Document:

Exhibit 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF OCTOBER 5, 2006

By and Among

RM
RESTAURANT HOLDING CORP.,

as Holdings

REAL MEX
RESTAURANTS, INC.,

as Company,

THE LENDERS
PARTY HERETO FROM TIME TO TIME,

as Lenders,

AND

CREDIT SUISSE,

as Administrative Agent, Sole Bookrunner and Sole Lead
Arranger

 

$65,000,000 TERM LOAN FACILITY

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1. DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Certain Defined Terms

  	
   

  	
  2

  
	
  1.2

  	
   

  	
  Defined Terms; Accounting Terms; Utilization of GAAP
  for Purposes of Calculations Under Agreement

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND TERM
  LOANS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Term Loans

  	
   

  	
  23

  
	
  2.2

  	
   

  	
  Interest on the Term Loans

  	
   

  	
  25

  
	
  2.3

  	
   

  	
  Fees

  	
   

  	
  27

  
	
  2.4

  	
   

  	
  Repayments and Prepayments; General Provisions
  Regarding Payments

  	
   

  	
  28

  
	
  2.5

  	
   

  	
  Use of Proceeds

  	
   

  	
  32

  
	
  2.6

  	
   

  	
  Special Provisions Governing Eurodollar Rate Loans

  	
   

  	
  33

  
	
  2.7

  	
   

  	
  Increased Costs; Taxes

  	
   

  	
  35

  
	
  2.8

  	
   

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3. CONDITIONS TO EFFECTIVENESS

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Conditions to Effectiveness on the Restatement Date

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND WARRANTIES

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Organization, Powers, Qualification, Good Standing,
  Business and Subsidiaries

  	
   

  	
  43

  
	
  4.2

  	
   

  	
  Authorization, etc

  	
   

  	
  43

  
	
  4.3

  	
   

  	
  Financial Condition; Projections

  	
   

  	
  44

  
	
  4.4

  	
   

  	
  No Material Adverse Change; No Restricted Payments

  	
   

  	
  45

  
	
  4.5

  	
   

  	
  Title to Properties; Liens; Real Property;
  Intellectual Property

  	
   

  	
  45

  
	
  4.6

  	
   

  	
  Litigation; Compliance with Law

  	
   

  	
  46

  
	
  4.7

  	
   

  	
  Payment of Taxes

  	
   

  	
  46

  
	
  4.8

  	
   

  	
  Performance of Agreements; Materially Adverse
  Agreements

  	
   

  	
  46

  
	
  4.9

  	
   

  	
  Governmental Regulation

  	
   

  	
  47

  
	
  4.10

  	
   

  	
  Securities Activities

  	
   

  	
  47

  
	
  4.11

  	
   

  	
  ERISA

  	
   

  	
  47

  
	
  4.12

  	
   

  	
  Certain Fees

  	
   

  	
  47

  
	
  4.13

  	
   

  	
  Environmental Matters

  	
   

  	
  48

  
	
  4.14

  	
   

  	
  Employee Matters

  	
   

  	
  48

  
	
  4.15

  	
   

  	
  Solvency

  	
   

  	
  48

  
	
  4.16

  	
   

  	
  Transaction Documents

  	
   

  	
  48

  
	
  4.17

  	
   

  	
  Disclosure

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5. AFFIRMATIVE COVENANTS

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Financial Statements and Other Reports and Notices

  	
   

  	
  49

  
	
  5.2

  	
   

  	
  Corporate Existence; Maintenance of Properties

  	
   

  	
  51

  

 

 i
 

 

 

	
  5.3

  	
   

  	
  Taxes

  	
   

  	
  52

  
	
  5.4

  	
   

  	
  Insurance

  	
   

  	
  52

  
	
  5.5

  	
   

  	
  Inspection

  	
   

  	
  53

  
	
  5.6

  	
   

  	
  Compliance with Laws, Contracts, Licenses, and Permits

  	
   

  	
  53

  
	
  5.7

  	
   

  	
  Environmental Laws

  	
   

  	
  53

  
	
  5.8

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  55

  
	
  5.9

  	
   

  	
  Reporting

  	
   

  	
  55

  
	
  5.10

  	
   

  	
  Use of Proceeds

  	
   

  	
  56

  
	
  5.11

  	
   

  	
  Further Assurances

  	
   

  	
  56

  
	
  5.12

  	
   

  	
  Conduct of Business; Stores

  	
   

  	
  56

  
	
  5.13

  	
   

  	
  New Subsidiaries

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6. NEGATIVE COVENANTS

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Indebtedness

  	
   

  	
  57

  
	
  6.2

  	
   

  	
  Liens and Related Matters

  	
   

  	
  58

  
	
  6.3

  	
   

  	
  Investments

  	
   

  	
  60

  
	
  6.4

  	
   

  	
  Restricted Payments

  	
   

  	
  61

  
	
  6.5

  	
   

  	
  Financial Covenants

  	
   

  	
  62

  
	
  6.6

  	
   

  	
  Restriction on Fundamental Changes; Asset Sales

  	
   

  	
  63

  
	
  6.7

  	
   

  	
  Sales and Lease-Backs

  	
   

  	
  63

  
	
  6.8

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  64

  
	
  6.9

  	
   

  	
  Change in Fiscal Year

  	
   

  	
  64

  
	
  6.10

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  64

  
	
  6.11

  	
   

  	
  Holdings Credit Documents, Senior Secured Note
  Documents and Revolving Credit Documents

  	
   

  	
  64

  
	
  6.12

  	
   

  	
  Business of Holdings

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7. EVENTS OF DEFAULT

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Failure to Make Payments When Due

  	
   

  	
  65

  
	
  7.2

  	
   

  	
  Default in Other Agreements

  	
   

  	
  66

  
	
  7.3

  	
   

  	
  Breach of Certain Covenants

  	
   

  	
  66

  
	
  7.4

  	
   

  	
  Breach of Representation or Warranty

  	
   

  	
  66

  
	
  7.5

  	
   

  	
  Other Defaults Under Loan Documents

  	
   

  	
  66

  
	
  7.6

  	
   

  	
  Involuntary Bankruptcy; Appointment of Receiver, etc

  	
   

  	
  66

  
	
  7.7

  	
   

  	
  Voluntary Bankruptcy; Appointment of Receiver, etc

  	
   

  	
  67

  
	
  7.8

  	
   

  	
  Judgments and Attachments

  	
   

  	
  67

  
	
  7.9

  	
   

  	
  Dissolution

  	
   

  	
  67

  
	
  7.10

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  67

  
	
  7.11

  	
   

  	
  Invalidity of the Guarantee Agreement

  	
   

  	
  67

  
	
  7.12

  	
   

  	
  Change of Control

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8. ADMINISTRATIVE AGENT

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Appointment

  	
   

  	
  68

  
	
  8.2

  	
   

  	
  Rights as a Lender

  	
   

  	
  69

  
	
  8.3

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  69

  
	
  8.4

  	
   

  	
  Reliance by the Administrative Agent

  	
   

  	
  70

  
	
  8.5

  	
   

  	
  Delegation of Duties

  	
   

  	
  70

  
	
  8.6

  	
   

  	
  Resignation of Administrative Agent

  	
   

  	
  70

  

 

 ii
 

 

 

	
  8.7

  	
   

  	
  Non-Reliance on Agent and Other Lenders

  	
   

  	
  71

  
	
  8.8

  	
   

  	
  Withholding

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9. MISCELLANEOUS

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Assignments and Participations in Term Loans

  	
   

  	
  71

  
	
  9.2

  	
   

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  74

  
	
  9.3

  	
   

  	
  Right of Set-Off

  	
   

  	
  75

  
	
  9.4

  	
   

  	
  Sharing of Payments by Lenders

  	
   

  	
  76

  
	
  9.5

  	
   

  	
  Amendments and Waivers

  	
   

  	
  76

  
	
  9.6

  	
   

  	
  Independence of Covenants

  	
   

  	
  77

  
	
  9.7

  	
   

  	
  Notices

  	
   

  	
  78

  
	
  9.8

  	
   

  	
  Survival of Representations, Warranties and
  Agreements

  	
   

  	
  78

  
	
  9.9

  	
   

  	
  Failure or Indulgence Not Waiver; Remedies
  Cumulative

  	
   

  	
  79

  
	
  9.10

  	
   

  	
  Marshalling; Payments Set Aside

  	
   

  	
  79

  
	
  9.11

  	
   

  	
  Severability

  	
   

  	
  79

  
	
  9.12

  	
   

  	
  Obligations Several; Independent Nature of the
  Lenders’ Rights

  	
   

  	
  79

  
	
  9.13

  	
   

  	
  Maximum Amount

  	
   

  	
  79

  
	
  9.14

  	
   

  	
  Headings

  	
   

  	
  80

  
	
  9.15

  	
   

  	
  Governing Law

  	
   

  	
  80

  
	
  9.16

  	
   

  	
  Consent to Jurisdiction and Service of Process

  	
   

  	
  80

  
	
  9.17

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  81

  
	
  9.18

  	
   

  	
  Confidentiality

  	
   

  	
  81

  
	
  9.19

  	
   

  	
  Counterparts; Integration; Effectiveness; Electronic
  Execution

  	
   

  	
  82

  
	
  9.20

  	
   

  	
  Restatement

  	
   

  	
  82

  

 

 iii
 

 

EXHIBITS

	
  I

  	
   

  	
  FORM OF ASSIGNMENT AGREEMENT

  
	
  II

  	
   

  	
  FORM OF NOTICE OF BORROWING

  
	
  III

  	
   

  	
  FORM OF NOTICE OF CONVERSION/CONTINUATION

  
	
  IV

  	
   

  	
  FORM OF GUARANTEE AGREEMENT

  
	
  V

  	
   

  	
  FORM OF TERM NOTE

  
	
  VI

  	
   

  	
  FORM OF FINANCIAL CONDITION CERTIFICATE

  
	
  VII

  	
   

  	
  FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES

  
	
  VIII

  	
   

  	
  FORM OF COMPLIANCE CERTIFICATE

  

 

SCHEDULES

	
  2.1A

  	
   

  	
  TERM LOAN COMMITMENTS

  
	
  3.1N

  	
   

  	
  CORPORATE STRUCTURE; CAPITAL STRUCTURE; OWNERSHIP

  
	
  3.1P

  	
   

  	
  LITIGATION

  
	
  4.1D

  	
   

  	
  CERTAIN REGISTRATION RIGHTS

  
	
  4.4

  	
   

  	
  CERTAIN RESTRICTED PAYMENTS

  
	
  4.6

  	
   

  	
  COMPLIANCE WITH LAW

  
	
  4.11

  	
   

  	
  ERISA

  
	
  6.1

  	
   

  	
  CERTAIN EXISTING INDEBTEDNESS

  
	
  6.2

  	
   

  	
  CERTAIN EXISTING LIENS

  
	
  6.3

  	
   

  	
  CERTAIN EXISTING INVESTMENTS

  

 

 iv

AMENDED AND RESTATED CREDIT
AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT is
dated as of October 5, 2006 and entered into by and among RM RESTAURANT HOLDING CORP., a Delaware
corporation (“Holdings”), REAL MEX RESTAURANTS, INC., a Delaware
corporation (the “Company”),
THE BANKS, FINANCIAL INSTITUTIONS AND OTHER
ENTITIES PARTY HERETO FROM TIME TO TIME AS LENDERS and CREDIT SUISSE (“CS”), as administrative agent for the
Lenders (and in such capacity and together with its successors, the “Administrative Agent”), and as sole
bookrunner and lead arranger (in such capacity, the “Lead Arranger”).

WHEREAS, Holdings and
the Company have entered into that certain Agreement and Plan of Merger (the “Merger Agreement”) dated as of August
21, 2006 (the “Merger Date”),
by and among Holdings, the Company, RM Integrated, Inc., a wholly-owned
subsidiary of Holdings (“Newco”), and Bruckmann, Rosser, Sherrill & Co.,
Inc., as representative for the benefit of the Former Securities Holders (as
defined therein) (collectively, the “Sellers”)
pursuant to which Newco merged with and into the Company on the terms and
subject to the conditions set forth in the Merger Agreement, with the Company
being the surviving corporation of the transactions contemplated therein and
becoming a wholly-owned subsidiary of Holdings (the “Merger”);

WHEREAS, in connection
with the Merger, Holdings incurred the Bank of Montreal Indebtedness to pay the
Sellers in cash the consideration for the Merger pursuant to the terms of the
Merger Agreement (the “Merger Consideration”) and transaction fees and
expenses;

WHEREAS, Holdings will
obtain a senior unsecured term loan facility in an aggregate principal amount
of up to $115,000,000 pursuant to the Holdings Credit Agreement to refinance
certain of the Bank of Montreal Indebtedness;

WHEREAS, fees and
expenses incurred in connection with the foregoing (the “Transaction Costs”) were paid on the
Merger Date or will be paid on or after the Restatement Date (the transactions
described in this paragraph, together with the Merger and the execution,
delivery and performance by the Loan Parties of the Loan Documents, are
collectively referred to herein as the “Transactions”);

WHEREAS, the Lenders
have agreed, severally and not jointly, to amend and restate the Original
Credit Agreement and provide a senior unsecured term loan facility to the
Company in an aggregate amount not to exceed $65,000,000 as set forth herein;
and

WHEREAS, Holdings and
the Subsidiary Guarantors have agreed to guarantee, on a joint and several basis,
the obligations of the Company hereunder.

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

 

SECTION
1.

DEFINITIONS

1.1          Certain Defined
Terms.

The
following terms used in this Agreement shall have the following meanings:

“Administrative
Agent” has the
meaning assigned to that term in the Preamble to this Agreement.

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

“Affected
Lender” has the meaning assigned to that term in subsection
2.6C.

“Affected
Loans”  has the meaning assigned to that
term in subsection 2.6C.

“Affiliate”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the Person specified.  For purposes of this definition, a Person
shall be deemed to “control”
or be “controlled by” a
Person if such Person possesses, directly or indirectly, power either (a) to
vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.

“Agreement”
means this Amended and Restated Credit Agreement dated as of October 5, 2006,
as it may be amended, restated, supplemented or otherwise modified from time to
time.

“Applicable
Laws” means,
collectively, all statutes, laws, rules, regulations, ordinances, decisions,
writs, judgments, decrees, and injunctions of any Governmental Authority
affecting Holdings, the Company or any of the Subsidiaries or any of their
respective assets, whether now or hereafter enacted and in force, and all
Governmental Authorizations relating thereto.

“Applicable
Margin” means (a) with respect to Term Loans that are Base Rate
Loans, 4.00% per annum and (b) with respect to Term Loans that are Eurodollar
Rate Loans, 5.00% per annum.

“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.

“Asset
Sale” means the sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition by Holdings, the Company or any of
the Subsidiaries to any Person (other than the Company or any Subsidiary
Guarantor) of any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including
Capital Stock of any of the Subsidiaries, but excluding (a) sales or other
dispositions of assets (other than Capital Stock of any of the Subsidiaries) in
the ordinary course of business, (b) dispositions between the Subsidiaries
that are not Subsidiary Guarantors and (c) sales or other dispositions of
assets (other than Capital Stock of any of the Subsidiaries) having a value not
in excess of $500,000 in a single transaction or series of related
transactions.

“Assignment
Agreement” means an assignment and assumption agreement in
substantially the form of Exhibit I or in such other form as may be
approved by the Administrative Agent.

 2
 

 

“Bank of
Montreal Indebtedness” means that certain Loan Authorization
Agreement dated as of August 21, 2006, as amended by that certain First
Amendment dated as of August 24, 2006, by and between Holdings and Bank of
Montreal, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time.

“Bankruptcy
Code” means Title 11 of the United States Code entitled “Bank­ruptcy”,
as now and hereafter in effect, or any successor statute.

“Base
Rate” means, at any time, the higher of (a) the Prime Rate and
(b) the rate which is 1⁄2 of 1% in excess of the Federal Funds Effective Rate.

“Base
Rate Loans” means Term Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.

“Business
Day” means a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close; provided  that with respect to matters relating to
Eurodollar Rate Loans (including with respect to all notices and determinations
in connection therewith and any payments of principal, interest or other
amounts thereon), the term “Business Day”
shall also exclude any day on which commercial banks in London, England are
authorized or required by law to close and any other day on which banks are not
open for dealings in Dollar deposits in the London interbank market.

“Capital
Assets” means fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as patents,
copyrights, trademarks, franchises and goodwill); provided  that Capital
Assets shall not include any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or less in accordance with
GAAP.

“Capital Expenditures”
means, for any period, all direct or indirect (by way of acquisition of Capital
Stock of a Person or the expenditure of cash or the transfer of property or the
incurrence of Indebtedness) expenditures in respect of the purchase or other
acquisition of fixed or Capital Assets that would be required to be capitalized
in conformity with GAAP, excluding (a) normal replacement and maintenance
programs properly charged to current operations, (b) the purchase price of
equipment to the extent that the consideration thereof consists of used, worn
out, damaged, obsolete or surplus equipment being traded in at such time or the
proceeds of a concurrent sale of such used, worn out, damaged, obsolete or
surplus equipment, (c) the acquisition of all or substantially all of the
assets of, or any Capital Stock of, another entity or business unit (such as a
division) as permitted by the terms of this Agreement, (d) the amount of any
expenditures used to replace assets that have suffered a casualty for which
insurance proceeds have been received or have been properly recorded as
receivable and (e) any item customarily charged directly to expenses or
depreciated over a useful life of twelve (12) months or less in accordance with
GAAP.

“Capitalized
Lease” means any lease under which Holdings, the Company or any
of the Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with GAAP.

“Capital
Stock” means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including partnership interests and membership interests, and any and all
warrants, rights or options to purchase or other arrangements or rights to
acquire any of the foregoing.

“Casa
Gallardo Restaurants” means the restaurants doing business as
Casa Gallardo located in Fairview Heights, Missouri, St. Louis, Missouri,
Bridgeton, Missouri and Westport, Missouri.

 3
 

 

“Cash”
means money, currency or a credit balance in a Deposit Account.

“Cash
Equivalents” means, as at any date of determination, (a)
marketable securities (i) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (ii) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, a rating of at
least A 1 from S&P or at least P 1 from Moody’s; (c) commercial paper
maturing no more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A 1 from S&P or
at least P 1 from Moody’s; (d) certificates of deposit or bankers’ acceptances
maturing within one year after such date and issued or accepted by any Lender
or by any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (i) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (ii) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (e) shares of any money market mutual fund that (i)
has substantially all of its assets invested continuously in the types of
investments referred to in clauses (a) and (b) above, (ii) has net assets of
not less than $500,000,000, and (iii) has the highest rating obtainable from
either S&P or Moody’s.

 “Cash Proceeds” means, with respect to
any Asset Sale, Cash payments (includ­ing any Cash received by way of deferred
payment pursuant to, or monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale.

“Change
in Law” means the occurrence, after the Restatement 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, 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” means, at any time, if (a) prior to the consummation
of a Qualified IPO, (x) the Permitted Holders shall cease to own, beneficially
and of record, and control 60% or more of the combined ordinary voting power
and equity value of all of the Capital Stock of Holdings or (y) the Sponsor and
its Control Investment Affiliates shall cease to own, beneficially and of
record, and control 54% or more of the combined ordinary voting power and
equity value of all of the Capital Stock of Holdings, (b) following the
consummation of a Qualified IPO, any Person or any two or more Persons (other
than the Permitted Holders) acting in concert shall have acquired beneficial or
record ownership (within the meaning of Rule 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of either (i) 30% or more of either the combined
ordinary voting power or equity value of all of the Capital Stock of Holdings
or (ii) a greater percentage of either the combined ordinary voting power or
equity value of all of the Capital Stock of Holdings than the percentage then held,
directly or indirectly, beneficially and of record, by the Permitted Holders,
(c) Holdings shall at any time fail to own directly or indirectly, beneficially
and of record, 100% of each class of issued and outstanding Capital Stock of
the Company free and clear of all Liens, (d) any Person or “group” (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than
the Permitted Holders shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of Holdings, (e) the majority of the seats (other than vacant
seats) on the board of directors (or similar governing body) of Holdings cease
to be occupied by Persons who either (i) were members of the board of directors
of Holdings on the Closing Date or (ii) were nominated for election by a
majority of the board of directors of Holdings who were either
(A) directors on the Closing Date or (B) whose election or nomination for
election was previously approved by a majority of such directors or (f) any
change of

 4
 

 

control (or similar event,
however denominated) with respect to Holdings, the Company or any of the
Subsidiaries shall occur under and as defined in any indenture or agreement in
respect of Indebtedness for borrowed money of Holdings, the Company or any of
the Subsidiaries.

“Closing
Date” means January 11, 2005.

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, any
successor statute and the regulations promulgated and rulings issued
thereunder.

“Co-Investors”
means H.I.G. Sun Partners, Inc., Kevin Genda, certain members of management of
Holdings, the Company, the Subsidiaries, and any of their Control Investment
Affiliates.

“Commitments”
means the commitments of the Lenders to make Term Loans as set forth in
subsection 2.1A of this Agreement.

“Company”
has the meaning assigned to that term in the Preamble to this Agreement.

“Compliance
Certificate” has the meaning assigned to that term in subsection
5.1A(v).

“Condemnation
Proceeds” has the meaning assigned to that term in subsection
2.4B(iii)(d).

“Confirmation
Order” has the
meaning assigned to that term in subsection 3.1C(ii).

“Consolidated
Current Assets” means, as at any date of determination, all
assets of the Company and the Subsidiaries on a consolidated basis that, in
accordance with GAAP, are properly classified as current assets, provided
that (a) notes and accounts receivable shall be included only if good
and collectible as determined by the Company in accordance with established
practice consistently applied and, with respect to such notes, only if payable
on demand or within one (1) year from the date as of which Consolidated Current
Assets are to be determined and if not directly or indirectly renewable or
extendible at the option of the debtors, by their terms, or by the terms of any
instrument or agreement relating thereto, beyond such year, and, with respect
to such accounts receivable, only if payable and outstanding not more than
ninety (90) days after the date of the shipment of goods or other transaction
out of which any such account receivable arose; and such notes and accounts
receivable shall be taken at their face value less reserves determined to be
sufficient in accordance with GAAP; (b) inventory shall be included only if and
to the extent that the same shall be marketable in the ordinary course of
business; and (c) Cash and marketable securities shall be excluded.

“Consolidated
Current Liabilities” means, as at any date of determination, all
liabilities and other Indebtedness of the Company and the Subsidiaries on a
consolidated basis maturing on demand or within one (1) year from the date as
of which Consolidated Current Liabilities are to be determined, and such other
liabilities as may properly be classified as current liabilities in accordance
with GAAP, but excluding, in any event, (a) any current maturities of any
Indebtedness of the Company and the Subsidiaries on a consolidated basis with a
maturity one (1) year or more from the date as of which Consolidated Current
Liabilities are to be determined and (b) payments due in the final year of any
Capitalized Lease.

“Consolidated EBITDA” means, for any
period, the sum of (a) the Consolidated Pre-Tax Income of the Company and the
Subsidiaries for such period, plus (b) to the extent not otherwise included in
the calculation of Consolidated Pre-Tax Income of the Company and the
Subsidiaries, income of a Person in which the Company holds a minority equity
interest to the extent such income is properly attributable to such minority
interest held by the Company and such income has been distributed to the

 5
 

 

Company
in Cash in such period, plus (c) Consolidated Interest Expense for such period,
plus (d) to the extent deducted in the calculation of Consolidated Pre-Tax Income,
Consolidated Restaurant Pre-Opening Costs and depreciation and amortization
expenses of the Company and the Subsidiaries for such period, plus (e) to the
extent deducted in the calculation of Consolidated Pre-Tax Income and actually
paid in cash and without duplication, option payments pursuant to the Merger
Agreement in an aggregate amount not to exceed $6,000,000, plus (f) to the
extent deducted in the calculation of Consolidated Pre-Tax Income and without
duplication, other non-cash charges (including non-cash extraordinary losses)
of the Company and the Subsidiaries for such period, plus (g) to the extent
deducted in the calculation of Consolidated Pre-Tax Income and without
duplication, Transaction Costs in an aggregate amount not to exceed $8,000,000,
plus (h) payments to restricted stockholders of the Company relating to the
Merger in an aggregate amount not to exceed $2,400,000, plus (i) any fees and
expenses paid pursuant to the Management Services Agreement, plus (j)
non-recurring expenses incurred in connection with (x) certain class action
lawsuits set forth on Schedule 3.1P hereto, (y) any litigation claims
consolidated with any of the litigation matters set forth on Schedule 3.1P
hereto and (z) any claims alleged against the Company and/or the Subsidiaries
that are asserted which arise in whole or in part from the conduct or alleged
conduct of business or any other action allegedly taken or omitted to be taken
by the Company or any of the Subsidiaries prior to the Merger Date and that
assert substantially the same or substantially similar legal theories as those
relating to the litigation described above (collectively, the “Existing Litigation”); provided
that the amount of such expenses which are added back pursuant to this clause
(j) shall not exceed $8,500,000 in the aggregate minus (k) to the extent
included in the calculation of Consolidated Pre-Tax Income, extraordinary
non-recurring gains, including without limitation, gains from asset
dispositions.

“Consolidated
Excess Cash Flow” means, for any period, Consolidated EBITDA of
the Company and the Subsidiaries for such period, minus the sum of (a) cash
income taxes paid during such period by the Company and the Subsidiaries on a
consolidated basis, (b) Capital Expenditures made in cash during such period by
the Company and the Subsidiaries (except to the extent financed with the
proceeds of Indebtedness, equity, casualty or condemnation proceeds), (c)
Consolidated Interest Expense paid in cash during such period, (d) permanent
repayments made in respect of Consolidated Total Debt (excluding mandatory
prepayments of Term Loans pursuant to subsection 2.4B(iii) and repayments of
revolving loans except to the extent the related commitments are permanently
reduced in connection with such repayments), plus decreases in Consolidated
Working Capital from the beginning to the end of such period or minus increases
in Consolidated Working Capital from the beginning to the end of such period,
(e) any fees and expenses paid pursuant to the Management Services Agreement
and (f) non-recurring expenses incurred in connection with the Existing
Litigation to the extent added back to Consolidated EBITDA pursuant to clause
(i) of the definition thereof, but not funded from the Litigation Escrow, in an
aggregate amount not to exceed $2,500,000.

“Consolidated
Funded Indebtedness” means, for any period, the sum of (a) the
aggregate amount of Indebtedness of the Company and the Subsidiaries, on a
consolidated basis, relating to the borrowing of money or the obtaining of
credit (but not including the Maximum Drawing Amount (as defined in the
Revolving Credit Agreement as of the Closing Date) still available under
letters of credit or trade credit obtained in the ordinary course of business)
or in respect of Capitalized Leases, other than any interest in respect thereof
(but not including Indebtedness consisting of deferred tax liability), plus (b)
without duplication, all Indebtedness of the type described in clause (a) above
guaranteed by the Company or any of the Subsidiaries.

“Consolidated
Interest Expense” means, for any period, the aggregate amount of
interest required to be paid or accrued by the Company and the Subsidiaries
during such period on all Indebtedness of the Company and the Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including

 6
 

 

payments consisting of
interest in respect of Capitalized Leases or any Synthetic Lease and including
commitment fees, agency fees, facility fees, balance deficiency fees and
similar fees or expenses in connection with the borrowing of money.

“Consolidated
Net Income” means, for any period, the consolidated net income
(or deficit) of the Company and the Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP.

“Consolidated
Pre-Tax Income” means, for any period, Consolidated Net Income
for such period, plus, to the extent deducted from the calculation of
Consolidated Net Income, income tax expenditures for such period, determined in
accordance with GAAP.

“Consolidated Restaurant Pre-Opening Costs” means 
“Start-up costs” (such term used herein as defined in SOP 98-5 published
by the American Institute of Certified Public Accountants) related to the
opening and organizing or conversion of new Stores, such costs including,
without limitation, the cost of feasibility studies, staff-training, and
recruiting and travel costs for employees engaged in such start-up activities.

“Consolidated Total Debt” means, as at
any date of determination, the aggre­gate amount of all outstanding
Indebtedness of the Company and the Subsidiaries on a consolidated basis, in
the amount that would be reflected on a balance sheet prepared as at such date
on a consolidated basis in accordance with GAAP.

“Consolidated Working Capital” means, as
at any date of determination, the excess or deficiency of Consolidated Current
Assets over Consolidated Current Liabilities.

“Contingent
Obligation” means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (a) with respect to
any Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
Person that such obligation of another Person will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part) against loss in
respect thereof, (b) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (c) under Rate Protection Agreements or other
Hedge Agreements.  Contingent Obligations
shall include (a) the direct or indirect guaranty, endorsement (otherwise than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other
party or parties to an agreement, and (c) any liability of such Person for the
obligation of another Person through any agreement (contingent or otherwise)
(i) to purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (ii) to maintain the solvency or any balance
sheet item, level of income or financial condition of another Person if, in the
case of any agreement described under subclauses (i) or (ii) of this sentence,
the primary purpose or intent thereof is as described in the preceding
sentence.  The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if less, the amount to which such Contingent Obligation
is specifically limited.

“Control
Investment Affiliate” means, as to any Person, any other Person
that (a) directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person and (b) is organized by such Person or
any Person controlling such Person primarily for the purpose of making

 7
 

 

equity or debt investments
in one or more companies.  For purposes
of this definition “control”
of a Person means the power to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.

“CS”
has the meaning assigned to that term in the Preamble to this Agreement.

“Default”
means a condition or event that, after notice or after any applicable grace period
has lapsed, or both, would constitute an Event of Default.

“Deposit
Account” means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.

“Distribution”
means (a) the declaration or payment of any dividend or other distribution
on or in respect of any Capital Stock of a Person, other than dividends or
distributions payable solely in Capital Stock of such Person of the same class;
(b) the purchase, redemption or other retirement of any Capital Stock of a
Person, directly or through a Subsidiary of such Person or otherwise;
(c) the return of capital by a Person to the holders of its Capital Stock
as such; or (d) any other distribution on or in respect of any Capital
Stock of a Person.

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

“Domestic
Subsidiary” means any Subsidiary incorporated, formed or
organized under the laws of any jurisdiction within the United States of
America or any territory thereof.

“Eligible
Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c)
an Approved Fund, and (d) any other Person (other than a natural person)
approved by the Administrative Agent (such approval not to be unreasonably
withheld or delayed); provided  that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Permitted Holders,
Holdings, the Company or any of the Company’s Affiliates or Subsidiaries.

“Employee Benefit Plan” means any “employee
benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored,
maintained or contributed to by, or required to be contributed by, the Company,
any of the Subsidiaries or any of their respective ERISA Affiliates.

“Environmental
Claim” means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any Governmental Authority or any
other Person, arising (a) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (b) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(c) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.

 “Environmental Laws” means any and all
applicable current or future foreign or domestic, federal or state (or any
subdivision of either of them), statutes, ordinances, orders, rules, regulations,
judgments, Governmental Authorizations, or any other requirements of
Governmental Authorities relating to (a) environmental matters, including
those relating to any Hazardous Materials Activity and the preservation and
protection of the environment; (b) the generation, use, storage,
transportation or disposal of, or exposure to, Hazardous Materials; or
(c) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner applicable
to Holdings, the Company or any of the Subsidiaries or any of the Facilities.

 8
 

 

“Equity
Contribution” means the contribution by the Sponsor and certain
other investors acceptable to the Administrative Agent of at least $81,500,000
in cash to Holdings as common equity, all of which shall be used for repayment
of the Bank of Montreal Indebtedness.

“Equity
Proceeds” means the cash proceeds (net of underwriting discounts
and commissions and other reasonable costs associated therewith) from the
issuance of any Capital Stock or other equity securities of, or the making of
any capital contribution to, the Company after the Closing Date.

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

“ERISA
Affiliate” means, as applied to any Person, (a) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Code of which that Person is a member; (b) any
trade or business (whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Code of which that Person is a member; and (c) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of the
Code of which that Person, any corporation described in clause (a) above or any
trade or business described in clause (b) above is a member.  Any former ERISA Affiliate of Holdings, the
Company or any of the Subsidiaries shall continue to be considered an ERISA
Affiliate of the Company or any such Subsidiary within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate of the
Company or such Subsidiary and with respect to liabilities arising after such
period for which the Company or such Subsidiary could be liable under the Code
or ERISA.

“ERISA
Event” means (a) a “reportable event” within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (b) the failure to meet the minimum
funding standard of Section 412 of the Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Code) or the
failure to make by its due date a required installment under Section 412(m) of
the Code with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (c) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (d) the withdrawal by Holdings, the Company, any of the
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability to Holdings, the Company, any of the Subsidiaries
or any of their respective Affiliates pursuant to Section 4063 or 4064 of
ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension
Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (f) the imposition of liability on Holdings, the
Company, any of the Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (g) the withdrawal of Holdings, the Company, any of
the Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Holdings, the Company, any of the Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(h) the occurrence of an act or omission which could reasonably be expected to
give rise to the imposition on Holdings, the Company, any of the Subsidiaries or
any of their respective ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Code or under Section 409, Section 502(c), (i)
or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i)
the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or

 9
 

 

against Holdings, the
Company, any of the Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (j) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Code) to qualify under Section 401(a) of the Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Code; or (k) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Code or pursuant to ERISA with respect to any
Pension Plan.

“Escrow
Agreement” means that certain Escrow Agreement, dated as of
August 21, 2006, by and among J.P. Morgan Trust Company, National Association,
as Escrow Agent thereunder, the Company, Holdings and Sellers.

“Eurocurrency
Reserve Requirements” means, for each Interest Period for each
Eurodollar Rate Loan, the highest reserve percentage applicable to any Lender
during such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System or any successor for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement), with respect to
liabilities or assets consisting of or including Eurocurrency liabilities
having a term equal to such Interest Period.

“Eurodollar
Base Rate” means the rate per annum determined by the
Administrative Agent at approximately 11:00 A.M. (London time) on the date
which is two (2) Business Days prior to the beginning of the relevant Interest
Period (as specified in the applicable Notice of Borrowing or Notice of
Conversion/Continuation) by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in Dollars (as set forth by any service
selected by the Administrative Agent which has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the “Eurodollar Base Rate”
shall be the interest rate per annum determined by the Administrative Agent to
be the average of the rates per annum at which deposits in Dollars are offered
for such relevant Interest Period to major banks in the London interbank market
in London, England by the Administrative Agent at approximately 11:00 A.M.
(London time) on the date which is two (2) Business Days prior to the beginning
of such Interest Period.

“Eurodollar
Rate Loans” means Term Loans bearing interest at rates
determined by reference to the Reserve Adjusted Eurodollar Rate as provided in
subsection 2.2A.

“Event
of Default” means each of the events set forth in Section 7
identified as such.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.

“Excluded
Foreign Subsidiary” means, at any time, a Foreign Subsidiary
that is (or is treated as) for United States federal income tax purposes either
(a) a corporation or (b) a pass-through entity owned directly or indirectly by
another Foreign Subsidiary that is (or is treated as) a corporation.

“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 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 Lender Office is located, (b) any branch profits taxes imposed
by the

 10
 

 

United States of America or
any similar tax imposed by any other jurisdiction in which the Company is
located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Company under subsection 2.8B), 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 Lender 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 subsection 2.7E(v), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new Lender Office (or assignment), to receive
additional amounts from the Company with respect to such withholding tax
pursuant to subsection 2.7E(i).

“Facilities”
means any and all real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings, the Company or any of the Subsidiaries (but only
as to portions thereof actually owned, leased, operated or used) or any of
their respective predecessors or any of their respective Affiliates that are
directly or indirectly controlled by the Company.

“Federal
Funds Effective Rate” means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.

“Fiscal
Quarter” means each period ending on the last Sunday of March,
June, September and  December (except for
(i) the first Fiscal Quarter of Fiscal Year 2007, ending on the first Sunday of
April and (ii) the second Fiscal Quarter of Fiscal Year 2007, ending on the
first Sunday of July 2007).

“Fiscal
Year” means the fiscal year of the Company and the Subsidiaries
ending on the last Sunday in December of each calendar year.

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

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

“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 business.

“Funding
and Payment Office” means the office of the Administrative Agent
located at Eleven Madison Avenue, New York, NY 10010 (or such office of the
Administrative Agent or any successor Administrative Agent specified by the
Administrative Agent or such successor Administrative Agent in a notice to the
Company and the Lenders).

“GAAP”
means, subject to the limitations on the application thereof set forth in
subsection 1.2, generally accepted accounting principles, as in effect in the
United States on the date of determination, consistently applied.

 11
 

 

“Governmental
Authority” means the government of the United States of America
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).

“Governmental
Authorization” means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.

“Granting
Lender” has the meaning assigned to that term in subsection
9.1G.

“Guarantee
Agreement” means the Guarantee Agreement, substantially in the form
of Exhibit IV executed and delivered by Holdings and each of the
Subsidiary Guarantors on the Restatement Date, or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter pursuant to
subsection 5.14, as it may be amended, restated, supplemented or otherwise
modified from time to time in accordance with its terms and this Agreement.

“Guaranteed
Pension Plan” means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by any Company or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.

“Guarantor”
means Holdings or any Subsidiary Guarantor.

“Hazardous Materials” means any
chemical, material or substance, the generation, use, storage, transportation
or disposal of which, or the exposure to which, is prohibited, limited or
regulated by any Governmental Authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity
of any Facility or to the indoor or outdoor environment.

“Hazardous
Materials Activity” means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.

“Hedge
Agreements” means all Rate Protection Agreements and all other
swaps, caps or collar agreements or similar arrangements entered into by the
Company or any of the Subsidiaries providing for protection against
fluctuations in currency exchange rates either generally or under specific
contingencies.

“Holdings”
has the meaning assigned to that term in the Preamble to this Agreement.

“Holdings
Credit Agreement” means the Credit Agreement dated as of October
5, 2006 among Holdings, as borrower, Credit Suisse, as administrative agent,
the lenders signatory thereto from time to time, as amended, amended and
restated, supplemented or otherwise modified in accordance with the terms
hereof from time to time.

“Holdings
Credit Documents” means the Holdings Credit Agreement and each
of the notes and other documents delivered pursuant thereto.

 12

 

“Holdings
Term Loan” means the indebtedness incurred by Holdings on the
Restatement Date pursuant to the Holdings Credit Agreement.

“Indebtedness”
means, as applied to any Person, without duplication, (a) all obligations of
such Person for borrowed money, (b) that portion of obligations of such Person
with respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (c) notes payable and drafts accepted
representing extensions of credit to such Person whether or not representing
obligations for borrowed money (other than current accounts payable incurred in
the ordinary course of business and accrued expenses incurred in the ordinary
course of business), (d) any obligation owed by such Person for all or any part
of the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and current trade payables incurred in the
ordinary course of business), (e) all obligations of such Person evidenced by
notes, bonds (other than performance bonds), debentures or other similar
instruments, (f) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to any
property or assets acquired by such Person (even though the rights and remedies
of the seller or the lender under such agreement in the event of default are
limited to repossession or sale of such property or assets), (g) all
reimbursement obligations of such Person, contingent or otherwise, as an
account party under any letter of credit or under acceptance, letter of credit
or similar facilities to the extent not reflected as trade liabilities on the
balance sheet of such Person in accordance with GAAP, (h) all obligations of
such Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock prior to the Term Loan Maturity Date, (i)
all obligations of such Person under Rate Protection Agreements and other Hedge
Agreements, including, as of any date of determination, the net amounts, if
any, that would be required to be paid by such Person if such Hedge Agreements
were terminated on such date, (j) all Contingent Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (i) above
or in respect of the payment of dividends on the Capital Stock of any other
Person, and (k) all indebtedness secured by any Lien on any property or asset
owned or held by such Person regardless of whether the indebtedness secured
thereby shall have been assumed by such Person or is nonrecourse to the credit
of such Person; provided, however, that the obligation of such Person to
pay current year insurance premiums in an amount not to exceed $3,500,000 shall
be excluded from Indebtedness.

“Indemnified
Taxes” means Taxes other than Excluded Taxes.

“Indemnitee”
has the meaning assigned to that term in subsection 9.2B.

“Initial
Period” means the period commencing on and including the Closing
Date and ending on the date that is one month following the Closing Date.

“Insurance
Proceeds” has the meaning assigned to that term in subsection
2.4B(iii)(d).

“Intellectual
Property” has the meaning assigned to that term in subsection
4.5C.

“Intercreditor
Agreement” means that intercreditor agreement among the borrowers
under the Revolving Credit Documents, Wells Fargo Bank, N.A. as collateral
agent and as trustee under the Senior Secured Note Documents, and the agent
under the Revolving Credit Documents, dated March 31, 2004, as amended, amended
and restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof and in effect from time to time, pursuant to
which, among other things, the liens securing the Senior Secured Notes are
subordinated to the liens securing the obligations in respect of the Revolving
Credit Facility.

 13
 

 

“Interest
Coverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (a) Consolidated EBITDA for the four–Fiscal Quarter period then
ending to (b) Consolidated Interest Expense for such four–Fiscal Quarter
period.

“Interest
Payment Date” means:

(a)           with respect to any Base Rate Loan, the last Business Day
in each of March, June, September and December of each year, commencing on
September 30, 2006; and

(b)           with respect to any Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Term Loan; provided  that
in the case of each Interest Period of longer than three months, “Interest
Payment Date” shall also include the date that is three months after the
commencement of such Interest Period.

 “Interest Period” has the meaning
assigned to that term in subsection 2.2B.

 “Interest Rate Determination Date” means
each date for calculating the Reserve Adjusted Eurodollar Rate for purposes of
determining the interest rate in respect of an Interest Period.  The Interest Rate Determination Date for
purposes of calculating the Reserve Adjusted Eurodollar Rate shall be the
second (2nd) Business Day
prior to the first day of the related Interest Period.

“Investment”
means (a) any direct or indirect purchase or other acquisition by Holdings, the
Company or any of the Subsidiaries of, or of a beneficial interest in, Capital
Stock or other Securities of any other Person, or (b) any direct or indirect
loan, advance (other than advances to employees for moving, entertainment and
travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by Holdings, the Company or any of
the Subsidiaries to any other Person, including any Indebtedness and accounts
receivable acquired from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business; provided,
however, that the term “Investment” shall not include (i) current trade
and customer accounts receivable for goods furnished or services rendered in
the ordinary course of business and payable in accordance with customary trade
terms, (ii) advances and prepayments to suppliers for goods and services in the
ordinary course of business, (iii) Capital Stock or other Securities acquired
in connection with the satisfaction or enforcement of Indebtedness or claims
due or owing to Holdings, the Company or any of the Subsidiaries or as security
for any such Indebtedness or claims, (iv) Cash held in Deposit Accounts with
banks, savings and loans, trust companies and the Lenders and (v) shares in a
mutual fund that invests solely in Cash Equivalents.  The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto minus
all cash dividends or distributions received in respect thereof, without any
adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.  Without limitation of the foregoing, “Investments”
shall include the incurring by any Person of Contingent Obligations in respect
of the obligations of any other Person.

“Lead
Arranger” has the meaning assigned to that term in the Preamble
to this Agreement.

“Leasehold
Property” means any leasehold interest of any Loan Party as
lessee under any lease of real property.

“Lender”
and “Lenders” means the
Persons identified as “Lenders” and listed on the signature pages of this
Agreement, together with their successors and permitted assigns pursuant to
subsection 9.1.

 14
 

 

“Lender
Office” means, as to any Lender, the office or offices of such
Lender specified in the Administrative Questionnaire completed by such Lender
and delivered to the Administrative Agent, or such other office or offices as
such Lender may from time to time notify the Company and the Administrative
Agent.

“Leverage
Ratio” means the ratio as of the last day of any Fiscal Quarter
of (a) Consolidated Funded Indebtedness on the last day of such Fiscal Quarter
to (b) Consolidated EBITDA for the four-Fiscal Quarter period then ending.

“Lien”
means any lien, mortgage, pledge, assignment, security interest, fixed or
floating charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or deposit or
other preferential arrangement having the practical effect of any of the
foregoing.

“Litigation
Escrow” means the $6,000,000 escrow fund established in connection
with the Existing Litigation pursuant to the Escrow Agreement.

“Loan
Documents” means this Agreement, any Term Notes, the Guarantee
Agreement and any other documents evidencing Obligations.

“Loan
Parties” means Holdings, the Company and each Subsidiary
Guarantor.

“Make-Whole
Premium” means, on any date of prepayment, the present
value, as determined by reference to a discount rate equal to the Treasury Rate
plus 50 basis points, of (a) all required interest payments due on the Term
Loans from the date of prepayment through and including the Make-Whole
Termination Date (excluding accrued interest) (assuming that the interest rate
applicable to all such interest is the interest rate applicable to the Term
Loans on such prepayment date) plus (b) 1.5% of the principal amount so prepaid
or repaid.

“Make-Whole
Termination Date” means the first anniversary of the
Restatement Date.

“Management
Services Agreement” means the Management Services Agreement,
dated as of August 21, 2006, by and between Sun Capital Partners Management IV,
LLC and the Company, as the same may be amended, amended and restated, modified
or supplemented from time to time, provided  that any such
amendment, amendment and restatement, modification or supplement does not
increase the amount of payments to be made by the Company or any other
subsidiary of Holdings thereunder.

“Margin
Stock” has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.

“Material
Adverse Effect” means a material adverse effect on (a) the
business, assets, operations, properties, condition (financial or otherwise) or
prospects of Holdings, the Company and the Subsidiaries, taken as a whole, (b)
the ability of any Loan Party to perform any of the Obligations, (c) the
legality, validity, binding effect or enforceability of any Loan Document or
(d) the rights, remedies and benefits available to, or conferred upon, the
Lenders or the Administrative Agent under any Loan Document.

 “Maximum Capital Expenditure Amount” has
the meaning assigned to that term in subsection 6.5C.

“Maximum
Amount” has the meaning assigned to that term in subsection
9.13.

 15
 

 

“Merger” has the meaning assigned to that term in
the Recitals to this Agreement.

“Merger
Agreement” has the meaning assigned to that term in the Recitals
to this Agreement.

“Merger
Consideration” has
the meaning assigned to that term in the Recitals to this Agreement.

“Merger
Documents” means, collectively, the Merger Agreement and all
schedules, exhibits, annexes and amendments thereto and all side letters and
agreements affecting the terms thereof.

“Moody’s”
means Moody’s Investor Services, Inc. or any successor thereto.

“Multiemployer
Plan” means a Plan which is a “multiemployer plan” as defined in
Section 3(37) of ERISA.

 “Net Cash Proceeds” means, with respect
to any Asset Sale, Cash Proceeds of such Asset Sale net of bona fide direct
costs of sale, including (a) income taxes reasonably estimated to be actually
payable as a result of such Asset Sale (after taking into account any available
tax credits or deductions and any tax sharing arrangements reasonably estimated
to be applicable in the relevant tax year), (b) transfer, sales, use and other
taxes payable in connection with such Asset Sale, (c) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on
any Indebtedness (other than the Term Loans, any such Indebtedness assumed by
the purchaser of the relevant assets and any Indebtedness under the Senior
Secured Note Documents, the Revolving Credit Documents or the Holdings Credit
Documents) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale, (d) brokers’ and financial advisors’ commissions and reasonable fees
and expenses of counsel and other advisors in connection with such Asset Sale
and (e) reasonable reserves against indemnities or other obligations (so long
as such indemnity or other obligations are outstanding) in respect of
post-closing and purchase price adjustments (including adjustments related to
the performance or results of any divested or acquired business) in connection
with such Asset Sale; provided  that, to the extent and at the
time any such amounts are released from such reserves, such amounts shall
constitute Net Cash Proceeds.

“Non-Consenting
Lender”  has the meaning
assigned to that term in subsection 9.5B.

“Notice
of Borrowing” means the notice in the form of Exhibit II
delivered by the Company to the Administrative Agent pursuant to subsection
2.1B with respect to the borrowing to be made on the Restatement Date.

“Notice
of Conversion/Continuation” means a notice substantially in the
form of Exhibit III delivered by the Company to the Administrative Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Term Loans specified therein.

“Obligations”
means all obligations of every nature of each Loan Party from time to time owed
to the Administrative Agent, the Lenders or any of them or their respective
Affiliates under the Loan Documents or Hedge Agreements (with any Lender or an
Affiliate of a Lender), whether for principal, interest, reimbursement or
payments for early termination of Rate Protection Agreements (with any Lender
or an Affiliate of a Lender), fees, expenses, indemnification or otherwise.

“Officer’s
Certificate” means, with respect to any Person, a certificate
executed on behalf of such Person (a) if such Person is a partnership or
limited liability company, by its chairman of the board

 16
 

 

(if an officer), chief
executive officer or chief financial officer or by the chief executive officer
or chief financial officer of its general partner or managing member or other
Person authorized to do so by its Organizational Documents, (b) if such Person
is a corporation, on behalf of such corporation by its chairman of the board
(if an officer), chief executive officer, chief financial officer or vice
president, and (c) if such person is the Company or any of the Subsidiaries, a
Responsible Officer.

“Organizational
Authorizations” means, with respect to any Person, resolutions
of its Board of Directors, general partners or members of such Person, and such
other Persons, groups or committees (including managers and managing
committees), if any, required by the Organizational Certificate or Organization
Documents of such Person to authorize or approve the taking of any action or
the entering into of any transaction.

“Organizational
Certificate” means, with respect to any Person, the certificate
or articles of incorporation, partnership or limited liability company or any
other similar or equivalent organizational, charter or constitutional certificate
or document filed with the applicable Governmental Authority in the
jurisdiction of its incorporation, organization or formation, which, if such
Person is a partnership or limited liability company, shall include such
certificates, articles or other certificates or documents in respect of each
partner or member of such Person.

“Organizational
Documents” means, with respect to any Person, the by-laws,
partnership agreement, limited liability company agreement, operating
agreement, management agreement or other similar or equivalent organizational,
charter or constitutional agreement or arrangement, which, if such Person is a
partnership or limited liability company, shall include such by-laws,
agreements or arrangements in respect of each partner or member of such Person.

“Original
Credit Agreement” means that certain credit agreement dated as
of January 11, 2005 among the Company, the lenders party thereto from time to
time and Credit Suisse (formerly known as Credit Suisse First Boston), as
administrative agent, as amended or modified and in effect immediately prior to
the Restatement Date.

“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 any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Participant”
has the meaning assigned to that term in subsection 9.1D.

“PBGC”
means the Pension Benefit Guaranty Corporation established pursuant to Subtitle
A of Title IV of ERISA (or any successor thereto).

“Pension
Plan” means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Code or Section 302
of ERISA.

“Permitted
Holders” means (i) the Sponsor and its Control Investment
Affiliates; (ii) the Co-Investors; and (iii) any Related Parties of either (x)
the Sponsor and its Control Investment Affiliates or (y) the Co-Investors.

“Permitted
Refinancing Indebtedness” means Indebtedness issued or incurred
(including by means of the extension or renewal of existing Indebtedness) to
refinance, refund, extend, renew or replace existing Indebtedness (“Refinanced Indebtedness”); provided that (a) the principal amount of such
refinancing, refunding, extending, renewing or replacing Indebtedness is not
greater than the principal

 17
 

 

amount of such Refinanced
Indebtedness plus the amount of any premiums or penalties and accrued and
unpaid interest paid thereon and reasonable fees and expenses, in each case,
associated with such refinancing, refunding, extension, renewal or replacement,
(b) such refinancing, refunding, extending, renewing or replacing Indebtedness
has a final maturity that is no sooner than, scheduled principal payments or
permanent commitment reductions no earlier than, and a weighted average life to
maturity that is no shorter than, such Refinanced Indebtedness, (c) if such
Refinanced Indebtedness or any guaranties thereof are subordinated to the
Obligations, such refinancing, refunding, extending, renewing or replacing
Indebtedness and any guaranties thereof remain so subordinated on terms no less
favorable to the Lenders, (d) the obligors in respect of such Refinanced
Indebtedness immediately prior to such refinancing, refunding, extending,
renewing or replacing are the only obligors on such refinancing, refunding
extending, renewing or replacing Indebtedness and (e) such refinancing,
refunding, extending, renewing or replacing Indebtedness contains covenants and
events of default and is benefited by guaranties, if any, which, taken as a
whole, are determined in good faith by a Responsible Officer of the Company to
be no less favorable to the Company or its applicable Subsidiary and the
Lenders in any material respect than the covenants and events of default or
guaranties, if any, in respect of such Refinanced Indebtedness.

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

“Prime
Rate” means the rate of interest per annum announced from time
to time by CS (or any successor Administrative Agent) as its prime commercial
lending rate in effect at its principal office in New York City.  The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer.  CS or any other Lender may
make commercial loans or other loans at rates of interest at, above or below
the Prime Rate.

“Principal
Office” means, for the Administrative Agent, such Person’s “Principal
Office” as such Person may from time to time designate in writing to the
Company and the Lenders.

“Pro
Forma Basis” means, with respect to compliance with any test or
covenant hereunder, compliance with such test or covenant after giving effect
to any proposed acquisition, distribution or other action which requires
compliance on a pro forma basis (taking into account only those pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case either (a) determined on a basis consistent with
Article 11 of Regulation S-X of the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission or (b) determined on a
basis acceptable to the Administrative Agent, in each case, which pro forma
adjustments shall be certified by the chief financial officer of the Company as
having been prepared in good faith on such basis and based upon reasonable
assumptions), using, for purposes of determining such compliance, the
historical financial statements of all entities or assets so acquired or to be
acquired and the consolidated financial statements of the Company and the
Subsidiaries which shall be reformulated (i) as if such acquisition,
distribution or other action, and any other acquisitions which have been
consummated during the period, and any Indebtedness or other liabilities
incurred in connection with any such acquisition, distribution or other action,
had been consummated at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the
interest rates applicable to outstanding Term Loans during such period or such
other interest rate acceptable to the Administrative Agent), and
(ii) otherwise in conformity with such procedures as may be agreed upon
between the Administrative Agent and the Company, all such calculations to be
in form and substance reasonably satisfactory to the Administrative Agent.

“Projections”
has the meaning assigned to that term in subsection 4.3B.

 18
 

 

“Pro
Rata Share” means with respect to all payments, computations and
other matters relating to the Term Loans of any Lender, the percentage obtained
by dividing (i) the Term Loan Exposure of that Lender by (ii) the
aggregate Term Loan Exposure of all the Lenders, as the applicable percentage
may be adjusted by assignments in accordance with subsection 9.1.  The initial Pro Rata Share of each Lender is
set forth opposite the name of that Lender on Schedule 2.1A.

“Qualified
IPO” means an underwritten initial public offering of common
stock of and by the Company pursuant to an effective registration statement
filed with the Securities and Exchange Commission in accordance with the
Securities Act.

“Rate
Protection Agreement” means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Company or any of the
Subsidiaries against fluctuations in interest rates.

“Real
Property Asset” means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Loan Party in any real
property.

“Recovery
Event” has the meaning assigned to that term in subsection
2.4B(iii)(d).

“Register”
has the meaning assigned to that term in subsection 9.1C.

“Reinvestment
Assets” means, in the case of any Reinvestment Event, any
Capital Assets which are used in the business of the Company and the
Subsidiaries.

“Reinvestment
Deferred Amount” means, with respect to any Reinvestment Event,
the aggregate Insurance Proceeds or Condemnation Proceeds, as the case may be,
received by the Company or any of the Subsidiaries in connection therewith
which are not applied to prepay the Term Loans in accordance with subsection
2.4B(iii)(d) as a result of the delivery of a Reinvestment Notice.

“Reinvestment
Event” means any Recovery Event in respect of which the Company
has delivered a Reinvestment Notice.

“Reinvestment
Notice” means a written notice executed by a Responsible Officer
stating that no Default or Event of Default has occurred and is continuing and
that the Company (directly or through one of the Subsidiaries) intends and
expects to use all or a specified portion of the Insurance Proceeds or
Condemnation Proceeds, as the case may be, of a Recovery Event to acquire
Reinvestment Assets within three hundred sixty (360) days of the receipt of
such Insurance Proceeds or Condemnation Proceeds, as the case may be.

“Reinvestment
Prepayment Amount” means, with respect to any Reinvestment
Event, the Reinvestment Deferred Amount, if any, relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
Reinvestment Assets.

“Reinvestment
Prepayment Date” means, with respect to any Reinvestment Event,
the earlier of (a) the date occurring three hundred sixty (360) days after such
Reinvestment Event and (b) the date on which the Company shall have determined
not to, or shall have otherwise ceased to, acquire Reinvestment Assets with all
or any portion of the relevant Reinvestment Deferred Amount.

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

 19
 

 

“Release”
means any release, spill, emission, leaking, pumping, pouring, injection,
escaping, deposit, disposal, discharge, dispersal, dumping, leaching or
migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement
of any Hazardous Material through the air, soil, surface water or groundwater.

“Required
Percentage” means 50%.

“Requisite
Lenders” means Lenders having or holding more than 50% of the
sum of the aggregate Term Loan Exposure of all Lenders.

“Reserve
Adjusted Eurodollar Rate” means, with respect to each day during
each Interest Period pertaining to a Eurodollar Rate Loan, a rate per annum
determined for such day in accordance with the following formula:

           Eurodollar
Base Rate           

1.00 - Eurocurrency Reserve Requirements

“Responsible
Officer” means the chief executive officer, president, executive
vice president, senior vice president, treasurer, general counsel or chief
financial officer of the Company or the applicable Subsidiary, but in any
event, with respect to financial matters, the chief financial officer,
treasurer or controller of the Company or the applicable Subsidiary.

“Restatement
Date” means October 5, 2006.

“Restricted
Payment” means, in relation to Holdings, the Company or any of
the Subsidiaries, any (a) Distribution, (b) payment by Holdings, the
Company or any of the Subsidiaries to any of the Permitted Holders (other than
payments to any of the Permitted Holders for goods and services in the ordinary
course of business on terms equivalent of those obtainable in arm’s length
transactions), (c) redemption of, payment in respect of or purchase of the
Senior Secured Notes, or (d) payment in respect of the Holdings Term Loan.

“Revolving
Credit Agreement” means the Revolving Credit Agreement dated as
of March 31, 2004 among the Company, as borrower, the other credit parties
signatory thereto, Fleet National Bank, as administrative agent, the lenders
signatory thereto from time to time, as amended, amended and restated,
supplemented or otherwise modified in accordance with the terms hereof from
time to time.

“Revolving
Credit Documents” means (a) the Revolving Credit Agreement and
each of the notes, security documents and other documents delivered pursuant
thereto, and (b) the Intercreditor Agreement.

“S&P”
means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation, or any successor thereto.

“Sale-Leaseback”
has the meaning assigned to that term in subsection 6.7.

“Securities”
means any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement
or arrangement, options, warrants, bonds, debentures, notes, or other evidences
of Indebtedness, secured or unsecured, convertible, subordinated or otherwise,
or in general any instruments commonly known as “securities” or any
certificates of interest,

 20
 

 

shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

“Securities
Act” means the Securities Act of 1933, as amended from time to
time, and any successor statute.

“Sellers” has the meaning assigned to that term in
the Recitals to this Agreement.

“SEC” means the
U.S. Securities and Exchange Commission.

“Senior
Secured Note Documents” means
(a) the indenture, dated as of March 21, 2004, among the Company and Wells
Fargo Bank Minnesota, National Association, pursuant to which up to
$105,000,000 original principal amount of Senior Secured Notes has been issued
by the Company, as amended or supplemented in accordance with the terms hereof
and in effect from time to time, and each of the notes, security documents and
other documents delivered pursuant thereto, and (b) the Intercreditor
Agreement.

“Senior
Secured Notes”  means
Indebtedness of the Company in an aggregate principal amount not to exceed
$105,000,000 evidenced by senior secured notes due 2010 issued pursuant to the
Senior Secured Note Documents and that is expressly subject to the provisions
of the Intercreditor Agreement.

“Solvent”
means, with respect to any Person, that as of the date of determination both
(a) (i) the then fair saleable value of the property of such Person is (A)
greater than the total amount of liabilities (including contingent liabilities
but excluding amounts payable under intercompany promissory notes) of such
Person and (B) not less than the amount that will be required to pay the
probable liabilities on such Person’s then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person’s capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or believe
that it will incur, debts beyond its ability to pay such debts as they become
due; and (b) such Person is “solvent” within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers and
conveyances.  For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

“Sponsor” means Sun Capital Partners Group IV, Inc.

“SPV” has the meaning assigned to that term in
subsection 9.1G.

“Store”
means a particular restaurant at a particular location that is owned or
operated by the Company or a Subsidiary.

“subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, members, partners, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other subsidiaries of that
Person or a combination thereof.

“Subsidiary” shall mean any
subsidiary of the Company.

 21
 

 

“Subsidiary
Guarantor” means any Subsidiary (other than any Excluded Foreign
Subsidiary) that is a party to the Guarantee Agreement on the Closing Date
(which shall include each Subsidiary (other than any Excluded Foreign
Subsidiary) existing as of the Closing Date) or at any time after the Closing
Date pursuant to subsection 5.14.

“Synthetic
Lease”  every obligation of any Person
under any lease treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax.

“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.

“Term
Loan Commitment” means the commitment of a Lender to make a Term
Loan pursuant to subsection 2.1A in the amount set forth opposite the name of
that Lender on Schedule 2.1A.  The
initial aggregate amount of the Term Loan Commitment on the Closing Date was
$75,000,000 and the aggregate amount of the Term Loan Commitment on the
Restatement Date is $65,000,000.

“Term
Loan Exposure” means, with respect to any Lender, as of any date
of determination, the outstanding principal amount of the Term Loans of that
Lender.

“Term
Loan Maturity Date” means the earlier of (a) October 5, 2010 and
(b) the date that all Term Loans shall become due and payable in full
hereunder, whether by acceleration or otherwise.

“Term
Loans” means the Term Loans outstanding or made by the Lenders
pursuant to subsection 2.1A.

“Term
Notes” means (a) the promissory notes of the Company issued
pursuant to subsection 2.1D and (b) any promissory notes issued by the Company
in connection with assignments of the Term Loans of any Lender, in each case
substantially in the form of Exhibit V, as they may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement.

“Transaction
Costs” has the meaning set forth in the Recitals to this
Agreement.

“Transaction Documents” means,
collectively, (a) the Loan Documents; (b) the Merger Documents; and (c)
all other documents, instruments and agreements entered into or delivered by
the Company and/or any of the Subsidiaries in connection with the Transactions
on or prior to the Restatement Date.

“Transactions” has the meaning set forth in the Recitals
to this Agreement.

“Treasury
Rate” means, as of any prepayment date, the yield to maturity as
of such prepayment date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
business days prior to the prepayment date (or if such Statistical Release is
no longer published, any publicly available source of similar market data))
most nearly equal to the period from the prepayment date to the Term Loan
Maturity Date.

“Unprofitable
Store” means, at the relevant time of reference thereto, any
Store whose net income (without deduction or adjustment for expenses related to
interest, income taxes, depreciation or amortization or other non-cash charges,
gains or losses on the sale of Capital Assets or corporate overhead that may be
attributable to such Store) on an individual Store basis is less than $1 for
the twelve

 22
 

 

most recently ended fiscal
months; provided  that, solely for the purposes of determining
whether any Store is an Unprofitable Store, it shall be assumed that the net
income of each Store shall be greater than $1 for each of its first six months’
of operation.

“Ventura
Property” means that certain real property owned by El Torito
Restaurants, Inc. and located at 770 Seaward Avenue, Ventura, California 93001.

1.2          Defined Terms; Accounting Terms;
Utilization of GAAP for Purposes of Calculations Under Agreement.

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”, and words of similar import, shall not be limiting
and shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to subsections, Exhibits and Schedules shall be construed
to refer to subsections of, and Exhibits and Schedules to, this Agreement and
(e) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, whether real, personal or mixed, including cash, Securities,
accounts and contract rights.

B.        Except
as otherwise expressly provided in this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP.  Financial and accounting
calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize accounting principles and policies in
conformity with those used to prepare the most recently delivered financial
statements referred to in subsection 5.1A(i); provided, that if
the Company notifies the Administrative Agent after the Closing Date that it
wishes to amend any covenant in subsection 6.5 or any related definition to
eliminate the effect of any change in GAAP occurring after the Closing Date on
the operation of such covenant (or if the Administrative Agent notifies the
Company that the Requisite Lenders wish to amend subsection 6.5 or any related
definition for such purpose), then the Company’s compliance with such covenant
shall be determined on the basis of GAAP in effect immediately before the
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Company and the
Requisite Lenders.

SECTION 2.

AMOUNTS AND TERMS OF COMMITMENTS AND TERM LOANS

2.1          Term Loans.

A.        Term Loans.  Subject to the terms
and conditions hereof, each Lender with a Term Loan Commitment on the Closing
Date severally made, on the Closing Date, a Term Loan to the Company in an
amount equal to such Lender’s Term Loan Commitment.  The original amount of each Lender’s Term
Loan Commitment on the Closing Date is set forth opposite its name on Schedule
2.1A.  The Term Loans made on the
Closing Date were used for the purposes identified in subsection 2.5A.

 23
 

 

Subject
to the terms and conditions hereof, each Lender with an outstanding Term Loan
immediately prior to the Restatement Date by executing and delivering a signature
page to this Agreement will be deemed upon the Restatement Date to have agreed
to the terms of this Agreement, as restated on the Restatement Date, and to
have continued all of its outstanding Term Loans as Term Loans for all purposes
under this Agreement, as restated on the Restatement Date.  The original amount of each Lender’s Term
Loan on the Restatement Date is set forth opposite its name on Schedule 2.1A.

The
Company may make only one borrowing under the Term Loan Commitments, which
shall be on the Restatement Date.  Any
amount borrowed under this subsection 2.1A and subsequently repaid or prepaid
may not be reborrowed.  Subject to
subsections 2.4A and 2.4B, all amounts owed hereunder with respect to the Term
Loans shall be paid in full no later than the Term Loan Maturity Date.  Each Lender’s Term Loan Commitment shall
terminate immediately and without further action on the Restatement Date after
giving effect to the funding of such Lender’s Term Loan Commitment on such
date.

B.        Borrowing Mechanics.  The Company
shall deliver to the Administrative Agent a fully executed Notice of Borrowing
no later than (i) three (3) days prior to the Restatement Date with respect to
Eurodollar Rate Loans to be made on the Restatement Date or (ii) one (1) day
prior to the Restatement Date with respect to Base Rate Loans to be made on the
Restatement Date.  Following receipt by
the Administrative Agent of such Notice of Borrowing, the Administrative Agent
shall notify each Lender of the proposed borrowing.

Each Lender shall make its Term Loan available to the
Administrative Agent upon receiving notice from the Administrative Agent that
the conditions precedent have been satisfied by wire transfer of same day funds
in Dollars at the Administra­tive Agent’s Principal Office.  Upon satisfaction or waiver of the conditions
precedent specified herein, the Administrative Agent shall make the Term Loans
available to the Company on the Restatement Date by causing such amount to be
credited to the account of the Company as may be designated in writing to the
Administrative Agent by the Company.

C.        Disbursement of Funds.  All Term Loans shall
be made by the Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for
any default by any other Lender in that other Lender’s obligation to make a
Term Loan requested hereunder nor shall the Commitment of any Lender to make
its Pro Rata Share of the Term Loans be increased or decreased as a result of a
default by any other Lender in that other Lender’s obligation to make its Pro
Rata share of the Term Loan requested hereunder.

Unless the Administrative Agent shall have
received notice from the Company prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that the
Company will not make such payment, the Administrative Agent may assume that
the Company 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 Company 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, 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 Effective Rate (or,
at any time following demand by the Administrative Agent for such payment, the
Base Rate) and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

D.        Term Notes.  The Company shall
execute and deliver on the Closing Date or the Restatement Date to each Lender
requesting the same a reasonable time in advance of the Closing Date or the
Restatement Date, as applicable, a Term Note to evidence that Lender’s Term
Loans in the principal amount of that Lender’s Term Loans and with other
appropriate insertions, and each Lender’s Term Note

 24
 

 

shall evidence such Lender’s Pro Rata Share of such
respective amounts.  Any Lender not
receiving a Term Note may request at any time that the Company issue it such a
Term Note on the terms set forth herein, and the Company agrees to issue such
Term Note promptly upon the request of a Lender.  The Term Notes and the Obligations evidenced
thereby shall be governed by, subject to and benefit from all of the terms and
conditions of this Agreement and the other Loan Documents.

2.2          Interest on the Term Loans.

A.        Rate of Interest.  Subject to the
provisions of subsections 2.6 and 2.7, each Term Loan shall bear interest on
the unpaid principal amount thereof from the date made to maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Reserve Adjusted Eurodollar Rate, as the case may be.  The applicable basis for determining the rate
of interest with respect to any Term Loan shall be selected by the Company
initially at the time the Notice of Borrowing is given with respect to such
Term Loan pursuant to subsection 2.1B. 
The basis for determining the interest rate with respect to any Term
Loan may be changed from time to time pursuant to subsection 2.2D.  If on any day any Term Loan is outstanding
with respect to which notice has not been delivered to the Administrative Agent
in accordance with the terms of this Agreement specifying the applicable basis
for determining the rate of interest, then for that day that Term Loan shall
bear interest determined by reference to the Base Rate.  Subject to the provisions of subsections 2.2E
and 2.7, the Term Loans shall bear interest through maturity as follows:

(i)            if a Base Rate Loan, then at the sum
of the Base Rate plus the Applicable Margin; or

(ii)           if a Eurodollar Rate Loan, then at
the sum of the Reserve Adjusted Eurodollar Rate for the relevant Interest
Period plus the Applicable Margin.

B.        Interest Periods.  In connection with
each Eurodollar Rate Loan, the Company may, pursuant to the Notice of Borrowing
or the applicable Notice of Conversion/Continuation, as the case may be, select
an interest period (each an “Interest
Period”) to be applicable to such Term Loan, which Interest
Period shall be, at the Company’s option, either a one, two, three or six month
period; provided  that:

(i)            the initial Interest Period for any
Eurodollar Rate Loan shall commence on the date specified in the applicable
Notice of Conversion/Continuation, in the case of a Term Loan converted to a
Eurodollar Rate Loan;

(ii)           in the case of immediately successive
Interest Periods applicable to a Eurodollar Rate Loan continued as such
pursuant to a Notice of Conversion/Continuation, each successive Interest
Period shall commence on the day on which the next preceding Interest Period
expires;

(iii)          if an Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day; provided  that, if any
Interest Period would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;

(iv)          any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the last
Business Day of the next calendar month;

 25
 

 

(v)           no Interest Period with respect to
any portion of the Term Loans shall extend beyond the Term Loan Maturity Date;

(vi)          the Company may not select an Interest
Period of longer than one month prior to the end of the Initial Period;

(vii)         there shall be no more than five (5)
Interest Periods outstanding at any time during the Initial Period, and
thereafter no more than ten (10) Interest Periods shall be outstanding at any
time; and

(viii)        in the event the Company fails to
specify an Interest Period for any Eurodollar Rate Loan in the Notice of
Borrowing or the applicable Notice of Conversion/Continuation, the Company
shall be deemed to have selected an Interest Period of one month.

C.        Interest Payments.  Subject to the
provisions of subsection 2.2E, interest on each Term Loan shall be payable in
arrears on and to each Interest Payment Date applicable to that Loan, upon any
prepayment of that Term Loan (to the extent accrued on the amount being
prepaid) and at maturity (including final maturity, by acceleration or otherwise);
provided  that in the event that any Term Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such Term
Loans to the date of such prepayment shall be payable on the next succeeding
Interest Payment Date applicable to Base Rate Loans (or, if earlier, at final
maturity) unless such Base Rate Loans are prepaid in full (in which case
interest accrued on such Term Loans to the date of such prepayment shall be
payable on the date of such prepayment).

D.        Conversion or Continuation.  Subject to the
provisions of subsection 2.6, the Company shall have the option (i) to convert
at any time all or any part of its outstanding Term Loans (x) in a minimum
amount of $5,000,000  and integral
multiples of $1,000,000 in excess of that amount with respect to conversions of
Eurodollar Rate Loans to Base Rate Loans and (y) in a minimum amount of
$5,000,000  and integral multiples of
$1,000,000  in excess of that amount with
respect to conversions of Base Rate Loans to Eurodollar Rate Loans; or (ii)
upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Term Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, subject to subsection 2.6D, a Eurodollar
Rate Loan may only be converted into a Base Rate Loan on the expiration date of
an Interest Period applicable thereto.

The Company shall deliver a Notice of
Conversion/Continuation to the Administrative Agent no later than 12:00 p.m.
(New York time) at least one (1) Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan), and at least
three (3) Business Days in advance of the proposed conversion/continuation date
(in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan).  A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Term Loan
to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan, the requested Interest Period, and (v) in the case
of a conversion to, or a continuation of, a Eurodollar Rate Loan, that no
Default or Event of Default has occurred and is continuing.  In lieu of delivering the above-described
Notice of Conversion/Continuation, the Company may give the Administrative
Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided  that
such notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Administrative Agent on or before the proposed
conversion/continuation date.

 26

 

Neither the Administrative Agent nor any
Lender shall incur any liability to the Company in acting upon any telephonic
notice referred to above that the Administrative Agent believes in good faith
to have been given by a duly authorized officer or other person authorized to
act on behalf of the Company or for otherwise acting in good faith under this
subsection 2.2D, and upon conversion or continuation of the applicable basis
for determining the interest rate with respect to any Term Loans in accordance
with this Agreement pursuant to any such telephonic notice the Company shall
have effected a conversion or continuation, as the case may be, hereunder.

Except as otherwise provided in subsections
2.6B, 2.6C and 2.6G, a Notice of Conversion/Continuation for conversion to, or
continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable, and the Company shall be bound to effect a conversion or
continuation in accordance therewith.

E.         Post-Default Interest.  Any overdue amounts
on any Term Loans and, to the extent permitted by applicable law, any interest
payments thereon not paid when due and any fees and other amounts then due and
payable hereunder, shall thereafter bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code, or other applicable
bankruptcy or insolvency laws) payable upon demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable under this Agreement
with respect to the applicable Term Loans; provided  that, in the
case of Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate equal to 2% per annum in
excess of the interest rates otherwise payable under this Agreement for Term
Loans.  Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of
the Administrative Agent or any Lender.

F.         Computation of Interest.  Interest on Term
Loans shall be computed on the basis of a 360-day year (a 365 or 366-day
year, as applicable, in the case of Base Rate Loans based on the Prime Rate)
and for the actual number of days elapsed in the period during which it
accrues.  In computing interest on any
Loan, the date of the making of such Term Loan or the first day of an Interest
Period applicable to such Term Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Term Loan or the expiration date of
an Interest Period applicable to such Term Loan or, with respect to a Base Rate
Loan being converted to a Eurodollar Rate Loan, the date of conversion of such
Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be
excluded; provided  that if a Term Loan is repaid on the same day
on which it is made, one day’s interest shall be paid on that Loan.

2.3          Fees.

A.        Annual Administrative Fee.  The Company agrees to
pay to the Administrative Agent, for its own account, an annual administrative
fee in such amounts as may have been or hereafter may be mutually agreed upon
from time to time.

B.        Other Agent Fees.  The Company agrees to
pay such other fees to the Administrative Agent and the Lead Arranger, for
their respective accounts, as may have been or hereafter may be mutually agreed
upon from time to time.

 27
 

 

2.4          Repayments and
Prepayments; General Provisions Regarding Payments.

A.        Scheduled Maturity of Term Loans.

On
the Term Loan Maturity Date the Company shall pay all amounts owing by the
Company under this Agreement with respect to the Term Loans.

B.        Prepayments.

(i)            Voluntary Prepayments.  Subject to the terms of subsection 2.4B(ii),
the Company may, upon not less than three (3) Business Days’ prior written or
telephonic notice, in the case of Term Loans which are Eurodollar Rate Loans,
and upon not less than one (1) Business Day’s prior written or telephonic
notice, in the case of Term Loans which are Base Rate Loans, promptly confirmed
in writing to the Administrative Agent (which notice the Administrative Agent
will promptly notify each Lender), at any time and from time to time
voluntarily prepay the Term Loans on any Business Day in whole or in part in an
aggregate minimum amount of (i) $3,500,000 and integral multiples of
$1,000,000 in excess of that amount in the case of Eurodollar Rate Loans; and
(ii) $3,500,000 and integral multiples of $1,000,000 in excess of that amount
in the case of Base Rate Loans; provided  that in the event the
Company shall prepay a Eurodollar Rate Loan other than on the expiration of the
Interest Period applicable thereto, the Company shall, at the time of such
prepayment, also pay any amounts payable under subsection 2.6D.  Notice of prepayment having been given as
aforesaid, the Term Loans shall become due and payable on the prepayment date
specified in such notice and in the aggregate principal amount specified
therein.  Any voluntary prepayments
pursuant to this subsection 2.4B(i) shall be applied as specified in subsection
2.4C. 

(ii)           Term Loan Call Protection.  Subject to Section 2.4B(iii)(e) below, in the
event that the Term Loans are prepaid or repaid (a) in whole or in part
pursuant to subsection (i) above (other than with respect to any voluntary
repayment made on the Restatement Date in an aggregate principal amount of
$10,000,000) or (b) in an amount in excess of $5,000,000 in connection
with any single transaction or series of related transactions pursuant to
subsections 2.4B(iii)(a), (b), (c) or (d) below or in any amount pursuant to
subsection 2.4B(iii)(a), (b), (c) or (d) below to the extent that the amount of
such prepayments pursuant to subsection 2.4B(iii)(a), (b), (c) and (d) below
shall exceed $10,000,000 following the Restatement Date (excluding for all
purposes of this clause (b) any Net Cash Proceeds resulting from the sale
by the Company or any of the Subsidiaries of the Casa Gallardo Restaurants), in
each case, (y) on or prior to the first anniversary of the Restatement Date,
the Company shall pay to the Lenders having Term Loan Exposure all accrued and
unpaid interest and fees outstanding and a prepayment premium equal to the
Make-Whole Premium or (z) after the first anniversary of the Restatement Date,
but on or prior to the third anniversary of the Restatement Date, the Company
shall pay to Lenders having Term Loan Exposure a prepayment premium on the
amount so prepaid or repaid as follows:

	
  Relevant Period

  	
   

  	
  Prepayment premium as a percentage of the

  amount so prepaid or repaid

  
	
  On or prior to the second anniversary of the
  Restatement Date, but after the first anniversary of the Restatement Date

  	
   

  	
  1.5%

  
	
  On or prior to the third anniversary of the
  Restatement Date, but after the second anniversary of the Restatement Date

  	
   

  	
  0.5%

  

 

 28
 

 

(iii)          Mandatory Prepayments.  The Term Loans shall be prepaid in the manner
provided in subsection 2.4C upon the occurrence of the following circumstances:

(a)           Prepayments from Asset Sales.  No later than the fifth (5th) Business Day following the date of receipt by Holdings, the
Company or any of the Subsidiaries of Cash Proceeds of any Asset Sale, the
Company shall, to the extent that (x) it is not required to offer such Net Cash
Proceeds to redeem or otherwise prepay the Senior Secured Notes (or following
such offer, to apply such Net Cash Proceeds to so redeem or otherwise prepay
the Senior Secured Notes) and (y) there is no “Default” or “Event of Default”
under and as defined in the Revolving Credit Agreement, and subject to the
terms of subsection 2.4B(ii), prepay the Term Loans (and associated accrued
interest and prepayment fees, if any) as provided in subsection 2.4C in an
amount equal to the Net Cash Proceeds received; provided  that so
long as no Default or Event of Default shall have occurred and be continuing,
the Company shall have the option, directly or through one or more of the
Subsidiaries, to invest such Net Cash Proceeds, within three hundred sixty
(360) days of receipt thereof, in long-term productive assets of the general
type used in the business of the Company and the Subsidiaries and, to the
extent not so invested, shall apply such amounts as provided in subsection
2.4C.

(b)           Prepayments Due to Issuance of
Debt.  No later than the fifth (5th) Business Day following the date of receipt by Holdings, the
Company or any of the Subsidiaries of any proceeds of any Indebtedness (other
than any Indebtedness permitted by subsection 6.1), the Company
shall,  to the extent there is no “Default”
or “Event of Default” under and as defined in the Revolving Credit Agreement,
prepay the Term Loans (and associated accrued interest and prepayment fees, if
any) as provided in subsection 2.4C in an amount equal to the amount of such
proceeds; provided  that payment or acceptance of the amounts
provided for in this subsection 2.4B(iii)(b) shall not constitute a waiver of
any Event of Default resulting from the incurrence of such Indebtedness or
otherwise prejudice any rights or remedies of the Administrative Agent or any
Lender.

(c)           Prepayments Due to Issuance of
Equity Securities.  No later than the
fifth (5th) Business
Day following the date of receipt by Holdings, the Company or any of the
Subsidiaries of any Equity Proceeds (other than (i) Equity Proceeds received in
connection with an issuance of Capital Stock to one or more of the Permitted
Holders,  (ii) equity issued to any
officer, employee or director of Holdings, the Company or any of the
Subsidiaries, or (iii) Equity Proceeds received by Holdings (x) in connection
with an equity contribution by Holdings to the Company to be used by the
Company for general corporate purposes or (y) to be used by Holdings for
repayment of Indebtedness of Holdings otherwise permitted hereunder); the
Company shall, to the extent there is no “Default” or “Event of Default” under
and as defined in the Revolving Credit Agreement, prepay the Term Loans (and
associated accrued interest and prepayment fees, if any) as provided in
subsection 2.4C in an aggregate amount equal to 50% of such Equity Proceeds.

(d)           Prepayments Due to Insurance and
Condemnation Proceeds.  No later than
the third (3rd) Business
Day following the date of receipt by Holdings, the Company or any of the
Subsidiaries of any cash payments in excess of $500,000 under any insurance
policy as a result of any damage to or loss of all or any portion any tangible
asset (net of actual and documented reasonable costs incurred by the Company or
any of the Subsidiaries in connection with adjustment and settlement thereof,  “Insurance

 29
 

 

Proceeds”) or any proceeds resulting from the taking of assets by the
power of eminent domain, condemnation or otherwise (net of actual and
documented reasonable costs incurred by Holdings, the Company or any of the
Subsidiaries in connection with adjustment and settlement thereof, “Condemnation Proceeds”) (any such event
resulting in the recovery of Insurance Proceeds or Condemnation Proceeds, a “Recovery Event”), the Company shall, to the extent there
is no “Default” or “Event of Default” under and as defined in the Revolving
Credit Agreement, prepay the Term Loans in an amount equal to the Insurance
Proceeds or Condemnation Proceeds, as the case may be, received (less any
payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Term Loans) that is secured by a
Lien on the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such event). 
Concurrently with any prepayment of Term Loans pursuant to this
subsection 2.4B(iii)(d), the Company shall deliver to the Administrative Agent
an Officer’s Certificate demonstrating in detail reasonably satisfactory to the
Administrative Agent the derivation of the Insurance Proceeds or Condemnation
Proceeds, as the case may be, of the correlative Recovery Event; provided
that if the Company shall have delivered a Reinvestment Notice to the
Administrative Agent no later than three (3) Business Days after the
receipt of such Insurance Proceeds or Condemnation Proceeds and no Default or
Event of Default exists at the time of such consummation or delivery of such
notice, the Company shall not be required to make any prepayment with the
proceeds of such Recovery Event to the extent that all or any portion of such
proceeds are reinvested in Reinvestment Assets within three hundred sixty (360)
days from the date of receipt of such proceeds. 
In addition, in the event that the Company shall, at any time after receipt
of proceeds of any Reinvestment Event requiring a prepayment pursuant to this
subsection 2.4B(iii)(d), determine that the prepayments previously made in
respect of such Reinvestment Event were in an aggregate amount less than that
required by the terms of this subsection 2.4B(iii)(d), the Company shall
promptly cause to be made an additional prepayment of the Term Loans in an
amount equal to the amount of any such deficit, and the Company shall
concurrently therewith deliver to the Administrative Agent an Officer’s
Certificate demonstrating the derivation of the additional proceeds resulting
in such deficit.

(e)           Prepayments from Consolidated
Excess Cash Flow.  In the event that
there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing
with the Fiscal Year ending December 31, 2007), the Company shall, to the
extent there is no “Default” or “Event of Default” under and as defined in the
Revolving Credit Agreement, no later than ninety-five (95) days after the
end of such Fiscal Year, prepay the Term Loans in an aggregate amount equal to
the Required Percentage of such Consolidated Excess Cash Flow for such Fiscal
Year.

 30
 

 

C.        Application
of Prepayments.

(i)            Application
of Mandatory Prepayments.  The
Company shall deliver to the Administrative Agent, no later than the date that
is fifteen (15) Business Days prior to any prepayment required by subclauses
(a), (b), (c), (d) or (e) of subsection 2.4B(iii) (unless delivery by such date
is not practicable, in which case the Company shall deliver the same as soon as
practicable), a certificate of a Responsible Officer setting forth (a) in
reasonable detail the calculation of the amount of such prepayment and (b) the
anticipated prepayment date therefor (which information the Administrative
Agent shall promptly provide to the Lenders). 
Any amount required to be applied as a prepayment of Loans pursuant to
subclauses (a), (b), (c), (d) or (e) of subsection 2.4B(iii) shall be applied
to prepay the Term Loans (and shall be applied to prepay the Term Loans on a
ratable basis, regardless of whether such Term Loans are Eurodollar Rate Loans
or Base Rate Loans and, in the case of Eurodollar Rate Loans, regardless of the
Interest Period therefor); provided  that any Lender may elect, by
notice to the Administrative Agent by telephone (confirmed by facsimile) at
least five (5) Business Days prior to the applicable prepayment date, to
decline all or any portion of any prepayment of its Term Loans pursuant to
subclauses (a), (b), (c), (d) or (e) of subsection 2.4B(iii), in which case the
aggregate amount of the prepayment that would have been applied to prepay such
Term Loans but was so declined shall be applied as an offer to prepay the
Holdings Term Loan under and in accordance with the Holdings Credit Agreement, provided
that such payment is not prohibited by the Revolving Credit Agreement.  Any voluntary prepayments pursuant to
subsection 2.4B(i) and any amount required to be applied as a prepayment of
Term Loans pursuant to subsection 2.4B(iii) shall be applied to prepay the Term
Loans of the Lenders in accordance with the Lenders Pro Rata Shares.  Each such prepayment shall be made subject to
the requirements of subsection 2.6D.

(ii)           Application of Payments Under the
Guarantee Agreement.  All payments
received by the Administrative Agent under the Guarantee Agreement shall be
applied promptly from time to time by the Administrative Agent in the following
order of priority:

(a)           to the payment of the reasonable
costs and expenses of any collection or other realization under the Guarantee
Agreement, including reasonable compensation to the Administrative Agent and
its agents and counsel, and all expenses, liabilities and advances made or
incurred by the Administrative Agent in connection therewith, all in accordance
with the terms of this Agreement and the Guarantee Agreement;

(b)           thereafter, to the extent of any
excess payments, to the payment of all other Guarantied Obligations (as defined
in the Guarantee Agreement) for the ratable benefit of the holders thereof; and

(c)           thereafter, to the extent of any
excess payments, to the payment to the applicable Guarantor or to whosoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.

D.        General Provisions
Regarding Payments.

(i)            Manner and Time of Payment.  All payments by the Company of principal,
interest, fees, expenses and other Obligations hereunder and under the Term
Notes shall be made in same day funds and without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to the Administrative
Agent not later than 1:00 p.m. (New York time) on the date due at the Funding
and Payment Office for the account of the Lenders; funds received by

 31
 

 

the Administrative Agent after that
time on such due date shall, at the Administrative Agent’s discretion, be
deemed to have been paid by the Company on the next succeeding Business
Day.  The Company hereby authorizes the
Administrative Agent to charge its accounts with the Administrative Agent in
order to cause timely payment to be made to the Administrative Agent of all
principal, interest, fees, expenses and other Obligations due hereunder
(subject to sufficient funds being available in its accounts for that purpose).

(ii)           Application of Payments to
Principal, Interest and Prepayment Fees. 
Except as provided in subsection 2.2C, all payments in respect of the
principal amount of any Term Loan shall include payment of accrued interest and
prepayment fees, if any, on the principal amount being repaid or prepaid, and
all such payments (and in any event any payments made in respect of any Term
Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest and prepayment fees, if any, before
application to principal.

(iii)          Apportionment of Payments.  The aggregate principal, prepayment fees, if
any, and interest payments shall be apportioned among all outstanding Term
Loans to which such payments relate, in each case proportionately to the
Lenders’ respective Pro Rata Shares.  The
Administrative Agent shall promptly distribute to each Lender, at its
applicable Lender Office, its Pro Rata Share of all such payments received by
the Administrative Agent. 
Notwithstanding the foregoing provisions of this subsection 2.4D(iii)
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, the Administrative Agent shall give effect thereto in
apportioning payments received thereafter.

(iv)          Payments on Business Days.  Except if expressly provided otherwise,
whenever any payment to be made hereunder shall be stated to be due on a day
that is not a Business Day, such payment shall be made on the immediately
preceding Business Day.

(v)           Notation of Payment.  Each Lender agrees that before disposing of
any Term Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Term
Loans evidenced by that Term Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of
any Term Loan made under such Note shall not limit or otherwise affect such
disposition or the obligations of the Company hereunder or under such Term Note
with respect to any Term Loan or any payments of principal or interest on such
Term Note.

2.5          Use of Proceeds.

A.        Use of Proceeds.  The proceeds of the
Term Loans made to the Company on the Closing Date were used by the Company on
the Closing Date, together with cash on hand of the Company, solely to pay the
acquisition consideration in connection with the acquisition of CKR Acquisition
Corp. and to pay transaction costs related thereto.  The proceeds of the Term Loans made to the
Company on the Restatement Date shall be used by the Company on the Restatement
Date solely to repay in full any Term Loans under the Original Credit Agreement
that are not continued on the Restatement Date pursuant to subsection 2.1A.

B.        Compliance With Laws.  The Company
undertakes that no portion of the proceeds of any Term Loans or other
extensions of credit under this Agreement shall be used by it or any of the
Subsidiaries in any manner which would be illegal under, or which would cause
the invalidity or unenforceability (in each case in whole or in part) of any
Loan Document under, any applicable law.

 32
 

 

C.        Margin Regulations.  Without limiting the
generality of subsection 2.5B, no portion of the proceeds of any borrowing or
other extension of credit under this Agreement shall be used by the Company or
any of the Subsidiaries in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Exchange Act, in each case as
in effect on the date or dates of such borrowing and such use of proceeds.

2.6          Special Provisions Governing
Eurodollar Rate Loans.

Notwithstanding any other provision of this
Agreement to the contrary, the following provisions shall govern with respect
to Eurodollar Rate Loans as to the matters covered:

A.        Determination of Applicable Interest
Rate.  As soon as practicable after 11:00 A.M. (New
York time) on each Interest Rate Determination Date, the Administrative Agent
shall determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the Company and each Lender.

B.        Inability to Determine Applicable
Interest Rate.  In the event that the Administrative Agent
shall have reasonably determined (which determination shall be final,
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances arising after the Restatement Date affecting the London interbank
market, adequate and fair means do not exist for ascertaining the interest rate
applicable to such Term Loans on the basis provided for in the definition of
Reserve Adjusted Eurodollar Rate the Administrative Agent shall on such date
give notice (in writing or by telephone confirmed in writing) to the Company
and each Lender of such determination, whereupon (i) no Term Loans may be made
or continued as, or converted to, Eurodollar Rate Loans, until such time as the
Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist (such notification not
to be unreasonably withheld or delayed) and (ii) any Notice of
Conversion/Continuation given by the Company with respect to the Term Loans in
respect of which such determination was made shall be deemed to be rescinded by
the Company.

C.        Illegality or Impracticability of
Eurodollar Rate Loans.  In the event that on any date any Lender
shall have reasonably determined (which determination shall be final,
conclusive and binding upon all parties hereto but shall be made only after
consultation with the Company and the Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the Restatement
Date which materially and adversely affect the London interbank market, then,
and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (in
writing or by telephone confirmed in writing) to the Company and the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each other Lender).  Thereafter (a) the obligation of the Affected
Lender to make Term Loans as, or to convert Term Loans to, Eurodollar Rate
Loans, shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to
a Eurodollar Rate Loan then being requested by the Company pursuant to the
Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender
shall make such Term Loan as (or convert such Term Loan to, as the case may be)
a Base Rate Loan, (c) the Affected Lender’s obligation to maintain its
outstanding Eurodollar Rate Loans,

 33
 

 

as the case may be (the “Affected
Loans”), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such
termination.  Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by the Company
pursuant to a Notice of Conversion/Continuation, the Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by facsimile or by telephone confirmed in writing) to the
Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission the Administrative Agent shall promptly transmit to each other
Lender).  Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect
the obligation of any Lender other than an Affected Lender to make or maintain
Term Loans as, or to convert Term Loans to, Eurodollar Rate Loans in accordance
with the terms of this Agreement.

D.        Compensation For Breakage or Non-Commencement
of Interest Periods.  The Company shall compensate each Lender,
upon written request by that Lender (which request shall set forth the basis
for requesting such amounts), for all reasonable losses, expenses and
liabilities (including any interest paid by that Lender to the Lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any actual loss,
expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain
(but excluding any lost profits): (i) if for any reason (other than a default
by that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation
or a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4B or assignment pursuant to
subsection 2.8) or conversion of any of its Eurodollar Rate Loans occurs on a
date that is not the last day of an Interest Period applicable to that Loan,
(iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any
date specified in a notice of prepayment given by the Company, or (iv) as a
consequence of any other default by the Company in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.

E.         Booking of Eurodollar Rate Loans.  Subject to subsection
2.8, any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or
for the account of any of its branch offices or the office of an Affiliate of
that Lender.

F.         Assumptions Concerning Funding of
Eurodollar Rate Loans.  Calculation of all amounts payable to a
Lender under this subsection 2.6 and under subsection 2.7A shall be made as
though that Lender had actually funded each of its relevant Eurodollar Rate
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to the definition of Reserve Adjusted Eurodollar Rate in an
amount equal to the amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period and, through the transfer of such
Eurodollar deposit from an offshore office of that Lender to a domestic office
of that Lender in the United States of America; provided  that
each Lender may fund each of its Eurodollar Rate Loans in any manner it sees
fit and the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this subsection 2.6 and under subsection
2.7A.

G.        Eurodollar Rate Loans After Default.  After the occurrence
of and during the continuation of a Default or Event of Default, (i) the
Company may not elect to have a Term Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Term Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by the Company with respect to a requested

 34
 

 

borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by the Company.

2.7          Increased Costs; Taxes.

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 by, any Lender (except any reserve requirement reflected in the
Eurodollar Base Rate); (ii)  subject any
Lender to any tax of any kind whatsoever with respect to this Agreement or any
Eurodollar Rate Loans 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 subsection 2.7E and changes 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 hereunder 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 obligations to make any such
Term 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 Company 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 the applicable
Lender 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 Term 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 Company 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 the case may be, as specified in subsection 2.7A or
2.7B and delivered to the Company shall be conclusive absent manifest
error.  The Company shall pay such
Lender, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.

D.        Delay in Requests.  Failure or delay on
the part of any Lender to demand compensation pursuant to this subsection shall
not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Company shall not be required to compensate a Lender pursuant
to this subsection for any increased costs incurred or reductions suffered more
than nine months prior to the date that such Lender, as the case may be,
notifies the Company 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.         Taxes.

(i)            Payments Free of Taxes.  Any and all payments by or on account of any
obligation of the Company hereunder or 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

 35
 

 

if the Company 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 subsection) 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 shall make such
deductions and (iii) the Company shall timely pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.

(ii)           Payment of Other Taxes by the
Company.  Without limiting the
provisions of paragraph (i) above, the Company shall timely pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.

(iii)          Indemnification by the Company.  The Company 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 by an Agent
or a Lender (with 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.

(iv)          Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Company to a Governmental Authority,
the Company 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.

(v)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Company is a resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or
under any other Loan Document shall deliver to the Company (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Company or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if
requested by the Company or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Company or the Administrative Agent as will enable the Company 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, in the event that the Company is a resident for tax purposes in the
United States of America, any Foreign Lender shall deliver to the Company 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 Company 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 of America 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

 36
 

 

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 Company
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
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Company to determine the withholding or deduction required to be
made.

(vi)          Treatment of Certain Refunds.  If the Administrative Agent or a Lender
determines, in its sole discretion, that it has received a refund of (or the
benefit of a tax credit in lieu of such refund attributable to) any Taxes or
Other Taxes as to which it has been indemnified by the Company or with respect
to which the Company has paid additional amounts pursuant to such subsection
2.7, it shall pay to the Company an amount equal to such refund or credit (but
only to the extent of indemnity payments made, or additional amounts paid, by the
Company under such subsection 2.7 with respect to the Taxes or Other Taxes
giving rise to such refund or credit), 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 or credit); provided  that
the Company, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to the Company (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 or credit to such Governmental
Authority.  This paragraph shall not be
construed to require any Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Company or any other Person.

2.8          Mitigation Obligations; Replacement
of Lenders.

A.        Designation of a Different Lender
Office.  If any Lender requests compensation under
subsection 2.7A or 2.7B, or requires the Company to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to subsection 2.7E, then such Lender shall use reasonable efforts to
designate a different Lender Office for making, issuing, funding or maintaining
its Term 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 subsection 2.7 in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.  The
Company hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

B.        Replacement of Lenders.  If any Lender
requests compensation under subsection 2.7A or 2.7B, or if the Company is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to subsection 2.7E, then the
Company 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, subsection 9.1), all of its interests, rights and obligations
under this Agreement and the related Loan Documents to an Eligible Assignee
that shall assume such obligations (which Eligible Assignee may be another
Lender, if a Lender accepts such assignment); provided  that (i)
the Company shall have paid to the Administrative Agent the assignment fee
specified in subsection 9.1B(iv), if applicable, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Term
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts under
subsection 2.6D) from such Eligible

 37
 

 

Assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Company (in the case of all other amounts),
(iii) in the case of any such assignment resulting from a claim for
compensation under subsection 2.7A or 2.7B or payments required to be made
pursuant to subsection 2.7E, such assignment will result in a reduction in such
compensation or payments thereafter, and (iv) such assignment does not
conflict with applicable law.  A Lender
shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Company to require such assignment and delegation cease to
apply.  Each Lender agrees that if the
Company exercises its option under this paragraph, it shall promptly execute
and deliver all agreements and documentation necessary to effectuate such
assignment as set forth in subsection 9.1. 
The Company shall be entitled (but not obligated) to execute and deliver
such agreements and documentation on behalf of each such applicable Lender and
any such agreements and/or documentation so executed by the Company shall be
effective for all purposes of documenting an assignment pursuant to subsection
9.1.

SECTION 3.

CONDITIONS TO EFFECTIVENESS

3.1          Conditions to Effectiveness on the
Restatement Date.

A.        Company Documents.  On or before the
Restatement Date, the Company shall deliver or cause to be delivered to the
Administrative Agent and the Requisite Lenders the following, each, unless
otherwise noted, dated the Restatement Date:

(i)            a certified copy of its Certificate
of Incorporation, together with a good standing certificate from the Secretary
of State of the State of Delaware, each state in which any of its Real Property
Assets are located, and each other state where it is qualified as a foreign
corporation to do business, each dated a recent date prior to the Restatement
Date;

(ii)           a copy of its Bylaws, certified as of
the Restatement Date by its corporate secretary or an assistant secretary;

(iii)          resolutions of its Board of Directors
approving and authorizing the execution, delivery and performance of this Agreement
and the other Transaction Documents to which it is a party or by which it or
its assets may be bound that are to be delivered on the Restatement Date,
certified as of the Restatement Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or amendment;

(iv)          incumbency certificates of its
officers executing this Agreement and the other Transaction Documents to which
it is a party as of the Restatement Date;

(v)           executed originals of this Agreement
and the other Loan Documents to which it is a party that are to be delivered on
the Restatement Date;

(vi)          certified copies of each of the other
Transaction Documents to which it is a party that are to be delivered on the
Restatement Date; and

(vii)         such other documents as the
Administrative Agent may reasonably request.

B.        Subsidiary Documents.  On or before the
Restatement Date, the Company shall deliver or cause to be delivered to the
Administrative Agent and the Requisite Lenders the following for each
Subsidiary that is a Loan Party (which may be waived by the Requisite Lenders
for any Subsidiary with

 38
 

 

respect to the items described in clause (i) below), each,
unless otherwise noted, dated the Restatement Date:

(i)            certified copies of its Organizational
Certificate, together with a good standing certificate from the applicable
Governmental Authority of its jurisdiction of incorporation, organization or
formation, each state in which any of its Real Property Assets are located, and
each other state in which it is qualified as a foreign corporation or other
entity to do business, each dated a recent date prior to the Restatement Date;

(ii)           copies of its Organizational
Documents, certified as of the Restatement Date by its corporate secretary or
an assistant secretary;

(iii)          copies of its Organizational
Authorizations approving and authorizing the execution, delivery and
performance of the Guarantee Agreement and the other Transaction Documents to
which it is party or by which it or its assets may be bound that are to be
delivered on the Restatement Date, certified as of the Restatement Date by its
corporate secretary or an assistant secretary as being in full force and effect
without modification or amendment;

(iv)          incumbency certificates of its
officers executing the Guarantee Agreement and the other Transaction Documents
to which it is a party as of the Restatement Date;

(v)           executed originals of the Guarantee
Agreement, as the case may be, and the other Loan Documents to which it is a
party that are to be delivered on the Restatement Date;

(vi)          certified copies of each of the other
Transaction Documents to which it is a party that are to be delivered on the
Restatement Date; and

(vii)         such other documents as the
Administrative Agent may reasonably request.

C.        Holdings Documents.  On or before the
Restatement Date, the Company shall deliver or cause to be delivered to the
Administrative Agent and the Requisite Lenders the following for Holdings,
each, unless otherwise noted, dated the Restatement Date:

(i)            a certified copy of the Certificate
of Incorporation of Holdings, together with a good standing certificate from
the Secretary of State of the State of Delaware and each other state where it
is qualified as a foreign corporation to do business, each dated a recent date
prior to the Restatement Date;

(ii)           a copy of Holdings’ Bylaws, certified
as of the Restatement Date by its corporate secretary or an assistant
secretary;

(iii)          resolutions of Holdings’ Board of
Directors approving and authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party or by
which it or its assets may be bound that are to be delivered on the Restatement
Date, certified as of the Restatement Date by its corporate secretary or an
assistant secretary as being in full force and effect without modification or
amendment;

(iv)          incumbency certificates of Holdings’
officers executing this Agreement and the other Transaction Documents to which
it is a party as of the Restatement Date;

 39
 

 

(v)           executed originals of this Agreement
and the other Loan Documents to which Holdings is a party that are to be
delivered on the Restatement Date;

(vi)          incumbency certificates of its
officers executing the Guarantee Agreement and the other Transaction Documents
to which it is a party as of the Restatement Date;

(vii)         certified copies of each of the other
Transaction Documents to which Holdings is a party that are to be delivered on
the Restatement Date; and

(viii)        such other documents as the Administrative
Agent may reasonably request.

D.    Consummation of
Transactions.

(i)            (a)  Each of the
Transaction Documents shall be in form and substance reasonably satisfactory to
the Requisite Lenders and each such Transaction Document shall have been duly
executed and delivered by each party thereto and shall be in full force and
effect; and (b) all other conditions set forth in the Transaction Documents
shall have been satisfied or the fulfillment of any such conditions shall have
been waived with the written consent of the Lenders;

(ii)           The Equity Contribution shall have
been made on terms reasonably acceptable to the Requisite Lenders;

(iii)          Holdings shall have received not less
than $115,000,000 in gross cash proceeds from its borrowings under the Holdings
Credit Agreement, which proceeds shall be applied to repay in full all amounts
due or outstanding in respect of the Bank of Montreal Indebtedness;

(iv)          All amounts due or outstanding in
respect of the Bank of Montreal Indebtedness shall have been (or substantially
simultaneously with the closing under the Holdings Credit Agreement shall be)
paid in full, all commitments in respect thereof terminated and all guarantees
thereof and security therefore discharged and released, and the Administrative
Agent and the Requisite Lenders shall have received reasonably satisfactory
evidence thereof; and

(v)           After giving effect to the
Transactions and the other transactions contemplated hereby, Holdings, the
Company and the Subsidiaries shall have outstanding no Indebtedness or
preferred stock other than (a) the Term Loans, (b) Indebtedness under the
Revolving Credit Documents, (c) the Senior Secured Notes, (d) Indebtedness
of Holdings under the Holdings Credit Documents and (e) Indebtedness
listed on Schedule 6.1.

E.         Lender Signatures.  The following Persons
shall have executed and delivered this Agreement:

(i)            the Lenders; and

(ii)           the Administrative Agent.

F.         Necessary Consents.  The Company shall
have obtained all approvals and consents of Governmental Authorities and other
Persons necessary in connection with the Transactions and the continued
operation of the business conducted by Holdings, the Company and the
Subsidiaries, all applicable appeal periods shall have expired and each of the
foregoing shall be in full force and effect and in form and substance
reasonably satisfactory to the Requisite Lenders.

 40
 

 

G.        Financial Condition and Solvency
Certificate.  The Company shall have delivered to the
Administrative Agent a certificate from the chief financial officer of the Company,
substantially in the form of Exhibit VI.

H.        Transaction Costs, Fees and Expenses.  On or prior to the
Restatement Date, the Company shall have paid (i) to the Administrative Agent
any and all fees and reasonable expenses of the Administrative Agent that are
then due and owing or accrued and not yet paid under or in connection with this
Agreement or any of the documents, instrument or agreements executed in
connection herewith and (ii) to the appropriate Persons any and all
outstanding reasonable fees and expenses (including legal advisors) incurred by
the Administrative Agent through the Restatement Date in connection with the
negotiation, drafting and execution of the Transaction Documents.  On or prior to the Restatement Date, the
Company shall have delivered to the Requisite Lenders a schedule, in a form
satisfactory to the Requisite Lenders, setting forth the Company’s estimate of
the Transaction Costs (other than fees payable to the Administrative Agent).

I.          Opinions of Loan Parties’ Counsel.  The Administrative
Agent and its counsel shall have received the written opinion of Morgan Lewis
& Bockius LLP, (a) in form and substance reasonably satisfactory to
the Requisite Lenders and the Administrative Agent and their counsel,
(b) dated as of the Restatement Date, (c) addressed to each of the
Administrative Agent and the Lenders and (d) setting forth substantially
the matters set forth in Exhibit VII.

J.         Financial Information.  On or before the
Restatement Date, the Requisite Lenders shall have received from the Company
such budgets and other cash flow and financial information and projections
described in subsection 4.3 as the Administrative Agent or the Requisite
Lenders may reasonably request, all in form and substance reasonably
satisfactory to the Requisite Lenders.

K.        Evidence of Insurance.  The Requisite Lenders
shall have received copies of certificates of insurance with respect to each of
the insurance policies required pursuant to subsection 5.4, and the Requisite
Lenders shall be reasonably satisfied with the nature and scope of these
insurance policies.

L.        Environmental.  The Requisite Lenders
shall be reasonably satisfied as to the amount and nature of any environmental
and employee health and safety exposures to which Holdings, the Company and the
Subsidiaries may be subject after giving effect to the Transactions, and with
the plans of Holdings, the Company or such Subsidiaries with respect thereto.

M.       No Material Adverse Effect.  Since December 31,
2005, there shall not have occurred any event, change or condition that has
had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

N.        Corporate
and Capital Structure, Ownership, Management, Etc.

(i)            Corporate Structure.  The corporate organizational structure of
Holdings, the Company and the Subsidiaries as of the Restatement Date shall be
as set forth on Schedule 3.1N.

(ii)           Capital Structure and Ownership.  The capital structure and ownership of
Holdings and the Company as of the Restatement Date shall be as set forth on Schedule
3.1N.

O.        Representations and Warranties;
Performance of Agreements.  The representations and warranties contained
herein and in the other Loan Documents shall be true and correct in all
material respects on and as of the Restatement Date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true and correct in
all material respects on and as of such earlier date.  The Company shall have delivered

 41
 

 

to the Administrative Agent and the Requisite Lenders an
Officer’s Certificate, in form and substance satisfactory to the Requisite
Lenders, to the effect that the representations and warranties in Section 4 are
true and correct in all material respects on and as of the Restatement Date and
both before and after giving effect to the Transactions, to the same extent as
though made on and as of that date and that the Company has performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Restatement Date.

P.        No Litigation.  There shall be no
litigation or governmental, administrative or judicial actions or proceedings,
actual or threatened, that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect or that could reasonably be
expected to restrain, prevent or impose burdensome conditions on any of the
Transactions; provided, that it is expressly acknowledged by the
Administrative Agent and the Lenders that none of (i) the litigation matters
currently pending against the Company and disclosed in Schedule 3.1P
hereto, (ii) any litigation claims that assert substantially the same or
substantially similar legal theories or bases of liability as any of the
matters described in the immediately preceding clause (i) that are consolidated
with any of the litigation matters described in the immediately preceding
clause (i), (iii) any claims alleged against the Company and/or the
Subsidiaries that are asserted during the period after the Merger Date which
arise in whole or in part from the conduct or alleged conduct of business or
any other action allegedly taken or omitted to be taken by the Company or any
of the Subsidiaries prior to Merger Date and that assert substantially the same
or substantially similar legal theories or bases of liability as any of the
matters described in the immediately preceding clauses (i) or (ii), and (iv) the
litigation claims disclosed in Item #5 of Schedule 3.1P hereto, shall be
considered to have or reasonably be expected to have a Material Adverse Effect
upon the Company, it being understood (and this proviso being conditioned upon
it being the case) that the Litigation Escrow shall have been established
pursuant and subject to the terms of the Escrow Agreement.

Q.        Completion of Proceedings.  All partnership,
corporate, limited liability company and other proceedings taken or to be taken
in connection with the Transactions and all documents incidental thereto not
previously found acceptable by the Requisite Lenders and the Administrative
Agent and its counsel shall be satisfactory in form and substance to the
Requisite Lenders and the Administrative Agent and such counsel, and the
Requisite Lenders and the Administrative Agent and such counsel shall have
received all such counterpart originals or certified copies of such documents
as the Administrative Agent may reasonably request.

R.        Money Laundering.  The Administrative
Agent and the Requisite Lenders shall have received, sufficiently in advance of
(and at least five (5) Business Days prior to) the Restatement Date, all
documentation and other information required by bank regulatory authorities
from the Loan Parties under applicable “know your customer” and anti-money
laundering rules and regulations, including the U.S.A. Patriot Act.

S.        Default, Event of Default.  No event
shall have occurred and be continuing or would result from the consummation of
the borrowing of the Term Loans that would constitute a Default or Event of
Default.

T.        Indebtedness.  The
aggregate principal amount of Indebtedness of Holdings, the Company and the
Subsidiaries outstanding on the Restatement Date shall not exceed $325,000,000.

Each Lender, by delivering its signature page to this
Agreement, shall be deemed to have acknowledged receipt of, and consented to
and approved, each Loan Document and each other document required to be
approved by any Agent, Requisite Lenders or Lenders, as applicable, on or prior
to the Restatement Date.

 42
 

 

SECTION 4.

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into
this Agreement and to make the Term Loans, each of Holdings and the Company
represents and warrants to the Administrative Agent and each Lender, on the
Restatement Date, that the following statements are true and correct on and as
of such date (except to the extent such statements specifically relate to any
earlier date, in which case they were true and correct on and as of such
earlier date).

4.1          Organization, Powers,
Qualification, Good Standing, Business and Subsidiaries.

A.        Organization and Powers.  Each Loan Party that
is a corporation is duly organized, validly existing and in good standing under
the laws of its state of organization. 
Each Loan Party that is a partnership or limited liability company is a
duly organized and validly existing partnership or limited liability company
(as applicable) under the laws of its jurisdiction of formation and is in good
standing in such jurisdiction.  Each Loan
Party has all requisite corporate, partnership or limited liability company (as
applicable) power and authority to own and operate its properties and to carry
on its business as now conducted and as proposed to be conducted, and each Loan
Party has all requisite corporate, partnership or limited liability company (as
applicable) power and authority to enter into the Transaction Documents to
which it is a party, to carry out the Transactions and the other transactions
contemplated thereby and, in the case of the Company, to issue, deliver and pay
the Term Notes and pay the obligations incurred under each of the Loan
Documents.

B.        Qualification and Good Standing.  Each Loan Party is
qualified or authorized to do business and is in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its businesses and operations, except in jurisdictions where the failure to be
so qualified or in good standing has not had and could not reasonably be
expected to have a Material Adverse Effect.

C.        Conduct of Business.  Holdings, the Company
and the Subsidiaries are engaged only in the businesses permitted to be engaged
in pursuant to subsection 5.12.

D.        Company and Subsidiaries.  All of the Subsidiaries
of the Company as of the Restatement Date are identified on Schedule 3.1N.  As of the Restatement Date, the Capital Stock
or other equity interests of the Company and each of the Subsidiaries
identified on Schedule 3.1N is duly authorized, validly issued, fully
paid and nonassessable and none of such Capital Stock or other equity interests
constitutes Margin Stock.  Schedule
3.1N correctly sets forth, as of the Restatement Date, the ownership
interest of the Company and each of the Subsidiaries identified therein and all
Capital Stock and other equity interest in such Subsidiaries owned by others
and there are no other warrants, options or other rights to acquire any such
Capital Stock or equity interests of such Subsidiaries.  As of the Restatement Date, except as set
forth on Schedule 4.1D, there are no registration rights, shareholder,
voting rights and similar agreements requiring the Company or any of the
Subsidiaries to register securities under the Securities Act or governing
voting or other rights of shareholders of the Company or any of the
Subsidiaries, in each case to which the Company or any of the Subsidiaries is a
party.

4.2          Authorization, etc.

A.        Authorization of Borrowing.  The execution,
delivery and performance of the Transaction Documents and the issuance,
delivery and payment of the Term Notes have been duly authorized by all
necessary corporate, partnership and/or limited liability company (as
applicable) action on the part of each of the Loan Parties party thereto.

 43
 

 

B.        No Conflict.  After giving effect
to the Transactions and the execution, delivery and performance by each of the
applicable Loan Parties of the Transaction Documents, the issuance, delivery
and payment of the Term Notes and the consummation of the Transactions do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to any Loan Party, or violate the Organizational
Certificate or any other Organizational Documents of any Loan Party or any
order, judgment or decree of any court or other Governmental Authority binding
on any Loan Party, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any indenture,
agreement, contract or instrument to which any Loan Party is a party or by
which any of them or any of their property may be bound, except to the extent
such conflict, breach or default could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of any Loan Party (other than any Liens securing obligations under the
Senior Secured Note Documents and the Revolving Credit Documents), (iv) require
any approval of stockholders, partners or members or any approval or consent of
any Person under any Organizational Certificate or other indenture, agreement,
contract or instrument to which any Loan Party is a party or by which any of
them or any of their property may be bound, except for such approvals or
consents obtained on or before the Restatement Date or (v) give rise to any
preemptive rights, rights of first refusal or other similar rights on behalf of
any Person under any Applicable Law or any provision of the Organizational Documents
of any Loan Party or any material contract to which any Loan Party is a party
or by which any Loan Party is bound.

C.        Governmental Consents.  The execution,
delivery and performance by the Loan Parties of the Transaction Documents, the
issuance, delivery and payment of the Term Notes and the consummation of the
Transactions do not and will not require any material registration with,
consent or approval of, or notice, declaration, filing or other action to, with
or by, any Governmental Authority, except to the extent obtained on or before
the Restatement Date.

D.        Binding Obligation.  Each of the
Transaction Documents has been duly executed and delivered by each of the Loan
Parties party thereto and is the legally valid and binding obligation of each
such Loan Party, enforceable against such Loan Party in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.

E.         Margin Regulations.   The making of the
Term Loans does not violate Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System.

4.3          Financial Condition; Projections.

A.        Financial Statements. The Company has heretofore delivered to the Administrative
Agent on behalf of the Lenders, at the Lenders’ request, (i) the quarterly
unaudited consolidated balance sheet of the Company and the Subsidiaries,
together with related consolidated statements of income, stockholders’ equity
and cash flows for (a) each Fiscal Quarter subsequent to December 31, 2005 and
ended thirty (30) days prior to the Restatement Date and (b) each fiscal month
after the most recent Fiscal Quarter for which financial statements were
received pursuant to clause (a) and ended thirty (30) days before the
Restatement Date, (ii) the pro forma consolidated balance sheet and
related pro forma consolidated statements of income and cash flows of the
Company as of and for the twelve-month period ended June 30, 2006, prepared
after giving effect to the Transactions as if the Transactions had occurred as
of such date (in the case of such balance sheet) or at the beginning of such
period (in the case of such other financial statements) and (iii) audited
annual consolidated balance sheets and statements of income, stockholders’
equity and cash flows of the Company and the Subsidiaries for Fiscal Years
2005, 2004 and 2003, together, in each case, with all supporting documentation
for any of the foregoing reasonably requested by the Administrative Agent.  All such statements were prepared in
conformity with GAAP and

 44
 

 

fairly present, in all material respects, the financial
position (on a consolidated basis) of the entities described therein as at the
respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments and the
absence of footnote disclosure required in accordance with GAAP.  Neither the Company nor any of the
Subsidiaries has any Contingent Obligation, contingent liability or liability
for taxes, long-term leases or unusual forward or long-term
commitments that is not reflected in the financial statements referred to in
the preceding clauses of this subsection, the most recent financial statements
delivered pursuant to subsection 5.1 or the notes thereto and which in any such
case is material in relation to the business, assets, operations, properties,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries, taken as a whole.

B.        Projections.  On and as of the
Restatement Date, the detailed business plan or projections of the Company and
the Subsidiaries for the Fiscal Years 2006 through 2009 and for the Fiscal
Quarters beginning with the third Fiscal Quarter of 2006 and through the fourth
Fiscal Quarter of 2007, in each case, previously delivered to the
Administrative Agent and prepared on a Pro Forma Basis (the “Projections”) were prepared in good
faith based upon assumptions believed to be reasonable at the time made and as
of the Restatement Date (it being recognized, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections may differ from the projected
results and that the differences may be material).

4.4                               No
Material Adverse Change; No Restricted Payments.

Since December 31, 2005, no event, change or
condition has occurred that has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.  Except as permitted under subsection 6.5 and
as set forth on Schedule 4.4, since December 31, 2005, none of Holdings
or the Company or any of the Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Payment or agreed to do so other than Restricted Payments of Subsidiaries of
the Company to the Company or the Subsidiaries.

4.5          Title to Properties; Liens; Real
Property; Intellectual Property.

A.        Title to Properties; Liens.  The Loan Parties have
good and marketable fee simple title to or a valid leasehold interest in all of
their Real Property Assets reflected in the financial statements referred to in
subsection 4.3 or in the most recent financial statements delivered pursuant to
subsection 5.1, except for Real Property Assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 6.7 and except for such defects that, individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.  All such properties and
assets are free and clear of Liens (other than Liens expressly permitted by
subsection 6.2).

B.        Real Property.  Each lease or
sublease, as applicable, for each such Leasehold Property is in full force and
effect and the Company does not have knowledge of and has not received written
notice of any material default by any party thereto that has occurred and is
continuing thereunder which could reasonably be expected to have a Material
Adverse Effect, and each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles.

 45

 

C.        Intellectual Property.  The Loan Parties own
or have the valid right to use all trademarks and service marks, tradenames,
patents, copyrights, trade secrets and technology necessary to conduct such
Loan Party’s business (collectively, the “Intellectual
Property”), free and clear of any and all Liens (other than
Liens expressly permitted by subsection 6.2). 
All registrations therefor are in full force and effect and are valid
and enforceable, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles. The conduct of each Loan Party’s
business as currently conducted, including all products, processes or services
made, offered or sold by such Loan Party, does not infringe upon, violate,
misappropriate or dilute any intellectual property of any third party, which
infringement, violation, misappropriation or dilution could reasonably be
expected to have a Material Adverse Effect. 
To each Loan Party’s knowledge, no third party is infringing upon the
Intellectual Property in any material respect. 
There is no pending or, to each Loan Party’s knowledge, threatened claim
or litigation contesting the right of such Loan Party to own or use any
material Intellectual Property or the validity or enforceability thereof.

4.6          Litigation; Compliance with Law.

There is no action, suit, proceeding,
arbitration or governmental investigation at law or in equity or before or by
any Governmental Authority pending or, to the knowledge of Holdings, the
Company and the Subsidiaries, threatened against or affecting Holdings, the
Company or any of the Subsidiaries or any property of Holdings, the Company or
any of the Subsidiaries that, either individually or in the aggregate, has had,
or could reasonably be expected to have, a Material Adverse Effect.  Except as identified on Schedule 4.6,
none of Holdings or the Company or any of the Subsidiaries is (i) in violation
of any Applicable Law that has had, or could reasonably be expected to have, a
Material Adverse Effect or (ii) subject to or in default with respect to any
final judgment, writ, injunction, decree, order, rule or regulation of any
Governmental Authority that has had, or could reasonably be expected to have, a
Material Adverse Effect.

4.7                               Payment
of Taxes.

Except to the extent permitted by subsection
5.3, all material tax returns and reports of Holdings, the Company and the
Subsidiaries required to be filed by any of them have been timely filed and are
true, correct and complete in all material respects, and all material taxes,
assessments, fees and other governmental charges upon Holdings, the Company and
the Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable.  None of Holdings, the Company
or any of the Subsidiaries knows of any proposed assessment of additional taxes
against the Company or any of the Subsidiaries with respect to any period
beginning on or before the Closing Date or the Restatement Date, as applicable,
other than those which are being actively contested by the Company or such
Subsidiary in good faith and by appropriate proceedings and for which reserves
or other appropriate provisions, if any, as may be required in conformity with
GAAP shall have been made or provided therefor.

4.8                               Performance
of Agreements; Materially Adverse Agreements.

On and after the Restatement Date and after
giving effect to the Transactions, none of Holdings, the Company or any of the
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any indenture,
agreement, contract or instrument to which it is a party or by which it or any
of its property may be bound, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default, except,
in each case, where the consequences, direct or indirect, of such default or
defaults, if any, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 46
 

 

4.9          Governmental Regulation.

None of Holdings, the Company or any of the
Subsidiaries is subject to regulation under the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to
incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.

4.10        Securities Activities.

None of Holdings, the Company or any of the
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.

4.11        ERISA.

Holdings, the Company, each of the
Subsidiaries and each of their respective ERISA Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the Code and the
regulations and published interpretations thereunder with respect to each Employee
Benefit Plan, and have performed all their obligations under each Employee
Benefit Plan.  Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service indicating
that such Employee Benefit Plan is so qualified and nothing has occurred
subsequent to the issuance of such determination letter which would cause such
Employee Benefit Plan to lose its qualified status.  No liability to the PBGC (other than required
premium payments), the Internal Revenue Service, any Employee Benefit Plan or
any trust established under Title IV of ERISA has been or is expected to be
incurred by Holdings, the Company, any of the Subsidiaries or any of their
respective ERISA Affiliates.  No ERISA
Event has occurred or is reasonably expected to occur.  Except to the extent required under Section
4980B of the Code or similar state laws or as set forth on Schedule 4.11,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of the
Company, any of the Subsidiaries or any of their respective ERISA
Affiliates.  The present value of the
aggregate benefit liabilities under each Pension Plan sponsored, maintained or
contributed to by Holdings, the Company, any of the Subsidiaries or any of
their respective ERISA Affiliates (determined as of the end of the most recent
plan year on the basis of the actuarial assumptions specified for funding
purposes in the most recent actuarial valuation for such Pension Plan) did not
exceed the aggregate current value of the assets of such Pension Plan by more
than $5,000,000.  As of the most recent
valuation date for each Multiemployer Plan for which the actuarial report is
available, the potential liability of Holdings, the Company, the Subsidiaries
and their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA is not greater than $5,000,000. 
Holdings, the Company, each of the Subsidiaries and each of their
respective ERISA Affiliates have complied with the requirements of Section 515
of ERISA with respect to each Multiemployer Plan and are not in material “default”
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan.

4.12        Certain Fees.

Except as otherwise disclosed in writing to
the Administrative Agent, no broker’s or finder’s fee or commission will be
payable with respect to this Agreement or any of the Transactions, and the
Company hereby indemnifies the Administrative Agent and the Lenders against,
and agrees that it will hold the Administrative Agent and the Lenders harmless
from, any claim, demand or liability for any such broker’s or finder’s fees
alleged to have been incurred in connection herewith or therewith by the
Company or any of its Affiliates and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.

 47
 

 

4.13        Environmental Matters.

None of Holdings, the Company or any of the
Subsidiaries nor any of their respective Facilities or operations are subject
to any outstanding written order, consent decree or settlement agreement with
any Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.  None of Holdings, the Company or any of the
Subsidiaries has received any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9604) or any comparable law.  There are and, to each of the Company’ and
the Subsidiaries’ knowledge, have been, no conditions, occurrences, or
Hazardous Materials Activities which could reasonably be expected to form the
basis of an Environmental Claim against Holdings, the Company or any of the
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. 
None of Holdings, the Company or any of the Subsidiaries or, to any Loan
Party’s knowledge, any predecessor of Holdings, the Company or any of the
Subsidiaries has filed any notice under any Environmental Law indicating past
or present treatment of Hazardous Materials at any Facility, and none of
Holdings’, the Company’s or any of the Subsidiaries’ operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state equivalent which
has materially violated any Environmental Law. 
Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.  No event or condition has
occurred or is occurring with respect to Holdings, the Company or any of the
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which, individually or in the
aggregate, has had, or could reasonably be expected to have, a Material Adverse
Effect.

4.14        Employee Matters.

There is no strike or work stoppage in
existence or threatened involving Holdings, the Company or any of the
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect.

4.15        Solvency.

Each of Holdings, the Company and each of the
Subsidiaries, taken as a whole, are, and, upon the incurrence of any
Obligations by any Loan Party (including the making of the Term Loans and the
delivery of the Guarantee Agreement) on any date on which this representation
is made, will be, Solvent.

4.16        Transaction
Documents.

A.        Delivery of Transaction Documents.  The Company has
delivered to the Administrative Agent complete and correct copies of each material
Transaction Document and all exhibits and schedules thereto.

B.        Representations and Warranties; No
Default.  Except to the extent otherwise set forth
herein or in the schedules hereto, each of the representations and warranties
of any Loan Party made in any other Transaction Document, except to the extent
qualified in the schedules to such Transaction Documents, was true and correct
in all material respects as of the Restatement Date (or as of any earlier date
to which such representation and warranty specifically relates).  As of the Restatement Date, all Transaction
Documents are in full force and effect and no party thereunder is in default
thereunder or has the right to terminate any of the Transaction Documents.

C.        Governmental Authorizations.  On the Restatement
Date, all Governmental Authorizations and all other authorizations, approvals
and consents of any other Person required by the

 48
 

 

Transaction Documents or to consummate the Transactions have
been obtained and are in full force and effect.

D.        Conditions and Consummation.  On or prior to the
Restatement Date, each of the Transactions have been consummated in all
material respects in accordance with the Transaction Documents and all
Applicable Laws.

E.         Merger
Consummation.  On or prior to the Restatement Date, the
Merger was consummated in accordance with Applicable Law and the terms and
conditions of the Merger Agreement, a copy of which has been previously
provided to the Administrative Agent and the Required Lenders, without any
amendment, supplement, modification or waiver thereof.

F.         Default,
Event of Default.  As of the Restatement Date, no event shall
have occurred and be continuing that would constitute a Default or Event of
Default under the Original Credit Agreement

4.17        Disclosure.

The representations and warranties of
Holdings, the Company and the Subsidiaries contained in the Loan Documents and
the factual information contained in the other documents, certificates and
written statements furnished to any of the Administrative Agent or the Lenders
by or on behalf of Holdings, the Company or any of the Subsidiaries for use in
connection with the transactions contemplated by this Agreement or any other
Loan Document, when taken together, do not contain any untrue statement of a
material fact or omit to state a material fact (known to the Company or the
applicable Subsidiary, in the case of any document not furnished by it)
necessary in order to make the statements contained herein or therein not
materially misleading in light of the circumstances under which the same were
made.  The Company has disclosed to the
Administrative Agent and the Lenders all facts known to Holdings, the Company
or any of the Subsidiaries (other than matters of a general economic nature)
that, individually or in the aggregate, have had, or could reasonably be
expected to have, a Material Adverse Effect.

SECTION 5.

AFFIRMATIVE COVENANTS

Each of Holdings
and the Company covenants and agrees that, until payment in full of all of the
Term Loans and other Obligations, Holdings and the Company shall perform, and
the Company shall cause each of the Subsidiaries to perform, all covenants in
this Section 5.

5.1          Financial Statements and Other
Reports and Notices.

A.        Financial Information.  The Company shall
maintain, and shall cause each of the Subsidiaries to maintain, a system of
accounting established and administered to permit preparation of financial
statements in conformity with GAAP.  The
Company shall deliver to the Administrative Agent (who shall promptly forward
copies of the same to each Lender):

(i)            as soon as practicable, but in any
event not later than ninety (90) days after the end of each Fiscal Year of the
Company and the Subsidiaries, the consolidated balance sheet of the Company and
the Subsidiaries, as at the end of such Fiscal Year, and the related
consolidated statement of income and consolidated statement of cash flow for
such Fiscal Year, each setting forth in comparative form the figures for the
previous Fiscal Year (all such consolidated statements to be in reasonable
detail, prepared in accordance with GAAP, and certified without qualification
and without an expression of uncertainty as to the ability of the Company and
any of

 49
 

 

the Subsidiaries to continue as a
going concern, by Ernst & Young L.L.P. or by other independent nationally
recognized certified public accountants reasonably satisfactory to the
Administrative Agent, together with a written statement from such accountants
to the effect that they have read a copy of this Agreement, and that, in making
the examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default, or, if such accountants shall
have obtained knowledge of any then existing Default or Event of Default they
shall disclose in such statement any such Default or Event of Default) and the
projections from the current Fiscal Year; provided  that such
accountants shall not be liable to the Lenders for failure to obtain knowledge
of any Default or Event of Default;

(ii)           as soon as practicable, but in any
event not later than forty-five (45) days after the end of each of the Fiscal
Quarters of the Company and the Subsidiaries, copies of the unaudited
consolidated balance sheet of the Company and the Subsidiaries as at the end of
such Fiscal Quarter, and the related consolidated statement of income and
consolidated statement of cash flow for such Fiscal Quarter and the portion of
such Persons’ Fiscal Year then elapsed, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet as of the end of) the previous Fiscal Year and
the comparisons to the projections for such period, all in reasonable detail
and prepared in accordance with GAAP, together with a certification by the
principal financial or accounting officer of the Company that the information
contained in such financial statements fairly presents the financial position
of the Company and the Subsidiaries on the date thereof (subject to year-end
adjustments);

(iii)          contemporaneously with the provision
of such financial statements to the lenders or agent under the Revolving Credit
Agreement, unaudited monthly consolidated financial statements of the Company
and the Subsidiaries for such monthly period ending on the last Sunday of each
calendar month (with the exception of (i) the first Fiscal Quarter of Fiscal
Year 2007 when such monthly period will end on the first Sunday of April and
(ii) the second Fiscal Quarter of Fiscal Year 2007 when such monthly period
will end on the first Sunday of July) and the portion of the Company’s Fiscal
Year then ending setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet,
as of the end of) the previous Fiscal Year and the projections for such period,
each prepared in accordance with GAAP, together with a certification by the
principal financial or accounting officer of the Company that the information
contained in such financial statements fairly presents the financial condition
of the Company and the Subsidiaries on the date thereof (subject to year-end
adjustments);

(iv)          simultaneously with the delivery of
the financial statements referred to in clauses (i) and (ii) above, a statement
certified by the principal financial or accounting officer of the Company (and
in the case of delivery of the financial statements referred to in subsection
(i) above, the accountants of the Company), in substantially the form of Exhibit
VIII hereto (a “Compliance Certificate”),
and setting forth in reasonable detail computations evidencing compliance with
the covenants contained in subsection 6.5 and (if applicable) reconciliations
to reflect changes in GAAP since the Closing Date;

(v)           promptly after the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities and
Exchange Commission or sent to the stockholders of Holdings or the Company;

(vi)          within forty-five (45) days after the
beginning of each Fiscal Year of the Company and from time to time upon request
of the Administrative Agent (but not more

 50
 

 

frequently than annually so long as
no Default or Event of Default is continuing), projections of the Company and
the Subsidiaries broken down for the next Fiscal Year on a month by month and
quarter by quarter basis updating those projections and budgets delivered to
the Lenders and referred to in subsection 4.3 or, if applicable, updating any
later such projections delivered in response to a request pursuant to this
subsection 5.1(vi);

(vii)         all notices and other information sent
to any holder of any of the Senior Secured Notes, to any lender under the
Revolving Credit Documents or to any lender under the Holdings Credit
Documents, in each case, in its capacity as such; and

(viii)        from time to time such other financial
data and information (including accountants’ management letters, quarterly
statements of Consolidated EBITDA for individual Stores and operating and other
financial statements delivered on a monthly basis under the Original Credit
Agreement) as the Administrative Agent or any Lender may reasonably request.

B.        Defaults.  The Company will
promptly notify the Administrative Agent in writing of the occurrence of any
Default or Event of Default.  If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Agreement
or any other note, evidence of Indebtedness, indenture or other such obligation
to which or with respect to which any of Holdings, the Company or the
Subsidiaries is a party or obligor in excess of $1,000,000, whether as
principal, guarantor, surety or otherwise, the Company shall forthwith give
written notice thereof to the Administrative Agent, describing the notice or
action and the nature of the claimed default.

C.        Environmental Events.  The Company will
promptly give notice to the Administrative Agent (a) of any violation of any
Environmental Law that any of Holdings, the Company or the Subsidiaries reports
in writing to, or is required by Environmental Law to report (or for which any
written report supplemental to any oral report is made) to, any federal, state
or local environmental agency, and (b) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice from
any agency of potential environmental liability, of any federal, state or local
environmental agency or board, that has the potential to have a Materially
Adverse Effect.

D.        Notice of Litigation and Judgments.  Each of Holdings and
the Company will, and the Company will cause each of the Subsidiaries to, give
notice to the Administrative Agent in writing within fifteen (15) days of
becoming aware of any litigation or proceedings threatened in writing or any
significant development in any pending litigation and proceedings affecting
Holdings, the Company or any of the Subsidiaries or to which any of Holdings,
the Company or the Subsidiaries is or becomes a party involving an uninsured
claim against any of Holdings, the Company or the Subsidiaries that could
reasonably be expected to have a materially adverse effect on Holdings, the
Company or the Subsidiaries and stating the nature and status of such
litigation or proceedings.  Holdings and
the Company will, and the Company will cause each of the Subsidiaries to, give
notice to the Administrative Agent, in writing, in form and detail satisfactory
to the Administrative Agent, within ten (10) days of any judgment not covered
by insurance, final or otherwise, against any of Holdings, the Company or the
Subsidiaries in an amount in excess of $500,000.

5.2          Corporate Existence; Maintenance of
Properties.

Holdings and the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and rights and those of the Subsidiaries and will not, and
the Company will not cause or permit any of the Subsidiaries to, convert to a
limited liability company.  Each of
Holdings and the Company (i) will cause all of its properties and those of the
Subsidiaries used or

 51
 

 

useful in the conduct of its
business or the business of the Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(ii) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (iii) will, and
the Company will cause each of the Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses; provided
that nothing in this subsection 5.2 shall prevent Holdings or the
Company from discontinuing the operation and maintenance of any of its
properties or any of those of the Subsidiaries if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its or their business
and that do not in the aggregate materially adversely affect the business of
the Company and the Subsidiaries on a consolidated basis.

5.3          Taxes.

Each of Holdings and the Company will, and the Company will cause each
of the Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by
law become a lien or charge upon any of its property; provided  that
any such tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if Holdings, the Company or any such Subsidiary
shall have set aside on its books adequate reserves with respect thereto; and provided
further  that Holdings, the Company and the Subsidiaries will pay
all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any Lien that may have attached as
security therefor.

5.4          Insurance.

Each of Holdings and the Company will, and the Company will cause each
of the Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.  Without limiting
the foregoing, (i) such insurance shall be in such minimum amounts that such
Person will not be deemed a co-insurer under applicable insurance laws,
regulations and policies and otherwise shall be in such amounts, contain such
terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Administrative Agent, and (ii) each such Person will (a)
keep all of its physical property insured with casualty or physical hazard
insurance on an “all risks” basis, with broad form flood and earthquake
coverages and electronic data processing coverage, with a full replacement cost
endorsement and an “agreed amount” clause in an amount equal to 100% of the
full replacement cost of such property, with deductibles equal to those
generally maintained by businesses engaged in similar activities in similar
geographic areas, subject to aggregate sublimits for flood and earthquake equal
to those generally maintained by businesses engaged in similar activities in
similar geographic areas, (b) maintain all such workers’ compensation or
similar insurance as may be required by law and (c) maintain, in amounts and
with deductibles and “stop loss” provisions equal to those generally maintained
by businesses engaged in similar activities in similar geographic areas,
general public liability insurance against claims of bodily injury, death or
property damage occurring, on, in or about the properties of such Person,
business interruption insurance, and product liability insurance.

A.        In
the event of failure by the Company to provide and maintain insurance as herein
provided, the Administrative Agent may, at its option, provide such insurance
and charge the amount thereof to the Company. 
The Company shall furnish the Administrative Agent with certificates of
insurance and policies evidencing compliance with the foregoing insurance
provision.

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5.5          Inspection.

A.        General.  Each of Holdings and
the Company shall permit the Lenders, if accompanied by the Administrative
Agent, or the Requisite Lenders, whether or not accompanied by the
Administrative Agent, to visit and inspect any of the properties of Holdings,
the Company or the Subsidiaries, to examine the books of account of Holdings,
the Company and the Subsidiaries (and to make copies thereof and extracts
therefrom), and shall permit the Lenders to discuss the affairs, finances and
accounts of Holdings, the Company and the Subsidiaries with, and to be advised
as to the same by, its and their officers, all at such reasonable times and
intervals as the Administrative Agent or any Lender may reasonably request; provided
that any such visits shall occur no more frequently than twice per year
if no Event of Default has occurred and is continuing.  The Administrative Agent shall notify the
Lenders of any such visit or inspection by the Administrative Agent, and the
Lenders shall have the right to participate therein.

B.        Communications with Accountants.  The Company authorizes the Lenders, if
accompanied by the Administrative Agent, to communicate directly with the
Company’s independent certified public accountants and authorizes such
accountants to disclose to the Administrative Agent any and all financial
statements and other supporting financial documents and schedules including
copies of any management letter with respect to the business, financial
condition and other affairs of any of Holdings, the Company or the
Subsidiaries.  At the request of the
Administrative Agent, the Company shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this subsection
5.5B.

5.6                               Compliance
with Laws, Contracts, Licenses, and Permits.

Each of Holdings and the Company will, and the Company will cause each
of the Subsidiaries to, comply in all material respects with (a) the applicable
laws and regulations wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its charter documents and by-laws,
(c) all agreements and instruments by which it or any of its properties may be
bound and (d) all applicable decrees, orders, and judgments.  If any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that Holdings, the Company or the
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which Holdings, the Company or such Subsidiary is a party,
Holdings or the Company, as the case may be, will, or the Company will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of Holdings, the Company or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the
Administrative Agent and the Lenders with evidence thereof.  Without limiting the foregoing, each of
Holdings and the Company will, and the Company will cause each of the Subsidiaries
to, obtain any and all approvals by any federal, state or local liquor
authority necessary for the continued operation at all times of any Store
operated by any of Holdings, the Company or the Subsidiaries with full liquor
service unless the failure to obtain such approvals would not have a Materially
Adverse Effect.

5.7          Environmental Laws.

A.        Each
of Holdings and the Company shall, and the Company shall cause each of the
Subsidiaries to, (i) comply and cause (x) all tenants under any leases or
occupancy agreements affecting any portion of the Facilities presently owned or
operated by Holdings, the Company or the Subsidiaries and (y) all other Persons
on or occupying such property to comply with all Environmental Laws and
(ii) obtain and comply with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws except where the failure to comply, obtain or maintain with
respect to clauses (i) or (ii) would not have a Material Adverse Effect.

 53
 

 

B.        Each
of Holdings and the Company shall, and the Company shall cause each of the
Subsidiaries to, conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and timely comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings and the
pendency of such proceedings, individually or in the aggregate, could not
reasonable be expected to have a Material Adverse Effect.

C.        Each
of Holdings and the Company agrees that the Administrative Agent may, from time
to time, retain, at the Company’s expense, an independent professional
consultant to review any report relating to Hazardous Materials prepared by or
for Holdings, the Company or the Subsidiaries and to conduct its own
investigation of any Facility currently owned, leased, operated or used by the
Company or any of the Subsidiaries, if (i) a Default or an Event of Default
shall have occurred and be continuing and any facility has an occurrence giving
rise to an Environmental Liability, or (ii) the Administrative Agent or
Requisite Lenders reasonably believes (x) that an occurrence relating to such
Facility is likely to give rise to an Environmental Liability or (y) that a
violation of an Environmental Law on or around such Facility has occurred or is
likely to occur, which could, in either such case, reasonably be expected to
have a Material Adverse Effect.  The
Company shall obtain for the Administrative Agent and its agents, employees,
consultants and contractors the right, upon notice to the Company, to enter
into or on to the Facilities currently owned, leased, operated or used by the
Company or any of the Subsidiaries to perform such tests on such property as
are necessary to conduct such a review and/or investigation.  Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by the Company and the Administrative
Agent, during normal business hours and, to the extent reasonably practicable,
shall be conducted so as not to interfere with the ongoing operations at any
such Facility or to cause any damage or loss to any property at such
Facility.  The Company and the
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of the Administrative Agent pursuant to
this subsection 5.7C shall be for the benefit of the Company and may be used by
the Administrative Agent and the Lenders for the purposes of the Lenders’
internal credit decisions, to monitor and police the Term Loans, and the
Administrative Agent and the Lenders hereby acknowledge and agree any such report
shall be kept confidential by them to the extent permitted by law pursuant to
subsection 9.18.  The Administrative
Agent agrees to deliver a copy of any such report to the Company with the
understanding that the Company acknowledges and agrees that (i) it shall
indemnify and hold harmless the Administrative Agent and each Lender from any
costs, losses or liabilities relating to the Company’s use of or reliance on
such report, (ii) no Agent nor any Lender makes any representation or warranty
with respect to such report, and (iii) by delivering such report to the
Company, no Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.

D.        Each
of Holdings and the Company shall, and the Company shall cause each of the
Subsidiaries to, promptly advise the Administrative Agent in writing and in
reasonable detail of (i) any Release or threatened Release of any Hazardous
Materials required to be reported to any Governmental Authority under any
applicable Environmental Laws, (ii) any and all communications (written or
oral) with respect to any pending or threatened Environmental Claims in each
such case which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect and any and all material written
communications with respect to any Release or threatened Release of Hazardous
Materials, (iii) any cleanup performed by Holdings, the Company or any of the
Subsidiaries or any other Person in response to (x) any Hazardous
Materials on, under or about any Facility, the existence of which could
reasonable be expected to result in an Environmental Liability having a
Material Adverse Effect, or (y) any Environmental Liabilities that could
reasonably be expected to have a Material Adverse Effect, (iv) any
discovery by Holdings, the Company or any of the Subsidiaries of any occurrence
or condition on any property that could cause any Facility presently owned or
operated by Holdings, the Company or the

 54
 

 

Subsidiaries or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use thereof under
any Environmental Laws, and (v) any request for information from any
Governmental Authority that fairly suggests such Governmental Authority is
investigating whether Holdings, the Company or any of the Subsidiaries may be
potentially responsible for a Release or threatened Release of Hazardous
Materials which could reasonably be expected to have a Material Adverse Effect.

E.         Each
of Holdings and the Company shall, and the Company shall cause each of the
Subsidiaries to, promptly notify the Administrative Agent in writing and in
reasonable detail of (i) any proposed acquisition of stock, assets, or property
by Holdings, the Company or any of the Subsidiaries that could reasonably be
expected to expose Holdings, the Company or any of the Subsidiaries to, or
result in, Environmental Liability that could reasonable be expected to have a
Material Adverse Effect or that could reasonably be expected to have a material
adverse effect on any Governmental Authorization then held by Holdings, the
Company or any of the Subsidiaries and (ii) any proposed action to be taken by
Holdings, the Company or any of the Subsidiaries to commence manufacturing,
agricultural, industrial or other similar operations that could reasonably be
expected to subject Holdings, the Company or any of the Subsidiaries to
additional Environmental Laws, that are materially different from the
Environmental Laws applicable to the operations of Holdings, the Company and
the Subsidiaries as of the Closing Date.

F.         Each
of Holdings and the Company shall, and the Company shall cause each of the
Subsidiaries to, at its own expense, provide copies of such documents or
information as the Administrative Agent may reasonably request in relation to
any matters disclosed pursuant to this subsection 5.7.

G.        Each
of Holdings and the Company shall, and the Company shall cause each of the
Subsidiaries to, defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the Facilities or the business or operations of
Holdings, the Company or any of the Subsidiaries, or any orders, requirements
or demands of Governmental Authorities related thereto, including reasonable
attorney’s and consultant’s fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. 
The agreements in this paragraph shall survive repayment of the
Obligations solely to the extent relating to periods prior to such repayment.

5.8                               Employee
Benefit Plans.

The
Company will (i) promptly upon filing the same with the Department of Labor or
Internal Revenue Service and upon request of the Administrative Agent, furnish
to the Administrative Agent a copy of the most recent actuarial statement
required to be submitted under Section 103(d) of ERISA and Annual Report, Form
5500, with all required attachments, in respect of each Guaranteed Pension Plan
and (ii) promptly upon receipt or dispatch by the Company or any ERISA affiliate,
furnish to the Administrative Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under Section 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer
Plan, under Section 4041A, 4202, 4219, 4242, or 4245 of ERISA.

5.9          Reporting.  Whether or not required by the SEC or any of
its rules or regulations, so long as any Term Loans are outstanding, the
Company will file with the SEC, unless such filing by a company having no
obligation to file under applicable law and regulation is not permitted by the
SEC, and will deliver to

 55
 

 

the
Administrative Agent and the Lenders, within the time periods specified in the
SEC’s rules and regulations, (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company was required to file such Forms, including a “Management’s
Discussion and Analysis of Financial Condition and Result of Operations” and
with respect to the annual information only, a report on the annual financial
statements by the Company’s certified independent accounts; and (ii) all
current reports that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports.

5.10        Use of Proceeds.

The Company has used and
will use the proceeds of the Term Loans for the purposes described in Section
2.5, and none other.

5.11                        Further
Assurances.

Each of Holdings and the Company will, and the Company will cause each
of the Subsidiaries to, cooperate with the Lenders and the Administrative Agent
and execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.  Upon receipt of an
affidavit of any officer of any Lender as to the loss, theft, destruction or
mutilation of the any Term Note or other Loan Document, the Company will issue,
in lieu thereof, a replacement Term Note or other Loan Document in the same
principal amount thereof and otherwise of like tenor.

5.12                        Conduct
of Business; Stores.

The Company will cause the Subsidiaries to continue to engage only in
the business of owning and operating casual dining restaurants, manufacturing
of food products and the distribution of food, beverages and other restaurant
supplies and in businesses and activities closely related thereto.  The Company shall inform the Administrative
Agent of any new Store locations simultaneously with the delivery of the
financial statements referred to in subsection 5.1A(iii) but in any event no
later than one month after the opening of a new Store location and the entering
into a lease for, or the acquisition of, the premises for a new Store.  The Company will continue to engage only in
the business of owning the capital stock of the Subsidiaries and shall not own
any assets other than the capital stock of the Subsidiaries.

5.13        New Subsidiaries.

Any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired shall become a Subsidiary Guarantor and
become a party to the Guarantee Agreement by (i) signing a joinder agreement,
and (ii) providing such other documentation as the Administrative Agent may
reasonably request, including, without limitation, legal opinions and corporate
authorization documentation with respect to such new Subsidiary and other
documentation with respect to the conditions specified in Section 3 hereof.

SECTION 6.

NEGATIVE COVENANTS

Each of Holdings and the Company covenants
and agrees that, until payment in full of all of the Term Loans and other
Obligations, it shall perform, and the Company shall cause each of the
Subsidiaries to perform, all covenants in this Section 6.

 56
 

 

6.1          Indebtedness.

Neither Holdings nor the Company shall, and
the Company shall not permit any of the Subsidiaries to, directly or
indirectly, create, incur, issue, assume or guaranty, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness other
than:

(i)            Indebtedness to the Lenders and the
Administrative Agent arising under any of the Loan Documents;

(ii)           Indebtedness at any time incurred
under the Revolving Credit Documents and any Permitted Refinancing Indebtedness
in respect of such Indebtedness in an aggregate principal amount under this
clause (ii) not to exceed $40,000,000, less the aggregate amount of all
permanent reductions of the commitments thereunder by the Company or any of the
Subsidiaries since the Closing Date;

(iii)          Indebtedness at any time incurred by
Holdings under the Holdings Credit Documents and any Permitted Refinancing
Indebtedness in respect of such Indebtedness, provided  that in no
event shall the principal amount of such Indebtedness increase in excess of the
amounts outstanding as of the Restatement Date plus the amount of accrued and
unpaid interest paid thereon in kind in accordance with the Holdings Credit
Agreement as in effect on the Restatement Date;

(iv)          other Indebtedness at any time
incurred by Holdings in an aggregate principal amount under this clause (iv)
not to exceed $25,000,000; provided  that (A) 100% of the
proceeds of such Indebtedness are contributed by Holdings in cash to the
Company as common equity, (B) such Indebtedness is unsecured and is not
guaranteed by the Company or any of the Subsidiaries, (C) such
Indebtedness is not exchangeable or convertible into any Indebtedness of
Holdings or any of its subsidiaries (other than Indebtedness permitted under
this clause (iv)), (D) such Indebtedness is subordinated to the Indebtedness
incurred by Holdings under the Holdings Credit Documents on terms satisfactory
to the Required Lenders, (E) interest on such Indebtedness shall be payable
only in kind, (F) such Indebtedness does not mature, and is not subject to
mandatory repurchase, redemption or amortization, in each case prior to the
maturity date of the Holdings Term Loan; and (G) to the extent such
Indebtedness contains covenants and events of default, such covenants and
events of default shall be determined by the Administrative Agent to be no more
restrictive, when taken as a whole, than the covenants and events of default in
the Holding Credit Documents;

(v)           Endorsements for collection, deposit
or negotiation and warranties of products or services, in each case incurred in
the ordinary course of business;

(vi)          Indebtedness of the Company or any of
the Subsidiaries in respect of Rate Protection Agreements entered into in order
to hedge against interest rate fluctuations on Indebtedness for borrowed money
of the Company and the Subsidiaries and not for speculative purposes;

(vii)         Indebtedness incurred in connection
with the acquisition after the Closing Date of any real or personal property by
the Company or any of the Subsidiaries or under any Capitalized Lease in
connection with new Stores or major renovations or refurbishments of existing
Stores; provided  that the aggregate principal amount of such
Indebtedness of the Company and the Subsidiaries outstanding at any time under
this clause (v) shall not exceed the aggregate amount of $5,000,000 and provided
further, that no Default or Event of Default shall

 57
 

 

exist (a) prior to the incurrence
of such Indebtedness or (b) as a result of the incurrence of such Indebtedness;

(viii)        Indebtedness of the Company or a
Subsidiary Guarantor to the Company or another Subsidiary Guarantor; provided
that all such intercompany Indebtedness shall be subordinated to the
Obligations on terms satisfactory to the Administrative Agent;

(ix)           Indebtedness existing on the Restatement
Date and listed and described on Schedule 6.1 hereto and any Permitted
Refinancing Indebtedness in respect of such Indebtedness;

(x)            Indebtedness evidenced by the Senior
Secured Note Documents and any Permitted Refinancing Indebtedness in respect of
such Indebtedness in an aggregate principal amount under this clause (x) not to
exceed $105,000,000, less the aggregate amount of all repayments, redemptions
or repurchase by the Company or any of the Subsidiaries of the Indebtedness
thereunder since the Closing Date;

(xi)           Indebtedness consisting of contingent
obligations of the Company or any of the Subsidiaries to repurchase or
otherwise redeem capital stock of the Company from former employees of the
Company and the Subsidiaries pursuant to the terms of employee stock ownership,
employee stock option or other employee compensation plans of the Company and
the Subsidiaries and matured obligations to repurchase or otherwise redeem such
stock to the extent such repurchase or redemption is permitted under subsection
6.4(iii);

(xii)          Indebtedness consisting of the Company
or any of the Subsidiaries guarantying the Indebtedness of the Company or any
of the Subsidiaries so long as such Indebtedness is otherwise permitted
hereunder; and

(xiii)         other Indebtedness in an aggregate
principal amount at any time outstanding not to exceed $5,000,000.

6.2          Liens and Related Matters.

Neither Holdings nor the Company
will, and the Company will not permit any of the Subsidiaries to, (i) create or
incur or suffer to be created or incurred or to exist any Lien upon any of its
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (ii) transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the
same to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (iii) acquire, or agree or have
an option to acquire, any property or assets upon conditional sale or other
title retention or purchase money security agreement, device or arrangement;
(iv) suffer to exist for a period of more than thirty (30) days after the same
shall have been incurred any Indebtedness or claim or demand against it that if
unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given
any priority whatsoever over its general creditors; (v) sell, assign, pledge or
otherwise transfer any accounts or general intangibles for money due or to
become due, chattel paper, instruments or documents creating or evidencing a
right to payment of money or other receivables, with or without recourse; or
(vi) enter into or permit to exist any arrangement or agreement, enforceable
under applicable law, which directly or indirectly prohibits the Company or any
of the Subsidiaries from creating or incurring any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest other than (1) the
restrictions under the Revolving Credit Documents as in effect on the
Restatement Date and as amended to the extent permitted by subsection 6.11 in
favor of the agent thereunder for the benefit of the lenders and the agent
thereunder, (2) the restrictions under the Senior Secured Note Documents as in
effect on the Restatement Date and as amended to the extent permitted by
subsection 6.11, and (3) customary anti-assignment provisions in

 58
 

 

leases and licensing agreements entered into by the Company
or any of the Subsidiaries in the ordinary course of its business; provided
that any of the Company or the Subsidiaries may create or incur or
suffer to be created or incurred or to exist:

(i)            liens to secure taxes, assessments
and other government charges in respect of obligations not overdue or liens on
properties to secure claims for labor, material or supplies in respect of
obligations not overdue or which are being contested in good faith and for
which an adequate reserve or other appropriate provisions shall have been made
to the extent required by generally accepted accounting principles;

(ii)           deposits or pledges made in
connection with, or to secure payment of, workmen’s compensation, unemployment
insurance, old age pensions or other social security obligations;

(iii)          liens in respect of judgments or
awards that have been in force for less than the applicable period for taking
an appeal so long as execution is not levied thereunder or in respect of which
the Company or a Subsidiary, as applicable, shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or review;

(iv)          liens of carriers, warehousemen,
mechanics and materialmen, and other like liens in existence less than 120 days
from the date of creation thereof in respect of obligations not overdue or
which are being contested in good faith and for which an adequate reserve or
other appropriate provisions shall have been made to the extent required by
generally accepted accounting principles;

(v)           encumbrances on Real Property Assets
consisting of easements, rights of way, zoning restrictions, restrictions on
the use of real property and defects and irregularities in the title thereto,
landlord’s or lessor’s liens under leases or subleases to which the Company or
a Subsidiary is a party, and other minor liens or encumbrances none of which in
the opinion of the Company interferes materially with the use of the property
affected in the ordinary conduct of the business of the Company and the
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Company and the Subsidiaries
on a consolidated basis;

(vi)          liens existing on the Restatement Date
and listed and described on Schedule 6.2 hereto;

(vii)         purchase money security interests in or
purchase money mortgages on real or personal property acquired after the
Closing Date to secure purchase money Indebtedness of the type and amount
permitted by subsection 6.1(vii), incurred in connection with the acquisition
of such property, which security interests or mortgages cover only the real or
personal property so acquired;

(viii)        liens on tenant improvements securing
Indebtedness incurred with respect thereto and which is permitted under
subsection 6.1(v) or subsection 6.1(xi);

(ix)           liens created under, or evidenced or
governed by, the Senior Secured Note Documents securing Indebtedness permitted
by subsection 6.1(viii) and other Note Obligations (as defined in the Senior
Secured Note Documents), as in effect on the Closing Date;

 59
 

 

(x)            liens created under, or evidenced or
governed by, the Revolving Credit Documents (or the documents relating to any
Permitted Refinancing Indebtedness in respect thereof) securing Indebtedness
permitted by subsection 6.1(ii);

(xi)           liens on Cash in an amount not to
exceed $5,000,000 utilized to collateralize letters of credit; and

(xii)          liens on assets of the Company and the
Subsidiaries not otherwise permitted by this subsection; provided  that
neither the aggregate amount of the obligations secured thereby nor the
aggregate fair market value of the assets subject thereto exceeds $500,000 at
any time outstanding.

6.3          Investments.

Neither
Holdings nor the Company will, and the Company will not permit any of the
Subsidiaries to, make or permit to exist or to remain outstanding any
Investment, except Investments in:

(i)            Cash Equivalents;

(ii)           receivables owing to the Company or
any of the Subsidiaries if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;

(iii)          demand deposits, certificates of
deposit, bankers acceptances and time deposits of United States banks having
total assets in excess of $1,000,000,000;

(iv)          Investments existing on the Closing
Date and listed on Schedule 6.3 hereto;

(v)           loans, investments and advances by
the Company or any Subsidiary Guarantor in or to the Company or another
Subsidiary Guarantor to the extent permitted by subsections 6.1(vi) or 6.1(vii)
and equity investments made by a Company in a Subsidiary Guarantor;

(vi)          Investments by the Company and the
Subsidiaries in respect of any Rate Protection Agreement which is permitted by
subsection 6.1(iv);

(vii)         securities (including debt obligations)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;

(viii)        Investments consisting of promissory
notes received as proceeds of asset dispositions permitted by subsection 6.6B, provided
that the aggregate value of such promissory notes received in connection
with any such asset disposition shall not exceed 25% of the aggregate value of
the proceeds of such asset disposition;

(ix)           Investments consisting of loans and
advances to employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to exceed $500,000 in the
aggregate at any time outstanding; and

(x)            Investments consisting of loans and
advances to stockholders to finance the purchase by such stockholder of capital
stock of the Company; provided  that the aggregate outstanding
amount of such loans and advances at any time during any period described in
the table below, shall not exceed the amount set forth below: 

 60
 

 

 

	
  Restatement Date to November
  29, 2006

  	
   

  	
  $

  	
  250,000

  
	
  November 30,
  2006 and thereafter

  	
   

  	
  $

  	
  0

  

 

6.4          Restricted Payments.

Neither Holdings nor the Company will, and
the Company will not permit any of the Subsidiaries to, make any Restricted
Payments, except for the following:

(i)            Distributions payable by any
Subsidiary to the Company;

(ii)           so long as no Event of Default is
then continuing, Distributions in an amount not to exceed $1,000,000 per annum
(with up to $1,000,000 of unused amounts in previous periods to be carried over
into subsequent periods) to be used to repurchase or otherwise redeem capital
stock of the Company or Holdings from former employees of the Company and the
Subsidiaries pursuant to the terms of employee stock ownership, employee stock
options or other employee compensation plans of the Company and the
Subsidiaries; provided  that that portion of such Distributions
equal to cash payments received by the Company from the subsequent sale of such
repurchased or redeemed capital stock for cash to any employee of the Company
and the Subsidiaries at the commencement of such Person’s employment shall not
be deemed to be a Distribution for purposes of this Section 6.4(ii);

(iii)          the Company may make Restricted
Payments to Holdings and Holdings may make Restricted Payments to pay (a)
reasonable expenses (other than fees and expenses of outside counsel) of
Sponsor or its Affiliates (including reasonable travel expenses and outside
director fees) in an aggregate amount not to exceed $150,000 in any Fiscal
Year, (b) so long as no Default or Event of Default is continuing,
management fees payable to the Permitted Holders in an aggregate amount not to
exceed the greater of (x) one percent (1%) of Consolidated EBITDA in any Fiscal
Year and (y) $500,000, and otherwise in accordance with subsection 6.10 and (c)
reasonable legal fees and expenses of Holdings (other than legal fees and
expenses incurred in connection with any litigation relating to or defaults
under either this Agreement or the Holdings Credit Agreement) in an aggregate
amount to not to exceed $500,000;

(iv)          so long as no Default or Event of
Default is continuing, the Company may make Restricted Payments to Holdings (a)
at the times when due and in an aggregate amount necessary for Holdings to pay
regular scheduled cash payments of principal (if any) and interest as and when
due in respect of the Holdings Term Loan as required under the Holdings Credit
Agreement as in effect on the Restatement Date (including, without limitation,
any amounts that may at Holdings’ option be added to the principal thereof or
paid in kind to the extent actually paid in cash) and any refinancings thereof
permitted pursuant to Section 6.1(iii) and (b) at the times when due and in an
aggregate amount not to exceed $150,000 in any Fiscal Year for Holdings to pay
fees and expenses of Ernst & Young L.L.P. or any other independent
nationally recognized certified public accountants reasonably satisfactory to
the Administrative Agent;

(v)           the Company and Holdings may make any
Restricted Payments for amounts payable by the Company or Holdings to the
Sellers arising under the Merger Agreement in respect of (x) the Post-Closing
Ventura Sale Proceeds (as defined in the Merger Agreement) pursuant to Section
5.13 of the Merger Agreement in an amount not to exceed $5,000,000 less any
amount withheld pursuant to the Merger Agreement, (y) the amount of any Tax
Benefit (as defined in the Merger Agreement) pursuant to Section 5.12 of the
Merger Agreement in an amount not to exceed $4,000,000 and (z) the amount of
any Actual Adjustment (as defined in the

 61
 

 

Merger Agreement) (if such amount
is a positive number) pursuant to Section 2.10(e)(i) of the Merger Agreement in
an amount not to exceed $5,000,000 (exclusive of the Purchase Price Escrow
Funds (as defined in the Merger Agreement)); and

(vi)          The Company and Holdings may make any
Restricted Payments consisting solely of the release (x) to Sellers of all or
any portion of the Purchase Price Escrow Funds (as defined in the Merger
Agreement) pursuant to the terms of the Merger Agreement and the Escrow
Agreement in an aggregate amount not to exceed $5,000,000 and (y) all or any
portion of the Employment Litigation Escrow Funds (as defined in the Merger
Agreement) pursuant to the terms of the Merger Agreement and the Escrow
Agreement in an aggregate amount not to exceed $6,000,000.

Notwithstanding the foregoing, neither the Company nor
Holdings shall make any Restricted Payments pursuant to clause (v) or clause
(vi) above if such Restricted Payment is or has been agreed to be redistributed
by Sellers (directly or indirectly) to the Sponsor or its Control Investment
Affiliates.

6.5          Financial Covenants.

A.        Maximum Leverage Ratio.  The Leverage Ratio,
as of the last day of each Fiscal Quarter of Company and the Subsidiaries
indicated below, shall be less than or equal to the following:

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  
	
  September 30,
  2006

  	
   

  	
  4.75 to 1.00

  
	
  December 31,
  2006 through March 31, 2007

  	
   

  	
  4.50 to 1.00

  
	
  June 30, 2007
  through December 31, 2007

  	
   

  	
  4.25 to 1.00

  
	
  Thereafter

  	
   

  	
  4.00 to 1.00

  

 

B.        Minimum Interest Coverage Ratio.  The
Interest Coverage Ratio, as of the last day of each Fiscal Quarter of Company
and the Subsidiaries indicated below, shall be greater than or equal to the
following:

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  
	
  September 30,
  2006 through December 31, 2006

  	
   

  	
  2.00 to 1.00

  
	
  March 31, 2007
  through December 31, 2007

  	
   

  	
  2.15 to 1.00

  
	
  Thereafter

  	
   

  	
  2.30 to 1.00

  

 

C.        Capital Expenditures.  The Company will not
make, and will not permit any of the Subsidiaries to make, any Capital
Expenditures during any Fiscal Year in excess of an amount equal to (i) 55% of
Consolidated EBITDA for the immediately preceding Fiscal Year or (ii) 60% of
Consolidated EBITDA for the immediately preceding Fiscal Year, if Consolidated
EBITDA for such immediately preceding Fiscal Year and for the Fiscal Year in
which such Capital Expenditures are made are each in excess of $70,000,000 (in
each case, the “Maximum Capital
Expenditure Amount”) plus the amount of any contributions
made by the Permitted Holders of Holdings to Holdings, which amount is
contributed by Holdings in cash to the Company as common equity for the
purposes of Capital Expenditures and which is contemporaneously used for such
purposes; provided  that the amount of unused permitted
Capital Expenditures for any Fiscal Year (not to exceed $3,000,000) may be
carried forward to the immediately following Fiscal Year only

 62

 

D.        Certain Calculations.  With
respect to any period during which the Company or any of the Subsidiaries has
consummated an acquisition of the Capital Stock of, or assets constituting a
business, division or product line of, another Person or an Asset Sale, in each
case permitted by the terms of this Agreement, for purposes of determining
compliance with the covenants set forth in this subsection 6.5, Consolidated
EBITDA and the components of Consolidated Interest Expense shall be calculated
with respect to such period on a Pro Forma Basis; provided  that
in the case of testing compliance with the covenants in subsection 6.5(C),
Capital Expenditures and Consolidated EBITDA shall also be calculated with
respect to such period on a Pro Forma Basis for the prior Fiscal Year.

6.6          Restriction on Fundamental Changes;
Asset Sales.

A.        Mergers and Consolidations.   Subject to
subsection 6.6C, the Company will not, and will not permit any of the
Subsidiaries to, become a party to any merger or consolidation except the merger
or consolidation of one or more of the Subsidiaries of the Company with and
into the Company, or the merger or consolidation of two or more Subsidiaries of
the Company; provided  that in the case of a merger involving a
Subsidiary Guarantor (and not the Company) a Subsidiary Guarantor shall be the
continuing or surviving corporation.

B.        Dispositions of Assets.    The Company will
not, and will not permit any of the Subsidiaries to, become a party to or agree
to or effect any Asset Sale, other than (a) the sale of inventory and the
disposition of obsolete assets, in each case in the ordinary course of business
consistent with past practices, (b) Sale-Leaseback transactions permitted
pursuant to subsection 6.7, (c) the sale of Unprofitable Stores and (d) Asset
Sales of assets having a fair market value (determined in good faith by the
board of directors of the Company) not in excess of $5,000,000 (provided
that the fair market value of any Casa Gallardo Restaurants and of the
Ventura Property sold shall not reduce this amount) during any Fiscal Year or $10,000,000 (provided  that
the fair market value of any Casa Gallardo Restaurants and of the Ventura
Property sold shall not reduce this amount) in the aggregate on a cumulative
basis from the Closing Date; provided  that, in each case under
this clause (d), (i) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof (determined in good
faith by the board of directors of the Company), (ii) not less than 75% of the
consideration received therefor shall be cash and (iii) the Net Cash Proceeds
of such Asset Sale shall be applied if and to the extent required by subsection
2.4B(iii).  Nothing in this subsection
6.7B is intended to prohibit the Company or any of the Subsidiaries from
conditionally agreeing to dispose of any assets subject to the prior approval
of the Lenders if the Company or such Subsidiary will not be subject to any
penalties in connection with such agreement in the event that the Lenders (or all
of the Lenders, as the case may require) do not consent to such disposition.

C.        Acquisitions.    The Company will
not, and will not permit any of the Subsidiaries to, agree to or effect any
asset acquisition or stock acquisition except (a) Capital Expenditures
permitted pursuant to subsection 6.5C, and (b) the acquisition of inventory,
equipment, furnishings and other similar assets (not including Stores or real
property) in the ordinary course of business consistent with past practices.

6.7          Sales and Lease-Backs.

Neither Holdings nor the Company will, and the Company will not permit
any of the Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby Holdings, the Company or any Subsidiary shall sell or transfer any
property owned by it in order then or thereafter to lease such property or
lease other property that Holdings, the Company or any such Subsidiary intends
to use for substantially the same purpose as the property being sold or
transferred (a “Sale-Leaseback”);
provided  that, so long as no Event of Default has occurred and is
continuing, the Company and the Subsidiaries may enter into Sale-Leaseback
transactions with respect to property and equipment in an aggregate amount not
to exceed $5,000,000; provided  further  that (a) the terms
of the sales as such are comparable to terms which could

 63
 

 

be
obtained in arms length sales among unaffiliated parties not involving
Sale-Leaseback transactions, and (b) the terms of the leases as such are
comparable to terms which could be obtained in arms length commercial operating
leases among unaffiliated parties.

6.8                               Employee
Benefit Plans.  

None
of Holdings, the Company or any ERISA Affiliate will:

(i)            engage in any “prohibited
transaction” within the meaning of Section 406 of ERISA or Section 4975 of the
Code which could result in a material liability for any of the Company or the
Subsidiaries; or

(ii)           permit any Guaranteed Pension Plan to
incur an “accumulated funding deficiency”, as such term is defined in Section
302 of ERISA, whether or not such deficiency is or may be waived; or

(iii)          fail to contribute to any Guaranteed
Pension Plan to an extent which, or terminate any Guaranteed Pension Plan in a
manner which, could result in the imposition of a lien or encumbrance on the
assets of the Company or the Subsidiaries pursuant to Section 302(f) or Section
4068 of ERISA; or

(iv)          permit any Guaranteed Pension Plan to
be amended in circumstances requiring the posting of security pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code; or

(v)           permit or take any action which would
result in the aggregate benefit liabilities (with the meaning of Section 4001
of ERISA) of all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.

6.9          Change in Fiscal Year.  The Company will not, and will not permit any
of the Subsidiaries to, effect any change in the end of its Fiscal Year from
that set forth in Section 1 hereto.

6.10        Transactions with Affiliates.  Except as set forth in the Management
Services Agreement, neither Holdings nor the Company will, and the Company will
not permit any of the Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Company, any corporation, partnership, trust or other entity
in which any such Affiliate has a substantial interest or is an officer,
director, trustee or partner, on terms less favorable to Holdings, the Company
or the Subsidiaries than would have been obtainable on an arm’s-length basis in
the ordinary course of business, provided  that the foregoing
restriction shall not apply to (i) management fees and expenses permitted under
subsection 6.4(iii) and (ii) Investments permitted under subsection
6.3(x).

6.11        Holdings Credit Documents, Senior Secured Note Documents
and Revolving Credit Documents.  Neither Holdings nor the Company will, and
the Company will not permit any of the Subsidiaries to materially amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms
and conditions of any of the Holdings Credit Documents, the Revolving Credit
Documents or the Senior Secured Note Documents without the prior written consent
of the Administrative Agent, if the effect of such amendment, supplement or
other modification or waiver is to increase the interest rate payable on the
relevant Indebtedness thereunder or increase the cash portion of any interest
required to be paid thereon, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, increase the obligations of
the obligor or obligors thereunder or confer any additional rights on

 64
 

 

the holders of the
relevant Indebtedness thereunder which would be materially adverse to Holdings,
the Company, any of the Subsidiaries, the Administrative Agent or the Lenders; provided
that no amendment, supplement, other modification or waiver of the Revolving
Credit Documents shall be construed to be materially adverse to Holdings, the
Company, any of the Subsidiaries, the Administrative Agent or the Lenders as
provided above unless such amendment, supplement, modification or waiver shall
(i) increase the interest rate or yield provisions applicable to the
obligations under the Revolving Credit Documents by more than 3.00% per annum
in the aggregate; (ii) increase any fee or other monetary obligation under the
Revolving Credit Documents, other than imposing a usual and customary
commitment fee or any usual and customary upfront fee in connection with any
refinancing of the facilities under the Revolving Credit Documents, or charge
any fee for any amendment, waiver or modification other than usual and
customary fees for amendments, waivers and modifications, (iii) impose any
prepayment or termination fee in respect of the obligations or commitments
under the Revolving Credit Documents (other than customary breakage charges);
(iv) shorten the maturity, or the termination date of, any obligation or commitment
under the Revolving Credit Documents; (v) increase the amounts required to be
applied as a mandatory prepayment of the obligations under the Revolving Credit
Documents, or create any new mandatory prepayment of the facilities under the
Revolving Credit Documents; (vi) make more restrictive any restriction in the
Revolving Credit Documents on the making of any mandatory prepayment under this
Agreement; or (vii) make more restrictive the provisions, covenants and
defaults of the Revolving Credit Documents relating to restricted payments.

6.12        Business of Holdings.(a) Holdings
shall not engage in any business activities or have any assets other than (i)
its ownership of 100% of the Capital Stock of the Company, (ii) performing its
obligations and activities incidental thereto under the Loan Documents and
under the Holdings Credit Documents and (iii) making Restricted Payments to the
extent permitted by this Agreement.

(b)           Except as permitted under Section 6.1
hereof, Holdings shall not incur, directly or indirectly, any Indebtedness or
any other obligations whatsoever other than the Holdings Term Loan and other
obligations not constituting Indebtedness incurred in the ordinary course of
business as a holding company and not otherwise restricted by this Section
6.12.

(c)           Holdings shall not
(i) consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person; (ii) sell or otherwise dispose of
any Capital Stock of the Company; (iii) create or acquire any subsidiary or
make or own any Investment in any Person other than the Company; or (iv) fail
to hold itself out to the public as a legal entity separate and distinct from
all other Persons.

SECTION 7.

EVENTS OF DEFAULT

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

7.1          Failure to Make Payments When Due.

(i) Failure to pay any installment of
principal of any Term Loan when due, whether at stated maturity, by
acceleration, by notice of prepayment or otherwise; or (ii) failure to pay any
interest on any Term Loan or any fee or any other amount (other than an amount
referred to in clause (i) above) due under this Agreement or any other Loan
Document within three (3) Business Days after the date due therefor; or

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7.2          Default in Other Agreements.

(i) Failure of Holdings, the Company or
any of the Subsidiaries to pay when due (a) any principal of or interest on any
Indebtedness (other than Indebtedness referred to in subsection 7.1) (x) in a
principal amount outstanding of $3,000,000 or more or (y) under the Revolving
Credit Agreement, or (b) any Contingent Obligation (x) in a principal amount of
$3,000,000 or more or (y) under the Revolving Credit Agreement, in each case of
clause (a) and (b) above beyond the end of any grace period provided therefor
or (ii) breach or default by Holdings, the Company or any of the Subsidiaries
with respect to any other term of (a) any evidence of any Indebtedness in a
principal amount of $3,000,000 or more or any Contingent Obligation in a
principal amount of $3,000,000 or more, (b) any loan agreement, mortgage,
indenture or other agreement relating to such Indebtedness or Contingent
Obligation(s), or (c) the Revolving Credit Agreement, or the occurrence of any
other event, condition or circumstance in respect of any such Indebtedness or
Contingent Obligations if in any case under this clause (ii) the effect of such
breach or default or event, condition or circumstance is to cause, or to permit
the holder or holders of that Indebtedness or Contingent Obligation(s) (or a
trustee on behalf of such holder or holders) to cause, that Indebtedness or
Contingent Obligation(s) to become or be declared due and payable (or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); provided  that this
clause (ii) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the assets securing such Indebtedness.

7.3          Breach of Certain Covenants.

Failure of Holdings, the Company or any of
the Subsidiaries to perform or comply with any term, covenant or condition
contained in subsection 2.4, subsection 5.9 or Section 6 of this Agreement; or

7.4          Breach of Representation or
Warranty.

Any representation, warranty, certification
or other statement made by Holdings, the Company or any of the Subsidiaries in
this Agreement or any other Loan Document or in any statement or certificate at
any time given by Holdings, the Company or any of the Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be
false or misleading in any material respect on the date as of which it is made;
or

7.5          Other Defaults Under Loan Documents.

Holdings, the Company or any of the
Subsidiaries shall default in the performance of or compliance with any term,
covenant or condition contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in subsection 7.3, and such
default shall not have been remedied or waived within thirty (30) days after
the occurrence of such default; or

7.6          Involuntary Bankruptcy; Appointment
of Receiver, etc.

(i) A court having jurisdiction in the
premises shall enter a decree or order for relief in respect of Holdings, the
Company or any of the Subsidiaries in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings, the Company or any of the
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings, the Company or any of the Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee

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or other custodian of
Holdings, the Company or any of the Subsidiaries for all or a substantial part
of its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings, the
Company or any of the Subsidiaries, and any such event described in this clause
(ii) shall continue for sixty (60) days unless dismissed, bonded or discharged;
or

7.7          Voluntary Bankruptcy; Appointment
of Receiver, etc.

(i) Holdings, the Company or any of the
Subsidiaries shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Holdings, the Company or any of the Subsidiaries shall make any assignment for
the benefit of creditors; or (ii) Holdings, the Company or any of the
Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the board
of directors of Holdings, the Company or any of the Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to in clause (i) above or this clause
(ii); or

7.8          Judgments and Attachments.

Any money judgment, writ or warrant of
attachment or similar process involving in the aggregate at any time an amount
in excess of $1,000,000  (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Holdings, the Company or any of the Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a period
of thirty (30) days; or

7.9          Dissolution.

Any order, judgment or decree shall be
entered against Holdings, the Company or any of the Subsidiaries decreeing the
dissolution or split up of Holdings, the Company or that Subsidiary and such
order shall remain undischarged or unstayed for a period in excess of sixty
(60) days; or

7.10        Employee Benefit Plans.

(i) There shall occur one or more ERISA Events which, individually or
in the aggregate, result in or could reasonably be expected to result in
liability of Holdings, the Company, any of the Subsidiaries or any of their
respective ERISA Affiliates in excess of $1,000,000 during the term hereof; or
(ii) there exists any fact or circumstance that reasonably could be expected to
result in the imposition of a Lien or security interest under Section 412(n) of
the Code or under ERISA; or

7.11        Invalidity of the Guarantee Agreement.

At any time after the execution and delivery
thereof, the guarantees pursuant to the Guarantee Agreement of the Obligations
of the Company for any reason, other than the satisfaction in full of all
Obligations (or any other termination thereof in accordance with the terms
hereof or thereof), shall cease to be in full force and effect or be declared
null and void, or any of the Guarantors shall deny in writing that it has any
further liability thereunder, including with respect to future advances by the
Lenders; or

7.12                        Change
of Control.

A Change of Control shall occur.

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THEN (i) upon the
occurrence of any Event of Default described in subsection 7.6 or 7.7, each of
(a) the unpaid principal amount of and accrued interest on the Term Loans and
(b) all other Obligations accrued hereunder or under any other Loan
Document shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by the Company, and the Administrative Agent and the Lenders
shall have the right to take any and all actions and exercise any and all
remedies available to a secured party under the Loan Documents or applicable
law or in equity and (ii) upon the occurrence and during the continuation of
any other Event of Default, the Administrative Agent may, and upon the written
request of the Requisite Lenders shall, declare all or any portion of the
amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the Administrative Agent and
the Lenders shall have the right to take any and all actions and exercise any and
all remedies available to a secured party under the Loan Documents or
applicable law or in equity.

Notwithstanding anything contained in the
preceding paragraph, if at any time within sixty (60) days after an
acceleration of the Term Loans pursuant to such paragraph the Company shall pay
all arrears of interest and all payments on account of principal which shall
have become due otherwise than as a result of such acceleration (with interest
on principal and, to the extent permitted by law, on overdue interest, at the
rates specified in this Agreement) and all Defaults and Events of Default
(other than non-payment of the principal of and accrued interest on the
Term Loans, in each case which is due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to subsection 9.5, then the
Requisite Lenders, by written notice to the Company, may at their option
rescind and annul such acceleration and its consequences; but such action shall
not affect any subsequent Default or Event of Default or impair any right
consequent thereon.  The provisions of
this paragraph are intended merely to bind the Lenders to a decision which may
be made at the election of the Requisite Lenders and are not intended to benefit
the Company and do not grant the Company the right to require the Lenders to
rescind or annul any acceleration hereunder or preclude the Administrative
Agent or the Lenders from exercising any of the rights or remedies available to
them under any of the Loan Documents, even if the conditions set forth in this
paragraph are met.

SECTION 8.

ADMINISTRATIVE AGENT

8.1          Appointment.

A.        Appointment Authority.  Each of the
Lenders hereby irrevocably appoints CS as the Administrative Agent hereunder
and under the other Loan Documents and authorizes CS, in such capacities, to
take such actions on its behalf and to exercise such powers as are delegated to
CS in such capacities by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto.  The Administrative Agent agrees to act upon
the express conditions contained in this Agreement and the other Loan
Documents, as applicable.  In performing
its functions and duties under this Agreement, the Administrative Agent shall act
solely as an agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust with
or for the Company or any of the Subsidiaries. 
The provisions of this Section are solely for the benefit of the
Administrative Agent, the Lenders and the Company and the Subsidiaries shall
not have rights as a third party beneficiary of any of such provisions.  Notwithstanding anything to the contrary in
this Agreement, in the event that at any time there shall be a Lender or group
of affiliated Lenders which shall constitute the Requisite Lenders, the
Administrative Agent shall act only in accordance with the consent of such
Lender or group of affiliated Lenders constituting the Requisite Lenders in
granting any approvals, making any requests on the Company, making any
determinations that items are performed to its satisfaction or exercising any
of its discretion under the Loan Documents (other than making determinations
relating to interest rates); provided that following the Restatement Date such
consent of

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such Lender or group of affiliated Lenders constituting the
Requisite Lenders shall not be required for non-material, routine and
administrative actions that the Administrative Agent is permitted to take under
the Loan Documents.

8.2          Rights as a Lender.

Any 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 an
Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include any Person serving
as the Administrative Agent hereunder in their 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 or any of the Subsidiaries or any of their Affiliates as if such Person
were not the Administrative Agent hereunder and without any duty to account
therefor to the Lenders.

8.3          Exculpatory Provisions.

The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the
generality of the foregoing, the Administrative Agent (i) shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default or an Event of Default has occurred and is continuing, (ii)  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 Requisite Lenders
(or such other number or percentage of the relevant Lenders as shall be
necessary under the circumstances as provided in subsection 9.5); provided
that no Agent shall 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 (iii) 
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 or any of its Affiliates
that is communicated to or obtained by the person serving as an Agent or any of
its Affiliates in any capacity.  No Agent
shall be liable for any action taken or not taken by it with the consent or at
the request of the Requisite Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in subsection
9.5) or in the absence of its own gross negligence or willful misconduct.  No Agent shall be deemed to have knowledge of
any Default or Event of Default unless and until notice thereof is given to the
Administrative Agent in writing by the Company 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 or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Section 3 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

Each of the Lead Arranger and the
Documentations Agent, in its capacity as such, shall have no duties and
responsibilities, and shall incur no liability whatsoever, under this Agreement
or any other Loan Document.

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8.4          Reliance by the
Administrative Agent.

The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, 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 any Term
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 Term Loan.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Company or its Affiliates),
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.

8.5          Delegation of Duties.

The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by
the Administrative Agent.  The
Administrative Agent and any such sub-agent may perform any and all of
its duties and exercise its rights and powers by or through their respective
Related Parties.  The exculpatory
provisions of subsection 8.3 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 the
Administrative Agent.

8.6          Resignation of Administrative Agent.

The Administrative Agent may at any time give notice of its resignation
to the Lenders and the Company.  Upon
receipt of any such notice of resignation, the Requisite Lenders shall have the
right, in consultation with the Company (provided that at any time during the
occurrence and continuance of an Event of Default no such consultation shall be
required) to appoint a successor Administrative Agent, as applicable, which
shall be a bank with an office in New York, or an Affiliate of any such bank
with an office in New York.  If no such
successor shall have been so appointed by the Requisite Lenders and shall have
accepted such appointment within sixty (60) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent, as applicable, may on behalf of the Lenders, appoint a
successor Administrative Agent, as applicable, meeting the qualifications set
forth above; provided  that if the Administrative Agent shall notify
the Company and the Lenders that no such successor is willing to accept such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent, as
applicable, shall be discharged from its duties and obligations hereunder and
under the other Loan Documents and (ii) 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
Requisite Lenders appoint a successor Administrative Agent, as applicable, as
provided for above in this paragraph. 
Upon the acceptance of a successor’s appointment as the 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 Loan Documents.  The fees payable by the Company to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Company and such successor.  After the retiring Administrative Agent’s
resignation hereunder and under the other Loan Documents, the provisions of
this Section 8 and subsection 9.2 shall

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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
in such capacity.

8.7                               Non-Reliance
on 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 shall, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.

8.8                               Withholding.  

To the extent required by any applicable law,
the Administrative Agent may withhold from any interest payment to any Lender
an amount equivalent to any applicable withholding tax.  If the Internal Revenue Service or any other
Governmental Authority asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
because the appropriate form was not delivered or was not properly executed or
because such Lender failed to notify the Administrative Agent of a change in
circumstance which rendered the exemption from, or reduction of, withholding
tax ineffective or for any other reason, such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including any penalties or interest
and together with all expenses (including legal expenses, allocated internal
costs and out-of-pocket expenses) incurred.

SECTION 9.

MISCELLANEOUS

9.1          Assignments and Participations in
Term Loans.

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 the Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender and the
Administrative Agent and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of subsection 9.1B, (ii) by way of participation
in accordance with the provisions of subsection 9.1D or (iii) by way of
pledge or assignment of a security interest in accordance with the provisions
of subsection 9.1F (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 9.1D and,
to the extent expressly contemplated hereby, the Related Parties of the
Administrative Agent and the Lenders and any other Indemnitee) 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 Eligible Assignees all or a portion of its rights
and obligations under this Agreement; provided  that

(i)            except in the case of an assignment
of the entire remaining amount of the assigning Lender’s Term Loans or in the
case of an assignment to a Lender or an Affiliate of a

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Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Term Loans subject to each
such assignment (determined as of the date of the Assignment Agreement with
respect to such assignment is recorded by the Administrative Agent) shall not
be less than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof, unless the Administrative Agent shall otherwise consent (such consent
not to be unreasonably withheld or delayed and such approval to be deemed to
have been given if a response is not received within five (5) Business Days
from the date on which request for approval was received by the applicable
Person);

(ii)           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 Term Loans assigned;
and

(iii)          the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment Agreement to be
either (a) electronically executed and delivered via an electronic settlement
system then acceptable to the Administrative Agent (which shall initially be
the settlement system of ClearPar) or (b) manually executed and delivered,
together with, except in the case of an assignment to an Affiliate of a Lender
or an Approved Fund with respect to a Lender, a processing and recordation fee
of $3,500 in the case of assignments not made using an electronic settlement
system, and the Eligible Assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire and, if required,
applicable tax forms.

Subject to acceptance and recording thereof
by the Administrative Agent pursuant to subsection 9.1C, from and after the effective
date specified in each Assignment Agreement, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment Agreement, 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 Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto) but shall continue to
be entitled to the benefits of subsections 2.7 and 9.2 with respect to
facts and circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection 9.1D.

C.        The Register.  The Administrative
Agent, acting solely for this purpose as an agent of the Company, shall
maintain at one of its offices in New York City a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, and principal amounts of the Term Loans owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive absent manifest error, and the Company, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Company and the Lenders 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 or the Administrative
Agent, sell participations to any Person (other than a natural person or the
Company or any of the Company’ 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 Term Loans owing to it); provided
that

(i)            such Lender’s obligations under this
Agreement shall remain unchanged,

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(ii)           such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, and

(iii)          the Company, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided  that
such agreement or instrument may provide that such Lender shall not, without
the consent of the Participant, agree to any amendment, modification or waiver
with respect to any action (i) effecting the extension of the final maturity of
the Term Loan allocated to such participation, (ii) effecting a reduction of
the principal amount of or the rate of interest payable on any Term Loan or any
fee allocated to such participation, or (iii) releasing all or substantially
all of the Subsidiary Guarantors from their obligations under the Guarantee
Agreement (other than in connection with Asset Sales permitted hereunder).  Subject to subsection 9.1E, the Company
agrees that each Participant shall be entitled to the benefits of subsection
2.7 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection 9.1B. 
To the extent permitted by law, each Participant also shall be entitled
to the benefits of subsection 9.3 as though it were a Lender, provided such
Participant agrees to be subject to subsection 9.4 as though it were a Lender.

E.         Limitations Upon Participant Rights.  A Participant shall
not be entitled to receive any greater payment under subsection 2.7 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 Company’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 subsection 2.7E
unless the Company is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Company, to comply with the
provisions of subsection 2.7E as though it were a Lender.

F.         Certain Pledges.  Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including 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. 
Notwithstanding anything to the contrary contained herein, any Lender
that is a Fund may create a security interest in all or any portion of the Term
Loans owing to it and the Term Notes, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities; provided  that unless and until
such trustee actually becomes a Lender in compliance with the other provisions
of this subsection 9.1, (i) no such pledge shall release the pledging Lender
from any of its obligations under this Agreement and (ii) such trustee shall
not be entitled to exercise any of the rights of a Lender under this Agreement
and the Term Notes even though such trustee may have acquired ownership rights
with respect to the pledged interest through foreclosure or otherwise.

G.        SPV Lender.  Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle (a “SPV”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Company, the option to provide to the Company all
or any part of any Term Loan that such Granting Lender would otherwise be
obligated to make the Company pursuant to this Agreement; provided  that
(i) nothing herein shall constitute a commitment by any SPV to make any Term
Loan and (ii) if an SPV elects not to exercise such option or otherwise fails
to provide all or any part of such Loan, the Granting Lender shall

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be obligated to make such Term Loan pursuant to the terms
hereof.  The making of a Term Loan by an
SPV hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Term Loan were made by such Granting Lender.  Each party hereto hereby agrees that no SPV
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior
indebtedness of any SPV, it shall not institute against, or join any other
person in instituting against, such SPV any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof.  In
addition, notwithstanding anything to the contrary contained in this subsection
9.1, any SPV may (i) with notice to, but without the prior written consent
of, the Company and the Administrative Agent and without paying any processing
fee therefore, assign all or a portion of its interests in any Term Loans to
the Granting Lender or to any financial institutions (consented to by the Company
and the Administrative Agent) providing liquidity and/or credit support to or
for the account of such SPV to support the funding or maintenance of Term Loans
and (ii) disclose on a confidential basis any non-public information relating
to its Term Loans to any rating agency, commercial paper dealer or provider of
any surety, guarantee or credit or liquidity enhancement to such SPV.  This subsection 9.1G may not be amended
without the written consent of the SPV. 
Notwithstanding anything to the contrary in this Agreement, no SPV shall
be entitled to any greater rights under subsection 2.7E than its Granting
Lender would have been entitled to absent the use of such SPV.

9.2          Expenses; Indemnity; Damage Waiver.

A.        Costs and Expenses.  The Company shall,
jointly and severally, pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its respective Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated); (ii) all 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 in connection with
this Agreement and the other Loan Documents, including its rights under this
subsection 9.2A, or in connection with the Term Loans made hereunder, including
all such out-of-pocket expenses incurred during any workout, Event
of Default, restructuring or negotiations in respect of such Term Loans; and
(iii) all reasonable out-of-pocket expenses incurred by any Lender or group of
affiliated Lenders that shall constitute the Requisite Lenders, including the
reasonable fees, charges and disbursements of counsel to such Lender or
Lenders, in connection with any amendments, modifications or waivers of the
provisions hereof.

B.        Indemnification by the Company.  The Company shall,
jointly and severally, indemnify the Administrative Agent (and any sub-Agent
thereof), each Lender and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
Term Loan or the use of the proceeds therefrom, or (iii) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any

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Indemnitee is a party thereto (including any claim under any
Environmental Laws); provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities
or related expenses are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from primarily the gross
negligence or willful misconduct of such Indemnitee.

C.        Reimbursement by the Lenders.  To the extent that
the Company fails to pay any amount required under subsection 9.2A or 9.2B to
be paid by it to any 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 Pro Rata Share (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 9.2C are subject to the provisions of
subsection 9.12.

D.        Waiver of Consequential Damages, Etc.  To the fullest extent
permitted by applicable law, the Company shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Term Loan or the use of the
proceeds thereof.  No Indemnitee referred
to in subsection 9.2B above shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

E.         Payments.  All amounts due under
this subsection 9.2 shall be payable promptly after demand therefor.

9.3                               Right
of Set-Off.

Without limitation of any other rights or
remedies of the Administrative Agent or the Lenders, if an Event of Default
shall have occurred and be continuing, the Administrative Agent, each Lender
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Administrative
Agent, Lender or any such Affiliate to or for the credit or the account of the
Company against any and all of the obligations of the Company now or hereafter
existing under this Agreement or any other Loan Document to the Administrative
Agent or Lender, irrespective of whether or not the Administrative Agent or
Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Company may be contingent or
unmatured or are owed to a branch or office of the Administrative Agent or
Lender different from the branch or office holding such deposit or obligated on
such indebtedness.  The rights of the
Administrative Agent, Lender and their respective Affiliates under this
subsection 9.3 are in addition to other rights and remedies (including other
rights of setoff) which the Administrative Agent, Lender or their respective
Affiliates may have.  The Administrative
Agent and Lender agrees promptly to notify in writing the Company 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.

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9.4          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 its Term Loans or other obligations
hereunder resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of its Term Loans and accrued interest thereon or other such
obligations 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 Term Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, to the end 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 Term 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 paragraph shall
not be construed to apply to (x) any payment made by the Company 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 Term Loans to any assignee or participant, other
than to the Company or any Subsidiary thereof (as to which the provisions of
this paragraph shall apply).  The Company
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against each of the Company rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Company in the amount of such
participation.

9.5          Amendments and Waivers.

A.        Amendment and Waivers.  No amendment,
modification, termination or waiver of any provision of this Agreement or of
the Term Notes, or consent to any departure by the Company or any other Loan
Party therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders; provided  that any such
amendment, modification, termination, waiver or consent which:

(a)           reduces or forgives the principal amount of any of the Term
Loans;

(b)           reduces or increases the percentage specified in the
definition of the “Requisite Lenders” (it being understood that, with the
consent of the Requisite Lenders, additional extensions of credit permitted
pursuant to this Agreement may be included in the definition of the “Requisite
Lenders” on substantially the same basis as the Term Loans are included on the
Restatement Date);

(c)           changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of all the
Lenders;

(d)           postpones the scheduled final maturity date of any of the
Term Loans;

(e)           postpones the date or reduces the amount of any scheduled
payment (but not prepayment) of principal of any of the Term Loans;

(f)            postpones the date on which any interest or any fees are
payable;

(g)           decreases the interest rate borne by any of the Term Loans
(other than any waiver of any increase in the interest rate applicable to any
of the Term Loans pursuant to subsection 2.2E) or the amount of any fees
payable hereunder;

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(h)           increases the maximum duration of Interest Periods
permitted hereunder;

(i)            except as expressly required or permitted by the Guarantee
Agreement, release all or substantially all of the Subsidiary Guarantors from
their obligations under the Guarantee Agreement; or

(j)            changes in any manner the provisions contained in
subsection 7.1 or this subsection 9.5;

in each
case, shall be effective only if evidenced by a writing signed by or on behalf
of all the Lenders to whom Obligations are owed being directly affected by such
amendment, modification, termination, waiver or consent (the consent of the
Requisite Lenders not being required for any such change).

In addition, no amendment, modification, termination or
waiver of any provision of Section 8 or of any other provision of this
Agreement which, by its terms, expressly requires the approval or concurrence
of the Administrative Agent shall be effective without the written concurrence
of the Administrative Agent.

The Administrative Agent may, but shall have no obligation
to, with the concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. 
Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given.  No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances.  Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.5 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by the Company, on the Company.

B.        Non-Consenting Lenders.  Each Lender grants
(x) to the Administrative Agent and any Lender or group of affiliated Lenders
which constitutes Requisite Lenders the right to purchase all (but not less
than all) of such Lender’s Term Loans owing to it and the Term Notes held by it
and all of its rights and obligations hereunder and under the other Loan
Documents, and (y) to the Company the right to cause an assignment of all (but
not less than all) of such Lender’s Term Loans owing to it, its participations
in the Term Notes held by it and all of its rights and obligations hereunder
and under the other Loan Documents to Eligible Assignees, which right may be
exercised by the Administrative Agent, any Lender or group of affiliated
Lenders which constitutes the Requisite Lenders or the Company, as the case may
be, if such Lender (a “Non-Consenting
Lender”) refuses to execute any amendment, waiver or consent
which requires the written consent of Lenders other than Requisite Lenders and
to which Requisite Lenders, the Administrative Agent and the Company have
otherwise agreed; provided  that such Non-Consenting Lender
shall receive, in connection with such assignment payment equal to the
aggregate amount of outstanding Term Loans owed to such Lender (together with
all accrued and unpaid interest, fees and all other amounts (other than
indemnities) owed to such Lender).  Each
Lender agrees that if the Administrative Agent, any Lender or group of
affiliated Lenders which constitutes Requisite Lenders or the Company, as the
case may be, exercises their option under this paragraph, it shall promptly
execute and deliver all agreements and documentation necessary to effectuate
such assignment as set forth in subsection 9.1. 
The Company shall be entitled (but not obligated) to execute and deliver
such agreements and documentation on behalf of such Non-Consenting Lender
and any such agreements and/or documentation so executed by the Company shall
be effective for all purposes of documenting an assignment pursuant to
subsection 9.1.

9.6          Independence of Covenants.

All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception

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to, or would otherwise be
within the limitations of, another such covenant shall not avoid the occurrence
of an Default or Event of Default if such action is taken or condition exists.

9.7          Notices.

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 9.7B 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 facsimile as follows:  (i)  if to the Company, to Real Mex Restaurants,
Inc., 5660 Katella Avenue, Suite 100, Cypress, California 90630) Attention:  Steven L.Tanner, Chief Financial Officer
(Facsimile No. 562-346-1325; Telephone No. 562-346-1200); (ii) if to the
Administrative Agent, to CS at Eleven Madison Avenue, New York, New York 10010,
Attention of Agency Group (Facsimile No. 212-325-8304; Telephone No.
212-325-9936); and (iii) if to a Lender, to it at its address (or facsimile
number) set forth 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 facsimile 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 9.7B below shall be
effective as provided in subsection 9.7B.

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
subsection 2.1 if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such subsection by electronic
communication.  The Administrative Agent
or the Company 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 acknowledgment
from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgment); 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.        Change of Address, Etc.  Any party hereto may
change its address or facsimile number for notices and other communications
hereunder by notice to the other parties hereto.

9.8          Survival of Representations,
Warranties and Agreements.

A.        All
representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Term Loans
hereunder.

B.        Notwithstanding
anything in this Agreement or implied by law to the contrary, the agreements of
the Company set forth in subsections 2.6D, 2.7, 9.2 and 9.3 and the agreements
of the Lenders set forth in subsections 8.4, 9.3, 9.4 and 9.18 shall survive
the payment of the Term Loans and the termination of this Agreement.

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9.9          Failure or Indulgence Not Waiver;
Remedies Cumulative.

No failure or delay on the part of any Agent
or any Lender in the exercise of any power, right or privilege hereunder or
under any other Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege.  All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

9.10        Marshalling; Payments Set Aside.

Neither any Agent nor any Lender shall be
under any obligation to marshal any assets in favor of the Company, any other
Loan Party or any other party or against or in payment of any or all of the
Obligations.  To the extent that the
Company or any other Loan Party makes a payment or payments to the
Administrative Agent or the Lenders (or to the Administrative Agent for the
benefit of the Lenders), or any Agent or the Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.

9.11        Severability.

In case any provision in or obligation under
this Agreement or the Term Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

9.12        Obligations Several; Independent
Nature of the Lenders’ Rights.

The obligations of the Lenders hereunder are
several and no Lender shall be responsible for the obligations or Commitments
of any other Lender hereunder.  Nothing
contained herein or in any other Loan Document, and no action taken by the
Lenders pursuant hereto or thereto, shall be deemed to constitute the Lenders
as a partnership, an association, a joint venture or any other kind of
entity.  The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

9.13        Maximum Amount.

A.        It
is the intention of the Company and the Lenders to conform strictly to the
usury and similar laws relating to interest from time to time in force, and all
agreements between the Loan Parties and the Subsidiaries and the Lenders,
whether now existing or hereafter arising and whether oral or written, are
hereby expressly limited so that in no contingency or event whatsoever, whether
by acceleration of maturity hereof or otherwise, shall the amount paid or
agreed to be paid in the aggregate to the Lenders as interest (whether or not
designated as interest, and including any amount otherwise designated but
deemed to constitute interest by a court of competent jurisdiction) hereunder
or under the other Loan Documents or in any other agreement given to secure the
Indebtedness or obligations of the Company to the Lenders, or in any other
document evidencing, securing or pertaining to the Indebtedness evidenced
hereby, exceed the maximum amount permissible under applicable usury or such
other laws

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(the “Maximum Amount”).  If under any circumstances whatsoever
fulfillment of any provision hereof, or any of the other Loan Documents, at the
time performance of such provision shall be due, shall involve exceeding the
Maximum Amount, then, ipso facto, the obligation to be fulfilled shall be
reduced to the Maximum Amount.  For the
purposes of calculating the actual amount of interest paid and/or payable
hereunder in respect of laws pertaining to usury or such other laws, all sums
paid or agreed to be paid to the holder hereof for the use, forbearance or
detention of the Indebtedness of the Company evidenced hereby, outstanding from
time to time shall, to the extent permitted by Applicable Law, be amortized,
pro-rated, allocated and spread from the date of disbursement of the
proceeds of the Term Notes until payment in full of all of such Indebtedness,
so that the actual rate of interest on account of such Indebtedness is uniform
through the term hereof.  The terms and
provisions of this subsection 9.13 shall control and supersede every other
provision of all agreements between the Company or any endorser of the Term
Notes and the Lenders.

B.        If
under any circumstances any Lender shall ever receive an amount which would
exceed the Maximum Amount, such amount shall be deemed a payment in reduction
of the principal amount of the Term Loans and shall be treated as a voluntary
prepayment under subsection 2.4B(i) and shall be so applied in accordance with
subsection 2.4 or if such excessive interest exceeds the unpaid balance of the
Term Loans and any other Indebtedness of the Company in favor of such Lender,
the excess shall be deemed to have been a payment made by mistake and shall be
promptly refunded to the Company.

9.14        Headings.

Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.

9.15        Governing Law.

THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

9.16        Consent to Jurisdiction and Service
of Process.

A.        SUBMISSION TO JURISDICTION.  THE COMPANY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED
STATES DISTRICT COURT SITTING IN NEW YORK CITY, 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 NEW YORK 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 ANY AGENT OR ANY LENDER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

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B.        WAIVER OF VENUE.  THE COMPANY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH
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 SUBSECTION 9.16A. 
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.

C.        Service of Process.  Each party hereto
irrevocably consents to service of process in the manner provided for notices
in subsection 9.7.  Nothing in this
Agreement shall affect the right of any party hereto to serve process in any
other manner permitted by applicable law.

9.17        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 LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SUBSECTION.

9.18        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,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made shall 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 (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 subsection 9.18, to (i) any assignee or pledgee of or
Participant in, or any prospective assignee or pledgee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any actual
or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Company and its obligations, (g) with the
written consent of the Company (such consent not to be unreasonably withheld or
delayed) or (h) to the extent such Information becomes publicly available
other than as a result of a breach of this subsection 9.18.

For purposes of this subsection 9.18 “Information”
means all information received from the Company or any of the Subsidiaries
relating to the Company or any of the Subsidiaries or any of their

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respective businesses, other
than any such information that is available to any Agent or any Lender on a
nonconfidential basis prior to disclosure by the Company; provided  that,
in the case of information received from the Company after the Closing Date,
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 subsection 9.18
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.

9.19        Counterparts; Integration;
Effectiveness; Electronic Execution.

A.        Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Agreement and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. 
This Agreement shall become effective upon the satisfaction of the
conditions precedent set forth in Section 3 and when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto required pursuant to Section 3,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement or any document or instrument delivered in
connection herewith by facsimile or electronic mail shall be effective as
delivery of a manually executed counterpart of this Agreement or such other
document or instrument, as applicable.

B.        Electronic Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment Agreement
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
record keeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
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.

9.20        Restatement.

(a)           On
the Restatement Date, the Original Credit Agreement shall be amended and
restated in its entirety by this Agreement and the Original Credit Agreement
shall thereafter be of no further force and effect except to evidence (i) the
incurrence by the Company of the “Obligations” under and as defined in the
Original Credit Agreement (whether or not such “Obligations” are contingent as
of the Restatement Date) and (ii) obligations of the Company to the extent such
obligations would have survived the termination of the Original Credit
Agreement in accordance with Section 9.8. 
This Agreement is not in any way intended to constitute a novation of
the obligations and liabilities existing under the Original Credit Agreement or
evidence payment of all or any portion of such obligations and liabilities.

(b)           The
terms and conditions of this Agreement and the Administrative Agent’s and the
Lenders’ rights and remedies under this Agreement and the other Loan Documents
shall apply to all of the Obligations incurred under the Original Credit
Agreement.

(c)           On
and after the Restatement Date, (i) all references to the Original Credit
Agreement in the Loan Documents (other than this Agreement) shall be deemed to
refer to the Original

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Credit Agreement, as amended and restated hereby, (ii) all
references to any section (or subsection) of the Original Credit Agreement in
any Loan Document (but not herein) shall be amended to become, mutatis mutandis, references to the
corresponding provisions of this Agreement and (iii) except as the context
otherwise provides, on or after the Restatement Date, all references to this
Agreement herein (including for purposes of indemnification and reimbursement
of fees) shall be deemed to be reference to the Original Credit Agreement as
amended and restated hereby.

(d)           This
amendment and restatement is limited as written and is not a consent to any
other amendment, restatement or waiver or other modification, whether or not
similar and, except as expressly provided herein or in any other Loan Document,
all terms and conditions of the Loans Documents remain in full force and effect
unless otherwise specifically amended hereby or by any other Loan Document.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

	
  HOLDINGS:

  	
   

  	
  RM RESTAURANT HOLDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  THE COMPANY:

  	
   

  	
  REAL MEX RESTAURANTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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Real Mex
Credit Agreement signature page

 

 

	
  ADMINISTRATIVE AGENT

  AND LENDERS:

  	
   

  	
  

  CREDIT SUISSE, CAYMAN ISLANDS BRANCH, acting as
  Administrative Agent, Sole Bookrunner and Sole Lead Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
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  SIGNATURE PAGE TO THE AMENDED AND RESTATED CREDIT
  AGREEMENT DATED AS OF OCTOBER 5, 2006 AMONG RM RESTAURANT HOLDING CORP., REAL
  MEX RESTAURANTS, INC., THE LENDERS PARTY HERETO AND CREDIT SUISSE, CAYMAN
  ISLANDS BRANCH, AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name of
  Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  Name:

  
	
   

  	
   

  	
  Title:Exhibit 10.2

 

FOURTH
AMENDMENT TO CREDIT AGREEMENT

AND AMENDMENT TO LOAN
DOCUMENTS

This FOURTH
AMENDMENT, dated as of October 5, 2006 (this “Fourth  Amendment”), amends that
certain AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of March 31, 2004 (as
amended, modified or supplemented from time to time, the “Credit  Agreement”),
by and among (i) REAL MEX RESTAURANTS, INC., formerly known as Acapulco Acquisition
Corp., a Delaware corporation (“Real  Mex”), (ii) ACAPULCO RESTAURANTS, INC., a Delaware corporation and
successor by merger to Acapulco Restaurants of Encinitas, Inc. (“ARI”),
(iii) EL TORITO FRANCHISING COMPANY,
a Delaware corporation (“ETFI”), (iv) EL TORITO RESTAURANTS, INC., a Delaware corporation (“ETRI”), (v) TARV, INC., a California corporation (“TARV”), (vi) ACAPULCO RESTAURANT OF VENTURA, INC., a
California corporation (“ARV”),
(vii) ACAPULCO RESTAURANT OF WESTWOOD, INC.,
a California corporation (“ARW”), (viii) ACAPULCO MARK CORP., a Delaware corporation
(“AMC”), (ix) MURRAY PACIFIC, a California corporation (“MP”), (x) ALA DESIGN, INC., a California corporation
(“ALAD”), (xi) REAL MEX FOODS, INC., formerly known as ALA
Foods, Inc., a California corporation (“RMF”),
(xii) ACAPULCO RESTAURANT OF DOWNEY, INC.,
a California corporation (“ARD”),
(xiiii) ACAPULCO RESTAURANT OF MORENO VALLEY,
INC., a California corporation (“AMV”),
(xiv) EL PASO CANTINA, INC., a
California corporation (“EPC”,
each of Real Mex, ARI, ETFI, ETRI, AEI, TARV, ARV, ARW, AMC, MP, ALAD, RMF,
ARD, AMV, and EPC, a “Borrower”
and, together, the “Original  Borrowers”),
(xv) CKR ACQUISITION CORP., a
Delaware corporation (“CKR”),
and (xvi) CHEVYS RESTAURANTS, LLC,
a Delaware limited liability company (“Chevys”,
each of CKR and Chevys, an “Additional  Borrower”
and, together with the Original Borrowers, the “Borrowers”),
(xvii) the several financial institutions from time to time party to the Credit
Agreement as lenders thereunder (the “Lenders”),
and (xviii) BANK OF MONTREAL (“BMO”), as the administrative agent for the Lenders
under the Credit Agreement (in such capacity, the “Agent”).

WHEREAS,
pursuant to the Amendment Agreement, dated as of September 3, 2004 (the “First
Amendment”), by and among the Original Borrowers, the Lenders, Fleet
National Bank (together with Bank of America, N.A., as successor by merger to
Fleet National Bank, the “Prior Agent”)
and Bank of America, N.A. (as predecessor in interest to BMO, as administrative
agent, “BofA”), certain terms of the
Credit Agreement were amended pursuant to the terms and conditions set forth in
the First Amendment;

WHEREAS,
pursuant to the Joinder Agreement, dated as of November 17, 2004 (the “CKR
Joinder”), by and between CKR and the Prior Agent, CKR joined the Credit
Agreement and the Loan Documents and agreed to become a Borrower under the
Credit Agreement and to comply with and be bound by all of the terms,
conditions and covenants of the Credit Agreement and Loan Documents applicable
to it as a Borrower;

WHEREAS,
pursuant to the Joinder Agreement, dated as of December 20, 2004 (the “Chevys
Joinder”), by and between Chevys and the Prior Agent, Chevys joined the
Credit Agreement and the Loan Documents and agreed to become a Borrower under
the Credit

 

 

Agreement and to comply with and be bound by all
of the terms, conditions and covenants of the Credit Agreement and Loan
Documents applicable to it as a Borrower;

WHEREAS,
pursuant to the Second Amendment and Consent, dated as of January 11, 2005
(the “Second  Amendment”), by and among the Borrowers, the Lenders,
and the Prior Agent, certain terms of the Credit Agreement were amended
pursuant to the terms and conditions set forth in the Second Amendment;

WHEREAS,
pursuant to the Third Amendment, dated as of January 5, 2006 (the “Third
Amendment”), by and among the Borrowers, the Lenders, and the Prior
Agent, certain terms of the Credit Agreement were amended pursuant to the terms
and conditions set forth in the Third Amendment;

WHEREAS, Prior Agent
and the Lenders under the Credit Agreement, as amended by the First Amendment,
CKR Joinder, Chevys Joinder, Second Amendment and Third Amendment, assigned all
of their rights and obligations under the Credit Agreement to BMO pursuant to
an Assignment Arrangements Agreement of even date herewith and Prior Agent
resigned as administrative agent, and BMO assumed its rights and obligations as
administrative agent pursuant thereto; and

WHEREAS,
the Borrowers have requested that the Lenders and the Agent agree, among other
things, to amend certain of the terms of the Credit Agreement and certain other
Loan Documents, and the Lenders and the Agent have, upon the terms and
conditions set forth herein, agreed to the foregoing;

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

§1.          Definitions in Credit Agreement;
etc.  Unless otherwise defined herein, terms defined
in or by reference in the Credit Agreement (as from time to time amended) are
used herein as therein defined.

§2.          Amendments.  Subject to the satisfaction of the conditions
set forth in §5 hereof, the parties hereto hereby agree to the following amendments
to the Credit Agreement:

§2.1.       Preamble.  The last sentence of the preamble to the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

“The parties hereto
hereby agree to amend the Credit Agreement to, among other things, provide a
$15,000,000 revolving credit facility (with unlimited availability for letters
of credit) and a $25,000,000 letter of credit facility.”

§2.2.       Definitions.  Section 1.1 of the Credit Agreement is hereby
amended as follows:

 2
 

 

(a)           The
definition of “Affiliate” set forth in §1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

“Affiliate.  Any Person that would be considered to be an
affiliate of any Borrower under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if such
Borrower were issuing securities.”

(b)           The definition of “Agent’s Office”
set forth in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety as follows:

“Agent’s
Office.  The Agent’s office located
at 115 South LaSalle Street, Chicago, Illinois 60603, or at such other location
as the Agent may designate from time to time.”

(c)           The definition of “Agent’s Special
Counsel” set forth in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety as follows:

“Agent’s
Special Counsel.  Chapman and Cutler
LLP or such other counsel as may be approved by the Agent.”

(d)           The definition of “Applicable Margin”
set forth in §1.1 of the Credit Agreement is hereby deleted in its entirety.

(e)           The definition of “Arranger” set
forth in §1.1 of the Credit Agreement is hereby deleted in its entirety.

(f)            The definition of “Balance Sheet
Date” set forth in §1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

“Balance Sheet Date.  December 25, 2005.”

(g)           The definition of “Base Rate” set
forth in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety as follows:

“Base
Rate.  For any day, the greater of
(i) the rate of interest announced or otherwise established by the Agent from
time to time as its prime commercial rate, as in effect on such day (it being
understood and agreed that such rate may not be the Agent’s best or lowest
rate); and (ii) the sum of (x) the rate determined by the Agent to be the
average (rounded upwards, if necessary, to the next higher 1/100 of 1%) of the
rates per annum quoted to the Agent at approximately 10:00 a.m. (Chicago time)
(or as soon thereafter as is practicable) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day) by two or more Federal
funds brokers selected by the Agent for the sale to the Agent at face value of
Federal funds in an amount equal or comparable to the principal amount owed to
the Agent for which such rate is being determined, plus (y) 1/2 of 1%.”

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(h)           The
definition of “BRS” set forth in §1.1 of the Credit Agreement is hereby deleted
in its entirety.

(i)            The
definition of “BRS Affiliate” set forth in §1.1 of the Credit Agreement is
hereby deleted in its entirety.

(j)            The definition of “Business Day” set
forth in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety as follows:

“Business
Day. Any day (excluding Saturday and Sunday) on which banking institutions
in Chicago, Illinois are open for the transaction of banking business.”

(k)           The definition of “Cash Flow Ratio”
set forth in §1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Cash Flow Ratio.  As at the end of each fiscal quarter of the
Borrowers, the ratio of (a) Consolidated Cash Flow for the last four fiscal
quarters then ended and (b) Consolidated Financial Obligations for the
Measurement Period then ending.”

(l)            The definition of “Change of Control”
set forth in §1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“Change
of Control.  At any time, the
occurrence of one or more of the following events:  (i) Sun Capital and the Sun Capital
Affiliates shall collectively cease to have the power, directly or indirectly
(including under any stockholders’ agreement) to elect a majority of the
directors of the Parent or any Borrower, (ii) the replacement of a majority of
the board of directors of the Parent or any Borrower over a two-year period
from the directors who constituted the board of directors of the Parent or such
Borrower, as applicable, at the beginning of such period, and such replacement
shall not (1) have been approved by a vote of at least a majority of the board
of directors of the Parent or such Borrower, as applicable, then still in
office who either were members of such board of directors at the beginning of
such period or whose election as a member of such board of directors was
previously so approved, or (2) have been elected or nominated for election by
Sun Capital or a Sun Capital Affiliate, (iii) the Parent shall at any time fail
to own, directly or indirectly, 100% of each class of issued and outstanding
Voting Stock and economic interests of Real Mex free and clear of all Liens,
(iv) Sun Capital and the other Sun Capital Affiliates shall collectively cease
to own, directly or indirectly, at least 54% of the Voting Stock and economic
interests of the Parent or any Borrower, (v) the Permitted Holders shall
collectively cease to own, directly or indirectly, at least 60% of the Voting
Stock and economic interests of the Parent or any Borrower, (vi) any “Change of
Control” under the Senior Secured Debt Documents, (vii) any “Change of Control”
under (and as defined in) the Unsecured Term Loan Documents, or

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(viii) any “Change
of Control” under (and as defined in) the Parent Debt Documents.”

(m)          The
definition of “Commitment Fee Rate” is hereby deleted in its entirety.

(n)           The
definition of “Consolidated Cash Interest Expense” set forth in §1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

“Consolidated
Cash Interest Expense.  For any
period, the aggregate portion of Consolidated Total Interest Expense required
to be paid in cash by any Borrower or any of its Subsidiaries during such
period.”

(o)           The
definition of “Consolidated EBITDA” set forth in §1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:

“Consolidated
EBITDA.  For any period, the sum of
(a) the Consolidated Pre-Tax Income of the Borrowers and their Subsidiaries for
such period, plus (b) to the extent not otherwise included in the
calculation of Consolidated Pre-Tax Income of the Borrowers and their
Subsidiaries, income of a Person in which any Borrower holds a minority equity
interest to the extent such income is properly attributable to such minority
interest held by such Borrower and such income has been distributed to such
Borrower in cash, plus (c) Consolidated Total Interest Expense for such
period, plus (d) to the extent deducted in
the calculation of Consolidated Pre-Tax Income, Consolidated Restaurant
Pre-Opening Costs and depreciation and amortization expenses of the Borrowers
and their Subsidiaries for such period, plus (e) to the extent deducted
in the calculation of Consolidated Pre-Tax Income and without duplication,
other non-cash charges (including non-cash extraordinary losses) of the
Borrowers and their Subsidiaries for such period, plus (f) to the extent
deducted in the calculation of Consolidated Pre-Tax Income and without
duplication, Transaction Costs in an aggregate amount not to exceed $8,000,000,
plus (g) to the extent deducted in the calculation of Consolidated
Pre-Tax Income and without duplication, payments to restricted stockholders of
Real Mex pursuant to the Merger Agreement in an aggregate amount not to exceed
$2,400,000, plus (h) to the extent deducted in the calculation of
Consolidated Pre-Tax Income and without duplication, any fees and expenses paid
pursuant to the Management Services Agreement, plus (i) to the extent
deducted in the calculation of Consolidated Pre-Tax Income and without
duplication, non-recurring expenses incurred in connection with (x) certain
class action lawsuits set forth on Schedule 8.7 hereto, (y) any
litigation claims consolidated with any of the litigation matters set forth on Schedule
8.7 hereto and (z) any claims alleged against the Borrowers and/or their
Subsidiaries that are asserted which arise in whole or in part from the conduct
or alleged conduct of business or any other action allegedly taken or omitted
to be taken by the Borrowers or any of their Subsidiaries prior to the
consummation of the Merger and that assert substantially the same or
substantially similar legal theories as those relating to the litigation
described above (collectively, the “Existing  Litigation”) up to
$8,500,000 in the aggregate, plus (j) to the extent deducted in the calculation
of Consolidated Pre-

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Tax Income and without duplication, option
payments pursuant to the Merger Agreement in an aggregate amount not to exceed
$6,000,000, minus (k) to the extent included in the calculation of Consolidated
Pre-Tax Income, extraordinary non-recurring gains, including without
limitation, gains from asset dispositions.”

(p)           The
definition of “Consolidated Financial Obligations” set forth in §1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

“Consolidated
Financial Obligations.  For any
period, the sum of (a) all scheduled payments of principal on Indebtedness of
the Borrowers and their Subsidiaries, including Capitalized Leases and
including Synthetic Leases during such period (but not including Consolidated
Rental Expense), plus (b) Consolidated Cash Interest Expense.  Demand obligations shall be deemed to be due
and payable during any period during which such obligations are outstanding.  Notwithstanding the foregoing, the parties
agree that for any Measurement Period ending after the Fourth Amendment Closing
Date, Consolidated Financial Obligations shall be determined by annualizing the
actual Consolidated Financial Obligations of the Borrowers and their
Subsidiaries for such Measurement Period by multiplying such amount by a
fraction, the numerator of which is 365 and the denominator of which is the
number of days in the period from the first day of such Measurement Period to
the last day of such Measurement Period.”

(q)           The
definition of “Equity Documents” set forth in §1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

“Equity
Documents. Collectively, (a) the Stockholders Agreement, (b) the
Subscription Agreement, (c) the Contribution Agreement, and (d) the
Registration Rights Agreement.

(r)            The
definition of “Fee Letter” set forth in Section 1.1 of the Credit Agreement is
hereby deleted in its entirety.

(s)           The
definition of “Furman Selz” set forth in §1.1 of the Credit Agreement is hereby
deleted in its entirety.

(t)            The
definition of “Furman Selz Affiliate” set forth in §1.1 of the Credit Agreement
is hereby deleted in its entirety.

(u)           The
definition of “Indebtedness” set forth in §1.1 of the Credit Agreement is
hereby amended and restated by deleting the last sentence of such definition in
its entirety and substituting in lieu thereof the following sentence: “The
obligation of such Person to pay current year insurance premiums in an amount
not to exceed $3,500,000 shall be excluded from Indebtedness.”

(v)           The
definition of “Interest Payment Date” set forth in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety as follows:

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“Interest
Payment Date.  The last day of each
calendar month with respect to interest accrued during such calendar month,
including, without limitation, the calendar month which includes the Drawdown
Date.”

(w)          The
definition of “Letter of Credit Facility” set forth in §1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

“Letter of Credit Facility.  The letter of credit facility established
pursuant to this Credit Agreement in an aggregate amount of $25,000,000.”

(x)            The
definition of “Loan Document” set forth in Section 1.1 of the Credit Agreement
is hereby amended to delete therefrom the reference to “the Fee Letter,”.

(y)           The
definition of “Management Agreement” set forth in §1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:

“Management Agreement.  The Management Services Agreement, dated as
of August 21, 2006, by and between Real Mex and Sun Capital Partners Management
IV, LLC.”

(z)            The
definition of “Maximum Drawing Amount” set forth in §1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

“Maximum Drawing Amount.  The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letter of Credit; provided, however, that the Maximum Drawing
Amount shall not include the amount of any Letter of Credit to the extent any
such Letter of Credit has been cash collateralized in an amount not less than
105% of the aggregate amount that the beneficiary may at any time draw under
such Letter of Credit.”

(aa)         The
definition of “Measurement Period” set forth in §1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

“Measurement Period.  The period of one (1) fiscal quarter ending
September 30, 2006, the period of two (2) fiscal quarters ending December 31,
2006, the period of three (3) fiscal quarters ending March 31, 2007, and each
period of four (4) consecutive fiscal quarters ending thereafter.”

(bb)         The definition of “Minimum Liquidity”
set forth in §1.1 of the Credit Agreement is hereby deleted in its entirety.

(cc)         The
definition of “Northridge LC” set forth in §1.1 of the Credit Agreement is
hereby deleted in its entirety.

(dd)         The
definition of “Perfection Certificate” set forth in §1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

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“Perfection
Certificate.  The Perfection
Certificate dated as of the Fourth Amendment Closing Date delivered by each of
the Borrowers to the Agent on the Fourth Amendment Closing Date.”

(ee)         The definition of “Preferred Stock” set
forth in §1.1 of the Credit Agreement is hereby deleted in its entirety.

(ff)           The
definition of “Registration Rights Agreement” set forth in  §1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

“Registration Rights Agreement.  The Registration Rights Agreement, dated as
of August 21, 2006, by and among the Parent, Sun Cantinas, and the other
parties thereto.”

(gg)         The
definition of “Restricted Payments” set forth in §1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:

“Restricted Payments.  In relation to the Borrowers, any (a)
Distribution, (b) payment by any of the Borrowers to Sun Capital or any Sun
Capital Affiliate other than payments to any Sun Capital Affiliate for goods
and services in the ordinary course of business on terms equivalent to those
obtainable in arms length transactions, (c) payment in respect of or purchase
of the Senior Secured Debt, or (d) payment in respect of or purchase of the
Unsecured Term Loan.”

(hh)         The
definition of “Revolving Credit Loan Maturity Date” set forth in §1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

“Revolving Credit Loan Maturity Date.  The earliest to occur of
(a) October 5, 2008, (b) the payment or defeasance in full of the
Senior Secured Debt, (c) the payment in full in cash of the Unsecured Term Loan
or (d) the date upon which interest on the Permitted Parent Debt is required to
be paid in cash pursuant to the terms thereof.”

(ii)           The
definition of “Security Documents” set forth in §1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

“Security Documents.  The Intercreditor Agreement, the Parent
Guaranty, the Security Agreement, the Mortgages, the Trademark Security
Agreement, the Stock Pledge Agreements, the Assignment and Agency Account
Agreement, the Agency Account Agreements and all other instruments and
documents, including, without limitation, Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document, in each case, as amended, restated, supplemented or otherwise
modified from time to time.”

(jj)           The
definition of “Shareholders Agreement” set forth in §1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 8
 

 

“Stockholders
Agreement.  The Stockholders
Agreement, dated as of August 21, 2006, by and among Sun Cantinas, the Parent,
and the other stockholders party thereto.

(kk)         The
definition of “Stock Pledge Agreement” set forth in §1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

“Stock Pledge Agreements.  (i) The Stock Pledge Agreement, amended and
restated as of the Closing Date, among certain of the Borrowers and the Agent
and (ii) the Membership Interest Pledge Agreement, dated as of December 20,
2004, by and between CKR Acquisition Corp. and the Agent.”

(ll)           The
definition of “Total Revolving Credit Commitment” set forth in §1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

“Total Revolving Credit Commitment.  The sum of the Revolving Credit Commitments
of the Lenders, as in effect from time to time. 
On the Fourth Amendment Closing Date, the Total Revolving Credit
Commitment shall include the $15,000,000 revolving credit loan commitment (with
unlimited availability for letters of credit) and the $25,000,000 letter of
credit commitment.”

(mm)       The
definition of “Unsecured Term Loan Maturity Date” set forth in §1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

“Unsecured Term Loan Maturity Date.  October 5, 2010.”

(nn)         The
following new definitions are hereby added to the Credit Agreement in
alphabetical order:

“Bank
of America Letter of Credit.  That
certain letter of credit   issued by the
Agent in favor of Bank of America, N.A. in the initial aggregate face amount of
$24,877,709.85 with an expiry date of December 4, 2007 to backstop Bank of
America’s obligations under, and arising in connection with, certain letters of
credit issued by Bank of America, N.A. on the Borrowers’ behalf prior to the
Fourth Amendment Effective Date.”

“BMO.  Bank of Montreal.”

“Co-Investors.  H.I.G. Sun Partners, Inc., Kevin Genda,
certain members of management of the Parent, Real Mex, the Subsidiaries of Real
Mex, and any of their Control Investment Affiliates.”

“Commitment
Fee Rate.  The Applicable Margin for
commitment fees set forth in the definition of Applicable Margin.”

“Contribution
Agreement.  The Contribution
Agreement, dated as of September 11, 2006, by and between Sun Cantinas and the
Parent.”

 9
 

 

“Control
Investment Affiliates.  As to any Person,
any other Person that (a) directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person and (b) is
organized by such Person or any Person controlling such Person primarily for
the purpose of making equity or debt investments in one or more companies.  For the purpose of this definition “control”
of a Person means the power to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.”

“Credit
Suisse.  Credit Suisse in its
capacity as administrative agent under the Parent Debt Documents or in its
capacity as purchaser of the Notes (as defined in the Indenture).”

“Escrow
Agreement.  The Escrow Agreement,
dated as of August 21, 2006, by and among J.P. Morgan Trust Company, National
Association, as Escrow Agent thereunder, Real Mex, Parent and Sellers.”

“Fourth
Amendment Closing Date.  October 5,
2006.”

“Guarantor.  Sun Capital Partners IV, LP.”

“Merger.  The consummation of the merger of RM
Integrated with and into Real Mex pursuant to the Merger Documents.”

“Merger
Documents.  (i) The Agreement and
Plan of Merger, dated August 17, 2006 (the “Merger Agreement”), by and
among Real Mex, the Parent, RM Integrated, Inc., and joined by Bruckman,
Rosser, Sherrill & Co., Inc., as representative for the Sellers solely for
the purposes of Sections 2.10 and 9.1 thereof; (ii) the Certificate of Merger
(as defined in the Merger Agreement); and (iii) all other agreements and
documents entered into in connection with the Merger and the other transactions
contemplated thereby, in each case as amended and in effect from time to time.”

“Parent.  RM Restaurant Holding Corp., a Delaware
corporation.”

“Parent
Debt.  Unsecured Indebtedness of the
Parent in an aggregate principal amount not to exceed $115,000,000 evidenced by
the Parent Debt Documents.”

“Parent
Debt Documents.  The Credit
Agreement, dated as of the Fourth Amendment Closing Date, among Parent, Credit
Suisse and the lenders referred to therein pursuant to which up to $115,000,000
aggregate principal amount of Parent Debt has been issued to the Parent and
each of the notes and other documents delivered pursuant thereto, in each case,
as amended in accordance with this Credit Agreement and in effect from time to
time.”

“Parent
Guaranty.  The Guaranty, dated as of
the Fourth Amendment Closing Date, by the Parent, in form and substance
satisfactory to the Agent.

 10

 

“Permitted
Holder Affiliate”  With respect to a
specified Person, another Person that directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with such Person.  For purposes of this
definition, a Person shall be deemed to “control” or be “controlled by” a
Person if such Person possesses, directly or indirectly, power either (a) to
vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.

“Permitted
Holders.  Collectively, (a) Sun
Capital and the other Sun Capital Affiliates, (b) the Co-Investors, and (c) any
Related Parties of (i) the Sun Capital Affiliates or (ii) the Co-Investors.”

“Permitted
Parent Debt.  Collectively, (a) the
Parent Debt and (b) any other Indebtedness at any time incurred by Parent in an
aggregate principal amount not to exceed $25,000,000 at any one time outstanding,
provided that, in the case of any Indebtedness referred to in clause (b)
of this definition, (i) 100% of the proceeds of such Indebtedness are
contributed by the Parent in cash to Real Mex as common equity, (ii) such
Indebtedness is unsecured and not guaranteed by any Borrower or any Subsidiary
of a Borrower, (iii) such Indebtedness is not exchangeable or convertible into
any Indebtedness of the Parent or any of its Subsidiaries (other than
Indebtedness permitted under this clause (b)), (iv) such Indebtedness is
subordinated to the Indebtedness incurred by Parent under the Parent Debt
Documents on terms satisfactory to the Majority Lenders, (v) interest on such
Indebtedness shall be payable only in kind, (vi) such Indebtedness does not
mature, and is not subject to mandatory repurchase, redemption or amortization,
in each case prior to the maturity date of the Parent Debt, and (vii) to the
extent such Indebtedness contains covenants and events of default, such
covenants and events of default shall be determined by the Agent to be no more
restrictive, when taken as a whole, than the covenants and events of default in
the Parent Debt Documents.”

“Related
Parties.  With respect to any
Permitted Holder, the Permitted Holder Affiliates of such Permitted Holder and
the members, partners, directors, officers, employees, agents, trustees and
advisors of such Permitted Holder and of the Permitted Holder Affiliates of
such Permitted Holder.”

“RM
Integrated.  RM Integrated, Inc., a
Delaware corporation and wholly-owned subsidiary of Parent.”

“Sellers.  The Former Securities Holders (as defined in
the Merger Agreement).”

“Subscription
Agreement.  The Subscription
Agreement, dated as of August 16, 2006, by and between Sun Cantinas and the
Parent.”

“Sun
Cantinas”  Sun Cantinas, LLC, a
Delaware limited liability company.”

 11
 

 

“Sun
Capital.  Sun Capital Partners Group
IV, Inc.”

“Sun
Capital Guaranty.  The Guaranty
Agreement made by the Guarantor in favor of the Agent for the benefit of the
Lenders, guaranteeing all present and future Obligations of the Borrowers.”

“Sun
Capital Affiliates.  Sun Capital and
any of its Control Investment Affiliates.”

“Tender
Offer.  The offer to purchase the
Notes (as defined in the Indenture), made by Real Mex on September 19, 2006,
upon the terms and conditions set forth in the Tender Offer Documents.”

“Tender
Offer Documents.  The Notice of Change of Control and Offer to
Purchase for Cash Any and All Outstanding 10% Senior Secured Notes due 2010,
each dated September 19, 2006.”

“Transaction
Costs.  Fees and expenses incurred by
the Parent and/or Borrowers in connection with the Merger and related financing
transactions.”

“Ventura
Property.  That certain real property
owned by ETRI and located at 770 Seaward Avenue, Ventura, California 93001.”

(oo)         Each
reference in the Credit Agreement to “Fleet” is hereby deleted and replaced
with a reference to “BMO”.

§2.3.       Commitment Fee. 
The Credit Agreement is hereby further amended by deleting Section 2.2
in its entirety and substituting in lieu thereof the following: “Intentionally
Omitted.”

§2.4.       Commitment to Issue
Letters of Credit.  The Credit Agreement is hereby further
amended by deleting clause (a) of §2.5 in its entirety and substituting in lieu
thereof the following:

“Each
Revolving Credit Loan shall bear interest for the period commencing on the
Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at an annual rate equal to the Base Rate.”

§2.5.       The Credit Agreement is hereby further
amended by deleting clause (b) of Section 2.5 thereof in its entirety and
substituting in lieu thereof the following:

“Notwithstanding
anything to the contrary set forth in this Credit Agreement or any other Loan
Document, all Revolving Credit Loans shall at all times bear interest at the
Base Rate.”

 12
 

 

§2.6.       The Credit Agreement is hereby further
amended by (x) replacing each reference to “1:00 p.m. (Boston time)” in Section
2.6 thereof with a reference to “12:00 p.m. (Chicago time)” and (y) replacing
the reference to “$500,000” in Section 2.6 thereof with a reference to “$100,000”.

§2.7.       The Credit Agreement is hereby further
amended by replacing the reference to “2:00 p.m. (Boston time)” in section
2.8.1 thereof with a reference to “1:00 p.m. (Chicago time)”.

§2.8.       The Credit Agreement is hereby further
amended by replacing the reference to “$30,000,000” in Section 5.1.1 with a
reference to “$40,000,000” and by adding the following to the end of Section
5.1.1:

“For the avoidance of doubt, the Bank of America
Letter of Credit is a Letter of Credit issued pursuant to the terms of this
Credit Agreement, including, without limitation, Section 5 hereof.”

§2.9.       The Credit Agreement is hereby further amended by
replacing the reference to “forty-five (45) days” appearing in clause b(ii) of Section
5.1.3 thereof with a reference to “thirty (30) days”.

§2.10.     The Credit Agreement is hereby further amended by
adding the following new Section 5.1.6:

“Section 5.1.6. 
Cash Collateral Demand.  At
any time during the term of this Credit Agreement, the Agent may   require that the Borrowers deliver to the
Agent on demand, and the Borrowers hereby agree to deliver to the Agent at any
such time, cash   collateral to secure
the Maximum Drawing Amount or Unpaid Reimbursement Obligation with respect to
any Letter of Credit in an   amount not
less than 105% of the amount of the Maximum Drawing Amount   and Unpaid Reimbursement Obligations under
any Letter of Credit outstanding at such time.”

§2.11.     The
Credit Agreement is hereby further amended by amending and restating Section
5.6 in its entirety as follows:

“With
respect to each Letter of Credit issued hereunder, the Borrowers shall pay to
the Agent a fee (the “Letter of Credit Fee”) for each Letter of Credit
issued or renewed by the Agent at a rate per annum as set forth in the Letter
of Credit Application therefor
(calculated on the basis of a 360 day year for the actual number of days
elapsed.)”

§2.12.     The
Credit Agreement is hereby further amended by amending and restating Section
6.1 in its entirety as follows:

 13
 

 

“Section
6.1.  Fees.  The Borrowers jointly and severally agree to
pay the Agent a fully earned and non-refundable closing fee of $60,000.00 due
and payable on the Fourth Amendment Closing Date.”

§2.13.     The Credit Agreement is hereby further
amended by replacing (x) the reference to “Boston, Massachusetts” in Section
6.2.1 with a reference to “Chicago, Illinois” and (y) the reference to “1:00
p.m. (Boston time)” with a reference to “12:00 p.m. (Chicago time)”.

§2.14.     The
Credit Agreement is further amended by deleting the clause “plus the Applicable
Margin for Base Rate Loans then in effect with respect to Revolving Credit
Loans” from each of Sections 6.10.1, 6.10.2 and 6.10.3.

§2.15.     Guaranty; Collateral Security; Collateral Notes.  The Credit Agreement is hereby further amended
by (a) deleting the heading of §7 of the Credit Agreement in its entirety and
substituting in lieu thereof the following: “GUARANTY;
COLLATERAL SECURITY; COLLATERAL NOTES”, (b) deleting the heading of
§7.1 of the Credit Agreement in its entirety and substituting in lieu thereof
the following: “Guaranty; Security of
Borrowers” and (c) amending §7.1 of the Credit Agreement by
inserting the following new sentence before the existing first sentence
thereof: “The Obligations shall be guaranteed by the Parent pursuant to the
terms of the Parent Guaranty and by the Guarantor pursuant to the Sun Capital
Guaranty.  The Borrowers  hereby acknowledge and agree that the Sun
Capital Guaranty is a material inducement to the Lenders’ extension of credit
hereunder.

§2.16.     Pro Forma Balance Sheet
and Projections.  The Credit Agreement is hereby further
amended by (x) deleting the first two sentences of §8.4.3 in their entirety and
substituting in lieu thereof the following: 
“The Borrowers have delivered to the Agent a consolidated pro forma
balance sheet as of August 20, 2006 (the “Pro Forma Balance Sheet”),
together with the projections of the annual operating budgets of the Borrowers
and their Subsidiaries on a consolidated basis, balance sheets and cash flow
statements for the 2006 to 2009 fiscal years, copies of which have been
delivered to each Lender (collectively with the Pro Forma Balance Sheet, the “Projections”),
which Projections were prepared in good faith based upon assumptions believed
to be reasonable at the time made and as of the Fourth Amendment Closing Date
(it being recognized, however, that projections as to future events are not to
be viewed as facts and that the actual results during the period or periods
covered by the Projections may differ from the projected results and that the
differences may be material) and (y) amending and restating the third sentence
of §8.4.3 in its entirety and substituting in lieu thereof the following:  “As of the Fourth Amendment Closing Date, to
the knowledge of any of the Borrowers or their Subsidiaries, no facts exist
that (individually or in the aggregate) would result in any material change in
the Projections.”

§2.17.     No Material Changes. 
The
Credit Agreement is hereby further amended by deleting the first sentence of
subsection (a) of §8.5 in its entirety and substituting in lieu thereof the
following:  “From the Balance Sheet Date
through the Closing Date, there has occurred no materially adverse change in
the financial condition or business of the

 14
 

 

Borrowers as
shown on or reflected in the balance sheet of the Borrowers as at the Balance
Sheet Date, or the consolidated statement of income for the fiscal year then
ended, other than (i) the Merger, (ii) a Restricted Payment in the amount of
$10,000,000 occurring on August 24, 2006 and (iii) changes in the ordinary
course of business that have not had any materially adverse effect either
individually or in the aggregate on the business or financial condition of the
Borrowers.”

§2.18.     Parent Debt Documents.  The Credit Agreement is hereby further amended
by deleting the heading located at §8.19 and substituting in lieu thereof the
following heading:  “Senior Secured Debt
Documents; Equity Documents; Unsecured Term Loan Documents, and Parent Debt
Documents”, and by amending  and
restating subsections (b), (c) and (d) of such §8.19 in their entirety as
follows:

“(b)         On
or prior to the Fourth Amendment Closing Date, the Borrowers have furnished to
the Agent true, complete and correct copies of the Equity Documents (including
schedules, exhibits and annexes thereto). 
As of the Fourth Amendment Closing Date, the Equity Documents have not
been amended, supplemented, or modified (other than the amendments, if any,
delivered to the Agent on or prior to the Fourth Amendment Closing Date and
consented to or approved on or prior to the Fourth Amendment Closing Date by
the Agent or as expressly permitted hereunder) and constitute the complete
understanding among the parties thereto in respect of the matters and
transactions covered thereby.  As of the
Fourth Amendment Closing Date, the representations and warranties of the
Borrowers and their Affiliates contained in the Equity Documents were true and
correct in all material respects when made or deemed to be made except as would
not have a Materially Adverse Effect and the Agent and the Lenders may rely on
such representations and warranties as if they were incorporated herein on the
Fourth Amendment Closing Date; provided, that nothing contained herein
shall prejudice in any way any rights of the Borrowers under or in respect of
the Equity Documents, all of which are expressly hereby reserved.

(c)           On
or prior to the Fourth Amendment Closing Date, the Borrowers have furnished to
the Agent true, complete and correct copies of the Unsecured Term Loan
Documents (including schedules, exhibits and annexes thereto).  As of the Fourth Amendment Closing Date, the
Unsecured Term Loan Documents have not been amended, supplemented, or modified
(other than the amendments, if any, delivered to the Agent on or prior to the
Fourth Amendment Closing Date and consented to or approved on or prior to the
Fourth Amendment Closing Date by the Agent or as expressly permitted hereunder)
and constitute the complete understanding among the parties thereto in respect
of the matters and transactions covered thereby.  To the best knowledge of the Borrowers, as of
the Fourth Amendment Closing Date, all of the representations and warranties
contained in the Unsecured Term Loan Documents were true and correct in all
material respects when made or deemed to be made except as would not have a
Materially Adverse Effect after giving effect to the transactions contemplated
thereby, and the Agent and the Lenders may rely on such representations and warranties
as if they were incorporated herein on the Fourth Amendment Closing Date; provided,
that nothing contained herein shall prejudice in any way any rights of the

 15
 

 

Borrowers under or in respect of the Unsecured
Term Loan Documents, all of which are expressly hereby reserved.

(d)           On
or prior to the Fourth Amendment Closing Date, the Borrowers have furnished to
the Agent true, complete and correct copies of the Parent Debt Documents
(including schedules, exhibits and annexes thereto).  As of the Fourth Amendment Closing Date, the
Parent Debt Documents have not been amended, supplemented, or modified (other
than the amendments, if any, delivered to the Agent on or prior to the Fourth
Amendment Closing Date and consented to or approved on or prior to the Fourth
Amendment Closing Date by the Agent or as expressly permitted hereunder) and
constitute the complete understanding among the parties thereto in respect of
the matters and transactions covered thereby.”

§2.19.     Notices of Default.  The
Credit Agreement is hereby further amended by deleting the words “and including
obligations with respect to the Preferred Stock” from §9.5.1 thereof.

§2.20.     Notification of Claim against Collateral. 
The Credit Agreement is hereby further amended by deleting the figure “$250,000”
set forth in §9.5.3 thereof and substituting in lieu therefor the figure “$500,000”.

§2.21.     Conduct of Business;
Stores.  The Credit Agreement is hereby further
amended by deleting (a) the parenthetical “(other than Real Mex)” set forth in
§9.15 thereof and (b) the last sentence of such §9.15.

§2.22.     Bank Accounts.  The
Credit Agreement is hereby amended by deleting each reference to “Closing Date”
set forth in §9.17 and substituting in lieu thereof the words: “Fourth
Amendment Closing Date”.

§2.23.     Fourth Amendment
Post-Closing Covenants.  The Credit Agreement is hereby amended by
adding the following as a new §9.20 of the Credit Agreement:

“9.20.     Fourth
Amendment Post-Closing Covenants.

(a)           On or prior to the date which is
thirty (30) days after the Fourth Amendment Closing Date, at the Agent’s
request, the Borrowers will deliver date down endorsements to the Title
Policies with respect to all of the real estate subject to the amendments to
the Mortgages delivered pursuant to the Fourth Amendment, together with
amendments to UCC-1 fixture filings and all other documents and certificates
with respect to such real estate as reasonably requested by the Agent, in each
case, in form and substance satisfactory to the Agent.

(b)           On or prior to the date which is
forty-five (45) days after the Fourth Amendment Closing Date, the Borrowers
will, in each case, at the Agent’s request, (i) deliver evidence of the release
and termination of any security interest in or other Lien (other than Permitted
Liens) on any Collateral (including, without limitation, assignments of or
security interests in any intellectual property of any Borrower of record with
the United States Patent & Trademark Office), in each

 16
 

 

case, in form and substance satisfactory to the Agent
and (ii) execute such supplements or other documents as the Agent may
reasonably request in connection with the perfection of the Agent’s Lien on the
trademarks of the Borrowers.

§2.24.     Restrictions on
Indebtedness.  The Credit Agreement is hereby further
amended by amending and restating subsection (k) of §10.1 in its entirety to
read as follows:

“(k)         Indebtedness
in an original principal amount not in excess of    $65,000,000 evidenced by the Unsecured Term Loan Documents.”

§2.25.     Restrictions on Liens.  The Credit Agreement is hereby further amended
by inserting a closed parenthetical in subsection (k) of §10.2 after the phrase
“in effect on the Closing Date” set forth therein.

§2.26.     Restricted Payments. 
The Credit Agreement is hereby further amended by amending and restating
subsection (d) of §10.4 in its entirety to read as follows:

“(d)         (i) reasonable expenses (other than
fees and expenses of outside counsel) of Sun Capital or the other Sun Capital
Affiliates (including reasonable travel expense and outside director fees) in
an aggregate amount not to exceed $150,000 in any fiscal year, (ii) so long as
no Default or Event of Default is continuing, management fees payable to Sun
Capital or any other Sun Capital Affiliate in accordance with the Management
Agreement, in an aggregate amount not to exceed the greater of (x) one percent
(1%) of Consolidated EBITDA in any fiscal year and (y) $500,000, and otherwise
in accordance with §10.10 and (iii) reasonable legal fees and expenses of the
Parent (other than legal fees and expenses and fees and expenses of auditors
and accountants incurred in connection with any litigation relating to or
defaults under either this Credit Agreement or the Parent Debt Documents) in an
aggregate amount not to exceed $500,000;”

§10.4 is hereby further
amended by deleting the words “Second Amendment Closing Date” set forth in
sub-clause (iii) of subsection (e) of such §10.4 in its entirety and
substituting in lieu thereof the following words: “Fourth Amendment Closing
Date”.

§10.4 is hereby further
amended by adding the following new subsection (f) to §10.4:

“(f)          amounts payable by the Borrowers or
their Subsidiaries to the Sellers arising under the Merger Agreement in respect
of (x) the Post-Closing Ventura Sale Proceeds (as defined in the Merger
Agreement) pursuant to Section 5.13 of the Merger Agreement in an amount not to
exceed $5,000,000 less any amount withheld pursuant to the Merger Agreement,
(y) the amount of any Tax Benefit (as defined in the Merger Agreement) pursuant
to Section 5.12 of the Merger Agreement in an amount not to exceed $4,000,000
and (z) the amount of

 17
 

 

any Actual Adjustment (as defined in the Merger
Agreement) (if such amount is a positive number) pursuant to Section 2.10(e)(i)
of the Merger Agreement in an amount not to exceed $5,000,000 (exclusive of the
Purchase Price Escrow Funds (as defined in the Merger Agreement)); and”

§10.4 is hereby further
amended by adding the following new subsection (g) to §10.4:

“(g)         Restricted Payments consisting of the
release to Sellers of all or any portion of the Purchase Price Escrow Funds (as
defined in the Merger Agreement) pursuant to the terms of the Merger Agreement
and the Escrow Agreement.”

§2.27.     Dispositions of Assets. 
The Credit Agreement is hereby further amended by deleting the first
sentence set forth in §10.5.2 and substituting in lieu thereof the following
sentence: “None of the Borrowers will, and none will permit any of its
Subsidiaries to, become a party to or agree to or effect any disposition of any
assets, other than (a) the sale of inventory and the disposition of obsolete
assets, in each case, in the ordinary course of business consistent with past
practices, (b) Sale-Leaseback transactions permitted pursuant to §10.6, (c) the
sale of up to five (5) Unprofitable Stores in any year and (d) the sale of the
Ventura Property.”

§2.28.     Unsecured Term Loan
Documents.  The Credit Agreement is hereby further
amended by deleting §10.15 in its entirety and substituting in lieu thereof the
following new §10.15:

“10.15.   Unsecured
Term Loan Documents. “None of the Borrowers will, and none will
permit any of its Subsidiaries to, materially amend, supplement or otherwise
modify (pursuant to a waiver or otherwise) the terms and conditions of any of
the Unsecured Term Loan Documents without the prior written consent of the
Agent, if the effect of such amendment, supplement or other modification or
waiver is to increase the interest rate payable on the relevant Indebtedness
thereunder or increase the cash portion of any interest required to be paid
thereon, change (to earlier dates) any dates upon which payments of principal
or interest are due thereon, increase the obligations of the obligor or
obligors thereunder or confer any additional rights on the holders of the
relevant Indebtedness thereunder which would be adverse to the Borrowers or any
of their Subsidiaries, the Agent or the Lenders.”

§2.29.     Chevys Acquisition Documents. 
The Credit Agreement is hereby further amended by deleting §10.16 in its
entirety and substituting in lieu thereof the words:  “[Intentionally Omitted]”.

§2.30.     Leverage Ratio.  The Credit Agreement is hereby further amended
by deleting the table set forth in §11.1 and substituting in lieu thereof the
following table:

 18
 

 

 

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  January 1, 2006 - December 31, 2007

  	
   

  	
  3.85 to 1.00

  
	
  January 1, 2008 and thereafter

  	
   

  	
  3.55 to 1.00

  

§2.31.     Adjusted Leverage Ratio.  The Credit Agreement is hereby further amended
by deleting the table set forth in §11.2 and substituting in lieu thereof the
following table:

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  January 1, 2006 - December 31, 2007

  	
   

  	
  5.95 to 1.00

  
	
  January 1, 2008 and thereafter

  	
   

  	
  5.75 to 1.00

  

§2.32.     Cash Flow Ratio.  The Credit Agreement is hereby further amended
by deleting the table set forth in §11.3 and substituting in lieu thereof the
following table:

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  January 1, 2006 and thereafter

  	
   

  	
  1.70 to 1.00

  

§2.33.     Capital Expenditures.  The Credit Agreement is hereby further amended
by deleting §11.4 in its entirety and substituting in lieu thereof the
following new §11.4:

“11.4      Capital Expenditures.  The Borrowers will not make, and
will not permit any of their Subsidiaries to make, any Capital Expenditures in
excess of $40,000,000 per annum; provided, however, that if
Consolidated EBITDA for any fiscal year (each a “Test  Year”) is
equal to or greater than $70,000,000, the Borrowers and their Subsidiaries
shall be permitted to make Capital Expenditures during the fiscal year
immediately following such Test Year in an aggregate amount not to exceed 60%
of Consolidated EBITDA for such Test Year. 
The Borrowers will not enter into any new lease obligations (other than
renewals of existing leases in the ordinary course of business) unless the
Leverage Ratio for the most recent reporting period, as set forth in the most
recent Compliance Certificate delivered pursuant to §9.4(e) hereof, is equal to
or less than the ratio set forth opposite such period as set forth in the table
below:

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  January 1, 2006 - December 31, 2007

  	
   

  	
  3.60 to 1.00

  
	
  January 1, 2008 and thereafter

  	
   

  	
  3.40 to 1.00

  

 

 19

 

§2.34.     Minimum Liquidity. 
The Credit Agreement is hereby further amended by deleting §11.5 in its
entirety and substituting in lieu thereof the words:  “[Intentionally Omitted]”.

§2.35.     Events of Default.

Section
14.1 of the Credit Agreement is hereby amended by deleting §14.1(g) in its
entirety and substituting the following in lieu thereof:

“(g)
(i) the Guarantor or (ii) the Parent, any Borrower or any of their respective
Subsidiaries shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of such Person or of any substantial
part of the assets of such Person or shall commence any case or other
proceeding relating to such Person under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against (i) the Guarantor or (ii) the Parent, any Borrower
or any of their respective Subsidiaries shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or application shall
not have been dismissed within forty-five (45) days following the filing
thereof;”

Section
14.1 of the Credit Agreement is hereby further amended by deleting §14.1(h) in
its entirety and substituting the following in lieu thereof:

“(h)       a decree or order is entered appointing
any such trustee, custodian, liquidator or receiver or adjudicating (i) the
Guarantor or (ii) the Parent, any Borrower or any of their respective
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of (i)
the Guarantor or (ii) the Parent, any Borrower or any of their respective
Subsidiaries in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;”

Section
14.1 of the Credit Agreement is hereby further amended by deleting the words “issued
in connection with the Preferred Stock” in their entirety from subsection (j)
thereof.

Section
14.1 of the Credit Agreement is hereby further amended by deleting the word “or”
at the end of §14.1(q) thereof, inserting a semicolon (“;”) at the end of

 20
 

 

§14.1(r)
thereof and inserting the following as new subsections (s), (t), (u), (v), (w),
and (y) of such §14.1:

“(s)    (i)
any default or event of default shall occur under the Parent Debt Documents or
under the terms of any other Permitted Parent Debt, (ii) the Parent shall incur
any Indebtedness other than the Permitted Parent Debt, or (iii) the Parent, any
Borrower or any of their Subsidiaries shall (A) materially amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions
of any of the Permitted Parent Debt or (B) refinance, refund, extend, renew or
replace any of the Permitted Parent Debt, in each case, without the prior
written consent of the Agent, if the effect of such amendment, supplement or
other modification or waiver or such refinancing, refunding, extension, renewal
or replacement is to (u) increase the interest rate payable on the relevant
Indebtedness thereunder, (v) increase the cash portion of any interest required
to be paid thereon, (w) change (to earlier dates) any dates upon which payments
of principal or interest are due thereon, (x) increase the obligations of the
obligor or obligors thereunder, (y) increase the principal amount of such
Indebtedness in excess of the amounts contemplated by the definitions of “Parent
Debt” or “Permitted Parent Debt” plus the amount of any accrued and unpaid
interest thereon, or (z) confer any additional rights on the holders of the
relevant Indebtedness thereunder which would be adverse to the Borrowers or any
of the their Subsidiaries, the Agent or the Lenders;”

“(t)    the
Parent shall engage is any business activities or has any other assets other
than (i) its ownership of 100% of the capital stock and economic interest of
Real Mex, (ii) performing its obligations and activities incidental thereto
under the Loan Documents and under the terms and conditions of the Permitted
Parent Debt, and (iii) making or receiving Restricted Payments to the extent
permitted by this Credit Agreement;”

“(u)    the
Parent shall (i) consolidate with or merge with or into, or convey, transfer or
lease all or substantially all assets to, any Person, (ii) sell or otherwise
dispose of any capital stock of Real Mex, (iii) create or acquire any
Subsidiary or make or own any Investment in any Person other than Real Mex, or (iv)
fail to hold itself out to the public as a legal entity separate and distinct
from all other Persons;”

“(v)    the
Guarantor shall fail to perform any term, covenant or agreement contained in
the Parent Guaranty or the Guarantor shall fail to perform any term, covenant,
or agreement contained in the Sun Capital Guaranty;”

“(w)    the
Company is required to purchase any of the Notes (as defined in the Indenture)
tendered pursuant to the Tender Offer and is unable to either (i) arrange for
all such Notes to be purchased by a Person other than Parent, any Borrower or
any of their respective Subsidiaries or (ii) obtain financing for its

 21
 

 

purchase of all such tendered Notes on the same terms
as the existing Senior Secured Debt Documents, in each case prior to or on the
date such purchase is required to be made; or”

“(y) the Sun Capital
Guaranty shall for any reason not be or shall cease to be in full force and
effect or is declared to be null and void or the Guarantor takes any action for
the purpose of terminating, repudiating or rescinding the Sun Capital Guaranty
or any of its obligations thereunder.”

§2.36.     The Credit Agreement is hereby further
amended by inserting the following to the end of Section 16.9 of the Credit
Agreement:

“Notwithstanding anything to the contrary set
forth herein, BMO, in its capacity as Agent hereunder, is permitted at any time
without prior notice to resign as Administrative Agent and to appoint Sun
Capital or Guarantor as successor Administrative Agent and Collateral Agent without
the prior consent of any Lender or the Borrowers.  Upon such appointment, BMO shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents as administrative agent or collateral agent and the provisions of
this Credit Agreement and the other Loan Documents shall continue in effect for
its benefit in respect of actions taken or omitted to be taken by it while it
was acting as Agent.”

§2.37.     The Credit Agreement is hereby further
amended by inserting the following to the end of Section 20.1 of the Credit
Agreement:

“Notwithstanding anything to the contrary set
forth herein, BMO, in its capacity as a Lender hereunder is permitted at any
time to assign all of its rights, obligations and liabilities hereunder to
Guarantor, Sun Capital or any Sun Capital Affiliate upon its execution and
delivery to Guarantor, Sun Capital or any Sun Capital Affiliate of an
Assignment and Acceptance Agreement, and any such assignment shall not in any
case be subject to the existence or absence of any Default or Event of Default,
the delivery of promissory notes, any minimum amount of the loans and
commitments assigned, the payment of any assignment fee or any other costs and
expenses or the prior consent of any Lender, the Borrowers, Sun Capital, Guarantor
or the Administrative Agent.  Upon the
delivery of such Assignment and Acceptance to Guarantor, Sun Capital or any Sun
Capital Affiliate, BMO shall be discharged from its duties and obligations
hereunder and under the other Loan Documents.”

§2.38.     The Credit Agreement is hereby further
amended by deleting Section 20.7 in its entirety.

§2.39.     NOTICES.  Section 21 of the Credit Agreement is hereby
amended by deleting subsection (a) in its entirety and substituting in lieu
thereof the following:

 22
 

 

(a)          if to the Borrowers, at 5660 Katella
Avenue, Suite 100, Cypress, California, 90630, Attention: Chief Financial
Officer, with a copy to Morgan, Lewis & Bockius LLP, 101 Park Avenue, New
York, New York, 10178-0060, Attention: Richard S. Petretti, Esq., or at such
other address for notice as the Borrowers shall last have furnished in writing
to the Person giving the notice.”

Section 21 of the
Credit Agreement is hereby further amended by deleting clause (b) in its
entirety and substituting the following in lieu thereof:

“(b)         if to the Agent, at 115 West LaSalle
Street, Chicago, Illinois, Attention: Client Services, Department 17 West, or
such other address for notice as the Agent shall have last furnished to the
Person giving such notice; and”

Section
21 of the Credit Agreement is hereby further amended by adding the following
new subsection (d) to §21:

“(d)       if to the Parent, at 5660 Katella Avenue,
Suite 100, Cypress, California, 90630, Attention: Steven L. Tanner, Chief
Financial Officer, Anthony Polazzi, Vice President and Clarence E. Terry, Vice
President, with a copy to Morgan, Lewis & Bockius LLP, 101 Park Avenue, New
York, New York, 10178-0060, Attention: Richard S. Petretti, Esq., or at such
other address for notice as the Parent shall last have furnished in writing to
the Person giving the notice.”

§2.40.     The
Credit Agreement is hereby further amended by amending and restating Section 22
thereof in its entirety and substituting in lieu thereof the following:

“22. GOVERNING LAW.

THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS
OF THE STATE OF ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID STATE OF ILLINOIS (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). 
EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE STATE OF ILLINOIS OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED
IN §21.  EACH OF THE BORROWERS HEREBY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT
OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.”

 23
 

 

§2.41.     Supplements to Schedules.  Schedules 1, 8.6.2, 8.7, 8.18, 8.22, 10.1 and
10.2 to the Credit Agreement are each hereby supplemented by Schedules 1,
8.6.2, 8.7, 8.18, 8.22, 10.1 and 10.2, attached hereto.

§3.          Representations and Warranties.  The Borrowers jointly and severally represent
and warrant to the Lenders and the Agent on the date of this Fourth Amendment
and on the Effective Date (as defined below) as follows:

§3.1.       Representations and
Warranties in Credit Agreement. 
The representations and warranties of the Borrowers contained in the
Credit Agreement, each as amended by this Fourth Amendment, (a) were true and
correct in all material respects when made, and (b) except to the extent such
representations and warranties by their terms are made solely as of a prior
date, continue to be true and correct in all material respects on the date
hereof.

§3.2.       Representations and
Warranties in Unsecured Term Loan Documents. 
The representations and warranties of the Borrowers contained in the
Unsecured Term Loan Documents (a) were true and correct in all material
respects when made, and (b) except to the extent such representations and warranties
by their terms are made solely as of a prior date, continue to be true and
correct in all material respects on the date hereof.

§3.3.       Representations and
Warranties in the Parent Debt Documents. 
To the best of the Borrowers’ knowledge, the representations and
warranties of the Parent contained in the Parent Debt Documents (a) were true
and correct in all material respects when made, and (b) except to the extent
such representations and warranties by their terms are made solely as of a
prior date, continue to be true and correct in all material respects on the
date hereof.

§3.4.       Authority, Etc. 
The execution and delivery by the Borrowers of this Fourth Amendment and
the performance by the Borrowers of all of their agreements and obligations
under this Fourth Amendment and the Credit Agreement as amended hereby (a) are
within the corporate authority of the Borrowers, (b) have been duly authorized
by all necessary corporate proceedings by the Borrowers, (c) do not conflict
with or result in any breach or contravention of any provision of law, statute,
rule or regulation to which any of the Borrowers is subject or any judgment,
order, writ, injunction, license or permit applicable to any of the Borrowers,
and (d) do not conflict with any provision of any corporate charter or by-laws
of, or any agreement or other instrument binding upon, any of the Borrowers.

§3.5.       Enforceability of
Obligations.  This Fourth Amendment, and the Credit
Agreement as amended hereby, constitute the legal, valid and binding obligations
of the Borrowers enforceable against each such Person in accordance with their
respective terms.  Immediately prior to
and immediately after and after giving effect to this Fourth Amendment, no
Default or Event of Default exists under the Credit Agreement or any other Loan
Document.

 24
 

 

§4.          Affirmation of Borrowers.  The Borrowers hereby affirm their absolute and
unconditional promise to pay to each Lender and the Agent all Obligations under
the Notes, the Credit Agreement as amended hereby, the other Loan Documents,
and all other related instruments or documents, at the times and in the amounts
provided for therein.  The Borrowers
confirm and agree that (a) the Obligations of the Borrowers to the Lenders and
the Agent under the Credit Agreement as amended hereby are secured by and
entitled to the benefits of the Security Documents and (b) all references to
the term “Credit Agreement” in the Security Documents shall hereafter
refer to the Credit Agreement as amended hereby.

§5.          Amendment to Loan Documents. 
The Loan Documents are hereby amended to:

(a)           replace all references to Fleet (as
defined herein) appearing therein with references to BMO (as defined herein);

(b)           replace all references to the “Commonwealth
of Massachusetts” as the governing law appearing therein with references to “State
of Illinois”; and

(c)           replace all references to “Boston
Time” appearing therein with references to “Chicago Time”.

§6.          Conditions to Effectiveness.  The consents, waivers and amendments set forth
in §2 of this Fourth Amendment shall be effective on the first day (the “Effective
Date”) upon which each of the following conditions precedent have been
satisfied:

(a)           The Agent shall have received an
original counterpart signature of (i) the Borrowers and the Lenders to this
Fourth Amendment and (ii) the Parent to the Parent Guaranty;

(b)           The Agent shall have received an
original signature of the Guarantor to the Sun Capital Guaranty and to the Side
Letter by and between the Guarantor and the Agent with respect to monitoring
responsibilities;

(c)           The Agent shall have received an
amendment and restatement of the Unsecured Term Loan Documents, dated as of the
Fourth Amendment Closing Date, evidencing an aggregate principal amount of
Indebtedness incurred by the Borrowers thereunder of not more than $65,000,000
and such amendment shall have become effective in accordance with its terms;

(d)           The Agent shall have received
evidence that all of the outstanding obligations of the Parent incurred under
that certain Bank of Montreal Loan Authorization Agreement, dated as of August
21, 2006, between the Parent and the Bank of Montreal (as amended in accordance
with the Loan Documents, the “Parent  Bridge  Financing”)
concurrently with the Fourth Amendment Closing

 25
 

 

Date
have been repaid in full and the commitments under the Parent Bridge Financing
have been terminated;

(e)           The Agent shall have received
evidence that, (i) after giving effect to the transactions contemplated by this
Fourth Amendment, (A) the pro forma Consolidated EBITDA for the last twelve
months prior to the Fourth Amendment Closing Date shall be not less than
$58,000,000, with such adjustments as shall be acceptable to the Agent and (B)
the aggregate principal amount of Indebtedness (as defined in the Parent Debt
Documents) of the Parent and its Subsidiaries including all committed amounts
under the Credit Agreement is not in excess of $325,000,000, and (ii) the Agent
shall have received evidence that on the Fourth Amendment Closing Date, (A) the
Leverage Ratio is not greater than 3.25 to 1.00 and (B) the Adjusted Leverage
Ratio is not greater than 5.25 to 1.00;

(f)            The Agent shall have received (x) a
Loan Request and Direction to Pay Proceeds and (y) a Partnership Agreement to
Obtain Credit and Other Financial Resources from the Guarantor;

(g)           The Borrowers shall have paid to the
Agent a fully earned and non-refundable amendment fee in the amount of
$60,000.00;

(h)           The Borrowers shall have reimbursed
the Agent for, or paid directly, all fees, costs and expenses incurred by the Agent’s
Special Counsel in connection with the closing of this Fourth Amendment for
which an invoice has been delivered;

(i)            The Agent shall have received a copy
of an officers’ certificate addressed to the Trustee (as defined in the
Indenture) and in accordance with Section 13.05 of the Indenture, duly executed
by two duly authorized officers of each of the Borrowers, one of whom must be
the principal executive officer, the principal financial officer, the
treasurer, or the principal accounting officer of each of the Borrowers, and
certifying that, (i) as of the Fourth Amendment Closing Date, after giving pro
forma effect to the Indebtedness incurred pursuant to the transactions
contemplated by this Fourth Amendment as if such Indebtedness had been incurred
at the beginning of the four fiscal quarters most recently completed prior to
the date of such incurrence for which internal financial statements are
available, and to the pro forma application of the net proceeds of such
Indebtedness, the Fixed Charge Coverage Ratio (as defined in the Intercreditor
Agreement) for such four-quarter period is greater than 3.0 to 1.0 and (ii) at
the time of the incurrence of such Indebtedness, such Indebtedness is permitted
to be secured by Liens permitted by clause 19(a) of the definition of “Permitted
Liens” set forth in the Indenture, and otherwise in form and substance
satisfactory to the Agent;

 26
 

 

(j)            All
corporate action necessary for the valid execution, delivery and performance by
(a) the Borrowers of this Fourth Amendment and each of the other Loan Documents
required to be executed and delivered by the Borrowers pursuant to this Fourth
Amendment and (b) the Parent of the Parent Guaranty and (c) the Guarantor
of the Sun Capital Guaranty, in each case, shall have been duly and effectively
taken, and evidence thereof satisfactory to the Agent shall have been provided
to the Agent, including without limitation, a certificate from a duly
authorized officer of such Person (i) certifying the charter documents or other
incorporation documents and by-laws or partnership agreement and certificate of
formation, as applicable, of such Person as true, correct and complete, (ii)
attaching a copy, certified by a duly authorized officer of such Person to be
true and complete on the Fourth Amendment Closing Date, of the resolutions of
such Person authorizing, (A) in the case of the Borrowers, this Fourth
Amendment and each of the other Loan Documents required to be executed and
delivered by the Borrowers pursuant to this Fourth Amendment, (B) in the
case of the Parent, the Parent Guaranty and (C) in the case of the
Guarantor, the Sun Capital Guaranty and the Side Letter, and (iii) certifying
the name and bearing a specimen signature of each individual who shall be
authorized (A) to sign, in the name and on behalf of such Person, this Fourth
Amendment and each of the other Loan Documents and other documents to which
such Person is a party, (B) in the case of each Borrower, to make Revolving
Credit Loan Requests and to apply for Letters of Credit, and (C) to give
notices and to take other action on its behalf under the Loan Documents;

(k)           The Agent shall have received
favorable legal opinions addressed to the Lenders and the Agent, dated as of
the Fourth Amendment Closing Date, in form and substance reasonably
satisfactory to the Agent from Morgan, Lewis & Bockius LLP, counsel to (i)
each of the Borrowers and the Parent and (ii) the Guarantor;

(l)            Each of the Parent Debt Documents
shall have been duly executed and delivered by the respective parties thereto,
shall be in full force and effect.  The
Agent shall have received a fully executed copy, certified by a duly authorized
officer on behalf of the Borrowers to be true, complete, and correct, of each
of the Parent Debt Documents;

(m)          Each of the Equity Documents shall
have been duly executed and delivered by the respective parties thereto, shall
be in full force and effect.  The Agent
shall have received a fully executed copy, certified by a duly authorized
officer on behalf of the Borrowers to be true, complete, and correct, of each
of the Equity Documents requested by the Agent;

(n)           The capital structure of the (i)
Parent and (ii) the Borrowers and their Subsidiaries shall be in form and
substance satisfactory to the Agent,

 27
 

 

including,
without limitation, that Sun Capital shall have made a capital contribution to
the Parent in an aggregate amount of not less than $81,500,000;

(o)           The Agent shall have received duly
executed updated Perfection Certificates from each of the Borrowers;

(p)           The Agent shall have received (i)
Notes, duly executed by each of the Borrowers, payable to each of the Lenders
and (ii) at Agent’s request, a supplement to the Trademark Security Agreement
in form and substance satisfactory to the Agent;

(q)           The Agent shall have received. at
Agent’s request, duly executed amendments to the Mortgages in form and
substance satisfactory to the Agent;

(r)            The Agent shall have received a duly
executed Assignment Arrangements Agreement by and between the Borrowers, Prior
Agent, Union Bank of California, N.A. and BMO, dated as of the date hereof;

(s)           The Agent shall have received a duly
executed Application and Indemnity Agreement (Standby Letter of Credit) from
the Borrowers, dated as of the date hereof; and

(t)            The satisfaction of such other
conditions as may be required by the Agent based upon due diligence review of
the Parent Debt Documents.

§7.          Miscellaneous Provisions.

§7.1.       No
Other Changes.  Except as otherwise expressly provided by
this Fourth Amendment, all of the terms, conditions and provisions of the
Credit Agreement and each of the other Loan Documents, and all of the rights
and remedies of the Lenders thereunder, shall remain unaltered.

§7.2.       Other
Provisions.
This Fourth Amendment is a Loan Document for all purposes of the Credit
Agreement and each of the other Loan Documents. 
This Fourth Amendment and the rights and obligations hereunder of each
of the parties hereto shall in all respects be construed in accordance with and
governed by the laws of the State of Illinois. 
This Fourth Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, but all of such
counterparts shall together constitute but one and the same agreement.  In making proof of this Fourth Amendment, it
shall not be necessary to produce or account for more than one counterpart
hereof signed by each of the parties hereto.

 28
 

 

§7.3.       Further Assurances.  The Borrowers will cooperate with the Lenders
and the Agent and provide and/or execute such further instruments and documents
as the Lenders or the Agent shall reasonably request to carry out to their
reasonable satisfaction the transactions contemplated by this Fourth Amendment.

[Remainder of page intentionally left blank]

 29

 

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

	
   

  	
  REAL MEX RESTAURANTS, INC.

  
	
   

  	
  ACAPULCO RESTAURANTS, INC.

  
	
   

  	
  EL TORITO FRANCHISING COMPANY

  
	
   

  	
  EL TORITO RESTAURANTS, INC.

  
	
   

  	
  TARV, INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF VENTURA, INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF WESTWOOD, INC.

  
	
   

  	
  ACAPULCO MARK CORP.

  
	
   

  	
  MURRAY PACIFIC

  
	
   

  	
  ALA DESIGN, INC.

  
	
   

  	
  REAL MEX FOODS, INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF DOWNEY, INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF MORENO VALLEY, INC.

  
	
   

  	
  EL PASO CANTINA, INC.

  
	
   

  	
  CKR ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHEVYS RESTAURANTS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to Fourth
Amendment]

 

 

	
  

  	
  BANK OF MONTREAL, individually
  and as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

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