinary course of such Person’s business
and which are not in excess of ninety (90) days past invoice or billing date,

     (d) obligations in respect of Capital Leases of such Person,

     (e) all Guarantees by such Person; provided, however, that a Guarantee will not be
considered Indebtedness if the underlying obligation secured by such Guarantee would not
constitute Indebtedness under this Agreement,

     (f) any Indebtedness of another Person secured by a Lien on any asset of such first
Person, whether or not such Indebtedness is assumed by such first Person,

     (g) any Indebtedness consisting of preferred stock of a Person having a mandatory
redemption date prior to the Maturity Date, and

     (h) amounts owed by such Person under any Related Swap Contract, provided that (except
for such amounts owed that are Indebtedness pursuant to clauses (a) through (g) above) such
amounts owed will not be considered Indebtedness for purposes of determining the financial
covenants set forth in Sections 7.12 and 7.13.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitees” has the meaning specified in Section 10.04(b).

     “Information” has the meaning specified in Section 10.07.

     “Interest Expense” means, for any Person, determined on a consolidated basis, the sum
of all interest on Indebtedness paid or payable (including the portion of rents payable under
Capital Leases allocable to interest, but excluding interest allowances from Manufacturers) plus
all original issue discount and other interest expense associated with Indebtedness amortized or
required to be amortized in accordance with GAAP.

     “Interest Payment Date” means the first Business Day of each calendar month.

     “Interest Period” means a period of approximately one month commencing on the first
Business Day of each month and ending on the first Business Day of the following month.

11

 

     “Investment” means, as to any Person, any investment so classified under GAAP.

     “Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case whether or not having the
force of law.

     “Lease” means each operating lease or Capital Lease of all or any portion of a
Financed Property, including but not limited to those leases set forth on Schedule 1.01A.

     “Lender” has the meaning specified in the introductory paragraph hereto.

     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower and the Administrative Agent.

     “Lessee Subsidiary” means, with respect to a Financed Property, the Restricted
Subsidiary party as a lessee to the Lease associated with such Financed Property.

     “Lessor Subsidiary” means any Subsidiary Guarantor which is a Restricted Subsidiary
and a Wholly Owned Subsidiary and owns a Financed Property, including without limitation, Baron
Development.

     “Lien” means any mortgage, pledge, hypothecation, judgment lien or similar legal
process, conditional sale, title retention or other security interest, or any lease in the nature
thereof.

     “Loan” has the meaning specified in Section 2.01.

     “Loan Documents” means this Agreement, each Note, the Fee Letter, the Company Guaranty
Agreement, the Subsidiary Guaranty Agreement, each Guaranty Joinder Agreement and each Security
Instrument.

     “Loan Notice” means a notice of (a) a Borrowing or (b) a conversion of Loans from one
Type to the other, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

     “Loan Parties” means, collectively, the Company, the Borrower, each Guarantor and each
Person (other than the Administrative Agent or any Secured Party) executing a Security Instrument.

     “Maintenance Capital Expenditures” means an amount equal to $(**) per year per
Dealership.

12

 

     “Manufacturer” means the manufacturer, or a manufacturer-appointed, wholesale
distributor of a Motor Vehicle.

     “Margin Stock” has the meaning specified in Regulation U.

     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of the Company and its Restricted Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Company, the Borrower, or the
Subsidiary Guarantors taken as a whole, to perform its or their obligations under any Loan Document
to which any of them is a party; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any Loan Document to which it is a
party.

     “Maturity Date” means the later of (a) March 29, 2012 and (b) if maturity is extended
pursuant to Section 2.12, such extended maturity date as determined pursuant to such
Section; provided, however, that, in each case, if such date is not a Business Day,
the Maturity Date shall be the preceding Business Day.

     “Maximum Loan to Value Ratio Amount” means, subject to the last sentence of this
definition, as of the date a Loan is made with respect to a Financed Property (i) in the case of a
Financed Property constituting Improved Real Property, (**) ((**)%) of the FIRREA Appraisal Value
of such Financed Property, and (ii) in the case of Financed Property constituting Unimproved Real
Property, (**) ((**)%) of the FIRREA Appraisal Value of such Financed Property. For purposes of
calculating the Maximum Loan to Value Ratio Amount, no value otherwise included in any FIRREA
Appraisal shall be attributed to any non-fixture equipment or other personal property or any future
construction or improvements, provided that (x) the value of Post-Construction and appreciation may
be included when determining the total Maximum Loan to Value Ratio Amount applicable to any
Financed Property if the FIRREA Appraisal Value of the respective Financed Property (as reflected
in a FIRREA Appraisal prepared after Post-Construction) is more than $(**) higher than the initial
FIRREA Appraisal Value of the respective Financed Property and (y) in the event Post-Construction
is so included pursuant to clause (x) above, the (**) ((**)%) Maximum Loan to Value Ratio Amount
shall then apply to any such Financed Property which has become Improved Real Property as a result
of such Post-Construction.

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

     “Mortgage Permitted Liens” means, with respect to any Financed Property, the
“Permitted Liens” as defined in the Mortgage for such Financed Property.

     “Mortgages” means, collectively, the mortgages, deeds of trust or security deeds now
or hereafter encumbering any of the Borrower’s or any Lessor Subsidiary’s (or after giving effect
to a merger or sale permitted by Section 7.03 (a) or (b), the Company’s) interests
in the Financed Properties and other property as described therein in favor of, or for the benefit
of, the Administrative Agent.

     “Mortgaged Property”, as to any Financed Property, means the “Mortgaged Property” as
defined in the Mortgage related to such Financed Property.

13

 

     “Motor Vehicle” means any motorized vehicle approved for highway use by any State of
the United States.

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

     “Net Income” means for any Person, for any period of determination, the net income (or
net losses) of such Person and its Subsidiaries on a consolidated basis as determined in accordance
with GAAP after deducting, to the extent included in computing said net income and without
duplication, (i) the income (or deficit) of any Person (other than a Wholly Owned Subsidiary of
such Person), in which such Person or any of its Subsidiaries has any ownership interest, except to
the extent that any such income has been actually received by such Person or such Subsidiary in the
form of cash dividends or similar cash distribution, (ii) any income (or deficit) of any other
Person accrued prior to the date it becomes a Subsidiary of such Person or merges into or
consolidates with such entity, (iii) the gain or loss (net of any tax effect) resulting from the
sale of any capital assets, (iv) any gains or losses or other income which are non-recurring or
extraordinary, and (v) any portion of the net income of any Subsidiaries which is not available for
distribution.

     “New Motor Vehicle” has the meaning specified in the Closing Date Revolving Credit
Agreement.

     “Non-Extending Lender” has the meaning specified in Section 2.12(b).

     “Note” means a promissory note made by the Borrower in favor of a Lender evidencing
Loans made by such Lender, substantially in the form of Exhibit B.

     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan
or any Related Swap Contract, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising and including
interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

     “Organization Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.

14

 

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

     “Outstanding Amount” means, on any date, the aggregate outstanding principal amount of
Loans after giving effect to any borrowings and prepayments or repayments of Loans occurring on
such date.

     “Participant” has the meaning specified in Section 10.06(d).

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “Permitted Acquisition” has the meaning specified in Section 6.16(a).

     “Permitted Financed Property Disposition” means a sale of a Financed Property in its
entirety by the Borrower or the applicable Lessor Subsidiary, provided that,

     (a) if such Financed Property is sold at a time when no Default resulting from non-payment of
any amount due under the Loan Documents (a “Payment Default”) exists and no Event of
Default exists, (i) such sale shall be on fair and reasonable terms substantially as favorable to
the Borrower or such Lessor Subsidiary as would be obtainable by the Borrower or such Lessor
Subsidiary at the time in an arm’s-length commercial transaction, and (ii) substantially
simultaneously with such sale, the Borrower shall repay in full the entire outstanding principal
balance of the Loan associated with such Financed Property and all accrued and unpaid interest and
any fees associated therewith; and

     (b) subject to Section 7.14, if such Financed Property is sold at a time when a
Payment Default or an Event of Default exists (provided that no such sale shall be permitted
hereunder during an Event of Default described in Section 8.01(f), at any time during any
proceeding described in Section 8.01(g)(i), (ii) or (iii), or following a foreclosure by
the Administrative Agent or deed in lieu of foreclosure of such Financed Property), (i) such sale
shall (x) be an arm’s-length commercial transaction to an unrelated third party on fair and
reasonable terms (“FMV”) and (y) occur concurrently with the sale of the Auto Dealer
associated with such Financed Property to such third party (or to the tenant of such third party
with respect to such Financed Property, which tenant shall not be an Affiliate of the Loan
Parties), and (ii) substantially simultaneously with such sale, the Borrower shall pay to the
Administrative Agent, on behalf of the Lenders, the greater of (x) the entire outstanding principal
balance of any Loan with respect to such Financed Property and all accrued and unpaid interest and
any fees associated therewith and (y) the cash proceeds resulting from such sale which are
attributable to such Financed Property after deducting Disposition Closing Costs.

     “Permitted Liens” means those Liens permitted under Section 7.02 hereof.

     “Permitted Real Estate Debt” means Indebtedness of a Subsidiary (i) existing as of the
Closing Date or incurred in connection with a Permitted Acquisition, provided that such
Indebtedness is secured solely by real estate, improvements, fixtures, leases, rents and related
real property rights of such Subsidiary used in the day-to-day operations of its business, and (ii)

15

 

Indebtedness and related interest rate swap agreements of a Subsidiary, provided that such
Indebtedness is secured solely by real estate, improvements, fixtures, leases, rents and related
real property rights of such Subsidiary and further provided that the amount of such indebtedness
does not exceed (**)% of the fair market value of the real estate collateral securing such
Indebtedness.

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

     “Plan” means a “pension plan,” as such term is defined in Section 3(2)(A) of ERISA
(other than a Multiemployer Plan), established or maintained by the Company, the Borrower or any of
their respective Subsidiaries or any ERISA Affiliate or as to which the Company, the Borrower or
any of their respective Subsidiaries or any ERISA Affiliate contributes or is a member or otherwise
may have any liability.

     “Platform” has the meaning specified in Section 6.05.

     “Post-Construction” means, with respect to a Financed Property, construction or
improvements completed after such Financed Property entered the Property Pool.

     “Principal Amortization Payment Date” means, in respect of each Loan, the first
Business Day of each April, July, October and January which is more than 90 days after the date on
which such Loan was made, provided that if such day is not a Business Day, the respective Principal
Amortization Payment Date shall be the next succeeding Business Day.

     “Pro Forma EBITDA” means, for any Person, for any period of determination, EBITDA of
such Person for the immediately preceding four fiscal quarters plus (or minus), without
duplication, the EBITDA for such four quarter period of any Person acquired during such period as
if such acquisition had occurred on the first day of such four quarter period, provided, if a
calculation of Pro Forma EBITDA results in an increase in the Company’s Consolidated EBITDA by 10%
or more from the most recent date of determination, no such increase above 10% shall be considered
a part of any computation hereunder unless the applicable calculations of Pro Forma EBITDA are
based on supporting calculations and such other information as the Administrative Agent may
reasonably request to determine the accuracy of such calculation.

     “Pro Forma Floor Plan Interest Expense” means, for any Person, as of any period of
determination, Floor Plan Interest Expense of such Person for the immediately preceding four fiscal
quarters plus, without duplication, the Floor Plan Interest Expense for such period of any Person
acquired during such period, as if acquired on the first day of such period.

     “Property Pool” means, collectively, as of any date, the Financed Properties
constituting Collateral as of such date.

     “Public Lender” has the meaning specified in Section 6.05.

     “Qualified Sale/Leaseback Transaction” means a sale by the Company or any Restricted
Subsidiary of real property and related fixtures and accessories used in the ordinary course of
business, which property is, in a concurrent transaction, leased by such Person from the

16

 

purchaser thereof under a lease agreement, the terms of which, as of the date of such
transaction, based upon the immediately preceding four fiscal quarters of the Company, would not
cause the Company or the Borrower to be in Default under any of the provisions of this Agreement.

     “Real Estate Support Documents” means, for each Financed Property, (a) mortgagee title
insurance policies (in amounts and with endorsements reasonably acceptable to the Administrative
Agent and insuring over, and without exception for, any then existing or future mechanics,
materialmen or similar Liens), and such surveys (certified to the Administrative Agent and
applicable title insurance company), zoning letters, appraisals (including FIRREA Appraisals),
environmental reports (including Phase I and if requested, Phase II environmental assessments) and
other mortgage-related documents, as the Administrative Agent may reasonably request, (b) a lessee
estoppel, subordination and attornment agreement in substantially the form attached hereto as
Exhibit G, or such other form as the Administrative Agent may accept in its sole
discretion, (c) third party consents, flood hazard certifications, and evidence of flood insurance
(if required), as the Administrative Agent may reasonably request; and (d) such lessee’s affidavits
and opinions of local counsel with respect to the Mortgages as the Administrative Agent may
reasonably request.

     “Register” has the meaning specified in Section 10.06(c).

     “Regulation T” means Regulation T of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

     “Regulation U” means Regulation U of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

     “Regulation X” means Regulation X of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

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

     “Related Swap Contract” means each interest rate Swap Contract the notional amounts
under which relate solely to the Obligations arising with respect to any Loan, which Swap Contract
is entered into or maintained by or for the benefit of any Loan Party with a Related Swap Contract
Provider and is not prohibited by the express terms of the Loan Documents.

     “Related Swap Contract Provider” means any Person that, at the time it enters into a
Related Swap Contract, is (a) a Lender or (b) an Affiliate of a Lender that has executed and
delivered a letter of undertaking in the form of Exhibit H hereto to the Administrative
Agent, provided that, at any time such Person ceases to be a Lender or an Affiliate of a
Lender hereunder, such Person shall no longer be considered a “Related Swap Contract Provider”.

     “Reportable Event” means a Reportable Event as referenced in Section 4043(b)(3) of
ERISA, other than an event for which the 30 day notice requirement under ERISA has been waived in
regulations issued by the PBGC.

17

 

     “Required Lenders” means, as of any date of determination, Lenders having more than
50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans has been
terminated pursuant to Section 8.02, Lenders holding in the aggregate more than 50% of the
Total Outstandings; provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making
a determination of Required Lenders.

     “Requirement of Law” means, as to any Person, any law (statutory or common), treaty,
rule or regulation or determination of any arbitrator or of a Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which such Person or any of
its property is subject.

     “Responsible Officer” means the chief executive officer, president, chief financial
officer, treasurer, assistant treasurer, vice president or controller of a Loan Party and, solely
for purposes of notices given pursuant to Article II, any other officer of the applicable
Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent.
Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.

     “Restricted Payment” means, as to any Person, any dividend or other distribution of
assets, properties, cash, rights, obligations or securities made by such Person or any Subsidiary
of such Person on account of shares of such Person’s capital stock, or any partnership interest or
similar ownership interest in such Person, or any purchase, retirement, redemption or other
acquisition made by such Person or any Subsidiary of such Person of any of such Person’s capital
stock, partnership interest or similar ownership interest or warrants, rights or options evidencing
a right to acquire such shares or interests.

     “Restricted Subsidiary” means any direct or indirect Subsidiary of the Company that is
organized under the laws of the United States or any state, territory or other political
subdivision thereof and is directly owned by the Company or another Restricted Subsidiary.

     “Retail Loan Guarantees” means any Guarantee by the Company or any of its Restricted
Subsidiaries in favor of any Person of retail installment contracts or other retail payment
obligations in respect of Motor Vehicles sold to a customer.

     “Revolving Credit Agreement” means that certain Seventh Amended and Restated Credit
Agreement effective as of March 19, 2007 among the Company, the Subsidiaries of the Company listed
therein, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative
agent, Comerica Bank, as floor plan agent, and Bank of America as syndication agent, as such
agreement may, from time to time, be amended, supplemented or otherwise modified.

     “Revolving Facility Borrowers” means the “Borrowers” as defined in the Revolving
Credit Agreement.

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     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

     “Secured Parties” means, collectively, with respect to each of the Security
Instruments, the Administrative Agent, the Lenders, and each Person that is a Related Swap Contract
Provider.

     “Security Instruments” means, collectively or individually as the context may
indicate, the Mortgages and all other agreements, instruments and other documents, whether now
existing or hereafter in effect, pursuant to which the Company, the Borrower, any other Loan Party
or any other Person shall grant or convey to the Administrative Agent for the benefit of the
Secured Parties a Lien on, or any other Person shall acknowledge any such Lien on, property as
security for all or any portion of the Obligations, any other obligation under any Loan Document
and any obligation or liability arising under any Related Swap Contract.

     “Senior Secured Leverage Ratio” means as of any date of determination, for the
Company, the ratio of (a) Adjusted Senior Indebtedness that is secured by any assets of the Company
or any of its direct or indirect Restricted Subsidiaries or is Guaranteed by the Company or any
direct or indirect Restricted Subsidiary as of such date to (b) (y) Consolidated Pro Forma EBITDA
as of such date, minus (z) Pro Forma Floor Plan Interest Expense of the Company and its Restricted
Subsidiaries, determined on a consolidated basis and after having given effect to any proposed
Acquisition, as of such date.

     “Solvent” means, when used with respect to any Person, that at the time of
determination, (a) the fair value of its assets (both at fair valuation and at present fair
saleable value on an orderly basis) is in excess of the total amount of its liabilities, including
contingent obligations; and (b) it is then able and expects to be able to pay its debts as they
mature; and (c) it has capital sufficient to carry on its business as conducted and as proposed to
be conducted.

     “Stockholders’ Equity” means, as of any date of determination, the consolidated
stockholders’ equity of the Company and its Restricted Subsidiaries determined in accordance with
GAAP, after eliminating all intercompany items and after deducting from stockholders’ equity such
portion thereof as is properly attributable to minority interests in Subsidiaries as reflected in
the financial statements most recently delivered.

     “Subordinated Indebtedness” means (i) Indebtedness of any Restricted Subsidiary having
maturities and terms, and which is subordinated to payment of the Obligations, and approved (with
respect to the maturity and subordination terms only, but approval of the Administrative Agent
shall not be required for the incurrence of such Indebtedness generally) in writing by the
Administrative Agent and which, in the aggregate, is less than ten percent (10%) of Stockholders’
Equity and (ii) unsecured subordinated Indebtedness of the Company (which may be Guaranteed by the
Restricted Subsidiaries of the Company on an unsecured basis) provided that such Indebtedness (x)
is subordinated to payment of the Obligations as approved in writing by the Administrative Agent,
(which approval of subordination terms (including any description of “senior” debt) shall be
required for any such Indebtedness, including, without limitation, any Indebtedness issued pursuant
to supplemental indentures entered into under the Subordinated Indenture dated August 13, 2003
among the Company, the subsidiary guarantors named therein

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and Wells Fargo Bank, N.A. as Trustee) (y) does not have a maturity before August 15, 2013,
and (z) has terms that are no more restrictive than the terms of the Loan Documents (taken as a
whole in each case) and further provided that, after giving effect to the issuance of such
Indebtedness, no Default or Event of Default shall have occurred or be continuing or would occur as
a result thereof.

     “Subsidiary” means any Person of which or in which any other Person (the “Parent”) or
any other Subsidiary of the Parent owns directly or indirectly fifty percent (50%) or more of: (a)
the combined voting power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such Person, if it is a corporation;
(b) the capital interest or profits interest of such Person, if it is a partnership, joint venture,
limited liability company or similar entity; or (c) the beneficial interest of such Person, if it
is a trust, association or other unincorporated organization. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Company.

     “Subsidiary Guarantors” means, collectively, all Restricted Subsidiaries executing a
Subsidiary Guaranty Agreement on the Closing Date and all other Restricted Subsidiaries that enter
into a Subsidiary Guaranty Agreement or Guaranty Joinder Agreement.

     “Subsidiary Guaranty Agreement” means the Subsidiary Guaranty Agreement made by the
Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the
form of Exhibit F.

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement or any schedules
to any such agreement.

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.

     “Total Outstandings” means the aggregate Outstanding Amount of all Loans.

     “Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

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     “UCC” means the Uniform Commercial Code as adopted and in effect in the State of Texas
from time to time.

     “Unimproved Real Property” means any Financed Property other than Improved Real
Property. Without limiting the generality of the foregoing, (i) “Unimproved Real Property” shall
include (A) those properties which do not contain building structures with electrical, water and/or
sewage hook-ups or which are not usable (without material modification) for Dealerships and/or
related facilities, and (B) (except as otherwise set forth in clause (b) of the definition of
“Improved Real Property”) those properties which consist of parking facilities (even if such
parking facilities contain curbs, asphalt and lighting improvements) and (ii) for purposes of
determining the calculation set forth in Section 4.02(d)(v) and the requirements of Loans
associated with Post-Construction, until the applicable construction is completed on a Financed
Property so that such property meets the definition of “Improved Real Property”, such Financed
Property shall be considered “Unimproved Real Property”.

     “United States” and “U.S.” mean the United States of America.

     “Unrestricted Subsidiary” means any direct or indirect Subsidiary of the Company that
is not a Restricted Subsidiary and any Subsidiary of an Unrestricted Subsidiary.

     “Wholly Owned Subsidiary” means any Person of which the Company or its other Wholly
Owned Subsidiaries own directly or indirectly one hundred percent (100%) of:

     (a) the issued and outstanding shares of stock (except shares required as directors’
qualifying shares and shares constituting less than two percent (2%) of the issued and
outstanding shares);

     (b) the capital interest or profits interest of such Person, if it is a partnership,
joint venture, limited liability company or similar entity; or

     (c) the beneficial interest of such Person, if it is a trust, association or other
unincorporated organization.

     (d) any Foreign Subsidiary that is required by the applicable laws and regulations of
such foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction, provided that
the Company, directly or indirectly, owns the remaining equity interests in such Subsidiary
and, by contract or otherwise, controls the management and business of such Subsidiary and
derives economic benefits of ownership of such Subsidiary to substantially the same extent
as if such Subsidiary were a Wholly Owned Subsidiary.

     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:

     (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.” The word
“will”

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shall be construed to have the same meaning and effect as the word “shall.” Unless
the context requires otherwise, (i) any definition of or reference to any agreement, instrument or
other document (including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or modifications set forth
herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, (iii) the words “herein,” “hereof”
and “hereunder,” and words of similar import when used in any Loan Document, shall be
construed to refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall
be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document
in which such references appear, and (v) any reference to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing or interpreting such law and any reference
to any Law or regulation shall, unless otherwise specified, refer to such Law or regulation as
amended, modified or supplemented from time to time.

     (b) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including;” the words “to” and “until”
each mean “to but excluding;” and the word “through” means “to and
including.”

     (c) Section headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any other Loan
Document.

     1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing the Audited Financial
Statements, except as otherwise specifically prescribed herein.

     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either the Company, the
Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders, the
Company and the Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to the approval of
the Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Company and the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.

     1.04 Rounding. Any financial ratios required to be maintained by the Company or the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by

22

 

which such ratio is expressed herein and rounding the result up or down to the nearest number
(with a rounding-up if there is no nearest number).

     1.05 Times of Day. Unless otherwise specified, all references herein to times of day shall be
references to Central time (daylight or standard, as applicable).

ARTICLE II.

THE COMMITMENTS AND BORROWINGS

     2.01 Loans. Subject to the terms and conditions set forth herein, each Lender severally
agrees to make term loans (each such loan, a “Loan”) to the Borrower in an aggregate amount
not to exceed at any time outstanding the amount of such Lender’s Commitment; provided
however, that, (a) each Loan shall be made with respect to a single Financed Property
identified in the Loan Notice for such Loan, (b) each Loan shall be made only on a Business Day
during the Availability Period (i) at the time the respective Financed Property initially enters
the Property Pool (including pursuant to a Collateral Substitution) or (ii) with respect to a
Financed Property already in the Property Pool in accordance with the terms hereof and subject to
the terms set forth in the definition of “Maximum Loan to Value Ratio Amount”, on or after the date
of completion of Post-Construction with respect to such property, (c) the aggregate amount of Loans
advanced with respect to any Financed Property shall be no greater than the Maximum Loan to Value
Ratio Amount for such property, (d) after giving effect to any Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of the Loans of any Lender, shall not exceed such Lender’s Commitment and (e) if the respective
Financed Property is owned by a Subsidiary Lessor, the Loan associated with such Financed Property
shall be made to the Borrower and simultaneously contributed to such Lessor Subsidiary, and the
Borrower and the Lessor Subsidiary shall direct the Administrative Agent to disburse such Loan in
accordance with Section 2.02(b). Within the limits of each Lender’s Commitment, and
subject to the other terms and conditions hereof, the Borrower may borrow under this Section
2.01, prepay under Section 2.03, and reborrow under this Section 2.01. Loans
may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

     2.02 Borrowings, Conversions and Continuations of Loans.

     (a) Each Borrowing and each conversion of Loans from one Type to the other, shall be made upon
the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than 10:00 a.m. (i) one
Business Day prior to the requested date of any Borrowing of Eurodollar Rate Loans, of any
conversion of Eurodollar Rate Loans to Base Rate Loans or of any conversion of Base Rate Loans to
Eurodollar Rate Loans, and (ii) one Business Day prior to the requested date of any Borrowing of
Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(a)
must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of,
conversion to or continuation of Loans shall be in a principal amount of $500,000 or more. Each
Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a
Borrowing or a conversion of Loans from one Type to the

23

 

other, (ii) the requested date of the Borrowing or conversion, as the case may be (which shall
be a Business Day), (iii) the principal amount of Loans to be borrowed or converted, and (iv) the
Type of Loans to be borrowed or to which existing Loans are to be converted. If the Borrower fails
to provide a timely Loan Notice requesting a conversion of Eurodollar Rate Loans to Base Rate
Loans, such Loans shall, subject to Article III, continue as Eurodollar Rate Loans. If the
Borrower fails to specify a Type of Loan in a Loan Notice, then the applicable Loans shall, subject
to Article III, be made as, or converted to, Eurodollar Rate Loans.

     (b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each
Lender of the amount of its Applicable Percentage of the applicable Loans. Each Lender shall make
the amount of its Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 12:00 noon on the Business Day specified in the
applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section
4.02 (and, if such Borrowing is the initial Borrowing, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower (or in the event
the Financed Property which is the subject of such Loan Notice is owned by a Lessor Subsidiary, to
such Lessor Subsidiary) in like funds as received by the Administrative Agent either by (i)
crediting the account of the Borrower (or the Lessor Subsidiary, if applicable) on the books of
Bank of America with the amount of such funds or (ii) crediting the account of the Borrower (or the
Lessor Subsidiary, if applicable) on the books of another bank with the amount of such funds, in
each case in accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower. The Borrower acknowledges and agrees that any funds so
delivered to a Lessor Subsidiary shall constitute a Loan to the Borrower and simultaneous
contribution of the proceeds of such Loan by the Borrower to the capital of such Lessor Subsidiary.

     (c) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Eurodollar Rate Loans upon determination of such interest rate. At
any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

     2.03 Prepayments.

     (a) The Borrower may, upon notice to the Administrative Agent, at any time or from time to
time voluntarily prepay Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than 10:00 a.m. on the date
of prepayment of such Loans; (ii) any prepayment of Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the date and amount of
such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the amount of such Lender’s
Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower
shall make such prepayment and the payment amount specified in such notice shall be due and payable
on the date specified therein. Each such prepayment shall be applied to the remaining installments
of principal of the Loans of the Lenders in accordance with their respective Applicable Percentages
in the inverse order of maturity.

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     (b) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then
in effect, the Borrower shall immediately prepay Loans in an aggregate amount equal to such excess.

     2.04 Termination or Reduction of Commitments. The Borrower may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce
the Aggregate Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 10:00 a.m. 10 days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall not terminate or
reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each
Lender according to its Applicable Percentage. All fees accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective date of such termination.

     2.05 Repayment of Loans.

     (a) The Borrower shall make quarterly amortization payments with respect to each Loan on each
Principal Amortization Payment Date (beginning on the first such date to occur after the making of
such Loan) in each case equal to 1.25% of the initial principal amount of such Loan.

     (b) The Borrower shall repay to the Lenders on the date of any Permitted Financed Property
Disposition any amounts required to be paid as set forth in the definition of “Permitted Financed
Property Disposition”.

     (c) The Borrower shall repay to any Non-Extending Lenders any amounts required to be paid to
such Lenders pursuant to Section 2.12(e).

     (d) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal
amount of Loans outstanding on such date.

     2.06 Interest.

     (a) Subject to the provisions of subsection (b) below and Section 10.09 below, (i)
each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Eurodollar Rate plus the
Applicable Rate, but in no event to exceed the Highest Lawful Rate; and (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the applicable borrowing date
at a rate per annum equal to the Base Rate plus the Applicable Rate, but in no event to
exceed the Highest Lawful Rate.

(b) (i) If any amount payable by the Borrower under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then until such amount is paid in full, such amount

25

 

(and the principal amount of all outstanding Obligations) shall thereafter bear interest at
a fluctuating interest rate per annum at all times equal to the Default Rate, but in no
event to exceed the Highest Lawful Rate, to the fullest extent permitted by applicable Laws.

     (ii) Without limiting the generality of clause (i) above, upon the request of the
Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate, but in no event to exceed the Highest Lawful
Rate, to the fullest extent permitted by applicable Laws.

     (iii) Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.

     2.07 Fees.

     (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage a non-refundable commitment fee
in advance (i) on the Closing Date, in an amount equal to the Applicable Rate times the
Aggregate Commitments in effect on the Closing Date, (ii) on each anniversary date of the Closing
Date, in an amount equal to the Applicable Rate times the Aggregate Commitments in effect
on such date and (iii) on each effectiveness date of an increase in Commitments pursuant to
Section 2.13 or otherwise, in an amount equal to the Applicable Rate times the
amount of the increase in the Aggregate Commitments as of such date multiplied (in the case of this
clause (iii)) by a fraction equal to (A) the number of days from such effectiveness date to and
including the next date that is an anniversary of the Closing Date divided by (B) 365 (such fees
described herein collectively referred to as the “Commitment Fee”).

(b) Other Fees. (i) The Company and the Borrower, jointly and severally, shall pay
to the Administrative Agent for its own account fees in the amounts and at the times
specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.

     (ii) The Borrower shall pay to the Lenders such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified. Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.

     2.08 Computation of Interest and Fees. All computations of interest for Base Rate Loans when
the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees
and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year);
provided that if such calculation results in a rate per annum in excess of

26

 

the Highest Lawful Rate, then such amount shall be calculated on the basis of a year of the
smallest number of days, not to exceed 365 or 366, as applicable, which does not exceed the Highest
Lawful Rate. Interest shall accrue on each Loan for the day on which the Loan is made, and shall
not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is
paid, provided that any Loan that is repaid on the same day on which it is made shall,
subject to Section 2.10(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.

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

     2.10 Payments Generally; Administrative Agent’s Clawback.

     (a) General. All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than 1:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the Administrative
Agent after 1:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing interest or fees, as the
case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to 11:00 a.m. on the
date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with Section 2.02 and may,
in reliance upon such assumption, make available to the Borrower a

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corresponding amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (A) in the case of a payment to be made by
such Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation,
plus any administrative processing or similar fees customarily charged by the Administrative
Agent in connection with the foregoing, and (B) in the case of a payment to be made by the
Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an overlapping period,
the Administrative Agent shall promptly remit to the Borrower the amount of such interest
paid by the Borrower for such period. If such Lender pays its share of the applicable
Borrowing to the Administrative Agent, then the amount so paid shall constitute such
Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have failed to make
such payment to the Administrative Agent.

     (ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders that the
Borrower will not make such payment, the Administrative Agent may assume that the Borrower
has made such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the Borrower has
not in fact made such payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender, in
immediately available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.

     A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount
owing under this subsection (b) shall be conclusive, absent manifest error.

     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Borrowing set forth in Article
IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent
shall return such funds (in like funds as received from such Lender) to such Lender, without
interest.

     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The

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failure of any Lender to make any Loan or to make any payment under Section 10.04(c)
on any date required hereunder shall not relieve any other Lender of its corresponding obligation
to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so
make its Loan or to make its payment under Section 10.04(c).

     (e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any particular place or
manner.

     2.11 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of
the Loans made by it resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Loans and accrued interest thereon greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the
Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans and other amounts
owing them, provided that:

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

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

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

     2.12 Extension of Maturity Date.

     (a) Requests for Extension. The Borrower may, by notice to the Administrative Agent
(who shall promptly notify the Lenders) not earlier than 75 days and not later than 60 days prior
to the date one year prior to the Maturity Date then in effect hereunder (the “Existing
Maturity Date”), request that each Lender extend such Lender’s Maturity Date for an additional
364 days from the Existing Maturity Date; provided that, in no event shall the Maturity Date be
extended beyond March 29, 2014.

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     (b) Lender Elections to Extend. Each Lender, acting in its sole and individual
discretion, shall, by notice to the Administrative Agent given not later than the date (the
“Notice Date”) that is 30 days prior to the date one year prior to the Existing Maturity
Date, advise the Administrative Agent whether or not such Lender agrees to such extension. Each
Lender that advises the Administrative Agent on or before the Notice Date that such Lender does not
agree to extend its Maturity Date, and each Lender that does not advise the Administrative Agent on
or before the Notice Date that such Lender agrees to such extension, shall be a “Non-Extending
Lender.” The election of any Lender to agree to such extension shall not obligate any other
Lender to so agree.

     (c) Notification by Administrative Agent. The Administrative Agent shall notify the
Borrower of each Lender’s determination under this Section no later than the date 25 days prior to
the date one year prior to the Existing Maturity Date (or, if such date is not a Business Day, on
the next preceding Business Day).

     (d) Additional Commitment Lenders. The Borrower shall have the right to replace each
Non-Extending Lender with, and add as “Lenders” under this Agreement in place thereof, one or more
Eligible Assignees (each, an “Additional Commitment Lender”) as provided in Section
10.13, provided that, each of such Additional Commitment Lenders shall enter into an
Assignment and Assumption pursuant to which such Additional Commitment Lender shall, effective as
of the date one year prior to the Existing Maturity Date, undertake a Commitment (and, if any such
Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such
Lender’s Commitment hereunder on such date).

     (e) Conditions to Effectiveness of Extensions. As a condition precedent to such
extension, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party
dated as of the Existing Maturity Date (in sufficient copies for each Extending Lender and each
Additional Commitment Lender) signed by a Responsible Officer of such Loan Party (i) certifying and
attaching the resolutions adopted by such Loan Party approving or consenting to such extension and
(ii) in the case of the Borrower, certifying that, before and after giving effect to such extension
(A) the representations and warranties contained in Article V and the other Loan Documents
are true and correct on and as of the Existing Maturity Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and that solely for purposes of this Section 2.12, the
representations and warranties contained in subsection (a) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to subsection (a) of Section
6.05, and (B) no Default exists. In addition, on the Maturity Date of each Non-Extending
Lender, (i) the Borrower shall repay to such Non-Extending Lender, an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents and (ii) the Loans shall be reallocated
in accordance with the revised Commitments and the Lenders shall make cash settlement with each
other directly or through the Administrative Agent (as the Administrative Agent shall direct and
approve), such that after giving effect to such reallocations each extending Lender’s Applicable
Percentage of the Aggregate Commitments equals its Applicable Percentage of the then Outstanding
Amount of all the Loans and the requisite assignments shall be deemed to be made in such amounts
among the Lenders and from each Lender to each other Lender with the same

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force and effect as if such assignments were evidenced by applicable Assignment Agreements,
but without payment of any related assignment fees.

     (f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.11 or 10.01 to the contrary.

     2.13 Increase in Commitments.

     (a) Request for Increase. Provided there exists no Default and subject to the
conditions set forth in this Section 2.13 (including obtaining agreement by the respective
Lenders or Eligible Assignees to increase their Commitments), upon notice to the Administrative
Agent (which shall promptly notify the Lenders), the Borrower may from time to time, increase the
Aggregate Commitments by an amount (for all such increases) not exceeding $100,000,000;
provided that (i) any such increase shall be in a minimum amount of $15,000,000, and (ii)
the Borrower may make a maximum of three such increases. At the time of sending such notice, the
Borrower (in consultation with the Administrative Agent) shall specify the time period within which
each Lender is requested to elect to participate in such increase (which shall in no event be less
than ten Business Days from the date of delivery of such notice to the Lenders).

     (b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent
within such time period whether or not it agrees to increase its Commitment and, if so, whether by
an amount equal to, greater than, or less than its Applicable Percentage of such proposed increase.
Any Lender not responding within such time period shall be deemed to have declined to increase its
Commitment.

     (c) Notification by Administrative Agent; Additional Lenders; Relation to Extension of
Maturity Date. The Administrative Agent shall notify the Borrower and each Lender of the
Lenders’ responses to each request made hereunder. To achieve the full amount of a requested
increase, the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to
a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.
If the Borrower has requested or obtained an extension of the Maturity Date pursuant to
Section 2.12 at any time prior to the Increase Effective Date, then any Lender or Eligible
Assignee agreeing to increase its Commitment or incur a new Commitment pursuant to this Section
2.12 must also agree to such extension of its Maturity Date (unless such extension does not
become effective as to any Lender).

     (d) Effective Date and Allocations. If the Aggregate Commitments are increased in
accordance with this Section, the Administrative Agent and the Borrower shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such increase.
The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation
of such increase and the Increase Effective Date.

     (e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party
dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a
Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such
Loan Party approving or consenting to such increase, and (ii) in the case of the Borrower,

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certifying that, before and after giving effect to such increase, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and correct on and
as of the Increase Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and that solely for purposes of this Section 2.13, the representations and warranties
contained in subsection (a) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to subsection (a) of Section 6.05, and (B) no Default exists.
The Borrower shall prepay any Loans outstanding on the Increase Effective Date to the extent
necessary to keep the outstanding Loans ratable with any revised Applicable Percentages arising
from any nonratable increase in the Commitments under this Section.

     (f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.11 or 10.01 to the contrary.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

     3.01 Taxes.

     (a) Payments Free of Taxes. Subject to Section 3.01(e), any and all payments
by or on account of any obligation of the Company or the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Company or the Borrower shall be required by
applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then
(i) the sum payable shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section) the Administrative
Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Company or the Borrower, as applicable, shall make such
deductions and (iii) the Company or the Borrower, as applicable, shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable Law.

     (b) Payment of Other Taxes by the Company and the Borrower. Subject to Section
3.01(e), without limiting the provisions of subsection (a) above, to the extent permitted by
applicable Laws, the Company and the Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Law.

     (c) Indemnification by the Company and the Borrower. Subject to Section
3.01(e), the Company and the Borrower (jointly and severally) shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent
or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Company or the Borrower by a Lender
(with

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a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

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

     (e) Status of Lenders. Each Foreign Lender shall deliver to the Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be made without
withholding under the law of the jurisdiction in which the Borrower is resident for tax purposes,
or any treaty to which such jurisdiction is a party, with respect to any payments hereunder or
under any other Loan Document. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

     Without limiting the generality of the foregoing, each Foreign Lender shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is
applicable:

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

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

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

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

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     Without limiting the obligations of the Foreign Lenders set forth above regarding delivery of
certain forms and documents to establish each Foreign Lender’s status for U.S. withholding tax
purposes, each Foreign Lender agrees promptly to deliver to the Administrative Agent and the
Borrower, as the Administrative Agent or the Borrower shall reasonably request, on or prior to the
Closing Date, and in a timely fashion thereafter, such other documents and forms required by any
relevant taxing authorities under the Laws of any other jurisdiction, duly executed and completed
by such Foreign Lender, as are required under such Laws to confirm such Foreign Lender’s
entitlement to any available exemption from applicable withholding taxes in respect of all payments
to be made to such Foreign Lender outside of the U.S. by the Borrower or the Company pursuant to
this Agreement or otherwise to establish such Foreign Lender’s status for withholding tax purposes
in such other jurisdiction. Each Foreign Lender shall promptly (i) notify the Administrative Agent
of any change in circumstances which would modify or render invalid any such claimed exemption or
reduction, and (ii) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Foreign Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable Laws of any such
jurisdiction that the Borrower or the Company make any deduction or withholding for taxes from
amounts payable to such Foreign Lender. Additionally, the Borrower shall promptly deliver to the
Administrative Agent or any Foreign Lender, as the Administrative Agent or such Foreign Lender
shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such
documents and forms required by any relevant taxing authorities under the Laws of any jurisdiction,
duly executed and completed by the Borrower or the Company, as applicable, as are required to be
furnished by such Foreign Lender or the Administrative Agent, under such Laws in connection with
any payment by the Administrative Agent or any Foreign Lender of Taxes or Other Taxes, or otherwise
in connection with the Loan Documents, with respect to such jurisdiction.

     Notwithstanding anything to the contrary herein, the Borrower and the Company shall not be
required to pay any additional amounts in respect of U.S. income tax pursuant hereto to any Lender
for the account of any Lending Office of such Lender:

     (i) if the obligation to pay such additional amounts would not have arisen but for a
failure by such Lender to comply with its obligations in Section 3.05(a) in respect
of such Lending Office; or

     (ii) if a Lender shall have delivered to the Borrower the forms referred to above in
this Section 3.01(e), and such Lender shall not at any time be entitled to complete
exemption from deduction or withholding of U.S. income tax with respect of payments by the
Borrower or the Company hereunder for the account of the Lending Office of such Lender for
any reason other than a change in U.S. Law or regulations after the date of delivery of such
forms.

     (f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Company or the Borrower or with respect to which the Company
or the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Company
or the Borrower, as applicable, an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Company or the

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Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender, as the case
may be, and without interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the Company and the Borrower, upon the request
of the Administrative Agent or such Lender, agree, jointly and severally, to repay the amount paid
over to the Company or the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to its taxes that it
deems confidential) to the Company, the Borrower or any other Person.

     (g) Assertion of Claims. Each Lender shall have 180 days from the date it determines
that the Company or the Borrower is required to pay an additional amount to such Lender, or to any
Governmental Authority for the account of such Lender, pursuant to this Section 3.01 to
assert such claim under this Section 3.01.

     3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative
Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base
Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of
such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. If any Lender
determines that any Law has made it unlawful, or that any Governmental Authority has asserted that
it is unlawful, for such Lender or its applicable Lending Office to participate in outstanding
Eurodollar Rate Loans, then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, the Borrower shall prepay such Eurodollar Rate Loans of such Lender or
convert all such Eurodollar Rate Loans of such Lender to Base Rate Loans immediately. Upon any
such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.

     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in
connection with any request for a Eurodollar Rate Loan or a conversion thereto that (a) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan, or (b) the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make
or maintain Eurodollar Rate Loans shall be suspended until the Administrative

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Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of
such notice, the Borrower may revoke any pending request for a Borrowing of or conversion to of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.

     3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

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

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 3.04(e));

     (ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, any Eurodollar Rate Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender); or

     (iii) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Eurodollar Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or
to reduce the amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay
to such Lender such additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.

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

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

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     (d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of
such Lender’s right to demand such compensation, provided that the Borrower shall not be
required to compensate a Lender pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than 180 days prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect thereof).

     (e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as long
as such Lender shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan
equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the Borrower shall have
received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such
additional interest from such Lender. If a Lender fails to give notice 10 days prior to the
relevant Interest Payment Date, such additional interest shall be due and payable 10 days from
receipt of such notice.

     3.05 Mitigation Obligations; Replacement of Lenders.

     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or the Company or the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender pursuant to Section
3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall
use reasonable efforts to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable,
and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Company and the Borrower (jointly and
severally) hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

     (b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Company or the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if
any Lender asserts any illegality under Section 3.02, the Borrower may replace such Lender
in accordance with Section 10.13.

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     3.06 Survival. Subject to Section 3.04(d), all of the Company’s and the Borrower’s
obligations under this Article III shall survive termination of the Aggregate Commitments
and repayment of all other Obligations hereunder.

ARTICLE IV.

CONDITIONS PRECEDENT TO BORROWINGS

     4.01 Conditions of Closing Date. This Agreement shall be effective subject to satisfaction of
the following conditions precedent:

     (a) The Administrative Agent’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date) and each in form and
substance reasonably satisfactory to the Administrative Agent and each of the Lenders:

     (i) executed counterparts of this Agreement, the Company Guaranty Agreement and the
Subsidiary Guaranty Agreement, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower;

     (ii) a Note executed by the Borrower in favor of each Lender requesting a Note;

     (iii) such certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Administrative Agent
may require evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;

     (iv) such documents and certifications as the Administrative Agent may reasonably
require (x) to evidence that each Loan Party is duly organized or formed, and (y) to
evidence that the Company, the Borrower and each other Loan Party listed on Schedule
4.01(a)(iv) is validly existing, in good standing and qualified to engage in business in
each jurisdiction where its ownership, lease or operation of properties or the conduct of
its business requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;

     (v) a favorable opinion of Vinson & Elkins LLP, counsel to the Loan Parties, addressed
to the Administrative Agent and each Lender, as to the matters set forth in Exhibit
I and such other matters concerning the Loan Parties and the Loan Documents as the
Administrative Agent may reasonably request;

     (vi) a certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against such

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Loan Party of the Loan Documents to which it is a party, and such consents, licenses
and approvals shall be in full force and effect, or (B) stating that no such consents,
licenses or approvals are so required;

     (vii) a certificate signed by a Responsible Officer of the Company and the Borrower
certifying that there has been no event, circumstance since the date of the Audited
Financial Statements that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect;

     (viii) a certificate signed by a Responsible Officer of each Loan Party certifying that
each Loan Party is Solvent after giving effect to this Agreement and the other Loan
Documents and the Indebtedness pursuant hereto;

     (ix) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent or the Required Lenders reasonably may require.

     (b) Any fees required to be paid on or before the Closing Date shall have been paid.

     (c) Unless waived by the Administrative Agent, the Company and the Borrower shall have paid
all reasonable fees, charges and disbursements of counsel to the Administrative Agent (directly to
such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the
Closing Date, plus such additional amounts of such fees, charges and disbursements as shall
constitute its reasonable estimate of such reasonable fees, charges and disbursements incurred or
to be incurred by it through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Company, the Borrower and the
Administrative Agent).

     (d) The Closing Date shall have occurred on or before April 16, 2007.

     Without limiting the generality of the provisions of the last paragraph of Section
9.03, for purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved
or accepted or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

     4.02 Conditions to all Borrowings. The obligation of each Lender to honor any Loan Notice
(other than a Loan Notice requesting only a conversion of Loans to the other Type) is subject to
the following conditions precedent:

     (a) The representations and warranties of the Company, the Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be true and correct on
and as of the date of such Borrowing, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section 4.02, the representations and

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warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the
most recent statements furnished pursuant to clause (a) of Section 6.05.

     (b) No Default shall exist, or would result from such proposed Borrowing or from the
application of the proceeds thereof.

     (c) The Administrative Agent shall have received a Loan Notice in accordance with the
requirements hereof.

     (d) With respect to the Financed Property which is to be financed in whole or in part by such
Loan, the Administrative Agent shall have received each of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, each dated the date of such Loan (or a
recent date before the date of such Loan) and each in form and substance reasonably satisfactory to
the Administrative Agent:

     (i) a satisfactory FIRREA Appraisal;

     (ii) (x) a Mortgage and evidence of the proper recordation of such Mortgage (or, except
in the case of a Financed Property located in Kansas, the delivery of such Mortgage to the
applicable title insurance company for recordation, on or immediately after the date of the
applicable Borrowing) in the appropriate filing office, and (y) the Real Estate Support
Documents with respect to such Financed Property (including Phase I and if reasonably
requested, Phase II environmental assessments and any other reasonably applicable
environmental reports);

     (iii) a copy of the Lease of such Financed Property to the applicable Lessee Subsidiary
and any sublease or Memorandum of Lease associated therewith, if any;

     (iv) a favorable opinion of local counsel to the Borrower or the applicable Lessor
Subsidiary in the state where such Financed Property is located, addressed to the
Administrative Agent and each Lender, as to such matters concerning the Borrower and the
Loan Documents as the Administrative Agent may reasonably request;

     (v) a certificate of a Responsible Officer of the Borrower in form and detail
reasonably satisfactory to the Administrative Agent (which may be contained in the
applicable Loan Notice) demonstrating (A) that the aggregate amount of the requested Loan
(together with any other Loan with respect to such Financed Property) is no greater than the
Maximum Loan to Value Ratio Amount applicable to such Financed Property and (B) in the case
of a Financed Property constituting Unimproved Real Property, the amount of such Loan, when
aggregated with all other Loans advanced with respect to Financed Properties then
constituting Unimproved Real Property, is no greater than fifteen percent (15%) of the then
Aggregate Commitments;

     (vi) Uniform Commercial Code search results showing no Liens on the Financed Property
other than Mortgage Permitted Liens;

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     (vii) delivery of Uniform Commercial Code financing statements and fixture filings
suitable in form and substance for filing in all places required by applicable Law to
perfect the Liens of the Administrative Agent under the Mortgage and other Security
Instruments related to such Financed Property as a first priority Lien (subject only to
Permitted Liens) as to items of Collateral in which a security interest may be perfected by
the filing of financing statements or fixture filings, and such other documents and/or
evidence of other actions as may be necessary under applicable Law to perfect the Liens of
the Administrative Agent under the Mortgage and other Security Instruments related to such
Financed Property as a first priority Lien in and to such other Collateral as the
Administrative Agent may require;

     (viii) evidence that all insurance required to be maintained pursuant to the Loan
Documents with respect to such Financed Property has been obtained and is in effect; and
endorsements naming the Administrative Agent (on behalf of the Lenders and the other Secured
Parties) as an additional insured and loss payee, as the case may be, on all such insurance
policies maintained with respect to such Financed Property; and

     (ix) with respect to the applicable Lessor Subsidiary associated with such Financed
Property (to the extent not previously delivered):

     (A) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of such Lessor Subsidiary as the
Administrative Agent may require evidencing the identity, authority and capacity of
each Responsible Officer thereof authorized to act as a Responsible Officer in
connection with the Loan Documents to which such Lessor Subsidiary is a party;

     (B) such documents and certifications as the Administrative Agent may
reasonably require (x) to evidence that each Loan Party is duly organized or formed,
and (y) to evidence that such Lessor Subsidiary is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business requires
such qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;

     (C) a certificate of a Responsible Officer of such Lessor Subsidiary either (A)
attaching copies of all consents, licenses and approvals required in connection with
the execution, delivery and performance by such Lessor Subsidiary and the validity
against such Lessor Subsidiary of the Loan Documents to which it is a party, and
such consents, licenses and approvals shall be in full force and effect, or (B)
stating that no such consents, licenses or approvals are so required; and

     (D) a certificate signed by a Responsible Officer of the Company and such
Lessor Subsidiary certifying that such Lessor Subsidiary is Solvent after giving
effect to this Agreement, the Mortgage of such Lessor Subsidiary, and the other Loan
Documents and the Indebtedness pursuant hereto.

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     (e) In addition to the items set forth in clause (d) above, in the case of a Loan associated
with Post-Construction for a Financed Property, the Administrative Agent shall have received each
of the following, each of which shall be originals or telecopies (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the date of such Loan (or a recent date before the date of such Loan) and each in
form and substance reasonably satisfactory to the Administrative Agent:

     (i) a satisfactory FIRREA Appraisal;

     (ii) (x) a modification of the respective Mortgage and evidence of the proper
recordation of such modification (or the delivery of such modification to the applicable
title insurance company for recordation, on or immediately after the date of the applicable
Borrowing) in the appropriate filing office, and (y) applicable Real Estate Support
Documents with respect to such Financed Property (including, if reasonably requested by the
Administrative Agent, an additional Phase I and if reasonably requested in connection with
the results of such additional Phase I, Phase II environmental assessments and any other
reasonably applicable environmental reports) and endorsements to the title insurance policy
with respect to such Financed Property, reflecting such modification and increased property
value but otherwise showing no change in coverage;

     (iii) if reasonably requested by the Administrative Agent, a favorable opinion of local
counsel to the Borrower or the applicable Lessor Subsidiary in the state where such Financed
Property is located, addressed to the Administrative Agent and each Lender with respect to
the modification of the respective Mortgage;

     (iv) a certificate of a Responsible Officer of the Borrower in form and detail
reasonably satisfactory to the Administrative Agent (which may be contained in the
applicable Loan Notice) demonstrating that the aggregate amount of the requested Loan
(together with any other Loan with respect to such Financed Property) is no greater than the
Maximum Loan to Value Ratio Amount applicable to such Financed Property; and

     (v) evidence that all insurance required to be maintained pursuant to the Loan
Documents with respect to such Financed Property has been obtained and is in effect; and
endorsements naming the Administrative Agent (on behalf of the Lenders and the other Secured
Parties) as an additional insured and loss payee, as the case may be, on all such insurance
policies maintained with respect to such Financed Property.

     (f) The Required Lenders shall not have declined the particular Financed Property in
accordance with such Lenders’ policies and practices generally applicable to its customers in
connection with loan transactions.

     (g) Any fees required to be paid on or before the date of the applicable Borrowing shall have
been paid.

     (h) Unless waived by the Administrative Agent, the Company and the Borrower shall have paid
all fees, charges and disbursements of counsel to the Administrative Agent (directly to such
counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the date of
the applicable Borrowing.

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     Each Loan Notice (other than a Loan Notice requesting only a conversion of Loans to the other
Type) submitted by the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of
the date of the applicable Borrowing.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

     The Company represents and warrants, with respect to itself and its Subsidiaries, and the
Borrower represents and warrants, with respect to itself and its Subsidiaries and each of the Loan
Parties, to the Administrative Agent and the Lenders that:

     5.01 Organization; Corporate Powers. The Company, the Borrower, each other Loan Party and
each of their respective Subsidiaries is duly organized only under the laws of the state (or in the
case of any Unrestricted Subsidiaries, the country) of its respective incorporation or organization
and each Loan Party and each Restricted Subsidiary is validly existing and in good standing under
the laws of the state of its respective incorporation or organization, has the requisite power and
authority, governmental licenses, consents and approvals to own its property and assets and to
carry on its business as now conducted and is qualified to do business in every jurisdiction where
such qualification is required and is in compliance with all Requirements of Law except where the
failure to so qualify or comply could not reasonably be expected to have a Material Adverse Effect.
The Borrower has the corporate power to execute, deliver and perform its Obligations under this
Agreement and the other Loan Documents to which it is a party, to borrow hereunder and to execute
and deliver the Notes. The Company and each other Loan Party has the corporate power to execute,
deliver and perform its Obligations under this Agreement and the other Loan Documents to which it
is a party.

     5.02 Authorization. The execution, delivery and performance of this Agreement and the Loan
Documents by the Loan Parties, the Borrowings hereunder, the execution and delivery of the Notes by
the Borrower and the use of the proceeds of the Borrowings (a) have been duly authorized by all
requisite corporate (or other organizational) and, if required, stockholder (or other equity
holder) action on the part of the Company, the Borrower and each other Loan Party and (b) will not
(i) violate (A) any provision of Law or the Organizational Documents of the Company, the Borrower
or any other Loan Party, (B) any order of any court, or any rule, regulation or order of any other
agency of government binding upon the Company, the Borrower or any other Loan Party or (C) any
provisions of any indenture, agreement or other instrument to which the Company, the Borrower or
any other Loan Party is a party, or by which the Company, the Borrower or any other Loan Party or
any of their respective properties or assets are or may be bound which violation could reasonably
be expected to have a Material Adverse Effect, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under any indenture, agreement
or other instrument referred to in (b)(i)(C) above which violation could reasonably be expected to
have a Material Adverse Effect or (iii) result in the creation or imposition of any Lien whatsoever
upon any property or assets of the Company, the Borrower or any other Loan Party other than under
the Loan Documents.

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     5.03 Governmental Approval. No registration with, or consent or approval of, or other action
by, any federal, state or other Governmental Authority or any other Person is or will be required
in connection with the execution, delivery and performance of this Agreement, any other Loan
Document, the execution and delivery of the Notes or repayment of the Borrowings hereunder.

     5.04 Enforceability. This Agreement and each of the Loan Documents have been duly executed
and delivered by each of the Company, the Borrower and each of the other Loan Parties and
constitute legal, valid and binding obligations of such Persons party thereto; and the Notes, when
duly executed and delivered by the Borrower, will constitute legal, valid and binding Obligations
of the Borrower, in each case enforceable in accordance with their respective terms (subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors’ rights generally and general principles of equity).

     5.05 Financial Statements.

     (a) The Audited Financial Statements, a copy of which has been furnished to the Lenders, has
been prepared in conformity with GAAP applied on a basis consistent with that of the preceding
fiscal year, and present fairly in all material respects the financial condition of the Company
and its Subsidiaries, as at such date, and the consolidated results of the operations of the
Company and its Subsidiaries for the period then ended.

     (b) The Form 10-K of the Company for the fiscal year ended December 31, 2006, a copy of which
has been furnished to the Lenders, has been prepared in accordance with all applicable rules,
regulations and guidelines of the Securities and Exchange Commission and presents fairly in all
material respects the financial condition of the Company and its Subsidiaries, as at such date, and
the results of their operations for the periods then ended.

     5.06 No Material Adverse Change. There has been no material adverse change in the businesses,
assets, operations, prospects or condition, financial or otherwise, as determined on a consolidated
basis, of the Company or any of its Subsidiaries, since the date of the Audited Financial
Statements.

     5.07 Title to Properties. Each Loan Party has good and marketable title to, or valid
leasehold interests in, all its properties and assets except for (i) such properties as are no
longer used or useful in the conduct of its business or as have been disposed of in the ordinary
course of business, (ii) Permitted Liens on property and assets other than Financed Properties,
(iii) minor defects in title on property and assets other than Financed Properties, which defects
do not interfere with the ability of such Loan Party to conduct its business as now conducted, and
(iv) Mortgage Permitted Liens on any Financed Property.

     5.08 Litigation; Compliance with Laws; Etc.

     (a) There are no actions, suits or proceedings, except as specified in Schedule
5.08(a), at law or in equity or by or before any Governmental Authority now pending or, to the
knowledge of any of the Loan Parties, threatened against or affecting any of the Loan Parties or
the business, assets or rights of any of the Loan Parties as to which there is a reasonable

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possibility of an adverse determination and which, if adversely determined, could,
individually or in the aggregate, reasonably to be expected to have a Material Adverse Effect.

     (b) (i) None of the Loan Parties is in violation of any law, the breach or consequence of
which could reasonably be expected to have a Material Adverse Effect, (ii) to the best knowledge of
the Loan Parties after due investigation, the Loan Parties are in material compliance with all
statutes and governmental rules and regulations applicable to them, and (iii) none of the Loan
Parties is in default under any material order, writ, injunction, award or decree of any
Governmental Authority binding upon it or its assets or any material indenture, mortgage, contract,
agreement or other undertaking or instrument to which it is a party or by which any of its
properties may be bound, which default could reasonably be expected to have a Material Adverse
Effect. Nothing has occurred which would materially and adversely affect the ability of any Loan
Party to carry on its business as now conducted or perform its obligations under any such order,
writ, injunction, award or decree or any such material indenture, mortgage, contract, agreement or
other undertaking or instrument.

     5.09 Agreements; No Default.

     (a) None of the Loan Parties is a party to any agreement or instrument or subject to any
corporate restriction reasonably to be expected to have a Material Adverse Effect.

     (b) No Default has occurred and is continuing.

     5.10 Federal Reserve Regulations.

     (a) Neither the Company, the Borrower nor any of their respective Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.

     (b) No part of the proceeds of the Loans will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately (i) to purchase or carry Margin Stock or to extend
credit to others for the purpose of purchasing or carrying Margin Stock or to refund Indebtedness
originally incurred for such purpose or (ii) for any purpose which entails a violation of, or which
is inconsistent with, the provisions of the Regulations of the Board, including Regulations T, U or
X; provided, however, the Company may acquire Margin Stock if, upon the acquisition of such Margin
Stock, twenty-five percent (25%) or less of the Company’s total assets subject to the restrictions
set forth in Section 7.01 would then be composed of Margin Stock, and the Company shall
furnish to the Administrative Agent upon its request, a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U.

     5.11 Taxes. The Company, the Borrower and each of their respective Subsidiaries has filed all
tax returns which are required to have been filed and has paid, or made adequate provisions for the
payment of, all of its taxes which are due and payable, except such taxes, if any, as are being
contested in good faith and by appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by GAAP have been maintained. Neither the Company, the
Borrower nor any of their respective Subsidiaries is aware of any proposed assessment against it
for additional taxes (or any basis for any such assessment) which could reasonably be expected to
have a Material Adverse Effect.

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     5.12 Pension and Welfare Plans. Except for matters that could not reasonably be expected to
have a Material Adverse Effect: (a) each Plan complies in all respects with all applicable statutes
and governmental rules and regulations; (b) no Reportable Event has occurred and is continuing with
respect to any Plan; (c) since December 31, 2006, neither the Company, the Borrower nor any ERISA
Affiliate has withdrawn from any Plan or instituted steps to do so, except as listed on
Schedule 5.12; and (d) since December 31, 2006, no steps have been instituted to terminate
any Plan, except as listed on Schedule 5.12. No condition exists or event or transaction
has occurred in connection with any Plan which could result in the incurrence by the Company, the
Borrower or any ERISA Affiliate of any liability, fine or penalty which could reasonably be
expected to have a Material Adverse Effect. Except for circumstances that could not reasonably be
expected to have a Material Adverse Effect, neither the Company, the Borrower nor any ERISA
Affiliate is a member of, or contributes to, any multiple employer Plan as described in Section
4064 of ERISA. None of the Loan Parties has any contingent liability with respect to any
post-retirement “welfare benefit plans,” as such term is defined in ERISA which could reasonably be
expected to have a Material Adverse Effect. Except for matters that could not reasonably be
expected to have a Material Adverse Effect, neither the Company, the Borrower nor any ERISA
Affiliate has any liability under Section 4201 or 4243 of ERISA for any withdrawal, partial
withdrawal, reorganization or other event under any Multiemployer Plan.

     5.13 No Material Misstatements. As of the date hereof, neither this Agreement, the other Loan
Documents nor any other document delivered by or on behalf of the Company, the Borrower, any other
Loan Party or any of their respective Subsidiaries in connection with any Loan Document or included
therein contained or contains any material misstatement of fact or omitted or omits to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

     5.14 Investment Company Act. Neither the Company, the Borrower nor any of their respective
Subsidiaries is an “investment company” or company “controlled” by an investment company as defined
in, or subject to regulation under, the Investment Company Act of 1940.

     5.15 Maintenance of Insurance. The Company, the Borrower and each of their respective
Subsidiaries maintains insurance to such extent and against such hazards and liabilities as is
commonly maintained by companies similarly situated.

     5.16 Existing Liens. None of the assets of the Company, the Borrower or any other Loan Party
is subject to any Lien, except:

     (a) Liens for current taxes not delinquent or taxes being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate provisions as may be
required by GAAP are being maintained;

     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, landlord’s and other like statutory
or contractual Liens arising in the ordinary course of business securing obligations which are not
overdue for a period of more than ninety (90) days or which are being contested in good faith and
by appropriate proceedings and as to which such reserves or other appropriate provisions as may be
required by GAAP are being maintained;

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     (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation and to secure performance of tenders, statutory obligations,
surety and appeal bonds and similar obligations;

     (d) deposits to secure the performance of bids, trade contracts, statutory obligations, lease
obligations, and other obligations of a like nature incurred in the ordinary course of business,
and Liens securing reimbursement obligations created by open letters of credit for the purchase of
inventory;

     (e) Liens granted by a Subsidiary of the Company to secure such Subsidiary’s Indebtedness to
the Company or to any other Subsidiary of the Company;

     (f) Liens, if any, disclosed in the financial statements referred to in Section 5.05;

     (g) Liens listed on Schedule 5.16(g) and Liens permitted by Section 7.02; and

     (h) Liens arising by virtue of statutory, common law or contractual provisions relating to
banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit,
brokerage and similar accounts (or funds, securities or other assets maintained therein) with a
creditor depository or similar institution.

     5.17 Environmental Matters. With respect to any real property owned or occupied by any Loan
Party other than the Financed Properties:

     (a) each Loan Party has complied in all respects with all applicable federal, state, local and
other statutes, ordinances, orders, judgments, rulings and regulations relating to environmental
pollution or to environmental regulation or control except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect;

     (b) neither the Company, the Borrower, any of their respective Restricted Subsidiaries has
received notice of any failure so to comply which alone or together with any other such failure
could reasonably be expected to have a Material Adverse Effect; and

     (c) neither the Company, the Borrower or any of their respective Restricted Subsidiaries nor
any of its facilities manages any hazardous wastes, hazardous substances, hazardous materials,
toxic substances or toxic pollutants, as those terms are used in the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Toxic Substance Control Act, the Clean Air Act or the
Clean Water Act, in violation of any regulations promulgated pursuant thereto or in any other
applicable law where such violation could reasonably be expected to have, individually or together
with other violations, a Material Adverse Effect.

     5.18 Subsidiaries. As of the Closing Date, (i) neither the Company nor the Borrower has any
Subsidiaries, and no Subsidiary has a Subsidiary other than those specifically disclosed (and
identified as Restricted or Unrestricted) in part (a) of Schedule 5.18, (ii) neither the
Company, the Borrower nor any of their respective Subsidiaries has any equity investments in any
other Person other than those specifically disclosed in part (b) of Schedule 5.18 and (iii)
all of the Restricted Subsidiaries of the Company (other than the Borrower, the Ford Borrowers and

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those listed in the first sentence of Section 6.16.(b)) are parties to the Subsidiary
Guaranty Agreement and are fully liable thereunder to the extent set forth therein. The state of
incorporation or formation and the address, principal place of business for each Subsidiary is
specified in part (a) of Schedule 5.18. Each of the Company, the Borrower and/or each of
their respective Restricted Subsidiaries is the owner, directly or indirectly, free and clear of
all Liens (except for Liens in favor of the Revolving Facility Administrative Agent and transfer
restrictions contained in the Dealer/Manufacturer Agreements), of all of the issued and outstanding
voting stock of each Subsidiary disclosed on Schedule 5.18 (except where ownership of less
than one hundred percent (100%) is indicated on Schedule 5.18).

     5.19 Engaged in Motor Vehicle Sales. The Lessee Subsidiaries are engaged in the business of
selling Motor Vehicles.

     5.20 Dealer Franchise Agreements and Manufacturer Framework Agreements. As of the Closing
Date, none of the Loan Parties is a party to any dealer franchise agreements, manufacturer
framework agreements, or any other similar agreements, including any master agreements between the
Loan Parties and any Manufacturer (“Dealer/Manufacturer Agreements”) other than those
specifically disclosed in Schedule 5.20, which schedule shows the Manufacturer and the Loan
Party which is a party to each such agreement, the date such agreement was entered into and the
expiration date (if any) of each such agreement. Each of the Dealer/Manufacturer Agreements
applicable to the Company, the Borrower or any Lessee Subsidiary is currently in full force and
effect as of the date hereof, and no such agreement has been terminated by a final non-appealable
decision by a court of competent jurisdiction. Each of the Dealer/Manufacturer Agreements
applicable to any Restricted Subsidiary (other than the Company, the Borrower or any Lessee
Subsidiary) is currently in full force and effect as of the date hereof and no such agreement has
been terminated by a final non-appealable decision by a court of competent jurisdiction except
where such termination could not reasonably be expected to have a Material Adverse Effect. There
exists no actual or threatened termination, cancellation, or limitation of, or any modification or
change in, the business relationship between any Loan Party and any customer or any group of
customers whose purchases individually or in the aggregate are material to the business of such
Loan Party, or with any material Manufacturer, and there exists no present condition or state of
facts or circumstances which could reasonably be expected to have a Material Adverse Effect.

     5.21 Use of Proceeds. The proceeds of the Loans shall be used (a) for general working
capital, capital expenditures and other lawful purposes of the Borrower, (b) to make distributions
to the Company and (c) for acquisitions of real property and vehicle dealerships. Neither the
Administrative Agent nor any Lender shall have any responsibility as to the use of any proceeds of
the Loans. The Borrower represents and warrants to the Lenders and the Administrative Agent that
all Loans will be for business, commercial, investment or other similar purpose and not primarily
for personal, family, household or agricultural use, as such terms are used in the Texas Finance
Code.

     5.22 Collateral. All of the Collateral is owned by the grantor of the security interest
therein in favor of the Administrative Agent, or such grantor has sufficient rights therein to
grant such security interest, free of any title defects or any Liens or interests of others, except
for (a) the Liens and security interests of the Administrative Agent and (b) Mortgage Permitted
Liens.

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Upon completion of the recordings contemplated by Section 4.02, the Administrative
Agent will have a perfected security interest in, or Lien on, all of the Collateral.

     5.23 Location of Borrower. As of the Closing Date, the Company’s, the Borrower’s and each
Lessor Subsidiary’s correct legal name, type of organization, jurisdiction of organization, state
organization number and federal employers identification number are set forth on Schedule
5.23. As of the Closing Date, the Company’s, the Borrower’s and each Lessor Subsidiary’s chief
executive office is located at the address set forth in Schedule 5.23. Each of the Company
and the Borrower shall, and shall cause each Lessor Subsidiary to, promptly (but in any event
within five (5) Business Days) immediately report to the Administrative Agent any change in such
Person’s name, type of organization, state organization number, jurisdiction of organization or
federal employers identification number or the address of such Person’s chief executive office.

     5.24 Leases. There is a Lease in force for each Financed Property, each Lease is in full
force and effect without amendment or modification from the form or copy delivered to the
Administrative Agent except for amendments permitted hereunder; no default by any party exists
under any such Lease that could result in termination of such Lease, nor has any event occurred
which, with the passage of time or the giving of notice, or both, would constitute such a default.
Schedule 1.01A is a complete and correct listing of all Leases as of the Closing Date.

     5.25 Security Interest. The Liens granted to the Administrative Agent (for the benefit of the
Secured Parties) are valid first priority Liens in the Collateral (subject only to Mortgage
Permitted Liens), and upon completion of the recordings contemplated by Section 4.02 will
be perfected in accordance with the requirements of all states in which the Borrower or the
applicable Lessor Subsidiary is organized or any item of the Collateral is located to the extent
that the filing of Uniform Commercial Code financing statements or fixture filings or the recording
of the Mortgages is sufficient to perfect such Lien.

     5.26 Solvency. Both before and after giving effect to the Loans hereunder, each Loan Party is
Solvent. On the Closing Date, both before and after giving effect to the Loans hereunder, each
Loan Party is Solvent.

ARTICLE VI.

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, or any Loan or other amount due
hereunder shall remain unpaid or unsatisfied, the Borrower, and the Company as to itself and its
Subsidiaries, covenant and agree that:

     6.01 Existence. Each of the Company and the Borrower will maintain and preserve, and except
as permitted by Section 7.03, will cause each other Loan Party to maintain and preserve,
its respective existence and good standing under the laws of its state of jurisdiction, as a
corporation or other form of business organization, as the case may be, and all rights, privileges,
licenses, permits, patents, patent rights, copyrights, trademarks, trade names,

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franchises and other authority to the extent material and necessary for the conduct of their
respective businesses in the ordinary course as conducted from time to time.

     6.02 Repair. Each of the Company and the Borrower will maintain, preserve and keep, and will
cause each other Loan Party to maintain, preserve and keep, all of its properties in good repair,
working order and condition (ordinary wear and tear excepted). Each of the Company and the
Borrower will make, and will cause each other Loan Party to make, all necessary and proper repairs,
renewals, replacements, additions, betterments and improvements thereto so that at all times the
efficiency thereof shall be fully preserved and maintained; the Company and the Borrower will at
all times do or cause to be done all things necessary to preserve, renew and keep in full force and
effect, and will cause each other Loan Party to do or cause to be done all things necessary to
preserve, renew and keep in full force and effect, the rights, licenses, permits, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its businesses; the
Company, the Borrower, each other Loan Party will maintain and operate such businesses in
substantially the manner in which they are presently conducted and operated (subject to changes in
the ordinary course of business); the Company, the Borrower, each other Loan Party will comply with
all laws and regulations applicable to the operation of such businesses whether now in effect or
hereafter enacted and with all other applicable laws and regulations except where the failure to
comply could not reasonably be expected to have a Material Adverse Effect; and the Company, the
Borrower, each other Loan Party will take all action which may be required to obtain, preserve,
renew and extend all licenses, permits and other authorizations which may be material to the
operation of such businesses.

     6.03 Insurance.

     (a) The Company will maintain, on a consolidated basis, insurance to such extent and against
such hazards and liabilities as is commonly maintained by companies similarly situated (and in any
event the Borrower will maintain such insurance). In addition to the insurance referred to above,
with respect to each Mortgaged Property, the Borrower will (and the Company and the Borrower shall
cause each Lessor Subsidiary to) maintain the following policies:

     (i) Prior to construction of any improvements on any Mortgaged Property, an “all-risk”,
completed value, non-reporting builder’s risk insurance policy or policies that provide
coverage similar to the foregoing must be submitted to the Administrative Agent. This
policy must be from a company and in an amount satisfactory to the Administrative Agent,
must have a vandalism and malicious mischief endorsement and must be sufficient to avoid the
application of any co-insurance provisions, must include provisions for a minimum 30-day
advance written notice of any intended policy cancellation or non-renewal, and must
designate the Administrative Agent as mortgagee and loss payee in a standard mortgagee
endorsement with the following address:

Bank of America, N.A., as Administrative Agent

2001 Clayton Road

Building B

Mailcode: CA4-702-02-25

Concord, CA 94520

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Attn: Monitoring and Compliance

     (ii) The Borrower covenants to (and the Company and the Borrower shall cause each
Lessor Subsidiary to) maintain or cause to be maintained, by the Borrower (or the Lessor
Subsidiary, as applicable) and, during the construction of any improvements on any Mortgaged
Property, the general contractor, general accident and public liability insurance against
all claims for bodily injury, death or property damage occurring upon, in or about any part
of such Mortgaged Property. The policies must be from companies and in amounts satisfactory
to the Administrative Agent. The contractor’s policy must include worker’s compensation
coverage in an amount sufficient to satisfy statutory requirements;

     (iii) An “all-risk” property insurance policy must be in effect, and an original
certificate from the issuing insurance company evidencing that the policy is in full force
and effect must be submitted to the Administrative Agent; provided that such insurance shall
include coverage for earthquakes and against wind damage on such terms as the Administrative
Agent may reasonably require. The policy must be from a company satisfactory to the
Administrative Agent, must be in an amount satisfactory to the Administrative Agent, must
eliminate all co-insurance provisions, must include a Replacement Cost and Agreed
Amount/Stipulated Value Endorsement, must include a Sinkhole Endorsement, if appropriate,
must include provisions for a minimum 30-day advance written notice to the Administrative
Agent of any intended policy cancellation or non-renewal, and must designate the
Administrative Agent as mortgagee and loss payee in a standard mortgagee endorsement, as its
interest may appear;

     (iv) If, and to the extent that, any Mortgaged Property is located within an area that
has been or is hereafter designated or identified as an area having special flood hazards as
defined in the Federal Flood Disaster Protection Act of 1973, as such act may from time to
time be amended and in effect, or pursuant to any other national or state program of flood
insurance, the Borrower shall (and the Company and the Borrower shall cause each Lessor
Subsidiary to) carry flood insurance with respect to such Mortgaged Property in an amount
not less than the maximum amount available under the Flood Disaster Protection Act of 1973
and the regulations issued pursuant thereto, as amended from time to time, in form complying
with the “insurance purchase” requirement of that Act;

     (v) Each such liability insurance policy shall name the Administrative Agent as an
additional insured party with respect to such Mortgaged Property, and each such casualty
insurance policy shall name the Administrative Agent as a loss payee, and shall provide by
way of endorsements, riders or otherwise that (i) proceeds will be payable to the
Administrative Agent as its interest may appear; (ii) such insurance policy shall be
renewed, if renewal is available, and shall not be canceled and further, shall not be
endorsed, altered or reissued to effect a change in coverage in any manner materially
adverse to the Administrative Agent, for any reason and to any extent whatsoever unless such
insurer shall have first given the Administrative Agent thirty (30) days’ prior written
notice thereof; (iii) such insurance policy shall not be impaired by any act or neglect of
the Borrower (or any Lessor Subsidiary) or any use of such Mortgaged Property for

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purposes more hazardous than are permitted by such policy; and (iv) the Administrative
Agent may, but shall not be obliged to, make premium payments to prevent any nonrenewal,
cancellation, endorsement, alteration or reissuance and such payments shall be accepted by
the insurer to prevent same;

     (vi) The Administrative Agent shall be furnished with the original of each such initial
policy or a certificate with a duplicate of such original policy coincident with the
execution of the Mortgage related to such Mortgaged Property and satisfactory evidence of
renewal thereof not less than thirty (30) days prior to the expiration of the initial or
each preceding renewal policy together with receipts or other evidence that the premiums
thereon have been paid, with the original of each renewal policy or a certificate with a
duplicate of such renewal policy to follow as soon as available or, in any such case, an
appropriate broker’s certificate in respect thereto. Upon request by Administrative Agent,
the Borrower shall (and the Company and the Borrower shall cause each Lessor Subsidiary to)
furnish to the Administrative Agent a statement certified by the Borrower (or the Lessor
Subsidiary, as applicable) or a duly authorized officer of the Borrower (or the Lessor
Subsidiary, as applicable) of the amounts of insurance maintained in compliance with this
Section 6.03, a general description of the risks covered by such insurance and of
the insurance company or companies which carry such insurance. In addition, the Borrower
will (and the Company and the Borrower shall cause each Lessor Subsidiary to) promptly
comply with any and all requirements of any insurer of any portion of any Mortgaged Property
and any and all rules and regulations of any insurance commission or board of fire
underwriters having jurisdiction over such Mortgaged Property; and

     (vii) Without limiting any of the other provisions of this Section 6.03, all
losses under, and the proceeds payable under, any policies of insurance that the Borrower
(or the Lessor Subsidiary, as applicable) may elect to obtain, whether or not required
hereunder, which insure, cover or relate to any Mortgaged Property, or any portion thereof,
shall be applied in the same manner and to the same extent as provided herein with respect
to any insurance required to be carried by the Borrower (or the Lessor Subsidiary, as
applicable).

     (b) Unless the Company or the Borrower provides the Administrative Agent with evidence of the
insurance coverage as required by this Agreement or any other Loan Document, the Administrative
Agent (at its discretion) may purchase insurance at the Company’s and the Borrower’s expense to
protect the Secured Parties’ interest. This insurance may, but need not, also protect the
Company’s and the Borrower’s interest. If the Collateral becomes damaged, the coverage the
Administrative Agent purchases may not pay any claim the Company, the Borrower or any of their
Subsidiaries makes or any claim made against the Company, the Borrower or any of their
Subsidiaries. The Company or the Borrower, as applicable, may later cancel this coverage by
providing evidence that the Company or the Borrower, as applicable, has obtained property coverage
elsewhere.

     (c) The Company and the Borrower (jointly and severally) are responsible for the cost of any
insurance purchased by the Administrative Agent. The cost of this insurance may be added to the
Obligations. If the cost is added to the Obligations, the interest rate provided in

52

 

Section 2.06(b)(i) shall apply to such added amount. The effective date of coverage
may be the date the Company’s prior coverage lapsed or the date the Company or the Borrower failed
to provide proof of coverage.

     (d) Each of the Company and the Borrower acknowledges that the coverage the Administrative
Agent purchases may be considerably more expensive than insurance the Company or the Borrower can
obtain on its own and may not satisfy any need for property damage coverage or any mandatory
liability insurance requirements imposed by applicable law.

     6.04 Obligations and Taxes. Subject to any additional requirements in any Mortgage, each of
the Company and the Borrower will pay and discharge and will cause each other Loan Party to pay and
discharge, when due, all taxes, assessments and governmental charges or levies imposed upon the
Company, the Borrower or such Loan Party, as the case may be, as well as all lawful claims for
labor, materials and supplies or otherwise unless and only to the extent that the Company, the
Borrower or such Loan Party, as the case may be, is contesting such taxes, assessments and
governmental charges, levies or claims in good faith and by appropriate proceedings and the
Company, the Borrower or such Loan Party has set aside on its books such reserves or other
appropriate provisions therefor as may be required by GAAP.

     6.05 Financial Statements; Reports. The Company will furnish to the Administrative Agent and
each Lender:

     (a) Annual Audit Reports. Within one hundred twenty (120) days after the end of each
fiscal year of the Company, to the extent not filed with the Securities and Exchange Commission, a
copy of the annual audit report of the Company and its Subsidiaries prepared on a consolidated
basis in conformity with GAAP and certified by an independent certified public accountant of
recognized national standing, to the extent any Unrestricted Subsidiaries exist, consolidating
financial statements for each of said Unrestricted Subsidiaries, and upon request by the
Administrative Agent or any Lender, unaudited annual financial statements with respect to the
Borrower;

     (b) Quarterly Financial Statements. Within sixty (60) days after the end of each
quarter (except the last quarter) of each fiscal year of the Company, to the extent not filed with
the Securities and Exchange Commission, a copy of the Form 10 Q of the Company for such quarter,
prepared in accordance with the rules, regulations and guidelines of the Securities and Exchange
Commission and including therein the consolidated financial statements of the Company and its
Subsidiaries, to the extent any Unrestricted Subsidiaries exist, consolidating financial statements
for each of said Unrestricted Subsidiaries, and upon request by the Administrative Agent or any
Lender, unaudited quarterly financial statements with respect to the Borrower, in each case subject
to normal year end audit adjustments in each case;

     (c) Officer’s Certificate. Together with the financial statements furnished by the
Company under Section 6.05(a) and Section 6.05(b), a Compliance Certificate
executed by the Company’s Chief Financial Officer or Treasurer dated the date of such annual audit
report or such quarterly financial statement, as the case may be, and including therewith the
calculations (and supporting documentation and/or backup information for such calculations) for all
financial

53

 

covenants set forth in ARTICLE VII hereof, and notices of all Swap Contracts to which
it is a party as of the date of such certificate;

     (d) SEC and Other Reports. Copies of each filing and report made by the Company, the
Borrower or any of their respective Subsidiaries with or to any securities exchange or the
Securities and Exchange Commission and each communication from the Company, the Borrower or any of
their respective Subsidiaries to shareholders generally, promptly upon the making thereof, to the
extent such filings and reports are not available on the Company’s website;

     (e) Intentionally omitted.

     (f) Intentionally omitted.

     (g) Intentionally omitted.

     (h) Requested Information. Promptly, from time to time, such other reports or
information as the Administrative Agent or any Lender may reasonably request.

     Each of the Company and the Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger may make available to the Lenders materials and/or information provided by or
on behalf of the Company and the Borrower hereunder (collectively, “Borrower Materials”) by
posting the Borrower Materials on IntraLinks or another similar electronic system (the
“Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have
personnel who do not wish to receive material non-public information with respect to the Company or
the Borrower, their Affiliates or their respective securities of any of the foregoing and who may
be engaged in investment and other market-related activities with respect to such Person’s
securities. Each of the Company and the Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page
thereof; (x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger, and the Lenders to treat such Borrower Materials
as not containing any material non-public information with respect to the Company or the Borrower
or their securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Investor”; and (z) the Administrative Agent and the Arranger shall be entitled
to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on
a portion of the Platform not designated “Public Investor”.

     6.06 Litigation and Other Notices. The Company will notify the Administrative Agent and the
Lenders in writing of any of the following immediately upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken by the Person(s) affected with
respect thereto:

     (a) Judgment. The entry of any judgment or decree against the Company, the Borrower
and/or any of their respective Subsidiaries if the aggregate amount of such judgment or decree
exceeds Five Million Dollars ($5,000,000) (after deducting the amount with respect to

54

 

which the Company, the Borrower or such Subsidiary is insured and with respect to which the
insurer has assumed responsibility in writing);

     (b) Suits and Proceedings. The filing or commencement of any action, suit,
investigation or proceeding, whether at law or in equity or by or before any court or any
Governmental Authority as to which there is a reasonable possibility of an adverse determination
and which, if adversely determined, could reasonably be expected to have a Material Adverse Effect;

     (c) Default. The occurrence of any Event of Default or Default, together with a
written explanation of the facts and circumstances associated therewith;

     (d) Material Adverse Change. The occurrence of any event which could reasonably be
expected to have a Material Adverse Effect;

     (e) Pension and Welfare Plans. The occurrence of a Reportable Event with respect to
any Plan; the institution of any steps by the Company, the Borrower or any of their respective
Subsidiaries or any ERISA Affiliate, the PBGC or any other Person to terminate any Plan if such
termination could reasonably be expected to result in a Material Adverse Effect; the institution of
any steps by the Company, the Borrower or any of their respective Subsidiaries or any ERISA
Affiliate to withdraw from any Plan if such withdrawal could reasonably be expected to result in a
Material Adverse Effect; the incurrence of any material increase in the contingent liability of the
Company, the Borrower or any of their respective Subsidiaries with respect to any post-retirement
welfare benefits that could reasonably be expected to have a Material Adverse Effect; or the
incurrence by the Company or any ERISA Affiliate of any liability under Section 4201 or 4243 of
ERISA for any withdrawal, partial withdrawal, reorganization or other event under any Multiemployer
Plan that could reasonably be expected to have a Material Adverse Effect;

     (f) Leases. (i) The entering into by the Borrower of any Lease after the Closing Date
or any amendment or other modification to any Lease (and a copy of any such Lease, amendment or
modification), (ii) the termination or expiration of any Lease, or (iii) any material adverse
change in the relationship between the Borrower and any lessee;

     (g) The occurrence of any material change in accounting policies or financial reporting
practices by the Company, the Borrower or any of their respective Subsidiaries;

     (h) Hazardous Materials. Any report, study, inspection or test that indicates the
presence of any Hazardous Materials on or about any Mortgaged Property or any adverse condition
relating to any Mortgaged Property, any Buildings or any such materials which presence or adverse
condition could reasonably be expected to have a Material Adverse Effect; and

     (i) Other Events. The occurrence of such other events as the Administrative Agent or
the Required Lenders may reasonably specify from time to time.

     6.07 ERISA. Each Loan Party will comply with the applicable provisions of ERISA except where
the failure to comply could not reasonably be expected to have a Material Adverse Effect.

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     6.08 Books, Records and Access. Each Loan Party will maintain complete and accurate books and
records in which full and correct entries in conformity with GAAP shall be made of all dealings and
transactions in relation to the business and activities of such Loan Party. Each Loan Party will
permit reasonable access by the Administrative Agent and each Lender, upon reasonable request, to
the books and records relating to such Loan Party during normal business hours, to permit or cause
to be permitted, the Administrative Agent and each Lender to make extracts from such books and
records, including, to the extent permissible without the relevant Loan Party being in breach
thereof, Master Franchise Agreements. Each Loan Party will also permit, or cause to be permitted,
upon reasonable request, any authorized representative designated by any Lender to discuss the
affairs, finances and condition of such Loan Party with such Person’s principal financial officers
and principal accounting officers and such other officers as such Loan Party shall deem
appropriate.

     6.09 Use of Proceeds. The Borrower shall use the proceeds of the Loans for only the purposes
described in Section 5.21. No Loans shall be used for any purpose which would be in
contravention of any Requirement of Law.

     6.10 Nature of Business. The Loan Parties will engage in substantially the same field of
business as they are engaged in on the date hereof, and except as permitted in Section
7.5(h), will refrain from engaging in, establishing or becoming in any way involved as a lender
in the business of automobile financing, sub-prime automobile financing or any other credit
transactions related to automobiles other than Retail Loan Guarantees.

     6.11 Compliance. The Loan Parties will comply with all statutes and governmental rules and
regulations applicable to them including all such statutes and government rules and regulations
relating to environmental pollution or to environmental regulation and control except where the
failure to comply could not reasonably be expected to have a Material Adverse Effect.

     6.12 Intentionally omitted.

     6.13 Intentionally omitted.

     6.14 Intentionally omitted.

     6.15 Further Assurances. Each of the Company and the Borrower shall, and shall cause each of
the Loan Parties to, to the extent applicable, execute, acknowledge, deliver, and record or file
such further instruments, including, without limitation, further security agreements, financing
statements, and continuation statements, and do such further acts as may be reasonably necessary,
desirable, or proper to carry out more effectively the purposes of this Agreement, and to protect
the Liens granted in this Agreement or the Loan Documents to which any of them respectively is a
party and against the rights or interests of third persons, and the Company and the Borrower
(jointly and severally) will pay all reasonable costs connected with any of the foregoing.

     6.16 Permitted Acquisitions; Subsidiary Guarantors.

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     (a) Subject to the remaining provisions of this Section 6.16 applicable thereto, the
Company may, from time to time after the Closing Date, make Acquisitions, as long as with respect
thereto each of the following conditions are satisfied (a “Permitted Acquisition”):

     (i) no Default or Event of Default is in existence at the time of the consummation of
such proposed Acquisition or would exist after giving effect thereto, and no other
agreement, contract or instrument to which any Loan Party is a party restricts such proposed
Acquisition; and

     (ii) for each acquisition involving the acquisition or creation of a direct or indirect
Restricted Subsidiary of the Company, (1) such Subsidiary shall be a Wholly Owned
Subsidiary, and (2) the Acquisition will not have the effect of causing or requiring any
direct or indirect Subsidiary of the Company to be engaged in the sale of New Motor Vehicles
of a different Manufacturer than the Manufacturer whose New Motor Vehicles such Subsidiary
was authorized to sell prior to the Acquisition.

     (b) The Company shall cause each Restricted Subsidiary (other than the Ford Borrowers, GPI
Associates Holdings, LLC, Group 1 Automotive Reinsurance Two, Ltd and Group 1 Reinsurance Ltd., any
other Subsidiary formed for purposes of reinsurance, and any dormant Subsidiaries having retained
equity of less than $50,000) that is created or is otherwise acquired to execute and deliver a
Guaranty Joinder Agreement and updated Schedules of the Agreement, if applicable, and the other
applicable Loan Documents, with the documentation to be in form and substance reasonably
satisfactory to the Administrative Agent. GPI Associates Holdings, LLC shall be excluded from the
requirements contained herein only so long as it does not acquire any assets or incur any
Indebtedness other than those assets (including additional interests in existing or similar assets)
and Indebtedness in place on the date hereof. Any Restricted Subsidiary and any Subsidiary formed
for the sole purpose of transacting specific asset securitizations shall be excluded from the
requirements contained herein unless such Subsidiary is a guarantor of obligations under the
Revolving Credit Facility. Notwithstanding the foregoing, in the event the Dealer/Manufacturer
Agreement or other written agreements with Manufacturers to which any Subsidiary is subject shall
prohibit or restrict any Subsidiary of the Company from entering into the Guaranty Joinder
Agreement, such affected Subsidiary shall not be required to be a party thereto.

     6.17 Ford Borrower and GM Borrower Dividends. On or before the last Business Day of each
fiscal quarter of the Company, the Company shall cause all GM Borrowers and Ford Borrowers to make
cash transfers to the Company or to their respective parent with a view toward making an ultimate
and concurrent cash transfers to the Company of all pre-tax profits in excess of working capital
reasonably required in the day to day operations of such GM Borrower or Ford Borrower, as
applicable or such amounts as may be required pursuant to a Dealer/Manufacturer Agreement or other
agreements with Manufacturers to which such GM Borrower or Ford Borrower, as applicable, is a
party.

     6.18 Leases. At all times, comply in all material respects with the terms and provisions of
the Leases of the Financed Properties, and cause such Leases to be kept in full force and effect
without termination, amendment or modification, except for (i) any modification or amendment of a
Lease made in the ordinary course of business consistent with past practices

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of the Loan Parties, and which amendment or modification is not materially adverse to the Loan
Parties, the Administrative Agent or the Lenders or (ii) renewals or extensions (A) on either
substantially the same terms as the existing Lease of a Financed Property, or (B) as otherwise
approved by the Administrative Agent in writing.

     6.19 Unimproved Real Property. With respect to each Financed Property constituting Unimproved
Real Property, the Borrower or the applicable Lessor Subsidiary shall commence construction on each
such Financed Property within (**) months of the date the applicable Financed Property enters the
Property Pool.

ARTICLE VII.

NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, or any Loan or other amount due
hereunder shall remain unpaid or unsatisfied, the Borrower, and the Company as to itself and as to
each of its Subsidiaries, covenants and agrees that:

     7.01 Indebtedness. Neither the Company nor any Subsidiary will incur, create, assume or
suffer to exist any Indebtedness, except:

     (a) the Notes and the Indebtedness and Obligations under this Agreement and the other Loan
Documents;

     (b) Indebtedness of any Loan Party existing at the Closing Date which is reflected in
Schedule 7.01(b) hereto (and does not fall within any other category in this Section
7.01) and all renewals and extensions thereof on substantially the same terms;

     (c) Indebtedness created under leases which, in accordance with GAAP, have been recorded
and/or should have been recorded on the books of the applicable Subsidiary as Capital Leases;

     (d) Indebtedness in connection with the purchase of personal property other than Motor
Vehicles;

     (e) Subordinated Indebtedness;

     (f) accounts payable (for the deferred purchase price of property or services) which are from
time to time incurred in the ordinary course of business and which are not in excess of ninety (90)
days past the invoice or billing date;

     (g) (A) Permitted Real Estate Debt, (B) any Guarantees by the Company of such Indebtedness and
(C) any Guarantees by any Subsidiary of such Indebtedness incurred by any Restricted Subsidiary;

     (h) Indebtedness of any Subsidiary of the Company in existence (but not incurred or created in
connection with a Permitted Acquisition) on the date on which such Subsidiary is acquired by the
Company, provided (i) neither the Company nor any of its other Subsidiaries has

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any obligation with respect to such Indebtedness, (ii) none of the properties of the Company
or any of its other Subsidiaries is bound with respect to such Indebtedness, (iii) the aggregate
amount of all such Subsidiary Indebtedness does not exceed 10% of Stockholders’ Equity, and (iv)
such Indebtedness may be prepaid only upon the payment of prepayment penalties or premiums in
excess of 5% of the principal amount of such Indebtedness;

     (i) Indebtedness secured by Liens upon any property hereafter acquired by the Company or any
of its Subsidiaries to secure Indebtedness in existence on the date of a Permitted Acquisition (but
not incurred or created in connection with such Permitted Acquisition), which Indebtedness is
assumed by such Person simultaneously with such Permitted Acquisition, which Liens extend only to
such property so acquired (and not to any after-acquired property) and with respect to which
Indebtedness neither the Company nor any of its Subsidiaries (other than the acquiring Person) has
any obligation;

     (j) Indebtedness owed by the Company or any of its Subsidiaries to the Company or to any other
Subsidiary;

     (k) any Retail Loan Guarantees; provided that the sum of (i) the aggregate principal amount of
all Retail Loan Guarantees plus (ii) Investments in seller financed notes in connection with Motor
Vehicles shall not exceed ten percent (10%) of Stockholders’ Equity;

     (l) contingent obligations (including Guarantees) by the Company of any Indebtedness of the
Restricted Subsidiaries permitted hereunder unless otherwise provided herein;

     (m) Indebtedness arising under any Service Agreement as such term is defined in Section
6.14;

     (n) Indebtedness of Unrestricted Subsidiaries to non-Affiliated Persons not secured by Liens
on any property of, and not Guaranteed by, the Company or any Restricted Subsidiary;

     (o) Indebtedness that constitutes a renewal, refinancing, replacement or extension of
Indebtedness of Loan Parties otherwise permitted hereunder; provided that the principal amount of
any such Indebtedness renewed, refinanced, replaced or extended shall not materially exceed the
amount outstanding immediately prior to such renewal, refinancing replacement or extension, and,
further provided, in the case of Subordinated Indebtedness, no such renewal, refinancing,
replacement or extension may shorten the maturity to a date that is earlier than six (6) months
after the Maturity Date or change any of the subordination provisions in a manner adverse to the
Lenders without the consent of Required Lenders;

     (p) Unsecured debt of the Company in an aggregate amount not to exceed Six Hundred Million and
No/100 Dollars ($600,000,000) outstanding at any time to the extent permitted under the Closing
Date Revolving Credit Agreement;

     (q) Indebtedness of the Company or any Restricted Subsidiary (other than the Borrower)
consisting of floor plan financing for Motor Vehicles, provided that such Indebtedness is not
secured by any of the Collateral;

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     (r) Indebtedness of any Restricted Subsidiary (other than the Borrower) created under a
qualified service loaner program with the financial affiliate of the Manufacturer of the Motor
Vehicles to be provided to such Loan Party (other than the Borrower) under such service loaner
program;

     (s) obligations (contingent or otherwise) of the Company, the Borrower or any Restricted
Subsidiary existing or arising under any Related Swap Contract; and

     (t) Indebtedness under the Revolving Credit Agreement in an amount not to exceed
$1,850,000,000 outstanding at any time.

     7.02 Liens. Neither the Company nor any Restricted Subsidiary will incur, create, assume or
permit to exist any Lien on any of its property or assets, whether owned at the date hereof or
hereafter acquired, or assign or convey any rights to or security interests in any future revenues,
except:

     (a) Liens pursuant to any Loan Document;

     (b) Liens securing Indebtedness permitted by Section 7.01(c), Section 7.01(d)
(which Liens extend only to property so purchased), Section 7.01(h), Section
7.01(i), Section 7.01(n), Section 7.01(q), Section 7.01(r) (which Liens
extend only to property under such qualified service loaner program) or Section 7.01(t)
(which Liens shall not extend to any of the Collateral);

     (c) Liens referred to in Section 5.16 and Mortgage Permitted Liens;

     (d) Liens securing Permitted Real Estate Debt and permitted guarantees thereof;

     (e) extensions, renewals and replacements of Liens referred to in Section 7.02(a),
(b), (c), (d) and (f) provided, that any such extension, renewal or
replacement Lien shall be limited to the property or assets covered by the Lien being extended,
renewed or replaced and that the Indebtedness secured by any such extension, renewal or replacement
lien shall be in an amount not greater than the amount of the Indebtedness secured by the original
Lien extended, renewed or replaced;

     (f) Certain rights of set-off in favor of a Manufacturer on amounts owing in connection with
Motor Vehicles purchased from such Manufacturer and in favor of suppliers and retail finance
institutions consistent with the Company’s existing business practices and in the ordinary course
of business; and

     (g) Liens existing under Qualified Sale/Leaseback Transactions, but only on the Property
subject of such transaction.

     7.03 Consolidations and Mergers. No Loan Party shall merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to
or in favor of any Person, except

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     (a) (i) any Loan Party may merge with the Company, provided that the Company shall be the
continuing or surviving Person, (ii) any Loan Party may merge with the Borrower provided that the
Borrower shall be the continuing or surviving Person (unless the Borrower is merging with the
Company), (iii) any Lessor Subsidiary may merge with the Company or the Borrower, provided that the
Company or the Borrower shall be the continuing or surviving Person, (iv) any Lessee Subsidiary may
merge with any Restricted Subsidiary, or (v) (subject to the provisions in clauses (i) and (ii)
above) any Loan Party may merge with any one or more such Loan Parties, provided that (A) if any
such Person merges with a Lessor Subsidiary, the Lessor Subsidiary shall be the continuing or
surviving Person, (B) if any such transaction shall be between a Loan Party which is a Wholly Owned
Subsidiary and a Loan Party which is not a Wholly Owned Subsidiary, the Wholly Owned Subsidiary
shall be the continuing or surviving Person and (C) nothing contained in this clause (v) shall be
deemed to permit Lessor Subsidiary to merge with any Person other than the Company or the Borrower;

     (b) (i) any Loan Party (other than the Borrower) may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Company, the Borrower or a Wholly Owned
Subsidiary that is a party to the Guaranty Agreement; (ii) the Borrower or any Lessor Subsidiary
may sell all or substantially all of its assets (upon voluntary liquidation or otherwise) to the
Company; and (iii) the Borrower or any Lessor Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise) other than assets comprising any Collateral to a
Loan Party; and

     (c) any Loan Party (other than the Borrower) may merge or consolidate with another Person
(that is not the Company or any of its Subsidiaries) if (x) the Loan Party involved in the merger
or the consolidation is the surviving Person or the Person who is the survivor becomes a Wholly
Owned Subsidiary as a result thereof, (y) if the Company or any Lessor Subsidiary is involved in
the merger or consolidation, the Company or such Lessor Subsidiary shall be the surviving Person
and (z) immediately prior to and after giving effect to such merger or consolidation, there exists
no Default or Event of Default;

provided, further, that if (w) the Borrower or any Lessor Subsidiary merges into
the Company pursuant to clause (a)(i) above, (x) any Lessor Subsidiary merges into the
Company or the Borrower pursuant to clause (a)(iii) above, (y) the Borrower or any Lessor
Subsidiary sells all or substantially all of its assets to the Company pursuant to clause
(b)(ii) above or (z) any Lessor Subsidiary sells all or substantially all of its assets to
another Loan Party pursuant to clause (b)(i) above, the Borrower, the Lessor Subsidiary,
the Company or such other Loan Party, as applicable, shall execute and/or deliver to the
Administrative Agent all such documents and opinions, deliver such endorsements of applicable title
policies, and take such other actions as may be required or as the Administrative Agent may
reasonably request in order to ensure the continued perfection and priority of the Administrative
Agent’s Lien on any property owned by the Borrower, the Lessor Subsidiary or the Company, as
applicable, immediately prior to such merger or sale, continued title insurance coverage with
respect to any applicable Financed Properties after giving effect to such merger or sale, and the
assumption by the purchasing or surviving Person of obligations under any applicable Mortgage;
provided further, that if any Lessee Subsidiary merges with any other Person
pursuant to clause (a) or (c) above, or sells all or substantially all of its assets to any other
Person pursuant to clause (b) above, then the Person who is the survivor of such merger or the
purchaser of such assets, as applicable, shall execute

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and/or deliver to the Administrative Agent a subordination and attornment agreement in
substantially the form of Exhibit G.

     7.04 Disposition of Assets. Neither the Company nor the Borrower will, or permit any Loan
Party to permit any Disposition (whether in one or a series of transactions) of any property or
assets (including Accounts, notes receivable, and/or chattel paper, with or without recourse) or
enter into any agreement so to do, except:

     (a) Dispositions of Motor Vehicles and other inventory in the ordinary course of business;

     (b) Dispositions of assets, properties or businesses by the Company or any of its Subsidiaries
to any other Subsidiary or to the Company provided, however, (i) other than Dispositions to newly
created Subsidiaries which become Revolving Facility Borrowers for purposes of complying with
Dealer/Manufacturer Agreements, any such Disposition made to a Ford Borrower or a GM Borrower shall
be made on an arms-length basis for fair market value for cash and only in the ordinary course of
business;

     (c) Dispositions of equipment and other property which is obsolete, worn out or no longer used
in or useful to such Person’s business, all in the ordinary course of business;

     (d) Dispositions occurring as the result of a casualty event, condemnation or expropriation;

     (e) Dispositions pursuant to Qualified Sale/Leaseback Transactions, provided that if any such
property so Disposed is in the Property Pool, the Borrower shall have made all necessary payments
contemplated by Section 7.14;

     (f) Dispositions of chattel paper to third parties pursuant to arms length transactions for
fair value in the ordinary course of business;

     (g) Dispositions as permitted in Section 7.03;

     (h) Dispositions in any year of other property, assets (including capital stock of its
Subsidiaries and Affiliates) or businesses of the Company not otherwise permitted by clauses (a)
through (g) of this Section 7.04; provided, that the proceeds realized from such
Disposition in any applicable year in excess of ten percent (10%) of the tangible assets of the
Company as of the beginning of such year are either reinvested within one (1) year in similar
assets or used to repay the Obligations; and

     (i) Dispositions of Financed Properties permitted by Section 7.14.

     7.05 Investments. Neither the Company nor any Restricted Subsidiary will make or permit to
exist any Investment in any Person, except for:

     (a) Permitted Acquisitions;

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     (b) extensions of credit in the nature of Accounts or notes receivable and/or chattel paper
arising from the sale of goods and services in the ordinary course of business;

     (c) shares of stock, obligations or other securities received in settlement of claims arising
in the ordinary course of business;

     (d) Investments in securities maturing within two (2) years and issued or fully guaranteed or
insured by the United States of America or any state or agency thereof;

     (e) Investments in commercial paper maturing two hundred seventy (270) days or less from the
date of acquisition thereof and having, at such date of acquisition, a credit rating of at least
A-1 from S&P and P-1 from Moody’s;

     (f) Investments in certificates of deposit, banker’s acceptances and time deposits maturing
within two (2) years from the date of acquisition thereof issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $100,000,000 and whose credit rating is
at least A-1 from S&P and P-1 from Moody’s, or any Lender;

     (g) Investments in negotiable instruments held by Comercia Securities, Inc. that are permitted
by the Revolving Credit Agreement;

     (h) Investments in seller financed notes in connection with Motor Vehicles; provided that the
sum of (i) the aggregate amount of all seller financed notes of the Loan Parties in connection with
Motor Vehicles plus (ii) the aggregate amount of all Retail Loan Guarantees shall not exceed ten
percent (10%) of Stockholders’ Equity;

     (i) Investments in Wholly Owned Subsidiaries of the Company;

     (j) Investments in less than Wholly Owned Subsidiaries in an aggregate amount of up to ten
percent (10%) of Stockholders’ Equity; and

     (k) Investments in joint ventures in an aggregate amount of up to five percent (5%) of
Stockholders’ Equity.

     7.06 Transactions with Affiliates. No Loan Party will enter into any transaction with any
Affiliate except upon terms no less favorable than the applicable Loan Party could obtain in an
arm’s-length transaction with a Person which was not an Affiliate.

     7.07 Other Agreements. No Loan Party will enter into any agreement containing any provision
which would be violated or breached by such Loan Party’s performance of its Obligations hereunder
or under any instrument or document delivered or to be delivered by the Loan Parties hereunder or
in connection herewith if the effect of such violation or breach could reasonably be expected to
have a Material Adverse Effect.

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     7.08 Fiscal Year; Accounting. No Loan Party will change its fiscal year without prior
notification to the Administrative Agent or change its method of accounting (other than immaterial
changes and methods and changes authorized or required by GAAP).

     7.09 Credit Standards. No Loan Party will modify in any material way and which is
inconsistent with normal industry practice, the credit standards and procedures, the collection
policies or the loss recognition procedures with respect to the creation or collection of Accounts,
notes received and/or chattel paper.

     7.10 Pension Plans. No Loan Party will engage in, or permit to exist or occur any other
condition, event or transaction with respect to any Plan which could reasonably be expected to have
a Material Adverse Effect. No Loan Party will take any action or fail to take any action the
result of which could be a past due liability to a Multiemployer Plan that could reasonably be
expected to have a Material Adverse Effect.

     7.11 Restricted Payments. Neither the Company nor any Restricted Subsidiary will declare or
make any Restricted Payment, if, in each case, immediately after giving effect thereto any Default
or Event of Default has occurred or would be created thereby.

     7.12 Fixed Charge Coverage Ratio. The Company will not permit (as of the end of any fiscal
quarter) its Fixed Charge Coverage Ratio to be less than 1.25 to 1.0, such ratio to be calculated
as of the end of each fiscal quarter of the Company based upon the four fiscal quarters immediately
preceding such date of determination.

     7.13 Senior Secured Leverage Ratio. The Company shall not, at any time, permit its Senior
Secured Leverage Ratio to be greater than 2.0 to 1.0.

     7.14 Disposition of Financed Properties. The Borrower and each Loan Party agree that it shall
not, and shall not permit any Lessor Subsidiary to, permit any Disposition (whether in one or a
series of transactions) of any Financed Property or any portion of any Financed Property, or enter
into any agreement so to do, except Permitted Financed Property Dispositions; provided
that, if (i) a payment default or Event of Default exists and (ii) the Administrative Agent is not
in agreement with the Borrower’s determination of the FMV or Disposition Closing Costs attributable
to such Financed Property, then (x) upon the request of the Administrative Agent (which such
request shall be in the Administrative Agent’s sole discretion), the Borrower shall place into
escrow (in a manner satisfactory to the Administrative Agent, the “escrow account”) an amount equal
to the difference between (1) 125% of the value of such Financed Property reflected in the original
FIRREA Appraisal with respect to such Financed Property (or if a subsequent FIRREA Appraisal has
been commissioned with respect to such Financed Property, 125% of the value reflected in such later
FIRREA Appraisal) (in either case, the “Baseline Appraisal”) and (2) the amount of the payment made
by the Borrower as required under clause (b)(ii) of the definition of “Permitted Financed Property
Disposition”; (y) the Administrative Agent shall commission a FIRREA Appraisal at the Borrower’s
expense with respect to such Financed Property (which such FIRREA Appraisal shall be acceptable to
the Administrative Agent in its sole discretion) (the “Commissioned Appraisal”) to determine any
amount required to be paid pursuant to clause (b) of the definition of “Permitted Financed Property
Disposition” and may make demand under or debit the escrow account in the amount of

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the difference between (1) the value reflected in the Commissioned Appraisal less Disposition
Closing Costs and (2) the amount of the payment made by the Borrower as required under clause
(b)(ii) of the definition of “Permitted Financed Property Disposition”. The Borrower acknowledges
that if the value of the applicable Financed Property reflected in any Commissioned Appraisal is
greater than 125% of the value reflected in the Baseline Appraisal, the Borrower shall pay to the
Administrative Agent an additional amount equal to the difference between (1) the value reflected
in the Commissioned Appraisal less Disposition Closing Costs and (2) the sum of (A) the amount
debited from the escrow account in accordance with this paragraph and (B) the amount of the payment
made by the Borrower as required under clause (b)(ii) of the definition of “Permitted
Financed Property Disposition”. The Administrative Agent will promptly return to the Borrower any
amounts remaining in the escrow account with respect to such Financed Property after determination
and debiting, if any, of the account in connection herewith. In the event of any Permitted
Financed Property Disposition in accordance with the terms hereof, such Financed Property shall be
removed from the Property Pool (and the Liens granted to the Administrative Agent in connection
therewith shall be released) and availability under the facility described in Section 2.01
hereof shall increase in the amount of such repayment (but in no event greater than the Aggregate
Commitments then in effect).

     7.15 Lessor Subsidiaries. No Loan Party shall permit any Person other than the Borrower, or a
Wholly Owned Subsidiary of the Company which is a Restricted Subsidiary, to own any equity interest
in any Lessor Subsidiary.

     7.16 Collateral. No Loan Party shall permit to exist any Lien or security interest on the
Collateral other than (i) the Liens and security interests of the Administrative Agent and (b)
Mortgage Permitted Liens.

     7.17 Leases. No Loan Party shall permit (i) any Person to occupy any Financed Property except
for the Lessee Subsidiary party to the Lease with respect to such Financed Property, which such
Lessor Subsidiary has executed and delivered to the Administrative Agent a subordination and
attornment agreement in substantially the form of Exhibit G or (ii) any sublease on any
Financed Property to exist other than a sublease to a Restricted Subsidiary which is a Wholly Owned
Subsidiary and has entered into a subordination and attornment agreement substantially in the form
of Exhibit G.

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

     8.01 Events of Default. Any of the following shall constitute an Event of Default:

     (a) any representation or warranty made or deemed made in or in connection with this
Agreement, the Notes, any of the Loan Documents or any of the Borrowings hereunder or in any
report, certificate, financial statement or other instrument furnished in connection with this
Agreement or the execution and delivery of the Notes or any of the Loan Documents or the making of
any of the Borrowings hereunder shall prove to have been false or misleading in any material
respect when made or deemed made;

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     (b) default shall be made in the payment of any principal of any Loan when and as the same
shall become due and payable pursuant to the terms of this Agreement, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;

     (c) default shall be made in the payment of any interest on any Loan or any Commitment Fees or
any other amount due under this Agreement other than principal of any Loan when and as the same
shall become due and payable which shall remain unremedied for a period of five (5) days from the
date due;

     (d) default shall be made in the due observance or performance of any covenant, condition or
agreement contained in Section 6.01, Section 6.06, Section 6.09,
Section 6.10 or in ARTICLE VII;

     (e) except as provided in Section 8.01(a) through Section 8.01(d), inclusive,
default shall be made in the due observance or performance of any other covenant, condition or
agreement to be observed or performed pursuant to this Agreement or any of the other Loan Documents
and such default shall continue unremedied for thirty (30) days after the earlier to occur of (i)
any Loan Party obtaining knowledge thereof and (ii) written notice thereof having been given to the
Company or the Borrower;

     (f) the Company or any Restricted Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking relief under any Debtor Relief Law, (ii) consent to the institution of,
or fail to contravene in a timely and appropriate manner to any such proceeding or the filing of
any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for such Person or for a substantial part of such Person’s
property or assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or
(vi) become unable, admit in writing its inability or fail generally to pay its debts as they
become due or (vii) take any corporate or other action for the purpose of effecting any of the
foregoing;

     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in
a court of competent jurisdiction seeking (i) relief in respect of the Company or any Restricted
Subsidiary, or of a substantial part of the property or assets of such Person, under any Debtor
Relief Law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any Restricted Subsidiary or any of its Subsidiaries or for a
substantial part of the property of any such Person or (iii) the winding-up or liquidation of the
Company or any Restricted Subsidiary; and such proceeding or petition shall continue undismissed
for sixty (60) days or an order or decree approving or ordering any of the foregoing shall continue
unstayed and in effect for sixty (60) days;

     (h) default (other than a default in the payment of principal or interest) shall occur with
respect to any Indebtedness of the Company or any Restricted Subsidiary, if the total amount of
such Indebtedness in default exceeds in the aggregate, an amount equal to Ten Million Dollars
($10,000,000) and if the effect of any such default shall be to accelerate, or to permit the holder
or obligee of any such Indebtedness (or any trustee on behalf of such holder or obligee) to
accelerate (with or without notice or lapse of time or both), the maturity of any such

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Indebtedness; or any payment of principal or interest, regardless of amount, on any
Indebtedness of the Company or any Restricted Subsidiary, which Indebtedness exceeds in the
aggregate an amount equal to Ten Million Dollars ($10,000,000), shall not be paid when due, whether
at maturity, by acceleration or otherwise (after giving effect to any period of grace as specified
in the instrument evidencing or governing such Indebtedness);

     (i) a Reportable Event or Reportable Events shall have occurred with respect to any Plan or
Plans that reasonably could be expected to result in a Material Adverse Effect or the incurrence by
the Company, the Borrower or any ERISA Affiliate of any liability under Section 4201 or 4243 of
ERISA for any withdrawal, partial withdrawal, reorganization or other event under any Multiemployer
Plan that could reasonably be expected to have a Material Adverse Effect;

     (j) there shall be entered against the Company or any Restricted Subsidiary one or more
judgments or decrees in excess of Ten Million Dollars ($10,000,000) in the aggregate at any one
time outstanding for the Company and all Restricted Subsidiaries and all such judgments or decrees
in the amount of such excess shall not have been vacated, discharged, stayed or bonded pending
appeal within sixty (60) days from the entry thereof, excluding those judgments or decrees for and
to the extent which the Company, any such Restricted Subsidiary is insured and with respect to
which the insurer has assumed responsibility in writing (subject to usual deductibles) or for and
to the extent which the Company or any such Loan Party is otherwise indemnified if the terms of
such indemnification are satisfactory to the Required Lenders;

     (k) there shall occur any material loss of or change to any Dealer/Manufacturer Agreement
between any Loan Party and a Manufacturer, which could reasonably be expected to result in a
Material Adverse Effect;

     (l) any of the Loan Documents shall cease to be legal, valid and binding agreements
enforceable against any Person other than the Administrative Agent or any Lender executing the same
in accordance with the respective terms thereof except as permitted by the terms hereof or thereof
or shall in any way be terminated or become or be declared ineffective or inoperative or shall in
any way whatsoever cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created thereby;

     (m) a Change of Control; or

     (n) there shall occur (i) any default under any Lease and such default is material (or, if
such default is not material, the Borrower (or the applicable Lessor Subsidiary) has made a claim
of default or has objected, either orally or in writing, to the conduct giving rise to such
default), and such default continues for 30 days, or (ii) an amendment or other modification to a
Lease which is materially adverse to the Borrower (or a Lessor Subsidiary, as applicable), the
Administrative Agent or the Lenders.

     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:

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     (a) declare the commitment of each Lender to make Loans to be terminated, whereupon such
commitments shall be terminated;

     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each of the Company and the Borrower;

     (c) exercise on behalf of itself, the Lenders all rights and remedies available to it or the
Lenders under the Loan Documents; provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower or the Company under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable, without further act of the Administrative Agent or any
Lender.

     8.03 Application of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable as set forth in
the proviso to Section 8.02), any amounts received on account of the Obligations shall be
applied by the Administrative Agent in the following order:

     First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article III, but excluding amounts payable
under Related Swap Contracts) payable to the Administrative Agent in its capacity as such;

     Second, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and amounts payable in respect of Related Swap
Contracts) payable to the Lenders (including fees, charges and disbursements of counsel to the
respective Lenders and amounts payable under Article III), ratably among them in proportion
to the respective amounts described in this clause Second payable to them;

     Third, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and other Obligations (other than in respect of Related Swap Contracts),
ratably among the Lenders in proportion to the respective amounts described in this clause
Third payable to them;

     Fourth, to payment of that portion of the Obligations constituting unpaid principal of
the Loans, ratably among the Lenders in proportion to the respective amounts described in this
clause Fourth held by them;

     Fifth, to payment of amounts owing under Related Swap Contracts, in each case to the
extent owing to any Related Swap Contract Provider arising under Related Swap Contracts that shall
have been terminated and as to which the Administrative Agent shall have received notice

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of such termination and the amount owing under the applicable Related Swap Contracts from the
applicable Related Swap Contract Provider;

     Sixth, to the payment of all other Obligations of the Loan Parties owing under or in
respect of the Loan Documents that are due and payable to the Administrative Agent and the other
Secured Parties, or any of them, on such date, ratably based on the respective aggregate amounts of
all such Obligations owing to the Administrative Agent and the other Secured Parties on such date;
and

     Last, the balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.

ARTICLE IX.

ADMINISTRATIVE AGENT

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

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

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

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

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

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Agent shall not be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document
or applicable law; and

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

     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii)
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrower or a Lender.

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

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

     9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or

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

     9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give
notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of
any such bank with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall notify the
Borrower and the Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations hereunder and under the
other Loan Documents (except that in the case of any collateral security held by the Administrative
Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor Administrative Agent
is appointed) and (2) all payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender directly, until such
time as the Required Lenders appoint a successor Administrative Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties
of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this Section). The fees payable by the
Company and the Borrower to a successor Administrative Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Company and the Borrower and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article and Section 10.04 shall continue in effect for the benefit
of such retiring Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the retiring
Administrative Agent was acting as Administrative Agent.

     9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make

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its own decisions in taking or not taking action under or based upon this Agreement, any other
Loan Document or any related agreement or any document furnished hereunder or thereunder.

     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, neither the Book
Manager nor the Lead Arranger listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except in its capacity,
as applicable, as the Administrative Agent or a Lender hereunder.

     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered,
by intervention in such proceeding or otherwise:

     (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such
other documents as may be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders and the Administrative Agent and their respective agents and counsel
and all other amounts due the Lenders and the Administrative Agent under Sections 2.07 and
10.04) allowed in such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 2.07
and 10.04.

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

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

     (a) to release any Lien on any property granted to or held by the Administrative Agent under
any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all
Obligations (other than contingent indemnification obligations), (ii) that is sold or to be sold as
part of or in connection with any sale permitted hereunder or under any other Loan Document
(including in connection with Permitted Financed Property Dispositions),

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or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by
the Required Lenders;

     (b) to subordinate any Lien on any property granted to or held by the Administrative Agent
under any Loan Document to the holder of any Lien on such property that is permitted by Section
7.02(b); and

     (c) to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty
Agreement (and to release any Lien or any property of such Subsidiary Guarantor) if such Person
ceases to be a Restricted Subsidiary as a result of a transaction permitted hereunder.

     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its interest in particular
types or items of property, or to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty Agreement pursuant to this Section 9.10.

ARTICLE X.

MISCELLANEOUS

     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Company, the Borrower or any other Loan Party
therefrom, shall be effective unless in writing signed by the Required Lenders and the Company, the
Borrower or the applicable Loan Party, as the case may be, and notice and an executed copy thereof
given to the Administrative Agent, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, however,
that no such amendment, waiver or consent shall:

     (a) waive any condition set forth in Section 4.01(a) without the written consent of
each Lender;

     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender;

     (c) postpone any date fixed by this Agreement or any other Loan Document for any payment or
mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of
them) hereunder or under any other Loan Document without the written consent of each Lender
directly affected thereby;

     (d) reduce the principal of, or the rate of interest specified herein on, any Loan, or
(subject to clause (ii) of the second proviso to this Section 10.01) any fees or other
amounts payable hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest at the Default Rate;

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     (e) change Section 8.03 in a manner that would alter the pro rata sharing of payments
required thereby without the written consent of each Lender;

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

     (g) release all or substantially all of the Collateral in any transaction or series of related
transactions or all or substantially all of the value of the Subsidiary Guaranty Agreement without
the written consent of each Lender, except to the extent the release of any Subsidiary Guarantor is
permitted pursuant to Section 9.10 or the release of Collateral is permitted pursuant to
Permitted Financed Property Dispositions (in which in either case such release may be made by the
Administrative Agent acting alone);

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any other Loan Document;
and (ii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or extended without the
consent of such Lender.

     10.02 Notices; Effectiveness; Electronic Communication.

     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

     (i) if to the Company, the Borrower or the Administrative Agent to the address,
telecopier number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

     (ii) if to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection (b).

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

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

     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its
Related Parties (collectively, the “Agent Parties”) have any liability to the Company, the
Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of the Company’s, the Borrower’s or
the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Agent Party; provided, however, that in no
event shall any Agent Party have any liability to the Company, the Borrower, any Lender or any
other Person for indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).

     (d) Change of Address, Etc. Each of the Company, the Borrower and the Administrative
Agent may change its address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by notice to the
Company, the Borrower and the Administrative Agent. In addition,

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each Lender agrees to notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to
cause at least one individual at or on behalf of such Public Lender to at all times have selected
the “Private Side Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance with such Public
Lender’s compliance procedures and applicable Law, including United States Federal and state
securities Laws, to make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material non-public
information with respect to the Company, the Borrower or their respective securities for purposes
of United States Federal or state securities laws.

     (e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Company and the Borrower (jointly and severally) shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each notice purportedly
given by or on behalf of the Company or the Borrower. All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the Administrative
Agent, and each of the parties hereto hereby consents to such recording.

     10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to
exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided
by law.

     10.04 Expenses; Indemnity; Damage Waiver.

     (a) Costs and Expenses. The Company and the Borrower (jointly and severally) shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent) and internally allocated costs incurred by the Administrative Agent and its
Affiliates for the review of environmental reports, in each case in connection with the syndication
of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender (including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan

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Documents, including its rights under this Section, or (B) in connection with the Loans made
hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

     (b) Indemnification by the Company and the Borrower. The Company and the Borrower
(jointly and severally) shall indemnify the Administrative Agent (and any sub-agent thereof) and
each Lender and each Related Party of any of the foregoing Persons (each such Person being called
an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses (including the fees, charges and disbursements of
any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Company, the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the consummation of the
transactions contemplated hereby or thereby or, in the case of the Administrative agent (and any
sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any
actual or alleged presence or release of Hazardous Materials on or from any property owned or
operated by the Company, the Borrower or any of their respective Subsidiaries (other than
Environmental Liability relating to a Financed Property, which indemnity shall be as set forth in
the Mortgage for such Financed Property), or any Environmental Liability related in any way to the
Company, the Borrower or any of their respective Subsidiaries (other than Financed Property, which
indemnity shall be as set forth in the Mortgage for such Financed Property), or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third party or by the
Company, the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party
thereto, 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 INDEMNITEE; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that (x) such losses, claims,
damages, liabilities or related expenses (1) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee or (2) result from a claim brought by the Company, the Borrower or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder
or under any other Loan Document, if the Company, the Borrower or such Loan Party has obtained a
final and nonappealable judgment in its favor on such claim as determined by a court of competent
jurisdiction or (y) to the extent that such losses, claims, damages, liabilities or related
expenses arising under clause (iii) result from any action or inaction of the Lenders following a
transfer of title by foreclosure or deed in lieu of foreclosure of the respective Financed Property
associated with such losses, claims, damages, liabilities or related expenses (unless such losses,
claims, damages, liabilities or related expenses are found in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from the Borrower’s, the Company’s or any
Subsidiary’s gross negligence or willful misconduct).

     (c) Reimbursement by Lenders. To the extent that the Company or the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this

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Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related
Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party
of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection
with such capacity. The obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.10(d).

     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, neither the Company nor the Borrower shall assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising
from the use by unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby other than for direct or actual damages resulting
from the gross negligence of willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.

     (e) Payments. All amounts due under this Section shall be payable not later than ten
Business Days after demand therefor.

     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments
and the repayment, satisfaction or discharge of all the other Obligations.

     10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Company or
the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or
required (including pursuant to any settlement entered into by the Administrative Agent or such
Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection
with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such setoff had not
occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the date such payment
is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in
full of the Obligations and the termination of this Agreement.

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     10.06 Successors and Assigns.

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

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

          (i) Minimum Amounts.

     (A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the case
of an assignment to a Lender, an affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and

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

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

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

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     (A) the consent of the Borrower (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund; and

     (B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required if such assignment is to be a
Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with
respect to such Lender.

     (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment. The assignee, if it is not a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.

     (v) No Assignment to Borrower. No such assignment shall be made to the
Company, the Borrower or any of their respective Affiliates or Subsidiaries.

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

     Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each Assignment and Assumption,
the assignee thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be
entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04
with respect to facts and circumstances occurring prior to the effective date of such assignment.
Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this subsection 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 subsection (d) of
this Section.

     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the Register shall
be conclusive, and the Company, the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.

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The Register shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

     (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Company, the Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Company, the Borrower or any of the Company’s or the Borrower’s
respective Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the Company, the Borrower,
the Administrative Agent and the 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, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this Section,
each of the Company and the Borrower agrees that each Participant shall be entitled to the benefits
of Sections 3.01 and 3.04 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to Section
2.11 as though it were a Lender.

     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 3.01 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e) as though it were a Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) 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 shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.

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

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applicable law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other similar state laws
based on the Uniform Electronic Transactions Act.

     10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement or
any Eligible Assignee invited to be a Lender pursuant to Section 2.13(c) or (ii) any actual
or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates
on a nonconfidential basis from a source other than the Company or the Borrower.

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

     Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may
include material non-public information concerning the Company, the Borrower or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of material
non-public information and (c) it will handle such material non-public information in accordance
with applicable Law, including United States Federal and state securities Laws.

     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each
Lender and each of their respective Affiliates is hereby authorized at any time and from time to
time, after obtaining the prior written consent of the Administrative Agent, to the fullest

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

     10.09 Interest Rate Limitation. Each provision in this Agreement and each other Loan Document
is expressly limited so that in no event whatsoever shall the amount contracted for, charged, paid,
or otherwise agreed to be paid, or received to the Administrative Agent or any Lender for the use,
forbearance or detention of the money to be loaned under this Agreement or any Loan Document or
otherwise (including any sums paid as required by any covenant or obligation contained herein or in
any other Loan Document which is for the use, forbearance or detention of such money), exceed that
amount of money which would cause the effective rate of interest to exceed the Highest Lawful Rate,
and all amounts owed under this Agreement and each other Loan Document shall be held to be subject
to reduction to the effect that such amounts so paid or agreed to be paid which are for the use,
forbearance or detention of money under this Agreement or such Loan Document shall in no event
exceed that amount of money which would cause the effective rate of interest to exceed the Highest
Lawful Rate. Anything in this Agreement, any Note or any other Loan Document to the contrary
notwithstanding, none of the Loan Parties shall ever be required to pay unearned interest on any
Note and shall never be required to pay interest on such Note at a rate in excess of the Highest
Lawful Rate, and if the effective rate of interest which would otherwise be payable under this
Agreement, such Note and the other Loan Documents would exceed the Highest Lawful Rate, or if the
holder of such Note shall receive any unearned interest or shall receive monies that are deemed to
constitute interest which would increase the effective rate of interest payable by the Loan Parties
under this Agreement, such Note or Loan Document to a rate in excess of the Highest Lawful Rate,
then (a) the amount of interest which would otherwise be payable by the Loan Parties under this
Agreement, such Note or any Loan Document shall be reduced to the amount allowed under applicable
law, and (b) any unearned interest paid by the Loan Parties or any interest paid by the Loan
Parties in excess of the Highest Lawful Rate shall be credited on the principal of such Note (or,
if the principal amount of such Note shall have been paid in full, refunded to the Loan Parties).
It is further agreed that, without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received by any Lender under the Notes held by it, or under
this Agreement, are made for the purpose of determining whether such rate exceeds the Highest
Lawful Rate applicable to such Lender (such Highest Lawful Rate being such Lender’s “Maximum
Permissible Rate”), and shall be made, to the extent permitted by usury laws applicable to such
Lender (now or hereafter enacted), by amortizing, prorating and spreading

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during the period of the full stated term of the Loans evidenced by said Notes all interest at
any time contracted for, charged or received by such Lender in connection therewith. If at any
time and from time to time (i) the amount of interest payable to any Lender on any date shall be
computed at such Lender’s Maximum Permissible Rate pursuant to this Section and (ii) in respect of
any subsequent interest computation period the amount of interest otherwise payable to such Lender
would be less than the amount of interest payable to such Lender computed at such Lender’s Maximum
Permissible Rate, then the amount of interest payable to such Lender in respect of such subsequent
interest computation period shall continue to be computed at such Lender’s Maximum Permissible Rate
until the total amount of interest payable to such Lender shall equal the total amount of interest
which would have been payable to such Lender if the total amount of interest had been computed
without giving effect to this Section.

     10.10 Counterparts; Effectiveness. This Agreement and the other Loan Documents may be
executed in counterparts (and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. Except as provided in Section 4.01, this Agreement and the other Loan Documents
shall become effective when they shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement and any other Loan Document by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement and the other Loan Documents.

     10.11 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by the Administrative Agent
and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or
on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

     10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04,
or if the Company or the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender gives a notice under Section 3.02, or if any Lender is a Defaulting Lender or if any
other circumstance exists hereunder that gives the Company or the Borrower the right to replace a

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Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and consents required
by, Section 10.06), all of its interests, rights and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:

     (a) the Borrower or the assignee Lender shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);

     (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and
under the other Loan Documents from the assignee (to the extent of such outstanding principal and
accrued interest and fees), the Borrower (in the case of all other amounts);

     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and

     (d) such assignment does not conflict with applicable Laws.

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

     10.14 Governing Law; Jurisdiction; Etc.

     (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS.

     (b) SUBMISSION TO JURISDICTION. EACH OF THE COMPANY AND THE BORROWER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF TEXAS SITTING IN HARRIS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT OR

85

 

ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

     (c) WAIVER OF VENUE. EACH OF THE COMPANY AND THE BORROWER IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF
THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.

     (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

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

     10.16 California Judicial Reference. If any action or proceeding is filed in a court of the
State of California by or against any party thereto in connection with any of the transactions
contemplated by this Agreement or any other Loan Document, (a) the court shall, and is hereby
directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to
a referee (who shall be a single active or retired judge) to hear and determine all of the issues
in such action or proceeding (whether of fact or of law) and to report a statement of decision
provided that at the option of any party to such proceeding, any such issues pertaining to a
“provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard
and determined by the court, and (b) without limiting the generality of Section 10.04, the

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Company and the Borrower (jointly and severally) shall be solely responsible to pay all fees
and expenses of any referee appointed in such action or proceeding.

     10.17 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment, waiver or other
modification hereof or of any other Loan Document), each of the Company and the Borrower
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the
arranging and other services regarding this Agreement provided by the Administrative Agent and the
Arranger, are arm’s-length commercial transactions between the Company, the Borrower and their
respective Affiliates, on the one hand, and the Administrative Agent and the Arranger, on the other
hand, (B) each of the Company and the Borrower has consulted its own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate, and (C) each of the Company and the
Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of
the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative
Agent and the Arranger each is and has been acting solely as a principal and, except as expressly
agreed in writing by the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Company, the Borrower or any of their respective Affiliates or
any other Person and (B) neither the Administrative Agent nor the Arranger has any obligation to
the Company, the Borrower or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in the other Loan
Documents and (iii) the Administrative Agent and the Arranger and their respective Affiliates may
be engaged in a board range of transactions that involve interests that differ from those of the
Company, the Borrower and their respective Affiliates, and neither the Administrative Agent nor the
Arranger has any obligation to disclose any of such interests to the Company and the Borrower or
any of their respective Affiliates. To the fullest extent permitted by Law, each of the Company
and the Borrower hereby waives and releases any claims that it may have against the Administrative
Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

     10.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined)
and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the
Company and the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies the Company and the Borrower, which information includes the
name and address of the Company and the Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify the Company and the Borrower in accordance
with the Act.

     10.19 Time of the Essence. Time is of the essence of the Loan Documents.

     10.20 ENTIRE AGREEMENT. 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 UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 
	 	GROUP 1 REALTY, INC., as the Borrower

 	 
	 	By:  	/s/ John C. Rickel
 	 
	 	Name:  	John C. Rickel 	 
	 	Title:  	President 	 
	 
	 	GROUP 1 AUTOMOTIVE, INC.

 	 
	 	By:  	/s/ John C. Rickel
 	 
	 	Name:  	John C. Rickel 	 
	 	Title:  	Senior Vice President & CFO 	 
	 

CREDIT AGREEMENT

Signature Page

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	/s/ Ronaldo Naval
 	 
	 	Name:  	Ronaldo Naval 	 
	 	Title:  	Vice President 	 
	 

CREDIT AGREEMENT

Signature Page

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender

 	 
	 	By:  	/s/ M. Patricia Kay
 	 
	 	Name:  	M. Patricia Kay 	 
	 	Title:  	Senior Vice President 	 
	 

CREDIT AGREEMENT

Signature Page

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