Exhibit 10.2

 

EXECUTION COPY

 

 

UNSECURED TERM LOAN CREDIT AND GUARANTEE AGREEMENT

 

Dated as of August 12, 2011

 

among

 

RDA HOLDING CO.,

 

THE READER’S DIGEST ASSOCIATION, INC.,

 

THE OTHER GUARANTORS NAMED HEREIN

 

The Lenders Party Hereto

 

and

 

LUXOR CAPITAL GROUP, LP,
as Administrative Agent

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

1

 

 

 

 

Defined Terms

1

 

Other Interpretive Provisions

37

 

Accounting Terms

37

 

Rounding

38

 

References to Agreements, Laws, Etc.

38

 

Times of Day

38

 

Timing of Payment of Performance

38

 

Currency Equivalents Generally

38

 

Change of Currency

39

 

 

 

ARTICLE II THE LOANS

39

 

 

 

 

The Loans

39

 

Procedure for Term Loan Borrowing

39

 

Reserved

39

 

Prepayments

39

 

Termination of Commitments

40

 

Repayment of Loans

40

 

Interest

40

 

Fees

40

 

Computation of Interest and Fees

41

 

Evidence of Indebtedness

41

 

Payments Generally

41

 

Sharing of Payments

43

 

 

 

ARTICLE III TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

43

 

 

 

 

Taxes

43

 

[Reserved]

45

 

[Reserved]

45

 

Increased Cost and Reduced Return; Capital Adequacy

45

 

[Reserved]

46

 

Matters Applicable to All Requests for Compensation

46

 

[Reserved]

47

 

Survival

47

 

 

 

ARTICLE IV CONDITIONS PRECEDENT

47

 

 

 

 

Conditions to Effectiveness

47

 

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES

49

 

 

 

 

Existence, Qualification and Power; Compliance with Laws

49

 

Authorization; No Contravention

49

 

Governmental Authorization; Other Consents

49

 

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Binding Effect

49

 

Financial Statements; No Material Adverse Effect

50

 

Litigation

50

 

No Default

50

 

Ownership of Property; Liens

50

 

Environmental Compliance

50

 

Taxes

51

 

ERISA Compliance

51

 

Subsidiaries; Equity Interests

52

 

Margin Regulations; Investment Company Act

52

 

Disclosure

52

 

Intellectual Property; Licenses, Etc.

52

 

Solvency

53

 

Labor Matters

53

 

[Reserved]

53

 

[Reserved]

53

 

Certain Documents

53

 

[Reserved]

53

 

 

 

ARTICLE VI AFFIRMATIVE COVENANTS

53

 

 

 

 

Financial Statements

53

 

Certificates; Other Information

55

 

Update Calls

57

 

Notices

57

 

Payment of Obligations

57

 

Preservation of Existence, Etc.

57

 

Maintenance of Properties

57

 

Maintenance of Insurance

57

 

Compliance with Laws

58

 

Inspection Rights; Books and Records; Discussions

58

 

Covenant to Guarantee Obligations

58

 

Compliance with Environmental Laws

58

 

[Reserved]

58

 

Use of Proceeds

58

 

Right of First Refusal to Provide Additional Financing

59

 

 

 

ARTICLE VII NEGATIVE COVENANTS

59

 

 

 

 

Limitation on Restricted Payments

59

 

Limitation on incurrence of Indebtedness and issuance of Disqualified Stock and
preferred stock

66

 

Liens

71

 

Merger, Consolidation or Sale of All or Substantially All Assets

71

 

Limitations on Guarantors

72

 

Transactions with Affiliates

73

 

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

75

 

Asset Sales

76

 

Prepayments, Etc. of Indebtedness

77

 

Holding Company

78

 

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Payments for Consent

78

 

Limitation on Lines of Business

78

 

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

78

 

Financial Condition Covenant

80

 

Receivables

80

 

Accounting Changes

80

 

 

 

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

81

 

 

 

 

Events of Default

81

 

Remedies Upon Event of Default

83

 

Application of Funds

83

 

 

 

ARTICLE IX ADMINISTRATIVE AGENT

84

 

 

 

 

Appointment and Authorization of Administrative Agent

84

 

Delegation of Duties

84

 

Liability of Administrative Agent

84

 

Reliance by Administrative Agent

85

 

Notice of Default

85

 

Credit Decision; Disclosure of Information by Administrative Agent

85

 

Indemnification of Administrative Agent

86

 

Administrative Agent in its Individual Capacity

86

 

Successor Agents

86

 

Administrative Agent May File Proofs of Claim

87

 

Guarantee Matters

88

 

[Reserved]

88

 

Appointment of Supplemental Administrative Agents

88

 

 

 

ARTICLE X GUARANTEE

88

 

 

 

 

Guarantee

88

 

Right of Contribution

89

 

No Subrogation

89

 

Amendments, etc. with Respect to the Obligations

89

 

Guarantee Absolute and Unconditional

90

 

Reinstatement

91

 

Payments

91

 

 

 

ARTICLE XI MISCELLANEOUS

91

 

 

 

 

Amendments, Etc.

91

 

Notices and Other Communications; Facsimile Copies

92

 

No Waiver; Cumulative Remedies

94

 

Attorney Costs, Expenses and Taxes

94

 

Indemnification by the Borrower

95

 

Payments Set Aside

95

 

Successors and Assigns

96

 

Confidentiality

99

 

Setoff

100

 

Interest Rate Limitation

100

 

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Counterparts

100

 

Integration

101

 

Survival of Representations and Warranties

101

 

Severability

101

 

Tax Forms

101

 

GOVERNING LAW

103

 

Submission To Jurisdiction; Waivers

103

 

WAIVER OF RIGHT TO TRIAL BY JURY

103

 

Binding Effect

103

 

Lender Action

104

 

USA PATRIOT Act

104

 

Acknowledgements

104

 

Releases of Guarantee

104

 

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SCHEDULES

 

 

 

 

 

1.01C

Designated Non-Debtors

 

2.01

Loans

 

5.11(c)

Foreign Benefits Matters

 

5.12

Subsidiaries and Other Equity Investments

 

 

 

EXHIBITS

 

 

 

 

 

Form of

 

 

 

 

 

A

[Reserved]

 

B

Note

 

C

Compliance Certificate

 

D

Assignment and Assumption

 

E

[Reserved]

 

F

Opinion of Weil, Gotshal & Manges LLP

 

G

[Reserved]

 

H

U.S. Tax Compliance Certificate

 

I

[Reserved]

 

J

[Reserved]

 

K

Warrants

 

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UNSECURED TERM LOAN CREDIT AND GUARANTEE AGREEMENT

 

This UNSECURED TERM LOAN CREDIT AND GUARANTEE AGREEMENT (“Agreement”) is entered
into as of August 12, 2011, among RDA HOLDING CO., a Delaware corporation
(“Holdings”), THE READER’S DIGEST ASSOCIATION, INC., a Delaware corporation (the
“Borrower”), the subsidiary guarantors from time to time party hereto, LUXOR
CAPITAL GROUP, LP, as Administrative Agent, and the several banks and other
financial institutions or entities from time to time parties to this Agreement
(collectively, the “Lenders” and each a “Lender”).

 

The parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

“Acquired Indebtedness” means, with respect to any specified Person,

 

(1) Indebtedness or Disqualified Stock of any other Person existing at the time
such other Person is merged with or into or became a Restricted Subsidiary of
such specified Person, including, without limitation, Indebtedness or
Disqualified Stock incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person; and

 

(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.

 

“Additional Interest” means all additional interest then owing pursuant to the
Registration Rights Agreement.

 

“Additional Notes” means additional notes issued from time to time under the
Senior Secured Note Indenture after the initial offering.

 

“Administrative Agent” means Luxor Capital Group in its capacity as
administrative agent under any of the Loan Documents, or any permitted successor
administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth in Section 11.02 or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders in writing (including by electronic mail or by posting to
Intralinks or other similar information transmission systems).

 

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

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any Person, shall mean
the

 

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possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

 

“Affiliate Transaction” has the meaning set forth in Section 7.06

 

“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Person and Affiliates.

 

“Aggregate Commitments” means the Commitments of all the Lenders. The original
aggregate amount of the Aggregate Commitments is $10,000,000.

 

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

 

“Allrecipes.com Sale” means the sale, conveyance, transfer or other disposition,
whether in a single transaction or a series of related transactions, of all or
substantially all of the property or assets of or Equity Interests in
Allrecipes.com, Inc.

 

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

 

“Asset Sale” means:

 

(1) the sale, conveyance, transfer or other disposition, whether in a single
transaction or a series of related transactions, of property or assets
(including by way of a sale and leaseback) of the Borrower, a Guarantor or any
Restricted Subsidiary (each referred to in this definition as a “disposition”);
or

 

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other
than directors’ qualifying shares or shares required by applicable law to be
held by a Person other than the Borrower or a Restricted Subsidiary), whether in
a single transaction or a series of related transactions (other than preferred
stock of Restricted Subsidiaries issued in compliance with Section 7.02) in each
case, other than:

 

(a) a disposition of Cash Equivalents or obsolete, damaged or worn out equipment
in the ordinary course of business or the sale or lease of equipment, inventory
or accounts receivable in the ordinary course of business and dispositions of
property in the ordinary course of business that is no longer used or useful in
the conduct of the business of the Borrower and its Restricted Subsidiaries;

 

(b) the disposition of all or substantially all of the assets of the Borrower
and the Restricted Subsidiaries in a manner permitted pursuant to Section 7.04;

 

(c) the making of any Restricted Payment or Permitted Investment that is
permitted to be made, and is made, under Section 7.01 or the granting of a Lien
permitted by Section 7.03;

 

(d) any disposition of assets or issuance or sale of Equity Interests of any
Restricted Subsidiary in any transaction or series of transactions with an
aggregate fair market value of less than $5.0 million;

 

(e) any disposition of property or assets or issuance of securities by (i) a
Restricted Subsidiary to the Borrower, (ii) the Borrower or a Restricted
Subsidiary to another Subsidiary Guarantor

 

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or (iii) a Restricted Subsidiary that is not a Subsidiary Guarantor to another
Restricted Subsidiary that is not a Subsidiary Guarantor;

 

(f) to the extent allowable under Section 1031 of the Internal Revenue Code of
1986, any exchange of like property (excluding any boot thereon) for use in a
Similar Business;

 

(g) the lease, assignment or sublease of any real or personal property in the
ordinary course of business;

 

(h) licenses or sub-licenses of intellectual property in the ordinary course of
business;

 

(i) solely with respect to Section 7.08(a)(i)(A) and (B), foreclosures on
assets, involuntary asset transfers or transfers by reason of eminent domain;

 

(j) sales of accounts receivable, or participations therein, in connection with
any Receivables Facility;

 

(k) any financing transaction with respect to property built or acquired by the
Borrower or any Restricted Subsidiary after the Closing Date, including, without
limitation, sale leasebacks and asset securitizations permitted by this
Agreement;

 

(l) any issuance or sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary, including in connection with any
merger or consolidation;

 

(m) dispositions of accounts receivable in connection with the compromise,
settlement or collection thereof in the ordinary course of business or in
bankruptcy or similar proceedings and not in connection with a Receivables
Facility;

 

(n) the factoring by Foreign Subsidiaries at maturity or collection of any
accounts receivable pursuant to factoring programs entered into in the ordinary
course of business on customary market terms and with respect to receivables of,
and generated by, Foreign Subsidiaries;

 

(o) the sale, lease, assignment, transfer or disposal of any property or assets
in connection with any office move or relocation in the ordinary course of
business;

 

(p) solely for purposes of satisfying Section 7.08(a)(i)(A), the sale, lease,
assignment, transfer or disposal of Investments in joint ventures to the extent
required by, or made pursuant to customary sell arrangements between, the joint
venture parties set forth in joint venture arrangements and similar binding
arrangements; and

 

(q) the sale, lease, assignment, transfer or disposal of any and all of the art
collections owned by the Borrower or its Restricted Subsidiaries on the Existing
Agreement Closing Date;

 

provided, that, notwithstanding the foregoing clauses (a) through (q), the
Allrecipes.com Sale shall be deemed an Asset Sale.

 

“Assignees” has the meaning specified in Section 11.07(b).

 

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit D.

 

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“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external legal counsel.

 

“Audited Financial Statements” means the audited consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as of each of June 30, 2008,
June 30, 2009 and December 31, 2010, and the related audited consolidated
statements of income, stockholders’ equity and cash flows for the Borrower and
its consolidated Subsidiaries for the periods ended on such dates.

 

“Bank Priority Obligations” has the meaning specified in the Security Agreement.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as heretofore and
hereafter amended, and codified as 11 U.S.C. §§101 et seq.

 

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of New York presiding over the Chapter 11 cases of The Reader’s Digest
Association, Inc. and its affiliates, Case No. 09-23529 (RDD).

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States (or any successor).

 

“Board of Directors” means:

 

(1) with respect to a corporation, the board of directors of the corporation or
any committee thereof duly authorized to act on behalf of such board;

 

(2) with respect to a partnership, the Board of Directors of the general partner
of the partnership;

 

(3) with respect to a limited liability company, the managing member or members
or any controlling committee of managing members thereof; and

 

(4) with respect to any other Person, the board or committee of such Person
serving a similar function.

 

“Borrower” has the meaning specified in the introductory paragraph to this
Agreement.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located or in
The City of New York.

 

“Capital Expenditures” means, for any period, the sum, without duplication, of
the additions to property, plant or equipment and other capital expenditures,
including replacements, capitalized repairs and improvements during such period,
of the Borrower and its Restricted Subsidiaries for such period, determined in
accordance with GAAP.

 

“Capital Stock” means:

 

(1) in the case of a corporation, corporate stock;

 

(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;

 

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(3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

 

(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.

 

“Capitalized Lease Obligation” means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized and reflected as a liability on a
balance sheet (excluding the footnotes thereto) in accordance with GAAP.

 

“Cases” means the jointly administered chapter 11 cases of the captioned In re
The Reader’s Digest Association, Inc., Case No. 09-23529 (RDD), arising upon the
filing of voluntary petitions for relief with the Bankruptcy Court on August 24,
2009.

 

“Cash Equivalents” means:

 

(1) U.S. dollars and any other foreign currency held by the Borrower and the
Restricted Subsidiaries in the ordinary course of business;

 

(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof),
maturing, unless such securities are deposited to defease any Indebtedness, not
more than two years from the date of acquisition;

 

(3) securities issued by U.S. government-sponsored entities (“GSE”) and
federally related institutions, maturing and not more than two years from the
date of acquisition;

 

(4) repurchase agreements with primary dealers of eligible banks, and

 

(a) with a maturity of not more than one year from the date of acquisition; and

 

(b) supported by underlying collateral that is U.S. Treasury of U.S.
government-sponsored entities;

 

(5) certificates of deposit, time deposits, Eurodollar time deposits, and
bankers’ acceptances

 

(a) with a rated bank that has received a short-term rating from a nationally
recognized statistical rating organization (“NRSRO”) in the highest short-term
rating category for debt obligations (within which there may be subcategories or
gradations indicating relative standing). Long-term ratings may be used if
short-term ratings are not available; and

 

(b) with a maturity of not more than two years from the date of acquisition;

 

(6) securities issued or fully guaranteed or insured by any state, commonwealth
or territory of the United States, or by any political subdivision or taxing
authority thereof; and

 

(a) such security is a rated security that has received a short-term rating from
a NRSRO (provided, that long-term ratings may be used if short term ratings are
not available) in the

 

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highest short-term rating category for debt obligations (within which there may
be subcategories or gradations indicating relative standing); and

 

(b) such security has a maturity of not more than two years from the date of
acquisition;

 

(7) money market funds assets of which are consistent with the quality standards
of Cash Equivalents described herein (but excluding for purposes of this clause
(7) money market funds that invest primarily in auction rate securities);

 

(8) commercial paper and corporate obligations of corporations, provided that
such security:

 

(a) is a rated security that has received a short-term rating from a NRSRO in
the highest short-term rating category for debt obligations (within which there
may be sub-categories or gradations indicating relative standing); and

 

(b) has a stated final maturity of not more than one year from the date of
acquisition; and

 

(9) instruments equivalent to those referred to in clauses (1) to (8) above
denominated in euro or pounds sterling or any other foreign currency comparable
in credit quality and tenor to those referred to above and customarily used by
corporations for cash management purposes in any jurisdiction outside the United
States to the extent reasonably required in connection with any business
conducted by any Restricted Subsidiary organized in such jurisdiction and not
for speculative purposes.

 

“Cash Management Obligations” means obligations owed by any Loan Party in
respect of any overdraft and related liabilities arising from treasury,
depository and cash management services or any automated clearing house
transfers of funds.

 

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

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“Change of Control” means the earliest to occur of:

 

(a)           the acquisition of ownership, directly or indirectly, beneficially
or of record, by any Person or group (within the meaning of the Exchange Act and
the rules of the SEC thereunder as in effect on the date hereof), of Equity
Interests representing 35% or more of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of Holdings;

 

(b)           the board of directors of Holdings ceasing to consist of a
majority of the Continuing Directors;

 

(c)           Holdings ceasing to own, directly, all of the outstanding Equity
Interests in the Borrower;

 

(d)           a Specified Change of Control; or

 

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(e)           the Disposition of all or substantially all of the assets of the
Loan Parties other than any Disposition to which Section 7.04 applies, but only
to the extent expressly permitted by Section 7.04 and so long as any
requirements set forth therein are satisfied.

 

“Charges” has the meaning specified in Section 11.10.

 

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

 

“Code” means the U.S. Internal Revenue Code of 1986.

 

“Collateral” means all property of the Loan Parties, now or hereafter acquired,
upon which a Lien in favor of the Collateral Agent for the benefit of the
Secured Parties is required to be created in accordance with the terms and
conditions of the Secured Obligations, provided that in no event shall any
Excluded Property constitute Collateral.

 

“Collateral Agent” means Wilmington Trust FSB and its successors and assigns.

 

“Collateral Documents” means such agreements, pledge agreements, mortgages,
collateral assignments, agency agreements and related agreements, instruments
and documents executed and delivered pursuant to the Secured Obligations
(including, without limitation, finance statements under the Uniform Commercial
Code of the relevant states), as amended, supplemented, restated, renewed,
refunded, replaced, restructured, repaid, refinanced or otherwise modified from
time to time, and pursuant to which Collateral is pledged, assigned or granted
to or on behalf of the Collateral Agent for the ratable benefit of the Secured
Parties (as defined in the Existing Credit Agreement) or notice of such pledge,
assignment or grant is given.

 

“Commitment” means as to any Lender, the obligation of such Lender, if any, to
make a Loan to the Borrower in a principal amount not to exceed the amount set
forth under the heading “Commitment” opposite such Lender’s name on Schedule
2.01.

 

“Compensation Period” has the meaning specified in Section 2.11(c)(ii).

 

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

 

“Confirmation Order” means the order of the United States Bankruptcy Court for
the Southern District of New York, dated January 19, 2010, confirming the
Reorganization Plan.

 

“Consolidated Depreciation and Amortization Expense” means with respect to any
Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees, of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.

 

“Consolidated Interest Expense” means, with respect to any Person for any
period, the sum, without duplication, of:

 

(a) consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, to the extent such expense was deducted (and not added back) in
computing Consolidated Net Income (including (a) amortization of original issue
discount resulting from the issuance of Indebtedness at less than par, (b) all
commission, discounts and other fees and charges owed with respect to letters of
credit or bankers’ acceptances, (c) non-cash interest payments (but excluding
any non-cash interest

 

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expense attributable to the movement in the mark to market valuation of
obligations under Swap Contracts or other derivative instruments pursuant to ASC
No. 815—“Derivatives and Hedging Overview”), (d) the interest component of
Capitalized Lease Obligations and (e) net payments, if any, without duplication,
pursuant to interest rate obligations under Swap Contracts with respect to
Indebtedness, and excluding (1) any Additional Interest, (2) amortization of
deferred financing fees and (3) any expensing of bridge or other financing
fees); plus

 

(b) consolidated capitalized interest of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued; less

 

(c) interest income for such period.

 

“Consolidated Leverage Ratio” means, with respect to any Person for any period,
the ratio of:

 

(1) the Consolidated Total Indebtedness of such Person and its Restricted
Subsidiaries at the time of determination (the “Calculation Date”), to

 

(2) the EBITDA of such Person for the four most recent full fiscal quarters 
ending immediately prior to the date for which internal financial statements are
available.

 

If the Borrower or any Restricted Subsidiary has incurred, assumed, guaranteed,
redeemed, retired or extinguished any Indebtedness (other than Indebtedness
incurred under any revolving credit facility unless such Indebtedness has been
permanently repaid and has not been replaced) or issues or redeems Disqualified
Stock or preferred stock subsequent to the commencement of the period for which
the Consolidated Leverage Ratio is being calculated but prior to or
substantially concurrently with the event for which the calculation of the
Consolidated Leverage Ratio is made, then the Consolidated Leverage Ratio shall
be calculated giving pro forma effect to such incurrence, assumption, guarantee,
redemption, retirement or extinguishment of Indebtedness, or such issuance or
redemption of Disqualified Stock or preferred stock, as if the same had occurred
at the beginning of the applicable four-quarter period.

 

For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and disposed operations (as
determined in accordance with GAAP) that have been made by the Borrower or any
of its Restricted Subsidiaries during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the Calculation Date shall be calculated on a pro forma basis assuming that all
such Investments, acquisitions, dispositions, mergers, consolidations and
disposed operations (and the change in any associated fixed charge obligations
and the change in EBITDA resulting therefrom) had occurred on the first day of
the four-quarter reference period. If since the beginning of such period any
Person that subsequently became a Restricted Subsidiary or was merged with or
into the Borrower or any of its Restricted Subsidiaries since the beginning of
such period shall have made any Investment, acquisition, disposition, merger,
consolidation or disposed operation that would have required adjustment pursuant
to this definition, then the Consolidated Leverage Ratio shall be calculated
giving pro forma effect thereto for such period as if such Investment,
acquisition, disposition, merger, consolidation or disposed operation had
occurred at the beginning of the applicable four-quarter period.

 

For purposes of this definition, whenever pro forma effect is to be given to a
transaction, the pro forma calculations shall be (x) made in good faith by a
responsible financial or accounting officer of the Borrower (and may include,
for the avoidance of doubt, cost savings and operating expense reductions
resulting from such Investments acquisition, disposition, merger or
consolidation or

 

8

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disposition which is being given pro forma effect that have been or are
reasonably expected to be realized within twelve (12) months after the date of
such Investment, acquisition, disposition, merger, consolidation or disposed
operation as the result of specified actions taken or to be taken within six
(6) months after such date) and which are reasonably identifiable and factually
supportable, except as otherwise provided herein or (y) determined in accordance
with Regulation S-X. If any Indebtedness bears a floating rate of interest and
is being given pro forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the Calculation Date had been the
applicable rate for the entire period (taking into account any obligations under
Swap Contracts applicable to such Indebtedness). Interest on a Capitalized Lease
Obligations shall be deemed to accrue at an interest rate reasonably determined
by a responsible financial or accounting officer of the Borrower to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP. For purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period except as set forth in the first paragraph of this
definition. Interest on Indebtedness that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Borrower may designate.

 

For the purposes of this definition, any amount in a currency other than U.S.
dollars will be converted to U.S. dollars based on the average exchange rate for
such currency for the most recent twelve month period immediately prior to the
date of determination determined in a manner consistent with that used in
calculating EBITDA for the applicable period.

 

“Consolidated Net Income” means, with respect to any Person for any period, the
aggregate of the Net Income, of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, and otherwise determined in accordance
with GAAP; provided, however, that, without duplication,

 

(1) any net after-tax effect of extraordinary, non-recurring or unusual gains or
losses, costs, charges or expenses (less all fees and expenses relating thereto)
shall be excluded (including, without limitation, severance, relocation,
transition and other restructuring costs and curtailments or modifications to
pension and post-retirement employee benefit plans),

 

(2) the Net Income for such period shall not include the cumulative effect of a
change in accounting principles during such period,

 

(3) any net after-tax effect of income (loss) from disposed, abandoned or
discontinued operations and any net after-tax gains or losses on disposal,
abandoned of disposed or discontinued operations shall be excluded,

 

(4) any net after-tax gains or losses (less all fees and expenses relating
thereto) attributable to asset dispositions other than in the ordinary course of
business, as determined in good faith by the Board of Directors of the Borrower,
shall be excluded,

 

(5) the Net Income for such period of any Person that is not a Subsidiary, or is
an Unrestricted Subsidiary, or that is accounted for by the equity method of
accounting, shall be excluded; provided that Consolidated Net Income of the
Borrower shall be increased by the amount of dividends or distributions or other
payments that are actually paid in cash (or to the extent converted into cash)
to the referent Person or a Restricted Subsidiary thereof in respect of such
period (without duplication for purposes of Section 7.01 of any amounts included
under Section 7.01(a)(vii)(D)(1));

 

9

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(6) solely for the purpose of determining the amount available for Restricted
Payments under Section 7.01(a)(vii)(A), the Net Income for such period of any
Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded if
the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of its Net Income is not at the date of determination
wholly permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule, or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, unless such restriction with respect to the payment of dividends
or in similar distributions has been legally waived; provided that Consolidated
Net Income of the Borrower will be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or to the extent
converted into cash) to the Borrower or a Restricted Subsidiary thereof in
respect of such period, to the extent not already included therein;

 

(7) the effects of adjustments (including the effects of such adjustments pushed
down to the Borrower and the Restricted Subsidiaries) in any line item of such
Person’s consolidated financial statements pursuant to GAAP resulting from the
application of purchase accounting in relation to any consummated acquisition,
net of taxes, shall be excluded;

 

(8) any net after-tax income (loss) from the early extinguishment or
cancellation of Indebtedness or obligations under Swap Contracts or other
derivative instruments shall be excluded;

 

(9) any impairment charge or asset write-off pursuant to ASC No. 350—“Intangible
Assets” and No. 360—“Impairments” and the amortization of intangibles arising
pursuant to ASC No. 805 (excluding any such impairment charge to the extent that
it represents an accrual of or reserve for cash expenditures in any future
period) shall be excluded;

 

(10) the amount of any expense will be excluded to the extent a corresponding
amount is received in cash by the Borrower and the Restricted Subsidiaries from
a Person other than the Borrower or any Restricted Subsidiaries under any
agreement providing for reimbursement of any such expense, provided such
reimbursement payment has not been included in determining Consolidated Net
Income (it being understood that if the amounts received in cash under any such
agreement in any period exceed the amount of expense in respect of such period,
such excess amounts received may be carried forward and applied against expense
in future periods);

 

(11) any non-cash compensation charge or expense recorded from grants of stock
appreciation or similar rights, stock options or other rights to officers,
directors or employees shall be excluded; and

 

(12) any increase in amortization or depreciation or other non-cash charges or
the impact of write-off of deferred revenues resulting from the application of
SOP 90-7 in relation to the Emergence Transactions shall be excluded.

 

Notwithstanding the foregoing, for the purpose of Section 7.01 only (other than
Section 7.01(a)(vii)(D)), there shall be excluded from Consolidated Net Income
any income arising from any sale or other disposition of Restricted Investments
made by the Borrower and the Restricted Subsidiaries, any repurchases and
redemptions of Restricted Investments from the Borrower and the Restricted
Subsidiaries, any repayments of loans and advances which constitute Restricted
Investments by the Borrower or any Restricted Subsidiary, any sale of the stock
of an Unrestricted Subsidiary or any distribution or dividend from an
Unrestricted Subsidiary, in each case only to the extent such amounts increase
the amount of Restricted Payments permitted under Section 7.01(a)(vii)(D).

 

10

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“Consolidated Secured Debt Ratio” means, with respect to any specified Person,
as of any date of determination, the ratio of (1) the sum, without duplication,
of (a) the aggregate principal amount of the Specified Notes, plus (b) the
aggregate amount outstanding under any Receivables Facility, plus (c) the
aggregate principal amount (or accreted value) outstanding under any Pari Passu
Payment Lien Obligations, plus (d) the aggregate principal amount (or accreted
value) of outstanding obligations under the Existing Credit Agreement and Credit
Facilities which constitute Priority Payment Lien Obligations (including letters
of credit) and any other Priority Payment Lien Obligations, and plus (e) the
aggregate amount of any incremental Indebtedness and other obligations permitted
to be incurred under Section 7.02(b)(i) after giving effect to any amounts of
Indebtedness and other obligations incurred under such Section 7.02(b)(i), as of
the last day of the most recent fiscal quarter for which internal financial
statements are available immediately preceding the date on which such event for
which such calculation is being made shall occur to (2) the EBITDA of the
specified Person and its Restricted Subsidiaries (on a consolidated basis) for
the most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such event for
which such calculation is being made shall occur, in each case with such pro
forma adjustments as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of Consolidated Leverage
Ratio.

 

“Consolidated Total Indebtedness” means, as at any date of determination, an
amount equal to the sum of (1) the aggregate amount of all outstanding
Indebtedness of the Borrower and its Restricted Subsidiaries on a consolidated
basis consisting of Indebtedness for borrowed money, Obligations in respect of
Capitalized Lease Obligations and debt obligations evidenced by promissory notes
and similar instruments, (2) the aggregate amount of all outstanding
Disqualified Stock of the Borrower and all preferred stock of its Restricted
Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock
and preferred stock equal to the greater of their respective voluntary or
involuntary liquidation preferences and maximum fixed repurchase prices, in each
case determined on a consolidated basis in accordance with GAAP, and (3) all
obligations relating to Receivables Facilities.

 

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified
Stock or preferred stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock or preferred
stock as if such Disqualified Stock or preferred stock were repurchased on any
date on which Consolidated Total Indebtedness shall be required to be determined
pursuant to this Agreement, and if such price is based upon, or measured by, the
fair market value of such Disqualified Stock or preferred stock, such fair
market value shall be determined reasonably and in good faith by the Borrower.

 

“Contingent Obligations” means, with respect to any Person, any obligation of
such Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,

 

(1) to purchase any such primary obligation or any property constituting direct
or indirect security therefor,

 

(2) to advance or supply funds

 

(a) for the purchase or payment of any such primary obligation, or

 

(b) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, or

 

11

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(c) 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 against loss in respect
thereof.

 

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Borrower who:

 

(1) was a member of such Board of Directors on the Closing Date; or

 

(2) was nominated for election or elected to such Board of Directors with the
approval of at least 75% of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Control” has the meaning specified in the definition of “Affiliate.”

 

“Credit Facilities” means, with respect to the Borrower or any of its Restricted
Subsidiaries, one or more debt facilities, other than the facility hereunder, or
other financing arrangements (including, without limitation, the Existing Credit
Agreement, the Secured Credit Facility, commercial paper facilities or
indentures) providing for revolving credit loans, term loans, letters of credit
or other long-term Indebtedness, including any notes, mortgages, guarantees,
security documents, instruments and agreements executed in connection therewith,
and any amendments, supplements, modifications, extensions, renewals,
restatements or refundings thereof and any indentures or credit facilities or
commercial paper facilities that replace, refund or refinance any part of the
loans, notes, other credit facilities or commitments thereunder, including any
such replacement, refunding or refinancing facility or indenture that increases
the amount permitted to be borrowed thereunder or alters the maturity thereof
(provided that such increase in borrowings is permitted under Section 7.02) or
adds Restricted Subsidiaries as additional borrowers or guarantors thereunder
and whether by the same or any other agent, lender or investor or group of
lenders or investors.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally
(including, in the case of Loan Parties incorporated or organized in England or
Wales, administration, administrative receivership, voluntary arrangement and
schemes of arrangement).

 

“Default” means any event that is, or with the passage of time or the giving of
notice or both would be, an Event of Default provided that any Default that
results solely from the taking of any action that would have been permitted but
for the continuation of a previous Default will be deemed to be cured if such
previous Default is cured prior to becoming an Event of Default.

 

“Default Rate” means an interest rate equal to the interest rate otherwise
applicable to the Loan plus 2.0% per annum.

 

“Defaulting Lender” means any Lender that (a) has failed to pay over to the
Administrative Agent or any other Lender any amount required to be paid by it
hereunder within one (1)

 

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Business Day of the date when due, unless subsequently cured or (b) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“Designated Noncash Consideration” means the fair market value of noncash
consideration received by the Borrower or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Noncash Consideration
pursuant to an Officers’ Certificate, setting forth the basis of such valuation,
less the amount of cash or Cash Equivalents received in connection with a
subsequent sale of such Designated Noncash Consideration.

 

“Designated Non-Debtors” means the Subsidiaries set forth on Schedule 1.01C.

 

“Designated Preferred Stock” means preferred stock of the Borrower or any direct
or indirect parent thereof (in each case other than Disqualified Stock) that is
issued for cash (other than to a Restricted Subsidiary or an employee stock
ownership plan or trust established by the Borrower or any of its Subsidiaries)
and is so designated as Designated Preferred Stock, pursuant to an Officers’
Certificate, as the case may be, on the issuance date thereof, the cash proceeds
of which are excluded from the calculation set forth in Section 7.01(a)(vii).

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction and any sale of Equity
Interests held in another Person) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith; and,
shall include any issuance by a Person of any of its Equity Interests to another
Person.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of
such Person which, by its terms, or by the terms of any security into which it
is convertible or for which it is putable or exchangeable, or upon the happening
of any event, matures or is mandatorily redeemable, other than as a result of a
change of control or asset sale, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, other than as a
result of a change of control or asset sale, in whole or in part, in each case
prior to the date 91 days after the Maturity Date; provided, however, that only
the portion of Capital Stock that so matures or is mandatorily redeemable, is so
convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such date will be deemed to be Disqualified Stock; and,
provided further, that if such Capital Stock is issued to any plan for the
benefit of employees of the Borrower or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Borrower or any of
its Subsidiaries in order to satisfy applicable statutory or regulatory
obligations.

 

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

 

“Domestic Subsidiary” means, with respect to any Person, any Restricted
Subsidiary of such Person other than a Foreign Subsidiary.

 

“EBITDA” means, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period plus (without duplication):

 

(a) provision for taxes based on income or profits, plus franchise or similar
taxes, of such Person for such period deducted (and not added back) in computing
Consolidated Net Income, plus

 

(b) Consolidated Interest Expense of such Person for such period to the extent
the same was deducted (and not added back) in calculating such Consolidated Net
Income, plus

 

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(c) Consolidated Depreciation and Amortization Expense of such Person for such
period to the extent such depreciation and amortization were deducted (and not
added back) in computing Consolidated Net Income, plus

 

(d) any fees, expenses or charges related to any Equity Offering, Permitted
Investment, acquisition, disposition, recapitalization or Indebtedness permitted
to be incurred by this Agreement (whether or not successful), including such
fees, expenses or charges related to the offering of the Senior Secured Notes,
and, in each case, deducted (and not added back) in computing Consolidated Net
Income, plus

 

(e) the amount of any restructuring charges deducted (and not added back) in
such period in computing Consolidated Net Income, including any one-time costs
incurred in connection with acquisitions after the Existing Agreement Closing
Date; provided that the aggregate amount of restructuring charges incurred
during 2011 and thereafter added to EBITDA pursuant to this clause (e) or
excluded in the calculation of Consolidated Net Income pursuant to clause (1) of
the definition thereof shall not exceed $35,000,000 for any twelve-month period,
and any restructuring charges incurred during any fiscal quarter of 2011 and
thereafter shall be set forth in reasonable detail on a schedule provided to the
Administrative Agent, as part of the Compliance Certificate with respect to such
quarter required to be delivered pursuant to Section 6.02(b), plus

 

(f) any other non-cash charges, expenses or losses reducing Consolidated Net
Income for such period (including any impairment charges or the impact of
purchase accounting and the effects of fresh start accounting under SOP 90-7),
excluding any such charge that represents an accrual or reserve for a cash
expenditure for a future period, plus

 

(g) the amount of any minority interest expense or non-controlling interest in
income of consolidated subsidiaries deducted (and not added back) in such period
in calculating Consolidated Net Income (less the amount of any cash dividends
paid to the holders of such minority interests), plus

 

(h) all non-recurring costs and expenses of the Borrower and its Restricted
Subsidiaries incurred in connection with the Emergence Transactions; plus

 

(i) any net loss resulting from obligations under Swap Contracts (including
pursuant to the application of SFAS No. 133), plus

 

(j) foreign exchange losses resulting from the impact of foreign currency
changes on the valuation of assets or liabilities on the balance sheet of the
Borrower and its consolidated Subsidiaries, plus

 

(k) any deductions consisting of subsidiary income attributable to minority
interests in Reader’s Digest Association Limited, except to the extent actually
paid to a holder of Equity Interests in such Subsidiary (or any designee of such
Person) other than the Borrower and its Subsidiaries (with such payments to be
deducted in the period made), less

 

(l) any net gain resulting from obligations under Swap Contracts (including
pursuant to the application of SFAS No. 133), less

 

(m) foreign exchange gains resulting from the impact of foreign currency changes
on the valuation of assets or liabilities on the balance sheet of the Borrower
and its consolidated Subsidiaries, less

 

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(n) any additions resulting from subsidiary losses attributable to minority
interests in Reader’s Digest Association Limited, less

 

(o) non-cash items increasing Consolidated Net Income of such Person for such
period (including the effects of fresh start accounting under SOP 90-7),
excluding any non-cash gains which represent the reversal of any accrual of, or
cash reserve for, anticipated cash charges that reduced EBITDA in any prior
period.

 

It is understood that (i) if the EBITDA for any fiscal quarter is less than
zero, then such EBITDA shall be deemed to be equal to zero and (ii) each
calculation of EBITDA hereunder shall include such pro forma adjustments as are
appropriate and consistent with the pro forma adjustment provisions set forth in
the definition of Consolidated Leverage Ratio (without duplication thereof).

 

“Eligible Assignee” means any Assignee permitted by and consented to in
accordance with Section 11.07(b).

 

“Emergence Date” means the day (a) that is the Business Day selected by the
Debtors (as defined under the Reorganization Plan) after the date of the
Confirmation Order on which all conditions specified in Article IX.A of the
Reorganization Plan have been satisfied or waived pursuant to Article IX.B of
the Reorganization Plan; (b) the Emergence Transactions shall have occurred; and
(c) the Reorganization Plan shall have been substantially consummated.

 

“Emergence Transactions” mean the various transactions set forth in the
Reorganization Plan entered into by the Borrower and certain of its affiliates
in connection with the Emergence Date and substantial consummation of the
Reorganization Plan.

 

“Environmental Laws” means any and all Laws (including common law) relating to
pollution, the protection of the environment, the protection of natural
resources, or, to the extent relating to exposure to hazardous substances, the
protection of human health or to the release of any pollutants into the
environment, including those related to air emissions and discharges to public
water or waste treatment systems.

 

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

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock, but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock.

 

“Equity Offering” means any public or private sale of common or preferred equity
of the Borrower or any of its direct or indirect parent companies (excluding
Disqualified Stock), other than (a) public offerings with respect to the
Borrower’s or any direct or indirect parent company’s common stock

 

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registered on Form S-8, (b) any sales to Holdings, the Borrower or any of its
Subsidiaries, and (c) any such public or private sale that constitutes an
Excluded Contribution or representing Designated Preferred Stock.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is under common control with any Loan Party within the meaning of Section 4001
of ERISA.

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization or is in endangered or critical status (within the meaning of
Section 432 of the Code or Section 305 or Title IV of ERISA); (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (g) a
determination that any Pension Plan is, or is expected to be, in “at risk”
status (within the meaning of Section 430 of the Code or Section 303 of ERISA);
(h) the filing pursuant to Section 412 of the Code or Section 303 of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Pension Plan, the failure to make by its due date a required installment under
Section 430(j) of the Code with respect to any Pension Plan or the failure of
any Loan Party or any ERISA Affiliates to make any required contribution to a
Multiemployer Plan; or (i) any failure by any Pension Plan to satisfy the
minimum funding standards (within the meaning of Section 412 of the Code or
Section 302 of ERISA) applicable to such Pension Plan, whether or not waived.

 

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

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

 

“Exchange Notes” means any notes issued in exchange for notes pursuant to the
Registration Rights Agreement or similar agreement.

 

“Excluded Contribution” means net cash proceeds, marketable securities or
Qualified Proceeds received by the Borrower and its Restricted Subsidiaries from

 

(a) contributions to its common equity capital, and

 

(b) the sale (other than to a Subsidiary of the Borrower or to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement of the Borrower or a Subsidiary) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock) of the Borrower or any direct
or indirect parent of the Borrower,

 

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in each case designated as Excluded Contributions pursuant to an Officers’
Certificate on the date such capital contributions are made or the date such
Equity Interests are sold, as the case may be, which are excluded from the
calculation set forth in Section 7.01(a)(vii).

 

“Excluded Property” has the meaning specified in the Security Agreement.

 

“Excluded Taxes” has the meaning specified in Section 3.01(f).

 

“Existing Agreement Closing Date” means the “Closing Date” as defined in the
Existing Credit Agreement.

 

“Existing Credit Agreement” means the Credit Agreement, dated as of February 19,
2010, among the Borrower, Holdings, the guarantors party thereto, the lenders
party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as
amended, supplemented, waived or otherwise modified from time to time in a
manner not prohibited by the provisions hereof.

 

“Existing Indebtedness” means Indebtedness of the Borrower and its Restricted
Subsidiaries existing on the Closing Date.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to JPMorgan Chase
Bank, N.A. (or, if the Existing Credit Agreement is no longer outstanding, the
administrative agent under the Borrower’s then-existing primary credit facility)
on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” has the meaning specified in Section 2.08(b).

 

“Foreign Benefit Arrangement” means any employee benefit arrangement mandated by
non-U.S. law that is maintained or contributed to by any Loan Party or any ERISA
Affiliate.

 

“Foreign Jurisdiction Deposit” means a deposit or Guarantee incurred in the
ordinary course of business and required by any Governmental Authority in a
foreign jurisdiction as a condition of doing business in such jurisdiction.

 

“Foreign Lender” has the meaning specified in Section 11.15.

 

“Foreign Plan” means each employee benefit plan (within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to
U.S. law and is maintained or contributed to by any Loan Party or any ERISA
Affiliate.

 

“Foreign Subsidiary” means, with respect to any Person, any Restricted
Subsidiary of such Person that is not organized or existing under the laws of
the United States, any state thereof or the District of Columbia, and any
Restricted Subsidiary of such Restricted Subsidiary.

 

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

 

“GAAP” means generally accepted accounting principles in the United States which
are in effect on the Existing Agreement Closing Date.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Government Securities” means securities that are:

 

(a) direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged, or

 

(b) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America the timely payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America,

 

which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act), as custodian with respect to
any such Government Securities or a specific payment of principal of or interest
on any such Government Securities held by such custodian for the account of the
holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Securities or the specific payment of
principal of or interest on the Government Securities evidenced by such
depository receipt.

 

“Granting Lender” has the meaning specified in Section 11.07(h).

 

“Group Member” means Holdings, the Borrower and the Subsidiaries.

 

“guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.

 

“Guarantee” means the guarantee by any Guarantor of the Borrower’s Obligations
under this Agreement.

 

“Guarantee Requirement” means, at any time, the requirement that, all
Obligations shall have been unconditionally guaranteed (the “Guaranty”) by
Holdings and each Domestic Subsidiary (other than Direct Holdings IP LLC), or,
in the case of Domestic Subsidiaries formed or acquired after the Closing Date,
each wholly-owned Domestic Subsidiary with assets with either a book value or
fair market value equal to or greater than $250,000 (each, a “Guarantor”).

 

“Guarantors” has the meaning specified in the definition of “Guarantee
Requirement”.

 

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“Guarantor Obligations”:  with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with this
Agreement (including, without limitation, Article X), or any other Loan Document
to which such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all Attorney Costs that are required
to be paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).

 

“Guaranty” has the meaning specified in the definition of “Guarantee
Requirement”.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances or wastes or 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 or that could give rise
to any liability under any Environmental Law.

 

“Holdings” has the meaning specified in the preamble of this Agreement.

 

“Indebtedness” means, with respect to any Person,

 

(a) any Indebtedness (including principal and premium) of such Person, whether
or not contingent:

 

(1) in respect of borrowed money,

 

(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit or bankers’ acceptances (or, without double counting, reimbursement
agreements in respect thereof),

 

(3) representing the deferred and unpaid balance of the purchase price of any
property (including Capitalized Lease Obligations), except any such balance that
constitutes a trade payable or similar obligation to a trade creditor, in each
case accrued in the ordinary course of business, or

 

(4) representing any obligations under Swap Contracts,

 

if and to the extent that any of the foregoing Indebtedness (other than letters
of credit and obligations under Swap Contracts) would appear as a liability upon
a balance sheet (excluding the footnotes thereto) of such Person prepared in
accordance with GAAP,

 

(b) to the extent not otherwise included, any obligation by such Person to be
liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness
of another Person (whether or not such items would appear upon the balance sheet
of such obligor or guarantor), other than by endorsement of negotiable
instruments for collection in the ordinary course of business, and

 

(c) to the extent not otherwise included, Indebtedness of another Person secured
by a Lien on any asset owned by such Person, whether or not such Indebtedness is
assumed by such Person (with the amount of such Indebtedness deemed to be the
lower of (i) the principal amount of the Indebtedness of such other person and
(ii) the fair market value of the assets securing such Indebtedness at the date
of determination);

 

provided, however, that (x) Contingent Obligations incurred in the ordinary
course of business, (y) and obligations under or in respect of Receivables
Facilities, and (z) in the case of the Borrower and its Restricted Subsidiaries,
statutory or other legal requirements to make deposits in

 

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connection with sweepstakes or similar contests, or surety bonds or letters of
credit posted pursuant to such requirements in the ordinary course of business
shall be deemed not to constitute Indebtedness.

 

“Indemnified Liabilities” has the meaning specified in Section 11.05.

 

“Indemnitees” has the meaning specified in Section 11.05.

 

“Independent Financial Advisor” means an accounting, appraisal, investment
banking firm or consultant to Persons engaged in Similar Businesses of
nationally recognized standing that is, in the good faith judgment of the
Borrower, qualified to perform the task for which it has been engaged.

 

“Information” has the meaning specified in Section 11.08.

 

“Initial Purchasers” means J.P. Morgan Securities Inc., Banc of America
Securities LLC, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and
Moelis & Company LLC.

 

“Intellectual Property” has the meaning set forth in the Security Agreement.

 

“Interest Payment Date” means, (a) the first Business Day of each fiscal quarter
and (b) the date of any repayment or prepayment made in respect of any Loan.

 

“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
trade credit, advances to customers, commission, travel and similar advances to
officers and employees, in each case made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet (excluding the
footnotes) of such Person in the same manner as the other investments included
in this definition to the extent such transactions involve the transfer of cash
or other property. For purposes of the definition of “Unrestricted Subsidiary”
and Section 7.01,

 

(1) “Investments” shall include the portion (proportionate to the Borrower’s
direct or indirect equity interest in such Subsidiary) of the fair market value
of the net assets of a Subsidiary of the Borrower at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however, that
upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower
or applicable Restricted Subsidiary shall be deemed to continue to have a
permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive)
equal to

 

(x) the Borrower’s direct or indirect “Investment” in such Subsidiary at the
time of such redesignation; less

 

(y) the portion (proportionate to the Borrower’s direct or indirect equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and

 

(2) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer, in each case as
determined in good faith by the Borrower.

 

“Issue Date” means the date on which the Senior Secured Notes were initially
issued.

 

“Junior Financing” has the meaning specified in Section 7.09.

 

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“Junior Financing Documentation” means any documentation governing any Junior
Financing.

 

“Junior Lien Indebtedness” means any Indebtedness incurred by the Borrower or
any Restricted Subsidiary which is permitted to be secured by the Collateral on
a junior basis to the security interest in favor of the Secured Obligations.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities.

 

“Lender” has the meaning specified in the introductory paragraph to this
Agreement.

 

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

 

“Lien” means, with respect to any asset, any mortgage, lien (statutory or
otherwise), pledge, charge, security interest, preference, priority or
encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law, including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction; provided that in no event shall an
operating lease be deemed to constitute a Lien.

 

“Liquidity” means, as of the most recent date for which internal financial
statements are available, the sum of (i) cash, (ii) Cash Equivalents and
(iii) unutilized commitments available to be borrowed under revolving credit
arrangements of the Borrower and its Restricted Subsidiaries, after giving
effect to outstanding letters of credit thereunder.

 

“Loan” means an extension of credit by a Lender to the Borrower under
Article II.

 

“Loan Documents” means, collectively, (i) this Agreement, (ii) the Notes,
(iii) the Warrants and (iv) the Fee Letter.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Luxor Capital Group” means Luxor Capital Group, LP and any successor thereto.

 

“Material Adverse Effect” means any event, development or circumstance that,
individually or in the aggregate, has had or could reasonably be expected to
have a material adverse effect on (a) the business, property, operations or
financial condition of Holdings and its Subsidiaries, taken as a whole, in each
case, (b) the business, property, operations or financial condition of Holdings,
the Borrower and the Restricted Subsidiaries, taken as a whole, in each case, or
(c) the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights and remedies of the Administrative Agent and the Lenders
hereunder or thereunder.

 

“Maturity Date” means May 12, 2014.

 

“Maximum Rate” has the meaning specified in Section 11.10.

 

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“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

 

“Net Award” means any awards or proceeds in respect of any condemnation or other
eminent domain proceeding.

 

“Net Cash Balance” means, at any time, the total cash balance (including cash,
Cash Equivalents and restricted cash) of the Borrower and its Subsidiaries at
such time, less their respective outstanding checks and drafts, wire transfer
instructions and similar payment directions that have not, at such time, cleared
the respective accounts of the Borrower and its Subsidiaries.

 

“Net Income” means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of preferred stock dividends.

 

“Net Insurance Proceeds” means any awards or proceeds in respect of any casualty
insurance or title insurance claim relating to any Collateral deposited in the
Collateral Account pursuant to the Collateral Documents.

 

“Net Proceeds” from an Asset Sale means the aggregate cash proceeds received by
the Borrower or any Restricted Subsidiary (including any cash received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and net proceeds from the sale of other disposition of any Designated
Noncash Consideration and securities or other assets received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Sale or received in any other non-cash form) therefrom, in each case net
of:

 

(1) all brokerage, legal, accounting, investment banking, title and recording
tax expenses, commissions and other fees and expenses incurred, and all federal,
state, provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP or distributed or distributable to its members as a tax
distribution (after taking into account any available tax credits or deductions
and any tax sharing agreements), as a direct cost relating to such Asset Sale;

 

(2) all payments made on any Indebtedness (other than Secured Obligations) that
is secured by any assets subject to such Asset Sale, in accordance with the
terms of any Lien upon such assets, or that must by its terms, or in order to
obtain a necessary consent to such Asset Sale, or by applicable law, be repaid
out of the proceeds from such Asset Sale;

 

(3) all distributions and other payments required to be made to minority
interest holders (other than the Borrower or Restricted Subsidiaries) in
Subsidiaries or joint ventures as a result of such Asset Sale;

 

(4) the deduction of appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
property or other assets disposed of in such Asset Sale and retained by the
Borrower or any Restricted Subsidiary after such Asset Sale; and

 

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(5) any portion of the purchase price from an Asset Sale placed in escrow in
accordance with GAAP (whether as a reserve for adjustment of the purchase price,
or for satisfaction of indemnities in respect of such Asset Sale);

 

provided, however, that, in the cases of clauses (4) and (5), upon reversal of
any such reserve or the termination of any such escrow, Net Proceeds shall be
increased by the amount of such reversal or any portion of funds released from
escrow to the Borrower or any Restricted Subsidiary.

 

“Note” means a promissory note of the Borrower payable to any Lender, in
substantially the form of Exhibit B hereto, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Loans of such
Lender.

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligations” means all monetary obligations of any Loan Party and its
Subsidiaries arising under any Loan Document, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or Subsidiary of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed claims
in such proceeding, including Guarantor Obligations.  Without limiting the
generality of the foregoing, the Obligations of the Loan Parties under the Loan
Documents (and of their Subsidiaries to the extent they have obligations under
the Loan Documents) include (x) the obligation (including guarantee obligations)
to pay principal, interest, charges, expenses, fees, Attorney Costs,
indemnities, and other amounts payable by any Loan Party or its Subsidiaries
under any Loan Document and (y) the obligation of any Loan Party or any of its
Subsidiaries to reimburse any amount in respect of any of the foregoing that any
Lender, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party or such Subsidiary.

 

“Officer” means the Chairman of the Board of Directors, the Chief Executive
Officer, the Chief Financial Officer, the President, any Executive Vice
President, Senior Vice President or Vice President, the Treasurer or the
Secretary of the Borrower. “Officer” of any Guarantor has a correlative meaning.

 

“Officers’ Certificate” means a certificate signed on behalf of the Borrower by
two Officers of the Borrower, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Borrower that meets the requirements set forth in this
Agreement.

 

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

 

“Other Taxes” has the meaning specified in Section 3.01(b).

 

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“Pari Passu Payment Lien Obligations” means any Additional Notes and any other
Indebtedness that has a stated maturity date that is longer than the Senior
Secured Notes and that is permitted to have Pari Passu Payment Lien Priority
relative to the Senior Secured Notes with respect to the Collateral and is not
secured by any other assets; provided that an authorized representative of the
holders of such Indebtedness (other than any Additional Notes) shall have
executed a joinder to the Collateral Documents in the form provided therein.

 

“Pari Passu Payment Lien Priority” means, relative to specified Indebtedness and
other obligations, having equal Lien priority to the Senior Secured Notes and
the guarantees thereof, as the case may be, on the Collateral.

 

“Participant” has the meaning specified in Section 11.07(e).

 

“Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA
and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to
which any Loan Party or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five (5) plan years.

 

“Permitted Investments” means

 

(a) any Investment in the Borrower or any Domestic Subsidiary or any Investment
by a Restricted Subsidiary that is not a Subsidiary Guarantor in a Restricted
Subsidiary that is not a Subsidiary Guarantor;

 

(b) any Investment in cash and Cash Equivalents;

 

(c) any Investment by the Borrower or any Domestic Subsidiary in a Person that
is engaged in a Similar Business if as a result of such Investment:

 

(1) such Person becomes a Domestic Subsidiary; or

 

(2) such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Borrower or a
Domestic Subsidiary,

 

provided that all such Investments made pursuant to this clause (c) shall not
exceed $5.0 million from and after the Closing Date;

 

(d) any Investment by a Restricted Subsidiary that is not a Subsidiary Guarantor
in a Person that is engaged in a Similar Business if as a result of such
Investment:

 

(1) such Person becomes a Restricted Subsidiary; or

 

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(2) such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Borrower or a
Restricted Subsidiary,

 

provided that all such Investments made pursuant to this clause (d) shall not
exceed $5.0 million from and after the Closing Date;

 

(e) any Investment in securities or other assets not constituting cash or Cash
Equivalents and received in connection with an Asset Sale made pursuant to
Section 7.08 or any other disposition of assets not constituting an Asset Sale;

 

(f) any Investment existing or pursuant to agreements or arrangements in effect
on the Existing Agreement Closing Date and any modification, replacement,
renewal or extension thereof; provided that the amount of any such Investment
may not be increased except (x) as required by the terms of such Investment as
in existence on the Existing Agreement Closing Date or (y) as otherwise
permitted under this Agreement;

 

(g) any Investment acquired by the Borrower or any Restricted Subsidiary:

 

(1) in exchange for any other Investment or accounts receivable held by the
Borrower or any such Restricted Subsidiary in connection with or as a result of
a bankruptcy, workout, reorganization or recapitalization of the issuers of such
other Investment or accounts receivable; or

 

(2) as a result of a foreclosure by the Borrower or any Restricted Subsidiary
with respect to any secured Investment or other transfer of title with respect
to any secured Investment in default;

 

(i) obligations under Swap Contracts permitted under Section 7.02(b)(i) and
Section 7.02(b)(xii);

 

(j) loans and advances to officers, directors and employees for business-related
travel expenses, moving expenses and other expenses, in each case incurred in
the ordinary course of business and in compliance with applicable law or to
finance the purchase of Equity Interests of the Borrower or any of its direct or
indirect parents and in an amount not to exceed $5.0 million at any one time
outstanding;

 

(k) Investments the payment for which consists of Equity Interests of the
Borrower or any of its direct or indirect parents (exclusive of Disqualified
Stock of the Borrower); provided, however, that such Equity Interests will not
increase the amount available for Restricted Payments under
Section 7.01(a)(vii);

 

(l) guarantees of Indebtedness permitted under Section 7.02; provided that if
such Indebtedness can only be incurred by the Borrower or Subsidiary Guarantors,
then such guarantees are only permitted by this clause to the extent made by the
Borrower or a Subsidiary Guarantor, and (ii) performance guarantees with respect
to obligations incurred by the Borrower or any of its Restricted Subsidiaries
that are permitted by this Agreement;

 

(m) any transaction to the extent it constitutes an Investment that is permitted
and made in accordance with Section 7.06(b) (except transactions described in
clauses (ii), (iv), (v), (vi), (viii) and (ix) of such Section 7.06(b));

 

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(n) Investments consisting of purchases and acquisitions of inventory, supplies,
material or equipment in the ordinary course of business or the non-exclusive
licensing of intellectual property pursuant to joint marketing arrangements with
other Persons;

 

(o) additional Investments having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (o) that are at that
time outstanding, not to exceed $25.0 million (with the fair market value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value) plus the amount of any distributions, dividends,
payments or other returns in respect of such Investments (without duplication
for purposes of Section 7.01 of any amounts applied pursuant to
Section 7.01(a)(vii)); provided that if such Investment is in Capital Stock of a
Person that subsequently becomes a Restricted Subsidiary, such Investment shall
thereafter be deemed permitted under clause (a) or (d) above and shall not be
included as having been made pursuant to this clause (o);

 

(p) Investments of a Restricted Subsidiary acquired after the Closing Date or of
an entity merged into the Borrower or merged into or consolidated with a
Restricted Subsidiary in accordance with Section 7.04 after the Closing Date to
the extent that such Investments were not made in contemplation of or in
connection with such acquisition, merger or consolidation and were in existence
on the date of such acquisition, merger or consolidation;

 

(q) the creation of Liens on the assets of the Borrower or any of its Restricted
Subsidiaries in compliance with Section 7.03;

 

(r) Investments relating to any special-purpose wholly owned subsidiary of the
Borrower organized in connection with a Receivables Facility that, in the good
faith determination of the Board of Directors of the Borrower, are necessary or
advisable to effect such Receivables Facility;

 

(s) Investments consisting of earnest money deposits required in connection with
a purchase agreement or letter of intent permitted by this Agreement;

 

(t) Investments in Reader’s Digest Association Limited in an amount not to
exceed £10.9 million to settle under-funded pension liabilities; and

 

(u) Investments in the form of contributions of the Capital Stock or
intercompany notes of first-tier Foreign Subsidiaries to other first-tier
Foreign Subsidiaries to effectuate a tax reorganization of the Borrower and its
Foreign Subsidiaries.

 

“Permitted Liens” means, with respect to any Person:

 

(1) Liens, pledges, prepayments or deposits by such Person in connection with
workmen’s compensation laws, unemployment insurance laws and other social
security legislation or similar legislation, Liens, pledges, prepayments or
deposits (including deposits made to satisfy statutory or other legal
obligations in connection with sweepstakes or similar contests and Liens in
favor of postal authorities) in connection with, or to secure the performance
of, bids, tenders, contracts (other than for the payment of Indebtedness) or
leases to which such Person is a party, or Liens, pledges, prepayments or
deposits to secure public or statutory obligations of such Person or Liens or
deposits of cash or U.S. government bonds to secure surety or appeal bonds to
which such Person is a party, or Liens or deposits as security for contested
taxes or import duties or for the payment of rent, in each case incurred in the
ordinary course of business;

 

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(2) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, workmen’s, suppliers’ or construction contractor’s
Liens, in each case which secure amounts which are not overdue for a period of
more than forty-five (45) days or if more than forty-five (45) days overdue, are
unfiled and no other action has been taken to enforce such Lien or being
contested in good faith by appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to which such Person shall
then be proceeding with an appeal or other proceedings for review;

 

(3) Liens for taxes, assessments or other governmental charges not yet due or
payable or which are being contested in good faith by appropriate proceedings;

 

(4) Liens (including rights of set-off), deposits, prepayments or cash pledges
in connection with or to secure the performance of statutory bonds, stay,
customs and appeal bonds, performance bonds and surety bonds or bid bonds and
other obligations of a like nature (including those to secure health, safety and
environmental obligations) or with respect to other regulatory requirements or
letters of credit issued pursuant to the request of and for the account of such
Person in the ordinary course of its business;

 

(5) easements, rights-of-way, restrictions (including zoning restrictions),
covenants, licenses, encroachments, protrusions and other similar minor
encumbrances and minor title defects affecting real property and zoning or other
restrictions as to the use of real properties or Liens incidental which are
imposed by any governmental authority having jurisdiction over such real
property which do not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation of the business
of such Person;

 

(6) Liens securing Indebtedness permitted to be incurred pursuant to
Section 7.02(b)(iv); provided that Liens securing Indebtedness incurred pursuant
to Section 7.02(b)(iv) are solely on acquired property or the assets of the
acquired entity; provided, further, however, that individual financings of
equipment provided by one lender may be cross collateralized to other financings
of equipment provided by such lender;

 

(7) Liens existing on the Existing Agreement Closing Date (other than Liens
securing the Secured Credit Facility, Liens securing the Existing Credit
Agreement and Liens securing the Senior Secured Notes);

 

(8) Liens on property or shares of stock of or held by a Person at the time such
Person becomes a Restricted Subsidiary; provided, however, such Liens are not
created or incurred in connection with, or in contemplation of, such other
Person becoming such a subsidiary; provided, further, however, that such Liens
may not extend to any other property owned by the Borrower or any Restricted
Subsidiary;

 

(9) Liens on property at the time the Borrower or a Restricted Subsidiary
acquired the property, including any acquisition by means of a merger or
consolidation with or into the Borrower or any Restricted Subsidiary; provided,
however, that such Liens are not created or incurred in connection with, or in
contemplation of, such acquisition; provided, further, however, that the Liens
may not extend to any other property owned by the Borrower or any Restricted
Subsidiary;

 

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary
that is not a Subsidiary Guarantor to another Restricted Subsidiary that is not
a Subsidiary Guarantor, in each case permitted to be incurred in accordance with
Section 7.02; provided that the Liens extend only to assets of Restricted
Subsidiaries that are not Subsidiary Guarantors;

 

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(11) Liens securing obligations under Swap Contracts so long as the related
Indebtedness is, and is permitted to be under this Agreement, secured by a Lien
on the same property securing such obligations under Swap Contracts;

 

(12) Liens on specific items of inventory of other goods and proceeds of any
Person securing such Person’s obligations in respect of bankers’ acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;

 

(13) Leases, licenses, sublicenses and subleases of real property granted to
others in the ordinary course of business which do not materially interfere with
the ordinary conduct of the business of the Borrower or any of the Restricted
Subsidiaries;

 

(14) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Borrower and its Restricted
Subsidiaries in the ordinary course of business;

 

(15) Liens in favor of the Borrower or any Domestic Subsidiary;

 

(16) Liens on equipment of the Borrower or any Restricted Subsidiary granted in
the ordinary course of business to the Borrower’s or any Restricted Subsidiary’s
clients at which such equipment is located;

 

(17) Liens to secure any refinancing, refunding, extension, renewal,
modification or replacement (or successive refinancing, refunding, extensions,
renewals, modifications or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9),
(10), (15), (19) and (22); provided, however, that (x) such new Lien shall be
limited to all or part of the same property that secured the original Lien (plus
improvements on such property and after acquired-property that is affixed or
incorporated into the property covered by such Lien) and (y) the Indebtedness
secured by such Lien at such time is not increased to any amount greater than
the sum of (A) the outstanding principal amount or, if greater, committed amount
of the Indebtedness secured by a Lien described under clauses (6), (7), (8),
(9), (10), (15), (19) and (22) at the time the original Lien became a Permitted
Lien under this Agreement, and (B) an amount necessary to pay any fees and
expenses, including premiums and defeasance costs, related to such refinancing,
refunding, extension, renewal or replacement;

 

(18) Liens to secure Indebtedness of any Foreign Subsidiary permitted by
Section 7.02(b)(xxi) covering only the assets of such Foreign Subsidiary;

 

(19) Liens securing the Senior Secured Notes outstanding on the Closing Date and
the Exchange Notes in respect thereof, the guarantees relating to such Senior
Secured Notes and Exchange Notes and any obligations with respect to such Senior
Secured Notes and Exchange Notes and guarantees relating thereto;

 

(20) Liens on the Collateral in favor of any collateral agent (including for the
benefit of the Secured Parties) relating to such collateral agent’s
administrative expenses with respect to the Collateral;

 

(21) Liens securing judgments, attachments or awards not giving rise to an Event
of Default and notices of lis pendens and associated rights related to
litigation being contested in good faith by appropriate proceedings and for
which adequate reserves have been made;

 

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(22) Liens on Collateral securing Pari Passu Payment Lien Obligations or Junior
Lien Indebtedness that has a stated maturity date that is longer than the
Indebtedness permitted to be incurred pursuant to Section 7.02(a); provided that
any such Indebtedness has Pari Passu Payment Lien Priority or junior Lien
priority relative to the Secured Obligations and after giving pro forma effect
thereto, the Consolidated Secured Debt Ratio would be no greater than 2.25 to
1.0;

 

(23) Any interest or title of a lessor, sublessor, licensor or sublicensor in
the property subject to any lease, sublease, license or sublicense (other than
any property that is the subject of a sale and leaseback transaction);

 

(24) Liens on assets or securities deemed to arise in connection with and solely
as a result of the execution, delivery or performance of contracts to sell such
assets or securities if such sale is otherwise permitted by this Agreement;

 

(25) Liens on Capital Stock of Unrestricted Subsidiaries securing Indebtedness
of such Unrestricted Subsidiaries;

 

(26) Liens on (x) Collateral securing Indebtedness incurred pursuant to, and
obligations described in, Section 7.02(b)(i); provided that any such
Indebtedness may be Bank Priority Obligations, Pari Passu Payment Lien
Obligations or have junior Lien priority relative to the Secured Obligations and
(y) Liens on property and assets of Foreign Subsidiaries securing Indebtedness
of Foreign Subsidiaries incurred pursuant to Section 7.02(b)(i).

 

(27) Liens on Collateral securing Junior Lien Indebtedness that has a stated
maturity date that is longer than the Loans and that is permitted to be incurred
pursuant to Section 7.02(a);

 

(28) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with importation of goods;

 

(29) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Borrower or any
of its Restricted Subsidiaries in the ordinary course of business;

 

(30) Liens that are contractual rights of set-off or, in the case of clause
(i) or (ii) below, other bankers’ Liens (i) relating to treasury, depository and
cash management services or any automated clearing house transfers of funds in
the ordinary course of business and not given in connection with the issuance of
Indebtedness, (ii) relating to pooled deposit or sweep accounts to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Borrower or any Subsidiary or (iii) relating to purchase
orders and other agreements entered into with customers of the Borrower or any
Restricted Subsidiary in the ordinary course of business;

 

(31) Liens (i) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection, (ii) in favor of a banking
institution arising as a matter of law encumbering deposits (including the right
of set-off) arising in the ordinary course of business in connection with the
maintenance of such accounts and (iii) arising under customary general terms of
the account bank in relation to any bank account maintained with such bank and
attaching only to such account and the products and proceeds thereof;

 

(32) Liens arising by operation of law or contract on insurance policies and the
proceeds thereof to secure premiums thereunder, and Liens, pledges and deposits
in the ordinary course of business

 

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securing liability for premiums or reimbursement or indemnification obligations
of (including obligations in respect of letters of credit or bank guarantees for
the benefit of) insurance carriers;

 

(33) Liens attaching solely to cash earnest money deposits in connection with
fully collateralized repurchase agreements that are permitted by Section 7.02
that constitute temporary cash investments and that do not extend to any assets
other than those that are the subject of such repurchase agreement;

 

(34) Liens solely on any cash earnest money deposits made in connection with any
letter of intent or purchase agreement permitted hereunder;

 

(35) Liens on accounts receivable and related assets incurred in connection with
a Receivables Facility;

 

(36) Liens on deposits in the ordinary course of business securing credit card
programs maintained in the ordinary course of business in an amount not to
exceed $15.0 million (plus the amount, up to an additional $20.0 million, of
such deposits sought by JPMorgan Chase Bank, N.A. or its subsidiaries (including
Paymentech)) in the aggregate at any one time outstanding;

 

(37) ground leases in respect of real property on which facilities owned or
leased by the Borrower or any of its Subsidiaries are located and other Liens
affecting the interest of any landlord (and any underlying landlord) of any real
property leased by the Borrower or any Subsidiary;

 

(38) Liens on equipment (including printing presses and data-processing
equipment) owned by the Borrower or any Restricted Subsidiary and located on the
premises of any supplier, in the ordinary course of business;

 

(39) Utility and other similar deposits made in the ordinary course of business;

 

(40) Liens encumbering reasonable customary initial deposits and margin deposits
and similar Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business, consistent with past
practice and not for speculative purposes;

 

(41) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Permitted Investments to be
applied against the purchase price for such Investment, and (ii) consisting of
an agreement to sell any property in an Asset Sale permitted under Section 7.08,
in each case, solely to the extent such Investment or Asset Sale, as the case
may be, would have been permitted on the date of the creation of such Lien;

 

(42) Liens on cash collateral securing letters of credit existing on the
Existing Agreement Closing Date; and

 

(43) Liens securing Indebtedness and other obligations in an aggregate principal
amount not to exceed $5.0 million at any one time outstanding.

 

For purposes of determining compliance with this definition, (A) Permitted Liens
need not be incurred solely by reference to one category of Permitted Liens
described above but are permitted to be incurred in part under any combination
thereof and (B) in the event that a Lien (or any portion thereof) meets the
criteria of one or more of the categories of Permitted Liens described above,
the Borrower shall, in its sole discretion, classify (or reclassify) such item
of Permitted Liens (or any portion thereof) in any manner that complies with
this definition and will only be required to include the amount

 

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and type of such item of Permitted Liens in one of the above clauses and such
Lien will be treated as having been incurred pursuant to only one of such
clauses.

 

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) (other than a Multiemployer Plan, Foreign Plan or Foreign
Benefit Arrangement) established by any Loan Party or, with respect to any such
plan that is subject to Section 412 of the Code or Section 302 or Title IV of
ERISA, any ERISA Affiliate.

 

“preferred stock” means any Equity Interest with preferential rights of payment
of dividends or upon liquidation, dissolution, or winding up.

 

“Priority Payment Lien Obligations” means the Indebtedness and other obligations
incurred or described in Section 7.02(b)(i).

 

“Pro Rata Share” means, with respect to each Lender at any time a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitments of such Lender and the
denominator of which is the amount of the Aggregate Commitments; provided that
(if applicable) if such Commitments have been terminated, then the Pro Rata
Share of each Lender shall be determined based on the Pro Rata Share of such
Lender immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof.

 

“Qualified Equity Interests” means any Equity Interests that are not
Disqualified Stock.

 

“Qualified Proceeds” means assets that are used or useful in, or Capital Stock
of any Person engaged in, a Similar Business; provided that the fair market
value of any such assets or Capital Stock shall be determined by the Board of
Directors of the Borrower in good faith.

 

“Receivables Facility” means one or more receivables financing facilities, as
amended from time to time, the Indebtedness and obligations of which are
non-recourse (except for standard representations, warranties, covenants and
indemnities made in connection with such facilities) to the Borrower and the
Restricted Subsidiaries pursuant to which any Restricted Subsidiaries that are
Foreign Subsidiaries sell their accounts receivable to a Person that is not a
Restricted Subsidiary.

 

“Receivables Fees” means distributions or payments made directly or by means of
discounts with respect to any participation interest in accounts receivables
issued or sold in connection with, and other fees paid to a Person that is not a
Restricted Subsidiary in connection with, any Receivables Facility.

 

“Recovery Event” means any event, occurrence, claim or proceeding that results
in any Net Award or Net Insurance Proceeds being deposited into the Collateral
Account pursuant to the Collateral Documents.

 

“Refinancing Indebtedness” has the meaning specified in Section 7.02(b)(xv).

 

“Register” has the meaning specified in Section 11.07(d).

 

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“Registration Rights Agreement” means the Registration Rights Agreement with
respect to the Senior Secured Notes dated as of the Issue Date, among the
Borrower, the Guarantors and the Initial Purchasers and, with respect to any
Additional Notes, one or more registration rights agreements among the Borrower,
the Guarantors and the other parties thereto, relating to the rights given by
the Borrower and the Guarantors to the purchasers of Additional Notes to
register such Additional Notes under the Securities Act.

 

“Reinvestment Assets” means an investment in (1) any one or more businesses;
provided that such investment in any business is in the form of the acquisition
of Capital Stock of such business such that it constitutes a Restricted
Subsidiary, (2) capital expenditures or (3) acquisitions of other assets (other
than current assets), in each of (1), (2) and (3), used or useful in a Similar
Business.

 

“Reorganization Plan” means the Third Amended Joint Chapter 11 Plan of
Reorganization for The Reader’s Digest Association, Inc. and its Debtor
Affiliates, dated as of November 30, 2009, Case No. 09-23529 (RDD) filed in the
United States Bankruptcy Court for the Southern District of New York, as
amended, supplemented or otherwise modified from time to time.

 

“Replacement Assets” means (1) non-current assets and property (including any
such assets acquired by capital expenditures but excluding Indebtedness and
Capital Stock) that shall be used or useful in a Similar Business by the
Borrower or a Restricted Subsidiary or (2) substantially all the assets of a
Similar Business or a majority of the Voting Stock of any Person engaged in a
Similar Business that shall become on the date of acquisition thereof a Domestic
Subsidiary (or a Restricted Subsidiary solely to the extent the assets being
replaced were sold by a Foreign Subsidiary).

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
or the regulations issued thereunder, other than events for which the thirty
(30) day notice period has been waived.

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the aggregate principal amount of the Loans then outstanding.

 

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

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or controller or other similar officer of a Loan
Party and, as to any document delivered on the Closing Date, any secretary or
assistant secretary of a Loan Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Payment” has the meaning specified in Section 7.01(a).

 

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of
the Borrower (including any Foreign Subsidiary) that is not then an Unrestricted
Subsidiary; provided, however, that upon the occurrence of an Unrestricted
Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be
included in the definition of “Restricted Subsidiary.”

 

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“Refunding Capital Stock” has the meaning set forth in Section 7.01(b)(ii).

 

“Retired Capital Stock” has the meaning set forth in Section 7.01(b)(ii).

 

“Same Day Funds” means immediately available funds.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Secured Credit Facility” has the meaning specified in Section 4.01(m).

 

“Secured Hedge Agreement” means any Swap Contract permitted under Article VII
that is entered into by any Loan Party and a “Hedge Bank” under the Existing
Credit Agreement, in each case at the time such Secured Hedge Agreement is
entered into.

 

“Secured Obligations” means the Priority Payment Lien Obligations, the Pari
Passu Payment Lien Obligations, any obligations under the Specified Notes and
any refinancings or replacements of any of the foregoing.

 

“Secured Parties” means the holders of the Secured Obligations and the holders
of any Junior Lien Indebtedness.

 

“Securities Act” means the Securities Act of 1933 and the rules and regulations
of the SEC promulgated thereunder.

 

“Security Agreement” means, collectively, the Security Agreement, dated
February 19, 2010, executed by Holdings, the Borrower, each Guarantor, the
Collateral Agent, the administrative agent under the Existing Credit Agreement
and the Senior Secured Notes Trustee (as amended or supplemented from time to
time).

 

“Senior Secured Indebtedness” means, as at any date, the aggregate principal
amount of all Consolidated Total Indebtedness that is secured by a Lien on any
assets of the Loan Parties.

 

“Senior Secured Leverage Ratio” means, as at any date, the ratio of (a) Senior
Secured Indebtedness as at such date to (b) EBITDA for the Test Period most
recently ended prior to such date, in each case with such pro forma adjustments
as are appropriate and consistent with the pro forma adjustment provisions set
forth in the definition of Consolidated Leverage Ratio, without duplication
thereof.

 

“Senior Secured Note Indenture” means the Indenture entered into by the Borrower
and certain of its Subsidiaries in connection with the issuance of the Senior
Secured Notes, together with all instruments and other agreements entered into
by the Borrower or such Subsidiaries in connection therewith.

 

“Senior Secured Note Trustee” means Wells Fargo Bank, N.A., in its capacity as
indenture trustee under the Senior Secured Note Indenture, together with any of
its successors.

 

“Senior Secured Notes” means the $525,000,000 aggregate principal amount of
senior secured notes of the Borrower issued on the Existing Agreement Closing
Date pursuant to the Senior Secured Note Indenture.

 

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“Similar Business” means any business conducted or proposed to be conducted by
the Borrower and its Restricted Subsidiaries on the Closing Date or any business
that is similar, reasonably related, incidental or ancillary thereto or any
business that is a reasonable extension thereof.

 

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

 

“Specified Change of Control” means a “Change of Control” (or other defined term
having a similar purpose) as defined in the Senior Secured Note Indenture, the
Existing Credit Agreement or any document governing any refinancing of any of
the Senior Secured Notes or the Existing Credit Agreement.

 

“Specified Notes” means, collectively, the Senior Secured Notes, the Additional
Notes and the Exchange Notes.

 

“SPC” has the meaning specified in Section 11.07(h).

 

“Successor Borrower” has the meaning specified in Section 7.04(a)(i).

 

“Successor Person” has the meaning specified in Section 7.05(a)(i).

 

“Subsidiary” means, with respect to any Person,

 

(1) any corporation, association, or other business entity (other than a
partnership, joint venture, limited liability company or similar entity) of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a combination thereof; and

 

(2) any partnership, joint venture, limited liability company or similar entity
of which

 

(x) more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general or limited partnership interests, as applicable, are
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of that Person or a combination thereof whether in the
form of membership, general, special or limited partnership or otherwise, and

 

(y) such Person or any Restricted Subsidiary of such Person is a controlling
general partner or managing member of such entity.

 

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“Subsidiary Guarantor” means each wholly owned Domestic Subsidiary of the
Borrower on the Closing Date (other than Direct Holdings IP L.L.C.) and any
other Restricted Subsidiaries that become Guarantors under this Agreement in
accordance with the terms hereof until such time as such Person’s Guarantee may
be released in accordance with this Agreement.

 

“Supplemental Administrative Agent” has the meaning specified in Section 9.13
and “Supplemental Administrative Agents” shall have the corresponding meaning.

 

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

 

“Taxes” has the meaning specified in Section 3.01(a).

 

“Test Period” means, for any determination under this Agreement, the period of
four consecutive fiscal quarters of the Borrower then last ended.

 

“Threshold Amount” means $18,000,000.

 

“Total Assets” means, with respect to any Person, the total consolidated assets
of such Person and its Restricted Subsidiaries as shown on the most recent
balance sheet of such Person.

 

“Treasury Rate” shall mean, as of any date of voluntary or mandatory prepayment
of the Loans, the yield to maturity as of such date of the United States
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two Business Days prior to such date (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from such date to the
second anniversary of the Closing Date; provided, however, that if the period
from such date to the second anniversary of the Closing Date is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used.

 

“Unaudited Financial Statements” means the unaudited consolidated balance sheets
and related statements of income, stockholders’ equity and cash flows of the
Borrower and its consolidated Subsidiaries for each subsequent fiscal quarter
ended after the fiscal year ended December 31, 2010, in each case for which and
to the extent such financial statements are available prior to the Closing Date.

 

“Uniform Commercial Code” means the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York or the Uniform Commercial
Code (or similar code

 

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or statute) of another jurisdiction, to the extent it may be required to apply
to any item or items of Collateral.

 

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

 

“Unrestricted Subsidiary” means:

 

(1) any Subsidiary of the Borrower, which at the time of determination is an
Unrestricted Subsidiary (as designated by the Board of Directors of the
Borrower, as provided below), and

 

(2) any Subsidiary of an Unrestricted Subsidiary.

 

The Board of Directors of the Borrower may designate any Subsidiary of the
Borrower (including any existing Subsidiary and any newly acquired or newly
formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or
any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or
holds any Lien on, any property of, the Borrower or any Subsidiary of the
Borrower (other than any Subsidiary of the Subsidiary to be so designated);
provided that

 

(a) any Unrestricted Subsidiary must be an entity of which shares of the Capital
Stock or other Equity Interests (including partnership interests) entitled to
cast at least a majority of the votes that may be cast by all shares or Equity
Interests having ordinary voting power for the election of directors or other
governing body are owned, directly or indirectly, by the Borrower,

 

(b) such designation complies with Section 7.01, and

 

(c) each of:

 

(1) the Subsidiary to be so designated, and

 

(2) its Subsidiaries

 

has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Borrower or any Restricted Subsidiary.

 

The Board of Directors of the Borrower may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that, immediately after giving effect to
such designation no Default or Event of Default shall have occurred and be
continuing and, on a pro forma basis taking into account such designation, the
Borrower would be permitted to incur such Indebtedness pursuant to Section 7.02.

 

Any such designation by the Board of Directors of the Borrower shall be notified
by the Borrower to the Administrative Agent by promptly filing with such
Administrative Agent a copy of the resolution of the Board of Directors giving
effect to such designation and an Officers’ Certificate certifying that such
designation complied with the foregoing provisions.

 

“Voting Stock” of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

 

“Warrants” means those warrants issued pursuant to the Class A Warrant to
Purchase Shares of Common Stock and the Class B Warrant to Purchase Shares of
Common Stock, each attached hereto as Exhibit K.

 

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“Weekly Reader Sale” means the sale, conveyance, transfer or other disposition,
whether in a single transaction or series of related transactions, of all or
substantially all of the property or assets of or Equity Interests in Weekly
Reader Corporation and Weekly Reader Custom Publishing, Inc.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness,
Disqualified Stock or preferred stock, as the case may be, at any date, the
quotient obtained by dividing

 

(1) the sum of the products of the number of years from the date of
determination to the date of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock or preferred stock multiplied by the amount of such payment, by

 

(2) the sum of all such payments.

 

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person, 100%
of the outstanding Capital Stock or other ownership interests of which (other
than directors’ qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person.

 

“Yield Maintenance Amount” has the meaning specified in Section 2.08(a).

 

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

 

(a)   The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

 

(b)   (i)  The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

 

(ii)           Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.

 

(iii)          The term “including” is by way of example and not limitation.

 

(iv)          The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

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

 

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

 

Section 1.03           Accounting Terms(a).  (a)  All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall

 

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be prepared in conformity with, GAAP, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.

 

(b)   Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Statement of Financial Accounting Standards
159 (or any other Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of Holdings, the Borrower
or any of their respective Subsidiaries at “fair value”, as defined therein.

 

Section 1.04           Rounding.  Any financial ratios required to be maintained
by the Borrower pursuant to this Agreement (or required to be satisfied in order
for a specific action to be permitted under this Agreement) shall be calculated
by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio is
expressed herein and rounding the result up or down to the nearest number (with
a rounding-up if there is no nearest number).

 

Section 1.05           References to Agreements, Laws, Etc.  Unless otherwise
expressly provided herein, (a) references to Organization Documents, agreements
(including the Loan Documents) and other contractual instruments shall be deemed
to include all subsequent amendments, restatements, extensions, supplements and
other modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are permitted by
any Loan Document; and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

 

Section 1.06           Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

 

Section 1.07           Timing of Payment of Performance.  When the payment of
any obligation or the performance of any covenant, duty or obligation is stated
to be due or performance required on a day which is not a Business Day, the date
of such payment (other than as described in the definition of Interest Period)
or performance shall extend to the immediately succeeding Business Day.

 

Section 1.08           Currency Equivalents Generally.  Any amount specified in
this Agreement (other than in Articles II, IX, and XI) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by the Reuters World Currency Page for the applicable
currency at 11:00 a.m. (London time) on such day (or, in the event such rate
does not appear on any Reuters World Currency Page, by reference to such other
publicly available service for displaying exchange rates as may be agreed upon
by the Administrative Agent and the Borrower, or, in the absence of such
agreement, such rate shall instead be the arithmetic average of the spot rates
of exchange of the Administrative Agent in the market where its foreign currency
exchange operations in respect of such currency are then being conducted, at or
about 10:00 a.m. (New York City time) on such date for the purchase of Dollars
for delivery two Business Days later).  Notwithstanding the foregoing, for
purposes of determining compliance with Sections 7.01, 7.02 or 7.03 with respect
to any amount of Indebtedness or Investment in a currency other than Dollars, no
Default shall be deemed to have occurred solely as a result of changes in rates
of exchange occurring after the time such Indebtedness or Investment is
incurred; provided that, for the avoidance of doubt, the foregoing provisions of
this Section 1.08 shall otherwise apply to such Sections, including with respect
to determining whether any Indebtedness or Investment may be incurred at any
time under such Sections.

 

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Section 1.09           Change of Currency.  Each provision of this Agreement
shall be subject to such reasonable changes of construction as the
Administrative Agent may from time to time specify with the Borrower’s consent
to appropriately reflect a change in currency of any country and any relevant
market conventions or practices relating to such change in currency.

 

ARTICLE II

 

THE LOANS

 

Section 2.01           The Loans.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make a term loan denominated in Dollars
to the Borrower (the “Loan”) on the Closing Date in an aggregate original
principal amount not to exceed the amount of the Commitment of such Lender.

 

Section 2.02           Procedure for Term Loan Borrowing(a).  The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:00 noon, New York City time, on the
Business Day of the anticipated Closing Date) requesting that the Lenders make
the Loans on the Closing Date and specifying the amount to be borrowed.  Upon
receipt of such notice the Administrative Agent shall promptly notify each
Lender thereof.  Not later than 12:00 Noon, New York City time, on the Closing
Date each Term Lender shall make available to the Administrative Agent at the
Funding Office (or may make available to the Borrower at such account as has
been notified to the Lenders by the Borrower) an amount in immediately available
funds equal to the Loan to be made by such Lender.  The Administrative Agent
shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent or the Borrower, as applicable, by the Lenders in
immediately available funds.

 

Section 2.03           Reserved.

 

Section 2.04           Prepayments.  (a)  Optional.  (i)  The Borrower may, upon
notice to the Administrative Agent, at any time or from time to time voluntarily
prepay the Loans in whole or in part; provided that (1) such notice must be
received by the Administrative Agent not later than 2:30 p.m. (New York time) on
the date of prepayment of Loans; (2) any prepayment of Loans shall be in a
principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof; and (3) any prepayment must be accompanied by the applicable Yield
Maintenance Amount required pursuant to Section 2.08.  Each such notice shall
specify the date and amount of such prepayment.  The Administrative Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Pro Rata Share of such prepayment.  If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Loan shall be accompanied by all accrued interest
thereon.  Each prepayment of the Loans pursuant to this Section 2.04(a) shall be
paid to the Lenders in accordance with their respective Pro Rata Shares.

 

(b)   Mandatory. (i) If the Borrower receives any Net Proceeds from Asset Sales
or any Recovery Event, such amounts shall be used to prepay the Loan within five
(5) Business Days of the receipt thereof to the extent required by Section 7.08;
provided that an aggregate amount of Net Proceeds from Asset Sales not in excess
of $5.0 million from all Asset Sales may be retained by the Borrower and shall
not be required to be applied to the repayment of the Loan; provided, further,
that any Net Proceeds received from (x) a Weekly Reader Sale shall not be
required to be used to prepay the Loan (subject to Section 7.08(a)(iv)) and may
be reinvested by the Borrower or any Guarantor in Reinvestment Assets

 

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within 180 days of the date of such Weekly Reader Sale so long as any such Net
Proceeds that are not so reinvested within such time period shall be used to
prepay the Loan on or before the 181st day after such Weekly Reader Sale or
(y) any Recovery Event shall not be required to be used to prepay the Loan and
may be reinvested by the Borrower or any Guarantor in Reinvestment Assets within
90 days of the date of such Recovery Event so long as any such Net Proceeds that
are not so reinvested within such time period shall be used to prepay the Loan
(subject to Section 7.08(a)(iv)) on or before the 91st day after such Recovery
Event. Any such payment shall be accompanied by payment of the applicable Yield
Maintenance Amount required pursuant to Section 2.08. (ii) The Borrower shall
notify the Administrative Agent in writing of any mandatory prepayment of Loans
required to be made pursuant to this Section 2.04(b) at least three (3) Business
Days prior to the date of such prepayment.  Each such notice shall specify the
date of such prepayment and provide a reasonably detailed calculation of the
amount of such prepayment.  The Administrative Agent will promptly notify each
Lender of the contents of the Borrower’s prepayment notice and of such Lender’s
Pro Rata Share of the prepayment.

 

(c)   Each prepayment of Loans pursuant to this Section 2.04 shall be paid to
the Lenders in accordance with their respective Pro Rata Shares.

 

Section 2.05           Termination of Commitments(a).  The Commitments shall
automatically terminate upon the making of the Loans on the Closing Date.

 

Section 2.06           Repayment of Loans.  The aggregate outstanding principal
amount of the Loans of each Lender shall be payable in full on the Maturity Date
to such Lender.

 

Section 2.07           Interest.  (a)  Subject to the provisions of
Section 2.07(b), the Loan shall bear interest on the outstanding principal
amount thereof at a rate per annum equal to 11%.

 

(b)   If any Event of Default shall have occurred and be continuing, all
outstanding Loans and other Obligations under the Loan Documents (whether or not
overdue at such time) shall bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

(c)   Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein.  Notwithstanding the foregoing, interest accruing pursuant to
Section 2.07(b) shall be payable from time to time on demand.  Interest
hereunder shall be due and payable in accordance with the terms hereof before
and after judgment, and before and after the commencement of any proceeding
under any Debtor Relief Law.

 

Section 2.08           Fees.

 

(a)   Yield Maintenance. In the event all or any portion of the Loans are
prepaid or repaid at any time after November 21, 2011 and prior to the second
anniversary of the Closing Date through voluntary or mandatory prepayments or
repayments, each such prepayment or repayment will be made with a payment
premium in an amount (the “Yield Maintenance Amount”) equal to the sum of
(I) the present value of the interest rate described in Section 2.07 that would
have been applicable to the Loan calculated as a rate per annum on the amount of
principal on the Loan through the second anniversary of the Closing Date
(computed on the basis of actual days elapsed over a year of 360 days and using
a discount rate equal to the Treasury Rate as of such payment date plus 50 basis
points) plus (II) a call premium equal to 1% of the amount of the Loan so paid.

 

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(b)   Other Fees. The Borrower shall pay to the Administrative Agent such fees
as shall have been separately agreed upon in writing in the amounts and at the
times so specified (such separate agreement, the “Fee Letter”).  Such fees shall
be fully earned when paid and shall not be refundable for any reason whatsoever
(except as expressly agreed between the Borrower and the Administrative Agent).

 

Section 2.09           Computation of Interest and Fees.  All computations of
interest shall be made on the basis of a three hundred and sixty (360) day year
and actual days elapsed.  Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid; provided that any Loan
that is repaid on the same day on which it is made shall, subject to
Section 2.11(a), bear interest for one (1) day.  Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

 

Section 2.10           Evidence of Indebtedness.  (a)  The Loans made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and evidenced by one or more entries in the Register maintained by the
Administrative Agent, acting solely for purposes of Treasury Regulation
Section 5f.103-1(c), as agent for the Borrower, in each case in the ordinary
course of business.  The accounts or records maintained by the Administrative
Agent and each Lender shall be prima facie evidence absent manifest error of the
amount of the Loans made by the Lenders to the Borrower and the interest and
payments thereon.  Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.  Upon the request of any Lender made through the Administrative
Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note payable to such Lender, which shall evidence such
Lender’s Loans in addition to such accounts or records.  Each Lender may attach
schedules to its Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.

 

(b)   [Reserved]

 

(c)   Entries made in good faith by the Administrative Agent in the Register
pursuant to Section 2.10(a), and by each Lender in its account or accounts
pursuant to Section 2.10(a), shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement and the other Loan
Documents, absent manifest error; provided that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement and the
other Loan Documents.

 

Section 2.11           Payments Generally.  (a)  All payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  Except as otherwise expressly provided herein,
all payments by the Borrower hereunder shall be made directly to the respective
Lenders to which such payment is owed, pursuant to the instructions provided to
the Borrower by the Administrative Agent, in Dollars and in Same Day Funds not
later than 2:00 p.m. on the date specified herein.  In the event the
Administrative Agent receives any payment owed to the Lenders, the
Administrative Agent will promptly distribute to each Lender its Pro Rata Share
(or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office.  All payments
received by the Administrative Agent after 2:00 p.m. (New

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York time) shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.

 

(b)   If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be; provided that, if such extension would cause payment of
interest on or principal of Loans to be made in the next succeeding calendar
month, such payment shall be made on the immediately preceding Business Day.

 

(c)   Unless the Borrower or any Lender has notified the Administrative Agent,
prior to the time any payment is required to be made by it to the Administrative
Agent hereunder, that the Borrower or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Borrower or such
Lender, as the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto.  If and to the extent that such payment was not
in fact made to the Administrative Agent in Same Day Funds, then:

 

(i)            if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in Same Day Funds,
together with interest thereon in respect of each day from and including the
date such amount was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent in Same Day Funds
at the Federal Funds Rate from time to time in effect; and

 

(ii)           if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in Same
Day Funds, together with interest thereon for the period from the date such
amount was made available by the Administrative Agent to the Borrower to the
date such amount is recovered by the Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from time to time
in effect.  When such Lender makes payment to the Administrative Agent (together
with all accrued interest thereon), then such payment amount (excluding the
amount of any interest which may have accrued and been paid in respect of such
late payment) shall constitute such Lender’s Loan.  If such Lender does not pay
such amount forthwith upon the Administrative Agent’s demand therefor, the
Administrative Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to the
applicable rate of interest.  Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights which the Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this Section 2.11(c) shall be conclusive, absent
manifest error.

 

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

 

(e)   The obligations of the Lenders hereunder to make Loans are several and not
joint.  The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other

 

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Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan or
purchase its participation.

 

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

 

(g)   Whenever any payment received by the Administrative Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full all
amounts due and payable to the Administrative Agent and the Lenders under or in
respect of this Agreement and the other Loan Documents on any date, such payment
shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the order of priority set forth in
Section 8.03.  If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the manner in which
such funds are to be applied, the Administrative Agent may, but at the direction
of Required Lenders shall, elect to distribute such funds to each of the Lenders
in accordance with such Lender’s Pro Rata Share of the principal amount of all
Loans outstanding at such time, in repayment or prepayment of such of the
outstanding Loans or other Obligations then owing to such Lender.

 

Section 2.12           Sharing of Payments.  If, other than as expressly
provided elsewhere herein, any Lender shall obtain on account of the Loans made
by it, any payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans, pro rata
with each of them; provided that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in Section 11.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon.  The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by
applicable Law, exercise all its rights of payment (including the right of
setoff, but subject to Section 11.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.  The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section 2.12 and will in each case notify the Lenders
following any such purchases or repayments.  Each Lender that purchases a
participation pursuant to this Section 2.12 shall from and after such purchase
have the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

 

ARTICLE III

TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

 

Section 3.01           Taxes.  (a)  Except as provided in this Section 3.01, any
and all payments by the Borrower to or for the account of the Administrative
Agent or any Lender under any Loan Document shall be made free and clear of and
without deduction for any and all present or future

 

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taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and all liabilities (including additions to tax, penalties and
interest) with respect thereto, excluding in the case of the Administrative
Agent and each Lender, taxes imposed on or measured by its net income or overall
gross income (including branch profits), and franchise (and similar) taxes
imposed on it in lieu of net income taxes, by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized, managed or controlled or maintains a
Lending Office or conducts business in (except to the extent the business is
considered to be conducted in such jurisdiction solely as a result of the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, any Loan Document) and all
liabilities (including additions to tax, penalties and interest) with respect
thereto.  All non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities described in
the immediately preceding sentence are hereinafter referred to as “Taxes”.  If
the Borrower shall be required by any Laws to deduct any Taxes or Other Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.01), each of the
Administrative Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within thirty (30) days after the date of such payment (or, if
receipts or evidence are not available within thirty (30) days, as soon as
possible thereafter), the Borrower shall furnish to the Administrative Agent or
Lender (as the case may be) the original or a certified copy of a receipt
evidencing payment thereof to the extent such a receipt is issued therefor.  If
the Borrower fails to pay any Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent or any Lender the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and such Lender for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or
such Lender arising out of such failure.  Notwithstanding anything to the
contrary in this Section 3.01(a), the Borrower shall not be required to increase
the sum payable under any Loan Document, or to indemnify any Lender or the
Administrative Agent, with respect to Taxes that (i) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower), are
United States withholding taxes imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a
new lending office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding taxes or (ii) are withholding taxes that are
excluded pursuant to Section 11.15(d).

 

(b)   In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise, property, intangible or
mortgage recording taxes or charges or similar levies which arise from any
payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as “Other Taxes”).

 

(c)   The Borrower agrees to indemnify the Administrative Agent and each Lender
for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 3.01) paid by the Administrative Agent and such Lender and (ii) any
liability (including additions to tax, penalties, interest and expenses) arising
therefrom or with respect thereto, in each case whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided the Administrative Agent or Lender, as the case
may be, provides the Borrower with a written statement thereof setting forth in
reasonable detail the basis and calculation of such amounts, which statement
shall be conclusive absent

 

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manifest error.  Payment under this Section 3.01(c) shall be made within thirty
(30) days after the date such Lender or the Administrative Agent makes a demand
therefor.

 

(d)   If any Lender or the Administrative Agent determines, in its reasonable
discretion, that it has received a refund in respect of any Taxes or Other Taxes
as to which indemnification or additional amounts have been paid to it by the
Borrower pursuant to this Section 3.01, it shall promptly remit such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 3.01 with respect to the Taxes or Other Taxes
giving rise to such refund plus any interest included in such refund by the
relevant taxing authority attributable thereto) to the Borrower, net of all
reasonable out-of-pocket expenses of the Lender or the Administrative Agent, as
the case may be and without interest (other than any interest paid by the
relevant taxing authority with respect to such refund); provided that the
Borrower, upon the request of the Lender or the Administrative Agent, as the
case may be, agrees promptly to return such refund (plus any penalties, interest
or other charges imposed by the relevant taxing authority) to such party in the
event such party is required to repay such refund to the relevant taxing
authority.  Such Lender or the Administrative Agent, as the case may be, shall,
at the Borrower’s request, provide the Borrower with a copy of any notice of
assessment or other evidence of the requirement to repay such refund received
from the relevant taxing authority (provided that such Lender or the
Administrative Agent may delete any information therein that such Lender or the
Administrative Agent deems confidential).  Nothing herein contained shall
interfere with the right of a Lender or the Administrative Agent to arrange its
tax affairs in whatever manner it thinks fit or to make available its tax
returns or disclose any information relating to its tax affairs or any
computations in respect thereof or require any Lender or the Administrative
Agent to do anything that would prejudice its ability to benefit from any other
refunds, credits, reliefs, remissions or repayments to which it may be entitled.

 

(e)   Each Lender agrees that, upon the occurrence of any event giving rise to
the operation of Section 3.01(a) or (c) with respect to such Lender it will, if
requested by the Borrower, use commercially reasonable efforts to designate
another Lending Office for any Loan affected by such event; provided that such
efforts are made on terms that, in the sole judgment exercised in good faith of
such Lender, cause such Lender and its Lending Office(s) to suffer no economic,
legal or regulatory disadvantage, and provided further that nothing in this
Section 3.01(e) shall affect or postpone any of the Obligations of the Borrower
or the rights of such Lender pursuant to Section 3.01(a) or (c).

 

(f)    Each Lender shall indemnify the Administrative Agent, within 10 days
after demand therefor, for the full amount of any taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges with
respect to which the Borrower is not required to pay additional amounts pursuant
to Section 3.01(a) (“Excluded Taxes”) attributable to such Lender that are
payable or paid by the Administrative Agent, and interest, penalties and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Excluded Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error.

 

Section 3.02           [Reserved].

 

Section 3.03           [Reserved].

 

Section 3.04           Increased Cost and Reduced Return; Capital Adequacy. 
(a)  If any Lender determines (in good faith) that as a result of the
introduction of or any change in or in the interpretation of any Law, in each
case after the date hereof, or such Lender’s compliance therewith, there shall
be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining Loans, or a reduction in the amount received or
receivable by such Lender in connection with any of the

 

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foregoing (excluding for purposes of this Section 3.04(a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.01 shall govern) and (ii) changes in the basis of taxation of
overall net income or overall gross income (including branch profits), and
franchise (and similar) taxes imposed in lieu of net income taxes, by the United
States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or maintains a Lending
Office), then from time to time within ten (10) days after demand by such Lender
setting forth in reasonable detail such increased costs (with a copy of such
demand to the Administrative Agent given in accordance with Section 3.06), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.

 

(b)   If any Lender determines (in good faith) that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, in each case after the date hereof, or compliance by such Lender or
such Lender’s holding company therewith, has the effect of reducing the rate of
return on the capital of such Lender or such Lender’s holding company (or its
Lending Office) as a consequence of its obligations hereunder to a level below
that which such Lender or such Lender’s holding company could have achieved but
for such introduction, change or compliance (taking into consideration its
policies with respect to capital adequacy, by an amount deemed by such Lender to
be material, then from time to time upon demand of such Lender setting forth in
reasonable detail the charge and the calculation of such reduced rate of return
(with a copy of such demand to the Administrative Agent given in accordance with
Section 3.06), the Borrower shall pay to such Lender such additional amounts as
will compensate such Lender or such Lender’s holding company for such reduction
within ten (10) days after receipt of such demand.

 

(c)   [Reserved]

 

(d)   Failure or delay on the part of any Lender to demand compensation pursuant
to this Section 3.04 shall not constitute a waiver of such Lender’s right to
demand such compensation, provided that the Borrower shall not be required to
compensate a Lender pursuant to Section 3.04(a) or (b) for any such increased
cost or reduction incurred more than 180 days prior to the date that such Lender
demands, or notifies the Borrower of its intention to demand, compensation
therefor, provided further that, if the circumstance giving rise to such
increased cost or reduction is retroactive, then such 180-day period referred to
above shall be extended to include the period of retroactive effect thereof.

 

(e)   If any Lender requests compensation under this Section 3.04, then such
Lender will, if requested by the Borrower, use commercially reasonable efforts
to designate another Lending Office for any Loan affected by such event;
provided that such efforts are made on terms that, in the reasonable judgment of
such Lender, cause such Lender and its Lending Office(s) to suffer no material
economic, legal or regulatory disadvantage, and provided further that nothing in
this Section 3.04(e) shall affect or postpone any of the Obligations of the
Borrower or the rights of such Lender pursuant to Section 3.04(a), (b)or (d).

 

Section 3.05           [Reserved]

 

Section 3.06           Matters Applicable to All Requests for Compensation. 
(a)  The Administrative Agent or any Lender claiming compensation under this
Article III shall deliver a certificate to the Borrower setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error.

 

(b)   With respect to any Lender’s claim for compensation under Section 3.01 or
3.04, the Borrower shall not be required to compensate such Lender for any
amount incurred more than 180 days prior to the date that such Lender notifies
the Borrower of the event that gives rise to such claim; provided

 

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that, if the circumstance giving rise to such claim is retroactive, then such
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

(c)   [Reserved]

 

(d)   [Reserved]

 

Section 3.07           [Reserved](a)

 

Section 3.08           Survival.  All of the Borrower’s obligations under this
Article III shall survive termination of the Aggregate Commitments and the
repayment of all Obligations hereunder.

 

ARTICLE IV

CONDITIONS PRECEDENT

 

Section 4.01           Conditions to Effectiveness.  The effectiveness of this
Agreement is subject to the satisfaction or waiver of the following conditions
precedent:

 

(a)   The Administrative Agent’s receipt of the following, each of which shall
be originals or facsimiles (followed promptly by originals) or electronic copies
(following promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, if any, each in
form and substance reasonably satisfactory to the Administrative Agent:

 

(i)            counterparts of this Agreement, duly executed by Holdings, the
Borrower, the Guarantors and the Administrative Agent;

 

(ii)           a Note executed by the Borrower in favor of each Lender that has
requested a Note at least two Business Days in advance of the Closing Date;

 

(iii)          [Reserved];

 

(iv)          such resolutions or other action, in each case in form and
substance satisfactory to the Administrative Agent, together with incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may reasonably require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized
to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents to which such Loan Party is a party or is to be a party on the
Closing Date and with appropriate insertions and attachments, including the
certificate of incorporation (or equivalent thereof) of each Loan Party that is
a corporation certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a long form good standing certificate (or
equivalent thereof) for each Loan Party from its jurisdiction of organization;

 

(v)           opinion from (i) Weil, Gotshal & Manges LLP, special New York
counsel to Holdings substantially in the form of Exhibit F and (ii) local
counsel in Washington as may be reasonably requested by the Administrative
Agent;

 

(vi)          evidence that all insurance (including title insurance) required
to be maintained pursuant to the Loan Documents has been obtained and is in
effect; and

 

(vii)         [Reserved]; and

 

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(viii)        a certificate signed by a Responsible Officer of the Borrower
certifying compliance with the conditions set forth in paragraphs (o) and (p) of
this Section 4.01.

 

(b)   The Administrative Agent shall have received counterparts of the Fee
Letter, duly executed by the Borrower and Holdings.

 

(c)   The Lenders and the Administrative Agent shall have received payment in
full in cash of all costs, fees and expenses due and payable (including those
required to be paid to such Lenders hereunder) and invoiced before the Closing
Date.

 

(d)   [Reserved].

 

(e)   [Reserved].

 

(f)    The Lenders shall have received (i) the Audited Financial Statements and
Unaudited Financial Statements and (ii) projections through December 31, 2014,
in form reasonably satisfactory to the Administrative Agent, accompanied by a
certificate of a Responsible Officer of the Borrower stating that such
projections are based on estimates, information and assumptions believed by
management of the Borrower to be reasonable on the Closing Date and that to his
or her best knowledge, such Responsible Officer (not in his or her individual
capacity, but solely as a Responsible Officer) has no reason to believe that
such projections are incorrect or misleading in any material respect (it being
understood and agreed that the projections are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Responsible Officer and that no assurance can be given that any of the
projections will be realized, and that such projections are not a guarantee of
financial performance and actual results may differ from the projected results
and such differences may be material).

 

(g)   [Reserved].

 

(h)   [Reserved].

 

(i)    The Administrative Agent shall have received at least three days prior to
the Closing Date all documentation and other information required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act, requested by such Person.

 

(j)    [Reserved]

 

(k)   [Reserved]

 

(l)    No Default or Event of Default shall have occurred and be continuing
under the Existing Credit Agreement at the time of or immediately after giving
effect to such proposed Loan.

 

(m)  The Borrower shall close, at substantially the same time as the closing
time hereof, that certain secured credit agreement among the Borrower, the
Administrative Agent and the Lenders providing for a term loan in the aggregate
principal amount of $45,000,000 (the “Secured Credit Facility”).

 

(n)   Holdings shall issue to the Lenders the Warrants.

 

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(o)   The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document shall be true and
correct in all material respects as of the date of such Loan; provided that, to
the extent that such representations and warranties specifically refer to an
earlier date, they shall be true and correct in all material respects as of such
earlier date; provided, further that, any representation and warranty that is
qualified as to “materiality,” “Material Adverse Effect” or similar language
shall be true and correct in all respects on such respective dates.

 

(p)   No Default or Event of Default shall have occurred and be continuing at
the time of or immediately after giving effect to such proposed Loan.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

Each Loan Party hereby jointly and severally represents and warrants to the
Administrative Agent and the Lenders that:

 

Section 5.01           Existence, Qualification and Power; Compliance with
Laws.  Each Loan Party and each of its Subsidiaries (a) is a Person duly
organized or formed, validly existing and in good standing (to the extent such
concept is applicable in the applicable jurisdiction) under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority to (i) own or lease its assets and carry on its business and (ii) 
execute, deliver and perform its obligations under the Loan Documents to which
it is a party, (c) is duly qualified and in good standing (to the extent such
concept is applicable in the applicable jurisdiction) under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, (d) is in compliance with
all Laws, orders, writs, injunctions and orders and (e) has all requisite
governmental licenses, authorizations, consents and approvals to operate its
business as currently conducted; except in each case referred to in clause (c),
(d) or (e), to the extent that failure to do so could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 5.02           Authorization; No Contravention.  The execution, delivery
and performance by each Loan Party of each Loan Document to which such Person is
a party, and the consummation of the transactions contemplated thereby, are
within such Loan Party’s corporate or other powers, have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(a) violate the terms of any of such Person’s Organization Documents,
(b) violate or result in any breach of, or the creation of any Lien under (other
than Liens permitted by Section 7.03), or require any payment to be made under
(i) any Contractual Obligation to which such Person is a party or which is
binding upon such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law; except with respect to any violation or breach (but not
creation of Liens or payments) referred to in each case of clauses (b) and
(c) above, to the extent that such violation or breach could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 5.03           Governmental Authorization; Other Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority is necessary or required in connection with the
execution, delivery or performance by any Loan Party of this Agreement or any
other Loan Document or the exercise by the Administrative Agent or any Lender of
its rights under the Loan Documents, in each case of the foregoing, except for
the approvals, consents, exemptions, authorizations, actions, notices and
filings which have been duly obtained, taken, given or made and are in full
force and effect.

 

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Section 5.04           Binding Effect.  This Agreement and each other Loan
Document has been duly executed and delivered by each Loan Party that is party
thereto.  This Agreement and each other Loan Document constitutes a legal, valid
and binding obligation of each Loan Party that is party thereto, enforceable
against such Loan Party in accordance with its terms, except as such
enforceability may be limited by Debtor Relief Laws and by general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

Section 5.05           Financial Statements; No Material Adverse Effect. 
(a)  (i)  The Audited Financial Statements and the Unaudited Financial
Statements fairly present in all material respects the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the periods
covered thereby, except as otherwise expressly noted therein and, in the case of
the Unaudited Financial Statements, subject to normal year-end audit adjustments
and the absence of footnotes.

 

(ii)           [Reserved]

 

(b)   Since June 30, 2011, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

 

(c)   The forecasts of consolidated balance sheets, income statements and cash
flow statements of the Borrower and its consolidated Subsidiaries which have
been furnished to the Administrative Agent prior to the Closing Date have been
prepared in good faith on the basis of assumptions believed by the Borrower to
be reasonable at the time made, it being understood that forecasts are, by their
nature, inherently uncertain and actual results may vary from such forecasts and
that such variations may be material.

 

Section 5.06           Litigation.  As of the Closing Date, there are no
actions, suits, proceedings, claims, investigations or disputes pending or, to
the knowledge of the Borrower, threatened in writing or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or against the
Borrower or any of its Subsidiaries or against any of their properties or
revenues that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

Section 5.07           No Default.  Neither the Borrower nor any Subsidiary is
in default under or with respect to any Contractual Obligation that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.  No Default or Event of Default has occurred and is
continuing.

 

Section 5.08           Ownership of Property; Liens.  Each Loan Party and each
of its Subsidiaries has good title to, or valid leasehold interests in, or (in
the case of Intellectual Property) a license or other right to use, or easements
or other limited property interests in, all its properties and assets material
to the ordinary conduct of its business, free and clear of all Liens except for
minor defects in title that do not materially interfere with its ability to
conduct its business or to utilize such assets for their intended purposes and
Liens permitted by Section 7.03.

 

Section 5.09           Environmental Compliance.  (a)  There are no claims,
actions, suits, or proceedings alleging potential liability or responsibility
for violation of, or otherwise relating to, any Environmental Law or to
Hazardous Materials that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

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(b)   Except as could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, (i) none of the properties currently or,
to the knowledge of the Borrower, formerly owned, leased or operated by any Loan
Party or any of its Subsidiaries is listed or proposed for listing on the NPL or
on the CERCLIS or any analogous foreign, state or local list or, to the
knowledge of the Borrower, is adjacent to any such property; and (ii) Hazardous
Materials have not been released, discharged or disposed of by any Person on any
property currently or, to the knowledge of the Borrower, formerly owned, leased
or operated by any Loan Party or any of its Subsidiaries and Hazardous Materials
have not otherwise been released, discharged or disposed of by any of the Loan
Parties and their Subsidiaries at any other location, in each case in a manner
that could reasonably be expected to result in Environmental Liability.

 

(c)   The properties owned, leased or operated by the Borrower and the
Subsidiaries do not contain any Hazardous Materials in amounts or concentrations
which (i) constitute a violation of, (ii) require remedial action under, or
(iii) could give rise to liability under, Environmental Laws, which violations,
remedial actions and liabilities, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

 

(d)   Neither the Borrower nor any of its Subsidiaries is undertaking, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law, except
for such investigation or assessment or remedial or response action that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

(e)   All Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, by any Loan Party or any of its Subsidiaries, any
property currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected to
result, individually or in the aggregate, in a Material Adverse Effect.

 

(f)    Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, none of the Loan Parties and their
Subsidiaries has contractually assumed any liability or obligation of any other
Person under or relating to any Environmental Law.

 

Section 5.10           Taxes.  The Borrower and its applicable Subsidiaries have
filed all U.S. Federal income and material state and other material tax returns
and reports required to be filed, and have paid all U.S. Federal income and
material state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which reserves
have been provided to the extent required by GAAP.

 

Section 5.11           ERISA Compliance.  (a)  Except as could not , either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect each Plan is in compliance with the applicable provisions of
ERISA, the Code and other Federal or state Laws.

 

(b)   (i)  Other than the commencement of the Cases, which is a Reportable
Event, no ERISA Event has occurred during the five year period prior to the date
on which this representation is made or deemed made with respect to any Pension
Plan; (ii) neither any Loan Party nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iii) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any

 

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liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would reasonably be expected to result in such liability)
under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan;
(iv) neither any Loan Party nor any ERISA Affiliate has engaged in a transaction
that could reasonably be expected to be subject to Sections 4069 or 4212(c) of
ERISA; and (v) the present value of all benefit liabilities under each Pension
Plan does not exceed the aggregate current value of the assets of such Pension
Plan (based on those assumptions used to fund the Pension Plans); except, with
respect to each of the foregoing clauses (i) through (v) of this
Section 5.11(b), as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

 

(c)   Except as specifically disclosed in Schedule 5.11(c), (i) all employer and
employee contributions required by applicable law or by the terms of any Foreign
Benefit Arrangement or Foreign Plan have been made, or, if applicable, accrued
in accordance with normal accounting practices; (ii) the accrued benefit
obligations of each Foreign Plan (based on those assumptions used to fund such
Foreign Plan) with respect to all current and former participants do not exceed
the assets of such Foreign Plan; (iii) each Foreign Plan that is required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities; and (iv) each such Foreign Benefit
Arrangement and Foreign Plan is in compliance (A) with all material provisions
of applicable law and all material applicable regulations and published
interpretations thereunder with respect to such Foreign Benefit Arrangement or
Foreign Plan and (B) with the terms of such plan or arrangement; except, with
respect to each of the foregoing clauses (i) through (iv) of this
Section 5.11(c), as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

 

Section 5.12           Subsidiaries; Equity Interests.  As of the Closing Date,
neither Holdings nor any other Loan Party has any Subsidiaries other than those
specifically disclosed in Schedule 5.12, and all of the outstanding Equity
Interests owned by the Loan Parties in such Subsidiaries have been validly
issued, are fully paid and nonassessable and all Equity Interests owned by
Holdings or a Loan Party are owned free and clear of all Liens except any Lien
that is permitted under Section 7.03.  As of the Closing Date, Schedule 5.12
(a) sets forth the name and jurisdiction of each Subsidiary and (b) sets forth
the ownership interest of Holdings, the Borrower and any other Subsidiary in
each Subsidiary, including the percentage of such ownership.

 

Section 5.13           Margin Regulations; Investment Company Act.  (a)  The
Borrower is not engaged nor will it engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board), or extending credit
for the purpose of purchasing or carrying margin stock, and no proceeds of any
Loans will be used for any purpose that violates Regulation U.

 

(b)   None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary is required to be registered as an “investment company” under the
Investment Company Act of 1940.

 

Section 5.14           Disclosure.  No report, financial statement, certificate
or other written information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or any other Loan Document (as modified or supplemented by other information so
furnished) when taken as a whole contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading; provided that, with respect to projected financial information and
pro forma financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time made; it being understood that projections are, by their
nature, inherently uncertain and such projections may vary from actual results
and that such variances may be material.

 

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Section 5.15           Intellectual Property; Licenses, Etc.  Each of the Loan
Parties and their Subsidiaries owns, or licenses or possesses the valid right to
use, all Intellectual Property that is material to the operation of the business
of the Borrower and its Subsidiaries, taken as a whole, as currently conducted,
and, without known conflict with the rights of any Person, except to the extent
such conflicts, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.  To the best knowledge of the
Borrower, the conduct of the business of the Borrower and its Subsidiaries,
taken as a whole, as currently conducted, does not infringe upon, misappropriate
or otherwise violate any Intellectual Property of any Person and, to the
knowledge of the Borrower, no Person infringes upon, misappropriates or
otherwise violates any Intellectual Property owned or exclusively licensed by
the Borrower and its Subsidiaries, except in each case of the foregoing as could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  No written or, to the knowledge of the Borrower, oral claim or
litigation regarding any Intellectual Property owned or exclusively licensed by
any Loan Party or its Subsidiaries is pending or, to the knowledge of the Loan
Parties, threatened against any Loan Party or Subsidiary, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

Section 5.16           Solvency.  On the Closing Date, after giving effect to
the incurrence of all Indebtedness and Obligations being incurred in connection
herewith and in connection with the Secured Credit Facility, the Borrower and
its Subsidiaries, on a consolidated basis, are Solvent.

 

Section 5.17           Labor Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against any Loan Party pending or, to the
knowledge of the Borrower, threatened; (b) hours worked by and payment made to
employees of each Loan Party have not been in violation of the Fair Labor
Standards Act or any other applicable Laws dealing with such matters; and
(c) all payments due from any Loan Party on account of employee health and
welfare insurance have been paid or accrued as a liability on the books of the
relevant party.

 

Section 5.18           [Reserved].

 

Section 5.19           [Reserved].

 

Section 5.20           Certain Documents.  The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Senior Secured Notes
Indenture, the Existing Credit Agreement and any other documentation relating to
the Senior Secured Notes and the Existing Credit Agreement reasonably requested
by the Administrative Agent, including any amendments, supplements or
modifications with respect to any of the foregoing.

 

Section 5.21           [Reserved].

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

So long as any Obligation shall remain outstanding (other than contingent
indemnification and contingent expense reimbursement obligations), each Loan
Party shall, and shall cause each of its Subsidiaries to:

 

Section 6.01           Financial Statements.  Deliver to the Administrative
Agent for prompt further distribution to each Lender:

 

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(a)   as soon as available, but in any event within ninety (90) days after the
end of each fiscal year of the Borrower beginning with the fiscal year ending on
December 31, 2011, a consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and a consolidated
balance sheet of the Borrower and its Restricted Subsidiaries as at the end of
such fiscal year, and the related consolidated statements of income or
operations, stockholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all prepared in accordance with GAAP (other than the consolidating financial
statements, which shall be substantially in the form delivered to the
Administrative Agent prior to the Closing Date), audited and accompanied by a
report and opinion of an independent registered public accounting firm of
nationally recognized standing, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject
to any “going concern” or like qualification, exception or explanatory paragraph
or any qualification or exception arising out of the scope of the audit;

 

(b)   as soon as available, but in any event within forty-five (45) days after
the end of each of the first three (3) fiscal quarters of each fiscal year of
the Borrower beginning with the fiscal quarter ending on September 30, 2011, an
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal quarter and an unaudited consolidated
balance sheet of the Borrower and its Restricted Subsidiaries as at the end of
such fiscal quarter, and the related unaudited (i) consolidated statements of
income or operations for such fiscal quarter and for the portion of the fiscal
year then ended and (ii) consolidated statements of cash flows for such fiscal
quarter and for the portion of the fiscal year then ended, setting forth in each
case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year for the applicable entities and the corresponding portion
of the previous fiscal year for the applicable entities, all certified by a
Responsible Officer of the Borrower as fairly presenting in all material
respects the consolidated financial condition, results of operations,
stockholders’ equity and cash flows of the Borrower and its consolidated
Subsidiaries and its Restricted Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes;

 

(c)   [Reserved]

 

(d)   as soon as available, and in any event no later than ninety (90) days
after the end of each fiscal year of the Borrower beginning with the fiscal year
ending on December 31, 2011, a reasonably detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of the end of the following fiscal
year and a projected consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow and projected income and a
summary of the material underlying assumptions applicable thereto)
(collectively, the “Projections”), which Projections shall be certified by a
Responsible Officer of the Borrower as being prepared based upon good faith
estimates and assumptions that are believed by such Responsible Officer to be
reasonable at the time made and that such Responsible Officer is not aware of
(x) any information contained in such Projections which is false or misleading
in any material respect or (y) any omission of information which causes such
Projections to be false or misleading in any material respect (it being
understood and agreed that the Projections are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Responsible Officer and that no assurance can be given that any of the
Projections will be realized, and that the Projections are not a guarantee of
financial performance and actual results may differ from the projected results
and such differences may be material).

 

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 6.01 may be satisfied with respect to financial information of the
Borrower and its consolidated Subsidiaries or of the Borrower and its Restricted
Subsidiaries by furnishing (A) the applicable financial

 

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statements of Holdings (or any direct or indirect parent of Holdings) or (B) the
Borrower’s or Holdings’ (or any direct or indirect parent thereof), as
applicable, Form 10-K or 10-Q, as applicable, filed with the SEC; provided that,
with respect to each of clauses (A) and (B), (i) to the extent such information
relates to Holdings (or a parent thereof), such information is accompanied by
consolidating information that explains in reasonable detail the differences
between the information relating to Holdings (or such parent), on the one hand,
and the information relating to the Borrower and its consolidated Restricted
Subsidiaries on a standalone basis, on the other hand and (ii) to the extent
such information is in lieu of information required to be provided under
Section 6.01(a), such materials are accompanied by a report and opinion of an
independent registered public accounting firm of nationally recognized standing,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like
qualification, exception or explanatory paragraph or any qualification or
exception arising out of the scope of the audit.

 

Section 6.02           Certificates; Other Information.  Deliver to the
Administrative Agent for prompt further distribution to each Lender:

 

(a)   simultaneously with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public accounting
firm certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default under Section 7.14 or, if any such Default or Event of Default shall
exist, stating the nature and status of such event (which certificate may be
limited to the extent required by such firm’s general accounting and auditing
rules, policies or guidelines);

 

(b)   simultaneously with the delivery of the financial statements referred to
in Section 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;

 

(c)   simultaneously with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a narrative discussion and analysis of the
financial condition and results of operations of the Borrower and its
Subsidiaries (including, without limitation, with respect to Dispositions, cost
savings, facility closures, litigation, contingent liabilities and other matters
as the Administrative Agent or any Lender through the Administrative Agent may
from time to time reasonably request) for the applicable period and for the
period from the beginning of the then current fiscal year to the end of such
period; provided, however, that so long as (i) the obligations in Sections
6.01(a) and (b) are satisfied by furnishing the Borrower’s or Holdings’ (or any
direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as
applicable, filed with the SEC and (ii) such Form 10-K or 10-Q, as applicable,
contains such narrative discussion and analysis, the obligations of this
Section 6.02(c) shall be deemed satisfied;

 

(d)   promptly upon the incurrence thereof of any obligation permitted under
Sections 7.02(b)(i)(B), (C) or (D) or upon the entering into of any treasury,
depository, cash management, or automated clearing house services permitted
under Section 7.02(b)(i)(E) notice of such event, which notice shall set forth
the nature of such obligation or service, including (i) in the case of clauses
(B) and (C), principal amount, maturity and interest rate, (ii) in the case of
clause (D), the principal terms of the applicable Secured Hedge Agreement,
including notional amount, maturity and interest rate, if applicable (but not
any ongoing requirement to provide mark-to-market valuations), and (iii) in the
case of clause (E), the anticipated range of exposure and any material change
thereto;

 

(e)   promptly after the same are publicly available, copies of all annual,
quarterly and current reports and registration statements which the Borrower or
any Subsidiary files with the SEC or with any Governmental Authority that may be
substituted therefor (other than amendments to any registration statement (to
the extent such registration statement, in the form it became effective, is

 

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delivered), exhibits to any registration statement and, if applicable, any
registration statement on Form S-8) and in any case not otherwise required to be
delivered to the Administrative Agent pursuant hereto;

 

(f)    promptly after the furnishing thereof, copies of any material requests or
material notices received by any Loan Party (other than in the ordinary course
of business) or material statements or material reports furnished to any holder
of debt securities of any Loan Party or of any of its Subsidiaries in a
principal amount greater than the Threshold Amount or to any holder of public or
preferred equity securities of any Loan Party and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6.02;

 

(g)   no later than two (2) Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification, and any replacement, with respect to the Existing
Credit Agreement, Senior Secured Notes Indenture, documentation governing Pari
Passu Payment Lien Obligations or any Junior Financing Documentation;

 

(h)   together with the delivery of each Compliance Certificate pursuant to
Section 6.02(b), to the extent not previously disclosed to the Administrative
Agent, a description of any Person that has become a Group Member, in each case,
since the date of the most recent list delivered pursuant to this
Section 6.02(h) (or, in the case of the first such list so delivered, since the
Closing Date) and a reconciliation of operating income of the Borrower and its
Restricted Subsidiaries to EBITDA (which reconciliation may be provided as part
of the calculations included in the applicable Compliance Certificate);

 

(i)    promptly, subject to applicable confidentiality requirements of Group
Members, such additional financial or other information as the Administrative
Agent or any Lender through the Administrative Agent may from time to time
reasonably request;

 

(j)    simultaneously with the delivery of the financial statements referred to
in Section 6.01(a) and (b), a calculation of (i) the outstanding aggregate
amount of “Priority Payment Lien Obligations” under and as defined in the Senior
Secured Note Indenture and (ii) the aggregate principal amount of Indebtedness
outstanding under Section 7.02(b)(i), in each case, certified by a Responsible
Officer of the Borrower; and

 

(k)   copies of any notices given to the administrative agent or any lender
under and pursuant to the Existing Credit Agreement.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) or (f) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date (i) on which the Borrower
posts such documents, or provides a link thereto on the Borrower’s website on
the Internet at the website address listed in Section 11.02; (ii) on which such
documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); or (iii) such documents are publicly
available on the SEC’s website pursuant to the SEC’s EDGAR system; provided
that:  (i) upon written request by the Administrative Agent, the Borrower shall
deliver paper copies of such documents to the Administrative Agent for further
distribution to each Lender until a written request to cease delivering paper
copies is given by the Administrative Agent and (ii) the Borrower shall notify
(which may be by facsimile or electronic mail) the Administrative Agent of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents. 
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent.

 

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Each Lender shall be solely responsible for timely accessing posted documents or
requesting delivery of paper copies of such documents from the Administrative
Agent and maintaining its copies of such documents.

 

Section 6.03           Update Calls.  At least once per fiscal quarter, at such
times as the Borrower and the Administrative Agent shall agree, the Borrower
shall host a conference call (with a question and answer period) with the chief
executive officer and chief financial officer of the Borrower and such other
members of senior management of the Borrower as the Borrower deems appropriate
and the Administrative Agent and the Lenders and their respective
representatives and advisors to discuss the performance of the business,
strategic alternatives and other issues as the Administrative Agent may
reasonably request.

 

Section 6.04           Notices.  Promptly after any Responsible Officer of a
Loan Party obtains knowledge thereof, notify the Administrative Agent (for
prompt notification to each Lender):

 

(a)   of the occurrence of any Default or Event of Default; and

 

(b)   of any development or event that has had or could reasonably be expected
to have a Material Adverse Effect.

 

Each notice pursuant to this Section shall be accompanied by a written statement
of a Responsible Officer of the Borrower (x) that such notice is being delivered
pursuant to Section 6.04(a) or (b) (as applicable) and (y) setting forth details
of the occurrence referred to therein and stating what action the Borrower has
taken and proposes to take with respect thereto.

 

Section 6.05           Payment of Obligations.  Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature (including, but not limited
to, all material taxes, fees, assessments, and other governmental charges),
except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and any required reserves in conformity with
GAAP with respect thereto have been provided on the books of the relevant Group
Member.

 

Section 6.06           Preservation of Existence, Etc.  (a)  Preserve, renew and
maintain in full force and effect its legal existence under the Laws of the
jurisdiction of its organization except (i) in the case of any Subsidiary of the
Borrower, where the failure to perform such obligations, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
or (ii) in a transaction permitted by Section 7.04 or Section 7.08 and (b) take
all reasonable action to maintain all privileges (including its good standing),
material rights, material permits, material licenses and material franchises
necessary or desirable in the normal conduct of its business, except (i) to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect or (ii) pursuant to a transaction permitted by Section 7.04 or
Section 7.08.

 

Section 6.07           Maintenance of Properties.  Except if the failure to do
so could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (a) maintain, preserve and protect all of its
properties and equipment material to the operation of its business in good
working order, repair and condition, ordinary wear and tear excepted and
casualty or condemnation excepted, and (b) make all necessary renewals,
replacements, modifications, improvements, upgrades, extensions and additions
thereof or thereto in accordance with prudent industry practice.

 

Section 6.08           Maintenance of Insurance.  Maintain with financially
sound and reputable insurance companies, insurance with respect to its
properties and business against loss or

 

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damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts (after giving effect to
any self-insurance reasonable and customary for similarly situated Persons
engaged in the same or similar businesses as the Borrower and its Subsidiaries)
and with deductible levels as are customarily carried under similar
circumstances by such other Persons and ensure that the Administrative Agent is
an additional insured and/or loss payee under such liability and property
insurance as reasonably requested by the Administrative Agent.

 

Section 6.09           Compliance with Laws.  Comply with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its business or property, except if the failure to comply therewith could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

Section 6.10           Inspection Rights; Books and Records; Discussions.  (a) 
Keep proper books of record and account in which full, true and correct entries
in all material respects are made of all dealings and transactions in relation
to its business and activities and (b) permit representatives of the
Administrative Agent or any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books of record at any reasonable
time upon reasonable notice and to discuss the business, operations, properties
and financial and other condition of the Loan Parties with officers and senior
managerial employees of the Loan Parties and with their independent certified
public accountants, in all cases subject to applicable Law and the terms of any
applicable confidentiality agreements not entered into for purposes of
obstructing the operation of this Section 6.10; provided, that an officer of the
Borrower shall be provided reasonable opportunity to participate in any such
discussion with the accountants; provided, further, that such inspections and
discussions shall be coordinated through the Administrative Agent and that in
the absence of a continuation of an Event of Default, the Administrative Agent
and the Lenders shall not exercise such rights more often than once (1) during
any calendar quarter.  The Administrative Agent and each Lender agrees to use
reasonable efforts to coordinate and manage the exercise its rights under this
Section 6.10 so as to minimize the disruption to the business of the Borrower
and its Subsidiaries resulting therefrom.

 

Section 6.11           Covenant to Guarantee Obligations.  At the Borrower’s
expense, take all action reasonably requested by the Administrative Agent to
ensure that the Guarantee Requirement continues to be satisfied, including,
within thirty (30) days after the formation or acquisition of any Wholly-Owned
Domestic Subsidiary or such longer period as may be reasonably acceptable to the
Administrative Agent if the Loan Parties are diligently pursuing compliance
herewith, cause each such Wholly-Owned Domestic Subsidiary that is required to
become a Guarantor under the Guarantee Requirement to become a Guarantor
hereunder.

 

Section 6.12           Compliance with Environmental Laws.  Except, in each
case, to the extent that the failure to do so could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect: 
(a) comply, and take all reasonable actions to cause all lessees and other
Persons operating or occupying its properties to comply, with all applicable
Environmental Laws and Environmental Permits; (b) obtain and renew all
Environmental Permits necessary for its operations and properties; and (c) in
each case to the extent required by Environmental Laws, conduct any
investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties, in accordance with the requirements of all
Environmental Laws.

 

Section 6.13           [Reserved].

 

Section 6.14           Use of Proceeds.  Apply the proceeds of the Loans solely
for working capital and other general corporate purposes of Holdings and its
Subsidiaries and to pay fees and expenses

 

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in connection with the negotiation and consummation of this Agreement, the
Secured Credit Facility and other related financing alternatives.

 

Section 6.15           Right of First Refusal to Provide Additional Financing. 
In the event the Borrower or any Restricted Subsidiary desires to incur any
additional unsecured Indebtedness under Section 7.02(b)(xx) hereof in excess of
the Loan, the Borrower or such Restricted Subsidiary, as applicable, shall offer
to the Administrative Agent and the Lenders the right to provide financing with
respect to such unsecured Indebtedness prior to entering any agreement related
thereto (including any commitment letter or similar agreement relating thereto)
with any other party on the same or better terms.

 

ARTICLE VII

 

NEGATIVE COVENANTS

 

So long as any Obligation shall remain outstanding (other than contingent
indemnification and contingent expense reimbursement obligations), each Loan
Party covenants and agrees with the Lenders that:

 

Section 7.01           Limitation on Restricted Payments.  (a)    The Borrower
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly:

 

(i)            declare or pay any dividend or make any distribution on account
of the Borrower’s or any Restricted Subsidiary’s Equity Interests, including any
dividend or distribution payable in connection with any merger or consolidation
other than:

 

(A)  dividends or distributions by the Borrower payable in Equity Interests
(other than Disqualified Stock) of the Borrower or in options, warrants or other
rights to purchase such Equity Interests; or

 

(B)   dividends or distributions by a Restricted Subsidiary so long as, in the
case of any dividend or distribution payable on or in respect of any class or
series of securities issued by a Restricted Subsidiary other than a Wholly Owned
Subsidiary, the Borrower or a Restricted Subsidiary receives at least its pro
rata share of such dividend or distribution in accordance with its Equity
Interests in such class or series of securities;

 

(ii)           purchase, redeem, defease or otherwise acquire or retire for
value any Equity Interests of the Borrower or any direct or indirect parent of
the Borrower, including in connection with any merger or consolidation, held by
Persons other than the Borrower or any Subsidiary Guarantor;

 

(iii)          make any principal payment on, or redeem, repurchase, defease,
otherwise acquire or retire for value or give any irrevocable notice of
redemption with respect thereto in each case, prior to any scheduled repayment,
sinking fund payment or maturity, any Indebtedness, other than (except to the
extent otherwise prohibited by the provisions of Section 7.09):

 

(A)  Pari Passu Payment Lien Obligations;

 

(B)   Priority Payment Lien Obligations;

 

(C)   Indebtedness permitted under clauses (iv), (vii), (viii), (ix), and (x) of
Section 7.02(b);

 

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(D)  Indebtedness incurred under the Loan Documents;

 

(E)   the purchase, repurchase or other acquisition of Indebtedness purchased in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of purchase,
repurchase or acquisition;

 

(F)   Indebtedness incurred under revolving credit facilities (other than
payments, redemptions, repurchases, defeasances or other acquisitions or
retirements for value that are accompanied by termination or reduction of
commitments under such revolving credit facilities); or

 

(G)   the giving of an irrevocable notice of redemption with respect to the
transactions described in clauses (ii) and (iii) of Section 7.01(a); or

 

(iv)          make any Restricted Investment

 

(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as “Restricted Payments”), unless at the time of
such Restricted Payment:

 

(v)           no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;

 

(vi)          immediately after giving effect to such transaction on a pro forma
basis, the Borrower could incur $1.00 of additional Indebtedness under
Section 7.02(a); and

 

(vii)         such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Borrower and the Restricted Subsidiaries
after the Existing Agreement Closing Date (including Restricted Payments
permitted by clauses (i), (viii), (xii) and (xiv) of paragraph (b) below, but
excluding all other Restricted Payments permitted by paragraph (b)), is less
than the sum of:

 

(A)  the EBITDA of the Borrower for the period (taken as one accounting period)
from April 1, 2010, to the end of the Borrower’s most recently ended fiscal
quarter for which internal financial statements are available at the time of
such Restricted Payment, less the product of 1.4 times Consolidated Interest
Expense of the Borrower for the same period; provided that if the amount under
this clause (A) for any fiscal quarter is less than zero, then the amount
“built” under this clause (A) for such fiscal quarter shall be deemed to be
equal to zero, plus

 

(B)   100% of the aggregate net cash proceeds and the fair market value, as
determined in good faith by the Board of Directors, of marketable securities or
other property received by the Borrower since immediately after the Existing
Agreement Closing Date from the issue or sale of:

 

(1)   Equity Interests of the Borrower, including Retired Capital Stock (as
defined below), but excluding cash proceeds and the fair market value, as
determined in good faith by the Board of Directors, of marketable securities or
other property received from the sale of:

 

I                                            Equity Interests to members of
management, directors or consultants of the Borrower, any direct or indirect
parent of the Borrower and the Borrower’s Subsidiaries after the Existing
Agreement Closing Date to the extent such amounts have been applied to
Restricted Payments made

 

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in accordance with clause (iv) of paragraph (b) below; and

 

II                                        Designated Preferred Stock; or

 

(2)   debt securities of the Borrower that have been converted into such Equity
Interests of the Borrower or its direct or indirect parents;

 

provided, however, that this clause (B) shall not include the proceeds from
(w) Refunding Capital Stock (as defined below), (x) Equity Interests or
converted debt securities of the Borrower sold to a Restricted Subsidiary, or to
an employee stock ownership plan or other trust established by the Borrower or a
Restricted Subsidiary, (y) Disqualified Stock or debt securities that have been
converted into Disqualified Stock or (z) Excluded Contributions or Designated
Preferred Stock, plus

 

(C)   100% of the aggregate amount of cash and the fair market value, as
determined in good faith by the Board of Directors, of marketable securities or
other property contributed to the capital of the Borrower following the Existing
Agreement Closing Date other than (i) net cash proceeds contributed to the
Borrower from the sale of Disqualified Stock or Designated Preferred Stock,
(ii) net cash proceeds received from Equity Offerings to the extent used to
redeem Senior Secured Notes, (iii) by any Excluded Contributions and (iv) by
contributions to the Borrower and the Restricted Subsidiaries in connection with
the Reorganization Plan, plus

 

(D)  100% of the aggregate amount received in cash and the fair market value, as
determined in good faith by the Board of Directors, of marketable securities or
other property received by the Borrower or a Restricted Subsidiary by means of:

 

(1)   the sale or other disposition (other than to the Borrower or a Restricted
Subsidiary or to an employee stock ownership plan or any trust established by
the Borrower or any of its Subsidiaries) of Restricted Investments made after
the Closing Date by the Borrower and its Restricted Subsidiaries and repurchases
and redemptions of such Restricted Investments from the Borrower and its
Restricted Subsidiaries and repayments of loans or advances which constitute
Restricted Investments made after the Closing Date by the Borrower and the
Restricted Subsidiaries and (without duplication of amounts included in EBITDA)
any dividends or distributions received by the Borrower or a Restricted
Subsidiary on account of Restricted Investments made after the Existing
Agreement Closing Date (other than in each case to the extent the Investment in
such Restricted Investment was made by the Borrower or a Restricted Subsidiary
pursuant to clause (xiv) of paragraph (b) below); or

 

(2)   the sale (other than to the Borrower or a Restricted Subsidiary or to an
employee stock ownership plan or any trust established by the Borrower or any of
its Subsidiaries) of the stock of an Unrestricted Subsidiary (other than in each
case to the extent the Investment in such Unrestricted Subsidiary was made by
the Borrower or a Restricted Subsidiary pursuant to clause (x) of paragraph
(b) below or to the extent such Investment constituted a Permitted Investment)
or a dividend or distribution from an Unrestricted Subsidiary in each case after
the Existing Agreement Closing Date; plus

 

(E)   in the case of the redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary after the Existing Agreement Closing Date, the fair market
value of the Investment in such Unrestricted Subsidiary, as determined by the
Board of Directors in good faith or if, in the case of an Unrestricted
Subsidiary, such fair market value may exceed $25.0 million, in writing

 

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by an Independent Financial Advisor, at the time of the redesignation of such
Unrestricted Subsidiary as a Restricted Subsidiary, other than an Unrestricted
Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made
by the Borrower or a Restricted Subsidiary pursuant to clause (xiv) of paragraph
(b) below or to the extent such Investment constituted a Permitted Investment.

 

(b)   The foregoing provisions of Section 7.01(a) will not prohibit:

 

(i)            the payment of any dividend or distribution within 60 days after
the date of declaration thereof, if at the date of declaration such payment
would have complied with the provisions of this Agreement or the redemption,
repurchase or retirement of Indebtedness if, at the date of any irrevocable
redemption notice such payment would have complied with the provisions of this
Agreement;

 

(ii)           the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Borrower (“Retired Capital Stock”) or Indebtedness
of the Borrower or a Subsidiary Guarantor, or any Equity Interests of any direct
or indirect parent of the Borrower, in exchange for, or out of the proceeds of
the substantially concurrent sale (other than to the Borrower or a Restricted
Subsidiary or to an employee stock ownership plan or other trust established by
the Borrower or a Restricted Subsidiary) of, Equity Interests of the Borrower or
any direct or indirect parent of the Borrower to the extent contributed to the
Borrower (in each case, other than any Disqualified Stock) (“Refunding Capital
Stock”);

 

(iii)          the redemption, repurchase or other acquisition or retirement of
Indebtedness of the Borrower or a Subsidiary Guarantor made by exchange for, or
out of the proceeds of the substantially concurrent sale of, new Indebtedness of
the Borrower or a Subsidiary Guarantor, as the case may be, which is incurred in
compliance with Section 7.02 so long as:

 

(A)  such new Indebtedness has a final scheduled maturity date equal to or later
than the final scheduled maturity date of the Indebtedness being so redeemed,
repurchased, acquired or retired;

 

(B)   such new Indebtedness has a Weighted Average Life to Maturity equal to or
greater than the remaining Weighted Average Life to Maturity of the Indebtedness
being so redeemed, repurchased, acquired or retired;

 

(C)   in the case of unsecured Indebtedness, such new Indebtedness is unsecured,
and in the case of secured Indebtedness, such new Indebtedness is either
unsecured or is Junior Lien Indebtedness; and

 

(D)  the principal amount of such new Indebtedness does not exceed the principal
amount of (or accreted value, if applicable), plus any accrued and unpaid
interest on, the Indebtedness being so redeemed, repurchased, acquired or
retired, plus the amount of any premium (including tender premiums) and any fees
and expenses incurred in connection with such issuance of new Indebtedness;

 

(iv)          a Restricted Payment to pay for the repurchase, retirement or
other acquisition or retirement for value of common Equity Interests of the
Borrower or any of its direct or indirect parents held by any future, present or
former employee, director or consultant of the Borrower, any of its Subsidiaries
or any of its direct or indirect parents (or permitted transferees, assigns,
estates, or heirs of such employee, director or consultant) pursuant to any
management equity plan or stock option plan or any other management or employee
benefit plan or agreement; provided, however, that the aggregate

 

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Restricted Payments made under this clause (iv) do not exceed $5.0 million in
any calendar year (with unused amounts in any calendar year being carried over
to the immediately succeeding calendar year; provided further that such amount
in any calendar year may be increased by an amount not to exceed:

 

(A)  the cash proceeds from the sale of Equity Interests (other than
Disqualified Stock) of the Borrower and, to the extent contributed to the
Borrower, Equity Interests of any of the Borrower’s direct or indirect parents,
in each case to members of management, directors or consultants of the Borrower,
any of its Subsidiaries or any of its direct or indirect parents that occurred
after the Existing Agreement Closing Date, to the extent the cash proceeds from
the sale of such Equity Interests have not otherwise been applied to the payment
of Restricted Payments by virtue of Section 7.01(a)(vii); plus

 

(B)   the cash proceeds of key man life insurance policies received by the
Borrower and its Restricted Subsidiaries after the Existing Agreement Closing
Date; less

 

(C)   the amount of any Restricted Payments previously made pursuant to clauses
(A) and (B) of this clause (iv);

 

(v)           the declaration and payment of dividends to holders of any class
or series of Disqualified Stock of the Borrower or any Restricted Subsidiary
issued in accordance with Section 7.02;

 

(vi)          the declaration and payment of dividends to holders of any class
or series of Designated Preferred Stock (other than Disqualified Stock) issued
by the Borrower after the Existing Agreement Closing Date;

 

(A)  provided that the aggregate amount of dividends paid pursuant to this
clause (A) shall not exceed the aggregate amount of cash actually received by
the Borrower from the sale of such Designated Preferred Stock;

 

(B)   the declaration and payment of dividends to a direct or indirect parent of
the Borrower, the proceeds of which will be used to fund the payment of
dividends to holders of any class or series of Designated Preferred Stock (other
than Disqualified Stock) of such parent issued after the Existing Agreement
Closing Date; provided, that the amount of dividends paid pursuant to this
clause (B) shall not exceed the aggregate amount of cash actually contributed to
the Borrower from the sale of such Designated Preferred Stock;

 

(vii)         repurchases of Equity Interests (i) constituting fractional shares
or (ii) deemed to occur upon exercise of stock options or warrants or other
securities convertible or exchangeable into Equity Interests if such Equity
Interests represent all or a portion of the exercise price of such options or
warrants;

 

(viii)        the payment of dividends on the Borrower’s common equity or the
dividend or distribution to any direct or indirect parent company to fund the
payment by such parent company of dividends on its common stock, following the
consummation of the first public offering of the Borrower’s common stock or the
common stock of any of its direct or indirect parents after the Closing Date, of
up to 6% per annum of the net cash proceeds received by or contributed to the
Borrower in any public offering, other than public offerings with respect to the
Borrower’s or such direct or indirect parent company’s common stock registered
on Form S-8 and other than any public sale constituting an Excluded
Contribution;

 

(ix)           Restricted Payments that are made with Excluded Contributions;

 

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(x)            other Restricted Payments in an aggregate amount taken together
with all other Restricted Payments made pursuant to this clause (x) not to
exceed $20.0 million;

 

(xi)           the declaration and payment of dividends by the Borrower to, or
the making of loans to, any direct or indirect parent company of the Borrower in
aggregate amounts not to exceed the aggregate amount required for any direct or
indirect parent company to pay, in each case without duplication;

 

(A)  franchise taxes and other fees, taxes and expenses required to maintain
their corporate existence;

 

(B)   foreign, federal, state and local income taxes, to the extent such income
taxes are attributable to the income of the Borrower and the Restricted
Subsidiaries and, to the extent of the amount actually received from its
Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent
attributable to the income of such Unrestricted Subsidiaries; provided that in
each case the amount of such payments in any fiscal year does not exceed the
amount that the Borrower and its Restricted Subsidiaries would be required to
pay in respect of foreign, federal, state and local taxes for such fiscal year
were the Borrower, its Restricted Subsidiaries and its Unrestricted Subsidiaries
(to the extent described above) to pay such taxes separately from any such
parent entity;

 

(C)   customary salary, bonus, indemnification obligations and other benefits
payable to officers, directors and employees or former officers, directors or
employees of any direct or indirect parent of the Borrower to the extent such
salaries, bonuses, indemnification obligations and other benefits are
attributable to the ownership or operation of the Borrower and the Restricted
Subsidiaries;

 

(D)  general corporate overhead expenses of any direct or indirect parent of the
Borrower to the extent such expenses are attributable to the ownership or
operation of the Borrower and the Restricted Subsidiaries;

 

(E)   fees and expenses incurred by any direct or indirect parent company of the
Borrower in connection with any unsuccessful equity issuances or incurrence of
Indebtedness to the extent the net proceeds thereof were intended to be
contributed to the Borrower; and

 

(F)   taxes with respect to income of any direct or indirect parent company of
the Borrower derived from funding made available to the Borrower and its
Restricted Subsidiaries by such direct or indirect parent company;

 

(xii)          the repurchase, redemption or other acquisition or retirement for
value of any Indebtedness or the making of a dividend or distribution to any
direct or indirect parent of the Borrower to fund a similar purchase, redemption
or other acquisition or retirement for value required pursuant to provisions
similar to those described in Section 3.10 of the Senior Secured Note Indenture
(in which case a repurchase, redemption or other acquisition or retirement price
of not greater than 101% of the principal amount of such Indebtedness) and under
Section 3.5 of the Senior Secured Note Indenture;

 

(xiii)         the distribution, as a dividend or otherwise, of (A) Equity
Interests of, or Indebtedness owed to the Borrower or a Restricted Subsidiary
by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary
assets of which are cash and/or Cash Equivalents) and (B) any proceeds received
from an Unrestricted Subsidiary on account of such Equity Interests or
Indebtedness,

 

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provided, that, in the case of clause (B), such proceeds will be excluded from
EBITDA for purposes of Section 7.01(a)(vii)(A) and will be excluded from
Section 7.01(a)(vii)(E);

 

(xiv)        Investments in joint ventures and Unrestricted Subsidiaries;
provided that the aggregate Restricted Payments made pursuant to this clause
(xiv) do not exceed $10.0 million; provided that such amount shall be increased
by an amount not to exceed (A) the cash proceeds received as a dividend,
distribution or otherwise from such joint ventures and Unrestricted Subsidiaries
(it being understood that the forgiveness of any debt by such joint venture and
Unrestricted Subsidiary will not be a Restricted Payment hereunder) less (B) the
amount of any Restricted Payments previously made pursuant to subclause (A) of
this clause (xiv); provided, further, that such increased amount shall be
excluded from EBITDA for purposes of Section 7.01(a)(vii)(A) and shall also be
excluded from clauses Section 7.01(a)(vii)(D) and Section 7.01(a)(vii)(E); and

 

(xv)         distributions or payments of Receivables Fees.

 

provided however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (v), (vi), (x) and (xiii), no Default
or Event of Default shall have occurred and be continuing or would occur as a
consequence thereof.

 

(c)   Notwithstanding anything to the contrary in the foregoing, (i) Restricted
Investments of assets and property constituting Collateral (other than cash and
Cash Equivalents) made pursuant to Section 7.01(a) may only be made in
Subsidiary Guarantors and (ii) the Borrower will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, (I) declare or pay any
dividend or make any distribution (whether cash or noncash) on account of the
Borrower’s Equity Interests; (II) purchase or redeem, defease or otherwise
acquire or retire for value any Equity Interests of the Borrower or any direct
or indirect parent of the Borrower, in the case of each of clauses (I) and
(II) to or for the benefit of any holder of common Equity Interests of the
Borrower or any direct or indirect parent of the Borrower, or (III) make any
principal payment on, or redeem, repurchase, defease, otherwise acquire or
retire for value or give any irrevocable notice of redemption with respect
thereto in each case, prior to any scheduled repayment, sinking fund payment or
maturity, any Indebtedness by means of (A) Section 7.01(a)(vii),
(B) Section 7.01(b)(v), Section 7.01(b)(vi), Section 7.01(b)(viii),
Section 7.01(b)(ix), Section 7.01(b)(x), Section 7.01(b)(xii),
Section 7.01(b)(xiii) or Section 7.01(b)(xiv) or (C) clause (o) of the
definition of “Permitted Investments,” unless in each case such Restricted
Payment is otherwise in compliance with this Agreement and at the time of such
Restricted Payment (x) the Consolidated Secured Debt Ratio (calculated without
giving effect to clause (1)(e) of the definition of Consolidated Secured Debt
Ratio) of the Borrower would have been no greater than 3.25 to 1.00 on a pro
forma basis (it being understood that the amount calculated pursuant to clause
(1) of the definition of Consolidated Secured Debt Ratio will be reduced by the
Liquidity of the Borrower and its Restricted Subsidiaries in excess of $150.0
million for purposes of such calculation), (y) the Borrower and its Restricted
Subsidiaries would have Liquidity of no less than $100.0 million on a pro forma
basis and (z) the Senior Secured Leverage Ratio (calculated on a pro forma basis
in accordance with the last sentence of Section 7.14) would have been no greater
than the ratio set forth in Section 7.14 opposite the last day of the then
current fiscal quarter less 0.50.

 

(d)   The amount of all Restricted Payments (other than cash) will be the fair
market value (as determined in good faith by the Borrower) on the date of such
Restricted Payment of the assets or securities proposed to be paid, transferred
or issued by the Borrower or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment.

 

(e)   As of the Closing Date, all of the Borrower’s Subsidiaries will be
Restricted Subsidiaries. The Borrower will not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last
sentence of the definition of “Unrestricted Subsidiary.” For

 

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purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary,
all outstanding Investments by the Borrower and the Restricted Subsidiaries
(except to the extent repaid) in the Subsidiary so designated will be deemed to
be Restricted Payments in an amount determined as set forth in the last sentence
of the definition of “Investment.” Such designation will be permitted only if a
Restricted Payment in such amount would be permitted at such time, whether
pursuant to Section 7.01(a), Section 7.01(b)(ix) or Section 7.01(b)(x), or
pursuant to the definition of “Permitted Investments,” and if such Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.

 

Section 7.02           Limitation on incurrence of Indebtedness and issuance of
Disqualified Stock and preferred stock.

 

(a)  The Borrower will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, (collectively,
“incur” and collectively, an “incurrence”) with respect to any Indebtedness
(including Acquired Indebtedness) and the Borrower will not issue any shares of
Disqualified Stock and will not permit any Restricted Subsidiary to issue any
shares of Disqualified Stock or preferred stock; provided, however, that the
Borrower may incur Indebtedness (including Acquired Indebtedness) or issue
shares of Disqualified Stock, and any Subsidiary Guarantor may incur
Indebtedness (including Acquired Indebtedness), issue shares of Disqualified
Stock and issue shares of preferred stock, if the Consolidated Leverage Ratio of
the Borrower and the Restricted Subsidiaries at the time such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been no greater than 5.00 to 1.00, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock or
preferred stock had been issued, as the case may be, and the application of
proceeds therefrom had occurred at the beginning of the most recently ended four
full fiscal quarters for which internal financial statements are available.

 

(b)   The foregoing limitations in paragraph (a) will not apply to:

 

(i)            the incurrence of (A) Indebtedness of any Loan Party pursuant to
the Secured Credit Facility, (B) Indebtedness under other Credit Facilities by
the Borrower or any of the Subsidiary Guarantors and the issuance and creation
of letters of credit and bankers’ acceptances thereunder (with letters of credit
and bankers’ acceptances being deemed to have a principal amount equal to the
face amount thereof), (C) Indebtedness under Credit Facilities of Foreign
Subsidiaries, (D) obligations under Secured Hedge Agreements or (E) Cash
Management Obligations; provided that the aggregate principal amount of
Indebtedness incurred under clauses (A), (B), (C), (D) and (E) outstanding at
any one time shall not exceed $100.0 million less the aggregate amount of all
Net Proceeds of Asset Sales applied by the Borrower or any Restricted Subsidiary
since the Closing Date to permanently repay any Indebtedness under Credit
Facilities (and, in the case of revolving credit Indebtedness, to effect a
corresponding permanent reduction thereunder); provided that Cash Management
Obligations incurred under this clause (i) shall not exceed $5.0 million in the
aggregate at any time outstanding;

 

(ii)           the incurrence by the Borrower and any Subsidiary Guarantor of
Indebtedness represented by (i) the Senior Secured Notes issued on the Issue
Date (other than any Additional Notes), including any guarantee thereof, and
(ii) any Exchange Notes (including any guarantee thereof);

 

(iii)          Existing Indebtedness (other than Indebtedness described in
clauses (i), (ii) and (iv) of Section 7.02(b) (in respect of clause (iv) only,
incurred on or after the Existing Agreement Closing Date));

 

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(iv)          Indebtedness (including Capitalized Lease Obligations),
Disqualified Stock and preferred stock incurred by the Borrower or any of the
Subsidiary Guarantors to finance the purchase, lease or improvement of property
(real or personal) or equipment that is used or useful in a Similar Business,
whether through the direct purchase of assets or the Capital Stock of any Person
owning such assets, in an aggregate principal amount which, when aggregated with
the principal amount of all other Indebtedness, Disqualified Stock and preferred
stock then outstanding and incurred pursuant to this clause (iv) and including
all Refinancing Indebtedness incurred to refund, refinance or replace any other
Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this
clause (iv), does not exceed the greater of $20.0 million and 1.0% of Total
Assets;

 

(v)           Indebtedness incurred by the Borrower or any Restricted Subsidiary
constituting reimbursement obligations with respect to letters of credit issued
in the ordinary course of business, including without limitation letters of
credit in respect of workers’ compensation claims, or other Indebtedness with
respect to reimbursement type obligations regarding workers’ compensation
claims, health, disability or other employee benefits, or property, casualty or
liability insurance or self insurance obligations in the ordinary course of
business; provided, however, that upon the drawing of such letters of credit or
the incurrence of such Indebtedness, such obligations are reimbursed within 30
days following such drawing or incurrence;

 

(vi)          Indebtedness arising from agreements of the Borrower or a
Restricted Subsidiary providing for and to the extent of indemnification,
adjustment of purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition or acquisition of any business,
assets or a Subsidiary, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or a Subsidiary for
the purpose of financing such acquisition; provided that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds including noncash proceeds (the fair market value of such noncash
proceeds being measured at the time received and without giving effect to any
subsequent changes in value) actually received by the Borrower and the
Restricted Subsidiaries in connection with such disposition;

 

(vii)         Indebtedness of the Borrower to a Subsidiary Guarantor; provided
that any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Subsidiary Guarantor ceasing to be a Subsidiary
Guarantor or any other subsequent transfer of any such Indebtedness (except to
the Borrower or another Guarantor) shall be deemed, in each case to be an
incurrence of such Indebtedness not permitted by this clause (vii);

 

(viii)        Indebtedness of the Borrower or a Subsidiary Guarantor to a
Restricted Subsidiary that is not a Subsidiary Guarantor; provided that any such
Indebtedness is subordinated in right of payment to the Obligations, as
applicable, provided further that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any other subsequent transfer of any
such Indebtedness (except to the Borrower or another Restricted Subsidiary)
shall be deemed, in each case, to be an incurrence of such Indebtedness not
permitted by this clause (viii);

 

(ix)           Indebtedness of a Subsidiary Guarantor to the Borrower or another
Subsidiary Guarantor;

 

(x)            Indebtedness of a Restricted Subsidiary that is not a Subsidiary
Guarantor to the Borrower or a Restricted Subsidiary;

 

(xi)           shares of preferred stock of a Restricted Subsidiary issued to
the Borrower or another Restricted Subsidiary; provided that any subsequent
issuance or transfer of any Capital Stock or any other

 

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event which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of preferred
stock (except to the Borrower or another Restricted Subsidiary) shall be deemed
in each case to be an issuance of such shares of preferred stock not permitted
by this clause (xi);

 

(xii)          obligations under Swap Contracts (excluding obligations under
Swap Contracts entered into for speculative purposes) for the purpose of
limiting:

 

(A)  interest rate risk with respect to any Indebtedness permitted to be
incurred or outstanding under the Senior Secured Note Indenture; or

 

(B)   exchange rate risk with respect to any currency exchange; or

 

(C)   commodity risk;

 

(xiii)         obligations in respect of performance, bid, appeal and surety
bonds and other similar types of performance and completion guarantees provided
by the Borrower or any Restricted Subsidiary in the ordinary course of business;

 

(xiv)        (A)  any guarantee by the Borrower or a Subsidiary Guarantor of
Indebtedness or other obligations of any Restricted Subsidiary so long as the
incurrence of such Indebtedness incurred by such Restricted Subsidiary is
permitted under the terms of this Agreement; provided that if the Indebtedness
being guaranteed is subordinated to or pari passu with a Subsidiary Guarantee,
then the guarantee shall be subordinated or pari passu to the Obligations or
Guarantor Obligations, as applicable, to the same extent as the Indebtedness
guaranteed; or

 

(B)   any guarantee by a Restricted Subsidiary of Indebtedness of the Borrower
or a Subsidiary Guarantor; provided that such guarantee is incurred in
accordance with Section 7.13; or

 

(C)   any guarantee by a Restricted Subsidiary that is not a Subsidiary
Guarantor of Indebtedness of another Restricted Subsidiary that is not a
Subsidiary Guarantor;

 

(xv)         the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness, Disqualified Stock or preferred stock which serves to refund or
refinance any Indebtedness, Disqualified Stock or preferred stock of the
Borrower or any Restricted Subsidiary incurred as permitted under
Section 7.02(a) and Section 7.02(b)(ii) and (b)(iii) above, this clause (xv) and
clause (xvi) below, including additional Indebtedness, Disqualified Stock or
preferred stock incurred to pay premiums (including tender premiums), defeasance
costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to
its respective maturity; provided, however, that such Refinancing Indebtedness:

 

(A)  (1) has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred which is not less than the lesser of (x) the remaining
Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or
preferred stock being refunded or refinanced and (y) the remaining Weighted
Average Life to Maturity of the Loans and (2) does not have a maturity date
prior to the Maturity Date;

 

(B)   to the extent such Refinancing Indebtedness refinances (i) Indebtedness
subordinated or pari passu in right of payment to the Obligations, such
Refinancing Indebtedness is subordinated or pari passu in right of payment to
the Obligations at least to the same extent as the

 

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Indebtedness being refinanced or refunded or (ii) Disqualified Stock or
preferred stock, such Refinancing Indebtedness must be Disqualified Stock or
preferred stock, respectively;

 

(C)   shall not be in an amount in excess the principal amount (or accreted
value, if applicable) or liquidation preference of, plus any accrued and unpaid
interest on, the Indebtedness being so refunded or refinanced, plus the amount
of any premium (including tender premiums), defeasance costs and any related
fees and expenses;

 

(D)  shall not have a final maturity date prior to the final maturity date of
the Indebtedness, Disqualified Stock or preferred stock being refunded or
refinanced; and

 

(E)   shall not include:

 

(1)   Indebtedness, Disqualified Stock or preferred stock of a Restricted
Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness,
Disqualified Stock or preferred stock of the Borrower or a Subsidiary Guarantor;
or

 

(2)   Indebtedness, Disqualified Stock or preferred stock of the Borrower or a
Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or
preferred stock of an Unrestricted Subsidiary;

 

(xvi)        (i)    Indebtedness, Disqualified Stock or preferred stock of
Persons incurred and outstanding on or prior to the date such Person was
acquired by the Borrower or any Restricted Subsidiary or merged into the
Borrower or a Restricted Subsidiary in accordance with the terms of this
Agreement and (ii) Indebtedness of the Borrower or any Restricted Subsidiary
incurred in connection with or in contemplation of, or to provide all or any
portion of the funds or credit support utilized to consummate, the acquisition
by the Borrower or such Restricted Subsidiary of property used or useful in a
Similar Business (whether through the direct purchase of assets or the purchase
of Capital Stock of, or merger or consolidation with, any Person owning such
assets); provided that in the case of both (i) and (ii), the Borrower would be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Leverage Ratio test set forth in paragraph (a) of this Section;

 

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

 

(xviii)      Indebtedness consisting of promissory notes issued by the Borrower
or any of its Restricted Subsidiaries to any current or former employee,
director or officer of the Borrower, any of its Restricted Subsidiaries or any
of its direct or indirect parents (or permitted transferees, assigns, estates,
or heirs of such employee, director or officer), to finance the purchase or
redemption of Equity Interests of the Borrower or any of its direct or indirect
parent companies permitted by Section 7.01; provided further, that such
indebtedness must be expressly subordinated in right of payment to the
Obligations;

 

(xix)         Indebtedness of the Borrower or any Restricted Subsidiary
consisting of (i) the financing of insurance premiums or (ii) take-or-pay
obligations contained in supply arrangements, in each case, in the ordinary
course of business;

 

(xx)          Indebtedness, Disqualified Stock and preferred stock of the
Borrower and the Restricted Subsidiaries not otherwise permitted hereunder in an
aggregate principal amount or liquidation preference, which when aggregated with
the principal amount and liquidation preference of all other Indebtedness,
Disqualified Stock and preferred stock then outstanding and incurred pursuant to
this clause

 

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(xx) and all aggregate outstanding principal amounts incurred under this
Agreement, does not at any one time outstanding exceed $35.0 million;

 

(xxi)                           Indebtedness of Foreign Subsidiaries in an
aggregate amount not to exceed $5.0 million at any time outstanding; and

 

(xxii)                        Indebtedness incurred pursuant to the Loan
Documents.

 

(c)          For purposes of determining compliance with this Section 7.03 in
the event that an item of Indebtedness, Disqualified Stock or preferred stock
(or any portion thereof) meets the criteria of more than one of the categories
of permitted Indebtedness, Disqualified Stock or preferred stock described in
clauses (b)(i) through (b)(xxii) above or is entitled to be incurred pursuant to
paragraph (a) of this Section, the Borrower shall, in its sole discretion,
classify or reclassify such item of Indebtedness, Disqualified Stock or
preferred stock (or any portion thereof) in any manner that complies with this
Section and such item of Indebtedness, Disqualified Stock or preferred stock
will be treated as having been incurred pursuant to only one of such clauses or
pursuant to paragraph (a) of this Section. Additionally, all or any portion of
any item of Indebtedness may later be reclassified as having been incurred
pursuant to any category of permitted Indebtedness described in clauses
(b)(i) through (b)(xxii) above or pursuant to paragraph (a) of this Section so
long as such Indebtedness is permitted to be incurred pursuant to such provision
at the time of reclassifications, provided that all Indebtedness outstanding on
the Closing Date under this Agreement shall be deemed to have been incurred on
such date in reliance on the exception provided by Section 7.02(b)(i) and may
not later be reclassified. Accrual of interest, the accretion of accreted value,
the amortization of original issue discount and the payment of interest in the
form of additional Indebtedness, Disqualified Stock or preferred stock will not
be deemed to be an incurrence of Indebtedness, Disqualified Stock or preferred
stock for purposes of this Section.

 

(d)         For purposes of determining compliance with any U.S.
dollar-denominated restriction on the incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term debt, or
first committed, in the case of revolving credit debt; provided that if such
Indebtedness is incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced.

 

(e)          The principal amount of any Indebtedness incurred to refinance
other Indebtedness, if incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such respective Indebtedness is
denominated that is in effect on the date of such refinancing.

 

(f)            The Borrower will not, and will not permit any Subsidiary
Guarantor to directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness) that is subordinated or junior in right of payment to any
Indebtedness of the Borrower or such Subsidiary Guarantor, as the case may be,
unless such Indebtedness is expressly subordinated in right of payment to the
Obligations or such Subsidiary Guarantor’s Guarantor Obligations to the extent
and in the same manner in all material respects and taken as a whole as such
Indebtedness is subordinated in right of payment to other Indebtedness of the
Borrower or such Subsidiary Guarantor as the case may be.

 

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(g)         This agreement will not treat (1) unsecured Indebtedness as
subordinated or junior to secured Indebtedness merely because it is unsecured or
(2) senior Indebtedness as subordinated or junior to any other senior
Indebtedness merely because it has a junior priority with respect to the same
collateral or is secured by different collateral.

 

(h)         Notwithstanding anything to the contrary in the foregoing, the
incurrence (as defined in Section 7.02(a)) of Senior Secured Indebtedness in a
principal amount greater than $5,000,000 under any other provision of this
Section 7.02 shall only be permitted under this Section 7.02 to the extent that,
both immediately before and after giving pro forma effect to the incurrence of
such Senior Secured Indebtedness (x) no Default or Event of Default shall have
occurred and be continuing and (y) the Borrower shall be in compliance with
Section 7.14.

 

Section 7.03                                                        Liens.  The
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien (other than Permitted Liens) upon any of their property or assets, now
owned or hereafter acquired, or upon any income or profits therefrom.

 

Section 7.04                                                        Merger,
Consolidation or Sale of All or Substantially All Assets.

 

(a)          The Borrower may not consolidate or merge with or into or wind up
into (whether or not the Borrower is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the properties or assets of the Borrower and the Restricted Subsidiaries,
taken as a whole, in one or more related transactions, to any Person unless:

 

(i)                                     the Borrower is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than the Borrower) or to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made is a corporation,
limited liability company or limited partnership organized or existing under the
laws of the United States, any state thereof, the District of Columbia, or any
territory thereof; provided that if such Person is not a corporation, such
Person shall be required to cause a subsidiary of such Person that is a
corporation to be a co-obligor of the Obligations (such Person, as the case may
be, being herein called the “Successor Borrower”);

 

(ii)                                  the Successor Borrower, if other than the
Borrower, expressly assumes all the obligations of such Borrower under this
Agreement pursuant to a supplement to this Agreement or other documents,
agreements or instruments in form reasonably satisfactory to the Administrative
Agent;

 

(iii)                               immediately after such transaction no
Default or Event of Default exists;

 

(iv)                              immediately after giving pro forma effect to
such transaction, as if such transaction had occurred at the beginning of the
applicable four-quarter period, the Successor Borrower would be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in Section 7.02(a);

 

(v)                                 each Guarantor, unless it is a Subsidiary
Guarantor that is the other party to the transactions described above, in which
Section 7.04(a)(ii) above shall apply, shall have by supplement to this
Agreement confirmed that its Guarantee shall apply to such Person’s obligations
under this Agreement shall continue to be in effect;

 

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(vi)                              the Borrower shall have delivered to the
Administrative Agent an Officers’ Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such supplements, if
any, comply with this Agreement;

 

(vii)                           [Reserved]; and

 

(viii)                        [Reserved]:

 

(b)         The Successor Borrower will succeed to, and be substituted for such
Borrower under this Agreement and the Obligations and the Borrower (if not the
Successor Borrower) will be fully released from its obligations under this
Agreement but, in the case of a lease of all or substantially all its assets,
the Borrower will not be released from the obligation to pay the principal of
and interest on the Obligations.

 

(c)          In addition, the Borrower will not, directly or indirectly, lease
all or substantially all of the properties and assets of it and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any other
Person.

 

(d)         Notwithstanding the foregoing clauses (a)(iii) and (a)(iv),

 

(i)                                     any Restricted Subsidiary that is not a
Subsidiary Guarantor may consolidate with, merge into or transfer all or part of
its properties and assets to the Borrower or any Restricted Subsidiary;

 

(ii)                                  any Subsidiary Guarantor may consolidate
with, merge into or transfer all or part of its properties and assets to the
Borrower or a Subsidiary Guarantor; and

 

(iii)                               the Borrower may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Borrower in another
State of the United States.

 

(e)          For purposes of this Section, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Borrower, which
properties and assets, if held by the Borrower instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Borrower on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Borrower.

 

(f)            Notwithstanding anything to the contrary herein, any Subsidiary
with a value of less than $250,000 may liquidate or dissolve or change its legal
form if the Borrower determines in good faith that such action is in the best
interests of the Borrower and its Subsidiaries and is not materially
disadvantageous to the interests of the Lenders.

 

Section 7.05                                                        Limitations
on Guarantors.  (a)  Subject to certain limitations described in this Agreement
governing release of a Guarantee upon the sale, disposition or transfer of a
Subsidiary Guarantor, each Guarantor will not, and the Borrower will not permit
any Subsidiary Guarantor to, consolidate or merge with or into or wind up into
(whether or not such Guarantor is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, any Person unless:

 

(i)                                     (A) such Guarantor is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made is a
corporation, partnership, trust or limited liability company organized or
existing under the laws of the United States, any state thereof, the

 

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District of Columbia, or any territory thereof (such Guarantor or such Person,
as the case may be, being herein called the “Successor Person”);

 

(B)        the Successor Person, if other than such Guarantor, expressly assumes
all the obligations of such Guarantor under this Agreement, such Guarantor’s
Guarantor Obligations pursuant to supplemental indentures or other documents or
instruments in form reasonably satisfactory to the Administrative Agent;

 

(C)        immediately after such transaction (and treating any Indebtedness
which becomes an obligation of the Successor Person or any Restricted Subsidiary
as a result of such transaction as having been incurred by the Successor Person
or such Restricted Subsidiary at the time of such transaction), no Default or
Event of Default exists;

 

(D)       [Reserved];

 

(E)         [Reserved]; and

 

(F)         [Reserved];

 

(ii)                                  the transaction is made in compliance with
Section 7.08.

 

(b)         Subject to certain limitations described in this Agreement, the
Successor Person will succeed to, and be substituted for, such Guarantor under
this Agreement and such Guarantor’s Guarantor Obligations but, in the case of a
lease of all or substantially all its assets, the Guarantor will not be released
from its obligations under its Guarantee. Notwithstanding the foregoing any
Subsidiary Guarantor may merge into or transfer all or part of its properties
and assets to another Subsidiary Guarantor or the Borrower.

 

Section 7.06                                                        Transactions
with Affiliates.  (a)  The Borrower will not, and will not permit any Restricted
Subsidiary to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Borrower (each of the foregoing, an “Affiliate
Transaction”), unless:

 

(i)                                     such Affiliate Transaction is on terms
that are not materially less favorable to the Borrower or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Borrower or such Restricted Subsidiary with an unrelated
Person on an arm’s-length basis; and

 

(ii)                                  the Borrower delivers to the
Administrative Agent (A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate payments or consideration in
excess of $15.0 million, a resolution adopted by the majority of the Board of
Directors of the Borrower approving such Affiliate Transaction and set forth in
an Officers’ Certificate that (x) such Affiliate Transaction has been approved
by a majority of the disinterested members of the Board of Directors, if any,
and (y) that such Affiliate Transaction complies with clause (i) above; and
(B) with respect to any Affiliate Transactions or series of related Affiliate
Transactions involving aggregate payments or consideration in excess of $25.0
million, a letter from an Independent Financial Advisor stating that such
transaction is fair to the Borrower or such Restricted Subsidiary from a
financial point of view.

 

(b)         The foregoing provisions will not apply to the following:

 

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(i)                                     transactions between or among the
Borrower and/or any of the Restricted Subsidiaries;

 

(ii)                                  Restricted Payments permitted by
Section 7.01 and the definition of “Permitted Investments” (other than pursuant
to clauses (c), (d) and (o) thereof);

 

(iii)                               the payment of reasonable fees and
compensation paid to, and indemnities provided on behalf of, (and entering into
related agreements with) officers, directors, employees or consultants of the
Borrower, any of its direct or indirect parents or any Restricted Subsidiary;

 

(iv)                              transactions in which the Borrower or any
Restricted Subsidiary, as the case may be, delivers to the Administrative Agent
a letter from an Independent Financial Advisor stating that such transaction is
fair to the Borrower or such Restricted Subsidiary from a financial point of
view;

 

(v)                                 payments or loans (or cancellation of loans)
to employees or consultants of the Borrower, any of its direct or indirect
parents or any Restricted Subsidiary which are approved by a majority of the
Board of Directors of the Borrower in good faith and in accordance with
applicable law;

 

(vi)                              this Agreement, the Secured Credit Facility
and any agreement as in effect as of the Existing Agreement Closing Date, or any
amendment thereto (so long as any such amendment is not disadvantageous to the
Lenders in any material respect) or payments made thereunder or the performance
thereof or any transaction contemplated thereby;

 

(vii)                           the existence of, or the performance by the
Borrower or any Restricted Subsidiaries of its obligations under the terms of,
any equityholders agreement (including any registration right agreement or
purchase agreements related thereto) to which it is party as of the Existing
Agreement Closing Date and any similar agreement that it may enter into
thereafter; provided, however, that the existence of, or the performance by the
Borrower or any Restricted Subsidiary of its obligations under any future
amendment to the equityholders’ agreement or under any similar agreement entered
into after the Existing Agreement Closing Date will only be permitted under this
clause (vii) to the extent that the terms of any such amendment or new agreement
are not otherwise disadvantageous to the Lenders in any material respects;

 

(viii)                        transactions with customers, clients, suppliers,
or purchasers or sellers of goods or services, in each case in the ordinary
course of business and otherwise in compliance with the terms of this Agreement
which are fair to the Borrower and the Restricted Subsidiaries, in the
reasonable determination of the Board of Directors of the Borrower or the senior
management thereof, or are on terms at least as favorable as might reasonably
have been obtained at such time in arm’s length negotiations with an
unaffiliated third party;

 

(ix)                                transactions with a Person (other than an
Unrestricted Subsidiary of the Borrower) that is an Affiliate of the Borrower
solely because the Borrower or a Restricted Subsidiary of the Borrower owns an
equity interest in or otherwise controls such Person;

 

(x)                                   any purchases by the Borrower’s Affiliates
of Indebtedness of the Borrower or any of its Restricted Subsidiaries the
majority of which Indebtedness is offered to Persons who are not Affiliates and
the Affiliate of the Borrower purchases such Indebtedness on similar terms;

 

(xi)                                any issuance or sale of Equity Interests
(other than Disqualified Stock) to Affiliates of the Borrower and the granting
of registration and other customary rights in connection therewith or any
contribution to capital of direct or indirect parent companies, the Borrower or
any Restricted Subsidiary;

 

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

 

(xiii)                          sales of accounts receivable, or participations
therein, in connection with any Receivables Facility; and

 

(xiv)                         transactions contemplated by the Reorganization
Plan and the related confirmation order.

 

Section 7.07                                                        Dividend and
Other Payment Restrictions Affecting Restricted Subsidiaries.

 

(a)          The Borrower will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any such Restricted Subsidiary to:

 

(i)                                     pay dividends or make any other
distributions to the Borrower or any Restricted Subsidiary on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Borrower or any Restricted
Subsidiary;

 

(ii)                                  make loans or advances to the Borrower or
any Restricted Subsidiary; or

 

(iii)                               sell, lease or transfer any of its
properties or assets to the Borrower or any Restricted Subsidiary.

 

(b)         The foregoing limitations in paragraph (a) will not apply (in each
case) to encumbrances or restrictions existing under or by reason of:

 

(i)                                     contractual encumbrances or restrictions
in effect on the Closing Date, including pursuant to this Agreement and the
related documentation as in effect on the Closing Date and any amendments,
restatements, modifications, renewals, supplements, refundings, replacements or
refinancings of those agreements; provided that the amendments, restatements,
modifications, renewals, supplements, refundings, replacements or refinancings
are not materially more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in those agreements
on the Closing Date;

 

(ii)                                  this Agreement, the Senior Secured Notes
Indenture, the Existing Credit Agreement and the Secured Credit Agreement, any
other Priority Payment Lien Obligations and other Pari Passu Payment Lien
Obligations permitted hereby;

 

(iii)                               purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature discussed in Section 7.07(a)(iii) on the property so acquired;

 

(iv)                              applicable law or any applicable rule,
regulation or order;

 

(v)                                 any agreement or other instrument of a
Person acquired by the Borrower or any Restricted Subsidiary in existence at the
time of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Agreement to be incurred;

 

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(vi)                              contracts for the sale of assets, including,
without limitation, customary restrictions with respect to a Subsidiary pursuant
to an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary that impose
restrictions on the assets to be sold;

 

(vii)                           secured Indebtedness otherwise permitted to be
incurred pursuant to Section 7.02 and Section 7.03 that limit the right of the
debtor to dispose of the assets securing such Indebtedness;

 

(viii)                        restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business;

 

(ix)                                other Indebtedness, Disqualified Stock or
preferred stock of Foreign Subsidiaries permitted to be incurred subsequent to
the Closing Date pursuant to Section 7.02 that impose restrictions solely on the
Foreign Subsidiaries party thereto or their Subsidiaries;

 

(x)                                   customary provisions in joint venture
agreements and other similar agreements relating solely to such joint venture
provided that with respect to any joint venture agreement relating to a
Restricted Subsidiary, such provisions will not materially affect the Borrower’s
ability to make anticipated payments on the Obligations (as determined in good
faith by the Board of Directors of the Borrower);

 

(xi)                                customary provisions contained in leases,
licenses and other agreements entered into in the ordinary course of business;

 

(xii)                             any agreement or instrument (A) relating to
any Indebtedness or preferred stock of a Restricted Subsidiary permitted to be
incurred subsequent to the Closing Date pursuant to Section 7.02 if the
encumbrances and restrictions are not materially more disadvantageous to the
Lenders than is customary in comparable financings (as determined in good faith
by the Borrower) and (B) either (x) the Borrower determines that such
encumbrance or restriction will not adversely affect the Borrower’s ability to
make payments on the Obligations as and when they come due or (y) such
encumbrances and restrictions apply only during the continuance of a default in
respect of a payment or financial maintenance covenant relating to such
Indebtedness;

 

(xiii)                          restrictions created in connection with any
Receivables Facility that, in the good faith determination of the Board of
Directors of the Borrower, are necessary or advisable to effect such Receivables
Facility; and

 

(xiv)                         any encumbrances or restrictions of the type
referred to in clauses (a)(i), a(ii) and (a)(iii) above imposed by any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i) through (xiii) above; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of the
Borrower’s Board of Directors, not materially more restrictive taken as a whole
with respect to such encumbrance and other restrictions than those prior to such
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.

 

Section 7.08                                                        Asset
Sales.  (a)  (i)  The Borrower will not, and will not permit any Restricted
Subsidiary to, cause or make an Asset Sale, unless:

 

(A)      the Borrower or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value (as determined

 

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in good faith by the Borrower on the date of contractually agreeing to such
Asset Sale) of the assets sold or otherwise disposed of; and

 

(B)        85% of the consideration therefor received by the Borrower or such
Restricted Subsidiary, as the case may be, is in the form of cash, Cash
Equivalents or Replacement Assets or a combination of the foregoing.

 

(ii)                                  [Reserved]

 

(iii)                               [Reserved]

 

(iv)                              All Net Proceeds received from any Recovery
Event or Asset Sale shall be applied to repay, first, the obligations under the
Secured Credit Facility in accordance with the terms thereof, and, second, to
the extent that any Net Proceeds remain after such repayment and to the extent
permitted by the terms of the respective Secured Obligations, to the payment of
Priority Payment Lien Obligations, the holders of Specified Notes and holders of
Pari Passu Payment Lien Obligations in accordance with the terms of the Existing
Credit Agreement and the Senior Secured Notes Indenture or the other agreements
governing such other Priority Payment Lien Obligations or Pasi Passu Payment
Lien Obligations and, third, to the extent any Net Proceeds remain and to the
extent permitted by the terms of the respective agreements governing Secured
Obligations to the payment of the Obligations in accordance with Section 2.04.

 

(v)                                 [Reserved]

 

(b)         [Reserved]

 

For purposes of paragraphs (a) and (b) of this Section, (i) any liabilities
(other than Pari Passu Payment Lien Obligations, Disqualified Stock and
Indebtedness the repayment of which would constitute a Restricted Payment) (as
shown on the Borrower’s, or such Restricted Subsidiary’s, most recent balance
sheet or in the notes thereto) of the Borrower or any Restricted Subsidiary that
are assumed by the transferee of any such assets and for which the Borrower and
all Restricted Subsidiaries have been validly released by all creditors in
writing; and (ii) any securities or other obligations received by the Borrower
or such Restricted Subsidiary from such transferee that are converted by the
Borrower or such Restricted Subsidiary into cash or Cash Equivalents (to the
extent of the cash or Cash Equivalents received) within 180 days following the
closing of such Asset Sale shall be deemed to be cash or Cash Equivalents.

 

Section 7.09                                                       
Prepayments, Etc. of Indebtedness.  The Borrower will not, and will not permit
any Restricted Subsidiary to, directly or indirectly:

 

(a)          prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner (it being understood that payments of
regularly scheduled interest shall be permitted) any unsecured Indebtedness
(other than the Obligations), any Junior Lien Indebtedness or any Indebtedness
that is required to be subordinated to the Obligations pursuant to the terms of
the Loan Documents (collectively, “Junior Financing”) or make any payment in
violation of any subordination terms of any Junior Financing Documentation,
except the refinancing thereof with Refinancing Indebtedness otherwise permitted
under Section 7.02(b)(xv);

 

(b)         amend, modify or change in any manner materially adverse to the
interests of the Lenders (including, without limitation, in each case any
covenant thereunder more restrictive in any material respect to the Borrower or
any Restricted Subsidiary) (i) any term or condition of the Senior

 

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Secured Notes, the Senior Secured Note Indenture, the Existing Credit Agreement,
documentation governing Pari Passu Payment Lien Obligations or any Junior
Financing Documentation or (ii) any Organization Document of any Group Member,
in any case without the consent of the Administrative Agent; provided, that
notwithstanding the foregoing, it is agreed and acknowledged that (x) any
extension of the maturity, including the payment of customary fees at a market
rate in connection therewith, of the Existing Credit Agreement or any other
Credit Facility and (y) any payment of customary fees at a market rate in
connection with any amendment, modification or change in respect of the
foregoing, in each case, are hereby deemed to be not materially adverse to the
interests of the Lenders;

 

(c)          amend, modify or otherwise change (i) Sections 3.2(b)(1) or 3.5 of
the Senior Secured Note Indenture or clause (26) of the definition of “Permitted
Liens” in the Senior Secured Note Indenture or (ii) Section 7.02(b)(i) of the
Existing Credit Agreement or clause (26) of the definition of “Permitted Liens”
in the Existing Credit Agreement; or

 

(d)         make any payment on account of Priority Payment Lien Obligations
(including, without limitation, the Existing Credit Agreement and any
refinancing or replacement thereof, but excluding the Secured Credit Facility),
the Specified Notes or other Pari Passu Payment Lien Obligations from Net
Proceeds of Asset Sales to the extent the Borrower is not required to make any
payment thereof pursuant to the terms of the applicable Credit Facility, Senior
Notes Indenture or other documents governing such Priority Payment Lien
Obligations or Pari Passu Payment Lien Obligations;

 

(e)          make any voluntary payment in respect of the Existing Credit
Facility; provided that such payment shall be permitted to the extent (i) made
with cash (other than Net Proceeds from Asset Sales or Recovery Events) and
(ii) at the time of such payment (x) no “Default” or “Event of Default” (as such
terms are defined in the Existing Credit Agreement) shall then exist or shall
exist immediately after giving effect to such prepayment, (y) no Default or
Event of Default shall exist or shall exist immediately after giving effect to
such prepayment, and (z) the commitments under the Existing Credit Facility are
not reduced; or

 

(f)            make any optional or voluntary redemption of any of the Specified
Notes prior to the scheduled maturity thereof.

 

Section 7.10                                                        Holding
Company.  Holdings shall not conduct, transact or otherwise engage in any
business or operations other than (i) its ownership of all of the Equity
Interests in, and its management of, the Borrower, (ii) action required by law
to maintain its existence, (ii) performance of its obligations under this
Agreement, the Existing Credit Agreement, the Secured Credit Facility, the
Senior Secured Note Indenture, and the other agreements contemplated thereby,
(v) any public offering of its common stock, (vi) activities incidental to its
maintenance and continuance and to any of the foregoing activities and
(vii) other activities to the extent permitted by, and in compliance with, this
Agreement.

 

Section 7.11                                                        Payments for
Consent.  The Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Lender for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Agreement unless such
consideration is offered to be paid and is paid to all Lenders that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or amendment.

 

Section 7.12                                                        Limitation
on Lines of Business.  The Borrower will not, and will not permit any Restricted
Subsidiary to, engage in any business other than a Similar Business.

 

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Section 7.13                                                        Limitation
on Guarantees of Indebtedness by Restricted Subsidiaries.

 

(a)          The Borrower will not permit any Restricted Subsidiary that is not
a Subsidiary Guarantor or a special-purpose Restricted Subsidiary formed in
connection with Receivables Facilities, to guarantee the payment of any
Indebtedness of the Borrower or any other Guarantor unless:

 

(i)                                     such Restricted Subsidiary executes and
delivers within 10 Business Days joinders or supplements to this Agreement
providing for a guarantee of payment of the Obligations by such Restricted
Subsidiary, except if such Indebtedness is by its express terms subordinated in
right of payment to the Obligations or such Subsidiary Guarantor’s Guarantor
Obligations, any such guarantee of such Restricted Subsidiary with respect to
such Indebtedness shall be subordinated in right of payment to such Restricted
Subsidiary’s Guarantor Obligations substantially to the same extent as such
Indebtedness is subordinated in right of payment to the Obligations or such
Subsidiary Guarantor’s Guarantor Obligations;

 

(ii)                                  such Restricted Subsidiary waives and will
not in any manner whatsoever claim or take the benefit or advantage of, any
rights of subrogation in relation to the Lenders in respect of any payment by
such Restricted Subsidiary under its guarantee until payment in full of the
Obligations (other than contingent indemnification and contingent expense
reimbursement obligations);

 

(iii)                               [Reserved]; and

 

(iv)                              such Restricted Subsidiary shall deliver to
the Administrative Agent an Opinion of Counsel to the effect that:

 

(A)      such Guarantee of the Obligations has been duly executed and
authorized; and

 

(B)        such Guarantee of the Obligations constitutes a valid, binding and
enforceable obligation of such Restricted Subsidiary, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
(including, without limitation, all laws relating to fraudulent transfers) and
except insofar as enforcement thereof is subject to general principles of
equity;

 

provided that this paragraph (a) shall not be applicable to any guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary to the extent it is not incurred
pursuant to a syndicated loan, registered offering of securities under the
Securities Act or a private placement of securities (including under Rule 144A)
pursuant to an exemption from the registration requirements of the Securities
Act.

 

(b)         Notwithstanding the foregoing and the other provisions of this
Agreement, any Guarantee by a Restricted Subsidiary of the Obligations shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon:

 

(i)                                     any sale, exchange or transfer (by
merger or otherwise) of Capital Stock of such Subsidiary Guarantor following
which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary
or all or substantially all the assets of such Subsidiary Guarantor (other than
by lease), which sale, exchange or transfer is made in compliance with the
applicable provisions of this Agreement and all the obligations of such
Subsidiary Guarantor in respect of all Indebtedness of the Borrower or the
Subsidiary Guarantors terminate upon consummation of such transaction;

 

(ii)                                  the release or discharge of the guarantee
by such Restricted Subsidiary which resulted in the creation of such Guarantee
if such Subsidiary Guarantor would not then otherwise be

 

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required to guarantee the Obligations pursuant to this Agreement provided, that
if such Restricted Subsidiary has incurred any Indebtedness or issued any
preferred stock or Disqualified Stock in reliance on its status as a Guarantor
under Section 7.02, such Restricted Subsidiary’s obligations under such
Indebtedness, Disqualified Stock or preferred stock, as the case may be, so
incurred are satisfied in full and discharged or are otherwise permitted to be
incurred by a Restricted Subsidiary (other than a Subsidiary Guarantor) under
Section 7.02; except a discharge or release by or as a result of payment under
such guarantee;

 

(iii)                              if such Subsidiary Guarantor is designated as
an Unrestricted Subsidiary or otherwise ceases to be a Restricted Subsidiary, in
each case in accordance with the provisions of this Agreement, upon
effectiveness of such designation or when it first ceases to be a Restricted
Subsidiary, respectively; or

 

(iv)                              if the Obligations under this Agreement are
discharged in accordance with the terms of this Agreement (other than contingent
indemnification and contingent expense reimbursement obligations).

 

Section 7.14                                Financial Condition Covenant. The
Borrower will not permit the Senior Secured Leverage Ratio as of any date set
forth below to be greater than the ratio set forth below opposite such date:

 

Date

 

Senior Secured
Leverage Ratio

 

 

 

September 30, 2011

 

4.25 : 1.00

December 31, 2011

 

4.00 : 1.00

March 31, 2012

 

3.75 : 1.00

June 30, 2012

 

3.75 : 1.00

September 30, 2012

 

3.75 : 1.00

December 31, 2012 and thereafter

 

3.75 : 1.00

 

For all purposes of determining pro forma compliance with this Section 7.14 on
any day, the applicable ratio shall be the one in effect on the last day of the
fiscal quarter in which such day falls (it being understood that the EBITDA used
in determining such pro forma compliance will be the EBITDA for the most
recently ended period for which financial statements have been or are required
to have been delivered pursuant to Section 6.01(a) or (b)).

 

Section 7.15                                Receivables.  The Borrower will not,
and will not permit any Restricted Subsidiary that is a Domestic Subsidiary, to
sell its accounts receivable to a Person that is not a Restricted Subsidiary in
connection with any receivables financing facility.

 

Section 7.16                                Accounting Changes.  The Borrower
will not make any change in its fiscal year, (i) except as required by GAAP and
(ii) except the change to December 31 and any related changes.

 

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ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

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

 

(a)          Non-Payment.  The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any Loan,
or (ii) within three (3) Business Days after the same becomes due, any interest
or any other amount payable hereunder or with respect to any other Loan
Document; or

 

(b)         Specific Covenants.  Any Group Member fails to perform or observe
(or to cause the performance or observance of) any term, covenant or agreement
contained in any of Sections 6.04(a), 6.06 (solely with respect to Holdings and
the Borrower) or Section 6.15 or Article VII; or

 

(c)          Other Defaults.  Any Group Member fails to perform or observe (or
to cause the performance or observance of) any other covenant or agreement (not
specified in Section 8.01(a) or (b) above) contained in any Loan Document on its
part to be performed or observed and such failure continues for thirty (30) days
after written notice thereof by the Administrative Agent or the Required Lenders
to the Borrower; or

 

(d)         Representations and Warranties.  Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document required to be delivered in connection herewith or therewith shall be
incorrect or misleading in any material respect when made or deemed made; or

 

(e)          Cross-Default.  (i) Any Group Member (A) fails to make any payment
beyond the applicable grace period with respect thereto, if any (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Indebtedness (other than Indebtedness hereunder) having an
aggregate principal amount of not less than the Threshold Amount, or (B) fails
to observe or perform any other agreement or condition contained in any
instrument or agreement evidencing, governing, securing or otherwise relating to
any such Indebtedness, or any other “default” (or like term) occurs, the effect
of which failure or other “default” is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due (automatically or otherwise) prior to
its stated maturity (or, in the case of any such Indebtedness constituting a
guarantee, to become payable); provided, that this clause (e)(B) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness, if such sale or
transfer is permitted hereunder and under the documents providing for such
Indebtedness; provided, further, that this clause (e) shall not apply in respect
of (x) any Indebtedness of any Designated Non-Debtor that becomes due or
payable, or is capable of becoming due or payable, prior to its stated maturity,
or (y) any non-payment in respect of any Indebtedness by any Designated
Non-Debtor, in each case to the extent caused by or directly resulting from the
institution of any proceeding under any Debtor Relief Law in respect of such
Designated Non-Debtor; or (ii) any “Event of Default” shall have occurred and be
continuing under, and as defined in, the Existing Credit Agreement, the Secured
Credit Facility or the Senior Notes Indenture; or

 

(f)            Insolvency Proceedings, Etc.  Any Group Member other than a
Designated Non-Debtor institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,

 

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trustee, custodian, conservator, liquidator, rehabilitator, administrator,
administrative receiver or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, administrator, administrative receiver or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for sixty (60) calendar days; or
any proceeding under any Debtor Relief Law relating to any such Person or to all
or any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for sixty (60) calendar days, or an
order for relief approving or ordering any of the foregoing is entered in any
such proceeding (to avoid any doubt, it being understood and agreed that none of
the foregoing shall be applicable to commencement of a process relating to
Mandataire ad Hoc or an appointment of a Mandataire pursuant to French laws); or

 

(g)         Inability to Pay Debts; Attachment.  (i)  Any Group Member other
than a Designated Non-Debtor becomes generally unable or admits in writing its
inability generally or fails generally to pay its debts in excess of the
Threshold Amount as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any Group Member, and is not released, vacated or fully
bonded within sixty (60) days after its issue or levy; or

 

(h)         Judgments.  (i) One or more judgments or decrees shall be entered
against any Group Member involving in the aggregate a liability (not paid or
fully covered by insurance as to which the relevant insurance company has not
disputed coverage) of an amount exceeding the Threshold Amount, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within thirty (30) days from the entry thereof; or (ii) there
shall be rendered against any Group Member a nonmonetary judgment with respect
to any event which causes or could reasonably be expected to have a Material
Adverse Effect; or

 

(i)             ERISA.  (i)  An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of any Loan Party under Title IV of ERISA in an aggregate
amount which could reasonably be expected to result in a Material Adverse
Effect, (ii) any Loan Party or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount which could reasonably be expected to
result in a Material Adverse Effect, (iii) any Loan Party or any ERISA Affiliate
engages in any “prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Pension Plan which could reasonably be
expected to result in a Material Adverse Effect, or (iv) other than the matters
disclosed in Schedule 5.11(c), any other event or condition shall occur or exist
with respect to a Pension Plan, a Foreign Benefit Arrangement or Foreign Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect; or

 

(j)             Change of Control.  There occurs any Change of Control; or

 

(k)          [Reserved]; or

 

(l)             Invalidity of Guarantees.  The Guarantees contained in this
Agreement shall cease, for any reason, to be in full force and effect or any
Loan Party or Affiliate of any Loan Party shall so assert in writing (it being
understood and agreed that the discharge of a Guarantor from this Agreement in
accordance with the terms hereof shall not be construed as the Guarantee(s) in
this Agreement ceasing to be in full force and effect); or

 

(m)       [Reserved].

 

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

 

(a)          [reserved];

 

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

 

(c)          [reserved]; and

 

(d)         exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable Law;

 

provided that upon the occurrence of an Event of Default specified in
Section 8.01(f) with respect to the Borrower, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid (including
without limitation the Yield Maintenance Amount) shall automatically become due
and payable without further act of the Administrative Agent or any Lender.

 

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

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including Attorney Costs payable under Section 11.04 and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs payable under Section 11.04 and amounts
payable under Article III), ratably among them in proportion to the amounts
described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, ratably among the holders of such Obligations in
proportion to the respective amounts described in this clause Third payable to
them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the holders of such Obligations in
proportion to the respective amounts described in this clause Fourth held by
them;

 

Fifth, to the payment of all other Obligations of the Loan Parties that are due
and payable to the Administrative Agent and the Lenders on such date, ratably
based upon the respective aggregate amounts of all such Obligations owing to the
Administrative Agent and the Lenders on such date; and

 

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Last, the balance, if any, after all of the Obligations have been paid in full,
to the Borrower or as otherwise required by Law.

 

Notwithstanding anything to the contrary in this Agreement, amounts received
from any Foreign Subsidiary on account of the Obligations of any Foreign
Subsidiary shall be applied solely to the payment of Obligations of Foreign
Subsidiaries.

 

ARTICLE IX

 

ADMINISTRATIVE AGENT

 

Section 9.01                                Appointment and Authorization of
Administrative Agent.  (a)  Each Lender hereby irrevocably appoints, designates
and authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together with such powers as
are reasonably incidental thereto.  Notwithstanding any provision to the
contrary contained elsewhere herein or in any other Loan Document, the
Administrative Agent shall have no duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender or participant, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.  Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Loan Documents with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law.  Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.

 

(b)         [reserved]

 

(c)          [reserved].

 

Section 9.02                                Delegation of Duties.  The
Administrative Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees or attorneys-in-fact and
such sub-agents as shall be deemed necessary by the Administrative Agent and
shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties.  The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
sub-agent or attorney-in-fact that it selects in the absence of gross negligence
or willful misconduct (as determined in the final non-appealable judgment of a
court of competent jurisdiction).

 

Section 9.03                                Liability of Administrative Agent. 
No Agent-Related Person shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct, as determined by the final judgment of a court
of competent jurisdiction, in connection with its duties expressly set forth
herein), or (b) be responsible in any manner to any Lender or participant for
any recital, statement, representation or warranty made by any Loan Party or any
officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Loan Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  No Agent-Related
Person shall be under any obligation to any Lender or participant to

 

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ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or
any Affiliate thereof.

 

Section 9.04                                Reliance by Administrative Agent. 
(a)  The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by the Administrative Agent. 
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.

 

(b)         For purposes of determining compliance with the conditions specified
in Article IV, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

Section 9.05                                Notice of Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a “notice of default.” 
The Administrative Agent will notify the Lenders of its receipt of any such
notice.  The Administrative Agent shall take such action with respect to any
Event of Default as may be directed by the Required Lenders in accordance with
Article VIII; provided that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default as it shall deem advisable or in the best interest of
the Lenders.

 

Section 9.06                                Credit Decision; Disclosure of
Information by Administrative Agent.  Each Lender expressly acknowledges that no
Agent-Related Person has made any representation or warranty to it, and that no
act by the Administrative Agent hereafter taken, including any consent to and
acceptance of any assignment or review of the affairs of any Loan Party or any
Affiliate thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession. 
Each Lender represents to the Administrative Agent that it has, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower and the other Loan Parties
hereunder.  Each Lender also represents that it will, independently and without
reliance upon any Agent-

 

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Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrower and the other Loan Parties. 
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the possession
of any Agent-Related Person.

 

Section 9.07                                Indemnification of Administrative
Agent.  Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Loan Party and without limiting the obligation
of any Loan Party to do so), pro rata, and hold harmless each Agent-Related
Person from and against any and all Indemnified Liabilities incurred by it;
provided that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting from such
Agent-Related Person’s own gross negligence or willful misconduct, as determined
by the final non-appealable judgment of a court of competent jurisdiction;
provided that no action taken in accordance with the directions of the Required
Lenders (or such other number or percentage of the Lenders as shall be required
by the Loan Documents) shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section 9.07.  In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Liabilities, this
Section 9.07 applies whether any such investigation, litigation or proceeding is
brought by any Lender or any other Person.  Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower.  The undertaking in this Section 9.07 shall survive the
termination of the Aggregate Commitments, the payment of all Obligations and the
resignation of the Administrative Agent.

 

Section 9.08                                Administrative Agent in its
Individual Capacity.  Luxor Capital Group and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire Equity
Interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Loan Parties and their
respective Affiliates as though Luxor Capital Group were not the Administrative
Agent hereunder and without notice to or consent of the Lenders.  The Lenders
acknowledge that, pursuant to such activities, Luxor Capital Group or its
Affiliates may receive information regarding any Loan Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them.  With respect to its Loans, Luxor Capital Group shall have the same rights
and powers under this Agreement as any other Lender and may exercise such rights
and powers as though it were not the Administrative Agent, and the terms
“Lender” and “Lenders” include Luxor Capital Group in its individual capacity.

 

Section 9.09                                Successor Agents.  The
Administrative Agent may resign as the Administrative Agent upon thirty (30)
days’ notice to the Lenders and the Borrower.  If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the

 

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Lenders a successor agent for the Lenders.  If no successor agent is appointed
prior to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders, a successor
agent, which shall be a Lender or a bank with an office in New York, New York or
an Affiliate of such Lender or bank.  Upon the acceptance of its appointment as
successor agent hereunder, the Person acting as such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term “Administrative Agent,” shall mean such successor
administrative agent and/or supplemental administrative agent, as the case may
be, and the retiring Administrative Agent’s appointment, powers and duties as
the Administrative Agent shall be terminated.  After the retiring Administrative
Agent’s resignation hereunder as the Administrative Agent, the provisions of
this Article IX and Sections 11.04 and 11.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Administrative
Agent under this Agreement.  If no successor agent has accepted appointment as
the Administrative Agent by the date which is thirty (30) days following the
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.  Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor, the Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents.  After the retiring Administrative Agent’s resignation
hereunder as the Administrative Agent, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.

 

Section 9.10                                Administrative Agent May File Proofs
of Claim.  In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)          to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.08 and 11.04) allowed in such judicial
proceeding; and

 

(b)         to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.08 and 11.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment

 

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or composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.

 

Section 9.11                                Guarantee Matters.  The Lenders
irrevocably agree that any Guarantor shall be automatically released from its
obligations hereunder in accordance with Section 7.13(b).

 

Section 9.12                                [Reserved].

 

Section 9.13                                Appointment of Supplemental
Administrative Agents.  (a)  It is the purpose of this Agreement and the other
Loan Documents that there shall be no violation of any Law of any jurisdiction
denying or restricting the right of banking corporations or associations to
transact business as agent or trustee in such jurisdiction.  It is recognized
that in case of litigation under this Agreement or any of the other Loan
Documents, and in particular in case of the enforcement of any of the Loan
Documents, or in case the Administrative Agent deems that by reason of any
present or future Law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith,
the Administrative Agent is hereby authorized to appoint an additional
individual or institution selected by the Administrative Agent in its sole
discretion as a separate trustee, co-trustee, administrative agent, collateral
agent, administrative sub-agent or administrative co-agent (any such additional
individual or institution being referred to herein individually as a
“Supplemental Administrative Agent” and collectively as “Supplemental
Administrative Agents”).

 

(b)         [Reserved].

 

(c)          Should any instrument in writing from the Borrower, Holdings or any
other Loan Party be required by any Supplemental Administrative Agent so
appointed by the Administrative Agent for more fully and certainly vesting in
and confirming to him or it such rights, powers, privileges and duties, the
Borrower or Holdings, as applicable, shall, or shall cause such Loan Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by the Administrative Agent.  In case any Supplemental Administrative
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Administrative Agent, to the extent permitted by Law, shall vest in and be
exercised by the Administrative Agent until the appointment of a new
Supplemental Administrative Agent.

 

ARTICLE X

 

GUARANTEE

 

Section 10.01                          Guarantee.  (a)   Each of the Guarantors
hereby, jointly and severally, unconditionally and irrevocably, guarantees to
the Administrative Agent, for the ratable benefit of the Lenders and their
respective successors and permitted indorsees, transferees and assigns, the
prompt and complete payment and performance by the Borrower when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.

 

(b)         Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 10.02.

 

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(c)          Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Article X or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.

 

(d)         The guarantee contained in this Article X shall remain in full force
and effect until all the Obligations and the obligations of each Guarantor under
the guarantee contained in this Article X (other than contingent indemnification
and contingent expense reimbursement obligations) shall have been satisfied by
payment in full, notwithstanding that from time to time during the term of this
Agreement the Borrower may be free from any Obligations.

 

(e)          No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full (other than contingent indemnification and
contingent expense reimbursement obligations).

 

Section 10.02                          Right of Contribution.  Each Subsidiary
Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such
Subsidiary Guarantor shall be entitled to seek and receive contribution from and
against any other Subsidiary Guarantor hereunder which has not paid its
proportionate share of such payment.  Each Subsidiary Guarantor’s right of
contribution shall be subject to the terms and conditions of Section 10.03.  The
provisions of this Section 10.02 shall in no respect limit the obligations and
liabilities of any Subsidiary Guarantor to the Administrative Agent and the
Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative
Agent and the Lenders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.

 

Section 10.03                          No Subrogation.  Notwithstanding any
payment made by any Guarantor hereunder or any set-off or application of funds
of any Guarantor by the Administrative Agent or any Lender, no Guarantor shall
be entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent or any
Lender for the payment of the Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Obligations are paid in full.  If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent,
if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.  For the
avoidance of doubt, nothing in the foregoing shall operate as a waiver of any
subrogation rights.

 

Section 10.04                          Amendments, etc. with Respect to the
Obligations.  To the fullest extent permitted by applicable law, each Guarantor
shall remain obligated hereunder notwithstanding that,

 

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without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Obligations continued,
and the Obligations, or the liability of any other Person upon them or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and this
Agreement and the other Loan Documents and any other documents executed and
delivered in connection herewith or therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders or all Lenders, as the case may be) may reasonably deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Administrative Agent or any Lender for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released.

 

Section 10.05                                    Guarantee Absolute and
Unconditional.  To the fullest extent permitted by applicable law, each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this
Article X or acceptance of the guarantee contained in this Article X; the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Article X; and all dealings between the
Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Article X.  To the fullest extent permitted by applicable law,
each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Obligations.  Each Guarantor understands and agrees that the
guarantee contained in this Article X, to the fullest extent permitted by
applicable law, shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of
this Agreement or any other Loan Document, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or any other Person against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Obligations,
or of such Guarantor under the guarantee contained in this Article X, in
bankruptcy or in any other instance.  When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the Borrower, any other Guarantor, or any other Person or against
any collateral security or guarantee for the Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Lender
to make any such demand, to pursue such other rights or remedies or to collect
any payments from the Borrower, any other Guarantor, or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor, or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
any Guarantor.  For the purposes hereof “demand” shall include the commencement
and continuance of legal proceedings.

 

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Section 10.06                                    Reinstatement.  The guarantee
contained in this Article X shall continue to be effective, or be reinstated, as
the case may be, if at any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Loan Party, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Loan Party or any substantial part of its property, or
otherwise, all as though such payments had not been made.

 

Section 10.07                                    Payments.  Each Guarantor
hereby guarantees that payments hereunder will be paid to the Administrative
Agent without set-off or counterclaim in Dollars at the Administrative Agent’s
Office.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01                                    Amendments, Etc.  Except as
otherwise set forth in this Agreement, no amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided that, no such amendment, waiver or consent shall:

 

(a)          postpone any date scheduled for, or reduce or forgive the amount
of, any payment of principal or interest under Section 2.07 or Section 2.08
without the written consent of each Lender directly affected thereby, it being
understood that the waiver of (or amendment to the terms of) any mandatory
prepayment of the Loans shall not constitute a postponement of any date
scheduled for the payment of principal or interest;

 

(b)         reduce or forgive the principal of, or the rate of interest
specified herein on, any Loan or (subject to clause (i) of the second proviso to
this Section 11.01) any fees (including fees set forth in Section 2.08 or other
amounts payable hereunder or under any other Loan Document), or extend, postpone
or waive the date upon which any fees are to be paid, without the written
consent of each Lender directly affected thereby; provided that, only the
consent of the Required Lenders shall be necessary to amend the definition of
“Default Rate” or to waive any obligation of the Borrower to pay interest at the
Default Rate;

 

(c)          change any provision of this Section 11.01, the definition of
“Required Lenders” or “Pro Rata Share”, the third sentence of Section 2.11(a),
Section 2.12, Section 8.03 or Section 11.07(a)(x) without the written consent of
each Lender adversely affected thereby;

 

(d)         [Reserved]; or

 

(e)          release all or substantially all of the aggregate value of the
Guaranty, without the written consent of each Lender;

 

and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of, or any fees or other amounts
payable to, the Administrative Agent under this Agreement or any other Loan
Document and (ii) Section 11.07(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such

 

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amendment, waiver or other modification.  Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the principal
of the Loans of such Lender may not be reduced or forgiven, and the Maturity
Date of the Loans of such Lender may not be extended, in each case without the
consent of such Lender (it being understood that any Loans held or deemed held
by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder
requiring any consent of the Lenders).

 

Notwithstanding anything to the contrary contained in Section 11.01, guarantees,
collateral security documents and related documents executed by Foreign
Subsidiaries in connection with this Agreement may be in a form reasonably
determined by the Administrative Agent and may be, together with this Agreement,
amended and waived with the consent of the Administrative Agent at the request
of the Borrower without the need to obtain the consent of any other Lender if
such amendment or waiver is delivered in order (i) to comply with local Law or
advice of local counsel, (ii) to cure ambiguities or defects or (iii) to cause
such guarantee, collateral security document or other document to be consistent
with this Agreement and the other Loan Documents.

 

Section 11.02                                    Notices and Other
Communications; Facsimile Copies.  (a)  General.  Unless otherwise expressly
provided herein, all notices and other communications provided for hereunder or
under any other Loan Document shall be in writing (including by facsimile
transmission).  All such written notices shall be mailed, faxed or delivered to
the applicable address, facsimile number or electronic mail address, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

 

(i)                                     if to the Borrower, any Guarantor or the
Administrative Agent to the address, facsimile number, electronic mail address
or telephone number specified for such Person below or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties:

 

The Borrower and any Guarantor:

The Reader’s Digest Association, Inc.

 

750 Third Avenue

 

New York, NY 10017

 

Attention: Treasurer

 

Telephone number:  646-293-6149

 

Facsimile number:  914-244-7949

 

Electronic mail address:  william.magill@rd.com

 

Website address:  www.rd.com

 

 

 

With copies to (which shall not constitute a notice hereunder):

 

 

 

RDA Holding Co./The Reader’s Digest Association

 

44 South Broadway

 

White Plains, NY 10601

 

Attention: General Counsel

 

Telephone number:  914-244-5262

 

Facsimile number:  914-244-7810

 

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Electronic mail address:  anewborn@RD.com

 

 

 

Weil, Gotshal & Manges LLP

 

767 Fifth Avenue

 

New York, NY 10153

 

Attention:  Daniel S. Dokos

 

Telephone number:  212-310-8576

 

Facsimile number:  212-310-8007

 

Electronic mail address: Daniel.dokos@weil.com

 

 

The Administrative Agent:

Luxor Capital Group

 

1114 Avenue of the Americas, 29th Floor

 

New York, NY 10036

 

Attention: Operations Department

 

Telephone number: (212) 763-8000

 

Facsimile number: (212) 763-8001

 

Electronic mail address:: Ops@luxorcap.com

 

(ii)                                  if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such party
in a notice to the Borrower and the Administrative Agent.

 

All such notices and other communications shall be deemed to be given or made,
if given or made during the recipient’s normal business hours (and if not, shall
be deemed to be given or made on the next succeeding Business Day), upon the
earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four (4) Business Days
after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when
sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
Section 11.02(d)), when delivered; provided that notices and other
communications to the Administrative Agent pursuant to Article II shall not be
effective until actually received by the Administrative Agent.  In no event
shall a voice mail message be effective as a notice, communication or
confirmation hereunder.

 

(b)         Effectiveness of Facsimile Documents and Signatures.  Loan Documents
may be transmitted and/or signed by facsimile or “PDF” (subject to
Section 11.02(d)).  The effectiveness of any such documents and signatures
shall, subject to applicable Law, have the same force and effect as manually
signed originals and shall be binding on all Loan Parties, the Administrative
Agent and the Lenders.

 

(c)          Reliance by Administrative Agent and Lenders.  The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. 
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, liabilities and related reasonable out-of-pocket costs and expenses
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of the Borrower in the absence of gross negligence or willful
misconduct.  All telephonic notices to the Administrative Agent may be recorded
by the Administrative Agent, and each of the parties hereto hereby consents to
such recording.

 

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(d)         Electronic Communications.  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Articles II and III, if such Lender
has notified the Administrative Agent that it is incapable of receiving notices
thereunder by electronic communication.  The Administrative Agent or the
Borrower may, in their discretion, agree to accept notices and other
communications to them hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.  Unless the Administrative
Agent otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgment from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgment), provided that if such notice or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
Business Day for the recipient, and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor.

 

Section 11.03                                    No Waiver; Cumulative
Remedies.  No failure by any Lender or the Administrative Agent to exercise, and
no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies,
powers and privileges herein provided, and provided under each other Loan
Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law.

 

Section 11.04                                    Attorney Costs, Expenses and
Taxes.  The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all reasonable documented out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation, syndication and execution of this
Agreement and the other Loan Documents, and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all (i) Attorney Costs of one lead counsel and, if necessary, one conflicts
counsel in each relevant jurisdiction and (ii) costs of other advisors to the
Administrative Agent (in the case of this clause (ii) accrued through the
completion of the transactions contemplated hereby) and (b) to pay or reimburse
the Administrative Agent and each Lender for all reasonable documented
out-of-pocket costs and expenses incurred in connection with the enforcement of
any rights or remedies under this Agreement or the other Loan Documents
(including all such costs and expenses incurred during any negotiations,
workouts, restructurings or legal proceedings, including any proceeding under
any Debtor Relief Law, and including all Attorney Costs of one lead counsel and,
if necessary, one conflicts counsel in each relevant jurisdiction and the fees
and disbursements of any financial advisor or third party consultants or
appraisers to and of the Administrative Agent).  The foregoing costs and
expenses shall include reasonable and out-of-pocket expenses incurred by the
Administrative Agent.  The agreements in this Section 11.04 shall survive the
termination of the Aggregate Commitments and the repayment of all Obligations. 
All amounts due under this Section 11.04 shall be paid within ten (10) Business
Days of receipt by the Borrower of an invoice relating thereto setting forth
such expenses in reasonable detail.  If any Loan Party fails to pay when due any
costs, expenses or other amounts payable by it hereunder or under any Loan
Document, such amount may be paid on behalf of such Loan Party by the
Administrative Agent in its sole discretion.

 

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Section 11.05                                    Indemnification by the
Borrower.  Whether or not the transactions contemplated hereby are consummated,
the Borrower shall indemnify and hold harmless the Agent-Related Person, each
Lender and their respective Affiliates, and directors, officers, employees,
counsel, agents, trustees, investment advisors and attorneys-in-fact of each of
the foregoing (collectively, the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments and suits and related reasonable out-of-pocket expenses (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution, delivery,
enforcement, performance, administration, amendment, modification or waiver of
any Loan Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Loan or the use or proposed use of
the proceeds therefrom, or (c) to the extent relating to or arising from any of
the foregoing, any actual or alleged presence or release of Hazardous Materials
on or from any property currently or formerly owned, leased or operated by any
Group Member, or any Environmental Liability related in any way to any Group
Member, or (d) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the “Indemnified Liabilities”), in all cases, whether or not
caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits or expenses are found in a
final non-appealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence, bad faith or willful misconduct of such
Indemnitee, any Affiliate of such Indemnitee or any officer, director, employee,
advisor, representative or agent of such Indemnitee or any such Affiliate.  No
Indemnitee shall be liable to any Group Member for any damages arising from the
use by others of any information or other materials obtained through IntraLinks
or other similar information transmission systems in connection with this
Agreement.  No Indemnitee shall be liable (whether direct or indirect, in
contract, tort or otherwise) to any Group Member except to the extent such
liability is found in a non-appealable judgment of a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee, any Affiliate of such Indemnitee or any officer,
director, employee, advisor, representative or agent of such Indemnitee or any
such Affiliate.  No Indemnitee shall have any liability to any Group Member, nor
any Group Member to any Indemnitee, for any special, punitive, indirect or
consequential damages (including, without limitation, loss of profits, business
or anticipated savings) relating to this Agreement or any other Loan Document or
arising out of its activities in connection herewith or therewith (whether
before or after the Closing Date).  All amounts due under this Section 11.05
shall be paid within ten (10) Business Days after demand therefor; provided,
however, that such Indemnitee shall promptly refund any amount received under
this Section 11.05 to the extent that there is a final judicial or arbitral
determination that such Indemnitee was not entitled to indemnification or
contribution rights with respect to such payment pursuant to the express terms
of this Section 11.05.  The agreements in this Section 11.05 shall survive the
resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the Obligations.

 

Section 11.06                                    Payments Set Aside.  To the
extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent or any Lender, or the Administrative Agent or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended

 

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to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each
Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.

 

Section 11.07                                    Successors and Assigns. 
(a)  The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (x) neither Holdings nor the Borrower may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and (y) no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee, (ii) by way of participation in accordance with the provisions of
Section 11.07(e), (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 11.07(g) or Section 11.07(i) or (iv) to
an SPC in accordance with the provisions of Section 11.07(h) (and any other
attempted assignment or transfer by any party hereto shall be null and void). 
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in
Section 11.07(e) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)         (i)  Subject to the conditions set forth in clause (b)(ii) below,
any Lender may assign to one or more assignees (other than (A) a natural person
or (B) Holdings or any of its Subsidiaries or any of their respective
Affiliates) (“Assignees”) all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Loans at the time owing to it)
with the prior written consent (such consent not to be unreasonably withheld or
delayed) of (x) the Borrower, unless (i) the assignee is a Lender, an Affiliate
of a Lender or an Approved Fund or (ii) an Event of Default has occurred and is
continuing and (y) the Administrative Agent.

 

(ii)                                  Assignments shall be subject to the
following additional conditions:

 

(1)                                  except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Loans, the amount of the Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 and in increments
of $1,000,000 in excess thereof unless the Administrative Agent otherwise
consents, provided that such amounts shall be aggregated in respect of each
Lender and its Affiliates or Approved Funds, if any;

 

(2)                                  the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500; provided that only one
such fee shall be payable in the event of simultaneous assignments to or from
two or more Approved Funds;

 

(3)                                  the Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire in
which the assignee designates one or more Credit Contacts (as defined in the
Administrative Questionnaire) to whom all syndicate-level information (which may
contain material non-public information about Holdings, the Borrower, the other
Loan Parties and their Affiliates and related parties or their respective
securities) will be made available and who may receive such information

 

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in accordance with the Assignee’s compliance procedures and applicable laws,
including Federal and state securities laws; and

 

(4)                                  no assignment shall be effective unless and
until such assignment is recorded in the Register.

 

(c)          Subject to acceptance and recording thereof by the Administrative
Agent pursuant to Section 11.07(d), from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 11.04 and 11.05 with
respect to facts and circumstances occurring prior to the effective date of such
assignment).  Upon request, and the surrender by the assigning Lender of its
Note, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this clause (c) shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
Section 11.07(e).

 

(d)         The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Administrative Agent’s Office a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders and principal amounts (and
related interest amounts) of the Loans, owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register
shall be conclusive, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by the Borrower, the Administrative Agent and, with
respect to its own Loans, any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

 

(e)          Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than (A) a natural person or (B) Holdings or any of its Subsidiaries or
any of their respective Affiliates) (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement (including all
or a portion of its Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and the other Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement or the other Loan
Documents; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 11.01
that directly affects such Participant.  Subject to Section 11.07(f), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01 and 3.04 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.07(c) but shall not
be entitled to recover greater amounts under such Sections than the selling
Lender would be entitled to recover.  To the extent permitted by applicable Law,
each Participant also shall be entitled to the benefits of Section 11.09 as
though it were a Lender; provided that such Participant

 

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agrees to be subject to Section 2.12 as though it were a Lender.  Each Lender
that sells a participation with respect to a Loan shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and related interest amounts) of each Participant’s interest in the Loan (the
“Participant Register”).  The entries in the Participant Register shall be
conclusive, absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.

 

(f)            A Participant shall not be entitled to receive any greater
payment under Section 3.01 and 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.  A Participant shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 11.15 as though it were a Lender.

 

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

 

(h)         Notwithstanding anything to the contrary contained herein, any
Lender (a “Granting Lender”) may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an “SPC”) the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof.  Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.01 or 3.04), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting Lender
shall for all purposes, including the approval of any amendment, waiver or other
modification of any provision of any Loan Document, remain the lender of record
hereunder.  Notwithstanding anything to the contrary contained herein, any SPC
may (i) with notice to, but without prior consent of the Borrower and the
Administrative Agent and with the payment of a processing fee of $3,500, assign
all or any portion of its right to receive payment with respect to any Loan to
the Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Loans to any rating agency, commercial
paper dealer or provider of any surety or guarantee or credit or liquidity
enhancement to such SPC.

 

(i)             Notwithstanding anything to the contrary contained herein,
(1) any Lender may in accordance with applicable Law create a security interest
in all or any portion of the Loans owing to it and the Note, if any, held by it
and (2) any Lender that is a Fund may, without the consent of the Borrower or
the Administrative Agent, create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities; provided that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
Section 11.07, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents.

 

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(j)             [reserved]

 

Section 11.08                                    Confidentiality.  Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information, except that Information may be disclosed (a) on a need to know
basis to its Affiliates and its and its Affiliates’ directors, officers,
employees, trustees, investment advisors 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 pursuant to the
terms hereof); (b) to the extent requested by any Governmental Authority; (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process; (d) to any other party to this Agreement; (e) subject to
an agreement for the benefit of the Borrower containing provisions substantially
the same as those of this Section 11.08 (or as may otherwise be reasonably
acceptable to the Borrower), to any pledgee referred to in Section 11.07(g),
counterparty to a Swap Contract, Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement; (f) with the written consent of the Borrower;
(g) to the extent such Information becomes publicly available other than as a
result of a breach of this Section 11.08; (h) to any Governmental Authority or
examiner (including the National Association of Insurance Commissioners or any
other similar organization) regulating any Lender; (i) to any rating agency when
required by it (it being understood that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any Information
relating to the Loan Parties received by it from such Lender); or (j) in
connection with the exercise of any remedies hereunder, under any other Loan
Document or any legal action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder.  In
addition, the Administrative Agent and the Lenders may disclose the existence of
this Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the other Loan Documents and the Loans.  For the
purposes of this Section 11.08, “Information” means all information received
from any Loan Party relating to any Loan Party or its business, other than any
such information that is publicly available to the Administrative Agent or any
Lender prior to disclosure by any Loan Party other than as a result of a breach
of this Section 11.08; provided that, in the case of information received from a
Loan Party after the date hereof, such information (i) is clearly identified at
the time of delivery as confidential or (ii) is delivered pursuant to
Section 6.01, 6.02 or 6.04 hereof.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION FURNISHED TO IT PURSUANT TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING HOLDINGS, THE BORROWER, THE OTHER LOAN PARTIES AND THEIR
AFFILIATES AND RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT
IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC
INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN
ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.

 

ALL INFORMATION, INCLUDING WAIVERS AND AMENDMENTS, FURNISHED BY HOLDINGS, THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH
MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT HOLDINGS, THE BORROWER, THE
OTHER LOAN PARTIES AND THEIR AFFILIATES AND RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO HOLDINGS, THE BORROWER AND
THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE

 

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QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN
MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

Section 11.09                                    Setoff.  In addition to any
rights and remedies of the Lenders provided by Law, upon the occurrence and
during the continuance of any Event of Default, each Lender and its Affiliates
is authorized at any time and from time to time, without prior notice to the
Borrower or any other Loan Party, any such notice being waived by the Borrower
(on its own behalf and on behalf of each Loan Party and its Subsidiaries) to the
fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other Indebtedness at any time owing by, such Lender and its
Affiliates to or for the credit or the account of the respective Loan Parties
and their Subsidiaries against any and all Obligations owing to such Lender and
its Affiliates hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
or Affiliate shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
Indebtedness.  Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set off and application made by such Lender;
provided, that the failure to give such notice shall not affect the validity of
such setoff and application.  The rights of the Administrative Agent and each
Lender under this Section 11.09 are in addition to other rights and remedies
(including other rights of setoff) that the Administrative Agent and such Lender
may have.  Notwithstanding anything herein or in any other Loan Document to the
contrary, in no event shall the assets of any Foreign Subsidiary that is not a
Loan Party constitute collateral security for payment of the Obligations of the
Borrower or any Domestic Subsidiary, it being understood that (a) the Equity
Interests of any Foreign Subsidiary that is not a Loan Party do not constitute
such an asset and (b) the provisions hereof shall not limit, reduce or otherwise
diminish in any respect the Borrower’s obligations to make any mandatory
prepayment pursuant to Section 2.04(b).

 

Section 11.10                                    Interest Rate Limitation. 
Notwithstanding anything to the contrary contained in any Loan Document, if at
any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts which are treated as interest on such Loan under
applicable Law (collectively the “Charges”), shall exceed the maximum lawful
rate (the “Maximum Rate”) which may be contracted for, charged, taken, received
or reserved by the Lender holding such Loan in accordance with applicable Law,
the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been payable
in respect of such Loan but were not payable as a result of the operation of
this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Rate to the date of repayment, shall have been
received by such Lender.

 

Section 11.11                                    Counterparts.  This Agreement
and each other Loan Document may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Delivery by telecopier of an executed counterpart
of a signature page to this Agreement and each other Loan Document shall be
effective as delivery of an original executed counterpart of this Agreement and
such other Loan Document.  The Administrative Agent may also require that any
such documents and signatures delivered by telecopier be confirmed by a manually
signed original thereof; provided that the failure to request or deliver the
same shall not limit the effectiveness of any document or signature delivered by
telecopier.

 

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Section 11.12                                    Integration.  This Agreement
and the other Loan Documents comprise the complete and integrated agreement of
the parties on the subject matter hereof and thereof and supersedes all prior
agreements, written or oral, on such subject matter.  In the event of any
conflict between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control; provided that the
inclusion of supplemental rights or remedies in favor of the Administrative
Agent or the Lenders in any other Loan Document shall not be deemed a conflict
with this Agreement.  Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair
meaning thereof.

 

Section 11.13                                    Survival of Representations and
Warranties.  All representations and warranties made hereunder and in any other
Loan Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof.  Such representations and warranties have been or will be relied
upon by the Administrative Agent and each Lender, regardless of any
investigation made by the Administrative Agent or any Lender or on their behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default on the Closing Date, and shall continue in
full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied.

 

Section 11.14                                    Severability.  If any provision
of this Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected
or impaired thereby.  The invalidity of a provision in a particular jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

 

Section 11.15                                    Tax Forms.  (a)  Each Lender
and Administrative Agent that is not a “United States person” within the meaning
of Section 7701(a)(30) of the Code (each, a “Foreign Lender”) shall, to the
extent it is legally entitled to do so, deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
or the Administrative Agent under this Agreement or changes its Lending Office
or place of organization (and from time to time thereafter upon the request of
the Borrower or the Administrative Agent), whichever of the following is
applicable:

 

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

 

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

 

(iii)                               in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate substantially in the form of Exhibit H to the effect
that (A) such Foreign Lender is not (i) a “bank” described in
Section 881(c)(3)(A) of the Code, (ii) a “10 percent shareholder” of the
applicable Borrower within the meaning of Section 881(c)(3)(B) of the Code or
(iii) a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code and (B) the interest payments in question are not effectively connected
with the United States trade or business conducted by such Lender (a “U.S. Tax
Compliance Certificate”) and (y) duly completed copies of Internal Revenue
Service Form W-8BEN,

 

(iv)                              to the extent a Foreign Lender is not the
beneficial owner (for example, where the Foreign Lender is a partnership or
participating Lender granting a typical participation), an Internal Revenue
Service Form W-8IMY, accompanied by a Form W-8ECI, W-8BEN, U.S. Tax Compliance
Certificate, Form W-9, and/or other certification documents from each beneficial
owner, as applicable;

 

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provided that, if the Foreign Lender is a partnership (and not a participating
Lender) and one or more beneficial owners of such Foreign Lender are claiming
the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax
Compliance Certificate on behalf of each such beneficial owner, or

 

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

 

(b)         Each Lender and Administrative Agent that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code (each, a “United
States Lender”) shall deliver to the Borrower and the Administrative Agent (in
such number of copies as shall be requested by the recipient) on or prior to the
date on which such Lender or the Administrative Agent becomes a Lender or the
Administrative Agent under this Agreement or changes its Lending Office or place
of organization (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent) properly completed copies of Internal
Revenue Service Form W-9, certifying that such Lender or the Administrative
Agent, as applicable, is entitled to an exemption from United States backup
withholding tax, or any successor form.

 

(c)          [ Reserved]

 

(d)         The Borrower shall not be required to pay any additional amounts
under Section 3.01(a) or indemnity with respect to such Taxes under
Section 3.01(c) to (A) any Foreign Lender if such Foreign Lender shall have
failed to satisfy the provisions of Section 11.15(a) or (B) any United States
Lender if such United States Lender shall have failed to satisfy the provisions
of Section 11.15(b); provided, that (i) if such Lender shall have satisfied the
requirement of this Section 11.15, as applicable, on the date such Lender became
a Lender, or ceased to act for its own account with respect to any payment under
any of the Loan Documents, nothing in this Section 11.15 shall relieve the
Borrower of its obligation to pay any amounts pursuant to Section 3.01 in the
event that, as a result of any change in any applicable Law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate and
(ii) nothing in this Section 11.15(d) shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 3.01 in the event that the
requirements of Section 11.15 have not been satisfied if the Borrower is
entitled, under applicable Law, to rely on any applicable forms and statements
required to be provided under this Section 11.15 by the Lender that does not act
or has ceased to act for its own account under any of the Loan Documents,
including in the case of a typical participation, and such Lender has provided
such required forms and statements.

 

(e)          Each Lender agrees that if any form or certification previously
delivered by it expires or becomes obsolete or inaccurate in any respect, it
shall update such form or certification or promptly notify the Borrower and the
Administrative Agent in writing of its legal inability to do so. 
Notwithstanding anything to the contrary herein, no Lender or the Administrative
Agent shall be required to deliver any form, certificate or other document
pursuant to this Section 11.15 that such Lender or the Administrative Agent is
not legally able to deliver.

 

(f)            The Administrative Agent may deduct and withhold any taxes
required by any Laws to be deducted and withheld from any payment under any of
the Loan Documents.

 

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SECTION 11.16                      GOVERNING LAW.  THIS AGREEMENT AND EACH OTHER
LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

 

Section 11.17                                    Submission To Jurisdiction;
Waivers.  (a)  Each Loan Party hereby irrevocably and unconditionally:

 

(i)                                     submits for itself and its property in
any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of
(i) any State or Federal court of competent jurisdiction sitting in New York
County, New York and (ii) appellate courts from any thereof;

 

(ii)                                  consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(iii)                               agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid at
its address set forth in Section 11.02 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

(iv)                              agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right of the Administrative Agent or the Lenders to sue in any other
jurisdiction; and

 

(v)                                 waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.

 

SECTION 11.18                      WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY
TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 11.18 WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

 

Section 11.19                                    Binding Effect.  This Agreement
shall become effective upon the satisfaction or waiver of the conditions
precedent set forth in Article IV and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Administrative Agent and each Lender and
their respective permitted successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.

 

103

--------------------------------------------------------------------------------

 

Section 11.20                                    Lender Action.  Each Lender
agrees that it shall not take or institute any actions or proceedings, judicial
or otherwise, for any right or remedy against any Loan Party or any other
obligor under any of the Loan Documents (including the exercise of any right of
setoff, rights on account of any banker’s lien or similar claim or other rights
of self-help), or institute any actions or proceedings, or otherwise commence
any remedial procedures, with respect to any any property of any Loan Party,
without the prior written consent of the Administrative Agent.  The provision of
this Section 11.20 are for the sole benefit of the Lenders and shall not afford
any right to, or constitute a defense available to, any Loan Party.

 

Section 11.21                                    USA PATRIOT Act.  Each Lender
hereby notifies the Loan Parties that pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that
identifies the Loan Parties, which information includes the name, address and
tax identification numbers of the Loan Parties and other information that will
allow such Lender to identify the Loan Parties in accordance with the Act.

 

Section 11.22                                    Acknowledgements.  Each Loan
Party hereby acknowledges that:

 

(a)          it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

 

(b)         neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Loan Party arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and the Loan Parties, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

 

(c)          no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Loan Parties and the Lenders.

 

Section 11.23                                    Releases of Guarantee. 
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Administrative Agent is hereby irrevocably authorized by each
Lender (without requirement of notice to or consent of any Lender except as
expressly required by Section 11.01) to take any action reasonably requested by
the Borrower having the effect of releasing any Guarantee Obligations (i) to the
extent necessary to permit any Disposition of the applicable Guarantor, as
permitted by the Loan Documents or that has been consented to in accordance with
Section 11.01 or (ii) in accordance with Section 7.13(b).

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

104

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

 

 

RDA HOLDING CO.

 

 

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Paul R. Tomkins

 

 

 

 

Name:

Paul R. Tomkins

 

 

 

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

THE READER’S DIGEST ASSOCIATION, INC.

 

 

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Paul R. Tomkins

 

 

 

 

Name:

Paul R. Tomkins

 

 

 

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

EACH OF THE GUARANTORS LISTED

 

 

ON ANNEX I HERETO

 

 

 

 

 

 

 

 

by

 

 

 

 

 

/s/ William H. Magill

 

 

 

 

Name:

William H. Magill

 

 

 

 

Title:

Authorized Signatory

 

Unsecured Credit Agreement Signature Page

 

--------------------------------------------------------------------------------

 

 

 

LUXOR CAPITAL GROUP, LP, as
Administrative Agent

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LUXOR CAPITAL PARTNERS, LP, as
Lender

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

 

 

 

 

 

 

 

LUXOR CAPITAL PARTNERS
OFFSHORE MASTER FUND, LP, as Lender

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

 

 

 

 

 

 

 

LUXOR WAVEFRONT, LP, as Lender

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

 

 

 

 

 

 

 

LUXOR SPECTRUM OFFSHORE MASTER FUND, LP, as Lender

 

 

 

 

 

 

by

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

Signature Pages for Unsecured Credit Agreement (Luxor)

 

--------------------------------------------------------------------------------

 

 

 

GAM EQUITY SIX INC., as Lender

 

 

 

 

 

 

by

 

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OC 19 MASTER FUND, L.P., as Lender

 

 

 

 

 

 

by

 

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LUXOR SPECTRUM, LLC, as Lender

 

 

 

 

 

 

by

 

 

 

 

 

 

/s/ Norris Nissim

 

 

 

 

Name:

Norris Nissim

 

 

 

 

Title:

General Counsel

 

 

 

 

 

Luxor Capital Group, LP

 

 

 

 

 

Investment Manager

 

Signature Pages for Unsecured Credit Agreement (Luxor)

 

--------------------------------------------------------------------------------

 

 

 

BLACKWELL PARTNERS LLC, as Lender

 

 

 

 

 

 

by

 

 

 

 

 

 

/s/ David R. Shumate

 

 

 

 

Name:

David R. Shumate

 

 

 

 

Title:

Executive Vice President

 

 

 

 

 

DUMAC, LLC

 

 

 

 

 

Authorized Agent

 

 

 

 

 

 

 

 

POINT LOBOS MASTER FUND, L.P., as
Lender

 

 

 

 

 

 

By: Point Lobos Capital, LLC, its general
partner

 

 

 

 

 

 

 

 

 

by

 

 

 

 

 

 

/s/ Ryan Schaper

 

 

 

 

Name:

Ryan Schaper

 

 

 

 

Title:

Manager

 

Signature Pages for Unsecured Credit Agreement (Point Lobos)

 

--------------------------------------------------------------------------------

 

ANNEX I

 

Alex Inc.

Allrecipes.com, Inc.

Ardee Music Publishing, Inc.

Christmas Angel Productions, Inc.

Direct Holdings U.S. Corp.

Direct Holdings Americas Inc.

Direct Holdings Custom Publishing Inc.

Direct Holdings Customer Service, Inc.

Direct Holdings Education Inc.

Direct Holdings Libraries Inc.

Direct Entertainment Media Group, Inc.

Funk & Wagnalls Yearbook Corp.

Gareth Stevens, Inc.

Haven Home Media, LLC

Home Service Publications, Inc.

Pegasus Asia Investments, Inc.

Pegasus Investment, LLC

Pegasus Sales, Inc.

Pleasantville Music Publishing, Inc.

R.D. Manufacturing Corporation

RD Publications, Inc.

RD Large Edition, Inc.

RD Walking, Inc.

RDA Sub Co.

RDCL, Inc.

Reader’s Digest Children’s Publishing, Inc.

Reader’s Digest Consumer Services, Inc.

Reader’s Digest Entertainment, Inc.

Reader’s Digest Financial Services, Inc.

Reader’s Digest Latinoamerica S.A.

Reader’s Digest Sales and Services, Inc.

Reader’s Digest Young Families, Inc.

Reiman Media Group, LLC

Reiman Manufacturing, LLC

Retirement Living Publishing Company, Inc.

Saguaro Road Records, Inc.

Taste of Home Media Group, LLC

Taste of Home Productions, Inc.

Travel Publications, Inc.

W.A. Publications, LLC

WAPLA, LLC

Weekly Reader Corporation

Weekly Reader Custom Publishing, Inc.

World Almanac Education Group, Inc.

World Wide Country Tours, Inc.

WRC Media Inc.

 

[Credit Agreement]

 

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