Senior Subordinated Note Purchase Agreement between NUCO2 Inc. and Subsidiary Guarantors, dated August 25, 2003

 EXHIBIT 10.4 ************************************************************ NUCO2 INC. and SUBSIDIARY GUARANTORS ----------------------------- SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT Dated as of August 25, 2003 ------------------------------ $30,000,000 16.3% SENIOR SUBORDINATED NOTES DUE FEBRUARY 27, 2009 ************************************************************  TABLE OF CONTENTS This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience of reference only. Page ---- ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS..................................1 SECTION 1.01 CERTAIN DEFINED TERMS.......................................1 SECTION 1.02 TERMS GENERALLY............................................15 SECTION 1.03 ACCOUNTING TERMS; GAAP.....................................16 ARTICLE II AMOUNT AND TERMS OF NOTES.........................................16 SECTION 2.01 COMMITMENTS................................................16 SECTION 2.02 DISBURSEMENT OF FUNDS......................................16 SECTION 2.03 NOTES......................................................16 SECTION 2.04 INTEREST...................................................17 SECTION 2.05 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT..................18 ARTICLE III PREPAYMENTS; PAYMENTS............................................18 SECTION 3.01 PREPAYMENTS................................................18 SECTION 3.02 METHOD AND PLACE OF PAYMENT................................21 ARTICLE IV REPRESENTATIONS OF THE INVESTORS..................................21 SECTION 4.01 PURCHASE FOR INVESTMENT....................................21 SECTION 4.02 ACCREDITED AND SOPHISTICATED INVESTOR......................21 ARTICLE V CONDITIONS PRECEDENT...............................................22 SECTION 5.01 CONDITIONS PRECEDENT TO NOTES..............................22 SECTION 5.02 OTHER CONDITIONS PRECEDENT.................................23 ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................24 SECTION 6.01 ORGANIZATION; POWERS.......................................24 SECTION 6.02 AUTHORIZATION; ENFORCEABILITY..............................24 SECTION 6.03 GOVERNMENTAL APPROVALS; NO CONFLICTS.......................24 SECTION 6.04 SEC DOCUMENTS; FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.............................................24 SECTION 6.05 PROPERTIES.................................................25 SECTION 6.06 LITIGATION AND ENVIRONMENTAL MATTERS.......................26 SECTION 6.07 COMPLIANCE WITH LAWS AND AGREEMENTS........................26 SECTION 6.08 INVESTMENT AND HOLDING COMPANY STATUS......................26 SECTION 6.09 TAXES......................................................26 SECTION 6.10 ERISA......................................................26 SECTION 6.11 DISCLOSURE.................................................27 SECTION 6.12 DEBT AGREEMENTS............................................27 -i-  SECTION 6.13 CAPITALIZATION.............................................27 SECTION 6.14 SUBSIDIARIES...............................................27 SECTION 6.15 PRIVATE OFFERING BY THE COMPANY............................27 SECTION 6.16 LABOR RELATIONS............................................28 ARTICLE VII AFFIRMATIVE COVENANTS............................................29 SECTION 7.01 FINANCIAL STATEMENTS AND OTHER INFORMATION.................29 SECTION 7.02 NOTICES OF MATERIAL EVENTS.................................31 SECTION 7.03 EXISTENCE; CONDUCT OF BUSINESS.............................32 SECTION 7.04 PAYMENT OF OBLIGATIONS.....................................32 SECTION 7.05 MAINTENANCE OF PROPERTIES; INSURANCE.......................32 SECTION 7.06 BOOKS AND RECORDS; INSPECTION RIGHTS.......................32 SECTION 7.07 COMPLIANCE WITH LAWS.......................................33 SECTION 7.08 USE OF PROCEEDS............................................33 SECTION 7.09 CERTAIN OBLIGATIONS AFFECTING SUBSIDIARIES.................33 SECTION 7.10 PERMITTED ACQUISITIONS.....................................34 ARTICLE VIII NEGATIVE COVENANTS..............................................35 SECTION 8.01 INDEBTEDNESS...............................................35 SECTION 8.02 LIENS......................................................36 SECTION 8.03 FUNDAMENTAL CHANGES........................................38 SECTION 8.04 ADVANCES, INVESTMENTS AND LOANS............................39 SECTION 8.05 RESTRICTED PAYMENTS........................................40 SECTION 8.07 TRANSACTIONS WITH AFFILIATES...............................40 SECTION 8.08 LIMITATION ON ISSUANCE OF CAPITAL STOCK....................40 SECTION 8.09 CAPITAL EXPENDITURES.......................................41 SECTION 8.10 CONSOLIDATED INTEREST COVERAGE RATIO.......................42 SECTION 8.11 MAXIMUM CONSOLIDATED TOTAL LEVERAGE RATIO..................43 SECTION 8.12 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.........44 SECTION 8.13 MODIFICATIONS OF CERTAIN DOCUMENTS.........................44 ARTICLE IX EVENTS OF DEFAULT.................................................46 SECTION 9.01 EVENTS OF DEFAULT; REMEDIES................................46 ARTICLE X SUBSIDIARY GUARANTEE...............................................48 SECTION 10.01 THE GUARANTEE.............................................48 SECTION 10.02 OBLIGATIONS UNCONDITIONAL.................................48 SECTION 10.03 REINSTATEMENT.............................................49 SECTION 10.04 SUBROGATION...............................................49 SECTION 10.05 REMEDIES..................................................49 SECTION 10.06 INSTRUMENT FOR THE PAYMENT OF MONEY.......................50 SECTION 10.07 CONTINUING GUARANTEE......................................50 SECTION 10.08 RIGHTS OF CONTRIBUTION....................................50 SECTION 10.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS...............50 SECTION 10.10 SUBORDINATION OF GUARANTEES...............................51 -ii-  ARTICLE XI SUBORDINATION.....................................................51 SECTION 11.01 AGREEMENT TO SUBORDINATE..................................51 SECTION 11.02 BANKRUPTCY, LIQUIDATION, DISSOLUTION, ETC.................51 SECTION 11.03 NO PAYMENT IN CERTAIN CIRCUMSTANCES.......................53 SECTION 11.04 PAYMENTS OTHERWISE PERMITTED..............................54 SECTION 11.05 SUBROGATION...............................................54 SECTION 11.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS...............54 SECTION 11.07 NO WAIVER OF SUBORDINATION PROVISIONS.....................55 SECTION 11.08 NOTICE TO INVESTORS.......................................55 SECTION 11.09 RELIANCE..................................................55 SECTION 11.10 REINSTATEMENT.............................................56 SECTION 11.11 SUBSIDIARY GUARANTEES.....................................56 SECTION 11.12 LIMITATIONS ON REMEDIES...................................56 SECTION 11.13 NOTICES...................................................57 ARTICLE XII MISCELLANEOUS....................................................57 SECTION 12.01 NOTICES...................................................57 SECTION 12.02 WAIVERS; AMENDMENTS.......................................57 SECTION 12.03 EXPENSES; INDEMNITY: DAMAGE WAIVER........................58 SECTION 12.04 SUCCESSORS AND ASSIGNS....................................59 SECTION 12.05 SURVIVAL..................................................61 SECTION 12.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS..................61 SECTION 12.07 SEVERABILITY..............................................61 SECTION 12.08 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.....................................61 SECTION 12.09 WAIVER OF JURY TRIAL......................................62 SECTION 12.10 HEADINGS..................................................62 SECTION 12.11 CONFIDENTIALITY...........................................62 SCHEDULE 6.10 - ERISA SCHEDULE 6.12 - Debt Agreements SCHEDULE 6.13 - Capitalization SCHEDULE 8.01 - Indebtedness SCHEDULE 8.02 - Liens SCHEDULE 8.04 - Investments SCHEDULE 8.09 - Capital Expenditures Percentage EXHIBIT A - Form of Senior Subordinated Note EXHIBIT B - Form of Opinion of Counsel to the Obligors EXHIBIT C - Form of Opinion of Special New York Counsel to JPMorgan Partners -iii-  SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of August 25, 2003, between: NUCO2 INC., a corporation duly organized and validly existing under the laws of the State of Florida (the "COMPANY"); each of the Subsidiaries of the Company appearing under the caption "SUBSIDIARY GUARANTORS" on the signature pages hereto and/or which pursuant to Section 7.09 shall hereafter become a Subsidiary Guarantor (each a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY GUARANTORS"; and, together with the Company, the "OBLIGORS"); and each of the Investors of the Notes (as defined below) appearing under the caption "INVESTORS" on the signature pages hereto and each assignee of the rights and obligations of an Investor pursuant to Section 12.04 (each, an "INVESTOR", and collectively, the "INVESTORS"). The Company has requested that the Investors acquire the Notes in an aggregate original principal amount of $30,000,000 (the "Original Principal Amount") to refinance certain existing indebtedness of the Company. To induce the Investors to purchase the Notes, the Obligors and the Investors propose to enter into this Agreement pursuant to which the Investors will purchase the Notes issued by the Company and the Subsidiary Guarantors will guarantee the payment in full of the Notes and all other amounts payable under this Agreement. Accordingly, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS SECTION 1.01 CERTAIN DEFINED TERMS. In addition to the other terms defined herein, as used herein, the following terms shall have the following meanings: "ACQUIRED ENTITY OR BUSINESS" means either (i) the assets constituting a business, division or product line of any Person not already a Subsidiary of the Company or (ii) 100% of the capital stock of any such Person, which Person shall, as a result of such stock acquisition, become a Wholly-Owned Domestic Subsidiary of the Company (or shall be merged with and into the Company or a Subsidiary Guarantor, with the Company or such Subsidiary Guarantor being the surviving Person). "AFFILIATE" means, with respect to any Person, any other Person directly or indirectly controlling (including all directors and officers of such Person), controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power (i) to vote 5% or more of the  2 securities having ordinary voting power for the election of directors (or equivalent governing body) of such Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided that none of the initial Investors (or any of their Affiliates) shall be deemed to be an Affiliate of the Company or any Subsidiary thereof. "BANKRUPTCY CODE" means the Federal Bankruptcy Code of 1978, as amended from time to time or any successor statute thereto. "BUSINESS DAY" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed. "CALLED PRINCIPAL" has the meaning assigned to such term in Section 3.01. "CALCULATION PERIOD" means, in the case of any Permitted Acquisition, the Test Period most recently ended prior to the date of any such Permitted Acquisition for which financial statements are available. "CAPITAL EXPENDITURES" means, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with generally accepted accounting principles and, without duplication, the amount of Capitalized Lease Obligations incurred by such Person. "CAPITALIZED LEASE OBLIGATIONS" means, with respect to any Person, all rental obligations of such Person which, under generally accepted accounting principles, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles. "CASH EQUIVALENTS" means, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition, (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's, (iii) dollar denominated time deposits, certificates of deposit and bankers acceptances of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having, a long-term unsecured debt rating of at least "A" or the equivalent thereof from S&P or "A2" or the equivalent thereof from Moody's with maturities of not more than six months from the date of acquisition by such Person, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iii) above, (v) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's and in each case maturing not more than six months after the date of acquisition by such Person, and (vi) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (v) above.  3 "CERCLA" means the Comprehensive Environmental Response Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C. ss.9601 et seq.). "CHANGE IN CONTROL" means (a) any "person" or "group" (within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on the Effective Date) shall (i) have acquired, directly or indirectly, beneficial ownership of 30% or more on a fully diluted basis of the voting and/or economic interest in the Company's capital stock, (ii) have acquired, directly or indirectly, by purchase, sale, lease, exchange or other transfer (in a single transaction or series of related transactions) all or substantially all of the assets of the Company or (iii) obtained the power (whether or not exercised) to elect a majority of the Company's directors or (b) the board of directors of the Company shall cease to consist of a majority of Continuing Directors. "CLOSING DATE" means August 25, 2003. "CODE" means the Internal Revenue Code of 1986, as amended from time to time and the rules and regulations promulgated thereunder. "COMPANY" has the meaning assigned to such term in the preamble of this Agreement. "CONSOLIDATED EBIT" means, for any period, Consolidated Net Income for such period before deducting therefrom consolidated interest expense of the Company and its Subsidiaries for such period (to the extent that such consolidated interest expense was deducted in arriving at Consolidated Net Income for such period) and provision for taxes based on income that were included in arriving at Consolidated Net Income for such period and without giving effect to any gains or losses from sales of assets other than from sales of inventory in the ordinary course of business. "CONSOLIDATED EBITDA" means, for any period, Consolidated EBIT for such period, adjusted by (x) adding thereto (i) the amount of all amortization of intangibles and depreciation that were deducted in arriving at Consolidated Net Income for such period, (ii) the amount of all expenses incurred in connection with the Transactions or the Senior Credit Agreement for such period to the extent that same were deducted in arriving at Consolidated Net Income for such period, and (iii) the amount of all non-cash deferred compensation expense for such period to the extent that same was deducted in arriving at the Consolidated Net Income for such period and (y) deducting therefrom (i) the amount of all cash payments during such period that are associated with any non-cash deferred compensation expense that was added back to Consolidated Net Income in a previous period and (ii) the amount of all consolidated interest income of the Company and its Subsidiaries for such period; it being understood that in determining the Consolidated Total Leverage Ratio only, Consolidated EBITDA for any period shall be calculated on a Pro Forma Basis to give effect to any Acquired Entity or Business acquired during such period pursuant to a Permitted Acquisition and not subsequently sold or otherwise disposed of by the Company or any of its Subsidiaries during such period. Notwithstanding the  4 foregoing, determinations of Consolidated EBITDA for purposes of Section 8.11 at any time prior to the first anniversary of the Closing Date shall be made in accordance with the requirements of the definition of "Test Period" contained herein. "CONSOLIDATED INDEBTEDNESS" means, at any time, the sum of (without duplication) (i) all indebtedness (including principal, interest, fees and charges) of the Company and its Subsidiaries for borrowed money (including obligations evidenced by bonds, notes or similar instruments) and for the deferred purchase price of property or services (excluding trade payables and accrued expenses incurred in the ordinary course of business), (ii) the aggregate amount of all Capitalized Lease Obligations of the Company and its Subsidiaries, (iii) all Indebtedness of the types described in clause (i), (ii), (iv), or (v) of this definition secured by any Lien on any property owned by the Company or any of its Subsidiaries, whether or not such Indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) all Contingent Obligations of the Company and any of its Subsidiaries (regardless of any contrary treatment under GAAP), and (v) all Indebtedness of the Company and its Subsidiaries of the type described in clauses (ii) and (vii) of the definition of Indebtedness contained herein; provided that for purposes of this definition the amount of Indebtedness in respect of the Interest Rate Protection Agreements and other Hedging Agreements shall be at any time the unrealized net loss position, if any, of the Company and/or its Subsidiaries thereunder on a marked-to-marked basis determined no more than one month prior to such time. "CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the ratio of Consolidated EBITDA for such period to Consolidated Interest Expense for such period. "CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of the total consolidated interest expense of the Company and its Subsidiaries for such period (calculated without regard to any limitations on the payment thereof) plus, without duplication, that portion of Capitalized Lease Obligations of the Company and its Subsidiaries representing the interest factor for such period; provided that the amortization of deferred financing, legal and accounting costs with respect to the Senior Credit Agreement and the non-cash interest expense on the Notes, in each case, shall be excluded from Consolidated Interest Expense to the extent same would otherwise have been included therein. Notwithstanding the foregoing, determinations of Consolidated Interest Expense for purposes of Section 8.10 at any time prior to the first anniversary of the Closing Date shall be made in accordance with the requirements of the definition of "Test Period" contained herein. "CONSOLIDATED NET INCOME" means, for any period, the net income (or loss) of the Company and its Subsidiaries for such period, determined on a consolidated basis (after any deduction for minority interests), provided that (i) in determining Consolidated Net Income, the net income of any other Person which is not a Subsidiary of the Company or is accounted for by the Company by the equity method of accounting shall be included only to the extent of the payment of cash dividends or cash distributions by such other Person to the Company or a Subsidiary thereof during such period, (ii) the net income of any Subsidiary of the Company shall be excluded to the extent that the declaration or payment of cash dividends or similar cash distributions by that Subsidiary of that net income is not at the date of determination permitted by operation of  5 its charter or any agreement, instrument or law applicable to such Subsidiary and (iii) except for determinations to be made on a Pro Forma Basis, the net income (or loss) of any other Person acquired by the Company or a Subsidiary of the Company in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. "CONSOLIDATED TOTAL LEVERAGE RATIO" means, at any time, the ratio of (x) Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the Test Period then most recently ended. "CONTINGENT OBLIGATION" means, as to any Person, any obligation of such Person as a result of such Person being a general partner of any other Person, unless the underlying obligation is expressly made non-recourse as to such general partner, and any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "CONTINUING DIRECTORS" means the directors of the Company on the Closing Date and each other director if such director's election to, or nomination for the election to, the board of directors of the Company is recommended or approved by a majority of then continuing directors. "DEFAULT" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "DISCOUNTED VALUE" has the meaning assigned to such term in Section 3.01. "DOLLARS" or "$" refers to lawful money of the United States of America. "ENVIRONMENTAL LAWS" means all Federal, state, local and foreign statutes and codes or regulations, rules or ordinances issued, promulgated, or approved thereunder, now or hereafter in effect (including those with respect to asbestos or asbestos containing material), relating to pollution or protection of the environment and relating to public health and safety, relating to (i)  6 emissions, discharges, releases or threatened releases of Hazardous Materials, into the environment (including ambient air, surface water, ground water, land surface or subsurface strata), or (ii) the manufacture, processing, distribution, use generation, treatment, storage, disposal, transport or handling of any Hazardous Materials, and (iii) underground storage tanks and related piping, and emissions, discharges and releases or threatened releases therefrom, such Environmental Laws to include, without limitation, (i) the Clean Air Act (42 U.S.C.ss.7401 et seq.), (ii) the Clean Water Act (33 U.S.C.ss.1251 et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.), (iv) the Toxic Substances Control Act (15 U.S.C.ss.2601 et seq.) and (v) CERCLA, each as amended. "ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company or any Subsidiary directly or indirectly resulting from or based upon (i) violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) exposure to any Hazardous Materials, (iv) the release or threatened release of any Hazardous Materials into the environment or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. "EQUITY RIGHTS" means, with respect to any Person, any subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including any stockholders' or voting trust agreements) for the issuance, sale, registration or voting of, or securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, such Person. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder. "ERISA AFFILIATE" means any trade or business (whether or not incorporated) that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. "ERISA EVENT" means: (i) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (ii) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (v) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by the Company or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability  7 or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. "ERISA PLAN" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Company or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "EVENT OF DEFAULT" has the meaning assigned to such term in Section 9.01. "EXISTING CREDIT AGREEMENT" means the Second Amended and Restated Revolving Credit Agreement, dated as of September 24, 2001, among the Company, the lenders party thereto, SunTrust Bank, as administrative agent, issuing bank and swingline lender, Heller Financial, Inc., as syndication agent, and BNP Paribas, as documentation agent, as amended, modified or supplemented. "EXISTING PREFERRED STOCK" means (i) 5,000 shares of Series A 8% cumulative convertible preferred stock, no par value, issued to J.P. Morgan Partners (BHCA), L.P. and (ii) 2,500 shares of Series B 8% cumulative convertible preferred stock, no par value, issued to Paribas North America, Inc., in each case outstanding on the date hereof. "EXISTING SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT" means the Senior Subordinated Note Purchase Agreement, dated as of October 31, 1997, among the Company, the subsidiary guarantors party thereto and the investors party thereto, as amended, modified or supplemented. "GAAP" means generally accepted accounting principles in the United States of America. "GOVERNMENTAL AUTHORITY" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory, monetary or administrative powers of a governmental nature or functions of or pertaining to government. "HAZARDOUS MATERIALS" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. "INDEBTEDNESS" means, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn under all letters of credit, bankers' acceptances and similar obligations issued for the account of such Person and all unpaid drawings in respect of such letters of credit, bankers' acceptances and similar obligations, (iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition  8 secured by any Lien on any property owned by such Person, whether or not such Indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) the aggregate amount of all Capitalized Lease Obligations of such Person, (v) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of such Person, and (vii) all obligations under any Interest Rate Protection Agreement, any Other Hedging Agreement or under any similar type of agreement. Notwithstanding the foregoing, Indebtedness shall not include trade payables and accrued expenses incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person. "INTEREST PAYMENT DATE" has the meaning assigned to such term in Section 2.04. "INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement. "INVESTMENT" has the meaning assigned to such term in Section 8.04. "INVESTOR REPRESENTATIVE" means (i) JPMorgan Partners so long as it shall be a holder of any of the Notes or (ii) otherwise, an Investor designated by the Required Investors to act as the Investor Representative hereunder. "INVESTORS" has the meaning assigned to such term in the preamble of this Agreement. "JPMORGAN PARTNERS" means J.P. Morgan Partners (BHCA), L.P. "LEASEHOLDS" of any Person means all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures. "LIEN" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing). "MAKE-WHOLE AMOUNT" has the meaning assigned to such term in Section 3.01. "MARGIN STOCK" means "margin stock" within the meaning of Regulation U. "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect on the business, operations, property, projections, assets, liabilities (whether contractual, environmental or otherwise), condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole or (ii) a material adverse effect on the ability of the Obligors (taken as a whole) to  9 perform their payment or other material obligations hereunder or under any other Note Document. "Moody's" means Moody's Investors Service, Inc. "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA as to which the Company, any Subsidiary or any ERISA Affiliate is obligated to make, has made, or will be obligated to make contributions on behalf of participants who are or were employed by any of them. "NET INSURANCE PROCEEDS" means, with respect to any Recovery Event, the cash proceeds (net of reasonable costs and taxes incurred in connection with such Recovery Event) received by the respective Person in connection with such Recovery Event. "NOTE DOCUMENTS" means, collectively, this Agreement, the Notes, the Warrant Agreement and the Warrants. "NOTES" has the meaning assigned to such term in Section 2.01, including any Notes issued in substitution for any Notes theretofore issued pursuant to this Agreement and any Notes issued under Section 2.04(d) "OBLIGORS" has the meaning assigned to such term in the preamble of this Agreement. "ORIGINAL PRINCIPAL AMOUNT" has the meaning assigned to such term in the recitals of this Agreement. "OTHER HEDGING AGREEMENTS" means any foreign exchange contracts, currency swap agreements, commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values or commodity prices. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. "PERMITTED ACQUISITION" means the acquisition by the Company or a Wholly Owned Domestic Subsidiary of the Company which is a Subsidiary Guarantor of an Acquired Entity or Business (including by way of merger of such Acquired Entity or Business with and into the Company (so long as the Company is the surviving corporation) or a Wholly-Owned Domestic Subsidiary of the Company which is a Subsidiary Guarantor (so long as the Subsidiary Guarantor is the surviving corporation)), provided that (in each case) (i) the consideration paid or to be paid by the Company or such Wholly-Owned Domestic Subsidiary consists solely of cash, the issuance or incurrence of Indebtedness otherwise permitted by Section 8.01 and the assumption/acquisition of any Indebtedness (calculated at face value) which is permitted to remain outstanding in accordance with the requirements of Section 8.01, (ii) in the case of the acquisition of 100% of the capital stock or other equity interests of any Person (including by way of merger), such Person shall own no capital stock or other equity interests of any other Person (excluding de minimis amounts) unless such Person owns 100% of the capital stock or other equity interests of such other Person, (iii) all of the business, division or product line acquired pursuant to the respective Permitted  10 Acquisition, or the business of the Person acquired pursuant to the respective Permitted Acquisition and its Subsidiaries taken as a whole, is in the United States, (iv) the Acquired Entity or Business acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section 8.06 and (v) all applicable requirements of Section 7.10 applicable to Permitted Acquisitions are satisfied. Notwithstanding anything to the contrary contained in the immediately preceding sentence, an acquisition which does not otherwise meet the requirements set forth above in the definition of "Permitted Acquisition" shall constitute a Permitted Acquisition if, and to the extent, the Required Investors agree in writing, prior to the consummation thereof, that such acquisition shall constitute a Permitted Acquisition for purposes of this Agreement. "PERMITTED ACQUISITION BASKET AMOUNT" means, for each fiscal year of the Company, $4,000,000 (or, in the case of the fiscal year of the Company ending June 30, 2004, $5,000,000, but only to the extent such incremental $1,000,000 over the annual basket provided above is used to acquire the assets of Coca-Cola Enterprises pursuant to a Permitted Acquisition). "PERMITTED ENCUMBRANCE" means, with respect to any Real Property owned or leased by the Company or any of its Subsidiaries which is encumbered (or required to be encumbered) by a mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or similar security instrument, such exceptions to title as are set forth in any mortgage title insurance policy or a binding commitment with respect thereto pursuant to the Senior Credit Agreement. "PERSON" means any natural person, corporation, partnership, limited liability company, trust, joint venture, association, company or other organization, whether or not legal entity, and any Governmental Authority. "PIK INTEREST AMOUNT" has the meaning assigned to such term in Section 2.04. "PLAN" means any pension plan as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) the Company or a Subsidiary of the Company or an ERISA Affiliate and each such plan for the five year period immediately following the latest date on which the Company, a Subsidiary of the Company or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. "PRO FORMA BASIS" means, in connection with any calculation of compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro forma basis to (x) the incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) after the first day of the relevant Calculation Period as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of the relevant Calculation Period, (y) the permanent repayment of any Indebtedness (other than revolving Indebtedness except to the extent accompanied by a corresponding permanent commitment reduction) after the first day of the relevant Calculation Period as if such Indebtedness had been retired or redeemed on the first day of the relevant Calculation Period and/or (z) the Permitted Acquisition, if any, then being consummated as well as any other Permitted  11 Acquisition consummated after the first day of the relevant Calculation Period and on or prior to the date of the respective Permitted Acquisition then being effected, as the case may be, with the following rules to apply in connection therewith: (i) all Indebtedness (x) (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) incurred or issued after the first day of the relevant Calculation Period (whether incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of the respective Calculation Period and remain outstanding through the date of determination and (y) (other than revolving Indebtedness except to the extent accompanied by a corresponding permanent commitment reduction) permanently retired or redeemed after the first day of the relevant Calculation Period shall be deemed to have been retired or redeemed on the first day of the respective Calculation Period and remain retired through the date of determination; (ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed rate indebtedness, or (y) at the rate which would have been applicable thereto on the last day of the respective Calculation Period, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while same was actually outstanding); and (iii) in making any determination of Consolidated EBITDA, pro forma effect shall be given to any Permitted Acquisition consummated during the periods described above, with such Consolidated EBITDA to be determined as if such Permitted Acquisition was consummated on the first day of the relevant Calculation Period, but without taking into account any pro forma cost savings and expenses. "PROJECTIONS" means the projections dated June 2, 2003 that were provided at the annual bank meeting and were prepared by or on behalf of the Company in connection with the Transactions and delivered to the Investors prior to the Closing Date. "QUALIFIED INVESTOR" means (i) any initial Investor of the Notes and (ii) any bank, trust company, savings and loan association, pension plan, investment company, insurance company, broker, dealer or any other financial institution or entity, regardless of legal form. "REAL PROPERTY" of any Person means all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds. "recovery event" means the receipt by the Company or any of its Subsidiaries of any cash insurance proceeds or condemnation awards payable by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of the Company or any of its Subsidiaries.  12 "REGULATIONS T, U AND X" means, respectively, Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time. "REINVESTMENT YIELD" has the meaning assigned to such term in Section 3.01. "RELATED PARTIES" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, partners, employees, agents and advisors of such Person and such Person's Affiliates. "RELEASE" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "REMAINING AVERAGE LIFE" has the meaning assigned to such term in Section 3.01. "REMAINING SCHEDULED PAYMENTS" has the meaning assigned to such term in Section 3.01. "REQUIRED INVESTORS" means, at any time, Investors holding more than a majority in aggregate principal amount of the Notes at the time outstanding, in aggregate principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates (other than any Investor)). "RESTRICTED PAYMENT" means: (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of the Company or any of its Subsidiaries other than dividends paid by a Subsidiary; (ii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of the Company or any of its Subsidiaries or any option, warrant or other right to acquire any such shares; (iii) any payment on account of the purchase, redemption, conversion, exchange, retirement, acquisition, defeasance or sinking fund payment with respect to any Indebtedness that is junior or subordinate to the Notes; and (iv) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of the Company or any of its Subsidiaries. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. "SEC" means the Securities and Exchange Commission or any successor thereto. "SECURITIES ACT" means the Securities Act of 1933, as amended and in effect from time to time. "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended and in effect from time to time.  13 "SENIOR CREDIT AGREEMENT" means the Credit Agreement, dated as of August 25, 2003, among the Company, the lenders from time to time parties thereto and BNP Paribas, as administrative agent for such lenders, and any refinancing, refunding, extension or renewal thereof (whether or not with any of the lenders or the agent for such lenders then party to the Senior Credit Agreement), in each case, at any time amended, modified, restated and/or supplemented in accordance with Section 8.13(a). "SENIOR CREDIT DOCUMENTS" means the Senior Credit Agreement and all other documents and agreements originally executed and delivered thereunder, in each case, as the same shall, subject to Section 8.13(a), be amended, restated and/or supplemented and in effect from time to time. "SENIOR DEBT" means the following obligations of the Company and its Subsidiaries: (i) with respect to the Company, all principal of the loans outstanding under the Senior Credit Agreement, all interest thereon (including any interest accruing after the date of any filing by the Company of any petition in bankruptcy or the commencing of any bankruptcy, insolvency or similar proceedings with respect to the Company whether or not the same is allowed as a claim in any such proceeding) and all other amounts outstanding thereunder, including all reimbursement obligations in respect of letters of credit thereunder, expenses (including attorneys' fees), indemnities and penalties and all commitment, facility and administrative, agency or other similar fees payable by the Company from time to time under the Senior Credit Documents, and any obligations of the Company in respect of Interest Rate Protection Agreements owing to one or more of the lenders under Senior Credit Agreement and/or affiliates of such lenders (even if such lender subsequently ceases to be a lender under the Senior Credit Agreement) that are permitted by the terms of the Senior Credit Agreement; (ii) with respect to any Subsidiary of the Company, the guarantee of such Subsidiary in respect of any Senior Debt of the Company; and (iii) with respect to the Company and its Subsidiaries, any and all refinancings, replacements or refundings of any of the amounts referred to in clauses (i) and (ii) above; provided that the aggregate principal or face amount of Senior Debt (exclusive of obligations in respect of Interest Rate Protection Agreements referred to in said clause (i)), and any refinancing, replacement or refunding thereof permitted under clause (iii) above (including the maximum amount of the aggregate commitments of the lenders to extend any revolving credit facility thereunder) shall not exceed at any time $60,000,000, minus the aggregate amount of (x) permanent reductions of revolving credit commitments thereunder and (y) prepayments of any term loans made from time to time in respect of the Senior Debt (excluding however, for avoidance of doubt, reductions of revolving credit commitments and/or prepayments of term loans made in connection with a refinancing, replacement or refunding of Senior Debt).  14 "SENIOR DEBT REPRESENTATIVE" means (i) initially, BNP Paribas and (ii) thereafter, such other holder of Senior Debt notified in writing to each Investor pursuant to (and in accordance with the requirements of) Section 11.13. "SETTLEMENT DATE" has the meaning assigned to such term in Section 3.01. "SUBSIDIARY" means, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time. Unless otherwise specified, "Subsidiary" and "Subsidiaries" means a Subsidiary and Subsidiaries, respectively, of the Company. "SUBORDINATED DEBT" has the meaning assigned to such term in Section 11.01. "SUBSIDIARY GUARANTOR" has the meaning assigned to such term in the preamble of this Agreement. "TAX" means, with respect to any Person, any Federal, state or foreign tax, assessment, customs duties or other governmental charge, levy or assessment (including any withholding tax) upon such Person or upon such Person's assets, revenues, income or profits. "TEST PERIOD" means each period of four consecutive fiscal quarters of the Company then last ended (in each case taken as one accounting period). Notwithstanding anything to the contrary required by United States generally accepted accounting principles for purposes of any calculation of Consolidated Interest Expense pursuant to Section 8.10 and Consolidated EBITDA required in determining the Consolidated Total Leverage Ratio at any time on or prior to September 30, 2004, the term "Test Period" shall mean be a one-year period ending on the last day of the fiscal quarter then last ended, with any calculations of (x) Consolidated Interest Expense required in determining compliance with Section 8.10 to be made on a pro forma basis in accordance with, and to the extent provided in, the immediately succeeding sentence and (y) Consolidated EBITDA required in determining the Consolidated Total Leverage Ratio to be made on a pro forma basis in accordance with, and to the extent provided in, the second succeeding sentence. To the extent the respective Test Period (i) includes the fiscal quarter of the Company ended December 31, 2002, Consolidated Interest Expense for such fiscal quarter shall be deemed to be $1,873,000, (ii) includes the fiscal quarter of the Company ended March 31, 2003, Consolidated Interest Expense for such fiscal quarter shall be deemed to be $1,766,000, (iii) includes the fiscal quarter of the Company ended June 30, 2003, Consolidated Interest Expense for such fiscal quarter shall be deemed to be $1,738,000 and (iv) includes the fiscal quarter of the Company ended September 30, 2003, Consolidated Interest Expense shall be determined by using actual Consolidated Interest Expense for such period determined in accordance with the definition thereof. To the extent the respective Test Period (i) includes the fiscal quarter of the Company ended December 31, 2002, Consolidated EBITDA for such fiscal quarter shall be deemed to be $4,421,000, (ii) includes  15 the fiscal quarter of the Company ended March 31, 2003, Consolidated EBITDA for such fiscal quarter shall be deemed to be $5,436,000, (iii) includes the fiscal quarter of the Company ended June 30, 2003, Consolidated EBITDA for such fiscal quarter shall be deemed to be $6,285,000 and (iv) includes the fiscal quarter of the Company ended September 30, 2003, Consolidated EBITDA shall be determined by using actual Consolidated EBITDA for such period determined in accordance with the definition thereof; provided that any additional adjustments required by the definition of Pro Forma Basis for occurrences after the Closing Date shall also be made. "TRANSACTIONS" means the execution, delivery and performance by the (i) Obligors of this Agreement, the issuance of the Notes and the use of the proceeds thereof in accordance with the preamble of this Agreement and (ii) Company of the Warrant Agreement and the issuance of the Warrants thereunder. "WARRANT AGREEMENT" means the Warrant Agreement dated as of the date hereof between the Company and the holders of the Warrants party thereto pursuant to which the Warrants are issued, as amended and in effect from time to time. "WARRANTS" means each of the warrants issued to the holders of the Warrants on the Closing Date pursuant to the Warrant Agreement, including any warrants issued in replacement or substitution thereof. "WHOLLY-OWNED DOMESTIC SUBSIDIARY" means, as to any Person, any Wholly-Owned Subsidiary of such Person which is incorporated or organized in the United States or any State thereof. "WHOLLY-OWNED SUBSIDIARY" means, as to any Person, (i) any corporation 100% of whose capital stock is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time. "WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02 TERMS GENERALLY. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles,  16 Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. SECTION 1.03 ACCOUNTING TERMS; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Company notifies the Investors that the Company requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Required Investors notify the Company that they request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. To enable the ready and consistent determination of compliance with the covenants set forth in Article VIII, the Company will not change the last day of its fiscal year from June 30 of each year, or the last days of the first three fiscal quarters in each of its fiscal years from September 30, December 31, and March 31 of each year, respectively. ARTICLE II AMOUNT AND TERMS OF NOTES SECTION 2.01 COMMITMENTS. Subject to and upon the terms and conditions set forth herein, each Investor severally agrees to purchase from the Company, and the Company agrees to issue to such Investor, its 16.3% Senior Subordinated Note due February 27, 2009 (each a "Note" and, collectively, the "Notes"), which Note (i) shall be issued on the Closing Date and (ii) shall be purchased at par by such Investor in an amount equal to the principal amount set forth opposite its name on the signature pages hereto. SECTION 2.02 DISBURSEMENT OF FUNDS. Each Investor shall make available all amounts to be funded by such Investor under this Agreement on the Closing Date in immediately available funds to the account specified by the Company. SECTION 2.03 NOTES. (a) The Company's obligation to pay the principal (including any PIK Interest Amount) of, Make-Whole Amount (if any) and interest on all the Notes issued by it shall be evidenced by a Note, substantially in the form of Exhibit A, duly executed and delivered by the Company with blanks appropriately completed in conformity herewith. (b) Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of any Note, and (in case of loss, theft or destruction) of indemnity satisfactory to it (the relevant Investor's undertaking shall be satisfactory indemnity in case of loss, theft or destruction of any Note owned by such Investor), and upon reimbursement to the  17 Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Note, if mutilated, the Company will pay any unpaid principal, Make-Whole Amount (if any), interest and prepayment charge then or theretofore due and payable on such Note and will deliver in lieu of such Note a new Note in the remaining unpaid principal amount thereof and carrying the same rights to interest (unpaid and to accrue). (c) Except to the extent otherwise provided herein, each payment of principal of the Notes (including any PIK Interest Amount) by the Company shall be made for account of the Investors pro rata in accordance with the respective unpaid principal amounts of the Notes held by them and each payment of interest on the Notes (including any PIK Interest Amount) by the Company shall be made for account of the Investors pro rata in accordance with the amounts of interest on such Notes then due and payable to the respective Investors. SECTION 2.04 INTEREST. (a) The unpaid principal amount of each Note (including any PIK Interest Amount) shall bear interest from the Closing Date until maturity (whether by acceleration or otherwise) at the rate of 16.3% per annum. (b) Any amount that is not paid when due hereunder (without giving effect to grace periods, if any) shall bear interest from the date such amount was due through the date of payment at a rate equal to 18.3% per annum. Without limiting the foregoing (but without duplication), upon the occurrence and during the continuance of any Event of Default, the principal amount of the Notes (including each PIK Interest Amount), and all other amounts then owing hereunder, shall bear interest for each day during the period from and including the occurrence of such Event of Default to but excluding the date such Event of Default shall have been cured or waived at a rate equal to 18.3% per annum. (c) Interest on the unpaid principal amount of each Note (including any PIK Interest Amount added to principal in accordance with this Section 2.04) shall accrue from and including the Closing Date (or, in the case of any PIK Interest Amount, the date on which such amount is so added to principal pursuant to this Section 2.04) to but excluding the date of any payment thereof and shall be payable, in immediately available funds (except as expressly provided in paragraph (d) of this Section 2.04), quarterly in arrears on February 28, May 31, August 31 and November 30 in each year and on the maturity date of each Note, commencing on November 30, 2003 (each an "Interest Payment Date"), and on any prepayment (on the amount prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. (d) Notwithstanding anything herein to the contrary, 4.3% per annum of the accrued interest on the Notes (including any PIK Interest Amount theretofore added to principal) due on any Interest Payment Date (other than at the maturity of the Notes) shall be paid "in kind" by the Company on the relevant Interest Payment Date by adding the amount of such interest to the principal amount of each Note (or, in the case of interest payable on any PIK Interest Amount, to such PIK Interest Amount) (each such amount so paid in kind pursuant to this clause being a "PIK Interest Amount"). Each Investor shall maintain records evidencing the amount of each PIK Interest Amount (and any interest paid "in kind" thereon) paid in respect of each Note held by such Investor, and the entries in such records shall be prima facie evidence of the  18 existence and amounts of the obligations recorded therein (provided that the failure of any such holder to maintain such records or any error therein shall not in any manner affect the obligation of the Company to pay each PIK Interest Amount, with interest thereon, in accordance with the terms of this Agreement). At the request of any Investor, the Company shall execute and deliver to such Investor one or more promissory notes (each substantially in the form of Exhibit A hereto, with such changes thereto as shall be requested by such Investor to give effect to the terms of this Section 2.04(d)) to evidence any or all of the PIK Interest Amounts (including interest thereon) then owing to such Investor hereunder. (e) All computations of interest hereunder and under the Notes shall be made on the basis of a 360-day year consisting of twelve 30-day months and shall be payable for the actual number of days elapsed (including the first day but excluding the date of payment thereof). SECTION 2.05 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure of any Investor to purchase the Note to be purchased by it on the Closing Date shall not relieve any other Investor of its obligation to purchase its Note on such date, but no Investor shall be responsible for the failure of the other Investor to purchase its Note, and no Investor shall have any obligation to any other Investor for the failure by such Investor to purchase any Note required to be purchased by such Investor. The amounts payable by the Company at any time hereunder and under the Notes to each Investor shall be a separate and independent debt and each Investor shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes held by it, and it shall not be necessary for any other Investor to consent to, or be joined as an additional party in, any proceedings for such purposes. ARTICLE III PREPAYMENTS; PAYMENTS SECTION 3.01 PREPAYMENTS. (a) Subject to Article XI, the Company may, at its option, upon notice as provided in this Section 3.01, prepay all or, from time to time, part of the Notes (including any PIK Interest Amounts) at any time prior to February 25, 2005 in an amount equal to 100% of the principal amount being prepaid, in each case together with interest accrued and unpaid on the Notes (or part thereof, as the case may be) to the prepayment date plus the applicable Make-Whole Amount. For purposes of this Agreement, the following terms shall have the following meanings: "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount shall not be less than 6% of such Called Principal.  19 "CALLED PRINCIPAL" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to this Section 3.01 or has become or is declared to be immediately due and payable pursuant to Section 9.01, as the context requires. "DISCOUNTED VALUE" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "REINVESTMENT YIELD" means, with respect to the Called Principal of any Note, the sum of (x) if such Called Principal is to be prepaid pursuant to Section 3.01 or has become or is declared to be immediately due and payable pursuant to Section 9.01, 2.50% plus (y) the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page PX1" on Bloomberg Financial Markets (or such other display as may replace Page PX1 on Bloomberg Financial Markets) for actively traded U.S. Treasury securities having a maturity equal to the remaining term of the Notes as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in U.S. Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the remaining term of the Notes as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the maturity closest to and greater than the remaining term of the Notes and (2) the actively traded U.S. Treasury security with the maturity closest to and less than the remaining term of the Notes. "REMAINING SCHEDULED PAYMENTS" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to this Section 3.01 or Section 9.01. "SETTLEMENT DATE" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 3.01 or has become or is declared to be immediately due and payable pursuant to Section 9.01, as the context requires.  20 (b) The Company may, at its option, upon notice as provided below, prepay all or, from time to time, part of the Notes (including any PIK Interest Amounts) at any time from and after February 25, 2005 at a price equal to the sum of (i) the principal amount of all PIK Interest Amounts being prepaid and (ii) the applicable percentage for the applicable period listed below of that portion of the Original Principal Amount being prepaid, in each case, together with interest accrued and unpaid on the Notes (including any PIK Interest Amounts), or part thereof, as the case may be, to the prepayment date: Period Price ------ ----- From February 25, 2005 through August 24, 2006 106% From August 25, 2006 through August 24, 2007 103% Thereafter 100%. (c) Notwithstanding clauses (a) or (b) above, in the event of a Change in Control prior to the third anniversary of the Closing Date in which the net cash consideration received (or receivable) by the Company or its shareholders shall be at least equal (or equivalent) to $22.00 per share of the Company's authorized common stock, the Company, in connection with the consummation of such Change in Control, may at its option prepay all outstanding Notes at a price equal to 103% of the principal amount of each Note, in each case, together with interest accrued and unpaid on each Note (or part thereof, as the case may be) to the payment date. (d) The Company will give each holder of the Notes notice of each optional prepayment under paragraph (a) or (b) of this Section 3.01 not less than 20 days prior to the date fixed for such prepayment, specifying such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid the interest to be prepaid to the prepayment date with respect to such principal amount being prepaid and the Make-Whole Amount or premium (if any), as applicable, due in connection with such prepayment. (e) In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment; provided that such prepayment shall be applied, first, to the prepayment of all PIK Interest Amounts, together with the accrued and unpaid interest thereon, and, only after such amounts have been paid in full, to the prepayment of the Original Principal Amount of the Notes. At the request of the Company, any Note which is to prepaid only in part shall be surrendered to the Company by the holder thereof, and the Company shall issue to such holder a new Note equal in principal amount to the unpaid portion of the surrendered Note (after giving effect to such prepayment) and in the form of Exhibit A. (f) In the case of each prepayment of Notes pursuant to this Section 3.01, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest, Make-Whole Amount (if any) and premium (if any) on such principal amount accrued to such date. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and  21 Make-Whole Amount, if any, thereon, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and canceled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. (g) The Company will not and will not permit any of its Affiliates to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement or otherwise on terms identical to those offered to all the other Investors (whether or not such terms have actually been accepted by all the Investors). The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. SECTION 3.02 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically provided herein, all payments under this Agreement shall be made to any Investor, not later than 1:00 p.m. (New York time) on the date when due, and shall be made in immediately available funds in dollars to the account specified therefor by such Investor. Any payments under this Agreement and the Notes which are made by the Company later than 1:00 p.m. (New York time) shall be deemed to have been made on the next succeeding Business Day. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of, Make-Whole Amount (if any), or premium or interest on any Note, or any other payment hereunder or under the Notes, that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day. ARTICLE IV REPRESENTATIONS OF THE INVESTORS Each Investor severally represents to the Company as follows: SECTION 4.01 PURCHASE FOR INVESTMENT. Such Investor is purchasing the Notes to be purchased by it on the Closing Date for its own general account and/or for one or more separate accounts maintained by it and not with a view to any distribution of the Notes that would be in violation of the securities laws of the United States of America or any State thereof, without prejudice, however, to such Investor's right at all times to sell or otherwise dispose of all or any part of the Notes under an exemption from such registration available under the Securities Act (including Rules 144 and 144A promulgated thereunder), and subject, nevertheless, to the disposition of its property being at all times within its control and subject to the terms of Section 12.04. SECTION 4.02 ACCREDITED AND SOPHISTICATED INVESTOR. Such Investor (a) is an "accredited investor" as defined in Rule 501(a) of the Securities Act, and (b) by reason of its business and financial experience, has such knowledge, sophistication and experience in business and financial matters so as to be  22 capable of evaluating the merits and risks of the prospective investment in the Notes, is able to bear the economic risk of such investment and is able to afford a complete loss of such investment, and (c) has been afforded the opportunity to make inquiries of management of the Company and has made its own investigation whether or not to purchase Notes and in making its decision has not relied in any way on the fact that any other Person has decided to purchase Notes under this Agreement. ARTICLE V CONDITIONS PRECEDENT SECTION 5.01 Conditions Precedent to Notes. The obligations of the Investors to purchase the Notes issued by the Company hereunder are subject, at the time of the purchase of the Notes, to the satisfaction of the following conditions: (a) CORPORATE AND OTHER DOCUMENTS. Certified copies of the charter and by-laws (or equivalent documents) of each Obligor and of all corporate (or other) authority for each Obligor (including board of director or similar resolutions and evidence of the incumbency, including specimen signatures, of officers) with respect to the execution, delivery and performance of such of the Note Documents to which such Obligor is intended to be a party and each other document to be delivered by such Obligor from time to time in connection herewith and the Notes hereunder (each Investor may conclusively rely on such certificate until it receives notice in writing from such Obligor to the contrary). (b) OFFICER'S CERTIFICATE. A certificate of a senior officer of the Company, dated the Closing Date, to the effect set forth in clauses (a) and (b) of Section 5.02. (c) OPINION OF COUNSEL TO THE OBLIGORS. An opinion, dated the Closing Date, of Olshan Grundman Frome Rosenzweig & Wolosky LLP, counsel to the Obligors, substantially in the form of Exhibit B (and each Obligor hereby instructs such counsel to deliver such opinion to the Investors). (d) OPINION OF SPECIAL NEW YORK COUNSEL TO JPMORGAN PARTNERS. An opinion, dated the Closing Date, of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to JPMorgan Partners, substantially in the form of Exhibit C. (e) NOTES. One or more Notes, duly completed and executed for each Investor. (f) WARRANT AGREEMENT. The Warrant Agreement, duly executed and delivered by each of the parties thereto, and the Warrants required to be issued under Section 2.02 of the Warrant Agreement as of the Closing Date duly issued and delivered to each of the initial holders of the Warrants as provided in the Warrant Agreement, and each of the other agreements and instruments contemplated to be executed and/or delivered thereunder, in each case duly executed and/or delivered.  23 (g) SENIOR CREDIT AGREEMENT. Evidence that the Senior Credit Agreement providing for commitments to extend credit to the Company in an aggregate principal amount of at least $50,000,000 and otherwise in form and substance satisfactory to the Investors shall have been executed and delivered by each of the parties thereto and shall be in effect, and that the initial loans thereunder shall have been made to the Company (or contemporaneously with the purchase of the Notes hereunder shall be made), and the Investors shall have received copies of the Senior Credit Agreement and, upon the request of the Investors, each of the other Senior Credit Documents delivered thereunder in connection with the initial borrowing thereunder, in each case certified by a senior officer of the Company. (h) REPAYMENT OF EXISTING INDEBTEDNESS. Evidence that the principal of and interest on, and all other amounts owing in respect of, the Indebtedness (including the Indebtedness outstanding under the Existing Senior Subordinated Note Purchase Agreement and the Existing Credit Agreement) indicated on Schedule 8.01 that is to be repaid on the Closing Date shall have been (or shall be simultaneously) paid in full, that any commitments to extend credit under the agreements or instruments relating to such Indebtedness shall have been canceled or terminated and that all guarantees in respect of, and all Liens securing, any such Indebtedness shall have been released (or arrangements satisfactory to the Required Lenders for such release shall have been made). (i) FINANCIAL STATEMENTS. The Investors shall have received the financial statements referred to in Section 6.04. (j) OTHER DOCUMENTS. Such other documents as any Investor or special New York counsel to the Investors may reasonably request. The obligation of any Investor to purchase its Note hereunder is also subject to the payment or delivery by the Company of such fees and other consideration as the Company shall have agreed to pay or deliver to any Investor or an Affiliate thereof in connection herewith, including the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to JPMorgan Partners, in connection with the negotiation, preparation, execution and delivery of the Note Documents and the issuance of the Notes hereunder and of the Warrants under the Warrant Agreement (to the extent that statements for such fees and expenses have been delivered to the Company). SECTION 5.02. OTHER CONDITIONS PRECEDENT. The obligation of any Investor to purchase its Note(s) hereunder is subject to the further conditions precedent that, both immediately prior to the purchase of such Note(s) and also after giving effect thereto and to the intended use thereof: (a) no Default shall have occurred and be continuing; and (b) the representations and warranties made by the Company in Article VI shall be true and correct on and as of the Closing Date with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).  24 ARTICLE VI REPRESENTATIONS AND WARRANTIES The Company represents and warrants to the Investors that: SECTION 6.01 ORGANIZATION; POWERS. Each of the Company and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its respective organization, (b) has all requisite power and authority to carry on its business in which it is engaged and presently proposes to engage and (c) except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. SECTION 6.02 AUTHORIZATION; ENFORCEABILITY. The Transactions are within each Obligor's corporate, partnership or limited liability company powers and have been duly authorized by all necessary corporate, partnership or limited liability company. Each of this Agreement and the Notes have been duly executed and delivered by each Obligor and constitutes a legal, valid and binding obligation of each Obligor, enforceable in accordance with its respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. SECTION 6.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority by the Company and its Subsidiaries, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Company or of any of its Subsidiaries or any order, writ, injunction or decree of any Governmental Authority, (c) will not violate or result in a default under any indenture, credit agreement or loan agreement or any other material agreement, contract or instrument, in each case binding upon the Company or of any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Company or of any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Company or of any of its Subsidiaries (other than pursuant to the Senior Credit Documents). SECTION 6.04 SEC DOCUMENTS; FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The Company has filed in a timely manner all documents that the Company was required to file with the Commission under Sections 13, 14(a) and 15(d) of the Securities Exchange Act, since its initial public offering. As of their respective filing dates, all documents filed by the Company with the SEC ("SEC DOCUMENTS") complied in all material respects with the requirements of the Securities Exchange Act or the Securities Act, as applicable. None of the SEC Documents as of their respective dates contained any untrue statement of a  25 material fact or omitted to state material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. (b) The Company has heretofore furnished to the Investors its audited consolidated balance sheet, statements of income (including supporting footnote disclosures) and cash flows as of and for the fiscal year ended June 30, 2002 with the opinion of Margolin, Winer & Evens LLP, independent public accountants. Such financial statements as of and for the fiscal year ended June 30, 2003 are being audited by Margolin, Winer & Evens LLP and such audit is substantially completed. (c) The financial statements included in the SEC Documents and the referred to in paragraph (b) above present fairly, in all material respects, the financial position and results of operations and cash flows of the Company and its consolidated Subsidiaries as of the respective dates and for the respective periods in accordance with GAAP (subject, in the case of any unaudited financial statements, to customary year-end adjustments). (d) Since June 30, 2002, there has been no material adverse change in the business, operations, property, projections, assets, liabilities (whether contractual, environmental or otherwise), condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole. (e) The Projections delivered to the Investors prior to the Closing Date have been prepared in good faith and are based on reasonable assumptions, and there are no statements or conclusions in the Projections which are based upon or include information known to the Company to be misleading in any material respect or which fail to take into account material information known to the Company regarding the matters reported therein. On the Closing Date, the Company believes that the Projections are reasonable and attainable, it being recognized by the Investors, 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 such differences may be material. SECTION 6.05 PROPERTIES. (a) Each of the Company and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for (i) Permitted Encumbrances and (ii) minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes. (b) Each of the Company and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Company and its Subsidiaries, to the best of the Company's knowledge, does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  26 SECTION 6.06 LITIGATION AND ENVIRONMENTAL MATTERS (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of any Obligor, threatened against or affecting the Company or any of its Subsidiaries (i) that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, or (ii) with respect to the Transactions or the Note Documents. (b) Except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Company nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability. SECTION 6.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Company and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. SECTION 6.08 INVESTMENT AND HOLDING COMPANY STATUS. Neither the Company nor any of its Subsidiaries is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. SECTION 6.09 TAXES. Each of the Company and its Subsidiaries has timely filed or caused to be filed all tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Company or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. SECTION 6.10 ERISA. Except as disclosed in Schedule 6.10: (a) IDENTIFICATION OF PLANS. Neither the Company nor any ERISA Affiliate maintains or contributes to, or has maintained or contributed to, any Plan that is an ERISA Plan; (b) COMPLIANCE. Each Plan has at all times been maintained, by its terms and in operation, in accordance with all applicable laws, except where such noncompliance (when taken as a whole) would not have a Material Adverse Effect; (c) LIABILITIES. Neither the Company nor any of its Subsidiaries is currently making, nor has in the last 6 years been obligated to make, contributions (directly or indirectly) to a Multiemployer Plan, nor is it currently nor will it become subject to any liability (including withdrawal liability), tax or penalty whatsoever to any Person whomsoever  27 with respect to any Plan including any tax, penalty or liability arising under Title I or Title IV or ERISA or Chapter 43 of the Code, except where such liabilities (when taken as a whole) would not have a Material Adverse Effect; and (d) Funding. The Company and each ERISA Affiliate has made full and timely payment of all amounts (i) required to be contributed under the terms of each Plan and applicable law and (ii) required to be paid as expenses of each Plan. SECTION 6.11 DISCLOSURE. All factual information (taken as a whole) furnished by or on behalf of the Company in writing to any Investor (including, without limitation, all information contained in the Note Documents and the Senior Credit Agreement) for purposes of or in connection with this Agreement, the other Note Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Company in writing to any Investor will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. SECTION 6.12 DEBT AGREEMENTS. Schedule 6.12 is a complete and correct list of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness (other than the Senior Credit Agreement, the Existing Credit Agreement and the Existing Senior Subordinated Note Purchase Agreement) or any extension of credit (or commitment for any extension of credit) to, or guarantee by, the Company or any of its Subsidiaries, outstanding on the date hereof, and the aggregate principal or face amount outstanding or that may become outstanding under each such arrangement is correctly described in Schedule 6.12. SECTION 6.13 CAPITALIZATION. The authorized capital stock of the Company consists, on the date hereof, of an aggregate of 35,000,000 shares, consisting of (i) 30,000,000 shares of common stock, par value $0.001 per share, of which 10,633,405 shares are duly and validly issued and outstanding, each of which shares is fully paid and nonassessable, and (ii) 5,000,000 shares of blank check preferred stock, of which the Existing Preferred Stock is duly and validly issued and outstanding. As of the date hereof, (x) except as disclosed in Schedule 6.13 and except as provided in the Warrant Agreement, there are no outstanding Equity Rights with respect to the Company and (y) there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any shares of capital stock of the Company nor are there any outstanding obligations of the Company or any of its Subsidiaries to make payments to any Person, such as "phantom stock" payments, where the amount thereof is calculated with reference to the fair market value or equity value of the Company or any of its Subsidiaries. SECTION 6.14 SUBSIDIARIES. The Company has no Subsidiaries as of the Closing Date. SECTION 6.15 PRIVATE OFFERING BY THE COMPANY. Neither the Company nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise  28 approached or negotiated in respect thereof with, any person other than the Investors and certain other institutional investors, each of which has been offered the Notes at a private sale for investment, which offer or sale would not require registration under the Securities Act. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act. SECTION 6.16 LABOR RELATIONS. Neither the Company nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against the Company or any of its Subsidiaries or, to the knowledge of the Company, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company or any of its Subsidiaries or, to the knowledge of the Company, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Company or any of its Subsidiaries or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries (iii) no union representation question exists with respect to the employees of the Company or any of its Subsidiaries and (iv) no collective bargaining agreement exists which is binding on the Company or any of its Subsidiaries; except (with respect to any matter specified in clause (i), (ii) (iii) or (iv) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has any Equal Employment Opportunity Commission charges or other claim of employment discrimination pending or, to the Company's knowledge, currently threatened against them that would reasonably be expected to have a Material Adverse Effect; no wage and hour department investigation has been made of the Company or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect; there are no occupational health and safety claims against the Company or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect. Since the enactment of the Worker Adjustment and Retraining Notification Act (the "WARN Act") neither the Company nor any of its Subsidiaries effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Company or any of its Subsidiaries; or (ii) a "mass layoff" (as defined in the WARN Act) affecting any site of employment or facility of the Company or any of its Subsidiaries; nor has the Company or any of its Subsidiaries been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state or local law. Neither the Company nor any of its Subsidiaries has suffered an "employment loss" (as defined in the WARN Act) since six (6) months prior to the date hereof; and the Company and its Subsidiaries are in compliance in all material respects with the terms and provisions of the Immigration Reform and Control Act of 1986, as amended, and all related regulations promulgated thereunder.  29 ARTICLE VII AFFIRMATIVE COVENANTS The Company covenants and agrees with the Investors that, so long as any Note is outstanding and until payment in full of all amounts payable by the Company hereunder and thereunder, unless the Required Investors shall otherwise consent pursuant to Section 12.02: SECTION 7.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company will furnish to each Investor: (a) within 90 days after the end of each fiscal year of the Company, (i) the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related consolidated and consolidating statements of income and retained earnings and statement of cash flows for such fiscal year setting forth (commencing with the Company's fiscal year ending June 30, 2004) comparative figures for the preceding fiscal year and certified (x) in the case of consolidated financial statements, by Margolin Winer & Evens LLP or other independent certified public accountants of recognized national standing reasonably acceptable to the Investor Representative, together with an unqualified opinion of such accounting firm which demonstrates that (I) in the course of its regular audit of the financial statements of the Company and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge of any Default relating to financial or accounting matters which has occurred and is continuing or, if in the opinion of such accounting firm such a Default has occurred and is continuing, a statement as to the nature thereof, and (II) such statements fairly present in all material respects in accordance with generally accepted accounting principles the financial condition of the Company and its Subsidiaries as of the date indicated and the results of their operations and changes in their cash flows for the periods indicated (y) in the case of the consolidating financial statements, by the chief financial officer or treasurer of the Company that they fairly present in all material respects in accordance with generally accepted accounting principles the financial condition of the respective Subsidiaries or group of Subsidiaries covered thereby as of the dates indicated and the results of their operations and changes in their cash flows for the periods indicated, and (ii) management's discussion and analysis of the important operational and financial developments during such fiscal year; (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, (i) the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such quarterly accounting period and the related consolidated and consolidating statements of income and retained earnings and statement of cash flows for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, in each case setting forth comparative figures for the corresponding quarterly accounting period in the prior fiscal year and comparable budgeted figures for such quarterly accounting period as set forth in the respective budget delivered pursuant to Section 7.01(e), all of which shall be certified by the chief financial officer of the Company that they fairly present in all material respects in accordance with  30 generally accepted accounting principles the financial condition of the Company and its Subsidiaries as of the dates indicated and the results of their operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes, and (ii) management's discussion and analysis of the important operational and financial developments during such quarterly accounting period; (c) Within 30 days after the end of each fiscal month (or, in the case of the last fiscal month of any fiscal quarter, within 45 days after the end of such fiscal month) of the Company (commencing with its fiscal month ended on July 31, 2003), the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal month and the related consolidated and consolidating statements of income and retained earnings and statement of cash flows for such fiscal month and for the elapsed portion of the fiscal year ended with the last day of such fiscal month, in each case setting forth comparative figures for the corresponding fiscal month in the prior fiscal year and comparable budgeted figures for such fiscal month as set forth in the respective budget delivered pursuant to Section 7.01(e), all of which shall fairly present in all material respects in accordance with generally accepted accounting principles the financial condition of the Company and its Subsidiaries as of the dates indicated and the results of their operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes; (d) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of the chief financial officer of the Company (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections 8.01(d), 8.01(e), 8.03(c), 8.09 and 8.11, (iii) setting forth the Consolidated Total Leverage Ratio as at the last day of the fiscal quarter or fiscal year, as the case may be, of the Company to which such financial statements relate, together with the calculation (in reasonable detail) required to establish such Consolidated Total Leverage Ratio, and (iv) stating whether any material change in GAAP or in the application thereof which would effect the financial statements in any material respect has occurred since the date of the audited financial statements referred to in Section 6.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; (e) no later than 45 days following the first day of each fiscal year of the Company, a budget in form reasonably satisfactory to the Investors (including budgeted statements of income, sources and uses of cash and balance sheets for the Company and its Subsidiaries on a consolidated basis) (i) for each of the twelve months of such fiscal year prepared in detail and (ii) for the two immediately succeeding fiscal years prepared in summary form, in each case setting forth, with appropriate discussion, the principal assumptions upon which such budget is based; (f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Company or any Subsidiary with the SEC or with any national securities  31 exchange, or distributed by the Company to its shareholders generally, as the case may be; (g) promptly upon receipt thereof, copies of all significant reports submitted to the Company by independent public accountants in connection with each annual, interim or special audit of the financial statements of the Company made by such accountants, including any "management letter" received from its certified public accountants and management's response thereto; (h) promptly upon receipt thereof, copies of all notices given or received by the Company with respect to noncompliance with any term or condition related to any Senior Debt; (i) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Company or any Subsidiary that is in the Company's or its Subsidiary's possession, as any Investor may reasonably request; and (j) within 30 Business Days after the end of each month, a monthly report, in the same form and content as had been delivered under the Existing Senior Subordinated Note Purchase Agreement (or such other form approved by the Required Investors), demonstrating performance levels for such month and the trailing twelve-month period ended with such month, including balance sheet, income statement, cash flow statement, actual-to-budget variance and analysis, customer activities activation and attrition rates), customer action/ticket analysis, and cost savings achievement schedule (with respect to such cost savings achievement schedule only, through December 31, 2003); provided that if at any time the officer's certificate then last delivered or required to be delivered by the Company pursuant to Section 7.01(d) demonstrates compliance with a Consolidated Total Leverage Ratio of less than 2.00:1.00 as at the last day of the fiscal quarter or fiscal year, as the case may be, for which such certificate is provided, the Company shall not be required to comply at such time with the requirements of this clause (j). SECTION 7.02 NOTICES OF MATERIAL EVENTS. The Company will furnish to each Investor prompt written notice of the following: (a) the occurrence of any Default; (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Company or any Affiliate thereof that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect or with respect to any Note Document; (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Company and its Subsidiaries in an aggregate amount exceeding $500,000; (d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and  32 (e) a copy of each notice of default or event of default furnished or received by the Company under the Senior Credit Agreement (or any agreement replacing the Senior Credit Agreement in effect from time to time) simultaneously with such delivery or receipt. Each notice delivered under this Section 7.02 shall be accompanied by a statement of the chief financial officer or other executive officer of the Company setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. SECTION 7.03 EXISTENCE; CONDUCT OF BUSINESS. The Company will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and its material rights, licenses, permits, privileges, franchises and intellectual property; provided that the foregoing shall not prohibit (i) any merger, consolidation, liquidation or dissolution permitted under Section 8.03 or (ii) any other action permitted under Section 8.07. SECTION 7.04 PAYMENT OF OBLIGATIONS. The Company will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Company or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. SECTION 7.05 MAINTENANCE OF PROPERTIES; INSURANCE. (a) The Company will, and will cause each of its Subsidiaries to, (a) keep and maintain all property which is material to the conduct of the business of the Company and its Subsidiaries in good working order and condition, ordinary wear and tear excepted, except where such failure could not reasonably be expected to result in a Material Adverse Effect, provided that the Company and each Subsidiary shall not be under any obligation to repair or replace any such property which has become obsolete or has become unsuitable or inadequate for the purpose for which they are used. (b) The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations. SECTION 7.06 BOOKS AND RECORDS; INSPECTION RIGHTS. The Company will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries in accordance with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. The Company will, and will cause each of its Subsidiaries to, permit any representatives designated by any Investor, upon reasonable prior notice, to visit and inspect its properties, to examine and  33 make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and during normal business hours and as often as reasonably requested. SECTION 7.07 COMPLIANCE WITH LAWS. (a) The Company will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. (b) The Company will comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or required by, the ownership, lease or use of Real Property now or hereafter owned, leased or operated by the Company or any of its Subsidiaries, except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and will promptly pay or cause to be paid all costs and expenses incurred in connection with such compliance, and will keep or cause to be kept all such Real Property free and clear of any Liens imposed pursuant to such Environmental Laws. Neither the Company nor any of its Subsidiaries will generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of Hazardous Materials on any Real Property now or hereafter owned, leased or operated by the Company or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any such Real Property, except for Hazardous Materials generated, used, treated, stored, Released or disposed of at any such Real Properties in compliance in all material respects with all applicable Environmental Laws and as required in connection with the normal operation, use and maintenance of the business or operations of the Company or any of its Subsidiaries. SECTION 7.08 USE OF PROCEEDS. The proceeds of the Notes will be used only for the purposes specified in the second paragraph of this Agreement. Neither the Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of the Notes hereunder will be used to buy or carry any Margin Stock. SECTION 7.09 CERTAIN OBLIGATIONS AFFECTING SUBSIDIARIES. (a) In the event that the Company or any of its Subsidiaries shall form or acquire any new Subsidiary after the date hereof, the Company will cause such Subsidiary to become a "Subsidiary Guarantor" (and, thereby an "Obligor") hereunder pursuant to a written instrument in form and substance satisfactory to the Required Investors and to deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by each Obligor pursuant to Section 5.01 upon the Closing Date as any Investor shall have requested.  34 (b) The Company will, and will cause each of its Subsidiaries to, take such action from time to time as shall be necessary to ensure that each of its Subsidiaries is a Wholly-Owned Subsidiary. SECTION 7.10 PERMITTED ACQUISITIONS. (a) Subject to the provisions of this Section 7.10 and the requirements contained in the definition of Permitted Acquisition, the Company and each Wholly-Owned Domestic Subsidiary of the Company which is a Subsidiary Guarantor may from time to time after September 30, 2003 effect Permitted Acquisitions, so long as (in each case except to the extent the Required Investors otherwise specifically agree in writing in the case of a specific Permitted Acquisition): (i) no Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) the Company shall have given to the Investors at least 10 Business Days' prior written notice of any Permitted Acquisition (or such shorter period of time as may be reasonably acceptable to the Required Investors), which notice shall describe in reasonable detail the principal terms and conditions of such Permitted Acquisition; (iii) calculations are made by the Company with respect to the financial covenants contained in Sections 8.09 through 8.11, inclusive, for the respective Calculation Period on a Pro Forma Basis as if the respective Permitted Acquisition (as well as all other Permitted Acquisitions theretofore consummated after the first day of such Calculation Period) had occurred on the first day of such Calculation Period, and such calculations shall show that such financial covenants would have been complied with if the Permitted Acquisition had occurred on the first day of such Calculation Period; (iv) based on good faith projections prepared by the Company for the period from the date of the consummation of the respective Permitted Acquisition to the date which is one year thereafter, the level of financial performance measured by the financial covenants set forth in Sections 8.09 through 8.11, inclusive, shall be better than or equal to such level as would be required to provide that no Default would exist under the financial covenants contained in such Sections 8.09 through 8.11, inclusive, as compliance with such financial covenants would be required through the date which is one year from the date of the consummation of the respective Permitted Acquisition; (v) all representations and warranties contained in this Agreement shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Permitted Acquisition (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; (vi) the aggregate consideration (including, without limitation, (I) the aggregate principal amount of any Indebtedness assumed, refinanced, incurred or issued in connection therewith and (II) the aggregate amount paid and reasonably expected to be paid (based on good faith projections prepared by the Company) pursuant to any non-compete, consulting or purchase price adjustments) payable for the proposed Permitted Acquisition, when added to the aggregate consideration paid or payable for all other Permitted Acquisitions theretofore consummated during such fiscal year, does not exceed the Permitted Acquisition Basket Amount for such fiscal year; (vii) the aggregate amount of deferred compensation or other deferred purchase price (including any earn-outs) paid in any fiscal year of the Company in respect of all Permitted Acquisitions (whether or not such Permitted Acquisitions were consummated during such fiscal year) shall not exceed $2,000,000 (it being understood and agreed, however, that  35 any such deferred compensation or other deferred purchase price (including any earn-outs) shall be structured as a multiple of the excess of the cash flow of the Acquired Entity or Business that is the subject of the respective Permitted Acquisition for the most recently ended 12-month period above the cash flow for such Acquired Entity or Business for such 12-month period selected to determine the purchase price for such Permitted Acquisition); and (viii) the Company shall have delivered to each Investor a certificate executed by its chief financial officer, certifying to the best of such officer's knowledge, compliance with the requirements of preceding clauses (i) through (vii), inclusive, and containing the calculations (in reasonable detail) required by preceding clauses (iii), (iv), (vi) and (vii). (b) The Company will cause each Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and to execute and deliver all of the documentation as and to the extent required by, Section 7.09. (c) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by the Company that the certifications pursuant to this Section 7.10 are true and correct and that all conditions thereto have been satisfied and that same is permitted in accordance with the terms of this Agreement, which representation and warranty shall be deemed to be a representation and warranty for all purposes hereunder, including, without limitation, Section 9.01. ARTICLE VIII NEGATIVE COVENANTS The Company covenants and agrees with the Investors that, so long as any Note is outstanding and until payment in full of all amounts payable by the Company hereunder or thereunder: SECTION 8.01 INDEBTEDNESS. The Company will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except: (a) Indebtedness created hereunder and under the Notes; (b) Indebtedness constituting Senior Debt; (c) Indebtedness of the Company under Interest Rate Protection Agreements entered into with respect to other Indebtedness permitted under this Section 8.01 so long as the entering into of such Interest Rate Protection Agreements are bona fide hedging activities and are not for speculative purposes; (d) Indebtedness of the Company and its Subsidiaries evidenced by Capitalized Lease Obligations (to the extent permitted pursuant to Section 8.09) and purchase money Indebtedness described in Section 8.02(g), provided that in no event shall the sum of the aggregate principal amount of all Capitalized Lease Obligations and purchase money Indebtedness permitted by this clause (d) exceed $5,000,000 at any time outstanding;  36 (e) Indebtedness of a Subsidiary of the Company acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition of an asset securing such Indebtedness), provided that (i) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition, (ii) such Indebtedness does not constitute debt for borrowed money, it being understood and agreed that Capitalized Lease Obligations and purchase money Indebtedness shall not constitute debt for borrowed money for purposes of this clause (e) and (iii) the aggregate principal amount of all Indebtedness permitted by this clause (e) shall not exceed $1,000,000 at any one time outstanding; (f) intercompany Indebtedness among the Company and the Subsidiary Guarantors to the extent permitted by Section 8.04; and (g) Indebtedness outstanding on the Closing Date and listed on Schedule 8.01 without giving effect to any subsequent extension, renewal or refinancing thereof except to the extent set forth on Schedule 8.01, provided that the aggregate principal amount of the Indebtedness to be extended, renewed or refinanced does not increase from that amount outstanding at the time of any such extension, renewal or refinancing. SECTION 8.02 LIENS. The Company will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except: (a) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles; (b) Liens in respect of property or assets of the Company or any of its Subsidiaries imposed by law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers', warehousemen's, materialmen's and mechanics' liens and other similar Liens arising in the ordinary course of business, and (i) which do not in the aggregate materially detract from the value of the Company's or such Subsidiary's property or assets or materially impair the use thereof in the operation of the business of the Company or such Subsidiary or (ii) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien; (c) Liens in existence on the Closing Date which are listed, and the property subject thereto described, in Schedule 8.02, but only to the respective date, if any, set forth in Schedule 8.02 for the removal, replacement and termination of any such Liens, plus renewals, replacements and extensions of such Liens to the extent set forth on Schedule 8.02, provided that (i) the aggregate principal amount of the Indebtedness, if any, secured by such Liens does not increase from that amount outstanding  37 at the time of any such renewal, replacement or extension and (ii) any such renewal, replacement or extension does not encumber any additional assets or properties of the Company or any of its Subsidiaries; (d) Liens securing the Senior Debt; (e) licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Company or any of its Subsidiaries; (f) Liens upon assets of the Company or any of its Subsidiaries subject to Capitalized Lease Obligations to the extent such Capitalized Lease Obligations are permitted by Section 8.01(d), provided that (x) such Liens only serve to secure the payment of Indebtedness arising under such Capitalized Lease Obligation and (y) the Lien encumbering the asset giving rise to the Capitalized Lease Obligation does not encumber any other asset of the Company or any Subsidiary of the Company; (g) Liens placed upon equipment or machinery acquired after the Closing Date and used in the ordinary course of business of the Company or any of its Subsidiaries and placed at the time of the acquisition thereof by the Company or such Subsidiary or within 90 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price thereof or to secure Indebtedness incurred solely for the purpose of financing the acquisition of any such equipment or machinery or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that (i) the Indebtedness secured by such Liens is permitted by Section 8.01(c) and (ii) in all events, the Lien encumbering the equipment or machinery so acquired does not encumber any other asset of the Company or such Subsidiary; (h) easements, rights-of-way, restrictions, encroachments and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of the Company or any of its Subsidiaries; (i) Liens arising from precautionary Uniform Commercial Code financing statement filings regarding operating leases entered into in the ordinary course of business; (j) Liens arising out of the existence of judgments or awards in respect of which the Company or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings, provided that the aggregate amount of all cash (including the stated amount of all letters of credit) and the fair market value of all other property subject to such Liens does not exceed $500,000 at any time outstanding; (k) statutory and common law landlords' liens under leases to which the Company or any of its Subsidiaries is a party;  38 (l) Liens (other than Liens imposed under ERISA) incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance and social security benefits and Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business and consistent with past practice (exclusive of obligations in respect of the payment for borrowed money), provided that the aggregate amount of all cash and the fair market value of all other property subject to all Liens permitted by this clause (l) shall not at any time exceed $500,000; (m) Permitted Encumbrances; and (n) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of the Company in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition, provided that (i) any Indebtedness that is secured by such Liens is permitted to exist under Section 8.01(e), and (ii) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any other asset of the Company or any of its Subsidiaries. SECTION 8.03 FUNDAMENTAL CHANGES. The Company will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any partnership, joint venture, or transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of all or any part of its property or assets, or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person (or agree to do any of the foregoing at any future time), except that: (a) Capital Expenditures by the Company and its Subsidiaries shall be permitted to the extent not in violation of Section 8.09; (b) Investments may be made to the extent permitted by Section 8.04; (c) the Company and its Subsidiaries may sell assets (other than the capital stock or other equity interests of any Subsidiary), so long as (i) no Default then exists or would result therefrom, (ii) each such sale is in an arm's-length transaction and the Company or the respective Subsidiary receives at least fair market value (as determined in good faith by the Company or such Subsidiary, as the case may be), (iii) the consideration received by the Company or such Subsidiary consists solely of cash and is paid at the time of the closing of such sale, and (iv) the aggregate amount of the proceeds received from all assets sold pursuant to this clause (c) shall not exceed $1,000,000 in any fiscal year of the Company; (d) each of the Company and its Subsidiaries may lease (as lessee) or license (as licensee) real or personal property (so long as any such lease or license does not create a Capitalized Lease Obligation except to the extent permitted by Section 8.01(d));  39 (e) each of the Company and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing transaction; (f) each of the Company and its Subsidiaries may grant licenses, sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the business of the Company or any of its Subsidiaries; (g) any Subsidiary of the Company may merge with and into, or be dissolved or liquidated into, the Company or any Wholly-Owned Domestic Subsidiary of the Company which is a Subsidiary Guarantor so long as (i) in the case of any such merger, dissolution or liquidation involving the Company, the Company is the surviving corporation of any such merger, dissolution or liquidation, (ii) in all other cases, the Wholly-Owned Domestic Subsidiary which is a Subsidiary Guarantor is the surviving corporation of any such merger, dissolution or liquidation, and (iii) in all cases, the then continuing or surviving corporation shall have assumed all of the obligations of such Subsidiary Guarantor hereunder; (h) Permitted Acquisitions may be made to the extent permitted by Section 7.10; and (i) each of the Company and its Subsidiaries may make sales of inventory in the ordinary course of business. SECTION 8.04 ADVANCES, INVESTMENTS AND LOANS. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or hold any cash or Cash Equivalents (each of the foregoing, an "Investment" and, collectively, "Investments"), except that: (a) the Company and its Subsidiaries may acquire and hold accounts receivables owing to any of them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms of the Company or such Subsidiary; (b) the Company and its Subsidiaries may acquire and hold cash and Cash Equivalents; (c) the Company and its Subsidiaries may hold the Investments held by them on the Closing Date as described on Schedule 8.04, provided that any additional Investments made with respect thereto shall be permitted only if permitted under the other provisions of this Section 8.04;  40 (d) the Company and its Subsidiaries may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (e) the Company may enter into Interest Rate Protection Agreements to the extent permitted by Section 8.01(c); (f) the Company and the Subsidiary Guarantors may make intercompany loans and advances between and among one another; and (g) Permitted Acquisitions shall be permitted in accordance with Section 7.10. SECTION 8.05 RESTRICTED PAYMENTS. The Company will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that: (a) any Subsidiary of the Company may pay cash dividends to the Company or to any Wholly-Owned Subsidiary of the Company; and (b) the Company may pay regularly scheduled dividends on its Existing Preferred Stock pursuant to the terms thereof or through an increase in the aggregate liquidation preference thereof rather than in cash. SECTION 8.06 BUSINESS. The Company will not, and will not permit any of its Subsidiaries to, engage in any business other than the businesses engaged in by the Company and its Subsidiaries as of the Closing Date and reasonable extensions thereof. SECTION 8.07 TRANSACTIONS WITH AFFILIATES. The Company will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions with any Affiliate of the Company or any of its Subsidiaries, other than in the ordinary course of business and on terms and conditions substantially as favorable to the Company or such Subsidiary as would reasonably be obtained by the Company or such Subsidiary at that time in a comparable arm's-length transaction with a Person other than an Affiliate, except that customary fees may be paid to non-officer directors of the Company and its Subsidiaries. SECTION 8.08 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) The Company will not, and will not permit any of its Subsidiaries to, issue (i) any preferred stock or other preferred equity interests or (ii) any redeemable common stock or other redeemable common equity interests other than common stock or other redeemable common equity interests that is redeemable at the sole option of the Company or such Subsidiary, as the case may be. (b) The Company will not permit any of its Subsidiaries to issue any capital stock or other equity interests (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock or other equity interests, except (i) for transfers and replacements of then outstanding shares of capital stock or other equity interests, (ii) for stock splits, stock dividends and issuances which do not decrease the percentage ownership of the Company or any of its Subsidiaries in  41 any class of the capital stock or other equity interests of such Subsidiary, (iii) to qualify directors to the extent required by applicable law or (iv) for issuances by Subsidiaries of the Company which are newly created or acquired in accordance with the terms of this Agreement. SECTION 8.09 CAPITAL EXPENDITURES. (a) The Company will not, and will not permit any of its Subsidiaries to, make any Capital Expenditures, except that (i) during the period from the Closing Date through and including September 30, 2003, the Company and its Subsidiaries may make Capital Expenditures, so long as (x) the aggregate amount of all such Capital Expenditures does not exceed $4,000,000 during that period and (y) the aggregate amount of all Capital Expenditures made during the fiscal quarter of the Company ending September 30, 2003 does not exceed $5,500,000, and (ii) during any fiscal quarter of the Company set forth below (taken as one accounting period), the Company and its Subsidiaries may make Capital Expenditures so long as the aggregate amount of all such Capital Expenditures does not exceed in any fiscal quarter of the Company set forth below the lesser of (i) the Consolidated EBITDA of the Company for the then previous fiscal quarter multiplied by the applicable percentage for the applicable fiscal quarter set forth in Schedule 8.09 or (ii) the amount set forth opposite such fiscal quarter below: Fiscal Quarter Ending Amount ($) --------------------- ---------- December 31, 2003 5,675,000 March 31, 2004 5,950,000 June 30, 2004 6,150,000 September 30, 2004 5,875,000 December 31, 2004 5,875,000 March 31, 2005 5,875,000 June 30, 2005 5,875,000 September 30, 2005 6,000,000 December 31, 2005 6,000,000 March 31, 2006 6,000,000 June 30, 2006 6,000,000 September 30, 2006 6,100,000 December 31, 2006 6,100,000 March 31, 2007 6,100,000 June 30, 2007 6,100,000 September 30, 2007 and thereafter 6,375,000 (b) In addition to the foregoing, in the event that the amount of Capital Expenditures permitted to be made by the Company and its Subsidiaries pursuant to clause (a) above in any fiscal quarter of the Company (before giving  42 effect to any increase in such permitted Capital Expenditure amount pursuant to this Section 8.09(b)) is greater than the amount of Capital Expenditures actually made by the Company and its Subsidiaries during such fiscal quarter, 50% of such excess may be carried forward and utilized to make Capital Expenditures in the immediately succeeding fiscal quarter, provided that no amounts once carried forward pursuant to this Section 8.09(b) may be carried forward to any subsequent fiscal quarter of the Company thereafter and such amounts may only be utilized after the Company and its Subsidiaries have utilized in full the permitted Capital Expenditure amount for such fiscal quarter as provided in Section 8.09(a) (without giving effect to any increase in such amount pursuant to this Section 8.09(b)). (c) In addition to the foregoing, the Company or any of its Subsidiaries may make Capital Expenditures with the amount of Net Insurance Proceeds received by the Company or any of its Subsidiaries from any Recovery Event so long as such Net Insurance Proceeds are used to replace or restore any properties or assets in respect of which such Net Insurance Proceeds were paid within 90 days (or 180 days in the case of the restoration or replacement of Real Property) following the date of receipt of such Net Insurance Proceeds from such Recovery Event, but only to the extent that such Net Insurance Proceeds are not otherwise required to be applied to repay Indebtedness pursuant to the Senior Credit Agreement or permanently reduce the revolving credit commitments under the Senior Credit Agreement. (d) In addition to the foregoing, the Company and its Wholly-Owned Domestic Subsidiaries that are Subsidiary Guarantors may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 8.09(a) constituting Permitted Acquisitions effected in accordance with the requirements of Section 7.10. SECTION 8.10 Consolidated Interest Coverage Ratio. The Company will not permit the Consolidated Interest Coverage Ratio for any Test Period ending on the last day of a fiscal quarter of the Company set forth below to be less than the ratio set forth opposite such fiscal quarter below: Fiscal Quarter Ending Ratio --------------------- ----- September 30, 2003 2.40:1.00 December 31, 2003 2.70:1.00 March 31, 2004 2.80:1.00 June 30, 2004 2.80:1.00 September 30, 2004 2.90:1.00 December 31, 2004 3.00:1.00 March 31, 2005 3.10:1.00 June 30, 2005 3.20:1.00 September 30, 2005 3.30:1.00 December 31, 2005 3.40:1.00  43 March 31, 2006 3.50:1.00 June 30, 2006 3.60:1.00 September 30, 2006 3.80:1.00 December 31, 2006 and thereafter 4.00:1.00 SECTION 8.11 Maximum Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio at any time during a period set forth below to be greater than the ratio set forth opposite such period below: Period Ratio ------ ----- From the Closing Date through and including December 30, 2003 4.20:1.00 December 31, 2003 through and including March 30, 2004 4.00:1.00 March 31, 2004 through and including June 29, 2004 3.90:1.00 June 30, 2004 through and including September 29, 2004 3.90:1.00 September 30, 2004 through and including December 30, 2004 3.70:1.00 December 31, 2004 through and including March 30, 2005 3.50:1.00 March 31, 2005 through and including June 29, 2005 3.40:1.00 June 30, 2005 through and including September 29, 2005 3.10:1.00 September 30, 2005 through and including December 30, 2005 3.00:1.00 December 31, 2005 through and including March 30, 2006 2.85:1.00 March 31, 2006 through and including June 29, 2006 2.70:1.00 June 30, 2006 through and including September 29, 2006 2.60:1.00 September 30, 2006 through and including December 30, 2006 2.50:1.00 December 31, 2006 through and including March 30, 2007 2.40:1.00 March 31, 2007 through and including June 29, 2007 2.30:1.00 June 30, 2007 through and including September 29, 2007 2.20:1.00  44 September 30, 2007 through and including December 30, 2007 2.15:1.00 December 31, 2007 through and including March 30, 2008 2.10:1.00 March 31, 2008 through and including June 29, 2008 2.05:1.00 Thereafter 2.00:1.00 SECTION 8.12 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Company or any of its Subsidiaries, or pay any Indebtedness owed to the Company or any of its Subsidiaries, (b) make loans or advances to the Company or any of its Subsidiaries or (c) transfer any of its properties or assets to the Company or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and other Note Documents, (iii) the Senior Credit Documents, (iv) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of the Company or any of its Subsidiaries, (v) customary provisions restricting assignment of any licensing agreement (in which the Company or any of its Subsidiaries is the licensee) or other contract entered into by the Company or any of its Subsidiaries in the ordinary course of business, (vi) restrictions on the transfer of any asset pending the close of the sale of such asset, and (vii) restrictions on the transfer of any asset subject to a Lien permitted by Section 8.02(c), (f), (g) or (n). SECTION 8.13 MODIFICATIONS OF CERTAIN DOCUMENTS. (a) The Company will not, and will not permit any of its Subsidiaries to, change, amend, supplement or otherwise modify the terms of any of the Senior Credit Documents, or refund or refinance the same, without the prior consent of the Required Investors, if the effect of such amendment, supplement or modification or such refunding or refinancing is to: (i) directly impose upon the Company any prohibition or limitation on its ability to make regularly scheduled payments of principal of or interest on the Notes, or any other amounts owing to the Investors under this Agreement, except as provided in the subordination provisions set forth in Article XI; (ii) increase the applicable margin with respect to interest rates on the loans under the Senior Credit Agreement by more than 4% per annum (or otherwise change the basis for determining the interest rates thereunder with the result that the applicable interest rates thereunder shall be increased by more than 4% per annum above the interest rates that otherwise would have been in effect), provided that nothing herein shall preclude the imposition of a post-default rate of interest in the amount and circumstances provided in the Senior Credit Agreement as in effect on the date hereof;  45 (iii) extend the scheduled final maturity of any of the term loans under the Senior Credit Agreement (as in effect on the Closing Date) by more than one year; (iv) modify the scheduled principal payments of any of the loans under the Senior Credit Agreement (as in effect on the Closing Date) so as to cause the average life to maturity of such loans to be more than one year shorter than the average life to maturity of such loans as of the Closing Date; or (v) (i) make more restrictive any one or more of the financial covenants under the Senior Credit Agreement (or related definitions) as in effect on the Closing Date (or any comparable provision of any agreement providing for the refunding or refinancing of the Senior Debt), unless simultaneously with the effectiveness of the change to the Senior Credit Agreement, the Company shall give the Investors the option to amend the corresponding provision (if any) of this Agreement to make such provision similarly more restrictive on the Company (whether or not such amendment shall be agreed to by the Required Investors) or (ii) add any financial covenants to the Senior Credit Agreement that are not contained in the Senior Credit Agreement as in effect on the date hereof. unless simultaneously with the effectiveness of such addition, the Company shall give the Investors the option to amend this Agreement to add the same financial covenant to this Agreement (whether or not such amendment shall be agreed to by the Required Investors) (it being understood that the levels for compliance with such new financial covenant under this Agreement shall reflect a differential of at least 20% from the levels for such financial covenant as contained in the Senior Credit Agreement). If the Company enters into any amendment, modification, restatement and/or supplement to the Senior Credit Agreement which requires the consent of the Required Investors pursuant to this Section 8.13(a) without obtaining such consent, then, without limiting any rights or remedies that the Investors may have arising therefrom, for the purposes of this Agreement (including the definition of "Senior Debt" contained herein), references to the Senior Credit Agreement and the Senior Credit Documents shall refer to such Senior Credit Agreement and Senior Credit Documents as the same are in effect without giving effect to such amendment, modification, restatement and/or supplement. (b) The Company will not, and will not permit any of its Subsidiaries to, consent to any modification, supplement or waiver of any of the provisions of its certificate of incorporation, certificates of designation of preferred stock or by-laws, if such modification, supplement or waiver could reasonably be expected to be adverse to the interests of the Investors, in each case without the prior consent of the Required Investors.  46 ARTICLE IX EVENTS OF DEFAULT SECTION 9.01 EVENTS OF DEFAULT; REMEDIES. If any of the following events ("Events of Default") shall occur: (a) the Company shall fail to pay any principal or Make-Whole Amount, if any, of any Note when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; (b) the Company shall fail to pay any interest on any Note or any fee or any other amount (other than an amount referred to in clause (a) of this Section 9.01) payable under this Agreement or the Notes, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five days; (c) any representation or warranty made or deemed made by or on behalf of the Obligors in or in connection with this Agreement or any amendment or modification hereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof, shall prove to have been incorrect in any material respect when made or deemed made; (e) the Company or any of its Subsidiaries shall fail to observe or perform any covenant, condition or agreement contained in Section 7.02(a), 7.10 or Article 8; (f) the Company shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clauses (a) through (e), inclusive, of this Article), and such failure shall continue unremedied for a period of 35 days after notice thereof from any Investor to the Company; (g) the Company or any Subsidiary shall fail to make any payment (whether of principal, Make-Whole Amount or interest and regardless of amount) at final stated maturity in respect of any Indebtedness (other than the Notes) having an aggregate unpaid principal balance in excess of $1,000,000 or such Indebtedness shall be declared to or become due and payable, required to be prepaid, redeemed, purchased or defeased in full or an offer to prepay, redeem, purchase or defease in full such Indebtedness, in each case prior to the final stated maturity thereof; (h) the Company or any of its Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the Company or any of its Subsidiaries, and the petition is not controverted within 10 days, or is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of the Company or any of its Subsidiaries, or the Company or any of its Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors,  47 dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any of its Subsidiaries, or there is commenced against the Company or any of its Subsidiaries any such proceeding which remains undismissed for a period of 60 days, or the Company or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company or any of its Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or the Company or any of its Subsidiaries makes a general assignment for the benefit of creditors; or any corporate, limited liability company or similar action is taken by the Company or any of its Subsidiaries for the purpose of effecting any of the foregoing; (i) one or more judgments or decrees shall be entered against the Company or any Subsidiary of the Company involving in the aggregate for the Company and its Subsidiaries a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 60 consecutive days, and the aggregate amount of all such judgments equals or exceeds $1,000,000; (j) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; (k) the guarantees of the Subsidiary Guarantors or any provision thereof shall cease to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting for or on behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under such guarantee or any Subsidiary Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to such guarantee; or (l) a Change in Control shall occur; then, and in every such event (other than an event with respect to the Company described in clause (h) of this Section 9.01), and at any time thereafter during the continuance of such event, the Required Investors may (subject to the provisions of Article XI), by notice to the Company (with a copy to the Senior Debt Representative in the manner set forth in Section 11.13, provided that the failure to provide such copy, or any delay in so providing such copy, shall not affect the validity of such notice), declare the Notes then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal and applicable Make-Whole Amounts in respect of such principal amount (if any) of the Notes so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Company accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Obligors; and in case of any event with respect to the Company described in clause (h) of this Section 9.01, the  48 principal and applicable Make-Whole Amounts in respect of such principal amount (if any) of the Notes then outstanding, together with accrued interest thereon and all fees and other obligations of the Company accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company. ARTICLE X SUBSIDIARY GUARANTEE SECTION 10.01 THE GUARANTEE. The Subsidiary Guarantors hereby jointly and severally guarantee to each Investor and its successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of, Make-Whole Amount in respect of such principal (if any) and interest on the Note(s) held by each Investor of, the Company and all other amounts from time to time owing to the Investors by the Company under this Agreement and the Notes, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the "Guaranteed Obligations"). The Subsidiary Guarantors hereby further jointly and severally agree that if the Company shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. SECTION 10.02 OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary Guarantors under Section 10.01 are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Company under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 10.02 that the obligations of the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and several, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder which shall remain absolute and unconditional as described above: (i) at any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived; (ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or omitted;  49 (iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or (iv) any lien or security interest granted to, or in favor of, any Investor as security for any of the Guaranteed Obligations shall fail to be perfected. The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Investor exhaust any right, power or remedy or proceed against the Company under this Agreement or the Notes or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations. SECTION 10.03 REINSTATEMENT. The obligations of the Subsidiary Guarantors under this Article X shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise and the Subsidiary Guarantors jointly and severally agree that they will indemnify each Investor on demand for all reasonable costs and expenses (including reasonable fees of counsel) incurred by such Investor in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. SECTION 10.04 SUBROGATION. Each Subsidiary Guarantor hereby waives all rights of subrogation or contribution, whether arising by contract or operation of law (including any such right arising under the Bankruptcy Code) or otherwise by reason of any payment by it pursuant to the provisions of this Article X and further agrees with the Company for the benefit of each of its creditors (including each Investor) that any such payment by it shall constitute a contribution of capital by such Subsidiary Guarantor to the Company (or an investment in the equity capital of the Company by such Subsidiary Guarantor). SECTION 10.05 REMEDIES. The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the Investors, the obligations of the Company under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Article IX (and shall be deemed to have become automatically due and payable in the circumstances provided in Article IX) for purposes of Section 10.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Company and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of Section 10.01.  50 SECTION 10.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Subsidiary Guarantor hereby acknowledges that the guarantee in this Article X constitutes an instrument for the payment of money, and consents and agrees that any Investor, at its sole option, in the event of a dispute by such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the right to bring motion-action under New York CPLR Section 3213. SECTION 10.07 CONTINUING GUARANTEE. The guarantee in this Article X is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising. SECTION 10.08 RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this purpose, without reference to the property, debts and liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section 10.08 shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Article X and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations. For purposes of this Section 10.08, (i) "EXCESS FUNDING GUARANTOR" means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "EXCESS PAYMENT" means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (iii) "PRO RATA SHARE" means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all property of such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all property of all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Subsidiary Guarantors hereunder) of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the Closing Date, as of the Closing Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder. SECTION 10.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of the Subsidiary Guarantors under Section 10.01 would otherwise, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 10.01, then, notwithstanding any  51 other provision hereof to the contrary, the amount of such liability shall, without any further action by any Subsidiary Guarantor, any Investor or any other Person, be automatically limited and reduced to the highest amount that (after giving effect to all other contingent and fixed obligations of such Subsidiary Guarantor (including all Senior Debt of such Subsidiary Guarantor)) is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding. SECTION 10.10 SUBORDINATION OF GUARANTEES. The obligations of the Subsidiary Guarantors under this Article X to the Investors are subordinated as provided in Section 11.11. ARTICLE XI SUBORDINATION SECTION 11.01 AGREEMENT TO SUBORDINATE. The Company covenants and agrees, and each Investor likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article XI, the payment of the principal of, Make-Whole Amount (if any) and interest and premium (if any) on the Notes, and all other sums due and payable by the Company to the Investors hereunder (for purposes of this Article XI, collectively, the "SUBORDINATED DEBT"), are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash of all Senior Debt. Each Investor hereby agrees not to amend or otherwise modify any provision of this Article XI (and any defined term used in this Article XI) without the prior written consent of the requisite number of holders of Senior Debt as provided in the Senior Credit Agreement. The holders of Senior Debt and their agent under the Senior Credit Agreement are third-party beneficiaries of the provisions of this Article XI and are entitled to rely thereon. To the extent that there is any conflict between any provision of this Article XI and any provision of any other Article of this Agreement, this Article XI shall govern to the extent of such conflict. SECTION 11.02 BANKRUPTCY, LIQUIDATION, DISSOLUTION, ETC. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company, then and in any such event: (i) the holders of Senior Debt shall be entitled to receive payment in full in cash of all amounts due or to become due on or in respect of all Senior Debt, before any Investor is entitled to receive any payment on account of the Subordinated Debt; and (ii) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which any Investor would be entitled but for the provisions of this Article XI, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other  52 Indebtedness of the Company being subordinated to the payment of the Subordinated Debt (other than any payment or distribution in the form of equity or debt securities of the Company or any successor obligor of Senior Debt provided for by a plan of reorganization or readjustment approved by a majority of the holders of Senior Debt under the Senior Credit Agreement which, in the case of any such debt securities, (x) are subordinated in right of payment to all Senior Debt that may at the time be outstanding to the same extent as, or to a greater extent than, the Subordinated Debt is subordinate to the Senior Debt as provided in this Article XI, (y) are not payable prior to the payment in full of the Senior Debt and (z) have other material terms which are at least as favorable to the holders of the Senior Debt at the time outstanding as the terms of the Subordinated Debt) shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Debt or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Debt may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of and interest and premium (if any) on, the Senior Debt held or represented by each, to the extent necessary to make payment in full in cash of all Senior Debt remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Debt; and (iii) in the event that, notwithstanding the foregoing provisions of this Section 11.02, any Investor shall have received any such payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Subordinated Debt (but excluding any payment of the character described in the parenthetical clause in the foregoing clause (ii)) before all Senior Debt is paid in full in cash, then and in such event such payment or distribution shall be held in trust for the holders of Senior Debt and paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Company for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in full in cash, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. If the Investors shall have failed to file proper claims or proofs of claim with respect to the Notes in any proceeding of the type referred to in the first sentence of this Section 11.02 prior to 30 days before the expiration of the time to file such claims or proofs of claim, the Investors hereby appoint and empower the Senior Debt Representative to file such claims or proofs of claim, and if the Investors shall fail to vote any such claim at least 15 days prior to the expiration of the time to vote such claim, the Investors hereby appoint and empower the Senior Debt Representative to vote such claim; provided that the Senior Debt Representative shall have no obligation to file and/or vote any such claim. If the Senior Debt Representative votes any such claim in accordance with the provisions of this paragraph no Investor shall be entitled to modify, revoke or withdraw such vote. The Investors shall execute and deliver, at the expense of the holders of the Senior Debt, such agreements, instruments and documents as the Senior Debt Representative may reasonably request to carry out the provisions of this paragraph.  53 SECTION 11.03 NO PAYMENT IN CERTAIN CIRCUMSTANCES. (a) In the event that any principal of or interest on the Senior Debt is not paid when due, whether at stated maturity, by mandatory prepayment, by acceleration or otherwise, but after expiration of any applicable grace period (each a "SENIOR DEBT PAYMENT DEFAULT"), then no payment or distribution of any kind or character (including any acquisition of the Notes) shall be made by the Company, or accepted by any Investor, on account of the Subordinated Debt unless and until such payment shall have been made or such Senior Debt Payment Default is waived in accordance with the terms of such Senior Debt. (b) In the event that any Event of Default under, and as defined in, the Senior Credit Agreement (other than a SENIOR DEBT PAYMENT DEFAULT) (each a "Senior Debt Non-Payment Default") shall have occurred and be continuing and the Company and the Investors shall have received written notice of such Senior Debt Non-Payment Default from the Senior Debt Representative (a "PAYMENT BLOCKAGE NOTICE"), then no payment or distribution of any kind or character shall be made by the Company, or accepted by any Investor, on account of the Subordinated Debt (including any repurchase of the Notes) during the period (a "PAYMENT BLOCKAGE PERIOD") commencing on the date the Company and the Investors received such Payment Blockage Notice and ending on the earlier of (i) the date 180 days thereafter and (ii) the date on which the Senior Debt Non-Payment Default giving rise to the Payment Blockage Period is cured or waived in accordance with the terms of the Senior Credit Documents; provided that (x) the holders of Senior Debt shall not be entitled to institute a Payment Blockage Period more often than once within any period of 360 consecutive days and (y) no Senior Debt Non-Payment Default or event which, with the giving of notice and/or lapse of time, would become a Senior Debt Non-Payment Default which existed on the date of the commencement of any such blockage period may be used as the basis for any subsequent Payment Blockage Notice unless such Senior Debt Non-Payment Default or event, as the case may be, shall in the interim have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenant for a period commencing after the date of commencement of such Payment Blockage Period, that, in either case, would give rise to a Senior Debt Non-Payment Default after such date pursuant to any provision under which a Senior Debt Non-Payment Default previously exists or was continuing shall constitute a new Senior Debt Non-Payment Default for this purpose). (c) The failure of the Company to make any payment with respect to the Subordinated Debt by reason of the operation of this Section 11.03 shall not be construed as preventing the occurrence of an Event of Default hereunder. Immediately upon the expiration of any period under this Section 11.03 during which no payment may be made on account of the Subordinated Debt, the Company may resume making any and all payments on account of the Subordinated Debt (including any payment of principal, interest (including interest at the applicable post-default interest rate specified in Section 2.04(b)) or any other amount missed during such period), so long as such payment is not then prohibited under any other provision of this Agreement. (d) The Company will not make any optional or mandatory prepayment or repurchase of the Notes as provided for under Section 3.01 and the Investors shall not accept any amount in respect of such prepayment or repurchase to the  54 extent that such prepayment or repurchase is prohibited under the Senior Credit Agreement, unless the lenders under the Senior Credit Agreement shall have given their written consent thereto. (e) In the event that, notwithstanding the foregoing, the Investors shall have received any payment prohibited by the foregoing provisions of this Section 11.03, then and in such event such payment shall be held in trust for the holders of the Senior Debt and paid over or delivered forthwith to the agent for the holders of the Senior Debt for application to the Senior Debt remaining unpaid after giving effect to any concurrent payment or distribution to the holders of Senior Debt in respect of the Senior Debt. No amount paid by the Company to the Investors and paid over by the Investors to the holders of the Senior Debt pursuant to this Article XI shall, as between the Company and the Investors, be deemed to be a payment by the Company to or on account of the Subordinated Debt. (f) Notwithstanding anything herein to the contrary, the Company may make any payment of interest "in kind" in respect of the Notes in accordance with Section 2.04(d). (g) The provisions of this Section 11.03 shall not apply to any payment with respect to which Section 11.02 would be applicable. SECTION 11.04 PAYMENTS OTHERWISE PERMITTED. Nothing contained in this Article XI or elsewhere in this Agreement or in the Notes shall prevent the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 11.02 or under the conditions described in Section 11.03, from making payments at any time of the Subordinated Debt. SECTION 11.05 SUBROGATION. Subject to the payment in full in cash of all Senior Debt, the Investors shall be subrogated to the rights of the holders of such Senior Debt to receive payments and distributions of cash, property and securities applicable to the Senior Debt until the principal of and interest on the Notes shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Debt of any cash, property or securities to which the Investors would be entitled except for the provisions of this Article XI, and no payments over pursuant to the provisions of this Article XI to the holders of Senior Debt by the Investors shall, as among the Company, its creditors (other than holders of Senior Debt), and the Investors be deemed to be a payment or distribution by the Company to or on account of the Senior Debt. SECTION 11.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this Article XI are and are intended solely for the purpose of defining the relative rights of the Investors on the one hand and the holders of Senior Debt on the other hand. Nothing contained in this Article XI or elsewhere in this Agreement or the Notes is intended to or shall (a) impair, as among the Company, its creditors (other than holders of Senior Debt) and the Investors, the obligation of the Company, which is absolute and unconditional, to pay to the Investors the principal of and interest or premium (if any) on, and any other amount payable by the Company under, the Notes or this Agreement as and when the same shall become due and payable in accordance with their respective terms; or (b) affect the relative rights against the Company of the Investors and creditors of the Company (other than the holders of Senior Debt); or (c)  prevent the Investors from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights of the holders of Senior Debt (i) in any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 11.02, to receive, pursuant to and in accordance with such Section, cash, property and securities otherwise payable or deliverable to the Investors, (ii) under the conditions specified in Section 11.03, to prevent any payment prohibited by Section 11.03 or (iii) pursuant to Section 11.12. SECTION 11.07 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing sentence, the holders of Senior Debt may, at any time and from time to time, without the consent of or notice to the Investors, without incurring responsibility to the Investors and without impairing or releasing the subordination provided in this Article XI or the obligations hereunder of the Investors to the holders of Senior Debt, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt, or waive any provision thereof or the occurrence of any default thereunder; (c) release any Person liable in any manner for the collection of Senior Debt; and (d) exercise or refrain from exercising any rights against the Company and any other Person. SECTION 11.08 NOTICE TO INVESTORS. Notwithstanding the provisions of this Article XI or any other provision of this Agreement, the Investors shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment to it in respect of the Subordinated Debt, unless and until the Investors shall have received written notice thereof from an Obligor or a holder of Senior Debt or from any trustee, fiduciary or agent therefor; and, prior to the receipt of any such written notice, the Investors shall be entitled in all respects to assume that no such facts exist. The Investors shall be entitled to rely on the delivery to it of a written notice by a Person representing itself to be a holder of Senior Debt (or a trustee, fiduciary or agent therefor) to establish that such notice has been given by a holder of Senior Debt (or a trustee, fiduciary or agent therefor). In the event that the Investors determine in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article XI, the Investors may request such Person to furnish evidence to the reasonable satisfaction of the Investors as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XI and if such evidence is not furnished, the Investors may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. SECTION 11.09 RELIANCE. Upon any payment or distribution of assets of the Company referred to in this Article XI, the Investors shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction  56 in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Investors for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XI. SECTION 11.10 REINSTATEMENT. If, at any time, all or part of any payment with respect to Senior Debt theretofore made by the Company or any other Person is rescinded or must otherwise be returned by the holders of Senior Debt for any reason whatsoever (including the insolvency, bankruptcy or reorganization of the Company or such other Person), the subordination provisions set forth in this Article XI shall continue to be effective or be reinstated, as the case may be, all as though such payment had not been made. It is further agreed that any diminution (whether pursuant to court decree or otherwise, including without limitation for any of the reasons described in the immediately preceding sentence) of any Subsidiary Guarantor's obligation to make any distribution or payment in respect of any Senior Debt of such Subsidiary Guarantor, except to the extent such diminution occurs by reason of the repayment (which has not been disgorged or returned) of such Senior Debt of such Subsidiary Guarantor in cash, shall have no force or effect for purposes of the subordination provisions contained in this Article XI, with any turnover of payments as otherwise calculated pursuant to this Article XI to be made as if no such diminution had occurred. SECTION 11.11 SUBSIDIARY GUARANTEES. The obligations of each Subsidiary Guarantor under Article X are subordinate and subject in right of payment in full in cash of any Senior Debt of such Subsidiary Guarantor to the same extent and in the same manner set forth in the preceding provisions of this Article XI and, for purposes of applying this Section 11.11, references in such preceding sections to "the Company" shall be deemed to refer to the relevant Subsidiary Guarantor. SECTION 11.12 LIMITATIONS ON REMEDIES. (a) Notwithstanding anything contained herein to the contrary, during any period commencing on the occurrence of a Senior Debt Payment Default or the date of receipt of a Payment Blockage Notice under Section 11.03(b) and ending on the earlier of (i) the date on which such Senior Debt Payment Default or the default that is the subject of such Payment Blockage Notice, as the case may be, is cured or waived or (ii) 120 days after the occurrence of such Senior Debt Payment Default or the receipt by the Investors of such Payment Blockage Notice, as the case may be, the Investors shall not (A) accelerate the Notes as provided in Section 9.01, (B) initiate any judicial proceeding or action to collect the Notes or (C) initiate any case, proceeding or other action in respect of any Obligor of the type referred to in clause (a) or (b) of Section 11.02 unless, prior to the expiration of such period, (x) the holder or holders (or their respective agent(s)) of any Senior Debt shall take any action of the type referred to in clauses (A), (B) and (C) above in respect of such Senior Debt or (y) any Senior Debt and/or the Subordinated Debt shall have become automatically due and payable in accordance with their respective terms.  57 (b) Prior to taking any action of the type referred to in clauses (A), (B) and (C) of Section 11.12(a), the Investors shall give the Senior Debt Representative not less than 5 Business Days' notice of the Investors' intent to take any such action (which notice may be given during the continuation of any period during which the Investors are blocked from receiving payments under Section 11.03). SECTION 11.13 NOTICES. All notices or other communications required or permitted to be made by the holders of Senior Debt or the Senior Debt Representative to the Investors shall be made to the Investor Representative, at its address provided under Section 12.01 (and upon receipt of any such notice or communication, the Investor Representative shall furnish a copy thereof to each Investor, and receipt thereof by the Investor Representative shall be deemed to satisfy the requirements of this Article XI for delivery thereof to the Investors). By acceptance of the benefits of this Article XI, the holders of Senior Debt agree with the Investors that (i) all notices or other communications required or permitted to be made to the holders of Senior Debt under this Article XI by the Investors or the Investor Representative may be made to the Senior Debt Representative at its address specified in Section 10.03 of the Senior Credit Agreement and (ii) BNP Paribas shall be the Senior Debt Representative for all purposes hereof until such time as the Investor Representative shall have received notice in writing from BNP Paribas or the then current Senior Debt Representative specifying a new Senior Debt Representative, following which the Investor Representative and each Investor shall be fully protected in dealing solely with such Senior Debt Representative for purposes of this Article XI. ARTICLE XII MISCELLANEOUS SECTION 12.01 NOTICES. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, to the intended recipient thereof at its respective address (or telecopy number) set forth beneath its name on the signature pages hereto. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or if mailed by certified mail or registered mail, on the date three days after the date of mailing. SECTION 12.02 WAIVERS; AMENDMENTS. (a) No failure or delay by any Investor in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Investors hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any  58 provision of this Agreement or consent to any departure by the Obligors therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 12.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the issuance of a Note shall not be construed as a waiver of any Default, regardless of whether any Investor may have had notice or knowledge of such Default at the time. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Obligors and the Required Investors; provided that no such agreement shall (i) increase the commitment of any Investor without the written consent of such Investor, (ii) reduce the principal amount of any Note or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Investor affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Note, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any commitment of any Investor, without the written consent of each Investor affected thereby, (iv) change any provision of this Agreement that would alter the pro rata sharing of payments required thereunder, without the written consent of each Investor, or (v) change any of the provisions of this Section 12.02 or the definition of "Required Investors" or any other provision hereof specifying the number or percentage of Investors required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Investor; provided further that no such waiver, amendment or modification shall be effective unless consented to by the requisite number of lenders under the Senior Credit Agreement as required by the Senior Credit Agreement as in effect on the date hereof. Notwithstanding anything herein to the contrary, in the event that within 60 days after the Closing Date the Company requests the Investors to amend or modify this Agreement to increase the aggregate principal amount of the Notes issued hereunder, such amendment will require the consent of each Investor. SECTION 12.03 EXPENSES; INDEMNITY: DAMAGE WAIVER. (a) The Company shall pay (i) all reasonable out-of-pocket expenses incurred by any Investor and its Affiliates, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to JPMorgan Partners, in connection with the preparation, negotiation, execution and delivery of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by any Investor, including the above fees, charges and disbursements of any counsel for any Investor, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section 12.03, or in connection with the Notes issued hereunder, including in connection with any workout, restructuring or negotiations in respect thereof. (b) The Company shall indemnify each Investor, 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  59 asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Note or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee. Promptly after receipt by an Indemnitee of notice of any complaint or the commencement of any action or proceeding with respect to which indemnification is being sought hereunder, such Indemnitee will notify the Company in writing of such complaint or of the commencement of such action or proceeding, but failure so to notify the Company will not relieve the Company from any liability which the Company may have hereunder or otherwise, except to the extent that such failure materially prejudices the Company's rights. If the Company so elects or is requested by such Indemnitee, the Company will assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to such Indemnitee and the payment of the fees and disbursements of such counsel, and in such event such Indemnitee will cooperate in connection therewith as reasonably requested by the Company (subject to the expenses of such Indemnitee being reimbursed by the Company as provided above). In the event, however, such Indemnitee reasonably determines that having common counsel would present such counsel with a conflict of interest or if the Company fails to assume the defense of the action or proceeding in a timely manner, then such Indemnitee may employ separate counsel to represent or defend it in any such action or proceeding and the Company will pay the reasonable fees and disbursements of such counsel, provided, however, that the Company will not be required to pay the fees and disbursements of more than one separate counsel for all Indemnified Parties in any jurisdiction in any single action or proceeding. In any action or proceeding the defense of which the Company assumes, any Indemnitee will have the right to participate in such litigation and to retain its own counsel at such Indemnitee's own expense. (c) To the extent permitted by applicable law, the Obligors shall not assert, and hereby waive, 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 or any agreement or instrument contemplated hereby, the Transactions, any Note or the use of the proceeds thereof. (d) All amounts due under this Section 12.03 shall be payable promptly after written demand therefor. SECTION 12.04 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto, all future holders of the Notes, and their respective successors and assigns permitted hereby, except that no Obligor may  60 assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Investor (and any attempted assignment or transfer by any Obligor without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Investors and, to the extent expressly provided in Article XI, the holders of Senior Debt and the Senior Debt Representative) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) Notwithstanding anything herein to the contrary, no Investor may assign all or any portion of its rights under this Agreement and the Note(s) held by such Investor (i) to a Person engaged in the operation of any business involving the sale of carbonic gas or the rental of bulk CO2 cylinders or high pressure cylinders, (ii) to any Person other than a Qualified Investor and (iii) unless such assignment complies with the registration requirements (or an applicable exemption therefrom) under the Securities Act and any applicable state securities laws. From and after the effective date of any transfer of a Note by any holder thereof to another Person, such Person shall become a party to this Agreement, be an "Investor" for all purposes hereof and, to the extent of the interest assigned pursuant to such transfer, have the rights and obligations of an Investor under this Agreement, and the relevant transferring Investor shall, to the extent of the interest assigned thereby, be released from its obligations under this Agreement (and, in the case of any transfer covering all of such transferring Investor's rights and obligations under this Agreement, such Investor shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 12.03). (c) The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is a Qualified Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes. (d) Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit A. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may  61 require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $2,000,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $2,000,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representations set forth in Article IV. SECTION 12.05 SURVIVAL. All covenants, agreements, representations and warranties made by the Obligors herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the issuance of any Note regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Investor may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Note or any fee or any other amount payable under this Agreement is outstanding and unpaid. The provisions of Section 12.03 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Notes or the termination of this Agreement or any provision hereof. SECTION 12.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement constitutes 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. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. SECTION 12.07 SEVERABILITY. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. SECTION 12.08 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. (b) Each Obligor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New  62 York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any Investor may otherwise have to bring any action or proceeding relating to this Agreement against any Obligor or its properties in the courts of any jurisdiction. (c) Each Obligor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 12.08(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 12.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 12.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.09. SECTION 12.10 HEADINGS. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. SECTION 12.11 CONFIDENTIALITY. Each of the Investors agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (and the Investor or the Investor Representative shall promptly notify the Company of any such disclosure), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 12.11, to any transferee permitted under Section 12.04 (including prospective transferee) of its rights or obligations under this Agreement, (g) with the consent of the  63 Company or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to any Investor on a nonconfidential basis from a source other than the Company. For the purposes of this Section 12.11, "Information" means all information received from the Company relating to the Company or any Subsidiary or their respective business, other than any such information that is available to any Investor on a nonconfidential basis prior to disclosure by the Company; provided that, in the case of information received from the Company after the date hereof, such information is clearly identified at the time of delivery as confidential unless such information is received pursuant to an inspection under Section 7.06. Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 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 and has taken measures to cause its representatives to do the same. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 12.11 as though it were a party to this Agreement. Notwithstanding the foregoing, the Investors and the Obligors (and each of their respective employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to such person relating to such tax treatment or tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws, and except that, with respect to any document or similar item that in either case contains information concerning the U.S. tax treatment or U.S. tax structure of such transactions as well as other information, this paragraph shall only apply to such portions of the document or similar item that relate to such tax treatment or tax structure.  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. NUCO2 INC. By: /s/ Robert R. Galvin ----------------------------------------- Title: Chief Financial Officer Address for Notices: NuCo2 Inc. 2800 S.E. Market Place Stuart, Florida 34997 Attention: Robert R. Galvin Fax No.: 772 ###-###-#### Telephone No.: 772 ###-###-####  SUBSIDIARY GUARANTORS [None as of the Closing Date]  AMOUNT OF NOTE INVESTORS $11,528,918.31 J.P. MORGAN PARTNERS (BHCA). L.P. BY: JPMP MASTER FUND MANAGER, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters, Jr. --------------------------------- Name: Title: $2,027,686.25 J.P. MORGAN PARTNERS Global investors, L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters, Jr. --------------------------------- Name: Title: $1,017,990.31 J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN), L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters, Jr. --------------------------------- Name: Title:  $311,561.54 J.P. MORGAN PARTNERS GLOBAL INVESTORS A, L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters, Jr. --------------------------------- Name: Title: $113,843.59 J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN) II, L.P. BY: JPMP GLOBAL INVESTORS, L.P., ITS GENERAL PARTNER BY: JPMP CAPITAL CORP., ITS GENERAL PARTNER By: /s/ Richard D. Waters, Jr. --------------------------------- Name: Title: Address for Notices for the foregoing Investors: J.P. Morgan Partners (BHCA), L.P. 1221 Avenue of the Americas New York, New York 10020-1080 Attention: Mr. Richard D. Waters, Jr. Fax No.: (212) 899-3661 Telephone No.: (212) 899-3663  $3,000,000 BETTINA LOORAM PRIVATSTIFTUNG By: /s/ Craig Burr --------------------------------- Name: Craig Burr Title: Trustee Address for Notices: -------------------- Bettina Looram Privatstiftung c/o Craig Burr 8 Hubbard Park Road Cambridge, MA 02138 Telephone: Fax:  $2,000,000 KBGM LLC By: /s/ Francis Kingsley --------------------------------- Title: Authorized Agent Addresses for Notices: ---------------------- KBGM LLC c/o Francis Kingsley Kingsley Business Services 8-D Pleasant Street, 2nd Floor South Natick, MA 01760 Telephone: (508) 647-3700 Fax:  $10,000,000 THE ROYAL BANK OF SCOTLAND PLC By: /s/ Matthew Headington --------------------------------- Name: Matthew Headington Title: Director Addresses for Notices: ---------------------- The Royal Bank of Scotland 101 Park Avenue New York, NY 10178 Attention: Una Corr Telephone: (212) 401-1354 Fax: (212) 401-1396