EXHIBIT 10.2
SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
          This SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of May
___, 2008 (this “Amendment”), by and among Handleman Company, a Michigan
corporation (“Holdings”), Handleman Services Company, a Michigan corporation
(“Handleman Services”), the other subsidiaries of Holdings identified on the
signature page hereto as “Borrowers” (such Subsidiaries, together with Handleman
Services, are referred to individually as a “Borrower” and collectively, jointly
and severally, as “Borrowers”), certain subsidiaries of Holdings identified on
the signature page hereto as “Credit Parties” (“Credit Parties”), the Lenders
(as defined below) party hereto, and General Electric Capital Corporation (“GE
Capital”), as administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, “Agent”).
          WHEREAS, Holdings, Borrowers, Credit Parties, the lenders party
thereto from time to time (“Lenders”) and Agent are parties to that certain
Credit Agreement, dated April 30, 2007 (as amended, restated, supplemented or
modified from time to time, the “Credit Agreement”), pursuant to which Lenders
have agreed to make, and have made, certain loans and other financial
accommodations to Borrowers;
          WHEREAS, Borrowers and Guarantors have requested that Agent and
Lenders agree to waive certain Events of Default that have occurred and are
continuing, and amend certain terms and conditions of the Credit Agreement, in
each case, as more fully set forth herein; and
          WHEREAS, Agent and Lenders have agreed to waive such Events of Default
and to make such amendments to the Credit Agreement, in each case, subject to
the terms and conditions set forth herein.
          NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
          1. Definitions. All terms used herein which are defined in the Credit
Agreement and not otherwise defined herein are used herein as defined therein.
          2. Amendments to Credit Agreement.
          (a) Section 1.5(a) of the Credit Agreement, Interest and Applicable
Margins, is hereby amended by amending and restating the table entitled
“Applicable Margins” as follows:

 

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“Applicable Margins

                              Level I   Level II   Level III
Applicable Revolver Index Margin
    1.50 %     150 %     1.50 %
Applicable Revolver LIBOR Margin
    3.00 %     3.00 %     3.00 %
Applicable L/C Margin
    3.00 %     3.00 %     3.00 %
Applicable Unused Line Fee Margin
    0.50 %     0.50 %     0.50 %”

          (b) Section 5.20 of the Credit Agreement, Deposit Accounts, is hereby
amended and modified by deleting the phrase “April 15, 2008” contained therein
and inserting the phrase “August 31, 2008” in its stead.
          (c) Section 6.2 of the Credit Agreement, Liens, is hereby amended and
modified by (i) deleting the word “and” at the end of clause (o) thereof,
(ii) deleting the period at the end of clause (p) thereof and inserting a
semicolon and the word “and” in its stead, and (iii) adding the following new
clause (q) to the end thereof to read in its entirety as follows:
“(q) Liens in favor of the Trade Lien Agent under the Trade Lien Agreement, so
long as any such Lien is subject to the Trade Lien Intercreditor Agreement;”
          (d) Section 6.6(a) of the Credit Agreement, Investments, is hereby
amended and modified by deleting clause (v) in its entirety and inserting the
following in lieu hereof:
“(v) maintained in the United Kingdom, whether or not in Blocked Accounts, but
excluding any Blocked Cash, will not exceed $2,000,000 for more than one
Business Day (or in the case of amounts held exclusively for purposes of
payroll, two Business Days); provided, however, notwithstanding anything to the
contrary contained in this Section 6.6(a), under no circumstances shall Deposit
Accounts used for collection of customer payments be maintained unless such
Deposit Account is also a Blocked Account.”
          (e) Section 6.6 of the Credit Agreement, Investments, is hereby
amended and modified by deleting clause (e) in its entirety and inserting the
following in lieu hereof:
“(e) Consolidated Capital Expenditures, License Advances, Exclusive Distribution
Costs and Software Development Costs, in each case, to the extent permitted by
Section 6.7 and Annex G;”
          (f) Section 6.8 of the Credit Agreement is hereby amended by amending
and restating the final parenthetical contained in the introductory paragraph
thereof to read in its entirety as follows:

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“(other than purchases or other acquisitions of inventory, materials and
equipment and Capital Expenditures, License Advances, Exclusive Distribution
Costs and Software Development Costs, in each case, in the ordinary course of
business)”
          (g) Article 6 of the Credit Agreement, Negative Covenants, is hereby
amended and modified by inserting the following new Section at the end of such
Article:
“6.24 Crave Business Plan. Holdings shall not fail to deliver to Agent (a) by
not later than May 15, 2008, a business plan for Crave Entertainment Group,
Inc., Crave Entertainment, Inc. and SVG Distribution, Inc. (collectively, the
“Crave Entities”), in form and substance satisfactory to Agent, and (b) by not
later than June 30, 2008, a historical and projected return on investment report
for each title owned by the Crave Entities, which report shall be in form and
substance satisfactory to Agent.”
          (h) Annex A of the Credit Agreement, Definitions, is hereby amended
and modified by adding the following new definitions thereto, in appropriate
alphabetical order, to read in its entirety as follows:
““Permitted Capital Expenditure Amount” means each amount that is approved in
writing by Agent (which approval may be delivered by Agent to Holdings via email
and will not be unreasonably withheld) for such purpose for such period
following receipt of a written request from Holdings therefor, supported by any
schedules and other documentation Agent may reasonably request (it being
understood and agreed that no amount approved by Agent shall be used for any
purpose other than the purpose detailed in the applicable request).
“Sixth Amendment Effective Date” means May ___, 2008.
“Trade Lien Agent” means the agent for certain trade creditors under the Trade
Lien Agreement, and its successors and assigns in such capacity.
“Trade Lien Agreement” means a Trade Lien Agreement, by and among the Borrowers,
the Guarantors, the Trade Lien Agent and the trade creditors from time to time
party thereto, in form and substance satisfactory to Agent and Lenders.
“Trade Lien Intercreditor Agreement” means an Intercreditor and Lien
Subordination Agreement, by and among Agent, the Term Loan Agent and the Trade
Lien Agent, and acknowledged by the Borrowers and the Guarantors, in form and
substance satisfactory to Agent and Lenders, as the same may be amended,
supplemented or otherwise modified from time to time and any annexes, exhibits,
schedules to any of the foregoing.”
          (i) Annex A of the Credit Agreement, Definitions, is hereby further
amended and modified by amending and restating the definitions of “Commitments”,
“Fixed Charge Coverage Ratio” and “Revolving Loan Commitment” to read in their
entirety as follows:

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““Commitments” means (a) as to any Lender, the aggregate of such Lender’s
Revolving Loan Commitment (including without duplication the Swing Lien Lender’s
Swing Line Commitment as a subset of its Revolving Loan Commitment) as set forth
on Annex J or in the most recent Assignment Agreement executed by such Lender
and (b) as to all Lenders, the aggregate of all Lenders’ Revolving Loan
Commitments (including without duplication the Swing Line Lender’s Swing Line
Commitment as a subset of its Revolving Loan Commitment), which aggregate
commitment shall be Fifty Million ($50,000,000) on the Sixth Amendment Effective
Date, as to each of clause (a) and (b), as such Commitment may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
“Fixed Charge Coverage Ratio” means the ratio as of the last day of any Fiscal
Month of (a) Consolidated Adjusted EBITDA for the twelve month period most
recently ended, taken as a single accounting period (or in the case of any
period ended on or prior to May 2, 2009, Consolidated Adjusted EBITDA for the
period from May 4, 2008 through the date of determination), to (b) Consolidated
Fixed Charges for such period.
“Revolving Loan Commitment” means (a) as to any Lender, the aggregate commitment
of such Lender to make Revolving Credit Advances or incur Letter of Credit
Obligations as set forth on Annex J or in the most recent Assignment Agreement
executed by such Lender and (b) as to all Lenders, the aggregate commitment of
all Lenders to make Revolving Credit Advances or incur Letter of Credit
Obligations, which aggregate commitment shall be Fifty Million ($50,000,000) on
the Sixth Amendment Effective Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.”
          (j) Annex A of the Credit Agreement, Definitions, is hereby further
amended and modified by amending and restating clause (f) of the definition of
“Consolidated Adjusted EBITDA” contained therein to read in its entirety as
follows:
“(f) amortization of License Advances and Exclusive Distribution Costs; plus”
          (k) Annex A of the Credit Agreement, Definitions, is hereby further
amended and modified by deleting the word “Amounts” contained in clause (f) of
the definition of “Consolidated Excess Cash Flow” contained therein and
inserting the word “Costs” in it stead.
          (l) Annex A of the Credit Agreement, Definitions, is hereby further
amended and modified by amending and restating clause (vi) of the definition of
“Consolidated Fixed Charges” contained therein to read in its entirety as
follows:
“(vi) License Advances paid in cash and Exclusive Distribution Costs paid in
cash; plus”

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          (m) Annex A of the Credit Agreement, Definitions, is hereby further
amended and modified by adding the phrase “Trade Lien Intercreditor Agreement,”
immediately after the phrase “Intercreditor Agreement,” in the definition of the
term “Loan Documents” contained therein.
          (n) Annex E of the Credit Agreement, Financial Statements and
Projections – Reporting, is hereby amended and modified by adding the following
proviso to the end of subsection (i) thereof:
“provided, that the Financial Plan required to be submitted on May 5, 2008 shall
not be required to include information for the 2010, 2011 and 2012 Fiscal Years
of the Credit Parties so long as such information is delivered to Agent by not
later than December 31, 2008.”
          (o) Annex G of the Credit Agreement, Financial Covenants, is hereby
amended and modified by deleting such Annex in its entirety and replacing it
with Annex G attached hereto.
          (p) Annex J of the Credit Agreement, Commitments as of the Closing
Date, is hereby amended and modified by deleting such Annex in its entirety and
replacing it with Annex J attached hereto.
     3. Waiver.
          (a) Credit Parties have advised Agent and Lenders that certain Events
of Default have occurred and are continuing under Section 8.1 of the Credit
Agreement due to the failure of Credit Parties to comply with (i) Section 5.24
of the Credit Agreement by reason of the Credit Parties failing to retain an
investment banker, acceptable to Agent, for the purpose of exploring strategic
options with respect to specified discrete businesses, pursuant to a written
agreement in form and substance acceptable to Agent and Lenders, and failing to
deliver a fully-executed copy of such agreement to Agent, certified as true and
correct by an Authorized Officer of Holdings, in each case, by March 31, 2008,
(ii) Section 6.6(a)(v) of the Credit Agreement, by reason of the Credit Parties
maintaining more than $2,000,000 in Deposit Accounts in the United Kingdom for
more than one Business Day prior to the date hereof, (iii) Section 5.20 of the
Credit Agreement, by reason of the Credit Parties failing to deliver control
agreements to Agent with respect to all Deposit Accounts maintained by any
Credit Party in the U.K by April 15, 2008 and (iv) Section 4.1(a) and clause
(i) of Annex E of the Credit Agreement, by reason of the Credit Parties failing
to include information for the 2010, 2011 and 2012 Fiscal Years of the Credit
Parties in the Financial Plan delivered to Agent on May 5, 2008 (such Events of
Default, the “Specified Events of Default”).
          (b) At the request of Credit Parties, effective upon the Sixth
Amendment Effective Date, each of Agent and Lenders hereby waives each Specified
Event of Default that occurred prior to the date hereof.
          (c) The waivers set forth in Section 3(b) above shall be effective
only in this specific instance and for the specific purposes set forth herein,
and do not allow for any other or further departure from the terms and
conditions of the Credit Agreement (including, without

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limitation, any further violation of Sections 5.24, 6.6(a)(v), 5.20, 4.1(a) and
clause (i) of Annex E of the Credit Agreement), or any further amendment of any
other provision of the Credit Agreement or any other Loan Document, which terms
and conditions shall continue in full force and effect.
     4. Conditions to Effectiveness. This Amendment shall become effective (the
“Sixth Amendment Effective Date”) upon satisfaction in full of the following
conditions precedent:
          (a) Immediately after giving effect to this Amendment, (i) the
representations and warranties contained in this Amendment, the Credit Agreement
and the other Loan Documents shall be correct on and as of the date of this
Amendment as though made on and as of such date (except where such
representations and warranties relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date) and (ii) no Default or Event of Default shall have occurred and be
continuing (or would result from this Amendment becoming effective in accordance
with its terms).
          (b) Agent shall have received counterparts of this Amendment that bear
the signatures of each of Credit Parties, Agent and Lenders.
          (c) Agent shall have received a copy of an amendment (or similar
agreement), in form and substance reasonably satisfactory to Agent, duly
executed by Credit Parties, Term Loan Agent, and Term Loan Lenders amending and
waiving the corresponding provisions of the Term Loan Agreement.
     5. Credit Parties’ Representations and Warranties. Each Credit Party
represents and warrants to Agent and Lenders as follows:
          (a) Such Credit Party (i) is duly organized, validly existing and in
good standing under the laws of the state of its organization and (ii) has all
requisite power, authority and legal right to execute, deliver and perform this
Amendment and to perform the Credit Agreement, as amended hereby.
          (b) The execution, delivery and performance by such Credit Party of
this Amendment and the performance by such Credit Party of the Credit Agreement,
as amended hereby (i) have been duly authorized by all necessary action, (ii) do
not and will not violate or create a default under such Credit Party’s
organizational documents, any applicable law or any contractual restriction
binding on or otherwise affecting such Credit Party or any of such Credit
Party’s properties, and (iii) except as provided in the Loan Documents, do not
and will not result in or require the creation of any Lien, upon or with respect
to such Credit Party’s property.
          (c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority is required in connection with the
due execution, delivery and performance by such Credit Party of this Amendment
or the performance by such Credit Party of the Credit Agreement, as amended
hereby.
          (d) This Amendment and the Credit Agreement, as amended hereby,
constitute the legal, valid and binding obligations of such Credit Party,
enforceable against such Credit Party in accordance with their terms except to
the extent the enforceability thereof may be

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limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect affecting generally the enforcement of
creditors’ rights and remedies and by general principles of equity.
          (e) Immediately after giving effect to this Amendment, (i) the
representations and warranties contained in the Credit Agreement are correct on
and as of the date of this Amendment as though made on and as of the date hereof
(except where such representations and warranties relate to an earlier date in
which case such representations and warranties shall be true and correct as of
such earlier date), and (ii) other than the Specified Events of Default, no
Default or Event of Default has occurred and is continuing (or would result from
this Amendment becoming effective in accordance with its terms).
     6. Continued Effectiveness of Credit Agreement. Each Credit Party hereby
(a) confirms and agrees that the Credit Agreement and each other Loan Document
to which it is a party is, and shall continue to be, in full force and effect
and is hereby ratified and confirmed in all respects except that on and after
the Amendment Effective Date all references in any such Loan Document to (i)
“the Credit Agreement”, “hereto”, “hereof”, “hereunder”, “thereto”, “thereof”,
“thereunder” or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended by this Amendment, (b) confirms and agrees
that to the extent that any such Loan Document purports to assign or pledge to
Agent, for the ratable benefit of Lenders, or to grant to Agent, for the ratable
benefit of Lenders a security interest in or Lien on, any Collateral as security
for the Obligations of the Credit Party, or any of their respective Subsidiaries
from time to time existing in respect of the Credit Agreement and the other Loan
Documents, such pledge, assignment and/or grant of the security interest or Lien
is hereby ratified and confirmed in all respects, (c) the execution and delivery
of this Amendment does not limit any other action that Agent is entitled to
take, or that the Credit Parties are required to perform, under the Fifth
Amendment Fee Letter, and (d) confirms and agrees that no amendment of any terms
or provisions of the Credit Agreement, or the amendments and waivers granted
hereunder shall relieve any Credit Party from complying with such terms and
provisions other than as expressly amended or waived hereby or from complying
with any other term or provision thereof or herein.
     7. Release. Each Credit Party hereby acknowledges and agrees that:
(a) neither it nor any of its Affiliates has any claim or cause of action
against Agent or any Lender (or any of their respective Affiliates, officers,
directors, employees, attorneys, consultants or agents) and (b) Agent and each
Lender has heretofore properly performed and satisfied in a timely manner all of
its obligations to Credit Parties and their Affiliates under the Credit
Agreement and the other Loan Documents. Notwithstanding the foregoing, Credit
Parties wish (and Agent and Lenders agree) to eliminate any possibility that any
past conditions, acts, omissions, events or circumstances would impair or
otherwise adversely affect Agent’s or any Lenders’ rights, interests, security
and/or remedies under the Credit Agreement and the other Loan Documents.
Accordingly, for and in consideration of the agreements contained in this
Amendment and other good and valuable consideration, each Credit Party (for
itself and its Affiliates and the successors, assigns, heirs and representatives
of each of the foregoing) (collectively, the “Releasors”) does hereby fully,
finally, unconditionally and irrevocably release and forever discharge Agent and
each Lender and each of their respective Affiliates, officers, directors,
employees, attorneys, consultants and agents (collectively, the “Released
Parties”) from any and

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all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands,
liabilities, actions, proceedings and causes of action, in each case, whether
known or unknown, contingent or fixed, direct or indirect, and of whatever
nature or description, and whether in law or in equity, under contract, tort,
statute or otherwise, which any Releasor has heretofore had or now or hereafter
can, shall or may have against any Released Party by reason of any act, omission
or thing whatsoever done or omitted to be done, arising out of, connected with
or related in any way to the Credit Agreement or any other Loan Document, or any
act, event or transaction related or attendant thereto, or the agreements of any
Agent or any Lender contained therein, or the possession, use, operation or
control of any of the assets of any Credit Party, or the making of any Loans or
other advances, or the management of such Loans or advances or the Collateral.
     8. Miscellaneous.
          (a) This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of this Amendment by
telefacsimile or electronic method shall be equally as effective as delivery of
an original executed counterpart of this Amendment.
          (b) Section and paragraph headings herein are included for convenience
of reference only and shall not constitute a part of this Amendment for any
other purpose.
          (c) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York. Each of the parties to this Amendment
hereby irrevocably waives all rights to trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Amendment.
          (d) Borrowers will pay on demand all reasonable fees, costs and
expenses of Agent and Lenders in connection with the preparation, execution and
delivery of this Amendment or otherwise payable under the Credit Agreement,
including, without limitation, reasonable fees disbursements and other charges
of counsel to Agent and Lenders.
          (e) This Amendment is a Loan Document executed pursuant to the Credit
Agreement and shall be construed, administered and interpreted in accordance
with the terms thereof. Accordingly, it shall be an Event of Default under the
Credit Agreement if any representation or warranty made or deemed made by any
Credit Party under or in connection with this Amendment shall have been
incorrect when made or deemed made or if any Credit Party fails to perform or
comply with any covenant or agreement contained herein.
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ANNEX J (from Annex A — Commitments definition)
TO
CREDIT AGREEMENT
COMMITMENTS AS OF THE CLOSING DATE

      Revolving Loan Commitment   Lender(s)
$50,000,000 (including a Swing Line Commitment of $25,000,000)
  General Electric Capital Corporation

 

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ANNEX G (Section 6.7)
to
CREDIT AGREEMENT
FINANCIAL COVENANTS
 Borrowers shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:

  (f)   Consolidated Adjusted EBITDA. Holdings shall not permit Consolidated
Adjusted EBITDA as at the end of the most-recently-ended Fiscal Month for the
trailing twelve-month period then ended (or in the case of any period ended on
or prior to May 2, 2009, for the period from May 4, 2008 through the date of
determination) to be less than the correlative amount indicated below:

          Consolidated Adjusted Fiscal Month Ended On or About   EBITDA May 31,
2008   ($1,637,000) June 30, 2008   ($1,478,000) July 31, 2008   ($2,445,000)
August 30, 2008   ($383,000) September 30, 2008   $1,613,000 October 31, 2008  
$8,347,000 November 30, 2008   $23,677,000 December 31, 2008   $28,676,000
January 31, 2009   $20,335,000 February 28, 2009   $21,581,000 March 31, 2009  
$22,018,000 April 30, 2009 and each Fiscal Month ended thereafter   $23,331,000

  (g)   Maximum Consolidated Capital Expenditures, License Advances, Exclusive
Distribution Costs and Software Development Costs. Holdings shall not make or
incur any Capital Expenditures, License Advances, Exclusive Distribution Costs
or Software Development Costs. Holdings shall not permit its Subsidiaries to
make or incur Consolidated Capital Expenditures, License Advances, Exclusive
Distribution Costs and Software Development Costs in an aggregate amount for all
of its Subsidiaries to exceed the lesser of (i) the Permitted Capital
Expenditure Amount for such period, and (ii) the amount specified below for such
period.

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          Period   Amount
April 20, 2008 through Fiscal Month ended on or about May 31, 2008
  $ 3,350,000  
April 20, 2008 through Fiscal Month ended on or about June 30, 2008
  $ 5,000,000  
April 20, 2008 through Fiscal Month ended on or about July 31, 2008
  $ 6,450,000  
April 20, 2008 through Fiscal Month ended on or about August 31, 2008
  $ 7,800,000  
April 20, 2008 through Fiscal Month ended on or about September 30, 2008
  $ 9,250,000  
April 20, 2008 through Fiscal Month ended on or about October 31, 2008
  $ 10,000,000  
April 20, 2008 through Fiscal Month ended on or about November 30, 2008
  $ 10,750,000  
April 20, 2008 through Fiscal Month ended on or about December 31, 2008
  $ 11,500,000  
April 20, 2008 through Fiscal Month ended on or about January 31, 2009
  $ 12,250,000  
April 20, 2008 through Fiscal Month ended on or about February 28, 2009
  $ 13,000,000  
April 20, 2008 through Fiscal Month ended on or about March 31, 2009
  $ 13,750,000  
April 20, 2008 through Fiscal Month ended on or about April 30, 2009
  $ 14,500,000  
Any period after April 30, 2009
  An amount to be agreed between Borrowers and Agent

  (h)   Maximum Lease Obligations. Holdings shall not create, incur or suffer to
exist, or permit any of its Subsidiaries to create, incur or suffer to exist,
any obligations as lessee (i) for the payment of rent for any personal property
in connection with any sale and leaseback transaction, or (ii) for the payment
of rent for any personal property under leases or agreements to lease other than
(A) obligations in respect of Capital Leases which would not cause the aggregate
amount of all obligations under Capital Leases entered into after the Closing
Date owing by Holdings and its Subsidiaries in the aggregate in any Fiscal Year
to exceed the amounts set forth in paragraph (b) of this Annex G, and
(B) Operating Lease Obligations which would not cause the aggregate amount of
all Operating Lease Obligations owing by Holdings and its Subsidiaries in the
aggregate in any Fiscal Year to exceed $10,000,000.     (i)   Minimum
Availability. The Credit Parties shall not permit Borrowing Availability
(without duplication, after giving effect to the Term Loan Reserve, the Minimum
Availability Amount and all other Reserves then in effect) to be less than zero.

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  (j)   Minimum Asset Coverage. Credit Parties shall not permit, at any time,
(i) the positive difference between (A) the Borrowing Base at such time (without
taking into account the Term Loan Reserve, the Minimum Availability Amount or
any other Reserves) and (B) the principal amount of all Indebtedness outstanding
(including without limitation, all undrawn letters of credit) under the Term
Loan Agreement and this Agreement at such time (such positive difference, the
“Minimum Asset Coverage”) to be less than the correlative amount indicated below
under the heading “Minimum Asset Coverage” for such period, or (ii) the
percentage obtained by dividing (A) the amount specified in clause (i)(B) above
at such time by (B) the amount specified in clause (i)(A) above at such time to
be greater than the percentage specified below under the heading “Maximum
Coverage Percentage” for such period:

                              Maximum       Minimum Asset     Coverage   Period
  Coverage     Percentage  
May 1, 2008 through May 31, 2008
  $ 25,000,000       74.1 %
June 1, 2008 through June 30, 2008
  $ 30,000,000       69.3 %
July 1, 2008 through July 31, 2008
  $ 30,000,000       68.9 %
August 1, 2008 through August 31, 2008
  $ 30,000,000       69.8 %
September 1, 2008 through September 30, 2008
  $ 35,000,000       69.9 %
October 1, 2008 through October 31, 2008
  $ 60,000,000       60.4 %
November 1, 2008 through November 30, 2008
  $ 90,000,000       53.8 %
December 1, 2008 through December 31, 2008
  $ 70,000,000       56.5 %
January 1, 2009 and all times thereafter
  $ 60,000,000       60.0 %

  (k)   Minimum Fixed Charge Coverage Ratio. Holdings shall not permit the Fixed
Charge Coverage Ratio as at any date specified below to be less than the
correlative amount indicated below:

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          Fixed Charge Fiscal Month Ended On or About   Coverage Ratio
May 31, 2008
  (0.45) : 1.00 June 30, 2008   (0.18) : 1.00 July 31, 2008   (0.20) : 1.00
August 30, 2008   (0.03) : 1.00 September 30, 2008   0.09 : 1.00 October 31,
2008   0.40 : 1.00 November 30, 2008   1.02 : 1.00 December 31, 2008   1.08 :
1.00 January 31, 2009 and each Fiscal Month ended thereafter   1.00 : 1.00

  (l)   Certain Calculations. For purposes of determining compliance with (i)
the financial covenants set forth in this Annex G, (ii) the Fixed Charge
Coverage Ratio requirements, and (iii) Borrowing Availability, in each case, in
connection with a proposed Permitted Acquisition or a proposed Restricted Junior
Payment, Consolidated Adjusted EBITDA, the components of Consolidated Fixed
Charges and Borrowing Availability shall be calculated with respect to such
period on a pro-forma basis (including pro forma adjustments approved by Agent
in its sole discretion) using the historical audited (if available) financial
statement of any business so acquired or to be acquired (in connection with a
proposed Permitted Acquisition) and the consolidated financial statements of
Holdings and its Subsidiaries which shall be reformulated as if the Permitted
Acquisition or Restricted Junior Payment had been consummated at the beginning
of such period.     (m)   Unless otherwise specifically provided herein, any
accounting term used in the Agreement shall have the meaning customarily given
such term in accordance with GAAP, and all financial computations hereunder
shall be computed in accordance with GAAP consistently applied. That certain
items or computations are explicitly modified by the phrase “in accordance with
GAAP” shall in no way be construed to limit the foregoing. If any “Accounting
Changes” (as defined below) occur and such changes result in a change in the
calculation of the financial covenants, standards or terms used in the Agreement
or any other Loan Document, then Borrowers, Agent and Lenders agree to enter
into negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrowers’ and their Subsidiaries’ financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders to
any required amendments of such provisions shall be sufficient to bind all
Lenders. “Accounting Changes” means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions),

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    (ii) changes in accounting principles concurred in by any Borrower’s
certified public accountants; (iii) purchase accounting adjustments under A.P.B.
16 or 17 and EITF 88-16, and the application of the accounting principles set
forth in FASB 109, including the establishment of reserves pursuant thereto and
any subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments. All such adjustments resulting from expenditures made subsequent to
the Closing Date (including capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of Consolidated
Adjusted EBITDA in such period. If Agent, Borrowers and Requisite Lenders agree
upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree upon
the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all Financial Statements delivered
and all calculations of financial covenants and other standards and terms in
accordance with the Agreement and the other Loan Documents shall be prepared,
delivered and made without regard to the underlying Accounting Change. For
purposes of Section 8.1, a breach of a Financial Covenant contained in this
Annex G shall be deemed to have occurred as of any date of determination by
Agent or as of the last day of any specified measurement period, regardless of
when the Financial Statements reflecting such breach are delivered to Agent.

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