Exhibit 10.4

EXECUTION VERSION

 

 

ABL CREDIT AGREEMENT

dated as of

June 18, 2019, among

CHEWY, INC.,

as the Borrower,

the Lenders from time to time party hereto,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, and

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION and JPMORGAN CHASE BANK, N.A.,

as Lead Arrangers and Joint Bookrunners

 

 

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TABLE OF CONTENTS

 

          Page   ARTICLE I        DEFINITIONS       

SECTION 1.01

   Defined Terms      1  

SECTION 1.02

   Classification of Loans and Borrowings      58  

SECTION 1.03

   Terms Generally      58  

SECTION 1.04

   Accounting Terms; GAAP      59  

SECTION 1.05

   Effectuation of Transactions      59  

SECTION 1.06

   Currency Translation; Rates      60  

SECTION 1.07

   Letters of Credit      60  

SECTION 1.08

   Limited Condition Acquisitions and Pro Forma Calculations      61  

SECTION 1.09

   Divisions      64   ARTICLE II        THE CREDITS       

SECTION 2.01

   Commitments      64  

SECTION 2.02

   Loans and Borrowings      64  

SECTION 2.03

   Requests for Borrowings      65  

SECTION 2.04

   Funding of Borrowings      65  

SECTION 2.05

   Interest Elections      66  

SECTION 2.06

   Termination and Reduction of Commitments      67  

SECTION 2.07

   Repayment of Loans; Evidence of Debt      68  

SECTION 2.08

   Protective Advances and Overadvances      69  

SECTION 2.09

   Prepayment of Loans      70  

SECTION 2.10

   Fees      71  

SECTION 2.11

   Interest      72  

SECTION 2.12

   Alternate Rate of Interest      73  

SECTION 2.13

   Increased Costs      74  

SECTION 2.14

   Break Funding Payments      75  

SECTION 2.15

   Taxes      76  

SECTION 2.16

   Payments Generally; Pro Rata Treatment; Sharing of Setoffs      79  

SECTION 2.17

   Mitigation Obligations; Replacement of Lenders      80  

SECTION 2.18

   Increased Commitments      81  

SECTION 2.19

   [Reserved]      83  

SECTION 2.20

   Defaulting Lenders      83  

SECTION 2.21

   Illegality      85  

SECTION 2.22

   Loan Modification Offers      86  

SECTION 2.23

   Swingline Loans      87  

SECTION 2.24

   Letters of Credit      89  

SECTION 2.25

   [Reserved]      96  

SECTION 2.26

   Reserves; Change in Reserves; Decisions by Agent      96  

 

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ARTICLE III        REPRESENTATIONS AND WARRANTIES       

SECTION 3.01

   Organization; Powers      96  

SECTION 3.02

   Authorization; Enforceability      96  

SECTION 3.03

   Governmental and Third-Party Approvals; No Conflicts      96  

SECTION 3.04

   Financial Condition; No Material Adverse Effect      97  

SECTION 3.05

   Properties; Insurance      97  

SECTION 3.06

   Litigation and Environmental Matters      97  

SECTION 3.07

   Compliance with Laws and Agreements      98  

SECTION 3.08

   Investment Company Status      98  

SECTION 3.09

   Taxes      98  

SECTION 3.10

   ERISA      98  

SECTION 3.11

   Disclosure      98  

SECTION 3.12

   Subsidiaries      99  

SECTION 3.13

   Intellectual Property; Licenses, Etc.      99  

SECTION 3.14

   Solvency      99  

SECTION 3.15

   Senior Indebtedness      99  

SECTION 3.16

   Federal Reserve Regulations      99  

SECTION 3.17

   Use of Proceeds      99  

SECTION 3.18

   Sanctions, Anti-Corruption Laws, and Anti-Terrorism Laws      99   ARTICLE IV
       CONDITIONS       

SECTION 4.01

   Effective Date      100  

SECTION 4.02

   Each Credit Event      102   ARTICLE V        AFFIRMATIVE COVENANTS       

SECTION 5.01

   Financial Statements and Other Information      103  

SECTION 5.02

   Notices of Material Events      106  

SECTION 5.03

   Information Regarding Collateral      106  

SECTION 5.04

   Existence; Conduct of Business      107  

SECTION 5.05

   Payment of Taxes, etc.      107  

SECTION 5.06

   Maintenance of Properties      107  

SECTION 5.07

   Insurance      107  

SECTION 5.08

   Books and Records; Inspection and Audit Rights; Appraisals; Field
Examinations      107  

SECTION 5.09

   Compliance with Laws      108  

SECTION 5.10

   Use of Proceeds      108  

SECTION 5.11

   Additional Subsidiaries      109  

SECTION 5.12

   Further Assurances      109  

SECTION 5.13

   Certain Post-Closing Obligations      109  

SECTION 5.14

   Designation of Subsidiaries      110  

SECTION 5.15

   Change in Business      110  

SECTION 5.16

   Changes in Fiscal Periods      110  

SECTION 5.17

   Cash Management      110  

SECTION 5.18

   Quarterly Lender Calls      111  

 

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ARTICLE VI        NEGATIVE COVENANTS       

SECTION 6.01

   Indebtedness; Certain Equity Securities      112  

SECTION 6.02

   Liens      116  

SECTION 6.03

   Fundamental Changes      119  

SECTION 6.04

   Investments, Loans, Advances, Guarantees and Acquisitions      120  

SECTION 6.05

   Asset Sales      123  

SECTION 6.06

   [Reserved]      125  

SECTION 6.07

   Negative Pledge      125  

SECTION 6.08

   Restricted Payments; Certain Payments of Indebtedness; Certain Amendments   
  126  

SECTION 6.09

   Transactions with Affiliates      130  

SECTION 6.10

   Fixed Charge Coverage Ratio      131   ARTICLE VII        EVENTS OF DEFAULT
      

SECTION 7.01

   Events of Default      132  

SECTION 7.02

   Application of Proceeds      134  

SECTION 7.03

   Cure Right      136   ARTICLE VIII        THE ADMINISTRATIVE AGENT       

SECTION 8.01

   The Administrative Agent      137   ARTICLE IX        MISCELLANEOUS       

SECTION 9.01

   Notices      144  

SECTION 9.02

   Waivers; Amendments      145  

SECTION 9.03

   Expenses; Indemnity; Damage Waiver      148  

SECTION 9.04

   Successors and Assigns      150  

SECTION 9.05

   Survival      154  

SECTION 9.06

   Counterparts; Integration; Effectiveness      154  

SECTION 9.07

   Severability      154  

SECTION 9.08

   Right of Setoff      154  

SECTION 9.09

   Governing Law; Jurisdiction; Consent to Service of Process; Process Agent   
  155  

SECTION 9.10

   WAIVER OF JURY TRIAL      155  

SECTION 9.11

   Headings      156  

SECTION 9.12

   Confidentiality      156  

SECTION 9.13

   Patriot Act      157  

SECTION 9.14

   Judgment Currency      157  

SECTION 9.15

   Release of Liens and Guarantees      158  

SECTION 9.16

   No Fiduciary Relationship      158  

SECTION 9.17

   Secured Cash Management Obligations, Secured Bank Product Obligations and
Secured Swap Obligations      158  

SECTION 9.18

   Acknowledgement and Consent to Bail-In of EEA Financial Institutions      159
 

SECTION 9.19

   Certain ERISA Matters      159  

SECTION 9.20

   Intercreditor Agreements      160  

SECTION 9.21

   Acknowledgement Regarding any Supported OFCs      160  

 

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SCHEDULES:

 

Schedule 1.01(a)      —     

Excluded Subsidiaries

Schedule 1.01(b)

     —     

Effective Date Existing Letters of Credit

Schedule 2.01

     —     

Commitments

Schedule 3.12

     —     

Subsidiaries

Schedule 5.14

     —     

Certain Post-Closing Obligations

Schedule 6.01

     —     

Existing Indebtedness

Schedule 6.02

     —     

Existing Liens

Schedule 6.04(f)

     —     

Existing Investments

Schedule 6.07

     —     

Existing Restrictions

Schedule 6.09

     —     

Existing Affiliate Transactions

EXHIBITS:

 

Exhibit A

     —      Form of Assignment and Assumption

Exhibit B

     —      Form of Borrowing Request

Exhibit C

     —      Form of Guarantee Agreement

Exhibit D

     —      Form of Collateral Agreement

Exhibit E

     —      Form of ABL Intercreditor Agreement

Exhibit F

     —      Form of Borrowing Base Certificate

Exhibit G

     —      Form of Closing Certificate

Exhibit H

     —      Form of Intercompany Note

Exhibit I

     —      Form of Compliance Certificate

Exhibits J-1 and J-2

     —      Forms of Collateral Access Agreements

Exhibit K

     —      [Reserved]

Exhibit L

     —      [Reserved]

Exhibit M

     —      [Reserved]

Exhibit N

     —      [Reserved]

Exhibit O

     —      [Reserved]

Exhibit P-1

     —      Form of U.S. Tax Compliance Certificate (For Non-U.S. Lenders That
Are Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit P-2

     —      Form of U.S. Tax Compliance Certificate (For Non-U.S. Lenders That
Are Partnerships For U.S. Federal Income Tax Purposes)

Exhibit P-3

     —      Form of U.S. Tax Compliance Certificate (For Non-U.S. Participants
That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit P-4

     —      Form of U.S. Tax Compliance Certificate (For Non-U.S. Participants
That Are Partnerships For U.S. Federal Income Tax Purposes)

 

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ABL CREDIT AGREEMENT dated as of June 18, 2019 (this “Agreement”), among CHEWY,
INC., a Delaware corporation (the “Borrower”), the Lenders party hereto, and
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as Administrative Agent.

WHEREAS, the Borrower has requested the Lenders to extend Commitments in an
initial aggregate principal amount of $300,000,000; and NOW THEREFORE, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“ABL Intercreditor Agreement” means an ABL Intercreditor Agreement,
substantially in the form of Exhibit E, among the Administrative Agent and the
representatives for one or more classes of obligations to be secured relative to
the Liens on the Collateral securing the Secured Obligations, with such
modifications thereto as the Administrative Agent and the Borrower shall
reasonably agree.

“ABL Priority Collateral” has the meaning assigned to such term in the form of
ABL Intercreditor Agreement attached as Exhibit E hereto.

“ABR,” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate. Notwithstanding any
provision to the contrary in this Agreement, if at any time the rate determined
pursuant to this definition is less than zero, then such rate shall be deemed to
be zero.

“Accepting Lenders” shall have the meaning assigned to each term in
Section 2.22.

“Account” as defined in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.

“Account Debtor” means any Person obligated on an Account.

“Accounting Changes” has the meaning specified in Section 1.04(d).

“Acquired EBITDA” means, with respect to any Pro Forma Entity for any period,
the amount for such period of Consolidated EBITDA of such Pro Forma Entity
(determined as if references to the Borrower and the Restricted Subsidiaries in
the definition of the term “Consolidated EBITDA” (and in the component financial
definitions used therein) were references to such Pro Forma Entity and its
Subsidiaries which will become Restricted Subsidiaries), all as determined on a
consolidated basis for such Pro Forma Entity.

“Acquired Entity or Business” has the meaning given such term in the definition
of “Consolidated EBITDA.”

“Acquisition Transaction” means the purchase or other acquisition, by merger,
amalgamation, consolidation or otherwise, by the Borrower or any Subsidiary of
Equity Interests in, or all or substantially all the assets of (or all or
substantially all the assets constituting a business unit, division, product
line or line of business of), any Person.

 

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“Additional Lender” means, at any time, any bank or other financial institution
(including any such bank or financial institution that is a Lender at such time)
that agrees to provide any portion of any Incremental Commitment pursuant to an
Incremental Facility Amendment in accordance with Section 2.18.

“Adjustment Date” means the first calendar day of each calendar month of
January, April, July and October.

“Administrative Agent” means Wells Fargo Bank, National Association, in its
capacity as administrative agent hereunder and under the other Loan Documents,
and its successors in such capacity as provided in Article VIII. The
Administrative Agent may from time to time designate one or more of its
Affiliates or branches to perform the functions of the Administrative Agent in
connection with Loans denominated in any Permitted Currency other than Dollars,
in which case references herein to the “Administrative Agent” shall, in
connection with Loans denominated in any such Permitted Currency, mean any
Affiliate or branch so designated.

“Administrative Agent Account” means, with respect to any payment to be made to
the Administrative Agent hereunder, the account specified by the Administrative
Agent from time to time for the purpose of receiving payments of such type.

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

“Affected Class” has the meaning specified in Section 2.22(a).

“Affiliate” means, with respect to a specified Person, another Person that
directly or indirectly Controls or is Controlled by or is under common Control
with the Person specified.

“Agent” means, individually and collectively as the context may require, the
Administrative Agent, each Lead Arranger, each Joint Bookrunner, the Syndication
Agent and any successors and assigns in such capacity, and “Agents” means two or
more of them.

“Agreement” has the meaning provided in the preamble hereto.

“Agreement Currency” has the meaning assigned to such term in Section 9.14(b).

“Alternate Base Rate” means for any day a fluctuating rate per annum equal to
the highest of (i) the Federal Funds Effective Rate plus 1/2 of 1%, (ii) the
rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate (and, if any such announced rate is
below zero, then the rate determined pursuant to this clause (ii) shall be
deemed to be zero) and (iii) the LIBO Rate on such day (or if such day is not a
Business Day, the immediately preceding Business Day) for a deposit in Dollars,
with a maturity of one calendar month plus 1.00%.

“AML Legislation” has the meaning specified in Section 9.13.

 

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“Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended,
and all other applicable laws and regulations or ordinances concerning or
relating to bribery or corruption in any jurisdiction in which the Borrower or
any of the Restricted Subsidiaries is located or is doing business.

“Anti-Terrorism Laws” means all applicable laws and regulations or ordinances
relating to terrorism or money laundering in any jurisdiction in which the
Borrower or any of the Restricted Subsidiaries is located or is doing business,
including Executive Order No. 13224, the USA Patriot Act, the Bank Secrecy Act,
and the Money Laundering Control Act of 1986 (i.e., 18 USC. §§ 1956 and 1957).

“Applicable Creditor” has the meaning assigned to such term in Section 9.14(b).

“Applicable Rate” means, for any day, with respect to all Revolving Loans, the
applicable rate per annum set forth below, based upon the Average Excess
Availability as of the most recent Adjustment Date; provided that until the
first Adjustment Date occurring after the first full fiscal quarter ended after
the Effective Date, the “Applicable Rate” shall be the applicable rate per annum
set forth below in Category 3:

 

Average Excess Availability

   LIBO Rate     ABR  

Category 1

Average Excess Availability less than 33.3% of the Total Maximum Borrowing
Amount

     1.75 %      0.75 % 

Category 2

Average Excess Availability greater than or equal to 33.3% of the Total Maximum
Borrowing Amount, but less than 66.6% of the Total Maximum Borrowing Amount

     1.50 %      0.50 % 

Category 3

Average Excess Availability greater than or equal to 66.6% of the Total Maximum
Borrowing Amount

     1.25 %      0.25 % 

The Applicable Rate shall be adjusted quarterly on a prospective basis on each
Adjustment Date based upon the Average Excess Availability in accordance with
the table above; provided that (i) if an Event of Default shall have occurred
and be continuing at the time any reduction in the Applicable Rate would
otherwise be implemented, then no such reduction shall be implemented until the
date on which such Event of Default shall no longer be continuing and (ii) if
any Borrowing Base Certificate delivered pursuant to this Agreement is at any
time restated or otherwise revised, or if the information set forth in any such
Borrowing Base Certificate otherwise proves to be false or incorrect such that
the Applicable Rate would have been higher than was otherwise in effect during
any period, without constituting a waiver of any Default or Event of Default
arising as a result thereof, interest due under this Agreement shall be
recalculated by the Administrative Agent at such higher rate for any applicable
periods and shall be due and payable within 5 Business Days of receipt of such
calculation by the Borrower from the Administrative Agent and shall be payable
only to the Lenders whose Commitments were outstanding during such period when
the Applicable Rate should have been higher (regardless of whether such Lenders
remain parties to this Agreement at the time such payment is made).

 

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“Approved Bank” has the meaning assigned to such term in the definition of the
term “Permitted Investments.”

“Approved Electronic Communications” means each notice, demand, communication,
information, document and other material that any Loan Party is obligated to, or
otherwise chooses to, provide to the Administrative Agent and/or the Collateral
Agent pursuant to any Loan Document or the transactions contemplated therein,
including (a) any supplement, joinder or amendment to the Security Documents and
any other written communication delivered or required to be delivered in respect
of any Loan Document or the transactions contemplated therein and any financial
statements, financial and other report, notice, request, certificate and other
information materials; provided, however, that solely with respect to delivery
of any such Communication by any Loan Party to the Administrative Agent and
without limiting or otherwise affecting either the Administrative Agent’s right
to effect delivery of such Communication by posting such Communication to the
Approved Electronic Platform or the protections afforded hereby to the
Administrative Agent in connection with any such posting, “Approved Electronic
Communication” shall exclude (i) any notice of borrowing, letter of credit
request, notice of conversion or continuation, and any other notice, demand,
communication, information, document and other material relating to a request
for a new, or a conversion of an existing, Borrowing, (ii) any notice relating
to the payment of any principal or other amount due under any Loan Document
prior to the scheduled date therefor, (iii) all notices of any Default or Event
of Default and (iv) any notice, demand, communication, information, document and
other material required to be delivered to satisfy any of the conditions set
forth in Article IV or any other condition to any Borrowing or other extension
of credit hereunder or any condition precedent to the effectiveness of this
Agreement.

“Approved Electronic Platform” has the meaning assigned to such term in
Section 9.01.

“Approved Foreign Bank” has the meaning assigned to such term in the definition
of the term “Permitted Investments.”

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

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any Person whose consent is
required by Section 9.04), substantially in the form of Exhibit A or any other
form reasonably approved by the Administrative Agent.

“Audited Financial Statements” means the audited consolidated balance sheets of
the Borrower and its subsidiaries as at the end of and the related consolidated
statements of income, stockholders’ equity and cash flows of the Borrower and
its Subsidiaries, for the fiscal years ended January 28, 2018 and February 3,
2019, including the notes thereto.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of (a) the Maturity Date of any Commitments and
(b) the date of termination of such Commitments.

“Availability Reserves” means, without duplication of any other reserves or
items that are otherwise addressed or excluded through eligibility criteria,
such reserves as the Administrative Agent from time to time determines in its
Permitted Discretion as being appropriate (a) to reflect any impediments to the
Administrative Agent’s ability to realize upon the ABL Priority Collateral
included in the Borrowing Base, (b) to reflect claims and liabilities that may
need to be satisfied in connection with the realization upon the Collateral
consisting of ABL Priority Collateral included in the Borrowing Base or (c) to
reflect criteria, events, conditions, contingencies or risks which adversely
affect any component of the Borrowing Base.

 

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“Available Equity Amount” as of any date means a cumulative amount equal to
(without duplication):

(a) the net cash proceeds of new public or private issuances of Qualified Equity
Interests in the Borrower or any parent of the Borrower which are contributed to
the Borrower, plus

(b) capital contributions received by Borrower in cash or Permitted Investments
(other than in respect of any Disqualified Equity Interest or constituting a
Cure Amount) and the Fair Market Value of other property that is useful in the
business of the Borrower and its Restricted Subsidiaries and contributed to the
capital of the Borrower (including through consolidation or merger), plus

(c) the net cash proceeds received by Borrower from Indebtedness and
Disqualified Equity Interest issuances issued and which have been exchanged or
converted into Qualified Equity Interests; plus

(d) returns, profits, distributions and similar amounts received in cash or
Permitted Investments by the Borrower and the Restricted Subsidiaries on
Investments made using the Available Equity Amount (not to exceed the amount of
such Investments);

in each case, which net cash proceeds, capital contributions, returns, profits,
distributions and similar amounts have been received by the Borrower during the
immediately preceding consecutive 90-day period and, in any event, after the
Effective Date.

“Available Revolving Commitment” means, at any time, the Commitments of any
Revolving Lender then in effect under the Facility minus the Revolving Exposure
of such Revolving Lender under the Facility at such time.

“Average Excess Availability” means, at any Adjustment Date, the average daily
Excess Availability for the calendar quarter immediately preceding such
Adjustment Date.

“Average Revolving Loan Utilization” means, as of any Adjustment Date, the
average daily Revolving Exposure under the Facility (excluding any Revolving
Exposure under the Facility resulting from any outstanding Swingline Loans) for
the three-calendar month period immediately preceding such Adjustment Date (or,
if less, the period from the Effective Date to such Adjustment Date), divided by
the aggregate Commitments under the Facility in effect at such time.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Accounts” means any checking or other demand deposit account, securities
account, commodities account or other bank account maintained by any of the Loan
Parties.

 

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“Bank Product Obligations” means other obligations in respect of purchase card
programs.

“Bank Product Reserve” means a reserve in respect of the full amount (or
(a) solely with respect to Secured Bank Product Obligations owed to the
Administrative Agent or any of its Affiliates or branches, such lesser amount as
the Administrative Agent may elect in its sole discretion and (b) solely with
respect to Secured Bank Product Obligations owed to any other Person, such
lesser amount as such Person may elect in its sole discretion) of Secured Bank
Product Obligations outstanding at the applicable time, as determined by the
Administrative Agent.

“Basel III” means, collectively, those certain agreements on capital
requirements, a leverage ratio and liquidity standards contained in “Basel III:
A Global Regulatory Framework for More Resilient Banks and Banking Systems,”
“Basel III: International Framework for Liquidity Risk Measurement, Standards
and Monitoring,” and “Guidance for National Authorities Operating the
Countercyclical Capital Buffer,” each as published by the Basel Committee on
Banking Supervision in December 2010 (as revised from time to time), and as
implemented by a Lender’s primary banking regulatory authority.

“Beneficial Ownership Certificate” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA)
that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of
the Code or (c) any Person whose assets include (for purposes of ERISA
Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of
the Code) the assets of any such “employee benefit plan” or “plan”.

“Board of Directors” means, with respect to any Person, (a) in the case of any
corporation, the board of directors of such Person or any committee thereof duly
authorized to act on behalf of such board, (b) in the case of any limited
liability company, the board of managers or board of directors of such Person,
(c) in the case of any partnership, the board of directors or board of managers
of a general partner of such Person and (d) in any other case, the functional
equivalent of the foregoing.

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

“Borrower” has the meaning provided in the preamble hereto.

“Borrowing” means (a) Loans of the same Facility, Class and Type, made,
converted or continued on the same date in the same currency and, in the case of
Eurocurrency Loans, as to which a single Interest Period is in effect,
(b) Swingline Loans or (c) Protective Advances.

“Borrowing Base” means:

(i) 85% (except as may be required by clauses (e) or (i) of the definition of
“Eligible Receivables”) of the Value of Eligible Receivables of the Loan
Parties, plus

(ii) 90% of the Net Orderly Liquidation Value of Eligible Inventory of the Loan
Parties, plus

(iii) 90% of the face amount of Eligible Credit Card Receivables of the Loan
Parties, plus

(iv) at the option of the Borrower, 100% of Qualified Cash, minus

 

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(v) without duplication, the amount of all Reserves as the Administrative Agent
may at any time and from time to time in the exercise of its Permitted
Discretion establish or modify in accordance with the provisions of
Section 2.26;

provided that in no event shall the aggregate amounts set forth in clauses
(i) through (iii) of this definition attributable to Inventory or Receivables
acquired pursuant to the purchase or other acquisition of property and assets or
businesses of any Person or of assets constituting a business unit, a line of
business or division of such Person or Equity Interests in a Person, that is not
subject to a completed inventory appraisal or field examination conducted by or
on behalf of the Administrative Agent exceed 10% of the Borrowing Base; provided
further that in connection with any such purchase or other acquisition, the
Borrower may request that the Administrative Agent undertake an inventory
appraisal or field examination in respect of such acquired Inventory or
Receivables and, upon such request, the Administrative Agent shall use
commercially reasonable efforts to engage a third party reasonably acceptable to
the Borrower to commence such inventory appraisal or field examination within 30
days.

The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Certificate delivered to the Administrative Agent pursuant
to the definition of “Qualified Accounts”, Section 5.01(i), Section 5.14, the
final paragraph of Section 6.05 or the first proviso of Section 9.15 and
adjusted by the Administrative Agent in the exercise of its Permitted Discretion
and in accordance with Section 2.26 based upon additional information, if any,
received after the date of delivery of any such Borrowing Base Certificate;
provided that until the earlier of (i) delivery of an initial inventory
appraisal and an initial field examination conducted by or on behalf of the
Administrative Agent and a Borrowing Base Certificate in respect thereof along
with customary supporting documentation and (ii) the date that is 90 days
following the Effective Date (or such later date as the Administrative Agent
reasonably agrees), the Borrowing Base shall be deemed to be $200,000,000 (or
such greater amount set forth in the initial inventory appraisal conducted by or
on behalf of the Administrative Agent); provided, further, that, in the event
the Borrower does not deliver an initial inventory appraisal and an initial
field examination conducted by or on behalf of the Administrative Agent by the
date that is 90 days following the Effective Date (or such later date as the
Administrative Agent reasonably agrees), on the date that is 90 days following
the Effective Date (or such applicable later date) the Borrowing Base shall be
reduced to zero and shall not be increased until such date as the Borrower has
delivered to the Administrative Agent such inventory appraisal and field
examination and a Borrowing Base Certificate in respect thereof along with
customary supporting documentation.

“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower Agent, in
substantially the form of Exhibit F or another form which is acceptable to the
Administrative Agent in its reasonable discretion.

“Borrowing Request” means a request by a Borrower for a Borrowing in accordance
with Section 2.03, via electronic notice via the Portal or otherwise in
substantially the form of Exhibit B or another form which is acceptable to the
Administrative Agent in its reasonable discretion.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that (a) when used in connection with any Eurocurrency
Loan or any Letter of Credit (other than U.S. Letters of Credit), the term
“Business Day” shall also exclude any day on which banks are not open for
dealings in deposits in the applicable currency in the London interbank market
and (b) in the case of any Letter of Credit, any Swingline Loan, or any
Eurocurrency Loan, in each case denominated in Euros, the term “Business Day”
shall also exclude any day which is not a Business Day as determined by the
Administrative Agent.

 

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“Capital Expenditures” means, for any period, the additions to property, plant
and equipment and other capital expenditures of the Borrower and the Restricted
Subsidiaries that are (or should be) set forth in a consolidated statement of
cash flows of the Borrower for such period prepared in accordance with GAAP.

“Capital Lease Obligation” means an obligation that is a Capitalized Lease; and
the amount of Indebtedness represented thereby at any time shall be the amount
of the liability in respect thereof that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP as applied by the
Borrower in the Audited Financial Statements.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP as applied by the Borrower in the Audited Financial Statements,
recorded as capitalized leases.

“Capitalized Software Expenditures” means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities) by the Borrower
and the Restricted Subsidiaries during such period in respect of purchased
software or internally developed software and software enhancements that, in
conformity with GAAP, are or are required to be reflected as capitalized costs
on the consolidated balance sheet of the Borrower and the Restricted
Subsidiaries.

“Cash Dominion Period” means (a) the period from the date that Specified Excess
Availability is less than the greater of (i) 10% of the Total Maximum Borrowing
Amount and (ii) $30,000,000 for five (5) consecutive Business Days until the
date that Specified Excess Availability has been at least the greater of (i) 10%
of the Total Maximum Borrowing Amount and (ii) $30,000,000 for twenty
(20) consecutive calendar days or (b) upon the occurrence of a Specified
Default, the period that such Specified Default shall be continuing.

“Cash Management Obligations” means (a) obligations in respect of any overdraft
and related liabilities arising from treasury, depository, cash pooling
arrangements and cash management services or any automated clearing house
transfers of funds and (b) other obligations in respect of netting services,
employee credit card programs and similar arrangements.

“Cash Management Services” has the meaning provided in the definition of Secured
Cash Management Obligations.

“Casualty Event” means any event that gives rise to the receipt by the Borrower,
a Loan Party or any Restricted Subsidiary of any insurance proceeds or
condemnation awards in respect of any equipment, fixed assets or real property
(including any improvements thereon) to replace or repair such equipment, fixed
assets or real property.

“CF Debt Priority Collateral” has the meaning assigned to such term in the form
of ABL Intercreditor Agreement attached as Exhibit E hereto.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group, other than the
Permitted Holders (directly or indirectly, including through one or more holding
companies), of Equity Interests representing 40% or more of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests
in the Borrower and the percentage of the aggregate ordinary voting power so
held is greater than the percentage of the aggregate ordinary voting power
represented by the Equity Interests in the Borrower held by the Permitted
Holders, unless the Permitted Holders (directly or indirectly, including through
one of more holding companies) otherwise have the right (pursuant to contract,
proxy or otherwise), directly or indirectly, to designate, nominate or appoint
(and do so designate, nominate or appoint) a majority of the Board of Directors
of

 

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the Borrower or (b) the occurrence of a “Change of Control” (or similar event,
however denominated), as defined in the documentation governing any Material
Indebtedness that is Subordinated Indebtedness. For purposes of this definition,
(i) “beneficial ownership,” shall be as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act, (ii) the phrase Person or “group” is within the meaning
of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee
benefit plan of such Person or “group” and its subsidiaries and any Person
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan, and (iii) if any Person or “group” includes one or more Permitted
Holders, the issued and outstanding Equity Interests of the Borrower directly or
indirectly owned by the Permitted Holders that are part of such Person or
“group” shall not be treated as being owned by such Person or “group” for
purposes of determining whether this definition is triggered).

“Change in Law” means (a) the adoption of any rule, regulation, treaty or other
law after the date of this Agreement, (b) any change in any rule, regulation,
treaty or other law or in the administration, interpretation or application
thereof by any Governmental Authority after the date of this Agreement or
(c) the making or issuance of any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement; provided that, notwithstanding anything herein to
the contrary, (i) any requests, rules, guidelines or directives under the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or issued in
connection therewith and (ii) any requests, rules, guidelines or directives
promulgated by the Bank of International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III, shall in each case
shall be deemed to be a “Change in Law,” regardless of when enacted, adopted,
promulgated or issued.

“Chattel Paper” means any “chattel paper,” as such term is defined in the UCC,
including electronic chattel paper, now owned or hereafter acquired by any Loan
Party, wherever located.

“Class” when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Loans under the Facility
(including a FILO Tranche), (b) any Commitment, refers to whether such
Commitment is a Revolving Commitment or an Incremental Commitment under the
Facility and (c) any Lender, refers to whether such Lender has a Loan or
Commitment with respect to a particular Class of Loans or Commitments under the
Facility. Loans made under Incremental Commitments that have different terms and
conditions shall be construed to be in different Classes.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means any and all assets, whether real or personal, tangible or
intangible, on which Liens are purported to be granted pursuant to the Security
Documents by any Loan Party to secure the Secured Obligations of the Loan
Parties.

“Collateral Access Agreement” means a collateral access agreement (including a
landlord lien waiver) in the form of Exhibit J-1 or J-2 hereto, as applicable,
or otherwise reasonably satisfactory to the Administrative Agent.

“Collateral Agreement” means the Collateral Agreement among the Borrower, each
other Loan Party and the Administrative Agent, substantially in the form of
Exhibit D.

 

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“Collateral and Guarantee Requirement” means, at any time, the requirement that:

(a) the Administrative Agent shall have received from (i) the Borrower and each
Subsidiary (other than an applicable Excluded Subsidiary) either (x) a
counterpart of the Guarantee Agreement duly executed and delivered on behalf of
such Person or (y) in the case of any Domestic Subsidiary that becomes a
Restricted Subsidiary of any Loan Party (other than any Excluded Subsidiary) or
ceases to be an Excluded Subsidiary after the Effective Date, a supplement to
the Guarantee Agreement, in the form specified therein, and (ii) the Borrower
and each Subsidiary Loan Party either (x) a counterpart of the Security
Documents, as applicable, duly executed and delivered on behalf of such Person
or (y) in the case of any Domestic Subsidiary that becomes a Loan Party after
the Effective Date (including by ceasing to be an Excluded Subsidiary), a
supplement to the Security Documents in the form specified therein, duly
executed and delivered on behalf of such Person, and in each case under this
clause (a) together with, in the case of any such Loan Documents executed and
delivered after the Effective Date, documents and, to the extent reasonably
requested by the Administrative Agent, opinions and certificates of the type
referred to in Section 4.01(b) and 4.01(c));

(b) all outstanding Equity Interests of the Restricted Subsidiaries of any Loan
Parties (other than any Equity Interests constituting Excluded Assets or Equity
Interests of Immaterial Subsidiaries) owned by or on behalf of any Loan Party
shall have been pledged pursuant to the Security Documents (and the
Administrative Agent shall have received certificates or other instruments
representing all such Equity Interests (if any), together with undated stock
powers or other instruments of transfer with respect thereto endorsed in blank);

(c) if any Indebtedness for borrowed money of the Borrower or any Subsidiary in
a principal amount of $10,000,000 or more is owing by such obligor to any Loan
Party, such Indebtedness shall be evidenced by a promissory note, such
promissory note shall have been pledged pursuant to the applicable Security
Document and the Administrative Agent shall have received all such promissory
notes, together with undated instruments of transfer with respect thereto
endorsed in blank; and

(d) all certificates, agreements, documents and instruments, including Uniform
Commercial Code financing statements, required by the Security Documents,
Requirements of Law and reasonably requested by the Administrative Agent to be
filed, delivered, registered or recorded to create the Liens intended to be
created by the Security Documents and perfect such Liens to the extent required
by, and with the priority required by, the Security Documents and the other
provisions of the term “Collateral and Guarantee Requirement,” shall have been
filed, registered or recorded or delivered to the Administrative Agent for
filing, registration or recording.

Notwithstanding the foregoing provisions of this definition or anything in this
Agreement or any other Loan Document to the contrary, (a) the foregoing
provisions of this definition shall not require the creation or perfection of
pledges of or security interests in, or the obtaining of title insurance, legal
opinions or other deliverables with respect to, particular assets of the Loan
Parties, or the provision of Guarantees by any Subsidiary, if, and for so long
as and to the extent that the Administrative Agent and the Borrower reasonably
agree in writing that the cost of creating or perfecting such pledges or
security interests in such assets, or obtaining such title insurance, legal
opinions or other deliverables in respect of such assets, or providing such
Guarantees (taking into account any material adverse Tax consequences to the
Borrower and its Subsidiaries (including the imposition of withholding or other
material Taxes)), shall be excessive in view of the benefits to be obtained by
the Lenders therefrom, (b) Liens required to be granted from time to time
pursuant to the term “Collateral and Guarantee Requirement” shall be subject to
exceptions and limitations set forth in the Security Documents as in effect on
the Effective Date, (c) except as otherwise expressly set forth herein, in no
event shall control agreements or other control or similar arrangements be
required with respect to deposit accounts, securities accounts, commodities
accounts or other assets specifically requiring perfection by control
agreements, (d) no perfection actions shall be required with respect to Vehicles
and other assets subject to certificates of title, (e) no perfection actions
shall be required with respect to commercial tort claims with a value less than
$5,000,000 and no perfection shall be required with respect to promissory notes
evidencing debt for borrowed money in a

 

10

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principal amount of less than $5,000,000 (except to the extent such perfection
may be achieved solely by filing a UCC financing statement), (f) no actions in
any non-U.S. jurisdiction or required by the laws of any non-U.S. jurisdiction
shall be required, except as expressly provided in this Agreement, to be taken
to create any security interests in assets located or titled outside of the
United States (including any Equity Interests of Foreign Subsidiaries and any
Intellectual Property or real property owned by Foreign Subsidiaries) or to
perfect or make enforceable any security interests in any such assets, (g) no
actions shall be required to perfect a security interest in letter of credit
rights (other than the filing of UCC filings), (h) in no event shall the
Collateral include any Excluded Assets and (i) no delivery of share certificates
evidencing Equity Interests in Immaterial Subsidiaries shall be required. The
Administrative Agent may grant extensions of time for the creation and
perfection of security interests in or the obtaining of title insurance, legal
opinions or other deliverables with respect to particular assets or the
provision of any Guarantee by any Subsidiary (including extensions beyond the
Effective Date or in connection with assets acquired, or Subsidiaries formed or
acquired, after the Effective Date) where it determines that such action cannot
be accomplished without undue effort or expense by the time or times at which it
would otherwise be required to be accomplished by this Agreement or the Security
Documents.

“Commercial Letter of Credit” means any Letter of Credit issued for the purpose
of providing the primary payment mechanism in connection with the purchase of
any materials, goods or services by the Borrower or its Subsidiaries in the
ordinary course of business.

“Commitment” means with respect to any Lender, its Revolving Commitment,
Incremental Commitment or any combination thereof (as the context requires).

“Commitment Fee Rate” means a rate per annum equal to 0.25%; provided that,
commencing on the first date of the first fiscal quarter commencing after the
Effective Date and for any day thereafter, the Commitment Fee Rate shall be the
applicable rate per annum set forth below based upon the Average Revolving Loan
Utilization under the Facility as of the most recent Adjustment Date:

 

Average Revolving Loan Utilization

   Commitment Fee Rate  

Less than 50%

     0.375 % 

Greater than or equal to 50%

     0.25 % 

The Commitment Fee Rate shall be adjusted quarterly on each Adjustment Date
based upon the Average Revolving Loan Utilization under the Facility in
accordance with the table above; provided that if a Specified Event of Default
shall have occurred and be continuing at the time any reduction in the
Commitment Fee Rate would otherwise be implemented, then no such reduction shall
be implemented until the date on which such Specified Event of Default shall
have been cured or waived.

“Commitment Schedule” means Schedule 2.01.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Company Materials” has the meaning specified in Section 5.01.

“Compliance Certificate” means a Compliance Certificate in the form of Exhibit I
required to be delivered pursuant to Section 5.01(c).

 

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“Compliance Period” means any period beginning on the date that Specified Excess
Availability has been less than the greater of (a) 10% of the Total Maximum
Borrowing Amount and (b) $30,000,000 for three (3) consecutive Business Days,
until the date that Specified Excess Availability has been at least the greater
of (i) 10% of the Total Maximum Borrowing Amount and (ii) $30,000,000 for twenty
(20) consecutive calendar days.

“Consolidated EBITDA” means, for any period, the Consolidated Net Income for
such period, plus:

(a) without duplication and to the extent already deducted (and not added back)
in arriving at such Consolidated Net Income, the sum of the following amounts
for such period:

(i) total interest expense and, to the extent not reflected in such total
interest expense, any losses on hedging obligations or other derivative
instruments entered into for the purpose of hedging interest rate risk, net of
interest income and gains on such hedging obligations or such derivative
instruments, and bank and letter of credit fees and costs of surety bonds in
connection with financing activities, together with items excluded from the
definition of “Consolidated Interest Expense” pursuant to clauses (i) through
(x) thereof,

(ii) provision for taxes based on income, profits, revenue or capital gains,
including federal, foreign and state income, franchise, excise, value added and
similar taxes and foreign withholding taxes paid or accrued during such period
(including in respect of repatriated funds) including penalties and interest
related to such taxes or arising from any tax examinations, and any payments to
a direct or indirect parent company pursuant to Section 6.08(a)(vii) in respect
of such taxes,

(iii) depreciation and amortization (including amortization of Capitalized
Software Expenditures, internal labor costs and deferred financing fees or
costs),

(iv) other non-cash charges (other than any accrual in respect of bonuses)
(provided, in each case, that if any non-cash charges represent an accrual or
reserve for potential cash items in any future period, the cash payment in
respect thereof in such future period shall be subtracted from Consolidated
EBITDA to such extent, and excluding amortization of a prepaid cash item that
was paid in a prior period),

(v) the amount of any non-controlling interest consisting of income attributable
to non-controlling interests of third parties in any non-wholly-owned subsidiary
deducted (and not added back in such period to Consolidated Net Income)
excluding cash distributions in respect thereof,

(vi) (A) the amount of management, monitoring, consulting and advisory fees,
indemnities and related expenses paid or accrued in such period to (or on behalf
of) the Sponsors (including any termination fees payable in connection with the
early termination of management and monitoring agreements) to the extent
otherwise permitted under Section 6.09(x) and (B) the amount of payments made to
option holders of the Borrower or any of its direct or indirect parent companies
in connection with, or as a result of, any distribution being made to
shareholders of such person or its direct or indirect parent companies, which
payments are being made to compensate such option holders as though they were
shareholders at the time of, and entitled to share in, such distribution, in
each case to the extent permitted in the Loan Documents,

 

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(vii) losses or discounts on sales of receivables and related assets in
connection with any Permitted Receivables Financing,

(viii) cash receipts (or any netting arrangements resulting in reduced cash
expenditures) not included in the calculation of Consolidated Net Income in any
period to the extent non-cash gains relating to such income were deducted in the
calculation of Consolidated EBITDA pursuant to paragraph (c) below for any
previous period and not added back,

(ix) any costs or expenses incurred by the Borrower or any Restricted Subsidiary
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement, any severance agreement or any
stock subscription or shareholder agreement, to the extent that such costs or
expenses are non-cash or otherwise funded with cash proceeds contributed to the
capital of the Borrower or net cash proceeds of an issuance of Equity Interests
of the Borrower (other than Disqualified Equity Interests or relating to Equity
Interests constituting Cure Amounts), and

(x) any net pension or other post-employment benefit costs representing
amortization of unrecognized prior service costs, actuarial losses, including
amortization of such amounts arising in prior periods, amortization of the
unrecognized net obligation (and loss or cost) existing at the date of initial
application of FASB Accounting Standards Codification 715, and any other items
of a similar nature,

plus

(b) without duplication, the amount of “run rate” cost savings, operating
expense reductions and synergies related to the Transactions or any other
Specified Transaction, any restructuring, cost saving initiative or other
initiative projected by the Borrower in good faith to be realized as a result of
actions that have been taken or initiated or are expected to be taken (in the
good faith determination of the Borrower), including any cost savings, expenses
and charges (including restructuring and integration charges) in connection
with, or incurred by or on behalf of, any joint venture of the Borrower or any
of the Restricted Subsidiaries (whether accounted for on the financial
statements of any such joint venture or the Borrower) (i) with respect to the
Transactions, on or prior to the date that is 24 fiscal months after the
Effective Date (including actions initiated prior to the Effective Date) and
(ii) with respect to any other Specified Transaction, any restructuring, cost
saving initiative or other initiative, within 24 fiscal months after such
Specified Transaction, restructuring, cost saving initiative or other initiative
(which cost savings shall be added to Consolidated EBITDA until fully realized
and calculated on a Pro Forma Basis as though such cost savings had been
realized on the first day of the relevant period), net of the amount of actual
benefits realized from such actions; provided that (A) such cost savings are
reasonably identifiable and factually supportable, (B) no cost savings,
operating expense reductions or synergies shall be added pursuant to this clause
(b) to the extent duplicative of any expenses or charges relating to such cost
savings, operating expense reductions or synergies that are included in clause
(a) above (it being understood and agreed that “run rate” shall mean the full
recurring benefit that is associated with any action taken) and (C) the share of
any such cost savings, expenses and charges with respect to a joint venture that
are to be allocated to the Borrower or any of the Restricted Subsidiaries shall
not exceed the total amount thereof for any such joint venture multiplied by the
percentage of income of such venture expected to be included in Consolidated
EBITDA for the relevant Test Period;

 

13

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less

(c) without duplication and to the extent included in arriving at such
Consolidated Net Income, the sum of the following amounts for such period:

(i) non-cash gains (excluding any non-cash gain to the extent it represents the
reversal of an accrual or reserve for a potential cash item that reduced
Consolidated Net Income or Consolidated EBITDA in any prior period),

(ii) the amount of any non-controlling interest consisting of loss attributable
to non-controlling interests of third parties in any non-wholly-owned subsidiary
added (and not deducted in such period from Consolidated Net Income),

in each case, as determined on a consolidated basis for the Borrower and the
Restricted Subsidiaries in accordance with GAAP; provided that,

(I) there shall be included in determining Consolidated EBITDA for any period,
without duplication, the Acquired EBITDA of any Person, property, business or
asset acquired by the Borrower or any Restricted Subsidiary during such period
(other than any Unrestricted Subsidiary) whether such acquisition occurred
before or after the Effective Date to the extent not subsequently sold,
transferred or otherwise disposed of (but not including the Acquired EBITDA of
any related Person, property, business or assets to the extent not so acquired)
(each such Person, property, business or asset acquired, including pursuant to
the Transactions or pursuant to a transaction consummated prior to the Effective
Date, and not subsequently so disposed of, an “Acquired Entity or Business”),
and the Acquired EBITDA of any Unrestricted Subsidiary that is converted into a
Restricted Subsidiary during such period (each, a “Converted Restricted
Subsidiary”), in each case based on the Acquired EBITDA of such Pro Forma Entity
for such period (including the portion thereof occurring prior to such
acquisition or conversion) determined on a historical Pro Forma Basis, and

(II) there shall be (A) excluded in determining Consolidated EBITDA for any
period the Disposed EBITDA of any Person, property, business or asset (other
than any Unrestricted Subsidiary) sold, transferred or otherwise disposed of,
closed or classified as discontinued operations by the Borrower or any
Restricted Subsidiary during such period (but if such operations are classified
as discontinued due to the fact that they are subject to an agreement to dispose
of such operations, only when and to the extent such operations are actually
disposed of) (each such Person, property, business or asset so sold, transferred
or otherwise disposed of, closed or classified, a “Sold Entity or Business”),
and the Disposed EBITDA of any Restricted Subsidiary that is converted into an
Unrestricted Subsidiary during such period (each, a “Converted Unrestricted
Subsidiary”), in each case based on the Disposed EBITDA of such Sold Entity or
Business or Converted Unrestricted Subsidiary for such period (including the
portion thereof occurring prior to such sale, transfer, disposition, closure,
classification or conversion) determined on a historical Pro Forma Basis and
(B) included in determining Consolidated EBITDA for any period in which a Sold
Entity or Business is disposed, an adjustment equal to the Pro Forma Disposal
Adjustment with respect to such Sold Entity or Business (including the portion
thereof occurring prior to such disposal) as specified in the Pro Forma Disposal
Adjustment certificate delivered to the Administrative Agent (for further
delivery to the Lenders).

 

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Notwithstanding the foregoing, for all purposes of this Agreement, Consolidated
EBITDA shall be deemed to equal (a) ($51,509,000) for the fiscal quarter ended
March 31, 2018, (b) ($53,410,000) for the fiscal quarter ended June 30, 2018,
(c) ($68,633,000) for the fiscal quarter ended September 30, 2018 and (d)
($55,355,000) for the fiscal quarter ended December 31, 2018, in each case and,
without duplication, adjusted to reflect any Pro Forma Adjustment with respect
to any relevant Specified Transaction or any restructuring, cost saving
initiative or other initiative, in each case, occurring or identified after the
Effective Date and not otherwise included in the calculation of the foregoing
amounts.

“Consolidated First Lien Debt” means Consolidated Total Debt that is not
Subordinated Indebtedness and is secured by Liens on the Collateral on an equal
or senior priority basis (but without regard to the control of remedies) with
Liens securing the Secured Obligations. For the avoidance of doubt, (a) any
Indebtedness under the Facility shall constitute First Lien Debt and
(b) Consolidated First Lien Debt shall be reduced, without duplication, by the
amount of cash and Permitted Investments reducing Consolidated Total Debt as of
the relevant date of determination.

“Consolidated Interest Expense” means the sum of (a) cash interest expense
(including that attributable to Capitalized Leases), net of cash interest income
of the Borrower and the Restricted Subsidiaries with respect to all outstanding
Indebtedness of the Borrower and the Restricted Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under hedging
agreements plus (b) non-cash interest expense resulting solely from the
amortization of original issue discount from the issuance of Indebtedness of the
Borrower and the Restricted Subsidiaries (excluding Indebtedness borrowed
hereunder in connection with the Transactions) at less than par, plus
(c) pay-in-kind interest expense of the Borrower and the Restricted
Subsidiaries, but excluding, for the avoidance of doubt, (i) amortization of
deferred financing costs, debt issuance costs, commissions, fees and expenses
and any other amounts of non-cash interest other than referred to in clause
(b) above (including as a result of the effects of acquisition method accounting
or pushdown accounting), (ii) non-cash interest expense attributable to the
movement of the mark-to-market valuation of obligations under hedging agreements
or other derivative instruments pursuant to FASB Accounting Standards
Codification No. 815-Derivatives and Hedging, (iii) any one-time cash costs
associated with breakage in respect of hedging agreements for interest rates,
(iv) commissions, discounts, yield, make whole premium and other fees and
charges (including any interest expense) incurred in connection with any
Permitted Receivables Financing, (v) any “additional interest” owing pursuant to
a registration rights agreement with respect to any securities, (vi) any
payments with respect to make-whole premiums or other breakage costs of any
Indebtedness, including, without limitation, any Indebtedness issued in
connection with the Transactions, (vii) penalties and interest relating to
taxes, (viii) accretion or accrual of discounted liabilities not constituting
Indebtedness, (ix) interest expense attributable to a direct or indirect parent
entity resulting from push-down accounting, (x) any expense resulting from the
discounting of Indebtedness in connection with the application of
recapitalization or purchase accounting and (xi) any interest expense
attributable to the exercise of appraisal rights and the settlement of any
claims or actions (whether actual, contingent or potential) with respect thereto
and with respect to any Permitted Acquisition or similar Investment permitted
hereunder, all as calculated on a consolidated basis in accordance with GAAP.

For purposes of this definition, interest on a Capitalized Lease shall be deemed
to accrue at an interest rate reasonably determined by the Borrower to be the
rate of interest implicit in such Capitalized Lease in accordance with GAAP.

 

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“Consolidated Net Income” means, for any period, the net income (loss) of the
Borrower and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, excluding (and excluding the effect
of), without duplication:

(a) extraordinary, non-recurring or unusual gains or losses (less all fees and
expenses relating thereto) or expenses (including any unusual or non-recurring
operating expenses directly attributable to the implementation of cost savings
initiatives and any accruals or reserves in respect of any extraordinary,
non-recurring or unusual items), severance, relocation costs, integration and
facilities’ opening costs and other business optimization expenses (including
related to new product introductions and other strategic or cost savings
initiatives), restructuring charges, accruals or reserves (including
restructuring and integration costs related to acquisitions and adjustments to
existing reserves), whether or not classified as restructuring expense on the
consolidated financial statements, signing costs, retention or completion
bonuses, other executive recruiting and retention costs, transition costs, costs
related to closure/consolidation of facilities and curtailments or modifications
to pension and post-retirement employee benefit plans (including any settlement
of pension liabilities and charges resulting from changes in estimates,
valuations and judgments),

(b) the cumulative effect of a change in accounting principles during such
period to the extent included in Consolidated Net Income,

(c) Transaction Costs,

(d) the net income for such period of any Person that is an Unrestricted
Subsidiary and any Person that is not a Subsidiary or that is accounted for by
the equity method of accounting; provided that Consolidated Net Income shall be
increased by the amount of dividends or distributions or other payments that are
actually paid in cash or Permitted Investments (or, if not paid in cash or
Permitted Investments, but later converted into cash or Permitted Investments,
upon such conversion) by such Person to the Borrower or a Restricted Subsidiary
thereof during such period,

(e) any fees and expenses (including any transaction or retention bonus or
similar payment) incurred during such period, or any amortization thereof for
such period, in connection with any acquisition, Investment, asset disposition,
issuance or repayment of debt, issuance of equity securities, refinancing
transaction or amendment or other modification of any debt instrument (in each
case, including any such transaction consummated prior to the Effective Date and
any such transaction undertaken but not completed) and any charges or
non-recurring merger costs incurred during such period as a result of any such
transaction, in each case whether or not successful (including, for the
avoidance of doubt, the effects of expensing all transaction-related expenses in
accordance with FASB Accounting Standards Codification 805 and gains or losses
associated with FASB Accounting Standards Codification 460),

(f) any income (loss) for such period attributable to the early extinguishment
of Indebtedness, hedging agreements or other derivative instruments,

(g) accruals and reserves that are established or adjusted as a result of the
Transactions in accordance with GAAP (including any adjustment of estimated
payouts on existing earn-outs) or changes as a result of the adoption or
modification of accounting policies during such period,

(h) all Non-Cash Compensation Expenses,

(i) any income (loss) attributable to deferred compensation plans or trusts,

 

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(j) any income (loss) from investments recorded using the equity method of
accounting (but including any cash dividends or distributions actually received
by the Borrower or any Restricted Subsidiary in respect of such investment),

(k) any gain (loss) on asset sales, disposals or abandonments (other than asset
sales, disposals or abandonments in the ordinary course of business) or income
(loss) from discontinued operations (but if such operations are classified as
discontinued due to the fact that they are subject to an agreement to dispose of
such operations, only when and to the extent such operations are actually
disposed of),

(l) any non-cash gain (loss) attributable to the mark to market movement in the
valuation of hedging obligations or other derivative instruments pursuant to
FASB Accounting Standards Codification 815-Derivatives and Hedging or mark to
market movement of other financial instruments pursuant to FASB Accounting
Standards Codification 825-Financial Instruments; provided that any cash
payments or receipts relating to transactions realized in a given period shall
be taken into account in such period,

(m) any non-cash gain (loss) related to currency remeasurements of Indebtedness
(including the net loss or gain resulting from hedging agreements for currency
exchange risk and revaluations of intercompany balances),

(n) any non-cash expenses, accruals or reserves related to adjustments to
historical tax exposures (provided, in each case, that the cash payment in
respect thereof in such future period shall be subtracted from Consolidated Net
Income for the period in which such cash payment was made), and

(o) any impairment charge or asset write-off or write-down (including related to
intangible assets (including goodwill), long-lived assets, and investments in
debt and equity securities).

There shall be excluded from Consolidated Net Income for any period the effects
from applying acquisition method accounting, including applying acquisition
method accounting to inventory, property and equipment, loans and leases,
software and other intangible assets and deferred revenue (including deferred
costs related thereto and deferred rent) required or permitted by GAAP and
related authoritative pronouncements (including the effects of such adjustments
pushed down to the Borrower and the Restricted Subsidiaries), as a result of the
Transactions, any acquisition consummated prior to the Effective Date and any
Permitted Acquisitions or other Investment or the amortization or write-off of
any amounts thereof.

In addition, to the extent not already included in Consolidated Net Income,
Consolidated Net Income shall include the amount of proceeds received or, so
long as such Person has made a determination that there exists reasonable
evidence that such amount will in fact be reimbursed by the insurer or
indemnifying party and only to the extent that such amount is in fact reimbursed
within 365 days of the date of the insurable or indemnifiable event (net of any
amount so added back in any prior period to the extent not so reimbursed within
the applicable 365-day period), due from business interruption insurance or
reimbursement of expenses and charges that are covered by indemnification and
other reimbursement provisions in connection with any acquisition or other
Investment or any disposition of any asset permitted hereunder.

“Consolidated Secured Debt” means Consolidated Total Debt that is not
Subordinated Indebtedness and is secured by a Lien on the Collateral. For the
avoidance of doubt, Consolidated Secured Debt shall be reduced, without
duplication, by the amount of cash and Permitted Investments reducing
Consolidated Total Debt as of the relevant date of determination.

 

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“Consolidated Total Assets” means, as at any date of determination, the amount
that would be set forth opposite the caption “total assets” (or any like
caption) on the most recent consolidated balance sheet of the Borrower and the
Restricted Subsidiaries in accordance with GAAP.

“Consolidated Total Debt” means, as of any date of determination (i) the
outstanding principal amount of all third party Indebtedness for borrowed money
(including purchase money Indebtedness), unreimbursed drawings under letters of
credit, Capital Lease Obligations, third party Indebtedness obligations
evidenced by notes or similar instruments and, without duplication, Receivables
Guarantees, in each case of the Borrower and the Restricted Subsidiaries on such
date, on a consolidated basis and determined in accordance with GAAP (excluding,
in any event, the effects of any discounting of Indebtedness resulting from the
application of acquisition method accounting in connection with the Transactions
or any Permitted Acquisition or other Investment) minus (ii) the aggregate
amount of cash and Permitted Investments on the consolidated balance sheet of
the Borrower and the Restricted Subsidiaries on such date to the extent the use
thereof for the application to the payment of Indebtedness is not prohibited by
law or any contract to which the Borrower and any Restricted Subsidiary is a
party (which, for the avoidance of doubt, shall include all Qualified Cash so
long as no Cash Dominion Event is continuing). It is understood that (x) the
foregoing clause (ii) shall not apply in respect of any calculation hereunder of
the Fixed Charge Coverage Ratio and (y), to the extent the Borrower or any
Restricted Subsidiary incurs any Indebtedness and receives the proceeds of such
Indebtedness, for purposes of determining any incurrence test under this
Agreement and whether the Borrower is in Pro Forma Compliance with any such
test, the proceeds of such incurrence may be considered cash or Permitted
Investments for purposes of any “netting” pursuant to clause (ii) of this
definition to the extent not promptly applied to the transaction financed in
connection with such incurrence.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies, or the dismissal or
appointment of the management, of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

“Control Agreement” has the meaning assigned to such term in Section 5.17(a).

“Controlled Accounts” has the meaning assigned to such term in Section 5.17(a).

“Converted Restricted Subsidiary” has the meaning given such term in the
definition of “Consolidated EBITDA.”

“Converted Unrestricted Subsidiary” has the meaning given such term in the
definition of “Consolidated EBITDA.”

“Cost” means the cost of purchase of Inventory determined according to the
accounting policies used in the preparation of the Borrower’s audited financial
statements.

“Covered Party” has the meaning specified in Section 9.21(a).

“Cure Amount” has the meaning assigned to such term in Section 7.03(a).

“Cure Expiration Date” has the meaning assigned to such term in Section 7.03(a).

“Cure Right” has the meaning assigned to such term in Section 7.03(a).

 

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“Customs Broker/Carrier Agreement” means an agreement in form and substance
reasonably satisfactory to the Administrative Agent among the Borrower, a
customs broker, freight forwarder, consolidator or carrier, and the
Administrative Agent, in which the customs broker, freight forwarder,
consolidator or carrier acknowledges that it has control over and holds the
documents evidencing ownership of the subject inventory for the benefit of the
Administrative Agent and agrees, upon notice from the Administrative Agent, to
hold and dispose of the subject inventory solely as directed by the
Administrative Agent.

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

“Default” means any event or condition that constitutes an Event of Default or
that upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.

“Defaulting Lender” means any Lender that has (a) failed to fund any portion of
its Loans or participations in Letters of Credit or Swingline Loans within two
Business Days of the date on which such funding is required hereunder,
(b) notified the Borrower, the Administrative Agent, any Issuing Bank, any
Swingline Lender or any Lender in writing that it does not intend to comply with
any of its funding obligations under this Agreement or has made a public
statement or provided any written notification to any Person to the effect that
it does not intend to comply with its funding obligations under this Agreement,
(c) failed, within three Business Days after request by the Administrative Agent
(whether acting on its own behalf or at the reasonable request of the Borrower
(it being understood that the Administrative Agent shall comply with any such
reasonable request)), to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective Loans and
participations in then outstanding Letters of Credit and Swingline Loans,
(d) otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within two Business Days of
the date when due, in each case unless the subject of a good faith dispute or
subsequently cured, (e)(i) become or is insolvent or has a parent company that
has become or is insolvent or (ii) become the subject of a bankruptcy or
insolvency proceeding or any action or proceeding of the type described in
Section 7.01(h) or (i), or has had a receiver, interim receiver, monitor,
conservator, trustee, administrator, assignee for the benefit of creditors,
examiner, liquidator or similar Person charged with reorganization or
liquidation of its business or custodian, appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, interim receiver, monitor, conservator, trustee, administrator,
assignee for the benefit of creditors, examiner, liquidator or similar Person
charged with reorganization or liquidation of its business or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment or
(f) or has a direct or indirect parent company that has become the subject of a
Bail-In Action.

“Deposit Account” has the meaning assigned to such term in the Uniform
Commercial Code in the state of New York.

“Designated Disbursement Account” has the meaning assigned to such term in
Section 5.17(d).

“Designated Non-Cash Consideration” means the Fair Market Value of non-cash
consideration received by the Borrower or a Subsidiary in connection with a
Disposition pursuant to Section 6.05(k) that is designated as Designated
Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the
Borrower, setting forth the basis of such valuation (which amount will be
reduced by the Fair Market Value of the portion of the non-cash consideration
converted to cash within 180 days following the consummation of the applicable
Disposition).

 

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“Determination Date” means, (a) with respect to any Letter of Credit denominated
in a currency other than Dollars, (i) each date of issuance of such Letter of
Credit and (ii) each date of any amendment of such Letter of Credit that would
have the effect of increasing the face amount thereof; and (b) such additional
dates as the Administrative Agent or the respective Issuing Bank determine in
its reasonable discretion.

“Dilution Percentage” means the percent equal to (a) bad debt write-downs or
write-offs, discounts, returns, promotions, credits, credit memos, charge backs
and other dilutive items with respect to Eligible Credit Card Receivables or
Eligible Receivables, as the case may be, divided by (b) gross sales, determined
based on information contained in the most recent field examination (or, in the
Permitted Discretion of the Administrative Agent, based on updated information
provided to the Administrative Agent by the Borrower).

“Dilution Reserve” means an amount equal to the amount of Eligible Credit Card
Receivables or Eligible Receivables under the Facility, multiplied by the
percentage by which the Dilution Percentage exceeds 5%.

“Disposed EBITDA” means, with respect to any Sold Entity or Business or
Converted Unrestricted Subsidiary for any period, the amount for such period of
Consolidated EBITDA of such Sold Entity or Business or Converted Unrestricted
Subsidiary (determined as if references to the Borrower and the Restricted
Subsidiaries in the definition of the term “Consolidated EBITDA” (and in the
component financial definitions used therein) were references to such Sold
Entity or Business and its subsidiaries or to such Converted Unrestricted
Subsidiary and its subsidiaries), all as determined on a consolidated basis for
such Sold Entity or Business or Converted Unrestricted Subsidiary.

“Disposition” has the meaning assigned to such term in Section 6.05.

“Disqualified Equity Interest” means, with respect to any Person, any Equity
Interest in such Person that by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable, either mandatorily or
at the option of the holder thereof), or upon the happening of any event or
condition:

(a) matures or is mandatorily redeemable (other than solely for Equity Interests
in such Person that do not constitute Disqualified Equity Interests and cash in
lieu of fractional shares of such Equity Interests), whether pursuant to a
sinking fund obligation or otherwise;

(b) is convertible or exchangeable, either mandatorily or at the option of the
holder thereof, for Indebtedness or Equity Interests (other than solely for
Equity Interests in such Person that do not constitute Disqualified Equity
Interests and cash in lieu of fractional shares of such Equity Interests); or

(c) is redeemable (other than solely for Equity Interests in such Person that do
not constitute Disqualified Equity Interests and cash in lieu of fractional
shares of such Equity Interests) or is required to be repurchased by such Person
or any of its Affiliates, in whole or in part, at the option of the holder
thereof;

 

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in each case, on or prior to the date 91 days after the Latest Maturity Date;
provided, however, that (i) an Equity Interest in any Person that would not
constitute a Disqualified Equity Interest but for terms thereof giving holders
thereof the right to require such Person to redeem or purchase such Equity
Interest upon the occurrence of an “asset sale,” a “change of control” or
similar event shall not constitute a Disqualified Equity Interest if any such
requirement becomes operative only after repayment in full of all the Loans and
all other Loan Document Obligations that are accrued and payable and the
termination of the Commitments and the termination of all outstanding Letters of
Credit (other than Letters of Credit that have been cash collateralized on terms
set forth in Section 2.24(i) or back-stopped following the termination of the
Commitments in a manner reasonably satisfactory to the applicable Issuing Banks)
and (ii) if an Equity Interest in any Person is issued pursuant to any plan for
the benefit of employees of the Borrower (or any direct or indirect parent
thereof) or any of the Subsidiaries or by any such plan to such employees, such
Equity Interest shall not constitute a Disqualified Equity Interest solely
because it may be required to be repurchased by the Borrower (or any direct or
indirect parent company thereof) or any of the Subsidiaries in order to satisfy
applicable statutory or regulatory obligations of such Person.

“Disqualified Lenders” means (a) those Persons identified by a Sponsor or the
Borrower to the Joint Bookrunners in writing prior to June 18, 2019 (or, if
identified in writing after such date but prior to the date hereof, with the
consent of Joint Bookrunners holding at least a majority of the financing
commitments as of June 18, 2019), (b) those Persons who are competitors of the
Borrower and its Subsidiaries identified by a Sponsor or the Borrower to the
Administrative Agent from time to time in writing (including by email) and
(c) in the case of each Persons identified pursuant to clauses (a) and (b)
above, any of their Affiliates that are either (i) identified in writing by the
Borrower or a Sponsor from time to time or (ii) known or reasonably identifiable
as Affiliates (other than, in the case of this clause (ii), Affiliates that are
bona fide debt funds); provided, that no designation of any Person as a
Disqualified Lender shall retroactively disqualify any assignments or
participations made to, or information provided to, such Person before it was
designated as a Disqualified Lender, and such Person shall not be deemed to be a
Disqualified Lender in respect of any assignments or participations made to such
Person prior to the date of such designation.

“Document” has the meaning assigned to such term in the Collateral Agreement.

“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount in Dollars, and (b) with respect to any
amount denominated in any other currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent at such time in accordance
with Section 1.06 hereof.

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary that is incorporated or organized
under the laws of a State within the United States of America or the District of
Columbia.

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit, including by electronic
transmission such as SWIFT, electronic mail, facsimile or computer generated
communication.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

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“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund and (d) any other Person other than, in each case, (i) a natural
person, (ii) a Defaulting Lender, (iii) a Disqualified Lender or (iv) any
Sponsor, the Borrower or any of their respective Affiliates.

“Eligible Credit Card Receivables” means, as of any date of determination,
Receivables and Payment Intangibles due to a Loan Party from major credit card
processors (including, without limitation, VISA, Mastercard, American Express,
Diners Club, Carte Blanche and DiscoverCard) as arise in the ordinary course of
business and which have been earned by performance, that, unless otherwise
approved by the Administrative Agent in its Permitted Discretion, meet all of
the following requirements:

(a) such Receivable or Payment Intangible has not been outstanding for more than
seven Business Days from the date of sale or for such longer period as may be
approved by the Administrative Agent;

(b) a Loan Party has good, valid and marketable title to such Receivable or
Payment Intangible;

(c) such Receivable or Payment Intangible is not subject to any other Lien other
than Liens permitted by Section 6.02, and such Liens do not have priority over
the Lien of the Administrative Agent and are junior to the Lien of the
Administrative Agent (other than inchoate or other Liens (including tax Liens)
arising by operation of law so long as the Administrative Agent has established
a Reserve in respect thereof in its Permitted Discretion);

(d) such Receivable or Payment Intangible is not disputed, or with respect to
which no claim, counterclaim, offset or chargeback has been asserted, by the
related credit card processor (but only to the extent of such dispute,
counterclaim, offset or chargeback) (it being the intent that chargebacks in the
ordinary course by the credit card processors shall not be deemed violative of
this clause); and

(e) if such Receivable or Payment Intangible is due to a Loan Party from a major
credit card processor other than VISA, Mastercard, American Express, Diners
Club, Carte Blanche or DiscoverCard, the Administrative Agent, in its Permitted
Discretion, has not determined that such Receivable or Payment Intangible is
unlikely to be collected.

“Eligible In-Transit Inventory” means Inventory (other than Eligible Letter of
Credit Inventory) owned by a Loan Party that would be Eligible Inventory under
clause (2) of such definition if it were not in transit from a foreign location
to a location of such Loan Party within the United States. Without limiting the
foregoing, no Inventory shall be Eligible In-Transit Inventory unless it (a) has
cleared customs into the United States; (b) is insured in accordance with the
provisions of this Agreement and the other Loan Documents; (c) has been
identified to the applicable sales contract and title has passed to the
applicable Loan Party; (d) is not sold by a vendor that has a right to reclaim,
divert shipment of, repossess, stop delivery, claim any reservation of title or
otherwise assert Lien rights against the

 

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Inventory, or with respect to whom any Loan Party is in default of any
obligations; (e) is subject to customary purchase orders and other sale
documentation consistent with such Loan Party’s ordinary course of dealing;
(f) is shipped by a common carrier that is not affiliated with the vendor; and
(g) is subject to documents of title evidencing ownership thereof over which the
Administrative Agent has control (such as, if requested by the Administrative
Agent, by the delivery of a Customs Broker/Carrier Agreement).

“Eligible Inventory” means (1) Eligible Letter of Credit Inventory and Eligible
In-Transit Inventory and (2) items of Inventory of the Loan Parties subject to
the Lien in favor of the Administrative Agent held for sale in the ordinary
course of the business of the Loan Parties (but not including packaging or
shipping materials or maintenance supplies) that, unless otherwise approved by
the Administrative Agent in its Permitted Discretion, meet all of the following
requirements:

(a) such Inventory is owned by a Loan Party and is subject to a perfected Lien
in favor of the Administrative Agent and not subject to any other Lien other
than Liens permitted by Section 6.02, and such Liens do not have priority over
the Lien of the Administrative Agent and are junior to the Lien of the
Administrative Agent (other than an inchoate or other Liens (including tax
Liens) arising by operation of law so long as either (A) the Administrative
Agent has established a Reserve in respect thereof in its Permitted Discretion
or (B) the relevant Loan Party has provided a Collateral Access Agreement
pursuant to clause (g) or (h) below);

(b) such Inventory consists of finished goods and does not consist of raw
materials, work in progress, supplies, live animals or consigned goods; provided
that raw materials or work-in-progress shall not be deemed ineligible under this
clause (b) to the extent the most recent inventory appraisal delivered to the
Administrative Agent ascribes a value thereto;

(c) such Inventory is in good condition and meets in all material respects all
material standards applicable to such goods, their use or sale imposed by any
Governmental Authority having regulatory authority over such matters;

(d) such Inventory is currently either usable or saleable, at prices
approximating at least the Cost thereof, in the normal course of the Loan
Party’s business;

(e) such Inventory is not slow-moving, perishable, obsolete or unmerchantable,
and does not constitute returned or repossessed goods; provided that slow-moving
or obsolete inventory shall not be deemed ineligible under this clause (e) to
the extent the most recent inventory appraisal delivered to the Administrative
Agent ascribes a value to such slow-moving or obsolete inventory;

(f) such Inventory (other than any Eligible Letter of Credit Inventory and
Eligible In-Transit Inventory) is either (x) located within the United States at
one of the Permitted Inventory Locations; provided that such Inventory at any
Permitted Inventory Location is in excess of $100,000 or (y) is in transit
within the United States;

(g) such Inventory is not located on leased premises or in the possession of a
vendor, warehouseman, processor, repairman, mechanic, shipper, freight forwarder
or other Person, unless (i) the lessor or such Person has delivered to the
Administrative Agent a Collateral Access Agreement or (ii) an appropriate Rent
Reserve with respect to such location has been established by the Administrative
Agent in its Permitted Discretion;

 

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(h) such Inventory is not subject to any warehouse receipt or negotiable
Document unless in the possession of the Administrative Agent, and if such
Inventory is located in any third party warehouse or is in the possession of a
bailee and is not evidenced by a Document, (i) such warehouseman or bailee has
delivered to the Administrative Agent a Collateral Access Agreement and such
other documentation as the Administrative Agent may reasonably require or
(ii) an appropriate Rent Reserve has been established by the Administrative
Agent in its Permitted Discretion;

(i) such Inventory is not subject to any Royalty or other similar arrangement
that restricts such Loan Party’s or Administrative Agent’s right to dispose of
such Inventory, unless (i) the Administrative Agent (A) has received a
Collateral Access Agreement or (B) is otherwise satisfied that it could sell
such Inventory on favorable terms following an Event of Default or (ii) an
appropriate Royalty Reserve has been established by the Administrative Agent in
its Permitted Discretion.

With respect to any Inventory that was acquired or originated by any Person
acquired after the Effective Date, the Administrative Agent shall use
commercially reasonable efforts, at the expense of the Loan Parties, to complete
diligence in respect of such Person and such Inventory, within a reasonable time
following request of the Borrower.

“Eligible Letter of Credit Inventory” means as of the date of determination
thereof, without duplication of other Eligible Inventory, Inventory, (a) the
purchase of which is supported by a Commercial Letter of Credit having an expiry
within one hundred twenty (120) days of such date of determination, which
Commercial Letter of Credit provides for documentary requirements to include a
document of title showing the applicable Loan Party as consignee (except as
otherwise reasonably agreed by the Administrative Agent) and, beginning with the
181st day after the Effective Date, as to which the Administrative Agent has
control over the documents of title, to the extent applicable, which evidence
ownership of the subject Inventory, and (b) which otherwise would constitute
Eligible Inventory under clause (2) thereof.

“Eligible Receivable” means the unpaid portion of a Receivable payable in a
Permitted Currency to a Loan Party subject to the Lien in favor of the
Administrative Agent, which Receivable, unless otherwise approved by the
Administrative Agent in its Permitted Discretion, meets all of the following
requirements:

(a) such Receivable is owned by a Loan Party and represents a complete bona fide
transaction which requires no further act under any circumstances on the part of
a Loan Party to make such Receivable payable by the Account Debtor and, for the
avoidance of doubt, in the case of a Receivable related to goods shipped where
title to such goods passes to the customer upon receipt of the goods, such
transaction shall not be deemed a bona fide transaction requiring no further act
until such goods have been received by the customer;

(b) such Receivable is not past due more than 90 days after its due date or
later than 120 days after the invoice date; provided that in calculating
delinquent portions of Receivables, credit balances which are unapplied for more
than 90 days shall not reduce the past due portion of the Receivables balance;

(c) such Receivable does not arise out of any transaction with any Loan Party,
Excluded Subsidiary, or any Affiliate of any of the foregoing, other than
Receivables arising out of transactions with domestic Affiliates of the Sponsor
(other than the Borrower or any Subsidiary thereof), which Receivables (i) arise
from arms-length transactions entered to in the ordinary course of business upon
standard market terms and (ii) would otherwise be Eligible Receivables
hereunder;

 

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(d) such Receivable is not owing by an Account Debtor from which an aggregate
amount of more than 50% of the Receivables owing therefrom are (i) based on the
most recent Borrowing Base Certificate, not Eligible Receivables pursuant to
clause (b) above or (ii) based on the most recent Borrowing Base Certificate,
past due more than 90 days after their applicable due date or later than 120
days after their applicable invoice date;

(e) such Receivables are due within no more than 360 days after the invoice
date; provided that such Receivables due more than 90 days after the invoice
date may be included as part of the Borrowing Base in an aggregate amount not to
exceed $20,000,000; and provided further, that only 70% of the value of such
Receivables shall be included in the Borrowing Base;

(f) if the Account Debtor with respect thereto is located outside of the United
States, the goods which gave rise to such Receivable were shipped after receipt
by the applicable Loan Party from the Account Debtor of an irrevocable letter of
credit that has been confirmed by a financial institution reasonably acceptable
to the Administrative Agent, and on terms, reasonably acceptable to the
Administrative Agent, payable in the full face amount of the face value of the
Receivable in a Permitted Currency at a place of payment located within the
United States and has been duly assigned to the Administrative Agent;

(g) the Account Debtor with respect to such Receivable is not a Sanctioned
Person or Sanctioned Entity;

(h) such Receivable is not a billing for interest, fees or late charges;

(i) such Receivable (i) is a valid, legally enforceable obligation of the
Account Debtor with respect thereto and (ii) is not disputed, is not subject to
a claim, counterclaim, discount, deduction, reserve, allowance for rebate, other
allowance recoupment, offset (including potential offsets associated with core
deposits) or chargeback that has been asserted with respect thereto by the
applicable Account Debtor (any such item, a “Contra Account”) (but only to the
extent of such Contra Account (with such Contra Account being valued at the
lesser of (x) such Receivable and (y) such asserted claim, counterclaim,
discount, deduction, reserve, allowance for rebate, other allowance recoupment,
offset or chargeback), and is not subject to offset or reduction based upon cash
received by such Loan Party but not yet applied against such Receivable;

(j) such Receivable is not owed by an Account Debtor that is subject to a
proceeding under any Debtor Relief Law or that is liquidating, dissolving or
winding up its affairs;

(k) the goods the sale of which gave rise to such Receivable were shipped or
delivered to the Account Debtor on an absolute sale basis and not on a bill and
hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or
return basis or on the basis of any other similar understanding, and such goods
have not been returned or rejected;

(l) such Receivable is not owing by an Account Debtor whose then-existing
Receivables owing to the Loan Parties, based on the most recent Borrowing Base
Certificate, exceed 20% of the net amount of all Eligible Receivables, but such
Receivable shall be ineligible only to the extent of such excess;

(m) such Receivable is evidenced by a customary invoice or other customary
documentation reasonably satisfactory to the Administrative Agent in its
Permitted Discretion;

(n) such Receivable is not evidenced by Chattel Paper or an Instrument of any
kind;

 

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(o) such Receivable is capable of being secured in favor of the Administrative
Agent and is subject to a first priority perfected Lien in favor of the
Administrative Agent;

(p) such Receivable has not been pledged to the lenders or any other credit
providers under, and is not included in the calculation of availability under,
any other receivables facility, whether or not a Permitted Receivables
Financing;

(q) such Receivable is not due to a Loan Party from VISA, Mastercard, American
Express, Diners Club, Carte Blanche and DiscoverCard (or any other credit card
processor); and

(r) such Receivable is not subject to any Lien other than Liens permitted by
Section 6.02 and such Liens do not have priority over the Lien of the
Administrative Agent and are junior to the Lien of the Administrative Agent
(other than inchoate or other Liens (including tax Liens) arising by operation
of law so long as the Administrative Agent has established a Reserve in respect
thereof in its Permitted Discretion).

With respect to any Receivables that were acquired or originated by any Person
acquired by the Borrower after the Effective Date, the Administrative Agent
shall use commercially reasonable efforts, at the expense of the Loan Parties,
to complete diligence in respect of such Person and such Receivables, within a
reasonable time following request of the Borrower. Notwithstanding anything in
this Agreement to the contrary, warehouse acceptance deferrals, re-bills,
unapplied cash and customer deposits, in each case, of any Loan Party will be
calculated and reflected in the Borrowing Base as of the end the last fiscal
month of each fiscal quarter of the Borrower and, with respect to each fiscal
month thereafter until the next such quarterly calculation, the Borrowing Base
shall be updated to reflect an equivalent percentage of the aggregate Value of
Receivables for each such item for such fiscal month based on the aggregate
Value of Receivables reflected in the calculation for such prior fiscal quarter
end.

“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

“Environmental Laws” means applicable common law, codes, ordinances and
judgments and other applicable Requirements of Law, and all applicable
injunctions or binding agreements issued, promulgated or entered into by or with
any Governmental Authority, in each instance relating to the protection of the
environment, including with respect to the preservation or reclamation of
natural resources or the Release or threatened Release of any Hazardous
Material, or to the extent relating to exposure to Hazardous Materials, the
protection of human health or safety.

“Environmental Liability” means any liability, obligation, loss, claim, action,
order or cost, contingent or otherwise (including any liability for damages,
costs of medical monitoring, costs of environmental remediation or restoration,
administrative oversight costs, consultants’ fees, fines, penalties and
indemnities), of or relating to the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law or permit, license or approval issued thereunder, (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 or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.

 

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“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, together with any Loan Party, is treated as a single employer under
Section 414(b) or 414(c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30 day notice period is waived); (b) any failure by any Plan
to satisfy the minimum funding standards (within the meaning of Section 412 or
Section 430 of the Code or Section 302 of ERISA) applicable to such Plan,
whether or not waived; (c) the filing pursuant to Section 412 of the Code or
Section 302 of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) a determination that any Plan is, or is
expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or
Section 430(i)(4) of the Code); (e) the incurrence by a Loan Party or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (f) the receipt by a Loan Party or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(g) the incurrence by a Loan Party or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan
(including any liability under Section 4062(e) of ERISA) or Multiemployer Plan;
or (h) the receipt by a Loan Party or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from a Loan Party or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA or in endangered or
critical status, within the meaning of Section 305 of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Euro” means the single currency of the European Union as constituted by the
Treaty on European Union and as referred to in the EMU Legislation.

“Eurocurrency” when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the LIBO Rate.

“Event of Default” has the meaning assigned to such term in Section 7.01.

“Excess Availability” means, at any time, an amount equal to (a) the Maximum
Borrowing Amount of the Facility at such time, minus (b) the aggregate Revolving
Exposures under the Facility (including the LC Exposure) of all Revolving
Lenders under the Facility at such time.

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended from time to time.

“Exchange Rate” means for a currency means the rate determined by the
Administrative Agent to be the rate quoted by the Person acting in such capacity
as the spot rate for the purchase by such Person of such currency with another
currency through its principal foreign exchange trading office at approximately
11:00 a.m. on the date two Business Days prior to the date of such
determination; provided that the Administrative Agent may obtain such spot rate
from another financial institution designated by the Administrative Agent if the
Person acting in such capacity does not have as of the date of determination a
spot buying rate for any such currency.

 

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“Excluded Account” has the meaning given such term in Section 5.17(d).

“Excluded Assets” means (a) any fee-owned real property, (b) all leasehold
interests in real property, (c) any governmental licenses or state or local
franchises, charters or authorizations, to the extent a security interest in any
such license, franchise, charter or authorization would be prohibited or
restricted thereby (including any legally effective prohibition or restriction,
but excluding any prohibition or restriction that is ineffective under the
Uniform Commercial Code or similar applicable law of any applicable
jurisdiction), (d) any asset if, to the extent that and for so long as the grant
of a Lien thereon to secure the Secured Obligations is prohibited by any
Requirements of Law (other than to the extent that any such prohibition would be
rendered ineffective pursuant to any other applicable Requirements of Law) or
would require consent or approval of any Governmental Authority, (e) margin
stock and, to the extent prohibited by, or creating an enforceable right of
termination in favor of any other party thereto under (other than any Loan
Party) the terms of any applicable Organizational Documents, joint venture
agreement or shareholders’ agreement, Equity Interests in any Person other than
wholly-owned Restricted Subsidiaries, (f) assets to the extent a security
interest in such assets would result in material adverse tax consequences to the
Borrower or one of its subsidiaries as reasonably determined by the Borrower in
consultation with the Administrative Agent, (g) any intent-to-use trademark
application prior to the filing of a “Statement of Use” or “Amendment to Allege
Use” with respect thereto, (h) any lease, license or other agreement or any
property subject thereto (including pursuant to a purchase money security
interest or similar arrangement) to the extent that a grant of a security
interest therein would violate or invalidate such lease, license or agreement or
purchase money arrangement or create a breach, default or right of termination
in favor of any other party thereto (other than any Loan Party) after giving
effect to the applicable anti-assignment provisions of the Uniform Commercial
Code or similar applicable law of any applicable jurisdiction, other than
proceeds and receivables thereof, the assignment of which is expressly deemed
effective under the Uniform Commercial Code or similar applicable law of any
applicable jurisdiction notwithstanding such prohibition, (i) solely with
respect to Security Documents, in excess of 65% of the voting Equity Interests
of (A) any Foreign Subsidiary or (B) any FSHCO, (j) receivables, and related
assets (or interests therein) (A) sold to any Receivables Subsidiary or
(B) otherwise pledged, factored, transferred or sold in connection with any
Permitted Receivables Financing, (k) commercial tort claims and letter-of-credit
rights, in each case with a value of less than $5,000,000 (except to the extent
a security interest therein can be perfected by a UCC or similar filing in the
applicable jurisdiction), (l) Vehicles and other assets subject to certificates
of title, (m) any aircraft, airframes, aircraft engines or helicopters, or any
Equipment or other assets constituting a part thereof and (n) any and all assets
and personal property owned by any Subsidiary that is not a Loan Party.

“Excluded Subsidiary” means (a) any Subsidiary that is not a wholly-owned
subsidiary of the Borrower, (b) each Subsidiary listed on Schedule 1.01(a), (c)
each Unrestricted Subsidiary, (d) each Immaterial Subsidiary, (e) any Subsidiary
that is prohibited by (i) applicable Requirements of Law or (ii) any contractual
obligation existing on the Effective Date or on the date any such Subsidiary is
acquired (so long in respect of any such contractual prohibition such
prohibition is not incurred in contemplation of such acquisition), in each case
from guaranteeing the Secured Obligations (but only for so long as such
restriction is continuing) or which would require governmental (including
regulatory) consent, approval, license or authorization to provide a Guarantee
under the Guarantee Agreement, or for which the provision of a Guarantee under
the Guarantee Agreement would result in a material adverse tax consequence
(including as a result of the operation of Section 956 of the Code or any
similar law or regulation in any applicable jurisdiction) to the Borrower or one
of its subsidiaries (as reasonably determined by the Borrower in consultation
with the Administrative Agent), (f) any Foreign Subsidiary, (g) any direct or
indirect Domestic Subsidiary of a direct or indirect Foreign Subsidiary of the
Borrower

 

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that is a “controlled foreign corporation” within the meaning of Section 957 of
the Code, (h) any FSHCO, (i) any other Subsidiary excused from becoming a Loan
Party pursuant to clause (a) of the last paragraph of the definition of the term
“Collateral and Guarantee Requirement,” (j) each Receivables Subsidiary and
(k) any not-for-profit Subsidiaries, captive insurance companies or other
special purpose subsidiaries designated by the Borrower from time to time.

“Excluded Swap Obligation” means, with respect to any Guarantor, (a) any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
as applicable, such Swap Obligation (or any Guarantee thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act (determined after giving effect to any applicable keep
well, support, or other agreement for the benefit of such Guarantor and any and
all Guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at
the time the Guarantee of such Guarantor, or a grant by such Guarantor of a
security interest, becomes effective with respect to such Swap Obligation or
(b) any other Swap Obligation designated as an “Excluded Swap Obligation” of
such Guarantor as specified in any agreement between the relevant Loan Parties
and counterparty applicable to such Swap Obligations. If a Swap Obligation
arises under a Master Agreement governing more than one Swap, such exclusion
shall apply only to the portion of such Swap Obligation that is attributable to
Swaps for which such Guarantee or security interest is or becomes excluded in
accordance with the first sentence of this definition.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of any Loan Party hereunder or under any other Loan Document, (a) Taxes imposed
on (or measured by) its net income or profits (however denominated), branch
profits Taxes and franchise Taxes, in each case imposed by (i) a jurisdiction as
a result of such recipient being organized or having its principal office
located in that jurisdiction or, in the case of any Lender, having its
applicable lending office located in the jurisdiction imposing such Tax (or any
political subdivision thereof) or (ii) any jurisdiction as a result of a present
or former connection between such recipient and the jurisdiction imposing such
Tax (other than a connection arising solely from such recipient having executed,
delivered, or become a party to, performed its obligations or received payments
under, received or perfected a security interest under, sold or assigned of an
interest in, engaged in any other transaction pursuant to, or enforced, any Loan
Documents), (b) any withholding Tax that is attributable to a Lender’s failure
to comply with Section 2.15(e) or Agent’s failure to comply with
Section 2.15(f), (c) except in the case of an assignee pursuant to a request by
the Borrower under Section 2.17, any U.S. federal withholding Taxes imposed due
to a Requirement of Law in effect at the time a Lender becomes a party hereto
(or designates a new lending office), except to the extent that such Lender (or
its assignor, if any) was entitled, immediately prior to the time of designation
of a new lending office (or assignment), to receive additional amounts with
respect to such withholding Tax under Section 2.15(a)and (d) any U.S. federal
withholding Tax imposed pursuant to FATCA.

“Existing Letter of Credit” means any letter of credit or bank guarantee
previously issued for the account of the Borrower or any other Loan Party or
Subsidiary by a Lender or an Affiliate or branch of a Lender that is
(a) outstanding on the Effective Date and (b) listed on Schedule 1.01(b).

“Facility” means, collectively, the Commitment and the extensions of credit made
thereunder.

“Fair Market Value” means with respect to any asset or group of assets on any
date of determination, the value of the consideration obtainable in a sale of
such asset at such date of determination assuming a sale by a willing seller to
a willing purchaser dealing at arm’s length and arranged in an orderly manner
over a reasonable period of time having regard to the nature and characteristics
of such asset. Except as otherwise expressly set forth herein, such value shall
be determined in good faith by the Borrower.

 

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“Fair Value” means the amount at which the assets (both tangible and
intangible), in their entirety, of the Borrower and its Subsidiaries taken as a
whole would change hands between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable knowledge of the
relevant facts, with neither being under any compulsion to act.

“FATCA” means Sections 1471 through 1474 of the Code as in effect on the date
hereof (or any amended or successor version that is substantively comparable),
any current or future regulations or official interpretations thereof, any
agreements entered into pursuant to current Section 1471(b)(1) of the Code and
any law, regulation, rule, promulgation or official agreement implementing an
official governmental agreement or intergovernmental agreement with respect to
the foregoing.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Federal Funds Effective Rate” means, for any period, a fluctuating interest
rate per annum equal to, for each day during such period, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it (and, if any such rate is below
zero, then the rate determined pursuant to this definition shall be deemed to be
zero).

“FILO Tranche” has the meaning assigned to such term in Section 2.18(d).

“Financed Capital Expenditures” means, with respect to any Person and for any
period, Capital Expenditures made by such Person during such period that are
financed with the proceeds of Indebtedness (other than Revolving Loans) or Net
Proceeds of any Disposition of assets, any Casualty Event, any incurrence or
issuance of Indebtedness or any issuance of Equity Interests.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

“First Lien Leverage Ratio” means, on any date, the ratio of (a) Consolidated
First Lien Debt as of such date to (b) Consolidated EBITDA for the Test Period
as of such date.

“Fixed Amounts” has the meaning specified in Section 1.08(f).

“Fixed Charge Coverage Ratio” means the ratio of (a) (1) Consolidated EBITDA
minus (2) taxes based on income, profits or capital, including federal, foreign,
state, franchise, excise and similar taxes (including in respect of repatriated
funds), net of cash refunds received, of the Borrower and its Restricted
Subsidiaries paid in cash during such Test Period minus (3) Capital Expenditures
paid in cash during the applicable Test Period (other than Financed Capital
Expenditures) to (b) (1) Consolidated Interest Expense plus (2) the aggregate
amount of scheduled principal payments in respect of long term Consolidated
Total Debt of the Borrower and its Restricted Subsidiaries made during such
period (other than payments made by the Borrower or any Restricted Subsidiary to
the Borrower or a Restricted Subsidiary), all calculated for such period for the
Borrower and its Restricted Subsidiaries on a consolidated basis plus (3) the
amount of distributions made pursuant to Section 6.08(a)(xiv) paid in cash
during the applicable Test Period.

 

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“Foreign Subsidiary” means any Subsidiary that is not incorporated or organized
under the laws of a State within the United States of America or the District of
Columbia.

“FSHCO” means any direct or indirect Domestic Subsidiary of the Borrower that
has no material assets other than Equity Interests in one or more direct or
indirect Foreign Subsidiaries that are “controlled foreign corporations” within
the meaning of Section 957 of the Code.

“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 of its activities.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time; provided, however, that if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the
Effective Date in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith. Notwithstanding any other provision
contained herein, (a) 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 FASB
Accounting Standards Codification 825-Financial Instruments, or any successor
thereto (including pursuant to the FASB Accounting Standards Codification), to
value any Indebtedness of the Borrower or any subsidiary at “fair value,” as
defined therein and (b) the amount of any Indebtedness under GAAP with respect
to Capital Lease Obligations shall be determined in accordance with the
definition of Capital Lease Obligations.

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

“Granting Lender” has the meaning assigned to such term in Section 9.04(e).

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; provided that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business or customary and
reasonable indemnity obligations in effect on the Effective Date or entered into
in connection with any acquisition or disposition of assets permitted under this
Agreement (other than such obligations with respect to Indebtedness). The amount
of any Guarantee shall be deemed to be an amount equal to

 

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the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined in good faith by a Financial Officer. The term “Guarantee” as a verb
has a corresponding meaning.

“Guarantee Agreement” means that certain Guarantee Agreement, entered into by
each Loan Party, substantially in the form of Exhibit C hereto.

“Guarantors” means (i) each Loan Party other than the Borrower and (ii) with
respect to the Secured Obligations of any Loan Party (other than the Borrower),
the Borrower.

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

“Hedge Termination Value” means, in respect of any one or more Secured Swap
Obligations, after taking into account the effect of any legally enforceable
netting agreement relating to such Secured Swap Obligations, (a) for any date on
or after the date such Secured Swap Obligations have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) or maximum peak exposure
value for such Secured Swap Obligations, as determined based upon customary
industry practices.

“IFRS” means international accounting standards as promulgated by the
International Accounting Standards Board.

“Immaterial Subsidiary” means any Subsidiary that is not a Material Subsidiary.

“Immediate Family Members” means with respect to any individual, such
individual’s child, stepchild, grandchild or more remote descendant, parent,
stepparent, grandparent, spouse, former spouse, qualified domestic partner,
sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including
adoptive relationships) and any trust, partnership or other bona fide
estate-planning vehicle the only beneficiaries of which are any of the foregoing
individuals or any private foundation or fund that is controlled by any of the
foregoing individuals or any donor-advised fund of which any such individual is
the donor.

“Impacted Loans” has the meaning assigned to such term in Section 2.12(a)(ii).

“Implementation Date” means the earlier to occur of (a) the first date on which
each of the policies and procedures designed to promote compliance by the
Borrower and its Restricted Subsidiaries and their respective directors,
officers, employees, agents and Affiliates with all Sanctions, Anti-Corruption
Laws and AML Legislation referenced in Section 3.18(e) have been implemented (as
determined by the Borrower in its reasonable discretion) and (b) the date that
is 120 days following the Closing Date (or such later date as the Administrative
Agent reasonably agrees to in writing).

“Incremental Commitment” has the meaning assigned to such term in
Section 2.18(a).

“Incremental Facility Amendment” has the meaning assigned to such term in
Section 2.18(b)(ii).

 

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“Incurrence-Based Amounts” has the meaning specified in Section 1.08(f)

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred and unpaid purchase price of property or services (excluding
trade accounts payable in the ordinary course of business and any earn-out
obligation until such obligation becomes a liability on the balance sheet of
such Person in accordance with GAAP and if not paid within 60 days after being
due and payable), (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (f) all Guarantees by
such Person of Indebtedness of others (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), (g) all Capital
Lease Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances; provided that the term “Indebtedness” shall not
include (i) deferred or prepaid revenue, (ii) purchase price holdbacks in
respect of a portion of the purchase price of an asset to satisfy warranty or
other unperformed obligations of the seller, (iii) any obligations attributable
to the exercise of appraisal rights and the settlement of any claims or actions
(whether actual, contingent or potential) with respect thereto,
(iv) Indebtedness of any Parent Entity appearing on the balance sheet of the
Borrower solely by reason of push down accounting under GAAP, (v) accrued
expenses and royalties and (vi) asset retirement obligations and obligations in
respect of reclamation and workers’ compensation (including pensions and retiree
medical care) that are not overdue by more than 60 days. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The amount of
Indebtedness of any Person for purposes of clause (e) above shall (unless such
Indebtedness has been assumed by such Person) be deemed to be equal to the
lesser of (A) the aggregate unpaid amount of such Indebtedness and (B) the Fair
Market Value of the property encumbered thereby as determined by such Person in
good faith. For all purposes hereof, the Indebtedness of the Borrower and the
Restricted Subsidiaries shall exclude intercompany liabilities arising from
their cash management, tax, and accounting operations and intercompany loans,
advances or Indebtedness having a term not exceeding 364 days (inclusive of any
rollover or extensions of terms) and made in the ordinary course of business.

“Indemnified Taxes” means all Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document.

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

“Individual LC Sublimit” has the meaning assigned to such term in the definition
of “LC Sublimit”.

“Information” has the meaning assigned to such term in Section 9.12(a).

“Information Certificate” means an information certificate in a form reasonably
satisfactory to the Administrative Agent delivered to the Administrative Agent
on or prior to the Effective Date.

“Insignificant Subsidiary” means any subsidiary of the Borrower other than any
such subsidiary that is a “significant subsidiary” of the Borrower within the
meaning of Rule 405 of the Securities Act of 1933, as amended, in each case
determined as of the date of the most recent financial statements of the
Borrower delivered pursuant to Section 4.01(h).

 

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“Intellectual Property” has the meaning assigned to such term in the applicable
Security Documents.

“Interest Coverage Ratio” means, as of any date, the ratio of (a) Consolidated
EBITDA to (b) Consolidated Interest Expense, in each case for the Test Period as
of such date.

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.05.

“Interest Payment Date” means, subject to Section 2.10(c), (a) with respect to
any ABR Loan, the first day of each calendar month of January, April, July and
October and the Maturity Date and (b) with respect to any Eurocurrency Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and the Maturity Date and, in the case of a Eurocurrency Borrowing
with an Interest Period of more than three calendar months’ duration, each day
immediately following the last day of such Interest Period that occurs at
intervals of three calendar months’ duration after the first day of such
Interest Period.

“Interest Period” means, with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six calendar
months thereafter (or, in the case of Eurocurrency Borrowings only, if agreed to
by each Lender participating therein, twelve calendar months or such other
period of less than one month as the Borrower may elect; provided that (a) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period and (c) that in the event the
Borrower elects an Interest Period of less than one month the interest rate in
respect of the applicable Eurocurrency Borrowing shall be determined through the
use of straight-line interpolation by reference to two such rates, one of which
shall be determined as if the length of the period of such deposits were the
period of time for which the rate for such deposits are available is the period
next shorter than the length of such Interest Period and the other of which
shall be determined as if the period of time for which the rate for such
deposits are available is the period next longer than the length of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests or Indebtedness or other securities of another
Person, (b) a loan, advance or capital contribution to, Guarantee or assumption
of Indebtedness of, or purchase or other acquisition of any other Indebtedness
or equity participation or interest in, another Person, including any
partnership or joint venture interest in such other Person (excluding, in the
case of the Borrower and the Restricted Subsidiaries, intercompany loans,
advances, or Indebtedness having a term not exceeding 364 days (inclusive of any
rollover or extensions of terms and made in the ordinary course of business) or
(c) the purchase or other acquisition (in one transaction or a series of
transactions) of all or substantially all of the property and assets or business
of another Person or assets constituting a business unit, line of business or
division of such Person. The amount, as of any date of determination, of (i) any
Investment in the form of a loan or an advance shall be the principal amount

 

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thereof outstanding on such date, minus any cash payments actually received by
the applicable investor representing interest in respect of such Investment (to
the extent any such payment to be deducted does not exceed the remaining
principal amount of such Investment and without duplication of amounts
increasing the Available Equity Amount), but without any adjustment for
write-downs or write-offs (including as a result of forgiveness of any portion
thereof) with respect to such loan or advance after the date thereof, (ii) any
Investment in the form of a Guarantee shall be equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof, as determined in
good faith by a Financial Officer, (iii) any Investment in the form of a
transfer of Equity Interests or other non-cash property by the investor to the
investee, including any such transfer in the form of a capital contribution,
shall be the Fair Market Value of such Equity Interests or other property as of
the time of the transfer, minus any payments actually received by the applicable
investor representing a return of capital of, or dividends or other
distributions in respect of, such Investment (to the extent such payments do not
exceed, in the aggregate, the original amount of such Investment and without
duplication of amounts increasing the Available Equity Amount), but without any
other adjustment for increases or decreases in value of, or write-ups,
write-downs or write-offs with respect to, such Investment after the date of
such Investment, and (iv) any Investment (other than any Investment referred to
in clause (i), (ii) or (iii) above) by the specified Person in the form of a
purchase or other acquisition for value of any Equity Interests, evidences of
Indebtedness or other securities of any other Person shall be the original cost
of such Investment (including any Indebtedness assumed in connection therewith),
plus (A) the cost of all additions thereto and minus (B) the amount of any
portion of such Investment that has been repaid to the investor in cash as a
repayment of principal or a return of capital, and of any cash payments actually
received by such investor representing interest, dividends or other
distributions in respect of such Investment (to the extent the amounts referred
to in clause (B) do not, in the aggregate, exceed the original cost of such
Investment plus the costs of additions thereto and without duplication of
amounts increasing the Available Equity Amount), but without any other
adjustment for increases or decreases in value of, or write-ups, write-downs or
write-offs with respect to, such Investment after the date of such Investment.
For purposes of Section 6.04, if an Investment involves the acquisition of more
than one Person, the amount of such Investment shall be allocated among the
acquired Persons in accordance with GAAP; provided that pending the final
determination of the amounts to be so allocated in accordance with GAAP, such
allocation shall be as reasonably determined by a Financial Officer.

“Investor” means a holder of Equity Interests in the Borrower (or any direct or
indirect parent thereof) on the Effective Date.

“IPO” means the initial underwritten public offering (other than a public
offering pursuant to a registration statement on Form S-8) of common Equity
Interests in the Borrower.

“IPO Separation Agreements” means (a) that certain master procurement agreement,
dated as of May 31, 2019, among the Borrower and the China Joint Business
Arrangement between PetSmart International Holdings I LLC and PetSmart
International Holdings II LLC, (b) that certain master transaction agreement,
dated as of June 1, 2019, among the Borrower and PetSmart, Inc., (c) that
certain tax matters agreement, dated as of June 13, 2019, among the Borrower,
PetSmart, Inc. and Argos Intermediate Holdco I Inc., (d) that certain master
purchase agreement, dated as of February 7, 2019 (as amended by that certain
amendment to master purchase agreement, effective as of May 15, 2019) among the
Borrower and PetSmart Home Office, Inc., (e) that certain intercompany services
agreement, dated as of July 2, 2018, among the Borrower and Chewy Pharmacy KY,
LLC, (f) that certain investor rights agreement, dated as of June 13, 2019,
among Chewy, Inc. and the other signatories thereto, (g) that certain
stockholders agreement of Chewy Inc., dated as of April 17, 2019.

 

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“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
version or revision thereof accepted by any Issuing Bank for use.

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by a Borrower in
favor of Issuing Bank and relating to such Letter of Credit.

“Issuing Bank” means each of Wells Fargo, JPMorgan Chase Bank, N.A. and any
other Revolving Lender which after notice to the Administrative Agent agrees to
become an Issuing Bank and, solely with respect to any Existing Letter of Credit
(and any amendment, renewal or extension thereof in accordance with this
Agreement), the Lender or Affiliate of a Lender that issued such Existing Letter
of Credit. Each Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.

“Joint Bookrunners” means Wells Fargo Bank, National Association and JPMorgan
Chase Bank, N.A.

“Judgment Currency” has the meaning assigned to such term in Section 9.14(b).

“Junior Financing” means any Indebtedness (other than any permitted intercompany
Indebtedness owing to the Borrower or any Restricted Subsidiary) that is
Subordinated Indebtedness.

“Latest Maturity Date” means, at any date of determination, the latest maturity
or expiration date applicable to any Loan or Commitment hereunder at such time,
in each case as extended in accordance with this Agreement from time to time.

“LC Collateral Account” has the meaning assigned to such term in
Section 2.24(i).

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a drawing
on a Letter of Credit.

“LC Exposure” means, at any time of determination, the sum (without duplication)
of the Dollar Equivalent of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
or any other Loan Party at such time, less (c) the amount then on deposit in the
LC Collateral Account. The LC Exposure of any Revolving Lender at any time shall
be its Pro Rata Share of the total LC Exposure at such time.

“LC Sublimit” means an amount equal to the lesser of (a) $50,000,000 and (b) the
Total Revolving Commitments; provided that, with respect to each Person acting
as an Issuing Bank as of the Effective Date, there shall be an individual LC
Sublimit (the “Individual LC Sublimit”) equal to the greater of (x) $25,000,000
and (y) the face amount of all Existing Letters of Credit (including extensions
and renewals thereof but without giving effect to any increase in the face
amount thereof) issued by such Issuing Bank (if any). The LC Sublimit is part
of, and not in addition to, the Revolving Commitments.

“LCA Election” has the meaning assigned to such term in Section 1.08. “LCA Test
Date” has the meaning assigned to such term in Section 1.08.

 

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“Lead Arrangers” means Wells Fargo Bank, National Association and JPMorgan Chase
Bank, N.A.

“Lenders” means, individually and collectively as the context may require, the
Revolving Lenders. Unless the context otherwise requires, the term “Lenders”
includes the Swingline Lenders and the Issuing Banks.

“Letter of Credit” means any letter of credit or bank guarantee issued pursuant
to this Agreement other than any such letter of credit or bank guarantee that
shall have ceased to be a “Letter of Credit” outstanding hereunder pursuant to
Section 9.05. Letters of Credit under the Facility may be issued in any
Permitted Currency under the Facility.

“Liabilities” means the recorded liabilities (including contingent liabilities
that would be recorded in accordance with GAAP) of the Borrower and its
Subsidiaries taken as a whole, as of the Effective Date after giving effect to
the consummation of the Transactions, determined in accordance with GAAP
consistently applied.

“LIBO Rate” means, for any Interest Period with respect to a Eurocurrency
Borrowing, the rate per annum equal to the London Interbank Offered Rate
(“LIBOR”) or a comparable or successor rate, which rate is approved by the
Administrative Agent, as published by ICE Benchmark Administration Limited (or
such other commercially available source providing quotations of LIBOR as may be
designated by the Administrative Agent from time to time) as of 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, for a term, and in an amount, comparable to the Interest Period and the
amount of the Eurocurrency Borrowing requested (whether as an initial
Eurocurrency Borrowing or as a continuation of a Eurocurrency Borrowing or as a
conversion of an ABR Borrowing to a Eurocurrency Borrowing) by the Borrower.

Notwithstanding any provision to the contrary in this Agreement, if at any time
the rate determined pursuant to this definition is less than zero, then such
rate shall be deemed to be zero. Each determination of the LIBO Rate shall be
made by the Administrative Agent and shall be presumed to be correct in the
absence of objective evidence to the contrary.

“LIBOR” has the meaning assigned to such term in the definition of “LIBO Rate.”

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset.

“Limited Condition Acquisition” shall mean any Acquisition Transaction the
consummation of which is not conditioned on the availability of, or on
obtaining, third party financing.

“Loan Document Obligations” means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest at the applicable rate or rates
provided in this Agreement (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership, examination or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of the Borrower under or pursuant to this Agreement and each of the
other Loan Documents, including obligations to pay LC Disbursements, fees,
expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or

 

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otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership, arrangement, administration, examination
or other similar proceeding, regardless of whether allowed or allowable in such
proceeding), (b) the due and punctual payment and performance of all other
obligations of the Borrower under or pursuant to each of the Loan Documents and
(c) the due and punctual payment and performance of all the obligations of each
other Loan Party under or pursuant to this Agreement and each of the other Loan
Documents (including interest and monetary obligations incurred during the
pendency of any bankruptcy, insolvency, receivership, arrangement,
administration, examination or other similar proceeding, regardless of whether
allowed or allowable in such proceeding).

“Loan Documents” means this Agreement, any Incremental Facility Amendment, any
Loan Modification Agreement, the Guarantee Agreement the Security Documents, the
ABL Intercreditor Agreement (if executed) and, except for purposes of
Section 9.02, any promissory notes delivered pursuant to Section 2.07(g).

“Loan Modification Agreement” means a Loan Modification Agreement, in form
reasonably satisfactory to the Administrative Agent, among the Borrower, the
Administrative Agent and one or more Accepting Lenders, effecting one or more
Permitted Amendments and such other amendments hereto and to the other Loan
Documents as are contemplated by Section 2.22.

“Loan Modification Offer” has the meaning specified in Section 2.22(a).

“Loan Parties” means the Borrower and the Subsidiary Loan Parties.

“Loans” means the loans and advances made by the Lenders to the Borrower
pursuant to this Agreement, including Revolving Loans, Swingline Loans and
Protective Advances.

“Local Time” means local time in New York, New York, with respect to the times
for the receipt and sending of notices by and to, and the disbursement by or
payment to, the Administrative Agent, any Lender or any Issuing Bank, (b) local
time in London, England, with respect to the times for the determination of
“LIBO Rate”; (c) local time at the place of determination, if such local time as
of such place for determination is specified herein; and (d) in all other
circumstances, New York, New York time.

“Management Investors” means the directors and officers and employees of the
Borrower and/or any of its subsidiaries who are (directly or indirectly through
one or more investment vehicles) Investors.

“Master Agreement” has the meaning assigned to such term in the definition of
“Swap Agreement.”

“Material Adverse Effect” means any event, circumstance or condition that has
had, or could reasonably be expected to have, a materially adverse effect on
(a) the business or financial condition of the Borrower and the Restricted
Subsidiaries, taken as a whole, (b) the ability of the Borrower and the
Guarantors, taken as a whole, to perform their payment obligations under the
Loan Documents or (c) the rights and remedies of the Administrative Agent and
the Lenders under the Loan Documents.

“Material Indebtedness” means Indebtedness (other than the Loan Document
Obligations), or obligations in respect of one or more Swap Agreements, of any
one or more of the Borrower and the Restricted Subsidiaries in an aggregate
principal amount exceeding $33,000,000; provided that in no event shall any
Permitted Receivables Financing be considered Material Indebtedness for any
purpose. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Restricted Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.

 

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“Material Subsidiary” means (a) each wholly-owned Restricted Subsidiary that, as
of the last day of the fiscal quarter of the Borrower most recently ended for
which financial statements are available, had revenues or total assets for such
quarter in excess of 2.5% of the consolidated revenues or total assets, as
applicable, of the Borrower for such quarter or that is designated by the
Borrower as a Material Subsidiary and (b) any group comprising wholly-owned
Restricted Subsidiaries that each would not have been a Material Subsidiary
under clause (a) but that, taken together, as of the last day of the fiscal
quarter of the Borrower most recently ended for which financial statements are
available, had revenues or total assets for such quarter in excess of 10.0% of
the consolidated revenues or total assets, as applicable, of the Borrower for
such quarter; provided that solely for purposes of Section 7.01(h) and 7.01(i)
each such Restricted Subsidiary forming part of such group is subject to an
Event of Default under one or more of such Sections.

“Maturity Date” means (a) with respect to the initial Commitments hereunder, the
date that is five years after the Effective Date and (b) with respect to any
Incremental Commitments, the final maturity date as specified in the applicable
Incremental Facility Amendment; provided, in each case, that if such day is not
a Business Day, the applicable Maturity Date shall be the Business Day
immediately preceding such day.

“Maximum Borrowing Amount” means the lesser of (a) the aggregate Revolving
Commitments at such time and (b) the Borrowing Base, in each case as determined
for the Facility at any time.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating
agency business.

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

“Net Orderly Liquidation Value” means, with respect to Inventory of any Loan
Party, the orderly liquidation value thereof, net of all costs of liquidation
thereof, as based upon the most recent Inventory appraisal conducted in
accordance with this Agreement and expressed as a percentage of Cost of such
Inventory.

“Net Proceeds” means, with respect to any event, (a) the proceeds received in
respect of such event in cash or Permitted Investments, including (i) any cash
or Permitted Investments received in respect of any non-cash proceeds, including
any cash payments received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment or earn-out (but
excluding any interest payments), but only as and when received, (ii) in the
case of a casualty, insurance proceeds that are actually received, and (iii) in
the case of a condemnation or similar event, condemnation awards and similar
payments that are actually received, minus (b) the sum of (i) all fees and
out-of-pocket expenses paid by the Borrower and the Restricted Subsidiaries in
connection with such event (including attorney’s fees, investment banking fees,
survey costs, title insurance premiums, and related search and recording
charges, transfer taxes, deed or mortgage recording taxes, underwriting
discounts and commissions, other customary expenses and brokerage, consultant,
accountant and other customary fees), (ii) in the case of a Disposition of an
asset (including pursuant to a Sale Leaseback or Casualty Event or similar
proceeding), (x) the amount of all payments that are permitted hereunder and are
made by the Borrower and the Restricted Subsidiaries as a result of such event
to repay Indebtedness (other than the Loans) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event, (y) the pro rata
portion of net cash proceeds thereof (calculated without regard to this clause
(y)) attributable to minority interests and not available for distribution to or
for the account of the Borrower and the

 

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Restricted Subsidiaries as a result thereof and (z) the amount of any
liabilities directly associated with such asset and retained by the Borrower or
the Restricted Subsidiaries and (iii) the amount of all Taxes paid (or
reasonably estimated to be payable), and the amount of any reserves established
by the Borrower and the Restricted Subsidiaries to fund contingent liabilities
reasonably estimated to be payable, that are directly attributable to such
event, provided that any reduction at any time in the amount of any such
reserves (other than as a result of payments made in respect thereof) shall be
deemed to constitute the receipt by the Borrower at such time of Net Proceeds in
the amount of such reduction.

“New Project” shall mean (a) each facility or store which is either a new
facility, store, branch or office or an expansion, relocation, remodeling or
substantial modernization of an existing facility, store, branch or office owned
by the Borrower or its Subsidiaries which in fact commences operations and
(b) each creation (in one or a series of related transactions) of a business
unit to the extent such business unit commences operations or each expansion (in
one or a series of related transactions) of business into a new market.

“Non-Accepting Lender” has the meaning assigned to such term in Section 2.22(c).

“Non-Cash Compensation Expense” means any non-cash expenses and costs that
result from the issuance of stock-based awards, partnership interest-based
awards and similar incentive based compensation awards or arrangements.

“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(c).

“Not Otherwise Applied” means the Available Equity Amount that was not
previously applied pursuant to Section 6.04(o) or 6.08(b)(iv).

“Noticed Cash Management Obligations” means any Secured Cash Management
Obligations with respect to which the Borrower and the Secured Party with
respect thereto have notified the Administrative Agent of the intent to include
such Secured Cash Management Obligations as Noticed Cash Management Obligations
hereunder (so long as such designation, and the resulting Secured Cash
Management Reserves at the time of designation, would not result in an
Overadvance) and with respect to which a Secured Cash Management Reserve has
subsequently been established in the amount set forth in such notice; provided
that such designation shall be made within ten (10) Business Days of (i) the
Effective Date if such Cash Management Services are in place on the Effective
Date or (ii) the date such Cash Management Services are commenced if not in
place on the Effective Date.

“Noticed Hedge” means any Secured Swap Obligations arising under a Swap
Agreement with respect to which the Borrower and the Secured Party thereof have
notified the Administrative Agent of the intent to include such Secured Swap
Obligations as a Noticed Hedge hereunder (so long as such designation, and the
resulting Secured Hedge Reserves at the time of designation, would not result in
an Overadvance) and with respect to which a Secured Hedge Reserve has
subsequently been established in the amount set forth in such notice; provided
that such designation shall be made within ten (10) Business Days of (i) the
Effective Date if such Swap Agreement is in place on the Effective Date or
(ii) the date such Swap Agreement is entered into if such Swap Agreement is not
in place on the Effective Date.

“OFAC” has the meaning assigned to such term in Section 3.18.

“Organizational 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 (or equivalent or
comparable constitutive documents

 

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with respect to any non-U.S. jurisdiction); and (c) with respect to any
unlimited liability company, partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation, organization or incorporation and any agreement, instrument, filing
or notice with respect thereto filed in connection with its formation,
organization or incorporation (as applicable) with the applicable Governmental
Authority in the jurisdiction of its formation, organization or incorporation
(as applicable) and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means all present or future recording, stamp, court or
documentary, intangible, filing or similar Taxes arising from any payment made
under any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document, except any such Taxes imposed with
respect to an assignment.

“Overadvance” means at any time the amount by which the aggregate outstanding
Revolving Exposure exceeds the Borrowing Base.

“Overadvance Condition” means and is deemed to exist any time the aggregate
outstanding Revolving Exposure exceeds the Borrowing Base.

“Overadvance Loan” means an Alternate Base Rate Revolving Loan made at a time an
Overadvance Condition exists or which results in an Overadvance Condition.

“Parent Entity” means any Person that is a direct or indirect parent of the
Borrower.

“Participant” has the meaning assigned to such term in Section 9.04(c)(i).

“Participant Register” has the meaning assigned to such term in
Section 9.04(c)(iii).

“Payment Account” has the meaning assigned to such term in Section 5.17(c).

“Payment Conditions” means the following: (a) Pro Forma Compliance for the most
recently ended Test Period with a Fixed Charge Coverage Ratio of 1.0:1.0 and
(b) the Borrower shall have pro forma Specified Excess Availability giving
effect to such transaction as of the date of such transaction (and would have
had pro forma Specified Excess Availability giving effect to such transaction
for each day in the period of 30 days immediately preceding such action) in
excess of the greater of 12.5% (or 15% in the case of Liens permitted by
Section 6.02(xxv) and Restricted Payments permitted by Section 6.08(a)(xiv)) of
the Total Maximum Borrowing Amount and $37,500,000 (or $45,000,000 in the case
of Liens permitted by Section 6.02(xxv) and Restricted Payments permitted by
Section 6.08(a)(xiv)); provided that the condition set forth in clause (a) shall
not be applicable if the Borrower have pro forma Specified Excess Availability
giving effect to such transaction as of the date of such transaction (and would
have had pro forma Specified Excess Availability giving effect to such
transaction for each day in the period of 30 days immediately preceding such
action) in excess of the greater of 17.5% of the Total Maximum Borrowing Amount
(or 20% in the case of Liens permitted by Section 6.02(xxv) and Restricted
Payments permitted by Section 6.08(a)(xiv)) and $52,500,000 (or $60,000,000 in
the case of Liens permitted by Section 6.02(xxv) and Restricted Payments
permitted by Section 6.08(a)(xiv)).

“Payment Intangible” has the meaning assigned to such term in the UCC.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

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“Permitted Acquisition” means an Acquisition Transaction; provided that (a) in
the case of any purchase or other acquisition of Equity Interests in a Person,
(i) such Person, upon the consummation of such purchase or acquisition, will be
a Subsidiary (including as a result of a merger, amalgamation or consolidation
between any Subsidiary and such Person), or (ii) such Person is merged into or
consolidated or, amalgamated with a Subsidiary and such Subsidiary is the
surviving or continuing entity of such merger, amalgamation or consolidation,
(b) the business of such Person, or such assets, as the case may be, constitute
a business permitted by Section 5.15, (c) with respect to each such purchase or
other acquisition, all actions required to be taken with respect to any such
newly created or acquired Subsidiary (including each subsidiary thereof) or
assets in order to satisfy the requirements set forth in clauses (a), (b), (c)
and (d) of the definition of the term “Collateral and Guarantee Requirement” to
the extent applicable shall have been taken (or arrangements for the taking of
such actions after the consummation of the Permitted Acquisition shall have been
made that are reasonably satisfactory to the Administrative Agent) (unless such
newly created or acquired Subsidiary is designated as an Unrestricted Subsidiary
pursuant to Section 5.14 or is otherwise an Excluded Subsidiary) and (d) after
giving effect to any such purchase or other acquisition, (i) no Event of Default
under clause (a), (b), (h) or (i) of Section 7.01 shall have occurred and be
continuing and (ii) if such Person is an Unrestricted Subsidiary or such assets
are owned by an Unrestricted Subsidiary, the applicable Payment Conditions are
satisfied.

“Permitted Amendment” means an amendment to this Agreement and, if applicable
the other Loan Documents, effected in connection with a Loan Modification Offer
pursuant to Section 2.22, providing for an extension of a maturity date
applicable to all or any portion of the Loans and/or Commitments of the
Accepting Lenders and, in connection therewith, (a) a change in the Applicable
Rate with respect to the Loans and/or Commitments of the Accepting Lenders
and/or (b) a change in the fees payable to, or the inclusion of new fees to be
payable to, the Accepting Lenders and/or (c) additional covenants or other
provisions applicable only to periods after the Latest Maturity Date at the time
of such Loan Modification Offer (it being understood that to the extent that any
additional financial maintenance covenant is added for the benefit of any such
Loans and/or Commitments, no consent shall be required by the Administrative
Agent or any of the Lenders if such additional financial maintenance covenant is
either (i) also added for the benefit of any corresponding Loans remaining
outstanding after the issuance or incurrence of such Loans and/or Commitments or
(ii) only applicable after the Latest Maturity Date at the time of such Loan
Modification Offer); provided that (A) the borrowing and repayment (other than
in connection with a permanent repayment and termination of commitments) of the
Loans made pursuant to the amended Commitments shall be made on a pro rata basis
with any borrowings and repayments of any Loans and Commitments of the
Class that is being amended and that remain outstanding after such amendment and
(B) assignments and participations of the amended Commitments shall be governed
by the assignment and participation provisions set forth in Section 9.04.

“Permitted Cure Securities” means any Equity Interest of the Borrower other than
any Disqualified Equity Interests; provided that any such Equity Interests
issued for purposes of exercising a Cure Right pursuant to Section 7.03 that are
not common Equity Interests shall be on terms and conditions reasonably
acceptable to the Administrative Agent.

“Permitted Currency” means each currency in which a Borrowing may be made under
the Facility as well as Euros, Sterling, Swiss Francs, Canadian Dollars,
Japanese Yen and Chinese Yuan.

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment. Any Reserve established or modified by the Administrative
Agent shall have a reasonable relationship to circumstances, conditions, events
or contingencies which are the basis for such reserve, as reasonably determined,
without duplication, by the Administrative Agent in good faith; provided that
circumstances, conditions, events or contingencies known to the Administrative
Agent as of the Effective Date shall not be the basis for any such establishment
or modification after the Effective Date; provided, further, that
notwithstanding the foregoing, solely with respect to Bank Product Reserves,
“Permitted Discretion” as used herein shall mean the sole discretion of the
Administrative Agent.

 

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“Permitted Encumbrances” means:

(a) Liens for taxes or other governmental charges that are not overdue for a
period of more than 30 days or that are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained in accordance with GAAP, in each case so long as such
Liens do not individually or in the aggregate have a Material Adverse Effect;

(b) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s or construction contractors’ Liens and other similar
Liens arising in the ordinary course of business that secure amounts not overdue
for a period of more than 30 days or, if more than 30 days overdue, are unfiled
and no other action has been taken to enforce such Liens or that are being
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP, in each case so long as such Liens do
not individually or in the aggregate have a Material Adverse Effect;

(c) Liens incurred or deposits made in the ordinary course of business (i) in
connection with workers’ compensation, unemployment insurance and other social
security legislation and (ii) securing liability for reimbursement or
indemnification obligations of (including obligations in respect of letters of
credit or bank guarantees or similar instruments for the benefit of) insurance
carriers providing property, casualty or liability insurance to the Borrower or
any Restricted Subsidiary or otherwise supporting the payment of items set forth
in the foregoing clause (i);

(d) Liens incurred or deposits made to secure the performance of bids, trade
contracts, governmental contracts and leases, statutory obligations, surety,
stay, customs and appeal bonds, performance bonds, bankers’ acceptance
facilities and other obligations of a like nature (including those to secure
health, safety and environmental obligations) and obligations in respect of
letters of credit, bank guarantees or similar instruments that have been posted
to support the same, incurred in the ordinary course of business or consistent
with past practices;

(e) easements, rights-of-way, restrictions, encroachments, protrusions,
municipal by-laws and regulations and other similar encumbrances and minor title
defects affecting real property that, in the aggregate, do not in any case
materially interfere with the ordinary conduct of the business of the Borrower
and the Restricted Subsidiaries, taken as a whole;

(f) Liens securing, or otherwise arising from, judgments not constituting an
Event of Default under Section 7.01(j);

(g) Liens on goods the purchase price of which is financed by a documentary
letter of credit issued for the account of the Borrower or any of its
Subsidiaries or Liens on bills of lading, drafts or other documents of title
arising by operation of law or pursuant to the standard terms of agreements
relating to letters of credit, bank guarantees and other similar instruments,
provided that such Lien secures only the obligations of the Borrower or such
subsidiaries in respect of such letter of credit to the extent such obligations
are permitted by Section 6.01;

(h) rights of set-off, banker’s lien, netting agreements and other Liens
(i) arising by operation of law or by of the terms of documents of banks or
other financial institutions in relation to the maintenance of administration of
deposit accounts, securities accounts, cash management arrangements or (ii) in
connection with the issuance of letters of credit, bank guarantees or other
similar instruments;

 

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(i) Liens arising from precautionary Uniform Commercial Code financing
statements or any similar filings made in respect of operating leases entered
into by the Borrower or any of its subsidiaries;

(j) [reserved];

(k) Liens given to a public utility or any municipality or governmental or other
public authority when required by such utility or other authority in connection
with the operation of the business or ownership of the assets of the Person;
provided that such Liens do not materially interfere with the ordinary conduct
of the business of the Borrower and the Restricted Subsidiaries, taken as a
whole;

(l) servicing agreements, development agreements, site plan agreements,
subdivision agreements and other agreements with Governmental Authorities
pertaining to the use or development of any of the assets of the Person,
provided that the same do not materially interfere with the ordinary conduct of
the business of the Borrower and the Restricted Subsidiaries, taken as a whole;
and

(m) the right reserved to or vested in any Governmental Authority by any
statutory provision or by the terms of any lease, license, franchise, grant or
permit of the Person, to terminate any such lease, license, franchise, grant or
permit, or to require annual or other payments as a condition to the continuance
thereof.

“Permitted Holder” means (a) any one or more of the Sponsors; (b) Argos Holdings
L.P. and its Affiliates (including, without limitation, Buddy Holdings Corp,
PetSmart, Inc., PetSmart Buddy Holdings Corp. and Buddy Chester Sub Corp.); (c)
the Management Investors and their Immediate Family Members and (d) any group
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act
as in effect on the date hereof) of which the Persons described in clauses (a),
(b) and/or (c) are members; provided that the Persons described in clause (a),
(b) and/or (c) beneficially own a majority of the Equity Interests beneficially
owned by such group.

“Permitted Inventory Locations” means each location listed on Schedules 6(a),
6(b) and 6(c) of the Information Certificate delivered to the Administrative
Agent prior to the Effective Date, and from time to time each other location
within the United States which the Borrower has notified the Administrative
Agent is a location at which Inventory of a Loan Party is maintained.

“Permitted Investments” means any of the following, to the extent owned by the
Borrower or any Restricted Subsidiary:

(a) Dollars, Euros, Sterling, Australian Dollars, Canadian Dollars, Chinese Yuan
or such other currencies held by it from time to time in the ordinary course of
business;

(b) readily marketable obligations issued or directly and fully guaranteed or
insured by the government or any agency or instrumentality of (i) the United
States or (ii) any member nation of the European Union rated A-2 (or the
equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or
better by Moody’s, having average maturities of not more than 24 calendar months
from the date of acquisition thereof; provided that the full faith and credit of
the United States or such member nation of the European Union is pledged in
support thereof;

 

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(c) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) is a Lender or (ii) has combined
capital and surplus of at least (x) $250,000,000 in the case of U.S. banks and
(y) $100,000,000 (or the Dollar equivalent as of the date of determination) in
the case of non-U.S. banks (any such bank meeting the requirements of clause
(i) or (ii) above being an “Approved Bank”), in each case with average
maturities of not more than 12 calendar months from the date of acquisition
thereof;

(d) commercial paper and variable or fixed rate notes issued by an Approved Bank
(or by the parent company thereof) or any variable or fixed rate note issued by,
or guaranteed by, a corporation rated A-2 (or the equivalent thereof) or better
by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case
with average maturities of not more than 24 calendar months from the date of
acquisition thereof;

(e) repurchase agreements entered into by any Person with an Approved Bank, a
bank or trust company (including any of the Lenders) or recognized securities
dealer, in each case, having capital and surplus in excess of (x) $250,000,000
in the case of U.S. banks and (y) $100,000,000 (or the Dollar equivalent as of
the date of determination) in the case of non-U.S. banks, in each case, for
direct obligations issued by or fully guaranteed or insured by the government or
any agency or instrumentality of (i) the United States or (ii) any member nation
of the European Union rated A (or the equivalent thereof) or better by S&P and
A2 (or the equivalent thereof) or better by Moody’s, in which such Person shall
have a perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a Fair Market Value of at least
100% of the amount of the repurchase obligations;

(f) marketable short-term money market and similar highly liquid funds either
(i) having assets in excess of (x) $250,000,000 in the case of U.S. banks or
other U.S. financial institutions and (y) $100,000,000 (or the Dollar equivalent
as of the date of determination) in the case of non-U.S. banks or other non-U.S.
financial institutions or (ii) having a rating of at least A-2 or P-2 from
either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be
rating such obligations, an equivalent rating from another nationally recognized
rating service);

(g) securities with average maturities of 24 calendar months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, or by any political subdivision or taxing
authority of any such state, commonwealth or territory having an investment
grade rating from either S&P or Moody’s (or the equivalent thereof);

(h) investments with average maturities of 12 calendar months or less from the
date of acquisition in mutual funds rated AAA- (or the equivalent thereof) or
better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s;

(i) instruments equivalent to those referred to in clauses (a) through (h) above
denominated in Euros 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
Subsidiary organized in such jurisdiction;

(j) investments, classified in accordance with GAAP as current assets, in money
market investment programs that are registered under the Investment Company Act
of 1940 or that are administered by financial institutions having capital of at
least $250,000,000, and, in either case, the portfolios of which are limited
such that substantially all of such investments are of the character, quality
and maturity described in clauses (a) through (i) of this definition;

 

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(k) with respect to any Foreign Subsidiary: (i) obligations of the national
government of the country in which such Foreign Subsidiary maintains its chief
executive office and principal place of business, provided such country is a
member of the Organization for Economic Cooperation and Development, in each
case maturing within one year after the date of investment therein,
(ii) certificates of deposit of, bankers’ acceptances of, or time deposits with,
any commercial bank which is organized and existing under the laws of the
country in which such Foreign Subsidiary maintains its chief executive office
and principal place of business, provided such country is a member of the
Organization for Economic Cooperation and Development, and whose short-term
commercial paper rating from S&P is at least “A-2” or the equivalent thereof or
from Moody’s is at least “P-2” or the equivalent thereof (any such bank being an
“Approved Foreign Bank”), and in each case with maturities of not more than 24
calendar months from the date of acquisition and (iii) the equivalent of demand
deposit accounts which are maintained with an Approved Foreign Bank; and

(l) investment funds investing at least 90% of their assets in securities of the
types described in clauses (a) through (k) above.

“Permitted Receivables Financing” means, collectively, any, receivables
securitizations or other receivables financings (including any factoring
programs in an aggregate amount not to exceed the greater of $50,000,000 and 32%
of Consolidated EBITDA for the last Test Period (measured at each time any such
financing is entered into) and that are non-recourse to the Borrower and the
Restricted Subsidiaries (except for (x) any customary limited recourse or
recourse limited Subsidiaries that are not Loan Parties, (y) any performance
undertaking or Guarantee and (z) an unsecured parent Guarantee (a “Receivables
Guarantee”) by the Borrower or a Restricted Subsidiary and a parent company of a
Restricted Subsidiary of obligations of Restricted Subsidiaries, and, in each
case, reasonable extensions thereof); provided that with respect to Permitted
Receivables Financings incurred in the form of a factoring program, the
outstanding amount of such Permitted Receivables Financing for the purposes of
this definition shall be deemed to be equal to the Permitted Receivables Net
Investment for the last Test Period.

“Permitted Receivables Net Investment” means the aggregate cash amount paid by
the purchasers under any Permitted Receivables Financing in the form of a
factoring program in connection with their purchase of accounts receivable and
customary related assets or interests therein, as the same may be reduced from
time to time by collections with respect to such accounts receivable and related
assets or otherwise in accordance with the terms of such Permitted Receivables
Financing (but excluding any such collections used to make payments of
commissions, discounts, yield and other fees and charges incurred in connection
with any Permitted Receivables Financing in the form of a factoring program
which are payable to any Person other than the Borrower or a Restricted
Subsidiary).

“Permitted Refinancing” means, with respect to any Person, any modification,
refinancing, refunding, renewal or extension of any Indebtedness of such Person;
provided that (a) the principal amount (or accreted value, if applicable)
thereof does not exceed the principal amount (or accreted value, if applicable)
of the Indebtedness so modified, refinanced, refunded, renewed or extended
except by an amount equal to unpaid accrued interest and premium thereon plus
other amounts paid, and fees and expenses incurred, in connection with such
modification, refinancing, refunding, renewal or extension and by an amount
equal to any existing revolving commitments unutilized thereunder to the extent
that the portion of any existing and unutilized revolving commitment being
refinanced was permitted to be drawn under Sections 6.01 and 6.02 of this
Agreement immediately prior to such refinancing (other than by reference to a
Permitted Refinancing) and such drawing shall be deemed to have been made,
(b) other than with respect to a Permitted Refinancing in respect of
Indebtedness permitted pursuant to Section 6.01(a)(v), Indebtedness resulting
from such modification, refinancing, refunding, renewal or extension has a final
maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being modified, refinanced, refunded,
renewed or extended, (c) if the Indebtedness being modified, refinanced,
refunded, renewed or extended is subordinated in right of payment to the Loan
Document Obligations,

 

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Indebtedness resulting from such modification, refinancing, refunding, renewal
or extension is subordinated in right of payment to the Loan Document
Obligations on terms at least as favorable to the Lenders as those contained in
the documentation governing the Indebtedness being modified, refinanced,
refunded, renewed or extended, (d) immediately after giving effect thereto, no
Event of Default shall have occurred and be continuing, (e) if the Indebtedness
being modified, refinanced, refunded, renewed or extended is permitted pursuant
to Section 6.01(a)(ii) or Section (a)(xxiii), the primary obligor in respect of,
and/or the Persons (if any) that Guarantee, the Indebtedness resulting from such
modification, refinancing, refunding, renewal or extension are the primary
obligor in respect of, and/or Persons (if any) that Guaranteed the Indebtedness
being modified, refinanced, refunded, renewed or extended and (f) the other
terms and conditions of such Indebtedness shall be as agreed between the
Borrower and the parties providing any such Indebtedness. For the avoidance of
doubt, it is understood that a Permitted Refinancing may constitute a portion of
an issuance of Indebtedness in excess of the amount of such Permitted
Refinancing; provided that such excess amount is otherwise permitted to be
incurred under Section 6.01. For the avoidance of doubt, it is understood and
agreed that a Permitted Refinancing includes successive Permitted Refinancings
of the same Indebtedness.

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which a Loan Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Platform” has the meaning specified in Section 5.01.

“Portal” has the meaning specified in Section 2.03.

“Post-Transaction Period” means, with respect to any Specified Transaction, the
period beginning on the date on which such Specified Transaction is consummated
and ending on the last day of the eighth full consecutive fiscal quarter of the
Borrower immediately following the date on which such Specified Transaction is
consummated.

“Present Fair Saleable Value” means the amount that could be obtained by an
independent willing seller from an independent willing buyer if the assets of
the Borrower and its Subsidiaries taken as a whole are sold with reasonable
promptness in an arm’s-length transaction under present conditions for the sale
of comparable business enterprises insofar as such conditions can be reasonably
evaluated.

“Pro Forma Adjustment” means, for any Test Period, any adjustment to
Consolidated EBITDA made in accordance with clause (b) of the definition of that
term.

“Pro Forma Basis,” “Pro Forma Compliance” and “Pro Forma Effect” means, with
respect to compliance with any test, financial ratio or covenant hereunder
required by the terms of this Agreement to be made on a Pro Forma Basis, that
(a) to the extent applicable, the Pro Forma Adjustment shall have been made and
(b) all Specified Transactions and the following transactions in connection
therewith that have been made during the applicable period of measurement or
subsequent to such period and prior to or simultaneously with the event for
which the calculation is made shall be deemed to have occurred as of the first
day of the applicable period of measurement in such test, financial ratio or
covenant: (i) income statement items (whether positive or negative) attributable
to the property or Person subject to such Specified Transaction, (A) in the case
of a Disposition of all or substantially all Equity Interests in any subsidiary
of the Borrower or any division, product line, or facility used for operations
of the Borrower or

 

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any of the Restricted Subsidiaries, shall be excluded, and (B) in the case of a
Permitted Acquisition or Investment described in the definition of “Specified
Transaction,” shall be included, (ii) any retirement of Indebtedness, and
(iii) any Indebtedness incurred or assumed by the Borrower or any of the
Restricted Subsidiaries in connection therewith and if such Indebtedness has a
floating or formula rate, shall have an implied rate of interest for the
applicable period for purposes of this definition determined by utilizing the
rate that is or would be in effect with respect to such Indebtedness as at the
relevant date of determination; provided that, without limiting the application
of the Pro Forma Adjustment pursuant to clause (a) above, the foregoing pro
forma adjustments may be applied to any such test, financial ratio or covenant
solely to the extent that such adjustments are consistent with the definition of
“Consolidated EBITDA” (and subject to the limitations set forth in clause
(b) thereof) and give effect to events (including cost savings, operating
expense reductions and synergies) that are (i) (x) directly attributable to such
transaction, (y) expected to have a continuing impact on the Borrower and any of
the Restricted Subsidiaries and (z) factually supportable or (ii) otherwise
consistent with the definition of “Pro Forma Adjustment.”

“Pro Forma Disposal Adjustment” means, for any four-fiscal quarter period that
includes all or a portion of a fiscal quarter included in any Post-Transaction
Period with respect to any Sold Entity or Business, the pro forma increase or
decrease in Consolidated EBITDA projected by the Borrower in good faith as a
result of contractual arrangements between the Borrower or any Restricted
Subsidiary entered into with such Sold Entity or Business at the time of its
disposal or within the Post-Transaction Period and which represent an increase
or decrease in Consolidated EBITDA which is incremental to the Disposed EBITDA
of such Sold Entity or Business for the most recent four-fiscal quarter period
prior to its disposal.

“Pro Forma Entity” means any Acquired Entity or Business or any Converted
Restricted Subsidiary.

“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 and, if applicable and
without duplication, Loans, of such Lender at such time and the denominator of
which is the amount of the Aggregate Commitments and, if applicable and without
duplication, Loans at such time (if the applicable Commitments have terminated
or expired, the Pro Rata Share shall be determined based upon such Lender’s
share of the aggregate Revolving Exposure at that time).

“Proposed Change” has the meaning assigned to such term in Section 9.02(c).

“Protective Advance” has the meaning assigned to such term in Section 2.08(a).

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“Public Lenders” has the meaning specified in Section 5.01.

“QFC Credit Support” has the meaning specified in Section 9.21.

“Qualified Accounts” means all Bank Accounts of Loan Parties that are either
(i) in the name of the Administrative Agent or (ii) subject to a segregated
account Control Agreement in favor of the Administrative Agent; provided that
the applicable depositary (if not the Administrative Agent) shall provide daily
reports to the Administrative Agent setting forth the balances in such accounts
(which reports may relate to the previous Business Day); provided further that,
in each case, such Qualified Account is not subject to any other Lien other than
Liens permitted by Section 6.02, and such Liens do

 

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not have priority over, and are junior to, the Lien of the Administrative Agent
(other than (i) inchoate or other Liens (including tax Liens) arising by
operation of law or (ii) Permitted Encumbrances under clause (h)(i) of the
definition thereof). To the extent any cash or cash equivalents have been
withdrawn from any Qualified Account, then, prior to or concurrently with either
(A) a Borrowing hereunder or (B) the consummation of a transaction hereunder
which requires satisfaction of the Payment Conditions, in each case subsequent
to such withdrawal, then either (1) the Borrower shall deliver an updated
Borrowing Base Certificate (which updated Borrowing Base Certificate shall be
updated only for the withdrawal of such cash or cash equivalents and which shall
supersede any previously delivered Borrowing Base Certificate for the applicable
period) within one (1) Business Day or (2) the Borrower may notify the
Administrative Agent of such withdrawal and in lieu of delivering the updated
Borrowing Base Certificate referred to in the foregoing clause (1), the
Administrative Agent shall take a Reserve in the amount of such withdrawal under
the Borrowing Base; provided that such Reserve shall no longer be in effect upon
the delivery of an updated Borrowing Base Certificate reflecting such
withdrawal.

“Qualified Cash” means, at any time, the amount of unrestricted cash and
Permitted Investments of the relevant Loan Parties held in Qualified Accounts as
such time.

“Qualified Equity Interests” means Equity Interests in the Borrower or any
parent of the Borrower other than Disqualified Equity Interests.

“Receivables” means (i) Accounts and (ii) Payment Intangibles evidencing rights
to payment for goods sold or leased, or for services rendered.

“Receivables Guarantee” has the meaning assigned to such term in the definition
of “Permitted Receivables Financing”.

“Receivables Subsidiary” means any Special Purpose Entity established in
connection with a Permitted Receivables Financing.

“Register” has the meaning assigned to such term in Section 9.04(b)(iv).

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the partners, directors, officers, employees, trustees, agents,
controlling persons, advisors and other representatives of such Person and of
each of such Person’s Affiliates and permitted successors.

“Release” means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) and including the environment within any building or other
structure.

“Removal Effective Date” has the meaning assigned to such term in Article VIII.

“Rent Reserve” means an amount equal to no more than three calendar months of
the aggregate rent payable by the Loan Parties on all leased properties in
respect of which Collateral Access Agreements are not in effect. Notwithstanding
anything in this Agreement to the contrary, Rent Reserves will be calculated by
the Administrative Agent on a semi-annual basis.

“Replacement Lender” has the meaning assigned to such term in Section 2.22(c).

 

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“Required Additional Debt Terms” means with respect to any Indebtedness,
(a) such Indebtedness does not mature earlier than the Latest Maturity Date
(except in the case of customary bridge loans, which subject to customary
conditions (including no payment or bankruptcy event of default), would either
automatically be converted into or required to be exchanged for permanent
refinancing which does not mature earlier than the Latest Maturity Date), (b)
such Indebtedness does not have mandatory redemption features (other than
customary asset sale, insurance and condemnation proceeds events, change of
control offers or events of default or, if term loans, excess cash flow
prepayments applicable to periods before the Latest Maturity Date) that could
result in redemptions of such Indebtedness prior to the Latest Maturity Date,
(c) such Indebtedness is not guaranteed by any entity that is not a Loan Party,
(d) such Indebtedness that is secured (i) is not secured by any assets not
securing the Secured Obligations, (ii) is subject to the ABL Intercreditor
Agreement or another intercreditor agreement reasonably acceptable to the
Administrative Agent and (iii) is subject to security agreements relating to
such Indebtedness that are substantially the same as the Security Documents
(with such differences as are reasonably satisfactory to the Administrative
Agent) and (e) the other terms and conditions of such Indebtedness shall be as
agreed between the Borrower and the parties providing any such Indebtedness.

“Required Lenders” means, at any time, Lenders having Revolving Exposures and
unused Commitments (other than Swingline Commitments) representing more than 50%
of the aggregate Revolving Exposures and unused Commitments (other than
Swingline Commitments) at such time; provided that whenever there are one or
more Defaulting Lenders or Disqualified Lenders, the total outstanding Revolving
Exposures of, and the unused Revolving Commitments of, each Defaulting Lender
and each Disqualified Lender shall in each case be excluded for purposes of
making a determination of Required Lenders.

“Requirements of Law” means, with respect to any Person, any statutes, laws,
treaties, rules, regulations, orders, decrees, writs, injunctions or
determinations of any arbitrator or 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.

“Required Reserve Notice” means (a) so long as no Event of Default has occurred
and is continuing, at least five Business Days’ advance notice to the Borrower
(or such shorter period as the Borrower may agree), and (b) if an Event of
Default has occurred and is continuing, one days’ advance notice to the
Borrower; provided that, solely for purposes of any determination under
Section 4.02(d), a Required Reserve Notice with respect to any Bank Product
Reserves shall be effective immediately and shall not require any advance
notice.

“Reserves” means all Availability Reserves, Dilution Reserves, Rent Reserves,
Royalty Reserves, Bank Product Reserves, Secured Cash Management Reserves,
Secured Hedge Reserves, Shrink Reserves and any and all other reserves which the
Administrative Agent deems necessary in its Permitted Discretion.
Notwithstanding anything in this Agreement to the contrary, Reserves in respect
of employee liabilities and employee withholdings will be determined based on
information contained in the most recent field examination (or, in the Permitted
Discretion of the Administrative Agent, based on updated information provided to
the Administrative Agent by the Borrower).

“Resignation Effective Date” has the meaning assigned to such term in Article
VIII.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, treasurer or assistant treasurer, or other
similar officer, manager or a director of a Loan Party (including, with respect
to the Portal, any person authorized and authenticated through the Portal in
accordance with the Administrative Agent’s procedures for such authentication)
and with respect to certain limited liability companies or partnerships that do
not have officers, any manager, sole member, managing member or general partner
thereof, and as to any document delivered on the Effective Date or

 

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thereafter pursuant to paragraph (a) of the definition of the term “Collateral
and Guarantee Requirement,” 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 Debt Payments” has the meaning specified in Section 6.08(b).

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any other Restricted Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in the Borrower or any Restricted Subsidiary
or any option, warrant or other right to acquire any such Equity Interests.

“Restricted Subsidiary” means any Subsidiary other than an Unrestricted
Subsidiary.

“Revolving Borrowing” means a request for Revolving Loans.

“Revolving Commitment” means, with respect to each Revolving Lender, the
commitment of such Revolving Lender to make Revolving Loans and to acquire
participations in Protective Advances, Letters of Credit and Swingline Loans
hereunder, expressed as an amount representing the maximum possible aggregate
amount of such Revolving Lender’s Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.06, (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04, (c) reduced or increased from time to time
pursuant to Section 2.25 and (d) increased from time to time pursuant to
Section 2.18. The initial amount of each Revolving Lender’s Revolving Commitment
is set forth on the Commitment Schedule, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable. The initial aggregate amount of the Revolving Lenders’ Revolving
Commitments is $300,000,000.

“Revolving Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC
Exposure and an amount equal to its Pro Rata Share of the aggregate principal
amounts of Swingline Loans and Protective Advances outstanding at such time.

“Revolving Lender” means, as of any date of determination, a Lender with a
Revolving Commitment or, if the Revolving Commitments have terminated or
expired, a Lender with Revolving Exposure. Unless the context otherwise
requires, the term “Revolving Lenders” includes the Swingline Lender under the
Facility.

“Revolving Loan” means the loans and advances made by the Revolving Lenders
pursuant to this Agreement, including a Loan made pursuant to Section 2.01,
Swingline Loans, Protective Advances, and Overadvance Loans.

“Royalties” means all royalties, fees, expense reimbursement and other amounts
payable by any Loan Party under a license of Intellectual Property.

“Royalty Reserve” means an amount equal to all accrued Royalties that are then
unpaid, whether or not then due and payable by any Loan Party.

 

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

“Sale Leaseback” means any transaction or series of related transactions
pursuant to which the Borrower or any other Restricted Subsidiary (a) sells,
transfers or otherwise disposes of any property, real or personal, whether now
owned or hereafter acquired, and (b) as part of such transaction, thereafter
rents or leases such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold,
transferred or disposed of.

“Sanctions” means economic sanctions administered or enforced by the United
States Government (including without limitation, sanctions enforced by OFAC),
the United Nations Security Council, the European Union or any European Union
member state, Her Majesty’s Treasury of the United Kingdom, or any other
Governmental Authority with jurisdiction over any Loan Party, any of their
respective Subsidiaries or any party hereto.

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, or (d) a Person resident
in or determined to be resident in a country, in each case of clauses
(a) through (d) that is a target of any comprehensive country Sanctions program
administered and enforced by OFAC.

“Sanctioned Person” means (a) any Person named on the list of Specially
Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated
Non-SDN list or any applicable other Sanctions-related list maintained by any
applicable Governmental Authority, (b) a Person or legal entity that is the
subject of Sanctions, (c) any Person operating, organized or resident in a
Sanctioned Entity to the extent it would be prohibited by Sanctions, or (d) any
Person directly or indirectly owned or controlled (individually or in the
aggregate) by or acting on behalf of any such Person or Persons described in
clauses (a) through (c) above.

“SEC” means the Securities and Exchange Commission or any Governmental Authority
succeeding to any of its principal functions.

“Secured Bank Product Obligations” means the due and punctual payment and
performance of all Bank Product Obligations of the Borrower and the Restricted
Subsidiaries in respect of any purchase card programs provided to the Borrower
or any Subsidiary (whether absolute or contingent and howsoever and whenever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor)) that are (a) owed to the
Administrative Agent or any of its Affiliates or branches, (b) owed on the
Effective Date to a Person that is a Lender or an Affiliate or branch of a
Lender as of the Effective Date or (c) owed to a Person that is an Agent, a
Lender or an Affiliate or branch of an Agent or Lender at the time such
obligations are incurred.

“Secured Cash Management Obligations” means the due and punctual payment and
performance of all obligations of the Borrower and the Restricted Subsidiaries
in respect of any overdraft and related liabilities arising from treasury,
depository, cash pooling arrangements and cash management services, corporate
credit and purchasing cards and related programs or any automated clearing house
transfers of funds (collectively, “Cash Management Services”) provided to the
Borrower or any Subsidiary (whether absolute or contingent and howsoever and
whenever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor)) that are
(a) owed to the Administrative Agent or any of its Affiliates or branches,
(b) owed on the Effective Date to a Person that is a Lender or an Affiliate or
branch of a Lender as of the Effective Date or (c) owed to a Person that is an
Agent, a Lender or an Affiliate or branch of an Agent or Lender at the time such
obligations are incurred.

 

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“Secured Cash Management Reserves” means Secured Obligations in respect of any
Secured Cash Management Obligation in the amount specified by the applicable
Secured Party and the Borrower in writing to the Administrative Agent under the
definition of “Noticed Cash Management Obligations”, which amount may, subject
to the restrictions set forth in the definition of “Noticed Cash Management
Obligations” be increased with respect to any existing Secured Cash Management
Obligation at any time by further written notice from such Secured Party and the
Borrower to the Administrative Agent.

“Secured Hedge Reserves” means Secured Obligations in respect of any Secured
Swap Obligation in the amount specified by the applicable Secured Party and the
Borrower in writing to the Administrative Agent under the definition of “Noticed
Hedges” (but not to exceed the Hedge Termination Value), which amount may,
subject to the restrictions set forth in the definition of “Noticed Hedges” and
herein, be increased with respect to any existing Secured Swap Obligation at any
time by further written notice from such Secured Party and the Borrower to the
Administrative Agent.

“Secured Leverage Ratio” means, on any date, the ratio of (a) Consolidated
Secured Debt as of such date to (b) Consolidated EBITDA for the Test Period as
of such date.

“Secured Obligations” means (a) the Loan Document Obligations, (b) the Secured
Cash Management Obligations, (c) the Secured Bank Product Obligations and
(d) the Secured Swap Obligations (excluding with respect to any Loan Party,
Excluded Swap Obligations of such Loan Party).

“Secured Parties” means (a) each Lender, (b) each Issuing Bank, (c) the
Administrative Agent, (d) each Joint Bookrunner, (e) each Lead Arranger,
(f) each Person to whom any Secured Cash Management Obligations are owed,
(g) each Person to whom any Secured Bank Product Obligations are owed, (h) each
counterparty to any Swap Agreement the obligations under which constitute
Secured Swap Obligations, (i) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document and (j) the
permitted successors and assigns of each of the foregoing.

“Secured Swap Obligations” means the due and punctual payment and performance of
all obligations of the Borrower, and the Restricted Subsidiaries under each Swap
Agreement that (a) is with a counterparty that is an Agent or any of its
Affiliates or branches, (b) is in effect on the Effective Date with a
counterparty that is a Lender or an Affiliate or branch of a Lender as of the
Effective Date and (c) is entered into after the Effective Date with any
counterparty that is a Lender, an Agent or an Affiliate or branch of a Lender or
an Agent at the time such Swap Agreement is entered into.

“Security Documents” means the Collateral Agreement, the ABL Intercreditor
Agreement (if executed) and each other security agreement, pledge agreement or
other instrument or document executed and delivered pursuant to the Collateral
and Guarantee Requirement, Section 4.01(f), 5.11 or 5.12 by a Loan Party or any
Parent Entity thereof to secure any of the Secured Obligations or to govern the
lien priorities of the holders of Liens on the Collateral.

“Settlement” has the meaning specified in Section 2.23(a)(ii).

“Settlement Date” has the meaning specified in Section 2.23(a)(ii).

“Shrink Reserve” means an amount reasonably estimated by the Administrative
Agent to be equal to that amount which is required in order that the shrink
reflected in current books and records of the Loan Parties would be reasonably
equivalent to the shrink calculated as part of the Borrower’s most recent
physical Inventory or cycle counts; provided that no Shrink Reserve established
by the Administrative Agent shall be duplicative of any shrink as so reflected
in the current books and records of the Loan Parties or estimated by the
Borrower for purposes of computing the Borrowing Base.

 

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“Sold Entity or Business” has the meaning given such term in the definition of
“Consolidated EBITDA.”

“Solvent” means (a) the Fair Value of the assets of the Borrower and its
Subsidiaries on a consolidated basis taken as a whole exceeds their Liabilities,
(b) the Present Fair Saleable Value of the assets of the Borrower and its
Subsidiaries on a consolidated basis taken as a whole exceeds their Liabilities,
(c) the Borrower and its Subsidiaries on a consolidated basis taken as a whole
after consummation of the Transactions is a going concern and has sufficient
capital to reasonably ensure that it will continue to be a going concern for the
period from the date hereof through the Latest Maturity Date taking into account
the nature of, and the needs and anticipated needs for capital of, the
particular business or businesses conducted or to be conducted by the Borrower
and its Subsidiaries on a consolidated basis as reflected in the projected
financial statements and in light of the anticipated credit capacity and (d) for
the period from the date hereof through the Latest Maturity Date, the Borrower
and its Subsidiaries on a consolidated basis taken as a whole will have
sufficient assets and cash flow to pay their Liabilities as those liabilities
mature or (in the case of contingent Liabilities) otherwise become payable, in
light of business conducted or anticipated to be conducted by the Borrower and
its Subsidiaries as reflected in the projected financial statements and in light
of the anticipated credit capacity.

“Special Purpose Entity” means a direct or indirect subsidiary of the Borrower,
whose organizational documents contain restrictions on its purpose and
activities and impose requirements intended to preserve its separateness from
the Borrower and/or one or more Subsidiaries of the Borrower.

“Special Resolution Regimes” has the meaning specified in Section 9.21.

“Specified Default” means any Event of Default pursuant to Section 7.01(a), (b),
(c) (with respect to representations in any Borrowing Base Certificate only),
(d) (with respect to Section 5.17 or 6.10 only), (e) (with respect to
Section 5.01(i) only), (h) or (i).

“Specified Excess Availability” means the sum of (a) Excess Availability and
(b) the lesser of (i) Suppressed Availability and (ii) 2.5% of the aggregate
Revolving Commitments at such time.

“Specified Transaction” means, with respect to any period, any Investment,
Disposition, incurrence or repayment of Indebtedness, Restricted Payment, New
Project, subsidiary designation or other event that by the terms of the Loan
Documents requires “Pro Forma Compliance” with a test or covenant hereunder or
requires such test or covenant to be calculated on a “Pro Forma Basis.”

“Specified Transaction Adjustments” has the meaning specified in
Section 1.08(d).

“Sponsor” means each of (a) BC Partners, Inc. and its Affiliates (including the
funds, partnerships or other co-investment vehicles managed, advised or
controlled thereby but other than, in each case, the Borrower and its
Subsidiaries or any portfolio company), (b) Caisse de dépôt et placement du
Québec and its Affiliates (including the funds, partnerships or other
co-investment vehicles managed, advised or controlled thereby but other than, in
each case, the Borrower and its Subsidiaries or any portfolio company), (c)
Government of Singapore Investment Corporation and its Affiliates (including the
funds, partnerships or other co-investment vehicles managed, advised or
controlled thereby but other than, in each case, the Borrower and its
Subsidiaries or any portfolio company), (d) GIC Private Limited and its
Affiliates (including the funds, partnerships or other co-investment vehicles
managed, advised or controlled thereby but other than, in each case, the
Borrower and its Subsidiaries or any portfolio company), (e) Longview Asset
Management LLC and its Affiliates (including the funds, partnerships or other
co-investment vehicles managed, advised or controlled thereby but other than, in
each case, the Borrower and its Subsidiaries or any portfolio company) and
(f) StepStone Group LP and its Affiliates (including the funds, partnerships or
other co-investment vehicles managed, advised or controlled thereby but other
than, in each case, the Borrower and its Subsidiaries or any portfolio company).

 

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“SPV” has the meaning assigned to such term in Section 9.04(e).

“Standby Letter of Credit” means any Letter of Credit other than a Commercial
Letter of Credit.

“Standard Letter of Credit Practice” means, for any Issuing Bank, any domestic
or foreign law or letter of credit practices applicable in the city in which
such Issuing Bank issued the applicable Letter of Credit or, for its branch or
correspondent, such laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

“Sterling” means the lawful currency of the United Kingdom.

“Subordinated Indebtedness” means any Material Indebtedness that is subordinated
in right of payment to the Loan Document Obligations.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Loan Party” means each Subsidiary that is party to the Guarantee
Agreement.

“Successor Borrower” has the meaning assigned to such term in
Section 6.03(a)(iv).

“Super Majority Lenders” means, at any time, Lenders having Revolving Exposures
and unused Commitments (other than Swingline Commitments) representing more than
66.7% of the aggregate Revolving Exposures and unused Commitments (other than
Swingline Commitments) at such time; provided that whenever there are one or
more Defaulting Lenders, the total outstanding Revolving Exposures of, and the
unused Revolving Commitments of, each Defaulting Lender shall in each case be
excluded for purposes of making a determination of Super Majority Lenders.

“Supported QFC” has the meaning specified in Section 9.21.

“Suppressed Availability” means, at any time, the amount (if any, but in no
event less than zero) by which the Borrowing Base exceeds the aggregate
Revolving Commitments at such time.

“Swap” means any agreement, contract, or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act or other
applicable law.

 

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“Swap Agreement” 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 (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Obligation” means, with respect to any Person, any obligation to pay or
perform under any Swap.

“Swingline Borrowing” means a request for Swingline Loans.

“Swingline Exposure” means, with respect to any Revolving Lender, at any time,
such Revolving Lender’s Pro Rata Share of the Swingline Loans outstanding at
such time.

“Swingline Lender” means Wells Fargo Bank, National Association, in its capacity
as lender of Swingline Loans hereunder, and its successors and assigns in such
capacity.

“Swingline Loan” means a Swingline Loan made by the Swingline Lender to the
Borrower under Section 2.23(a).

“Swingline Sublimit” means an amount equal to the lesser of (a) $30,000,000 and
(b) the Total Revolving Commitments. The Swingline Sublimit is part of, and not
in addition to, the Revolving Commitments.

“Syndication Agent” means JPMorgan Chase Bank, N.A., in its capacity as
syndication agent hereunder.

“Tax Group” has the meaning specified in Section 6.08(a)(vii)(A)

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings (including backup withholding) imposed by
any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.

“Test Period” means, at any date of determination, the most recently completed
four consecutive fiscal quarters of the Borrower ending on or prior to such date
for which financial statements have been (or were required to have been)
delivered pursuant to Section 5.01(a) or Section 5.01(b); provided that prior to
the first date financial statements have been delivered pursuant to
Section 5.01(a) or Section 5.01(b), the Test Period in effect shall be the
period of four consecutive fiscal quarters of the Borrower ended February 3,
2019.

“Total Leverage Ratio” means, on any date, the ratio of (a) Consolidated Total
Debt as of such date to (b) Consolidated EBITDA for the Test Period as of such
date.

 

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“Total Maximum Borrowing Amount” means the Maximum Borrowing Amount under the
Facility at such time.

“Total Revolving Commitments” means the aggregate outstanding amount of
Revolving Commitments for the Facility of all Revolving Lenders under the
Facility.

“Transactions” means, collectively, (a) the effectiveness of this Agreement,
(b) the effectiveness of the IPO Separation Agreements, (c) the consummation of
any other transactions in connection with the foregoing and (d) the payment of
the fees and expenses incurred in connection with any of the foregoing
(including the Transaction Costs).

“Transaction Costs” means any fees or expenses incurred or paid by the Sponsors,
a Parent Entity, the Borrower or any Subsidiary in connection with the
Transactions, this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby.

“Type,” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBO Rate or the Alternate Base Rate.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, however, that, at
any time, if by reason of mandatory provisions of law, any or all of the
perfection or priority of the Administrative Agent’s security interest in any
item or portion of the Pledged Collateral (as defined in the Collateral
Agreement) is governed by the Uniform Commercial Code as in effect in a U.S.
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect, at such time, in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or priority
and for purposes of definitions relating to such provisions.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any version or revision thereof accepted by any
Issuing Bank for use.

“Uncontrolled Cash” means all amounts from time to time on deposit in any
Designated Disbursement Account.

“Unrestricted Subsidiary” means any Subsidiary designated by the Borrower as an
Unrestricted Subsidiary pursuant to Section 5.14 subsequent to the Effective
Date.

“U.S. Tax Compliance Certificate” has the meaning specified in
Section 2.15(e)(2)(D)

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as
amended from time to time.

“Value” means, on any date, with reference to (a) Eligible Inventory, the Net
Orderly Liquidation Value thereof and (b) Eligible Receivables, the book value
thereof determined in accordance with GAAP.

“Vehicles” means all railcars, cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law of any
state and all tires and other appurtenances to any of the foregoing.

 

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“Weekly Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower, in substantially
the form of Exhibit F or another form which is acceptable to the Administrative
Agent in its reasonable discretion (it being agreed that each Weekly Borrowing
Base Certificate will be based on the most recently delivered Borrowing Base
Certificate delivered on a monthly basis updated to reflect changes in the
aggregate Value of Receivables and Inventory of the relevant Loan Parties but
with ineligibility and reserve related items reflecting those set forth in such
most recent Borrowing Base Certificate).

“Weekly Reporting Period” means any period (a) beginning on the date that Excess
Availability is less than the greater of (i) 10% of the Total Maximum Borrowing
Amount and (ii) $30,000,000 for five consecutive Business Days, until such time
as Excess Availability has been at least the greater of (i) 10% of the Total
Maximum Borrowing Amount and (ii) $30,000,000 for at least 20 consecutive
calendar days, or (b) during which a Specified Default has occurred and is
continuing.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by (b) the then outstanding principal amount of such
Indebtedness.

“wholly-owned subsidiary” means, with respect to any Person at any date, a
subsidiary of such Person of which securities or other ownership interests
representing 100% of the Equity Interests (other than (a) directors’ qualifying
shares and (b) nominal shares issued to foreign nationals to the extent required
by applicable Requirements of Law) are, as of such date, owned, controlled or
held by such Person or one or more wholly-owned subsidiaries of such Person or
by such Person and one or more wholly-owned subsidiaries of such Person.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” shall mean any Loan Party, the Administrative Agent and, in
the case of any U.S. federal withholding tax, any other withholding agent, if
applicable.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

SECTION 1.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans and Borrowings may be classified and referred to by Class
(e.g., a “Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by
Class and Type (e.g., a “Eurocurrency Revolving Loan”). Borrowings also may be
classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type
(e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency
Revolving Borrowing”).

SECTION 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise,

 

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(a) any definition of or reference to any agreement (including this Agreement
and the other Loan Documents), instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, amended and restated, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to any restrictions on
assignment set forth herein) and, in the case of any Governmental Authority, any
other Governmental Authority that shall have succeeded to any or all functions
thereof, (c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

SECTION 1.04 Accounting Terms; GAAP.

(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 be prepared in conformity with GAAP.

(b) Notwithstanding anything to the contrary herein, for purposes of determining
compliance with any test contained in this Agreement (other than Section 6.10),
the Fixed Charge Coverage Ratio, First Lien Leverage Ratio, Secured Leverage
Ratio, Interest Coverage Ratio and the Total Leverage Ratio shall be calculated
on a Pro Forma Basis to give effect to all Specified Transactions that have been
made during the applicable period of measurement or subsequent to such period
and prior to or simultaneously with the event for which the calculation is made.

(c) Where reference is made to “the Borrower and the Restricted Subsidiaries on
a consolidated basis” or similar language, such consolidation shall not include
any Subsidiaries of the Borrower other than the Restricted Subsidiaries.

(d) In the event that the Borrower elects to prepare its financial statements in
accordance with IFRS and such election results in a change in the method of
calculation of financial covenants, standards or terms (collectively, the
“Accounting Changes”) in this Agreement, the Borrower and the Administrative
Agent agree to enter into good faith negotiations in order to amend such
provisions of this Agreement (including the levels applicable herein to any
computation of the Fixed Charge Coverage Ratio, First Lien Leverage Ratio,
Secured Leverage Ratio, Interest Coverage Ratio or the Total Leverage Ratio) so
as to reflect equitably the Accounting Changes with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be
substantially the same after such change as if such change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed in accordance with GAAP (as determined in good faith by a
Responsible Officer of the Borrower) (it being agreed that the reconciliation
between GAAP and IFRS used in such determination shall be made available to
Lenders) as if such change had not occurred.

SECTION 1.05 Effectuation of Transactions. All references herein to the Borrower
and its subsidiaries shall be deemed to be references to such Persons, and all
the representations and warranties of the Borrower and the other Loan Parties
contained in this Agreement and the other Loan Documents shall be deemed made,
in each case, after giving effect to the Transactions to occur on the Effective
Date, unless the context otherwise requires.

 

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SECTION 1.06 Currency Translation; Rates.

(a) Unless expressly provided otherwise, all references in the Loan Documents to
Loans, Letters of Credit, Loan Document Obligations, Revolving Commitments,
Borrowing Base components and other amounts shall be denominated in Dollars. For
purposes of any determination under Article IV, Article V, Article VI or Article
VII, all amounts incurred, outstanding or proposed to be incurred or outstanding
in currencies other than Dollars shall be translated into Dollars at the
Exchange Rate (rounded to the nearest currency unit, with 0.5 or more of a
currency unit being rounded upward). The Borrower shall report Borrowing Base
components to the Agent in the currency invoiced by the applicable obligors or
shown in their financial records, and unless expressly provided otherwise,
herein shall deliver financial statements and calculate financial covenants in
Dollars. Unless expressly provided otherwise, if any Loan Document Obligation is
funded and expressly denominated in a currency other than Dollars, the Loan
Parties shall repay such Loan Document Obligation in such other currency. No
Default or Event of 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 or Disposition or Restricted Payment made; provided,
further, that, for the avoidance of doubt, the foregoing provisions of this
Section 1.06 shall otherwise apply to such Sections, including with respect to
determining whether any Indebtedness or Investment may be incurred or
Disposition or Restricted Payment made at any time under such Sections. For
purposes of any determination of Consolidated Total Debt, amounts in currencies
other than Dollars shall be translated into Dollars at the currency exchange
rates used in preparing the most recently delivered financial statements
pursuant to Section 5.01(a) or Section 5.01(b). 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
(such consent not to be unreasonably withheld) to appropriately reflect a change
in currency of any country and any relevant market conventions or practices
relating to such change in currency.

(b) The Administrative Agent shall determine the Exchange Rate as of each
Determination Date to be used for calculating the Dollar Equivalent amounts of
Revolving Loans, Swingline Loans and Letters of Credit denominated in a currency
other than Dollars. Such Exchange Rates shall become effective as of such
Determination Date and shall be the Exchange Rate employed in converting the
amount of any Revolving Loan, Swingline Loan and Letters of Credit between
Dollars and another currency until the next Determination Date to occur. In the
event that on any Determination Date (after giving effect to the determination
of the outstanding amount of each Revolving Loan, Swingline Loan and LC
Exposure) the total Revolving Exposure under the Facility exceeds the Maximum
Borrowing Amount under the Facility, the relevant Borrower shall, within one
Business Day after receipt of notice from the Administrative Agent, prepay the
Revolving Loans or Swingline Loans and/or reduce LC Exposure (in each case,
taking the Dollar Equivalent of any amounts in a currency other than Dollars),
in accordance with, and to the extent required by, Section 2.09(b).

SECTION 1.07 Letters of Credit.

(a) Letters of Credit. Unless otherwise specified herein, the amount of a Letter
of Credit at any time shall be deemed to be the amount of the stated amount of
such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the amount of the maximum stated amount of such Letter of Credit after giving
effect to all such increases, whether or not such maximum stated amount is in
effect at such time.

 

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SECTION 1.08 Limited Condition Acquisitions and Pro Forma Calculations.

(a) In connection with any action being taken solely in connection with a
Limited Condition Acquisition, for purposes of:

(i) determining compliance with any provision of this Agreement which requires
the calculation of the Interest Coverage Ratio, the Fixed Charge Coverage Ratio,
the First Lien Leverage Ratio, the Secured Leverage Ratio or the Total Leverage
Ratio;

(ii) determining compliance with representations, warranties, defaults or Events
of Default (in each case, other than for purposes of Section 4.02); and

(iii) testing availability under baskets set forth in this agreement (including
baskets measured as a percentage of Consolidated EBITDA or Consolidated Total
Assets and the Payment Conditions baskets (including the Fixed Charge Coverage
Ratio as set forth therein));

in each case, at the option of the Borrower (the Borrower’s election to exercise
such option in connection with any Limited Condition Acquisition, an “LCA
Election”), the date of determination of whether any such action is permitted
hereunder, shall be deemed to be the date the definitive agreements for such
Limited Condition Acquisition are entered into (the “LCA Test Date”) (provided
that the Borrower shall be required to make an LCA Election on or prior to the
date on which the definitive agreements for such Limited Condition Acquisition
have been entered into), and if, after giving Pro Forma Effect to the Limited
Condition Acquisition and the other transactions to be entered into in
connection therewith (including any incurrence of Indebtedness and the use of
proceeds thereof) as if they had occurred at the beginning of the most recent
Test Period ending prior to the LCA Test Date (after giving effect to any
increases or decrease in Indebtedness of the Borrower and Restricted
Subsidiaries since such date), the Borrower could have taken such action on the
relevant LCA Test Date in compliance with such ratio, representation, warranty,
default, Events of Default or basket, such ratio, representation, warranty,
default, Event of Default or basket shall be deemed to have been complied with
for purposes of such Limited Condition Acquisition. For the avoidance of doubt,
if the Borrower has made an LCA Election and any of the ratios or baskets for
which compliance was determined or tested as of the LCA Test Date are exceeded
as a result of fluctuations in any such ratio or basket, including due to
fluctuations in Consolidated EBITDA or Consolidated Total Assets of the Borrower
or the Person subject to such Limited Condition Acquisition, at or prior to the
consummation of the relevant transaction or action, such baskets or ratios will
not be deemed to have been exceeded as a result of such fluctuations. If the
Borrower has made an LCA Election for any Limited Condition Acquisition, then in
connection with any subsequent calculation of any ratios, representations,
warranties, defaults, Events of Default or basket availability with respect to
the incurrence of Indebtedness or Liens, or the making of Restricted Payments,
mergers, the conveyance, lease or other transfer of all or substantially all of
the assets of the Borrower, the prepayment, redemption, purchase, defeasance or
other satisfaction of Indebtedness, or the designation of an Unrestricted
Subsidiary on or following the relevant LCA Test Date and prior to the earlier
of the date on which such Limited Condition Acquisition is consummated or the
date that the definitive agreement for such Limited Condition Acquisition is
terminated or expires without consummation of such Limited Condition
Acquisition, any such ratios, representations, warranties, defaults, Events of
Default or baskets shall be calculated on a Pro Forma Basis assuming such
Limited Condition Acquisition and other transactions in connection therewith
(including any incurrence of Indebtedness and the use of proceeds thereof) have
not been consummated until such time as the applicable Limited Condition
Acquisition has actually closed or the definitive agreement with respect thereto
has been terminated (it being further understood that any Consolidated Net
Income, Consolidated EBITDA and/or Consolidated Total Assets therefrom shall not
be included in the Borrower’s Consolidated Net Income, Consolidated EBITDA or
Consolidated Total Assets, as applicable, in any such subsequent calculation
until such Limited Condition Acquisition has actually closed or the definitive
agreement with respect thereto has been terminated).

 

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(b) Notwithstanding anything to the contrary herein, the First Lien Leverage
Ratio, the Secured Leverage Ratio, the Total Leverage Ratio, the Interest
Coverage Ratio and the Fixed Charge Coverage Ratio shall be calculated in the
manner prescribed by this Section 1.08; provided, that notwithstanding anything
to the contrary in clauses (c), (d) or (e) of this Section 1.08, when
calculating the Fixed Charge Coverage Ratio for purposes of Section 6.10, the
events described in this Section 1.08 that occurred subsequent to the end of the
applicable Test Period shall not be given pro forma effect.

(c) For purposes of calculating the First Lien Leverage Ratio, the Secured
Leverage Ratio, the Total Leverage Ratio, the Interest Coverage Ratio and the
Fixed Charge Coverage Ratio, Specified Transactions (and the incurrence or
repayment of any Indebtedness in connection therewith) that have been made
(i) during the applicable Test Period or (ii) subsequent to such Test Period and
prior to or simultaneously with the event for which the calculation of any such
ratio is made shall be calculated on a pro forma basis assuming that all such
Specified Transactions (and any increase or decrease in Consolidated EBITDA,
Consolidated First Lien Debt, Consolidated Secured Debt, Consolidated Total Debt
and/or Fixed Charges and the component financial definitions used therein
attributable to any Specified Transaction) had occurred on the first day of the
applicable Test Period. If since the beginning of any applicable Test Period any
Person that subsequently became a Restricted Subsidiary or was merged,
amalgamated or consolidated with or into the Borrower or any of its Restricted
Subsidiaries since the beginning of such Test Period shall have made any
Specified Transaction that would have required adjustment pursuant to this
Section 1.08, then the First Lien Leverage Ratio, the Secured Leverage Ratio,
the Total Leverage Ratio, the Interest Coverage Ratio and the Fixed Charge
Coverage Ratio shall be calculated to give pro forma effect thereto in
accordance with this Section 1.08.

(d) Whenever pro forma effect is to be given to a Specified Transaction, the pro
forma calculations shall be made in good faith by a Responsible Officer and may
include, for the avoidance of doubt, the amount of cost savings, operating
expense reductions and, synergies projected by the Borrower in good faith to be
realized as a result of specified actions taken, committed to be taken or
expected to be taken (calculated on a pro forma basis as though such cost
savings, operating expense reductions and synergies had been realized on the
first day of such Test Period and as if such cost savings, operating expense
reductions and synergies were realized during the entirety of such period)
relating to such Specified Transaction, net of the amount of actual benefits
realized during such period from such actions (such cost savings and synergies,
“Specified Transaction Adjustments”); provided that (i) such Specified
Transaction Adjustments are reasonably identifiable, quantifiable and factually
supportable in the good faith judgment of the Borrower (it being agreed such
determination need not be made in compliance with Regulation S-X or other
applicable securities laws), (ii) such actions are taken, committed to be taken
or expected to be taken no later than twenty-four months after the date of such
Specified Transaction and (iii) no amounts shall be added pursuant to this
clause (d) to the extent duplicative of any amounts that are otherwise added
back in calculating Consolidated EBITDA, whether through a pro forma adjustment
or otherwise, with respect to any Test Period.

(e) Without limiting the general application of Section 1.04(b), in the event
that the Borrower or any Restricted Subsidiary incurs (including by assumption
or guarantees) or repays (including by redemption, repayment, retirement or
extinguishment) any Indebtedness included in the calculations of the First Lien
Leverage Ratio, the Secured Leverage Ratio, the Total Leverage Ratio, the
Interest Coverage Ratio and the Fixed Charge Coverage Ratio, as the case may be,
(i) during the applicable Test Period or (ii) subsequent to the end of the
applicable Test Period and prior to or simultaneously with the event for which
the calculation of any such ratio is made, then the First Lien Leverage Ratio,
the Secured Leverage Ratio, the Total Leverage Ratio, the Interest Coverage
Ratio and the Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect to such incurrence or repayment of Indebtedness, to the extent required,
as if the same had occurred on the last day of the applicable Test Period with
respect to leverage ratios or the first day of such Test Period with respect to

 

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the Fixed Charge Coverage Ratio and to the extent the proceeds of any new
Indebtedness are to be used to repay other Indebtedness (including by
repurchase, redemption, retirement, extinguishment, defeasance, discharge or
pursuant to escrow or similar arrangements) whether at the time of or after the
incurrence of such new Indebtedness, the Borrower shall be permitted to give Pro
Forma Effect to such repayment of Indebtedness.

(f) Notwithstanding anything in this Agreement or any Loan Document to the
contrary (i) unless the Borrower elects otherwise, if the Borrower or its
Restricted Subsidiaries in connection with any transaction or series of related
transactions (A) incurs Indebtedness, creates Liens, makes Dispositions, makes
Investments, makes Restricted Payments, designates any Subsidiary as restricted
or unrestricted or repays any Indebtedness or takes any other action under or as
permitted by a ratio-based basket (including, without limitation, any First Lien
Leverage Ratio test, any Secured Leverage Ratio test, any Total Leverage Ratio
test, any Interest Coverage Ratio test and/or any Fixed Charge Coverage Ratio
test) (any such amounts, the “Incurrence-Based Amounts”) and (B) incurs
Indebtedness, creates Liens, makes Dispositions, makes Investments, makes
Restricted Payments, designates any Subsidiary as restricted or unrestricted or
repays any Indebtedness or takes any other action under a non-ratio-based basket
(any such amounts, the “Fixed Amounts”), then the Fixed Amounts shall be
disregarded in the calculation of the financial test or ratio test applicable to
such Incurrence-Based Amounts, (ii) if the Borrower or its Restricted
Subsidiaries enters into any revolving, delayed draw or other committed debt
facility, the Borrower may elect to determine compliance of such debt facility
(including the incurrence of Indebtedness and Liens from time to time in
connection therewith) with this Agreement and each other Loan Document on the
date commitments with respect thereto are first received, assuming the full
amount of such facility is incurred (and any applicable Liens are granted) on
such date, in lieu of determining such compliance on any subsequent date
(including any date on which Indebtedness is incurred pursuant to such
facility); provided, that if such election is made, then all calculations under
this Agreement from the date of such election until such facility is effective
or such commitments are terminated shall be calculated as if such facility were
fully drawn and (iii) if the Borrower or any Restricted Subsidiary incurs
Indebtedness consisting of Incurrence-Based Amounts (together with any other
Incurrence-Based Amounts incurred or made in connection therewith, including in
respect of other Indebtedness, Liens, Dispositions, Investments, Restricted
Payments or Restricted Debt Payments) the relevant ratios will be calculated
excluding the cash proceeds of such Incurrence-Based Amounts for netting
purposes (i.e., such cash proceeds shall not reduce the Borrower’s Consolidated
Total Debt) in connection with any calculation with respect to the fiscal
quarter in which such Indebtedness was incurred. In addition, any Indebtedness
(and associated Liens, subject to the applicable priorities required pursuant to
the applicable Incurrence-Based Amounts), Investments, liquidations,
dissolutions, mergers, consolidations, Restricted Payments or any prepayments of
Indebtedness (or, in each case, any portion thereof) incurred or otherwise
effected in reliance on Fixed Amounts shall be automatically and immediately
reclassified at any time, unless the Borrower otherwise elects from time to
time, as incurred under the applicable Incurrence-Based Amounts if the Borrower
subsequently meets the applicable ratio for such Incurrence-Based Amounts on a
pro forma basis.

(g) For purposes of determining the permissibility of any action, change,
transaction or event that requires a calculation of any financial ratio or test
(including, without limitation, any First Lien Leverage Ratio test, Secured
Leverage Ratio test, any Total Leverage Ratio test, any Interest Coverage Ratio
test and/or any Fixed Charge Coverage Ratio test and/or the amount of
Consolidated EBITDA), such financial ratio or test shall be calculated at the
time such action is taken (subject to Section 1.04(b) and this Section 1.08),
such change is made, such transaction is consummated or such event occurs, as
the case may be, and no Default or Event of Default shall be deemed to have
occurred solely as a result of a change in such financial ratio or test
occurring after the time such action is taken, such change is made, such
transaction is consummated or such event occurs, as the case may be.

 

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SECTION 1.09 Divisions. For all purposes under the Loan Documents, in connection
with any division or plan of division under Delaware law (or any comparable
event under a different jurisdiction’s laws): (a) if any asset, right,
obligation or liability of any Person becomes the asset, right, obligation or
liability of a different Person, then it shall be deemed to have been
transferred from the original Person to the subsequent Person, and (b) if any
new Person comes into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its Equity
Interests at such time.

ARTICLE II

THE CREDITS

SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein,
each Revolving Lender agrees, severally and not jointly, to make Revolving Loans
in Dollars under the Facility to the Borrower under the Facility from time to
time during the Availability Period in an aggregate principal amount that will
not result in (i) such Revolving Lender’s Revolving Exposure exceeding such
Revolving Lender’s Revolving Commitment for the Facility at such time or
(ii) the total Revolving Exposures exceeding the Maximum Borrowing Amount for
the Facility (subject to the Administrative Agent’s authority, in its sole
discretion, to make Protective Advances and Overadvances pursuant to the terms
of Section 2.08) at such time. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, repay and
reborrow Revolving Loans.

SECTION 2.02 Loans and Borrowings.

(a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing
consisting of Loans of the same Facility, Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder, provided that the
Commitments of the Lenders are several and, other than as expressly provided
herein with respect to a Defaulting Lender, no Lender shall be responsible for
any other Lender’s failure to make Loans as required hereby.

(b) Subject to Section 2.12, each Borrowing denominated in Dollars shall be
comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may
request in accordance herewith; provided that all Borrowings denominated in
Dollars made on the Effective Date must be made as ABR Borrowings unless the
Borrower shall have given the notice required for a Eurocurrency Borrowing under
Section 2.03.

(c) At the commencement of each Interest Period for any Eurocurrency Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 (or, in the case of any currency other than Dollars, an approximate
equivalent thereof as determined by the Administrative Agent in its sole
discretion) and not less than $1,000,000 (or, in the case of any currency other
than Dollars, an approximate equivalent thereof as determined by the
Administrative Agent in its sole discretion). ABR Borrowings may be in any
amount. Each Swingline Loan shall be in an amount that is an integral multiple
of $100,000 (or, in the case of any currency other than Dollars, an approximate
equivalent thereof as determined by the Administrative Agent in its sole
discretion) and not less than $500,000 (or, in the case of any currency other
than Dollars, an approximate equivalent thereof as determined by the
Administrative Agent in its sole discretion). Borrowings of more than one Type
may be outstanding at the same time; provided that there shall not at any time
be more than a total of 15 Eurocurrency Borrowings outstanding under the
Facility at the same time.

 

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(d) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.

SECTION 2.03 Requests for Borrowings. To request an ABR Borrowing, the Borrower
shall request through the Administrative Agent’s Commercial Electronic Office
Portal or through such other electronic portal provided by the Administrative
Agent (the “Portal”), which must be received by the Administrative Agent not
later than 2:00 p.m. on the requested date of any ABR Borrowing. The Borrower
hereby acknowledges and agrees that any request made through the Portal shall be
deemed made by a Responsible Officer of the Borrower. All Borrowing requests
which are not made on-line via the Portal shall be subject to (and unless the
Administrative Agent elects otherwise in the exercise of its sole discretion,
such Borrowings shall not be made until the completion of) the Administrative
Agent’s authentication process (with results satisfactory to the Administrative
Agent) prior to the funding of any such requested Borrowing. To request a
Eurocurrency Borrowing, the Borrower shall notify the Administrative Agent of
such request not later than 11:00 a.m., Local Time, three Business Days before
the date of the proposed Borrowing (or, in the case of any Eurocurrency
Borrowing to be made on the Effective Date, not later than 11:00 a.m., Local
Time, one Business Day before the Effective Date). Each such Borrowing Request
shall be irrevocable and shall be delivered by hand delivery, facsimile or other
electronic transmission to the Administrative Agent and shall be signed by the
Borrower. Each Borrowing Request in respect of a Eurocurrency Borrowing shall
specify the following information:

(i) the Class and Type of Loans to be borrowed or to which existing Loans are to
be converted and the currency thereof;

(ii) the aggregate amount of such Borrowing;

(iii) the date of such Borrowing, which shall be a Business Day;

(iv) the initial Interest Period to be applicable thereto, which shall be a
period contemplated by the definition of the term “Interest Period”; and

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.04.

If no election as to the Type of Borrowing of Revolving Loans is specified, then
a Borrowing of Revolving Loans requested in Dollars shall be an ABR Borrowing.
If no Interest Period is specified with respect to any requested Eurocurrency
Borrowing of Revolving Loans, then the Borrower shall be deemed to have selected
an Interest Period of one calendar month’s duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each applicable Lender of the details thereof and of the amount of
such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04 Funding of Borrowings.

(a) The Administrative Agent shall promptly notify each Lender of the amount of
its Pro Rata Share of the applicable Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to ABR Loans
described in Section 2.03. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds in the currency of such Borrowing by 4:00 p.m., Local Time, to the
Administrative Agent Account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders; provided that
Swingline

 

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Loans shall be made pursuant to Section 2.23. The Administrative Agent will make
such Loans available to the Borrower either by (i) promptly crediting the
amounts so received, in like funds, to an account of the Borrower designated by
the Borrower in the applicable Borrowing Request or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrower.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date (and, with respect to any ABR Loan, time) of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance on such assumption and in its
sole discretion, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender agrees to pay
to the Administrative Agent an amount equal to such share on demand of the
Administrative Agent. If such Lender does not pay such corresponding amount
forthwith upon demand of the Administrative Agent therefor, the Administrative
Agent shall promptly notify the Borrower, and the Borrower agrees to pay such
corresponding amount to the Administrative Agent forthwith on demand. The
Administrative Agent shall also be entitled to recover from such Lender or the
Borrower interest on such corresponding amount, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, if
such Borrowing is denominated in Dollars, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation, the rate reasonably
determined by the Administrative Agent to be its cost of funding such amount, or
(ii) in the case of the Borrower, the interest rate applicable to such Borrowing
in accordance with Section 2.11. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

(c) Obligations of the Lenders hereunder to make Loans, to fund participations
in Letters of Credit and Swingline Loans and to make payments pursuant to
Section 9.03(c) are several and not joint. The failure of any Lender to make any
Loan, to fund any such participation or to make any payment under
Section 9.03(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and, other than as
expressly provided herein with respect to a Defaulting Lender, no Lender shall
be responsible for the failure of any other Lender to so make its Loan, to
purchase its participation or to make its payment under Section 9.03(c).

SECTION 2.05 Interest Elections.

(a) Each Revolving Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a
different Type or to continue such Borrowing and, in the case of a Eurocurrency
Borrowing, may elect Interest Periods therefor, all as provided in this
Section 2.05. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably (in accordance with the principal amount of the applicable
Loans) among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
This Section 2.05 shall not apply to Swingline Loans or Protective Advances,
which may not be converted or continued.

 

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(b) To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Revolving
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such Interest Election Request shall be irrevocable
and shall be made by hand delivery, facsimile or other electronic transmission
to the Administrative Agent (with a copy to the Administrative Agent if not the
original recipient thereof) of a written Interest Election Request in a form
approved by the Administrative Agent and signed by the Borrower.

(c) Each Interest Election Request shall specify the following information in
compliance with Section 2.03:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing;

(iv) if the resulting Borrowing is to be a Eurocurrency Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period.

If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one calendar month’s duration.

(d) Promptly following receipt of an Interest Election Request in accordance
with this Section, the Administrative Agent shall advise each Lender of the
applicable Class of the details thereof and of such Lender’s portion of each
resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurocurrency Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Revolving Borrowing under the Facility
may be converted to or continued as a Eurocurrency Borrowing; and (ii) unless
repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto.

(f) Except as otherwise provided herein, a Eurocurrency Loan may be continued or
converted only on the last day of an Interest Period for such Eurocurrency Loan.

SECTION 2.06 Termination and Reduction of Commitments. Upon the prior written
notice to the Administrative Agent (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
without premium or penalty, on any day, permanently to terminate or reduce the
Commitments of any Class, as determined by the Borrower, in whole or in part;
provided that:

(i) any such termination or reduction shall apply proportionately and
permanently to reduce the Commitments of each of the Lenders of such Class,
except that, notwithstanding the foregoing, the Borrower may allocate any
termination or reduction of Commitments among Classes of Commitments at its
direction,

 

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(ii) any partial reduction pursuant to this Section 2.06 shall be in an
aggregate amount of at least $1,000,000 or any whole multiple of $1,000,000 in
excess thereof,

(iii) after giving effect to such termination or reduction and to any
prepayments of Loans or cancellation or cash collateralization of Letters of
Credit made on the date thereof in accordance with this Agreement, the aggregate
amount of the Lenders’ Revolving Credit Exposure for such Class shall not exceed
the Total Revolving Commitments for such Class, and

(iv) if, after giving effect to any reduction of the Commitments, the LC
Sublimit or the Swingline Sublimit with respect to the Facility exceeds the
amount of Total Revolving Commitments thereunder, such sublimit shall be
automatically reduced by the amount of such excess.

Except as provided above, the amount of any such Revolving Commitment reduction
shall not be applied to the LC Sublimit or the Swingline Sublimit unless
otherwise specified by the Borrower. Notwithstanding the foregoing, the Borrower
may rescind or postpone any notice of termination of the Commitments if such
termination would have resulted from a refinancing of all of the Facility, which
refinancing is not consummated or is otherwise shall be delayed. Unless
previously terminated, all Commitments of a Class shall terminate on the
Maturity Date applicable to such Class.

SECTION 2.07 Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Revolving Lender the then unpaid principal amount
of each Revolving Loan on the Maturity Date, (B) to the Administrative Agent the
then unpaid amount of each Protective Advance on the earlier of the Maturity
Date and demand by the Administrative Agent, and (C) to each Swingline Lender
the then unpaid principal amount of such Swingline Loan of such Swingline Lender
on the Maturity Date; provided that on each date that a Revolving Loan is made
while any Swingline Loan or Protective Advance is outstanding under the same
Facility, the Borrower shall repay all such Swingline Loans and Protective
Advances with the proceeds of such Revolving Loan then outstanding under the
Facility.

(b) At all times after the commencement and during the continuance of a Cash
Dominion Period, and written notification thereof by the Administrative Agent to
the Borrower (subject to the provisions of Section 5.17(b)), on each Business
Day, at or before 1:00 p.m., Local Time, the Administrative Agent shall apply
all immediately available funds credited on behalf of the Borrower to a Payment
Account or such other account directed by the Administrative Agent pursuant to
Section 5.17(b) in accordance with Section 7.02 (except (A) clauses first and
second thereof and (B) to Secured Cash Management Obligations, Secured Bank
Product Obligations and Secured Swap Obligations).

(c) [Reserved].

(d) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

 

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(e) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made under the Facility, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the relevant Borrower
to each Lender under the Facility and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.

(f) The entries made in the accounts maintained pursuant to paragraph (d) or (e)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein, provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to pay any amounts due
hereunder in accordance with the terms of this Agreement. In the event of any
inconsistency between the entries made pursuant to paragraphs (d) and (e) of
this Section, the accounts maintained by the Administrative Agent pursuant to
paragraph (e) of this Section shall control.

(g) Any Lender may request through the Administrative Agent that Loans of any
Class made by it be evidenced by a promissory note. In such event, the relevant
Borrower shall execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and
its registered assigns) and in a form provided by the Administrative Agent and
approved by the Borrower.

SECTION 2.08 Protective Advances and Overadvances.

(a) Subject to the limitations set forth below, the Administrative Agent is
authorized by the Borrower and the Lenders, from time to time in the sole
discretion of the Administrative Agent (but, in any such case, none of them
shall have absolutely any obligation to) to make Loans in Dollars to the
Borrower on behalf of the Revolving Lenders (each such Loan, a “Protective
Advance”), which the Administrative Agent, in its Permitted Discretion, deems
necessary or desirable (A) to preserve or protect the Collateral, or any portion
thereof, (B) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Secured Obligations, or (C) to pay any other amount
chargeable to or required to be paid by the Borrower pursuant to the terms of
this Agreement, including payments of reimbursable expenses (including costs,
fees, and expenses as described in Section 9.03) and other sums payable under
the Loan Documents; provided that the aggregate amount of outstanding Protective
Advances (taken together with Overadvances under Section 2.08(c) below under the
Facility) shall not, at any time, exceed (x) 10% of the Borrowing Base as
determined on the date of such proposed Protective Advance or (y) when added to
the aggregate Revolving Exposure of all the Revolving Lenders, the aggregate
Commitments. Protective Advances may be made even if the conditions precedent
set forth in Section 4.02 have not been satisfied. All Protective Advances shall
be ABR Borrowings. The Administrative Agent’s authorization to make Protective
Advances may be revoked at any time by the Required Lenders. Any such revocation
must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof. At any time that the conditions
precedent set forth in Section 4.02 have been satisfied, the Administrative
Agent may request the Revolving Lenders under the Facility to make a Revolving
Loan, in the currency in which the applicable Protective Advance was
denominated, to repay a Protective Advance. At any other time the Administrative
Agent may require the Lenders to fund, in the currency in which the applicable
Protective Advance was denominated, their risk participation described in
Section 2.08(b).

(b) Upon the making of a Protective Advance (whether before or after the
occurrence of a Default) by the Administrative Agent under the Facility, each
Revolving Lender under the Facility shall be deemed, without further action by
any party hereto, to have unconditionally and irrevocably purchased from the
Administrative Agent, without recourse or warranty, an undivided interest and
participation in such Protective Advance, in proportion to its Pro Rata Share.
From and after the date, if any, on which any Lender is required to fund its
participation in any Protective Advance purchased hereunder, the Administrative
Agent shall promptly distribute to such Lender, such Lender’s Pro Rata Share of
all payments of principal and interest and all proceeds of Collateral received
by the Administrative Agent in respect of such Protective Advance.

 

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(c) Notwithstanding anything to the contrary contained elsewhere in this
Section 2.08 or this Agreement or the other Loan Documents and whether or not a
Default or Event of Default exists at the time, the Administrative Agent may
require the Revolving Lenders under the Facility to honor requests or deemed
requests by the Borrower for Revolving Loans at a time that an Overadvance
Condition exists or which would result in an Overadvance Condition and each
relevant Lender shall be obligated to continue to make its Pro Rata Share of any
such Overadvance Loan up to a maximum amount outstanding equal to its Revolving
Commitment under the Facility at such time, so long as such Overadvance is not
known by the Administrative Agent to exceed 5% of the Maximum Borrowing Amount
under the Facility, at such time, but in no event shall such Overadvance exist
for more than thirty (30) consecutive Business Days or more than forty-five
(45) Business Days in any twelve calendar month period; provided, that (i) the
aggregate amount of outstanding Overadvances plus any Protective Advances
described in Section 2.08(a) plus the aggregate of all other Revolving Exposure
shall not exceed the Total Revolving Commitments under the Facility and (ii) the
Revolving Exposure of any Lender shall not exceed the Revolving Commitment of
such Lender under the Facility. The Administrative Agent’s authorization to
require Revolving Lenders to honor requests or deemed requests for Overadvance
Loans may be revoked at any time by the Required Lenders.

SECTION 2.09 Prepayment of Loans.

(a) Upon prior notice in accordance with paragraph (c) of this Section 2.09, the
Borrower shall have the right at any time and from time to time to prepay any
Revolving Borrowing in whole or in part without premium or penalty (but subject
to Section 2.14).

(b) Except for Protective Advances and Overadvance Loans permitted under
Section 2.08, in the event and on each Business Day on which the total Revolving
Exposure under the Facility exceeds the Maximum Borrowing Amount under the
Facility, the relevant Borrower shall promptly prepay first, any outstanding
Swingline Loans under the Facility in an amount equal to such excess Swingline
Loans, second, if any excess remains after prepaying all Swingline Loans, any
outstanding Revolving Loans under the Facility in an amount equal to any
remaining excess and third, if any excess remains after prepaying all Swingline
Loans and all Revolving Loans, depositing an amount in cash in an amount equal
to any remaining excess in the LC Collateral Account for the Facility.

(c) The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the applicable Swingline Lender) by facsimile or
other electronic communication of any prepayment hereunder (i) in the case of
prepayment of a Eurocurrency Rate Loan, not later than 11:00 a.m., Local Time,
three (3) Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Loan, not later than 10:00 a.m., Local Time, on the day of
prepayment, or (iii) in the case of prepayment of a Swingline Loan, not later
than 11:00 a.m., Local Time, on the date of prepayment. Each such notice shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid. Promptly following receipt of any such notice,
the Administrative Agent shall advise the applicable Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Prepayments shall be accompanied by accrued interest
to the extent required by Section 2.11. At the Borrower’s election in connection
with any prepayment pursuant to this Section 2.09, such prepayment shall not be
applied to any Loan of a Defaulting Lender and shall be allocated ratably among
the relevant non-Defaulting Lenders.

 

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SECTION 2.10 Fees.

(a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent for
the account of the Revolving Lenders (based on their Pro Rata Share of the
Revolving Exposure) a commitment fee, which shall accrue at the Commitment Fee
Rate on the average daily amount of the Available Revolving Commitment of the
Revolving Lenders during the period from and including the Effective Date to but
excluding the date on which the Lenders’ Revolving Commitments terminate.
Accrued commitment fees shall be payable in arrears in accordance with clause
(c) below. All commitment fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). For purposes of calculating the
commitment fees only, no portion of the Revolving Commitments shall be deemed
utilized as a result of outstanding Swingline Loans.

(b) Letter of Credit Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Revolving Lender a participation fee with respect
to its participations in Letters of Credit issued for the account of the
Borrower, which shall accrue at the Applicable Rate used to determine the
interest rate applicable to Eurocurrency Rate Loans on the daily amount of such
Revolving Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) under the Facility, during the period from and
including the Effective Date to but excluding the later of the date on which
such Revolving Lender’s Revolving Commitment terminates and the date on which
such Revolving Lender ceases to have any LC Exposure. In addition, the Borrower
agrees to pay to each Issuing Bank, for its own account, a fronting fee, in
respect of each Letter of Credit issued by such Issuing Bank to the Borrower for
the period from the date of issuance of such Letter of Credit through the
expiration date of such Letter of Credit (or if terminated on an earlier date to
the termination date of such Letter of Credit), computed at a rate equal to
0.125% per annum or such other percentage per annum to be agreed upon between
the Borrower and such Issuing Bank of the daily outstanding amount of such
Letter of Credit, as well as such Issuing Bank’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Accrued participation fees and fronting fees
shall be payable in accordance with clause (c) below; provided that all such
fees shall be payable on the date on which the Revolving Commitments terminate
and any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed.

(c) Subject to clause (d) below, all interest, commitment fees under
Section 2.10(a) and participation and fronting fees under Section 2.10(b), in
each case payable hereunder, shall accrue through and including, and be due and
payable in arrears on, (i) in the case of all interest and commitment fees
payable under Section 2.10(a), the first day of each calendar month of January,
April, July and October and (ii) in the case of all participation and fronting
fees payable under Section 2.10(b), the first Business Day of each calendar
month of January, April, July and October and, in each case, as applicable, on
the date on which the Revolving Commitments terminate (other than as set forth
under the definition of “Interest Payment Date”). The Borrower hereby authorizes
the Administrative Agent, from time to time without prior notice to the
Borrower, to charge all such amounts that are due and payable to the loan
account of the Borrower (provided that such amounts shall not be charged to any
loan account until (5) Business Days after the Administrative Agent has provided
the Borrower with an invoice for any such amount). Any such amounts payable
hereunder that are charged to a loan account shall thereupon constitute Loans
under the Facility and shall initially accrue interest at the rate then
applicable to Loans comprising ABR Borrowings (unless and until converted, if
applicable, into Eurocurrency Borrowings in accordance with the terms of this
Agreement).

 

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(d) The Borrower shall pay to the Agents such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified. Such fees
shall be fully earned when paid and shall not be refundable for any reason
whatsoever (except as expressly agreed between the Borrower and each applicable
Agent).

(e) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the applicable Issuing Bank
in the case of fees payable to it) for distribution, in the case of commitment
fees and participation fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.

(f) Notwithstanding the foregoing, and subject to Section 2.10, the Borrower
shall not be obligated to pay any amounts to any Defaulting Lender pursuant to
this Section 2.10.

SECTION 2.11 Interest.

(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate
Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the
LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c) [Reserved].

(d) [Reserved].

(e) Each Protective Advance shall bear interest at the Alternate Base Rate plus
the Applicable Rate.

(f) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2.00% per annum
plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2.00% per
annum plus the rate applicable to Loans that are ABR Loans as provided in
paragraph (a) of this Section; provided that no amount shall be payable pursuant
to this Section 2.11(f) to a Defaulting Lender so long as such Lender shall be a
Defaulting Lender; provided, further, that no amounts shall accrue pursuant to
this Section 2.11(f) on any overdue amount or other amount payable to a
Defaulting Lender so long as such Lender shall be a Defaulting Lender.

(g) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, provided that (i) interest accrued pursuant to
paragraph (f) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurocurrency Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.

(h) All computations of interest for ABR Loans (including ABR Loans determined
by reference to the LIBO Rate) shall be made on the basis of a year of 365 days
(or 366 days, as the case may be) and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which

 

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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 2.16,
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

SECTION 2.12 Alternate Rate of Interest.

(a) If at least two Business Days prior to the commencement of any Interest
Period for a Eurocurrency Borrowing:

(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate or the LIBO Rate, as applicable for such Interest
Period; or

(ii) the Administrative Agent is advised by the Required Lenders that the LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period (in each case
with respect to the Loans impacted by this clause (b) or clause (a) above,
“Impacted Loans”),

(iii) in the case of clause (a) or (b) above, the Administrative Agent shall
give notice thereof (and, if requested by the Borrower, reasonably acceptable
evidence of such determination) to the Borrower and the Lenders by facsimile or
other electronic means as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurocurrency Borrowing, shall be ineffective
and (ii) if any Borrowing Request requests a Eurocurrency Borrowing, then such
Borrowing shall be made as an ABR Borrowing and the utilization of the LIBO Rate
component in determining the Alternate Base Rate shall be suspended; provided,
however, that, in each case, the Borrower may revoke any Borrowing Request that
is pending when such notice is received.

(iv) Notwithstanding the foregoing, if the Administrative Agent has made the
determination described in clause (a) of this Section 2.12 and/or is advised by
the Required Lenders of their determination in accordance with clause (b) of
this Section 2.12 and the Borrower shall so request, the Administrative Agent,
the Required Lenders and the Borrower shall negotiate in good faith to amend the
definition of “LIBO Rate” and other applicable provisions to preserve the
original intent thereof in light of such change; provided that, until so
amended, such Impacted Loans will be handled as otherwise provided pursuant to
the terms of this Section 2.12.

(b) If at any time the Administrative Agent determines (which determination
shall be conclusive absent manifest error), or the Required Lenders notify the
Administrative Agent (with a copy to the Borrower) that the Required Lenders
have determined, that (i) adequate and reasonable means do not exist for
ascertaining the LIBO Rate (including because the LIBO Rate is not available or
published on a current basis or the circumstances set forth in Section 2.12(i)
or (ii) above have occurred) and such circumstances are unlikely to be
temporary; or (ii) the administrator of the LIBO Rate or a Governmental
Authority has made a public statement identifying a specific date after which
the LIBO Rate shall no longer be made available or used for determining the
interest rate of loans (such specific date, the “Scheduled Unavailability
Date”), then the Administrative Agent and the Borrower shall endeavor to
establish an alternate rate of interest to the LIBO Rate and agree on the spread
adjustment applicable

 

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thereto (if any), giving due consideration to (i) any evolving or
then-prevailing market convention for determining a rate of interest as a
replacement to LIBOR for U.S. dollar-denominated syndicated credit facilities or
(ii) any selection, endorsement or recommendation of a replacement rate and/or
replacement spread or the mechanism for determining such a rate or spread by the
relevant Governmental Authority (or a committee convened by the Board of
Governors) in effect at such time, and shall enter into an amendment to this
Agreement to reflect such alternate rate of interest, the spread adjustment
applicable thereto (if any) and such other related changes to this Agreement as
may be applicable; provided that such amendment shall provide that if such
alternate rate of interest shall be less than zero, such rate shall be deemed to
be zero for purposes of this Agreement. Notwithstanding anything to the contrary
in Section 9.02, such amendment shall become effective without any further
action or consent of any other party to this Agreement so long as the
Administrative Agent shall not have received, within five (5) Business Days of
the date a copy of such amendment is provided to the Lenders, written notice
from the Required Lenders stating that such Required Lenders object to such
amendment. If no such alternate rate has been determined and the circumstances
under clause (i) above exist or the Scheduled Unavailability Date has occurred
(as applicable), the Administrative Agent will promptly so notify the Borrower
and each Lender, and thereafter until execution of an amendment to implement an
alternative rate in accordance with the foregoing, (x) the obligation of the
Lenders to make or maintain Eurocurrency Loans shall be suspended, and (y) the
LIBO Rate component shall no longer be utilized in determining the Alternate
Base Rate. Upon receipt of such notice, the Borrower may revoke any pending
request for a Loan of, conversion to or continuation of Eurocurrency Loans (to
the extent of the affected Eurocurrency Loans or Interest Periods) or, failing
that, will be deemed to have converted such request into a request for a
Borrowing of ABR Loans (subject to the foregoing clause (y)) in the amount
specified therein.

SECTION 2.13 Increased Costs.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the LIBO Rate) or Issuing Bank;

(ii) impose on any Lender or Issuing Bank or the London interbank market any
other condition, cost or expense (other than with respect to Taxes) affecting
this Agreement, Eurocurrency Loans made by such Lender or any Letter of Credit
or participation therein; or

(iii) subject any Lender or Issuing Bank to any Taxes on its Loans, letters of
credit, Commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, maintaining, continuing or converting any Eurocurrency Loan
(or of maintaining its obligation to make any such Loan) or to increase the cost
to such Lender or any Issuing Bank or to reduce the amount of any sum received
or receivable by such Lender or Issuing Bank hereunder (whether of principal,
interest or otherwise), then, from time to time upon request of such Lender or
Issuing Bank, the Borrower will pay to such Lender or Issuing Bank such
additional amount or amounts as will compensate such Lender or such Issuing Bank
for such increased costs actually incurred or reduction actually suffered,
provided that to the extent any such costs or reductions are incurred by any
Lender as a result of any requests, rules, guidelines or directives enacted or
promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 and Basel III after the Effective Date, then such Lender or such Issuing
Bank shall be compensated pursuant to this Section 2.13(a) only to the extent
such Lender or such Issuing Bank is

 

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imposing such charges on similarly situated borrowers under the other syndicated
credit facilities that such Lender is a lender under or such Issuing Bank is a
letter of credit issuer under. Notwithstanding the foregoing, (i) the Borrower
shall not be liable for such increased cost or reduction other than to the
extent that it relates to the Facility under which such Person is the Borrower
and (ii) this paragraph will not apply to (A) Indemnified Taxes or Other Taxes
indemnifiable under Section 2.15 or (B) Excluded Taxes.

(b) If any Lender or Issuing Bank determines that any Change in Law regarding
capital or liquidity requirements has the effect of reducing the rate of return
on such Lender’s or such Issuing Bank’s capital or on the capital of such
Lender’s or such Issuing Bank’s holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender the Issuing Bank or such Lender’s or Issuing Bank’s
holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such Issuing Bank’s policies and the policies of
such Lender’s or such Issuing Bank’s holding company with respect to capital
adequacy and liquidity requirements), then, from time to time upon request of
such Lender or such Issuing Bank, the Borrower will pay to such Lender or such
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or such Issuing Bank, or such Lender’s or such Issuing
Bank’s holding company, for any such reduction actually suffered.

(c) A certificate of a Lender or Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or Issuing Bank or its holding
company in reasonable detail, as the case may be, as specified in paragraph
(a) or (b) of this Section delivered to the Borrower shall be conclusive absent
manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 15 days after
receipt thereof.

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

SECTION 2.14 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Loan on the date specified in any notice delivered pursuant hereto
or (d) the assignment of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.17 or Section 9.02(c), then, in any such event, the
Borrower shall, after receipt of a written request by any Lender affected by any
such event (which request shall set forth in reasonable detail the basis for
requesting such amount), compensate each Lender under the Facility for the
actual loss, cost and expense attributable to such event. For purposes of
calculating amounts payable by the Borrower to the Lenders under this
Section 2.14, each Lender shall be deemed to have funded each Eurocurrency Loan
made by it at the LIBO Rate for such Loan by a matching deposit or other
borrowing for a comparable amount and for a comparable period, whether or not
such Eurocurrency Loan was in fact so funded. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section delivered to the Borrower shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 15 days after receipt of such demand.
Notwithstanding the foregoing, this Section 2.14 will not apply to losses, costs
or expenses resulting from Taxes, as to which Section 2.15 shall govern.

 

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SECTION 2.15 Taxes.

(a) Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made free and clear of and without deduction or
withholding for any Taxes, provided that if the applicable Withholding Agent
shall be required by applicable Requirements of Law to deduct or withhold any
Taxes from such payments, then (i) the applicable Withholding Agent shall make
such deductions or withholding, (ii) the applicable Withholding Agent shall
timely pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable Requirements of Law and (iii) if the Tax
in question is an Indemnified Tax or Other Tax, the amount payable by the
applicable Loan Party shall be increased as necessary so that after all required
deductions or withholding have been made (including deductions or withholdings
applicable to additional amounts payable under this Section 2.15) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions or
withholding been made.

(b) Without limiting the provisions of paragraph (a) above, the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with Requirements of Law, or at the option of Withholding Agent timely reimburse
it for the payment thereof.

(c) The Loan Parties shall indemnify each applicable Lender and the
Administrative Agent and each Issuing Bank under the Facility, within 30 days
after written demand therefor, for the full amount of any Indemnified Taxes paid
by the Administrative Agent or such Lender or Issuing Bank, as the case may be,
and any Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.15) and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate setting forth in
reasonable detail the basis and calculation of the amount of such payment or
liability delivered to the Borrower by a Lender (with a copy to Administrative
Agent), by an Issuing Bank or by the Administrative Agent on its own behalf or
on behalf of a Lender or Issuing Bank, shall be conclusive absent manifest
error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by a Loan Party to a Governmental Authority pursuant to this Section 2.15, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(e) Each Lender shall deliver to the Borrower and the Administrative Agent at
the time or times prescribed by law and reasonably requested by the Borrower or
the Administrative Agent, such properly completed and executed documentation
prescribed by applicable Requirements of Law and such other documentation
reasonably requested by the Borrower or the Administrative Agent (i) as will
permit such payments under any Loan Document to be made without, or at a reduced
rate of, withholding or (ii) as will enable the Borrower or the Administrative
Agent to determine whether or not such Lender is subject to withholding or
information reporting requirements. Each Lender shall, whenever a lapse or time
or change in circumstances renders such documentation obsolete, expired or
inaccurate in any respect, deliver promptly to the Borrower and the
Administrative Agent updated or other appropriate documentation (including any
new documentation reasonably requested by the Borrower or the Administrative
Agent) or promptly notify the Borrower and the Administrative Agent in writing
of its inability to do so.

 

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Without limiting the foregoing:

(1) Each Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Administrative Agent on or before the date on which it becomes a party to this
Agreement (and from time to time thereafter upon the request of the Borrower or
the Administrative Agent) two properly completed and duly signed original copies
of Internal Revenue Service Form W-9 (or any successor forms) certifying that
such Lender is exempt from U.S. federal backup withholding.

(2) Each Lender that is not a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Administrative Agent on or before the date on which it becomes a party to this
Agreement (and from time to time thereafter upon the request of the Borrower or
the Administrative Agent) whichever of the following is applicable:

(A) two properly completed and duly signed original copies of Internal Revenue
Service Form W-8BEN or W-8BEN-E (or any successor forms) claiming eligibility
for the benefits of an income tax treaty to which the United States is a party,

(B) two properly completed and duly signed original copies of Internal Revenue
Service Form W-8ECI (or any successor forms),

(C) in the case of a Lender claiming the benefits of the exemption for portfolio
interest under Section 871(h) or Section 881(c) of the Code, (x) two properly
completed and duly signed certificates substantially in the form of Exhibit P-1,
P-2, P-3 or P-4, as applicable, (any such certificate, a “U.S. Tax Compliance
Certificate”) and (y) two properly completed and duly signed original copies of
Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor forms),

(D) to the extent a Lender is not the beneficial owner (for example, where the
Lender is a partnership or a participating Lender), two properly completed and
duly signed original copies of Internal Revenue Service Form W-8IMY (or any
successor forms) of the Lender, accompanied by a Form W-8ECI, W-8BEN or
W-8BEN-E, U.S. Tax Compliance Certificate, Form W-9, Form W-8IMY or any other
required information (or any successor forms) from each beneficial owner that
would be required under this Section 2.15(e) if such beneficial owner were a
Lender, as applicable (provided that, if the Lender is a partnership for U.S.
federal income tax purposes (and not a participating Lender) and one or more
direct or indirect partners are claiming the portfolio interest exemption, the
U.S. Tax Compliance Certificate may be provided by such Lender on behalf of such
direct or indirect partner(s)), or

(E) two properly completed and duly signed original copies of any other form
prescribed by applicable U.S. federal income tax laws as a basis for claiming a
complete exemption from, or a reduction in, U.S. federal withholding tax on any
payments to such Lender under the Loan Documents, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Borrower or the Administrative Agent to determine the withholding or deduction
required to be made.

(3) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the

 

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Administrative Agent at the time or times prescribed by law and at such time or
times reasonably requested by the Borrower or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA, to determine whether such Lender has or has not
complied with such Lender’s obligations under FATCA and, if necessary, to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (3), “FATCA” shall include any amendments made to FATCA
after the date hereof.

Notwithstanding any other provisions of this clause (e), a Lender shall not be
required to deliver any form or other documentation that such Lender is not
legally eligible to deliver.

(f) On or before the date Agent (or any successor thereto) becomes a party to
this Agreement, Agent shall provide to the Borrower, two duly-signed, properly
completed copies of the documentation prescribed in clause (i) or (ii) below, as
applicable (together with all required attachments thereto): (i) Form W-9 (or
successor forms), or (ii) (A) Form W-8ECI (or successor forms), and (B) with
respect to payments received on account of any Lender, a U.S. branch withholding
certificate on Form W-8IMY (or successor forms) evidencing its agreement with
the Borrower to be treated as a U.S. person for U.S. federal withholding
purposes as contemplated by Treasury Regulation Section 1.1441-1(b)(2)(iv)(A).
At any time thereafter, Agent shall provide updated documentation previously
provided (or successor forms) when any documentation previously delivered has
expired or become obsolete or invalid or otherwise upon the reasonable request
of the Borrower.

(g) If the Borrower determines in good faith that a reasonable basis exists for
contesting any Taxes for which indemnification has been demanded hereunder, the
Administrative Agent or the relevant Lender or Issuing Bank, as applicable,
shall use commercially reasonable efforts to cooperate with the Borrower in a
reasonable challenge of such Taxes if so requested by the Borrower; provided
that (a) the Administrative Agent or such Lender or Issuing Bank determines in
its reasonable discretion that it would not be subject to any unreimbursed third
party cost or expense or otherwise be prejudiced by cooperating in such
challenge, (b) the Borrower pays all related expenses of the Administrative
Agent or such Lender or Issuing Bank, as applicable and (c) the Borrower
indemnifies the Administrative Agent or such Lender or Issuing Bank, as
applicable, for any liabilities or other costs incurred by such party in
connection with such challenge. The Administrative Agent or a Lender or Issuing
Bank shall claim any refund that it determines is reasonably available to it,
unless it concludes in its reasonable discretion that it would be adversely
affected by making such a claim. If the Administrative Agent or a Lender or
Issuing Bank receives a refund of any Indemnified Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.15, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section with
respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses (including Taxes) of the Administrative Agent or
such Lender or Issuing Bank and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that the Borrower, upon the request of the Administrative Agent or such Lender
or Issuing Bank, agrees promptly to repay the amount paid over to the Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. The Administrative Agent or such Lender or Issuing Bank,
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 the
Administrative Agent or such Lender or Issuing Bank may delete any information
therein that the

 

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Administrative Agent or such Lender or Issuing Bank deems confidential).
Notwithstanding anything to the contrary, this Section 2.15(g) shall not be
construed to require the Administrative Agent or any Lender or Issuing Bank to
make available its Tax returns (or any other information relating to Taxes which
it deems confidential to any Loan Party or any other Person).

(h) The agreements in this Section 2.15 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

(a) The Borrower shall make each payment required to be made by it under any
Loan Document (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15, or
otherwise) prior to the time expressly required hereunder or under such other
Loan Document for such payment (or, if no such time is expressly required, prior
to 2:00 p.m., Local Time), on the date when due, in immediately available funds,
without setoff or counterclaim. Any amounts received after such time on any date
may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to such account as may be
specified by the Administrative Agent, except payments to be made directly to
any Issuing Bank or the Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment (other than payments on the Eurocurrency Loans) under any Loan
Document shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day. If any payment on a
Eurocurrency Loan becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day. In the case of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate for the period of such extension. All payments or prepayments of
any Loan or with respect to a Letter of Credit shall be made in the currency in
which such Loan or Letter of Credit (as applicable) is denominated, all payments
of accrued interest payable on a Loan shall be made in the currency in which
such Loan is denominated, and all other payments under each Loan Document shall
be made in Dollars. If, for any reason, the Borrower is prohibited by
Requirements of Law from making any required payment hereunder in any currency
(other than Dollars), the Borrower shall make such payment in Dollars in the
Dollar Equivalent of such payment amount.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due under the Facility, such funds shall
be applied in accordance with Section 7.02(a) (except (A) clauses first and
second thereof and (B) to Secured Cash Management Obligations, Secured Bank
Product Obligations and Secured Swap Obligations) notwithstanding the absence of
an Event of Default, exercise of remedies or acceleration of the Loans.

(c) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans of a given Class or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans of such Class or participations in LC
Disbursements or Swingline Loans and accrued interest thereon than the
proportion received by any other Lender with outstanding Loans of the same
Class or participations in such LC Disbursements or Swingline Loans, then the
Lender

 

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receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of such Class or participations in such LC
Disbursements or Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans of such Class or participations in such LC Disbursements
or Swingline Loans, provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest and (ii) the provisions of this paragraph
shall not be construed to apply to (A) any payment made by the Borrower pursuant
to and in accordance with the express terms of this Agreement (including the
application of funds arising from existence of a Defaulting Lender), (B) any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant or (C) any
disproportionate payment obtained by a Lender of any Class or participations in
LC Disbursements or Swingline Loans as a result of the extension by Lenders of
the maturity date or expiration date of some but not all Loans of that Class or
participations in LC Disbursements or Swingline Loans or any increase in the
Applicable Rate in respect of Loans or participations in LC Disbursements or
Swingline Loans of Lenders that have consented to any such extension. The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower, as applicable, in the amount of such
participation.

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

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(a) or 2.04(b), 2.16(d) or 9.03(c), then the
Administrative Agent may, in its discretion and in the order determined by the
Administrative Agent (notwithstanding any contrary provision hereof), (i) apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender’s obligations under such Section until all
such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in
a segregated account as cash collateral for, and to be applied to, any future
funding obligations of such Lender under any such Section.

SECTION 2.17 Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.13, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15 or any event
that gives rise to the operation of Section 2.21, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or its participation in any Letter of Credit
affected by such event, or to assign and delegate its rights and obligations
hereunder to another of its offices, branches or Affiliates, if, in the judgment
of such Lender, such designation or assignment and delegation (i) would
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payable pursuant to Section 2.13 or Section 2.15 or mitigate the applicability
of Section 2.21, as the case may be, and (ii) would not subject such Lender to
any unreimbursed cost or expense reasonably deemed by such Lender to be material
and would not be inconsistent with the internal policies of, or otherwise be
disadvantageous in any material economic, legal or regulatory respect to, such
Lender.

(b) If (i) any Lender requests compensation under Section 2.13 or gives notice
under Section 2.21, (ii) the Borrower is required to pay any additional amount
to any Lender or to any Governmental Authority for the account of any Lender
pursuant to Section 2.15, or (iii) any Lender becomes a Defaulting Lender, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
and the other Loan Documents to an Eligible Assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment and delegation), provided that (A) the Borrower shall have received
the prior written consent of the Administrative Agent to the extent such consent
would be required under Section 9.04(b) for an assignment of Loans or
Commitments, as applicable, which consents, in each case, shall not unreasonably
be withheld or delayed, (B) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and unreimbursed participations
in LC Disbursements and Swingline Loans, accrued but unpaid interest thereon,
accrued but unpaid fees and all other amounts payable to it hereunder from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), (C) the Borrower or
such assignee shall have paid (unless waived) to the Administrative Agent the
processing and recordation fee specified in Section 9.04(b)(ii) and (D) in the
case of any such assignment resulting from a claim for compensation under
Section 2.13, payment required to be made pursuant to Section 2.15 or a notice
given under Section 2.21, such assignment will result in a material reduction in
such compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise (including as a result of any action taken by such Lender
under paragraph (a) above), the circumstances entitling the Borrower to require
such assignment and delegation cease to apply. Each party hereto agrees that an
assignment required pursuant to this paragraph may be effected pursuant to an
Assignment and Assumption executed by Borrower, the Administrative Agent and the
assignee and that the Lender required to make such assignment need not be a
party thereto.

SECTION 2.18 Increased Commitments.

(a) At any time and from time to time after the Effective Date, subject to the
terms and conditions set forth herein, the Borrower may, by notice to the
Administrative Agent (whereupon the Administrative Agent shall promptly make
available to the Administrative Agent and each of the Lenders under the
Facility), request to effect one or more increases in the Revolving Commitments
of the Facility (or, solely to the extent set forth in Section 2.18(d) below,
provide commitments under a new Facility constituting a FILO Tranche) (an
“Incremental Commitment”) from one or more Additional Lenders; provided that
(A) at the time of each such request and upon the effectiveness of each
Incremental Facility Amendment, (i) no Event of Default shall have occurred and
be continuing (except in connection with a Permitted Acquisition or any other
Investment not prohibited by the terms of this Agreement, which shall be subject
to no continuing Event of Default under clauses (a), (b), (h) or (i) of
Section 7.01) or shall result therefrom and (ii) the representations and
warranties set forth Article III hereof shall be true and correct in all
material respects (except in connection with a Permitted Acquisition or any
other Investment not prohibited by the terms of this Agreement, which, if and
only to the extent required by the Lenders providing such Incremental
Commitment, shall be subject to customary “SunGard” or “certain funds”
conditionality), (B) the arrangement, upfront or similar fees in respect of such
Incremental Commitment and the extensions of credit thereunder shall be
determined by the Borrower and the applicable Additional Lenders, and (C) except
as set forth in clause (B) above or, with respect to any FILO Tranche under

 

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Section 2.18(d) below, any Incremental Commitment shall be on the same terms and
pursuant to the same documentation applicable to the existing Revolving
Commitments under the Facility. Notwithstanding anything to the contrary herein,
the aggregate principal amount of all Incremental Commitments shall not exceed
$100,000,000. Each Incremental Commitment shall be in a minimum principal amount
of $5,000,000 and integral multiples of $1,000,000 in excess thereof (unless the
Borrower and the Administrative Agent otherwise agree); provided that such
amount may be less than $5,000,000 if such amount represents all the remaining
availability under the aggregate principal amount of Incremental Commitments set
forth above.

(b) (i) Each notice from the Borrower pursuant to this Section shall set forth
the requested amount of the relevant Incremental Commitments.

(ii) Any Incremental Commitments shall become Commitments under this Agreement
pursuant to an amendment (an “Incremental Facility Amendment”) to this Agreement
and, as appropriate, the other Loan Documents executed by the Borrower, such
applicable Additional Lenders and the Administrative Agent. Incremental
Commitments shall be provided by Additional Lenders (including any Existing
Lender (it being understood that no existing Lender shall have any right to
participate in any Incremental Commitments or, unless it agrees, be obligated to
provide any Incremental Commitments)); provided that each Additional Lender
(other than any Person that is a Lender) shall be subject to the written consent
of the Administrative Agent, each Issuing Bank, the Swingline Lender and the
Borrower (such approval in each case not to be unreasonably withheld or
delayed). An Incremental Facility Amendment may, without the consent of any
other Lenders, effect such amendments to any Loan Documents as may be necessary
or appropriate, in the reasonable opinion of the Administrative Agent, to
(x) effect the provisions of this Section and/or (y) so long as such amendments
are not, in the reasonable opinion of the Administrative Agent, materially
adverse to the Lenders, maintain the “fungibility” of any such Incremental
Commitments with any tranche of then outstanding Loans and or Commitments
hereunder.

(c) Any Revolving Loan made pursuant to an Incremental Commitment shall be a
“Loan” for all purposes of this Agreement and the other Loan Documents.

(d) Any Incremental Commitment may be in the form of a separate “first-in,
last-out” or “last-out” tranche (the “FILO Tranche”) with interest rate margins,
rate floors, upfront fees, funding discounts and original issue discounts and
advance rates, in each case to be agreed upon (which, for the avoidance of
doubt, shall not require any adjustment to the Applicable Rate or other Loans)
among the Borrower and the Additional Lenders providing the FILO Tranche so long
as (1) any loans and related obligations in respect of the FILO Tranche are not
be guaranteed by any Person other than the Guarantors and are not secured by any
assets other than Collateral; (2) as between (x) the Revolving Loans (other than
the FILO Tranche) and other Loan Document Obligations, the Noticed Cash
Management Obligations and the Noticed Hedges and (y) the FILO Tranche, all
proceeds from the liquidation or other realization of the Collateral or
application of funds under Section 7.02 shall be applied, first to obligations
owing under, or with respect to, the Revolving Loans (other than the FILO
Tranche) and other Loan Document Obligations, the Noticed Cash Management
Obligations and the Noticed Hedges, and second to the FILO Tranche; (3) the
Borrower may not prepay Loans under the FILO Tranche or terminate or reduce the
commitments in respect thereof at any time that other Loans (including Swingline
Loans) and/or amounts owed in respect of LC Disbursements (unless cash
collateralized or otherwise provided for in a manner reasonably satisfactory to
the Administrative Agent) are outstanding; (4) the Required Lenders shall,
subject to the terms of the ABL Intercreditor Agreement, exercise control of
remedies in respect of the Collateral; (5) no changes affecting the priority
status of the Revolving Loans (other than the FILO Tranche) and other Loan
Document Obligations, the Noticed Cash Management Obligations

 

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and the Noticed Hedges vis-à-vis the FILO Tranche may be made without the
consent of each of the Revolving Lenders (other than the Revolving Lenders under
FILO Tranche), (6) the final maturity of any FILO Tranche shall not occur, and
no FILO Tranche shall require mandatory commitment reductions prior to, the
Latest Maturity Date at such time and (7) except as otherwise set forth in this
Section 2.18(d), the terms of any such FILO Tranche (other than advance rates
that do not exceed 95%) shall be reasonably acceptable to the Administrative
Agent.

(e) Notwithstanding anything to the contrary, this Section 2.18 shall supersede
any provisions in Section 2.16 or Section 9.02 to the contrary.

SECTION 2.19 [Reserved].

SECTION 2.20 Defaulting Lenders.

(a) General. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 9.02.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of that Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 9.08), shall be applied at such
time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent; second, to the payment on a pro rata basis of any amounts
owing by that Defaulting Lender to each Issuing Bank and the Swingline Lender;
third, to cash collateralize the Issuing Banks’ LC Exposure with respect to such
Defaulting Lender in accordance with Section 2.24(i); fourth, as the Borrower
may request (so long as no Default or Event of Default exists), to the funding
of any Loan under the Facility in respect of which that Defaulting Lender has
failed to fund its portion thereof as required by this Agreement, as determined
by the Administrative Agent; fifth, if so determined by the Administrative Agent
and the Borrower, to be held in a deposit account and released in order to
satisfy obligations of that Defaulting Lender to fund Loans under the Facility;
sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or
the Swingline Lender as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, such Issuing Bank or the Swingline Lender
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to any Loan Party as a
result of any judgment of a court of competent jurisdiction obtained by any Loan
Party against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; and eighth, subject to the last
sentence of Section 2.09(e), to that Defaulting Lender or as otherwise directed
by a court of competent jurisdiction; provided that if such payment is a payment
of the principal amount of any Loans or LC Disbursements and such Lender is a
Defaulting Lender under clause (a) of the definition thereof, such payment shall
be applied solely to pay the relevant Loans of, and LC Disbursements owed to,
the relevant non-Defaulting Lenders on a pro rata basis prior to being applied
pursuant to Section 2.24(i). Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post cash collateral pursuant to Section 2.24(i) shall
be deemed paid to and redirected by that Defaulting Lender, and each Lender
irrevocably consents hereto.

 

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(iii) Certain Fees. That Defaulting Lender (x) shall not be entitled to receive
or accrue any commitment fee pursuant to Section 2.10(a) for any period during
which that Lender is a Defaulting Lender (and the Borrower shall not be required
to pay any such fee that otherwise would have been required to have been paid to
that Defaulting Lender) and (y) shall be limited in its right to receive Letter
of Credit Fees as provided in Section 2.10(b).

(iv) Reallocation of Swingline Exposure and LC Exposure. If any Swingline
Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender
then:

(A) all or any part of such Swingline Exposure and LC Exposure shall be
reallocated among the non-Defaulting Lenders under the Facility in accordance
with their respective Pro Rata Shares (calculated without regard to such
Defaulting Lender’s Commitment) but only to the extent (x) the sum of all
non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s
Swingline Exposure and LC Exposure does not exceed the lesser of the total of
all non-Defaulting Lenders’ Revolving Commitments under the Facility and the
applicable Borrowing Base, as of such date and (y) no such non-Defaulting
Lender’s Revolving Exposure under the Facility shall exceed such Revolving
Lender’s Revolving Commitment under the Facility at such time; and

(B) If the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within three (3) Business Days
following notice by the Administrative Agent (x) first, prepay the Swingline
Exposure of such Defaulting Lender and (y) second, cash collateralize such
Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation
pursuant to clause (i) above) in accordance with the procedures set forth in
Section 2.24(i) for so long as such LC Exposure is outstanding;

(C) if the Borrower cash collateralizes any portion of such Defaulting Lender’s
LC Exposure pursuant to this Section 2.22(a)(iv), the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.10(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(D) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
this Section 2.22(c), then the fees payable to the Lenders pursuant to
Section 2.10(a) and Section 2.10(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Pro Rata Share (calculated without regard to such
Defaulting Lender’s Commitment); or

(E) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to this Section 2.20(a)(iv), then, without prejudice to any
rights or remedies of the applicable Issuing Bank or any Lender hereunder, all
letter of credit fees payable under Section 2.10(b) with respect to such
Defaulting Lender’s LC Exposure shall be payable to the applicable Issuing Bank
until such LC Exposure is cash collateralized and/or reallocated.

 

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(v) Swingline Loans and Letters of Credit. So long as any Lender is a Defaulting
Lender, the Swingline Lender shall not be required to fund any Swingline Loan
and the Issuing Banks thereunder shall not be required to issue, amend or
increase any Letter of Credit, unless it is satisfied that the related exposure
will be 100% covered by the Commitments of the non-Defaulting Lenders and/or
cash collateral will be provided by the Borrower in accordance with
Section 2.20(a)(iv), and participating interests in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.20(a)(iv) (and
Defaulting Lenders shall not participate therein).

(b) Defaulting Lender Cure.

(i) If the Borrower, the Administrative Agent, the Swingline Lender and each
Issuing Bank agree in writing in their sole discretion that a Defaulting Lender
should no longer be deemed to be a Defaulting Lender, the Administrative Agent
will so notify the parties hereto, whereupon as of the effective date specified
in such notice and subject to any conditions set forth therein, that Lender will
cease to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

(ii) After a determination pursuant to clause (i) above, then the Swingline
Exposure and LC Exposure of the other Lenders shall be readjusted to reflect the
inclusion of such Lender’s Revolving Commitment and on such date such Lender
shall purchase at par such of the Loans of the other Lenders (other than
Swingline Loans) as the Administrative Agent shall determine may be necessary in
order for such Lender to hold such Loans in accordance with its Pro Rata Share
(without giving effect to Section 2.20(a)(iv)).

SECTION 2.21 Illegality. If any Lender determines that any law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender to make, maintain or fund Loans whose interest is determined by
reference to the LIBO Rate, or to determine or charge interest rates based upon
the LIBO Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurocurrency Loans or to convert ABR Loans to Eurocurrency Loans, as applicable,
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, (x) the Borrower shall, upon three Business
Days’ notice from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurocurrency Loans of such Lender to ABR Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurocurrency Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurocurrency Loans, and (y) if such notice asserts the illegality of such Lender
determining or charging interest rates based upon the LIBO Rate, the
Administrative Agent shall, during the period of such suspension, compute the
Alternate Base Rate, as applicable, applicable to such Lender without reference
to the LIBO Rate component thereof until the Administrative Agent is advised in
writing by such Lender that it is no longer illegal for such Lender to determine
or charge interest rates based upon the LIBO Rate. Each Lender agrees to notify
the Administrative Agent and the Borrower in writing promptly upon becoming
aware that it is no longer illegal for such Lender to determine or charge
interest rates based upon the LIBO Rate. Upon any such prepayment or conversion,
the Borrower shall also pay accrued interest on the amount so prepaid or
converted.

 

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SECTION 2.22 Loan Modification Offers.

(a) At any time after the Effective Date, the Borrower may on one or more
occasions, by written notice to the Administrative Agent, make one or more
offers (each, a “Loan Modification Offer”) to all the Lenders of one or more
Classes (each Class subject to such a Loan Modification Offer, an “Affected
Class”) to effect one or more Permitted Amendments relating to such Affected
Class pursuant to procedures reasonably specified by the Administrative Agent
and reasonably acceptable to the Borrower (including mechanics to permit
cashless rollovers and exchanges by Lenders). Such notice shall set forth
(i) the terms and conditions of the requested Permitted Amendment and (ii) the
date on which such Permitted Amendment is requested to become effective.
Permitted Amendments shall become effective only with respect to the Loans and
Commitments of the Lenders of the Affected Class that accept the applicable Loan
Modification Offer (such Lenders, the “Accepting Lenders”) and, in the case of
any Accepting Lender, only with respect to such Lender’s Loans and Commitments
of such Affected Class as to which such Lender’s acceptance has been made.

(b) A Permitted Amendment shall be effected pursuant to a Loan Modification
Agreement executed and delivered by the Borrower, each applicable Accepting
Lender and the Administrative Agent; provided that no Permitted Amendment shall
become effective unless the Borrower shall have delivered to the Administrative
Agent such legal opinions, board resolutions, secretary’s certificates,
officer’s certificates and other documents as shall be reasonably requested by
the Administrative Agent in connection therewith. The Administrative Agent shall
promptly notify each Lender as to the effectiveness of each Loan Modification
Agreement. Each Loan Modification Agreement may, without the consent of any
Lender other than the applicable Accepting Lenders, effect such amendments to
this Agreement and the other Loan Documents as may be necessary or appropriate,
in the opinion of the Administrative Agent, to give effect to the provisions of
this Section 2.22, including any amendments necessary to treat the applicable
Loans and/or Commitments of the Accepting Lenders as a new “Class” of loans
and/or commitments hereunder.

(c) If, in connection with any proposed Loan Modification Offer, any Lender of
the Affected Class declines to consent to such Loan Modification Offer on the
terms and by the deadline set forth in such Loan Modification Offer (each such
Lender, a “Non-Accepting Lender”) then the Borrower may, on notice to the
Administrative Agent and the Non-Accepting Lender, (i) replace such
Non-Accepting Lender in whole or in part by causing such Lender to (and such
Lender shall be obligated to) assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04) all
or any part of its interests, rights and obligations under this Agreement in
respect of the Loans and Commitments of the Affected Class to one or more
Persons approved (other than any Person that is a Lender, an Affiliate of a
Lender or an Approved Fund of a Lender at such time, in which case no such
approval shall be required) by the Administrative Agent (such approval in each
case not to be unreasonably withheld or delayed), each Issuing Bank and the
Swingline Lender under the Facility (such Person, a “Replacement Lender”);
provided that neither the Administrative Agent nor any Lender shall have any
obligation to the Borrower to find a Replacement Lender; provided, further, that
(i) the Replacement Lender shall have agreed to provide Commitments on the terms
set forth in the applicable Permitted Amendment, (ii) such Non-Accepting Lender
shall have received payment of an amount equal to the outstanding principal of
the Loans of the Affected Class assigned by it pursuant to this Section 2.22(c),
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder from the Replacement Lender (to the extent of such outstanding
principal and accrued interest and fees) and (iii) unless waived, the Borrower
or such Replacement Lender shall have paid to the Administrative Agent the
processing and recordation fee specified in Section 9.04(b).

(d) Notwithstanding anything to the contrary, this Section 2.22 shall supersede
any provisions in Section 2.16 or Section 9.02 to the contrary.

 

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SECTION 2.23 Swingline Loans.

(a) Facility.

(i) Subject to the terms and conditions set forth herein, each Swingline Lender
under the Facility in reliance upon the agreements of the other Revolving
Lenders set forth in this Section 2.23, make available Swingline Loans to the
relevant Borrower from time to time during the Availability Period in an
aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans under the
Facility exceeding the Swingline Sublimit for the Facility, (ii) any Revolving
Lender’s Revolving Exposure exceeding such Revolving Lender’s Revolving
Commitment for the Facility or (iii) the total Revolving Exposures exceeding the
Maximum Borrowing Amount, at such time; provided, that a Swingline Lender shall
not be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower under the Facility may borrow, prepay and reborrow
Swingline Loans. Such Swingline Loans shall bear interest at the rate then
applicable to Revolving Loans based on the Alternate Base Rate under the
Facility. To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by facsimile or electronic communication
(if arrangements for doing so have been approved by the Administrative Agent),
not later than 2:00 p.m. Local Time on the day of a proposed Swingline Loan.
Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. Such Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit in accordance with
the instructions of the Borrower (including, in the case of a Swingline Loan
made to finance the reimbursement of an LC Disbursement as provided in
Section 2.24(e), by remittance to the applicable Issuing Bank, and in the case
of repayment of another Loan or fees or expenses, by remittance to the
Administrative Agent to be distributed to the relevant Lenders) on the requested
date of such Swingline Loan.

(ii) To facilitate administration of the Revolving Loans, the Revolving Lenders
and the Administrative Agent agree (which agreement is solely among them, and
not for the benefit of or enforceable by the Borrower) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans under the Facility, and
Swingline Loans under the Facility, shall take place on a periodic basis in
accordance with this clause (a)(ii). The Administrative Agent shall request
settlement (a “Settlement”) with the Revolving Lenders on at least a bi-weekly
basis, or on a more frequent basis if so determined by the Administrative Agent,
(A) on behalf of the applicable Swingline Lender, with respect to each
outstanding Swingline Loan and (B) with respect to collections received, in each
case, by notifying the applicable Revolving Lenders of such requested Settlement
by facsimile or other electronic form of transmission, of such requested
Settlement, no later than 1:00 p.m. Local Time, on the date of such requested
Settlement (the “Settlement Date”). Each applicable Revolving Lender (other than
the Swingline Lender, in the case of Swingline Loans) shall make the amount of
such Revolving Lender’s Pro Rata Share of the outstanding principal amount of
the Swingline Loans with respect to which Settlement is requested available to
the Administrative Agent, to such account of the Administrative Agent as the
Administrative Agent may designate, not later than 3:00 p.m., Local Time, on the
Settlement Date applicable thereto, which may occur before or after the
occurrence or during the continuation of a Default or an Event of Default and
whether or not the applicable conditions precedent set forth in Article IV have
then been satisfied without regard to any minimum amount specified therein. Such
amounts made available to the Administrative Agent shall be applied

 

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against the amounts of the applicable Swingline Loan and, together with the
portion of such Swingline Loan representing the Swingline Lender’s pro rata
share thereof, shall constitute Revolving Loans of the Revolving Lenders under
the Facility. If any such amount is not made available to the Administrative
Agent by any Revolving Lender on the Settlement Date applicable thereto, the
Administrative Agent shall, on behalf of the applicable Swingline Lender with
respect to each outstanding Swingline Loan, be entitled to recover such amount
on demand from such Revolving Lender together with interest thereon at the
Alternate Base Rate for the first three days from and after the Settlement Date
and thereafter at the interest rate then applicable to Revolving Loans. Between
Settlement Dates, the Administrative Agent may pay over to the applicable
Swingline Lender any payments received by the Administrative Agent, which in
accordance with the terms of this Agreement would be applied to the reduction of
the Revolving Loans, for application to such Swingline Lender’s Revolving Loans
or Swingline Loans. If, as of any Settlement Date, collections received since
the then immediately preceding Settlement Date have been applied to such
Swingline Lender’s Revolving Loans, such Swingline Lender shall pay to the
Administrative Agent for the accounts of the applicable Revolving Lenders, to be
applied to the outstanding Revolving Loans of such Revolving Lenders, an amount
such that each Revolving Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Revolving Loans under the
Facility. During the period between Settlement Dates, each Swingline Lender with
respect to its Swingline Loans, the Administrative Agent with respect to
Protective Advances under the Facility and each Revolving Lender with respect to
its Revolving Loans shall be entitled to interest thereon at the applicable rate
or rates payable under this Agreement.

(iii) In addition, a Swingline Lender under the Facility may by written notice
given to the Administrative Agent not later than 11:00 a.m., Local Time, on any
Business Day require the Revolving Lenders under the Facility to acquire
participations not later than 1:00 p.m. on such Business Day in all or a portion
of its outstanding Swingline Loans under the Facility. Such notice shall specify
the aggregate amount of Swingline Loans in which Revolving Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Revolving Lender under the Facility, specifying in
such notice such Revolving Lender’s Pro Rata Share of such Swingline Loan or
Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of a Swingline Lender under the Facility, such Revolving Lender’s Pro
Rata Share of such Swingline Loan or Loans. Each Revolving Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.04 with respect to Loans made by such
Revolving Lender (and Section 2.04 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the applicable Swingline Lender the amounts so received by it
from the Revolving Lenders. The Administrative Agent shall notify the Borrower
of any participations in any Swingline Loan acquired pursuant to this paragraph.
Any amounts received by a Swingline Lender from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan under the Facility after
receipt by such Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to such Swingline Lender, as their
interests may appear; provided that any

 

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such payment so remitted shall be repaid to the Swingline Lender or the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

(b) Termination and Appointment. The Borrower may terminate the appointment of
any Swingline Lender as a “Swingline Lender” hereunder by providing a written
notice thereof to such Swingline Lender, with a copy to the Administrative
Agent. Any such termination shall become effective upon the earlier of (i) such
Swingline Lender’s acknowledging receipt of such notice and (ii) the fifth
Business Day following the date of the delivery thereof; provided that no such
termination shall become effective until and unless the Swingline Exposure of
such Swingline Lender shall have been reduced to zero. Notwithstanding the
effectiveness of any such termination, the terminated Swingline Lender shall
remain a party hereto and shall continue to have all the rights of a Swingline
Lender under this Agreement with respect to Swingline Loans made by it prior to
such termination, but shall not make any additional Swingline Loans. After
notice to the Administrative Agent, the Borrower may appoint any other Revolving
Lender as a “Swingline Lender” so long as such Revolving Lender agrees to such
appointment.

SECTION 2.24 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, (i) each
Issuing Bank agrees, in reliance upon the agreements of the other Revolving
Lenders set forth in this Section 2.24, (A) from time to time on any Business
Day during the period from the Effective Date to but not including the 5th
Business Day prior to the Maturity Date, upon the request of the Borrower, to
issue Letters of Credit denominated in a Permitted Currency and issued on sight
basis only for the account of the Borrower, and to amend or renew Letters of
Credit previously issued by it, in accordance with Section 2.24(b); provided
that if the Borrower requests the applicable Issuing Bank to issue a Letter of
Credit for an affiliated or unaffiliated third party (an “Account Party”), (i)
such Account Party shall have no rights against the applicable Issuing Bank;
(ii) the Borrower shall be responsible for the application and obligations under
this Agreement; and (iii) communications (including notices) related to the
respective Letter of Credit shall be among the applicable Issuing Bank and the
Borrower, and (B) to honor drafts under the Letters of Credit, and (ii) the
Revolving Lenders under the Facility severally agree to participate in the
Letters of Credit issued pursuant to Section 2.24(d) under the Facility;
provided that no Letters of Credit shall be issued if the Administrative Agent
receives notice from the Required Lenders that the conditions set forth in
Article IV have not been satisfied. Subject to the terms and conditions hereof,
the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit, the Borrower shall hand deliver or
facsimile (or transmit by electronic communication, if arrangements for doing so
have been approved by the applicable Issuing Bank) to the applicable Issuing
Bank and the Administrative Agent, at least two (2) Business Days in advance of
the requested date of issuance (or such shorter period as is acceptable to the
applicable Issuing Bank), a completed and irrevocable Letter of Credit
application in a form reasonably acceptable to the applicable Issuing Bank,
subject to the applicable Issuing Bank’s authentication procedures with results
satisfactory to the applicable Issuing Bank. To request an amendment, extension
or renewal of a Letter of Credit, the Borrower shall submit such an application
to the applicable Issuing Bank and the Administrative Agent at least two
(2) Business Days in advance of the requested date of amendment, extension or
renewal, which such application (i) shall specify (A) the amount of such Letter
of Credit, (B) the date of issuance, amendment, renewal, or extension of such
Letter of Credit, (C) the proposed expiration date of such Letter of Credit,
(D) the name and address of the beneficiary of the Letter of Credit, and
(E) such other

 

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information (including, the conditions to drawing, and, in the case of an
amendment, renewal, or extension, identification of the Letter of Credit to be
so amended, renewed, or extended) as shall be necessary to prepare, amend,
renew, or extend such Letter of Credit, and (ii) shall be accompanied by such
Issuer Documents as the Administrative Agent or applicable Issuing Bank may
request or require, to the extent that such requests or requirements are
consistent with the Issuer Documents such Issuing Bank generally requests for
Letters of Credit in similar circumstances. The applicable Issuing Bank’s
records of the content of any such application will be conclusive. In the event
of any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of Letter of Credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the applicable Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control. A Letter of Credit shall be issued,
amended, renewed or extended if (and on issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed the LC Sublimit with respect to
the Facility, (ii) no Issuing Bank’s LC Exposure shall exceed its Individual LC
Sublimit and (iii) the Revolving Exposures shall not exceed the Maximum
Borrowing Amount with respect to the Facility at such time. Additionally, the
applicable Issuing Bank shall have no obligation to issue or extend a Letter of
Credit if (A) any order, judgment, or decree of any Governmental Authority or
arbitrator shall, by its terms, purport to enjoin or restrain Issuing Bank from
issuing such Letter of Credit, or any law applicable to the applicable Issuing
Bank or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the applicable Issuing Bank
shall prohibit or request that the applicable Issuing Bank refrain from the
issuance of letters of credit generally or such Letter of Credit in particular,
or (B) the issuance of such Letter of Credit would violate one or more policies
of the applicable Issuing Bank applicable to letters of credit generally.
Promptly after the delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the applicable Issuing Bank will also deliver to the Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment. Promptly after receipt of such Letter of Credit or amendment, the
Administrative Agent shall notify the Revolving Lenders, in writing, of such
Letter of Credit or amendment, and if so requested by a Revolving Lender the
Administrative Agent, will provide such Revolving Lender with copies of such
Letter of Credit or amendment. With respect to Commercial Letters of Credit,
each Issuing Bank shall, on the first Business Day of each week, submit to the
Administrative Agent, by facsimile (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank), a
report detailing the daily aggregate total of Commercial Letters of Credit for
the previous calendar week.

(c) Expiration Date. Each Standby Letter of Credit shall expire not later than
the date that is twelve months after the date of the issuance of such Letter of
Credit; provided that any Standby Letter of Credit may provide for the automatic
extension thereof for any number of additional periods each of up to one year in
duration; provided further that any Letter of Credit which extends beyond the
Maturity Date shall be cash collateralized pursuant to clause (j) of this
Section 2.24 on or before the date that is five (5) Business Days prior to the
Maturity Date. Each Commercial Letter of Credit shall expire on the earlier of
(i) 120 days after the date of the issuance of such Commercial Letter of Credit
and (ii) 5 Business Days prior to the Maturity Date.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the applicable Issuing Bank or the Revolving Lenders, the
applicable Issuing Bank hereby grants to each Revolving Lender under the
Facility, and each Revolving Lender hereby acquires from such Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Pro Rata Share of
the aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay in Dollars (in accordance with
Section 1.06,

 

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as applicable) to the Administrative Agent such Lender’s Pro Rata Share of each
LC Disbursement made by such Issuing Bank and not reimbursed by the relevant
Borrower on the date due as provided in paragraph (e) of this Section 2.24, or
of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments under the Facility, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.

(e) Reimbursement. (i) If the applicable Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than (i) 3:00 p.m., Local Time, on the Business Day
immediately following the date the Borrower is presented notice of such LC
Disbursement under paragraph (g) of this Section 2.24; provided that the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.23 that such payment be financed with ABR
Loans or Swingline Loans under the Facility in an equivalent amount and, to the
extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Loans or Swingline Loan. In the
case of a Letter of Credit denominated in a Permitted Currency (other than
Dollars), the Borrower shall reimburse the applicable Issuing Bank in Dollars in
accordance with Section 1.06. Letters of Credit denominated in Dollars shall be
reimbursed by the Borrower in Dollars. In the case of any such reimbursement in
Dollars of a drawing under a Letter of Credit denominated in another Permitted
Currency, the applicable Issuing Bank shall notify the Borrower of the Dollar
equivalent of the amount of the drawing promptly following the determination
thereof. If the Borrower fails to make such payment when due, the amount of the
LC Disbursement immediately and automatically shall be deemed to be a Revolving
Loan hereunder (notwithstanding any failure to satisfy any condition precedent
set forth in Article IV) and, initially, shall bear interest at the rate then
applicable to Revolving Loans that are ABR Loans. If an LC Disbursement is
deemed to be a Revolving Loan hereunder, the Borrower’s obligation to pay the
amount of such LC Disbursement to the applicable Issuing Bank shall be
automatically converted into an obligation to pay the resulting Revolving Loan.
Promptly following receipt by the Administrative Agent of any payment from the
Borrowers pursuant to this paragraph, Agent shall distribute such payment to
Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to Section 2.11(e) to reimburse Issuing Bank, then to such Revolving
Lenders and Issuing Bank as their interests may appear.

(ii) Promptly following receipt of a notice of a drawing pursuant to the
foregoing clause (i), each Revolving Lender shall fund its Pro Rata Share of any
Revolving Loan deemed made pursuant to the foregoing clause (i) on the same
terms and conditions as if the Borrower had requested the amount thereof as a
Revolving Loan and the Administrative Agent shall promptly pay to the applicable
Issuing Bank the amounts so received by it from the Revolving Lenders. By the
issuance of a Letter of Credit (or an amendment, renewal, or extension of a
Letter of Credit) and without any further action on the part of the applicable
Issuing Bank or the Revolving Lenders, such Issuing Bank shall be deemed to have
granted to each Revolving Lender, and each Revolving Lender shall be deemed to
have purchased, a participation in each Letter of Credit issued by such Issuing
Bank, in an amount equal to its Pro Rata Share of such Letter of Credit, and
each such Revolving Lender agrees to pay to the Administrative Agent, for the
account of such Issuing Bank, such Revolving Lender’s Pro Rata Share of any LC
Disbursement made by such Issuing Bank under the applicable Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the applicable Issuing Bank, such Revolving Lender’s Pro Rata
Share of each LC Disbursement made by such Issuing Bank and not reimbursed by
the

 

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Borrower on the date due as provided in the foregoing clause (i), or of any
reimbursement payment that is required to be refunded (or that the
Administrative Agent or the applicable Issuing Bank elects, based upon the
advice of counsel, to refund) to the Borrower for any reason. Each Revolving
Lender acknowledges and agrees that its obligation to deliver to the
Administrative Agent, for the account of the applicable Issuing Bank, an amount
equal to its respective Pro Rata Share of each LC Disbursement pursuant to this
Section 2.24(e)(ii) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Article
IV. If any such Revolving Lender fails to make available to the Administrative
Agent the amount of such Revolving Lender’s Pro Rata Share of a LC Disbursement
as provided in this Section 2.24, such Revolving Lender shall be deemed to be a
Defaulting Lender and the Administrative Agent (for the account of the
applicable Issuing Bank) shall be entitled to recover such amount on demand from
such Revolving Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.

(f) Obligations Absolute. The Borrower’s reimbursement and payment obligations
under this Section 2.24 are absolute, unconditional and irrevocable and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever; provided, that subject to Section 2.24(n) below,
the foregoing shall not release the applicable Issuing Bank from such liability
to the Borrower as may be finally determined in a final, non-appealable judgment
of a court of competent jurisdiction against the applicable Issuing Bank
following reimbursement or payment of the obligations and liabilities, including
reimbursement and other payment obligations, of the Borrower to the applicable
Issuing Bank arising under, or in connection with, this Section 2.24 or any
Letter of Credit.

(g) No Impairment of Rights and Remedies or Obligations. Without limiting any
other provision of this Agreement, the applicable Issuing Bank and each other
Letter of Credit Related Person (if applicable) shall not be responsible to the
Borrower for, and the applicable Issuing Bank’s rights and remedies against the
Borrower and the obligation of the Borrower to reimburse the applicable Issuing
Bank for each drawing under each Letter of Credit shall not be impaired by:

(i) honor of a presentation under any Letter of Credit that on its face
substantially complies with the terms and conditions of such Letter of Credit,
even if the Letter of Credit requires strict compliance by the beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to
have been signed, presented or issued (A) by any purported successor or
transferee of any beneficiary or other Person required to sign, present or issue
such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for
payment under a Letter of Credit, even if nonnegotiable or not in the form of a
draft or notwithstanding any requirement that such draft, demand or request bear
any or adequate reference to the Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing
Document or the form, accuracy, genuineness or legal effect of any Drawing
Document (other than Issuing Bank’s determination that such Drawing Document
appears on its face substantially to comply with the terms and conditions of the
Letter of Credit);

(v) acting upon any instruction or request relative to a Letter of Credit or
requested Letter of Credit that Issuing Bank in good faith believes to have been
given by a Person authorized to give such instruction or request;

 

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(vi) any errors, omissions, interruptions or delays in transmission or delivery
of any message, advice or document (regardless of how sent or transmitted) or
for errors in interpretation of technical terms or in translation or any delay
in giving or failing to give notice to any Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary,
any nominated person or entity or any other Person or any breach of contract
between any beneficiary and any Borrower or any of the parties to the underlying
transaction to which the Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily
benefits an issuer of a letter of credit, including any requirement that any
Drawing Document be presented to it at a particular hour or place;

(ix) payment to any presenting bank (designated or permitted by the terms of the
applicable Letter of Credit) claiming that it rightfully honored or is entitled
to reimbursement or indemnity under Standard Letter of Credit Practice
applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of
Credit Practice applicable to where the applicable Issuing Bank has issued,
confirmed, advised or negotiated such Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any Letter of Credit
notwithstanding that a presentation was made prior to such expiration date and
dishonored by the applicable Issuing Bank if subsequently the applicable Issuing
Bank or any court or other finder of fact determines such presentation should
have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is
fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by the applicable
Issuing Bank to have been made in violation of international, federal, state or
local restrictions on the transaction of business with certain prohibited
Persons.

(h) Disbursement Procedures. The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall promptly
notify the Administrative Agent by facsimile or electronic communication (if
arrangements for doing so have been approved by the applicable Issuing Bank) of
such demand for payment and whether such Issuing Bank has made or will make a LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse such
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(i) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section 2.24, then Section 2.24(b) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the applicable Issuing Bank,
except that interest accrued on and after the date of funding by any Revolving
Lender pursuant to clause (e) of this Section 2.24 to reimburse such Issuing
Bank shall be for the account of such Lender to the extent of such payment.

 

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(j) Replacement of an Issuing Bank. An Issuing Bank may be replaced at the
written request of the Borrower and without the consent of the Administrative
Agent at any time by written agreement among the Borrower, the replaced Issuing
Bank and the successor Issuing Bank, and acknowledged by the Administrative
Agent. The Administrative Agent shall notify the Revolving Lenders of any such
replacement of an Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.10(b). From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the replaced Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein
to the term “Issuing Bank” shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.

(k) Cash Collateralization. If (i) any Event of Default shall occur and be
continuing, (ii) Excess Availability under the Facility shall at any time be
less than zero or (iii) if and to the extent required in accordance with the
provisions of Section 2.07, 2.20 or 2.24, on the Business Day following the date
that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Revolving
Lenders with LC Exposure representing greater than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, upon such
demand, the Borrower shall deposit, in an account or accounts with the
Administrative Agent(s), in the name of the Administrative Agent and for the
benefit of the Revolving Lenders (each, an “LC Collateral Account”), an amount
in cash equal to 102% of the LC Exposure under the Facility as of such date;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in Section 7.01(h) or
(i); provided, further, that such deposit may be required at times and in the
amounts specified in Section 2.09(b) and (c). Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the Loan
Document Obligations in accordance with the provisions of this clause (j). The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account and the Borrower hereby grants
the Administrative Agent a security interest in the LC Collateral Account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower’s risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the applicable Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated (but
subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other Loan
Document Obligations. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (together with all interest and other earnings with respect thereto, to
the extent not applied as aforesaid) shall be returned promptly to the Borrower
but in no event later than three (3) Business Days after such Event of Default
has been cured or waived. If the Borrower fails to provide any cash collateral
as required by this Section 2.24(j), the Lenders may (and, upon direction of the
Administrative Agent, shall) advance, as Revolving Loans under the Facility, the
amount of the cash collateral required (whether or not the Commitments have
terminated, a Protective Advance or Overadvance exists or the conditions in
Section 4.02 are satisfied).

 

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(l) Existing Letters of Credit. The Administrative Agent, the Lenders (including
any Lender that issued any Existing Letter of Credit) and the Borrower agree
that, notwithstanding the provisions specified in the Existing Letters of
Credit, effective as of the Effective Date, the Existing Letters of Credit
specified on Schedule 1.01(b) shall be deemed to have been issued as of the
Effective Date and deemed to be maintained under, and to be governed by the
terms and conditions of, this Agreement as Letters of Credit under the Facility
specified on Schedule 1.01(b) as obligations or co-obligations of the Borrower
for its own account or for the account of such Restricted Subsidiary of the
Borrower, in each case as specified on Schedule 1.01(b).

(m) Indemnity. The Borrower agrees to indemnify, defend and hold harmless each
Issuing Bank and its branches, Affiliates, and correspondents and each such
Person’s respective directors, officers, employees, attorneys and agents (each,
including Issuing Bank, a “Letter of Credit Related Person”) on the same basis
as set forth in Section 9.03(b).

(n) Liability. The liability of each Issuing Bank (or any other Letter of Credit
Related Person) under, in connection with or arising out of any Letter of Credit
(or pre-advice), regardless of the form or legal grounds of the action or
proceeding, shall be limited to direct damages suffered by the Borrower that are
caused directly by the applicable Issuing Bank’s gross negligence or willful
misconduct in (i) honoring a presentation under a Letter of Credit that on its
face does not at least substantially comply with the terms and conditions of
such Letter of Credit, (ii) failing to honor a presentation under a Letter of
Credit that strictly complies with the terms and conditions of such Letter of
Credit or (iii) retaining Drawing Documents presented under a Letter of Credit.
The Borrower’s aggregate remedies against the applicable Issuing Bank and any
Letter of Credit Related Person for wrongfully honoring a presentation under any
Letter of Credit shall in no event exceed the aggregate amount paid by the
Borrower to the applicable Issuing Bank in respect of the honored presentation
in connection with such Letter of Credit under Section 2.24(e), plus interest at
the Alternate Base Rate hereunder. The Borrower shall take action to avoid and
mitigate the amount of any damages claimed against the applicable Issuing Bank
or any other Letter of Credit Related Person, including by enforcing its rights
against the beneficiaries of the Letters of Credit.

(o) Letter of Credit Governing Law. Unless otherwise expressly agreed by the
applicable Issuing Bank and the Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), (i)
the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the
rules of the UCP shall apply to each commercial Letter of Credit.

(p) Power of Attorney. At the Borrower’s cost and expense, the Borrower shall
execute and deliver to the applicable Issuing Bank such additional certificates,
instruments and/or documents and take such additional action as may be
reasonably requested by the applicable Issuing Bank to enable the applicable
Issuing Bank to issue any Letter of Credit pursuant to this Agreement, to
protect, exercise and/or enforce the applicable Issuing Bank’s rights and
interests under this Agreement or to give effect to the terms and provisions of
this Agreement. The Borrower irrevocably appoints the applicable Issuing Bank as
its attorney-in-fact and authorizes the applicable Issuing Bank, without notice
to the Borrower, to execute and deliver ancillary documents and letters
customary in the letter of credit business that may include but are not limited
to advisements, indemnities, checks, bills of exchange and issuance documents.
The power of attorney granted by the Borrower is limited solely to such actions
related to the issuance, confirmation or amendment of any Letter of Credit and
to ancillary documents or letters customary in the letter of credit business.
This appointment is coupled with an interest.

 

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SECTION 2.25 [Reserved].

SECTION 2.26 Reserves; Change in Reserves; Decisions by Agent. The
Administrative Agent may at any time and from time to time in the exercise of
its Permitted Discretion establish and increase or decrease Reserves; provided
that as a condition to the establishment of any new category of Reserves, or any
increase in Reserves resulting from a change in the manner of determination
thereof, any Required Reserve Notice shall have been given to the Borrower;
provided further that, other than in the case of Bank Product Reserves,
circumstances, conditions, events or contingencies arising prior to the
Effective Date of which the Administrative Agent had actual knowledge prior to
the Effective Date shall not be the basis for any such establishment or
modification after the Effective Date. Upon delivery of such notice, the
Administrative Agent shall be available to discuss the proposed Reserve or
increase, and the Borrower may take such action as may be required so that the
event, condition or matter that is the basis for such Reserve or increase no
longer exists, in a manner and to the extent reasonably satisfactory to the
Administrative Agent in the exercise of its Permitted Discretion. In no event
shall such notice and opportunity limit the right of the Administrative Agent to
establish or change such Reserve, unless the Administrative Agent shall have
determined in its Permitted Discretion that the event, condition or other matter
that is the basis for such new Reserve or such change no longer exists or has
otherwise been adequately addressed by the Borrower. Notwithstanding anything
herein to the contrary, Reserves shall not duplicate eligibility criteria
contained in the definition of “Eligible Credit Card Receivable,” “Eligible
Receivable,” “Eligible In-Transit Inventory,” “Eligible Letter of Credit
Inventory” or “Eligible Inventory” and vice versa, or reserves or criteria
deducted in computing the cost or market value or Value of any Eligible
Inventory or Eligible Receivable or the Net Orderly Liquidation Value of any
Eligible Inventory and vice versa.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

SECTION 3.01 Organization; Powers. Each of the Borrower and each Restricted
Subsidiary is (a) duly organized or incorporated, validly existing and in good
standing (to the extent such concept exists in the relevant jurisdictions) under
the laws of the jurisdiction of its organization or incorporation, (b) has the
corporate or other organizational power and authority to carry on its business
as now conducted and to execute, deliver and perform its obligations under each
Loan Document to which it is a party and, (c) is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required, except in the case of clause (a), clause (b) and clause (c), where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

SECTION 3.02 Authorization; Enforceability. This Agreement has been duly
authorized, executed and delivered by the Borrower and constitutes, and each
other Loan Document to which any Loan Party is to be a party, when executed and
delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of the Borrower or such Loan Party, as the case may be, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

SECTION 3.03 Governmental and Third-Party Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or third-party,
except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created under the Loan Documents,
(b) will not

 

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violate (i) the Organizational Documents of any Loan Party, or (ii) any
Requirements of Law applicable to the Borrower or any Restricted Subsidiary,
(c) will not violate or result in a default under any indenture or other
agreement or instrument binding upon the Borrower or any Restricted Subsidiary
or their respective assets, or give rise to a right thereunder to require any
payment, repurchase or redemption to be made by the Borrower or any Restricted
Subsidiary, or give rise to a right of, or result in, termination, cancellation
or acceleration of any obligation thereunder, and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any
Restricted Subsidiary, except Liens created under the Loan Documents, except (in
the case of each of clauses (a), (b), (c) and (d)) to the extent that the
failure to obtain or make such consent, approval, registration, filing or
action, or such violation, default or right as the case may be, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

SECTION 3.04 Financial Condition; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly indicated therein, including the notes thereto, and (ii) fairly
present in all material respects the financial condition of the Borrower and its
consolidated subsidiaries as of the respective dates thereof and the
consolidated results of their operations for the respective periods then ended
in accordance with GAAP consistently applied during the periods referred to
therein, except as otherwise expressly indicated therein, including the notes
thereto.

(b) [Reserved].

(c) Since the Effective Date, there has been no Material Adverse Effect.

SECTION 3.05 Properties; Insurance.

(a) Each Loan Party and each Restricted Subsidiary has good title to, or valid
leasehold interests in, all its real and personal property material to its
business, if any, (i) free and clear of all Liens except for Liens permitted by
Section 6.02 and (ii) except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or as proposed
to be conducted or to utilize such properties for their intended purposes, in
each case, except as could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.

(b) As of the Effective Date, Schedule 3.05 sets forth a list of each fee owned
real property owned by any Loan Party having a Fair Market Value in excess of
$10,000,000.

(c) Each of the Borrower and each Restricted Subsidiary maintains in effect
insurance that complies, in all material respects, with the requirements of
Section 5.07.

SECTION 3.06 Litigation and Environmental Matters.

(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened in writing against or affecting any Loan Party or any Restricted
Subsidiary that could reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect.

(b) Except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, no Loan Party or any Restricted Subsidiary (i) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit,

 

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license or other approval required under any Environmental Law, (ii) has, to the
knowledge of the Borrower, become subject to any Environmental Liability,
(iii) has received written notice of any claim with respect to any Environmental
Liability or (iv) has, to the knowledge of the Borrower, any basis to reasonably
expect that any Loan Party or any Restricted Subsidiary will become subject to
any Environmental Liability.

SECTION 3.07 Compliance with Laws and Agreements. Each Loan Party and each
Restricted Subsidiary is in compliance with (a) its Organizational Documents,
(b) all Requirements of Law applicable to it or its property and (c) all
indentures and other agreements and instruments binding upon it or its property,
except, in the case of clauses (b) and (c) of this Section, where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 3.08 Investment Company Status. None of the Borrower or any other Loan
Party is required to be registered as an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended from
time to time.

SECTION 3.09 Taxes. Except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Borrower and each
Restricted Subsidiary (a) have timely filed or caused to be filed all Tax
returns required to have been filed and (b) have paid or caused to be paid all
Taxes required to have been paid (whether or not shown on a Tax return)
including in their capacity as tax withholding agents, except any Taxes (i) that
are not overdue by more than 30 days or (ii) that are being contested in good
faith by appropriate proceedings, provided that the Borrower or such Restricted
Subsidiary, as the case may be, has set aside on its books adequate reserves
therefor in accordance with GAAP.

SECTION 3.10 ERISA.

(a) Except as could not, 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) Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect: (i) no ERISA Event has
occurred during the five year period prior to the date on which this
representation is made or deemed made or is reasonably expected to occur;
(ii) no Plan has failed to satisfy the minimum funding standard (within the
meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such
Plan, whether or not waived; (iii) 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 Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither any Loan Party nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 of ERISA with respect
to a Multiemployer Plan; and (v) neither any Loan Party nor any ERISA Affiliate
has engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.

SECTION 3.11 Disclosure. (i) As of the Effective Date, none of the reports,
financial statements, certificates or other written information furnished by or
on behalf of any Loan Party to any Agent or any Lender in connection with the
negotiation of any Loan Document or delivered thereunder (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, the Borrower represents only that such
information was

 

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prepared in good faith based upon assumptions believed by it to be reasonable at
the time delivered and, if such projected financial information was delivered
prior to the Effective Date, as of the Effective Date, it being understood that
any such projected financial information may vary from actual results and such
variations could be material and (ii) the information set forth in each
Borrowing Base Certificate is true and correct in all material respects and has
been prepared in all material respects in accordance with the requirements of
this Agreement.

SECTION 3.12 Subsidiaries. As of the Effective Date, Schedule 3.12 sets forth
the name of each Subsidiary and the ownership interest of the Borrower and each
Subsidiary in such Subsidiary.

SECTION 3.13 Intellectual Property; Licenses, Etc. Each Loan Party and each
Restricted Subsidiary owns, licenses or possesses the right to use, all of the
rights to Intellectual Property that are reasonably necessary for the operation
of its business as currently conducted, and, without conflict with the rights of
any Person, except to the extent such conflicts, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Each Loan Party or any Restricted Subsidiary do not, in the operation of their
businesses as currently conducted, infringe upon any Intellectual Property
rights held by any Person except for such infringements, individually or in the
aggregate, which could not reasonably be expected to have a Material Adverse
Effect. No claim or litigation regarding any of the Intellectual Property owned
by each Loan Party or any of the Restricted Subsidiaries is pending or, to the
knowledge of the Borrower, threatened in writing against any Loan Party or any
Restricted Subsidiary, which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

SECTION 3.14 Solvency. On the Effective Date, immediately after the consummation
of the Transactions to occur on the Effective Date, the Borrower and its
Subsidiaries are, on a consolidated basis after giving effect to the
Transactions, Solvent.

SECTION 3.15 Senior Indebtedness. The Loan Document Obligations constitute
“Senior Indebtedness” (or any comparable term) under and as defined in the
documentation governing any Subordinated Indebtedness.

SECTION 3.16 Federal Reserve Regulations. None of the Borrower or any Restricted
Subsidiary is engaged or will engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors), or extending credit for the
purpose of purchasing or carrying margin stock. No part of the proceeds of the
Loans will be used, directly or indirectly, to purchase or carry any margin
stock or to refinance any Indebtedness originally incurred for such purpose, or
for any other purpose that entails a violation (including on the part of any
Lender) of the provisions of Regulations U or X of the Board of Governors.

SECTION 3.17 Use of Proceeds. The Borrower will use the proceeds of (a) the
Loans made on the Effective Date to backstop letters of credit issued under the
letter of credit facility listed on Schedule 6.01; and (b) the Loans made on or
after the Effective Date will be used for working capital and other general
corporate purposes of the Borrower and the Subsidiaries, including Capital
Expenditures, Investments, Restricted Payments and any other use not explicitly
prohibited under the Loan Documents.

SECTION 3.18 Sanctions, Anti-Corruption Laws, and Anti-Terrorism Laws.

(a) The Borrower and the Restricted Subsidiaries will not, directly or, to the
knowledge of the Borrower after due inquiry, indirectly, use the proceeds of the
Loans or the proceeds of the Letters of Credit, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
Person, to fund (i) any activities of or business with any Person, or in any
country or territory, that, at the time of such funding, is the subject of
Sanctions, or (ii) any other transaction that will result in a violation by any
Person participating in the transaction(whether as underwriter, advisor,
investor or otherwise) of Sanctions.

 

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(b) The Borrower and the Restricted Subsidiaries will not use the proceeds of
the Loans or the proceeds of the Letters of Credit directly, or, to the
knowledge of the Borrower, indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the FCPA or other applicable Anti-Corruption Laws.

(c) To the knowledge of the Borrower, none of the Borrower or the Restricted
Subsidiaries has, in the past three years, committed a violation of applicable
Sanctions or a material violation of applicable Anti-Corruption Laws, or
Anti-Terrorism Laws.

(d) None of the Borrower or any of the Restricted Subsidiaries or, to the
knowledge of Borrower, any director, officer, any employee or agent of the
Borrower or any Restricted Subsidiary is, or is owned or controlled by a
Sanctioned Entity or Sanctioned Person.

(e) Since the Implementation Date, each of the Borrower and its Restricted
Subsidiaries has implemented and maintains in effect policies and procedures
designed to promote compliance by the Borrower and its Restricted Subsidiaries
and their respective directors, officers, employees, agents and Affiliates with
all Sanctions, Anti-Corruption Laws and AML Legislation.

ARTICLE IV

CONDITIONS

SECTION 4.01 Effective Date. The obligations of the Lenders to make Loans (and
each Issuing Bank to issue a Letter of Credit) hereunder shall not become
effective until the date on which each of the following conditions shall be
satisfied (or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include facsimile or other electronic transmission of a signed counterpart
of this Agreement) that such party has signed a counterpart of this Agreement.

(b) The Administrative Agent shall have received a written opinion (addressed to
the Administrative Agent and the Lenders under the Facility and dated the
Effective Date) of Kirkland & Ellis LLP, New York counsel for the Loan Parties.
The Borrower hereby requests such counsel to deliver such opinion.

(c) The Administrative Agent shall have received a certificate of each Loan
Party (other than the Insignificant Subsidiaries), dated the Effective Date,
substantially in the form of Exhibit G with appropriate insertions, executed by
any Responsible Officer of such Loan Party, and including or attaching the
documents referred to in paragraph (d) of this Section.

(d) The Administrative Agent shall have received a copy of (i) each
Organizational Document of each Loan Party (other than the Insignificant
Subsidiaries for which Organizational Documents shall be delivered to the
Administrative Agent within five days after the Effective Date, or such later
date as agreed by the Administrative Agent in its reasonable discretion), in
each case certified, to the extent applicable, as of a recent date by the
applicable Governmental Authority, (ii) signature and

 

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incumbency certificates of the Responsible Officers of each Loan Party (other
than the Insignificant Subsidiaries for which certificates shall be delivered to
the Administrative Agent within five days after the Effective Date, or such
later date as agreed by the Administrative Agent in its reasonable discretion)
executing the Loan Documents to which it is a party, (iii) resolutions of the
Board of Directors and/or similar governing bodies of each Loan Party (other
than the Insignificant Subsidiaries) approving and authorizing the execution,
delivery and performance of Loan Documents to which it is a party, certified as
of the Effective Date by its secretary, an assistant secretary or a Responsible
Officer as being in full force and effect without modification or amendment and
(iv) a good standing certificate (to the extent such concept exists and it is
customary to provide a good standing certificate in such jurisdiction) from the
applicable Governmental Authority of each Loan Party’s jurisdiction of
incorporation, organization or formation.

(e) The Administrative Agent shall have received all fees and other amounts
previously agreed in writing by the Joint Bookrunners and the Borrower to be due
and payable on or prior to the Effective Date, including, to the extent invoiced
at least three Business Days prior to the Effective Date (except as otherwise
reasonably agreed by the Borrower), reimbursement or payment of all
out-of-pocket expenses (including reasonable fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Loan Party under any Loan
Document.

(f) Except for any items referred to on Schedule 5.13, the Collateral and
Guarantee Requirement shall have been satisfied.

(g) Since February 3, 2019, there has not been any Material Adverse Effect.

(h) The Joint Bookrunners shall have received the Audited Financial Statements.

(i) On the Effective Date, the representations and warranties of the Loan
Parties set forth in this Agreement and in each of the other Loan Documents
shall be true and correct in all material respects (or, in the case of any
representations and warranties qualified by materiality or Material Adverse
Effect, in all respects) on and as of the Effective Date, with the same effect
as though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects (or, in the case of any representations and warranties qualified by
materiality or Material Adverse Effect, in all respects) as of such earlier
date).

(j) The Administrative Agent shall have received a certificate from the chief
financial officer of the Borrower certifying that the Borrower and its
Subsidiaries on a consolidated basis after giving effect to the Transactions are
Solvent.

(k) The Administrative Agent and the Joint Bookrunners shall have received all
documentation at least two (2) Business Days prior to the Effective Date and
other information about the Loan Parties that shall have been reasonably
requested in writing at least ten (10) days prior to the Effective Date and that
the Administrative Agent or the Joint Bookrunners have reasonably determined is
required by United States regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation Title III of the USA Patriot Act.

(l) At least three Business Days prior to the Effective Date, to the extent the
Borrower qualifies as a “legal entity customer” under the Beneficial Ownership
Regulation the Borrower shall deliver a Beneficial Ownership Certificate to each
Lender that has requested a Beneficial Ownership Certificate at least ten
(10) days prior to the Effective Date.

 

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(m) The IPO shall have been consummated, or substantially concurrently with the
Effective Date shall be consummated, in a manner consistent in all material
respects with the Form S-1 filed with the SEC prior to or on the Effective Date.

(n) The Transactions shall not violate or result in a default under that certain
ABL Credit Agreement, dated as of March 11, 2015 (as amended, restated,
supplemented or otherwise modified from time to time prior to the Effective
Date), among Argos Holdings, Inc., as Holdings, PetSmart, Inc., as U.S.
Borrower, PETM Canada Corporation, as Canadian Borrower, the lenders or other
financial institutions or entities from time to time party thereto and Citibank,
N.A., as administrative agent.

(o) On the Effective Date, no Event of Default or Default shall have occurred
and be continuing.

SECTION 4.02 Each Credit Event. The obligation of each Revolving Lender to make
a Revolving Loan on the occasion of any Revolving Borrowing, and of any Issuing
Bank to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions (except as otherwise set forth in
Section 2.18 and, with respect to clauses (b) and (c) below, subject to
Section 1.08 in connection with any Limited Condition Acquisition to be funded
with the proceeds of a FILO Tranche):

(a) The Administrative Agent shall have received, in the case of a Revolving
Borrowing, a Borrowing Request as required by Section 2.03 or, in the case of
the issuance of a Letter of Credit, the applicable Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance of
such Letter of Credit as required by Section 2.24(b), or, in the case of a
Swingline Borrowing, the applicable Swingline Lender and the Administrative
Agent shall have received a Swingline Borrowing request as required by
Section 2.23(a).

(b) The representations and warranties of the Loan Parties set forth in this
Agreement and in each of the other Loan Documents shall be true and correct in
all material respects (or, in the case of any representations and warranties
qualified by materiality or Material Adverse Effect, in all respects) on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit (other than an amendment, extension or
renewal of a Letter of Credit without any increase in the stated amount of such
Letter of Credit), as applicable, with the same effect as though made on and as
of such date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall be true and correct in all material respects (or, in the case of any
representations and warranties qualified by materiality or Material Adverse
Effect, in all respects) as of such earlier date).

(c) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit (other than
an amendment, extension or renewal of a Letter of Credit without any increase in
the stated amount of such Letter of Credit), as applicable, no Event of Default
or Default shall have occurred and be continuing.

(d) On the proposed date of such Borrowing, Excess Availability under the
Facility for which a Borrowing Request or notice of request for Letter of Credit
issuance has been delivered shall be adequate to cover the amount of such
Borrowing or issuance.

(e) If at the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit (other
than an amendment, extension or renewal of a Letter of Credit without any
increase in the stated amount of such Letter of Credit), as applicable,
Specified Excess Availability is less than the greater of (a) 10% of the Total
Maximum Borrowing Amount and (b) $30,000,000, then the Fixed Charge Coverage
Ratio of the Borrower shall be no lower than 1.00 to 1.00 on a Pro Forma Basis.

 

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Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (b) and
(c).

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments shall have expired or been terminated, the principal of
and interest on each Loan and all fees, expenses and other amounts (other than
contingent indemnification obligations for which no claim has been asserted)
payable under any Loan Document shall have been paid in full, or any Letter of
Credit shall remain outstanding (unless such Letters of Credit have been cash
collateralized pursuant to the terms hereof), the Borrower covenants and agrees
with the Lenders that:

SECTION 5.01 Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent (on behalf of each Lender):

(a) on or before the date on which such financial statements are required or
permitted to be filed with the SEC (or, if such financial statements are not
required to be filed with the SEC, on or before the date that is 90 days after
the end of such fiscal year (or, in the case of financial statements for the
fiscal year ended February 2, 2020, on or before the date that is 120 days after
the end of such fiscal year), audited consolidated balance sheet and audited
consolidated statements of income, comprehensive income, stockholders’ equity
and cash flows of the Borrower as of the end of and for such fiscal year, and
related notes thereto, setting forth in each case commencing with the financial
statements for the fiscal year ended February 2, 2021 in comparative form the
figures for the previous fiscal year, all reported on by Deloitte LLP or other
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit (other than any exception or explanatory
paragraph, but not a qualification, that is expressly solely with respect to, or
expressly resulting solely from, (A) an upcoming maturity date of any
Indebtedness under this Agreement occurring within one year from the time such
opinion is delivered or (B) any potential inability to satisfy a financial
maintenance covenant on a future date or in a future period)) to the effect that
such consolidated financial statements present fairly in all material respects
the financial position and results of operations and cash flows of the Borrower
and its Subsidiaries as of the end of and for such year on a consolidated basis
in accordance with GAAP consistently applied;

(b) commencing with the financial statements for the fiscal quarter ending
May 5, 2019, on or before the date on which such financial statements are
required or permitted to be filed with the SEC with respect to each of the first
three fiscal quarters of each fiscal year of the Borrower (or, if such financial
statements are not required to be filed with the SEC, on or before the date that
is 45 days after the end of each such fiscal quarter (or, in the case of
financial statements for the fiscal quarters ending on May 5, 2019, August 4,
2019 and November 3, 2019, on or before the date that is 60 days after the end
of such fiscal quarter), unaudited consolidated balance sheet and unaudited
consolidated statements of income, comprehensive income and cash flows of the
Borrower as of the end of and for such fiscal quarter (except in the case of
cash flows) and the then elapsed portion of the fiscal year, setting forth in
each case commencing with the financial statements for the fiscal quarter ended
August 2, 2020 in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by a Financial Officer as presenting fairly in all
material respects the financial position and results of operations and cash
flows of the Borrower and

 

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the Subsidiaries as of the end of and for such fiscal quarter (except in the
case of cash flows) and such portion of the fiscal year on a consolidated basis
in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes and which may exclude the effects of
purchase accounting with respect to any Permitted Investment or similar
Investment permitted under this Agreement;

(c) simultaneously with the delivery of each set of consolidated financial
statements referred to in paragraphs (a) and (b) above, (i) the related
consolidating financial information (which may be unaudited) reflecting
adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if
any) from such consolidated financial statements and (ii) commencing with the
financial statements delivered for the fiscal quarter ended May 5, 2019, a
Compliance Certificate evidencing compliance with the requirements of
Section 6.10 if a Compliance Period then exists;

(d) not later than five days after any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer certifying as
to whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect;

(e) commencing with the fiscal year ending February 2, 2020, not later than 90
days after the commencement of each fiscal year of the Borrower (or in the case
of the fiscal year ending February 2, 2020, on or before the date that is 120
days after the end of such fiscal year), a detailed consolidated budget for the
Borrower and its Subsidiaries for such fiscal year (including a projected
consolidated balance sheet and consolidated statements of projected operations
and cash flows as of the end of and for such fiscal year and setting forth the
material assumptions used for purposes of preparing such budget) in the form
customarily provided by management of the Borrower (or otherwise provided to the
Investors);

(f) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and registration statements (other than
amendments to any registration statement (to the extent such registration
statement, in the form it became effective, is delivered to the Administrative
Agent), exhibits to any registration statement and, if applicable, any
registration statement on Form S-8) filed by the Borrower or any Subsidiary with
the SEC or with any national securities exchange;

(g) reasonably promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower, any Loan Party or any Restricted Subsidiary as the Administrative
Agent on its own behalf or on behalf of any Lender may reasonably request in
writing; and

(h) [reserved];

(i) as soon as available but in any event on or prior to 20th calendar day
following the end of the previous fiscal month beginning with the fiscal month
ending on the Effective Date, a Borrowing Base Certificate as of the close of
business on the last day of the immediately preceding fiscal month,
substantially in the form of Exhibit F hereto; provided that the Borrower may
elect to deliver the Borrowing Base Certificate on a more frequent basis but if
such election is exercised, it must be continued until the date that is 30 days
after the date of such election (with a frequency equal to that of the initial
additional Borrowing Base Certificate delivered by the Borrower for such
period); provided further that upon the commencement and during the continuance
of a Weekly Reporting Period, the Borrower shall deliver a Weekly Borrowing Base
Certificate and such supporting information on Wednesday of each week (or if
Wednesday is not a Business Day, on the next succeeding Business Day), as of the
close of business on the immediately preceding Friday; and

 

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(j) concurrently with the delivery of the Borrowing Base Certificates pursuant
to Section 5.01(i) above, deliver to the Administrative Agent (x) a schedule of
Inventory as of the last Business Day of the immediately preceding fiscal month
or week, as applicable, of the Loan Parties, itemizing and describing the kind,
type and quantity of Inventory, the Loan Parties’ Cost thereof and the location
thereof, (y) a reconciliation of the Company’s perpetual inventory balance to
the general ledger inventory balance, and (z) a reconciliation of the Company’s
general ledger inventory balance to the inventory balance shown on the most
recent fiscal monthly balance sheet.

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 5.01 may be satisfied with respect to financial information of the
Borrower and its Subsidiaries by furnishing the Form 10-K or 10-Q (or the
equivalent), as applicable, of the Borrower (or a parent company thereof) filed
with the SEC or with a similar regulatory authority in a foreign jurisdiction or
(B) the applicable financial statements of any direct or indirect parent of the
Borrower); provided that to the extent such information relates to a parent of
the Borrower, such information is accompanied by consolidating information,
which may be unaudited, that explains in reasonable detail the differences
between the information relating to such parent, on the one hand, and the
information relating to the Borrower and its Subsidiaries on a stand-alone
basis, on the other hand, and to the extent such information is in lieu of
information required to be provided under Section 5.01(a), such materials are
accompanied by a report and opinion of Deloitte LLP or any other 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 or exception or any qualification or exception as to the scope of
such audit (other than any exception or explanatory paragraph, but not a
qualification, that is expressly solely with respect to, or expressly resulting
solely from, (i) an upcoming maturity date of any Indebtedness under this
Agreement occurring within one year from the time such opinion is delivered or
(ii) any potential inability to satisfy a financial maintenance covenant
(including Section 7.09) on a future date or in a future period).

Documents required to be delivered pursuant to Section 5.01(a), (b) or (f) (to
the extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the earlier of the date (A) on which the Borrower posts
such documents, or provides a link thereto, on the Borrower’s website on the
Internet or (B) on which such documents are posted on the Borrower’s behalf on
IntraLinks/IntraAgency, SyndTrak or another 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); provided
that: (i) the Borrower shall deliver such documents to the Administrative Agent
upon its reasonable request until a written notice to cease delivering such
documents is given by the Administrative Agent and (ii) the Borrower shall
notify the Administrative Agent (by telecopier or electronic mail) of the
posting of any such documents and upon its reasonable request, provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. The Administrative Agent shall have no obligation to request
the delivery of or maintain paper copies of the documents referred to above, and
each Lender shall be solely responsible for timely accessing posted documents
and maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent, Lead
Arrangers and/or the Joint Bookrunners will make available to the Lenders
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Company Materials”) by posting the Company Materials on
IntraLinks, SyndTrak or another similar electronic system (the “Platform”) and
(b) certain of the Lenders (each, a “Public Lender”) may have personnel who do
not wish to receive material non-public information with respect to the Borrower
or its Affiliates, or the respective securities of any of the foregoing, and who
may be engaged in investment and other market-related activities with respect to
such Persons’ securities. The Borrower hereby agrees that it will, upon the
Administrative Agent’s reasonable

 

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request, identify that portion of the Company Materials that may be distributed
to the Public Lenders and that (i) all such Company Materials shall be clearly
and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (ii) by marking
Company Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Joint Bookrunners, Lead Arrangers and the Lenders to
treat such Company Materials as not containing any material non-public
information (although it may be sensitive and proprietary) with respect to the
Borrower or its respective securities for purposes of United States federal and
state securities laws (provided, however, that to the extent such Company
Materials constitute Information, they shall be treated as set forth in
Section 9.12); (iii) all Company Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Side
Information”; and (iv) the Administrative Agent, Lead Arrangers and the Joint
Bookrunners shall be entitled to treat any Company Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Side Information”; provided that the Borrower’s failure to
comply with this sentence shall not constitute a Default or an Event of Default
under this Agreement or the Loan Documents.

SECTION 5.02 Notices of Material Events. Promptly after any Responsible Officer
of the Borrower obtains actual knowledge thereof, the Borrower will furnish to
the Administrative Agent (for distribution to each Lender through the
Administrative Agent) written notice of the following:

(a) the occurrence of any Default; or

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or, to the knowledge of a
Financial Officer or another executive officer of the Borrower or any of its
Subsidiaries, affecting the Borrower or any of its Subsidiaries or the receipt
of a written notice of an Environmental Liability or the occurrence of an ERISA
Event, in each case that could reasonably be expected to result in a Material
Adverse Effect.

Each notice delivered under this Section shall be accompanied by a written
statement of a Responsible Officer of the Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.

SECTION 5.03 Information Regarding Collateral.

(a) The Borrower will furnish to the Administrative Agent promptly (and in any
event within 60 days or such longer period as reasonably agreed to by the
Administrative Agent) written notice of any change (i) in any Loan Party’s legal
name (as set forth in its certificate of organization or like document) or
(ii) in the jurisdiction of incorporation or organization or the location of the
chief executive office or domicile of any Loan Party or in the form of its
organization.

(b) Not later than five days after delivery of financial statements pursuant to
Section 5.01(a), (or such later date as agreed by the Administrative Agent in
its reasonable discretion), the Borrower shall deliver to the Administrative
Agent a certificate executed by a Responsible Officer of the Borrower
(i) setting forth the information required pursuant to Schedules I through IV of
the Collateral Agreement or confirming that there has been no change in such
information since the Effective Date or the date of the most recent certificate
delivered pursuant to this Section, (ii) identifying any wholly-owned Subsidiary
that has become, or ceased to be, a Material Subsidiary during the most recently
ended fiscal quarter and (iii) certifying that all notices required to be given
prior to the date of such certificate by Section 5.03 or 5.12 have been given.

 

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SECTION 5.04 Existence; Conduct of Business. The Borrower will, and will cause
each Restricted Subsidiary to, do or cause to be done all things reasonably
necessary to obtain, preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, the
patents, copyrights, trademarks and trade names and other Intellectual Property
material to the conduct of its business, in each case (other than the
preservation of the existence of the Borrower) to the extent that the failure to
do so could reasonably be expected to have a Material Adverse Effect, provided
that the foregoing shall not prohibit any merger, amalgamation, consolidation,
liquidation or dissolution permitted under Section 6.03 or any Disposition
permitted by Section 6.05.

SECTION 5.05 Payment of Taxes, etc. The Borrower will, and will cause each
Restricted Subsidiary to, pay its obligations in respect of Taxes before the
same shall become delinquent or in default, except where (i) the validity or
amount thereof is being contested in good faith by appropriate proceedings or
(ii) the failure to make payment could not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.

SECTION 5.06 Maintenance of Properties. Each of the Borrower and each Loan Party
will, and will cause each Restricted Subsidiary to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, except where the failure to do so
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

SECTION 5.07 Insurance. The Borrower will, and will cause each Restricted
Subsidiary to, maintain, with insurance companies that the Borrower believes (in
the good faith judgment of the management of the Borrower) are financially sound
and responsible at the time the relevant coverage is placed or renewed,
insurance in at least such amounts (after giving effect to any self-insurance
which the Borrower believes (in the good faith judgment of management of the
Borrower) is reasonable and prudent in light of the size and nature of its
business) and against at least such risks (and with such risk retentions) as the
Borrower believes (in the good faith judgment of the management of the Borrower)
are reasonable and prudent in light of the size and nature of its business; and
will furnish to the Lenders, upon written request from the Administrative Agent,
information presented in reasonable detail as to the insurance so carried. Each
such policy of insurance maintained by the Borrower shall (i) name the
Administrative Agent, on behalf of the Lenders under the Facility, as an
additional insured thereunder as its interests may appear and (ii) in the case
of each casualty insurance policy, contain a loss payable/mortgagee clause or
endorsement that names the Administrative Agent, on behalf of the Lenders under
the Facility, as the loss payee/mortgagee thereunder.

SECTION 5.08 Books and Records; Inspection and Audit Rights; Appraisals; Field
Examinations.

(a) The Borrower will, and will cause each Restricted Subsidiary to, maintain
proper books of record and account in which entries that are full, true and
correct in all material respects and are in conformity with GAAP (or applicable
local standards) consistently applied shall be made of all material financial
transactions and matters involving the assets and business of the Loan Parties
or the Restricted Subsidiaries, as the case may be. The Borrower will, and will
cause the Restricted Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested; provided that, excluding any such visits and inspections
during the continuation of an Event of Default, only the Administrative Agent on
behalf of the Lenders under the Facility may exercise visitation and inspection
rights of the Administrative Agent and the Lenders under this Section 5.08(a)
and the Administrative Agent shall not exercise such rights more often

 

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than one time during any calendar year in the aggregate absent the existence of
an Event of Default, which visitation and inspection shall be at the reasonable
expense of the Borrower; provided, further that (i) when an Event of Default
exists, the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and upon
reasonable advance notice and (ii) the Administrative Agent and the Lenders
shall give the Borrower the opportunity to participate in any discussions with
the Borrower’s independent public accountants.

(b) At reasonable times during normal business hours and upon reasonable prior
notice that the Administrative Agent requests, independently of or in connection
with the visits and inspections provided for in clause (a) above, (x) each Loan
Party and each Restricted Subsidiary shall grant access to the Administrative
Agent (including employees of the Administrative Agent or any consultants,
accountants, lawyers and appraisers retained by the Administrative Agent) to
such Person’s books, records, accounts and Inventory so that the Administrative
Agent or an appraiser retained by the Administrative Agent may conduct an
inventory appraisal and (y) the Administrative Agent may conduct (or engage
third parties to conduct) such field examinations, verifications and evaluations
as the Administrative Agent may deem necessary or appropriate; provided that the
Borrower shall only be required to cover the costs of such periodic field
examinations and inventory appraisals as follows:

(i) in any calendar year in which Specified Excess Availability has not for any
five consecutive Business Days been less than the greater of (x) 12.5% of the
Total Maximum Borrowing Amount and (y) $37,500,000, no more than one such
appraisal and one such field examination shall be at the Borrower’s expense;

(ii) if Specified Excess Availability has for any five (5) consecutive Business
Days in any calendar year been less than the greater of (x) 12.5% of the Total
Maximum Borrowing Amount and (y) $37,5000,000, no more than two such appraisals
and two such field examinations shall be at the Borrower’s expense during the
following 12-calendar month period;

(iii) at any time after the occurrence and during the continuation of a
Specified Default, as many appraisals and field examinations as the
Administrative Agent may reasonably request shall be at the Borrower’s expense.

(iv) The Administrative Agent shall provide the Borrower with a reasonably
detailed accounting of all such expenses payable by the Borrower.

(c) The Loan Parties acknowledge that the Administrative Agent, after exercising
its rights of inspection, may prepare and distribute to the Lenders certain
Reports pertaining to the Loan Parties’ assets for internal use by the
Administrative Agent and the Lenders, subject to the provisions of Section 9.12
hereof.

SECTION 5.09 Compliance with Laws. The Borrower will, and will cause each
Restricted Subsidiary to, comply with its Organizational Documents and all
Requirements of Law with respect to it or its property (including, without
limitation, ERISA and applicable Environmental Laws), except where the failure
to do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 5.10 Use of Proceeds. On and after the Effective Date, the proceeds of
the Revolving Loans may be used for working capital requirements and other
general corporate purposes of the Borrower and its Subsidiaries, including any
purposes not otherwise prohibited hereunder (including (i) in accordance with
Sections 3.18(a) and (b) and (ii) to, directly or indirectly, finance a portion
of the Transactions).

 

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SECTION 5.11 Additional Subsidiaries. If any additional Domestic Subsidiary that
is a Restricted Subsidiary is formed or acquired after the Effective Date, the
Borrower will (i) within 60 days after such newly formed or acquired Restricted
Subsidiary is formed or acquired (unless such Subsidiary is an Excluded
Subsidiary), notify the Administrative Agent thereof, and take all actions (if
any) required to be taken with respect to such newly formed or acquired
Subsidiary in order to satisfy the Collateral and Guarantee Requirement shall
have been taken with respect to such Subsidiary and with respect to any Equity
Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan
Party within 60 days after such notice (or such longer period as the
Administrative Agent shall reasonably agree) and (ii) provide any documentation
and other information about such Restricted Subsidiary as shall have been
reasonably requested in writing by any Lender through the Administrative Agent
that the Administrative Agent shall have reasonably determined is required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including Title III of the USA Patriot Act.

SECTION 5.12 Further Assurances.

(a) The Borrower will, and will cause each Loan Party to execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
that may be required under any applicable law and that the Administrative Agent
or the Required Lenders may reasonably request, to cause the Collateral and
Guarantee Requirement to be and remain satisfied, all at the expense of the Loan
Parties.

(b) If, after the Effective Date, any material assets (including any owned (but
not leased) real property or improvements thereto or any interest therein) with
a book value in excess of $10,000,000, are acquired by the Borrower or any other
Loan Party or are held by any Subsidiary on or after the time it becomes a Loan
Party pursuant to Section 5.11 (other than assets constituting Collateral under
a Security Document that become subject to the Lien created by such Security
Document upon acquisition thereof or constituting Excluded Assets), the Borrower
will notify the Administrative Agent thereof, and, if requested by the
Administrative Agent, the Borrower will cause such assets to be subjected to a
Lien securing the Secured Obligations and will take and cause the other Loan
Parties to take, such actions as shall be necessary and reasonably requested by
the Administrative Agent and consistent with the Collateral and Guarantee
Requirement to grant and perfect such Liens, including actions described in
paragraph (a) of this Section, all at the expense of the Loan Parties and
subject to last paragraph of the definition of the term “Collateral and
Guarantee Requirement.”

SECTION 5.13 Certain Post-Closing Obligations. As promptly as practicable, and
in any event within the time periods after the Effective Date specified in
Schedule 5.13 or such later date as the Administrative Agent reasonably agrees
to in writing, including to reasonably accommodate circumstances unforeseen on
the Effective Date, the Borrower and each other Loan Party shall deliver the
documents or take the actions specified on Schedule 5.13 that would have been
required to be delivered or taken on the Effective Date but for the exception to
Section 4.01(f), in each case except to the extent otherwise agreed by the
Administrative Agent pursuant to its authority as set forth in the definition of
the term “Collateral and Guarantee Requirement.”

 

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SECTION 5.14 Designation of Subsidiaries. The Borrower may at any time after the
Effective Date designate any Restricted Subsidiary as an Unrestricted Subsidiary
or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that
(i) immediately before and after such designation, no Event of Default shall
have occurred and be continuing or would result therefrom, (ii) no Subsidiary
may be designated as an Unrestricted Subsidiary or continue as an Unrestricted
Subsidiary if it is a “Restricted Subsidiary” for the purpose of any Material
Indebtedness and (iii) no Subsidiary may be designated as an Unrestricted
Subsidiary if the value of ABL Priority Collateral held by such Subsidiaries so
designated exceeds $30,000,000 in any given calendar year unless the Borrower
shall have delivered an updated Borrowing Base Certificate giving pro forma
effect to such designation on or prior to the date thereof. The designation of
any Subsidiary as an Unrestricted Subsidiary after the Effective Date shall
constitute an Investment by the Borrower therein at the date of designation in
an amount equal to the Fair Market Value of the Borrower’s or its Subsidiary’s
(as applicable) investment therein. The designation of any Unrestricted
Subsidiary as a Restricted Subsidiary shall constitute (i) the incurrence at the
time of designation of any Investment, Indebtedness or Liens of such Subsidiary
existing at such time and (ii) a return on any Investment by the Borrower in
Unrestricted Subsidiaries pursuant to the preceding sentence in an amount equal
to the Fair Market Value at the date of such designation of the Borrower’s or
its Subsidiary’s (as applicable) Investment in such Subsidiary.

SECTION 5.15 Change in Business. The Borrower, each Loan Party and each of the
Restricted Subsidiaries, taken as a whole, will not fundamentally and
substantively alter the character of their business, taken as a whole, from the
business conducted by them on the Effective Date and other business activities
which are extensions thereof or otherwise incidental, reasonably related or
ancillary to any of the foregoing.

SECTION 5.16 Changes in Fiscal Periods. The Borrower shall not make any change
in its fiscal year; provided, however, that the Borrower may, upon written
notice to the Administrative Agent, change its fiscal year to any other fiscal
year reasonably acceptable to the Administrative Agent, in which case, the
Borrower and the Administrative Agent will, and are hereby authorized by the
Lenders to, make any adjustments to this Agreement that are necessary to reflect
such change in fiscal year.

SECTION 5.17 Cash Management.

(a) (i) Each Loan Party shall use commercially reasonable efforts to enter into
control agreements or blocked account agreements (each, a “Control Agreement”)
as soon as possible after the Effective Date and, in any event, shall have
actually entered into such Control Agreements within 120 days after the
Effective Date (or such later date approved by the Administrative Agent in its
reasonable discretion), in a form reasonably satisfactory to the Administrative
Agent, with the Administrative Agent and each other bank with which such Loan
Party maintains a Bank Account located in the United States that is a primary
concentration account (other than any Excluded Account) (collectively, the
“Controlled Accounts”); and (ii) upon delivery of such Control Agreements
referred to in (a)(i) immediately above, the Borrower shall provide a schedule
of Bank Accounts, indicating for each Bank Account if such Bank Account is
required to be subject to a Control Agreement pursuant to the Loan Documents.

(b) The Borrower agrees that it will cause all proceeds of the ABL Priority
Collateral (other than the Uncontrolled Cash and subject to clause (c) below) to
be deposited into a Controlled Account.

(c) Each Control Agreement of a Loan Party shall require (only during the
continuance of a Cash Dominion Period and following delivery of notice of the
commencement thereof from the Administrative Agent to the Borrower and the
account bank party to such instrument or agreement; provided that such notice
shall not be delivered earlier than two Business Days following the start of a
Cash Dominion Period), the ACH or wire transfer no less frequently than once per
Business Day (but without limit on frequency if the Maturity Date shall have
actually occurred), of all available cash balances and cash receipts, including
the then contents or then entire ledger balance of each Controlled

 

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Account (net of such minimum balance as may be required to be maintained in the
subject Controlled Account by the bank at which such Controlled Account is
maintained and other than any Uncontrolled Cash), to one or more accounts
maintained by the Administrative Agent and subject to a Control Agreement (the
“Payment Accounts”). Subject to the terms of the ABL Intercreditor Agreement,
all amounts received in a Payment Account or such other account shall be applied
(and allocated) by the Administrative Agent in accordance with Section 7.02(a)
(except (A) pursuant to clauses first and second thereof and (B) to Secured Cash
Management Obligations, Secured Bank Product Obligations and Secured Swap
Obligations).

(d) If, at any time after the occurrence and during the continuance of a Cash
Dominion Event, any Permitted Investments owned by any Loan Party (other than
(i) with respect to a Cash Dominion Period, an amount equal to the aggregate
amount of cash collected in Controlled Accounts during the first two Business
Days of such Cash Dominion Period and that is on deposit in a segregated Bank
Account which the Borrower designates in writing to the Administrative Agent as
being the “uncontrolled cash account” (each such account, a “Designated
Disbursement Account” and collectively, the “Designated Disbursement Accounts”),
which funds shall not thereafter be funded from, or when withdrawn from the
Designated Disbursement Accounts, shall not be replenished by, funds
constituting proceeds of the ABL Priority Collateral so long as such Cash
Dominion Period continues, (ii) de minimis Permitted Investments from time to
time inadvertently misapplied by any Loan Party, (iii) payroll, employee
benefits, trust, third party escrow, customs and tax withholding accounts or
accounts exclusively used for other fiduciary purposes funded in the ordinary
course of business and required by applicable Law, (iv) accounts used
exclusively for the purposes of compliance with legal requirements, to the
extent such legal requirements prohibit the granting of a Lien thereof and
(v) solely to the extent the ABL Intercreditor Agreement is in effect, accounts
designated by the Borrower to solely contain identifiable proceeds of assets of
any Subsidiary constituting Collateral that is non-ABL Priority Collateral (each
such account described in clauses (i) through (v), an “Excluded Account”) are
deposited to any account, or held or invested in any manner, otherwise than in a
Controlled Account subject to a Control Agreement or a lockbox, the
Administrative Agent shall be entitled to require the applicable Loan Party to
close such account and have all funds therein transferred to a Controlled
Account, and to cause all future deposits to be made to a Controlled Account.

(e) The Loan Parties may close Bank Accounts or Controlled Accounts and/or open
new Bank Accounts or Controlled Accounts without the Administrative Agent’s
consent, subject to the prompt execution and delivery to the Administrative
Agent of a Control Agreement to the extent required by the provisions of this
Section 5.17. The Loan Parties may open or close Excluded Accounts at any time,
without requirement of delivery of a Control Agreement without consent of the
Administrative Agent.

(f) So long as no Cash Dominion Period is in effect, the Loan Parties may
direct, and shall have sole control over, the manner of disposition of funds in
their respective Controlled Accounts.

(g) (i) Any amounts received in the Payment Accounts (including all interest and
other earnings with respect thereto, if any) at any time after the payment in
full of all Loan Document Obligations (other than contingent indemnification
obligations as to which no claims has been asserted) and termination of the
aggregate Commitments hereunder and (ii) any amounts that continue to be swept
to the Payment Accounts after no Cash Dominion Event exists, shall, in each
case, be remitted to the operating account of the Borrower as specified by the
Borrower.

SECTION 5.18 Quarterly Lender Calls. To the extent requested by the
Administrative Agent, the Borrower shall conduct quarterly conference calls with
management of the Borrower and the Lenders (at such times as reasonably agreed
by the Borrower and the Administrative Agent) to discuss the financial
performance of the Borrower and the Restricted Subsidiaries.

 

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ARTICLE VI

NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable (other
than contingent indemnification obligations for which no claim has been
asserted) under any Loan Document have been paid in full, or any Letter of
Credit shall remain outstanding (unless such Letters of Credit have been cash
collateralized pursuant to the terms hereof), the Borrower covenants and agrees
with the Lenders that:

SECTION 6.01 Indebtedness; Certain Equity Securities.

(a) The Borrower will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:

(i) Indebtedness of the Borrower and the Restricted Subsidiaries under the Loan
Documents (including any Indebtedness incurred pursuant to Section 2.18 or
2.22);

(ii) Indebtedness (A) outstanding on the date hereof and listed on Schedule 6.01
and any Permitted Refinancing thereof and (B) that is intercompany Indebtedness
outstanding on the date hereof;

(iii) Guarantees by the Borrower and the Restricted Subsidiaries in respect of
Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted
hereunder; provided that (A) such Guarantee is otherwise permitted by
Section 6.04, (B) no Guarantee by any Restricted Subsidiary of any Junior
Financing shall be permitted unless such Restricted Subsidiary shall have also
provided a Guarantee of the Loan Document Obligations pursuant to the Guarantee
Agreement, and (C) if the Indebtedness being Guaranteed is subordinated to the
Loan Document Obligations, such Guarantee shall be subordinated to the Guarantee
of the Loan Document Obligations on terms at least as favorable to the Lenders
as those contained in the subordination of such Indebtedness;

(iv) Indebtedness of the Borrower or of any Restricted Subsidiary owing to any
other Restricted Subsidiary or the Borrower to the extent permitted by
Section 6.04; provided that all such Indebtedness of any Loan Party owing to any
Restricted Subsidiary that is not a Loan Party shall be subordinated to the Loan
Document Obligations (to the extent any such Indebtedness is outstanding at any
time after the date that is 30 days after the Effective Date or such later date
as the Administrative Agent may reasonably agree) (but only to the extent
permitted by applicable law and not giving rise to material adverse Tax
consequences) on terms (A) at least as favorable to the Lenders as those set
forth in the form of intercompany note attached as Exhibit H or (B) otherwise
reasonably satisfactory to the Administrative Agent;

(v) (A) Indebtedness (including Capital Lease Obligations) of the Borrower or
any of the Restricted Subsidiaries financing the acquisition, construction,
repair, replacement or improvement of fixed or capital assets; provided that
such Indebtedness is incurred concurrently with or within 270 days after the
applicable acquisition, construction, repair, replacement or improvement, and
(B) any Permitted Refinancing of any Indebtedness set forth in the immediately
preceding clause (A); provided further that, at the time of any such incurrence
of Indebtedness and after giving Pro Forma Effect thereto and the use of the
proceeds thereof, the aggregate principal amount of Indebtedness that is
outstanding in reliance on this clause (v) shall not exceed the greater of
$100,000,000 and 25% of Consolidated EBITDA for the most recently ended Test
Period as of such time;

 

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(vi) Indebtedness in respect of (A) Swap Agreements entered into to hedge or
mitigate risks to which the Borrower or any Restricted Subsidiary has actual
exposure (other than those in respect of shares of capital stock or other Equity
Interests of the Borrower or any Restricted Subsidiary) and (B) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate
or otherwise) with respect to any interest-bearing liability or investment of
the Borrower or any Restricted Subsidiary;

(vii) (A) Indebtedness of any Person that becomes a Restricted Subsidiary (or of
any Person not previously a Restricted Subsidiary that is merged, amalgamated or
consolidated with or into the Borrower or a Restricted Subsidiary) after the
date hereof as a result of a Permitted Acquisition, or Indebtedness of any
Person that is assumed by the Borrower or any Restricted Subsidiary in
connection with an acquisition of assets by the Borrower or such Restricted
Subsidiary in a Permitted Acquisition; provided that such Indebtedness is not
incurred in contemplation of such Permitted Acquisition; provided further that
either (I) the Interest Coverage Ratio after giving Pro Forma Effect to the
assumption of such Indebtedness and such Permitted Acquisition is equal to or
greater than (x) 2.0 to 1.0 or (y) the Interest Coverage Ratio immediately prior
to the assumption of such Indebtedness and such Permitted Acquisition for the
most recently ended Test Period as of such time or (II) the Total Leverage Ratio
after giving Pro Forma Effect to the assumption of such Indebtedness and such
Permitted Acquisition is less than or equal to either (x) 6.50 to 1.00 or
(y) the Total Leverage Ratio immediately prior to the assumption of such
Indebtedness and such Permitted Acquisition for the most recently ended Test
Period as of such time and (B) any Permitted Refinancing of Indebtedness
incurred pursuant to the foregoing clause (A); provided that the aggregate
principal amount of Indebtedness of which the primary obligor or a guarantor is
a Restricted Subsidiary that is not a Loan Party outstanding in reliance on this
clause (vii) and clauses (xiv) and (xxvi) below shall not exceed, at the time of
incurrence thereof and after giving Pro Forma Effect thereto, the greater of
$80,000,000 and 20% of Consolidated EBITDA for the most recently ended Test
Period as of such time;

(viii) Indebtedness in respect of Permitted Receivables Financings;

(ix) Indebtedness representing deferred compensation to employees of the
Borrower and the Restricted Subsidiaries incurred in the ordinary course of
business;

(x) Indebtedness consisting of unsecured promissory notes issued by any Loan
Party to current or former officers, directors and employees or their respective
estates, spouses or former spouses to finance the purchase or redemption of
Equity Interests in the Borrower (or any direct or indirect parent thereof)
permitted by Section 6.08(a);

(xi) Indebtedness constituting indemnification obligations or obligations in
respect of purchase price or other similar adjustments incurred in a Permitted
Acquisition, any other Investment or any Disposition, in each case permitted
under this Agreement;

(xii) Indebtedness consisting of obligations under deferred compensation or
other similar arrangements incurred in connection with the Transactions or any
Permitted Acquisition or other Investment permitted hereunder;

 

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(xiii) Cash Management Obligations, Bank Product Obligations and other
Indebtedness in respect of netting services, overdraft protections and similar
arrangements and Indebtedness arising from the honoring of a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business;

(xiv) Indebtedness of the Borrower and the Restricted Subsidiaries; provided
that at the time of the incurrence thereof and after giving Pro Forma Effect
thereto, the aggregate principal amount of Indebtedness outstanding in reliance
on this clause (xiv) shall not exceed the greater of $200,000,000 and 50% of
Consolidated EBITDA for the most recently ended Test Period as of such time;
provided, further, that the aggregate principal amount of Indebtedness of which
the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan
Party outstanding in reliance on this clause (xiv), clause (vii) above and
clause (xxvi) below shall not exceed, at the time of incurrence thereof and
after giving Pro Forma Effect thereto, the greater of $80,000,000 and 20% of
Consolidated EBITDA for the most recently ended Test Period as of such time;

(xv) Indebtedness consisting of (A) the financing of insurance premiums or
(B) take-or-pay obligations contained in supply arrangements, in each case in
the ordinary course of business;

(xvi) (A) Indebtedness incurred by the Borrower or any of the Restricted
Subsidiaries in respect of letters of credit, bank guarantees, bankers’
acceptances or similar instruments issued or created, or related to obligations
or liabilities incurred, in the ordinary course of business, including in
respect of workers compensation claims, health, disability or other employee
benefits or property, casualty or liability insurance or self-insurance or other
reimbursement-type obligations regarding workers compensation claims and
(B) Indebtedness of the Borrower or any of the Restricted Subsidiaries as an
account party in respect of letters of credit, bank guarantees or similar
instruments in favor of suppliers or trade creditors issued in the ordinary
course of business; provided that the aggregate principal amount of Indebtedness
outstanding in reliance on this sub-clause (B) shall not exceed, at the time of
incurrence thereof and after giving Pro Forma Effect thereto, the greater of
$25,000,000 and 15% of Consolidated EBITDA for the most recently ended Test
Period as of such time;

(xvii) obligations in respect of performance, bid, appeal and surety bonds and
performance, bankers’ acceptance facilities and completion guarantees and
similar obligations provided by the Borrower or any of the Restricted
Subsidiaries or obligations in respect of letters of credit, bank guarantees or
similar instruments related thereto, in each case in the ordinary course of
business or consistent with past practice;

(xviii) Indebtedness in the form of term loans; provided that (i) if such
Indebtedness is secured Indebtedness, the Secured Leverage Ratio after giving
Pro Forma Effect to the incurrence of such Indebtedness a is less than or equal
to 4.00 to 1.00, (ii) the Total Leverage Ratio after giving Pro Forma Effect to
the incurrence of such Indebtedness a is less than or equal to 4.00 to 1.00 and
(iii) such Indebtedness complies with the Required Additional Debt Terms (except
that, with respect to clause (b) of such definition, such Indebtedness may be
subject to customary amortization so long as such Indebtedness has a Weighted
Average Life to Maturity no shorter than the Maturity Date) and to the extent
secured by Liens on Collateral, such Liens shall be junior in priority relative
to the Liens on the ABL Priority Collateral securing the Secured Obligations and
senior in priority relative to the Liens on the CF Debt Priority Collateral
securing the Secured Obligations, in each case pursuant to an ABL Intercreditor
Agreement;

 

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(xix) unsecured Indebtedness of the Borrower or any of the Restricted
Subsidiaries; provided that (A) after giving effect to the incurrence of such
Indebtedness on a Pro Forma Basis, no Event of Default has occurred and is
continuing, (B) such Indebtedness (to the extent constituting Material
Indebtedness) has a final maturity date that is equal to or later than the
Latest Maturity Date at that time, and (C) such Indebtedness (to the extent
constituting Material Indebtedness) has a weighted average life to maturity no
shorter than that of the Commitments hereunder on the date of determination;
provided, that, at the time any such Indebtedness is incurred, the applicable
Payment Conditions are satisfied;

(xx) Indebtedness supported by a Letter of Credit or any other letter of credit
or bank guaranty permitted to be issued hereunder, in a principal amount not to
exceed the face amount of such Letter of Credit, letter of credit or bank
guaranty;

(xxi) [Reserved];

(xxii) [Reserved];

(xxiii) [Reserved];

(xxiv) [Reserved];

(xxv) Indebtedness of any Restricted Subsidiary that is not a Loan Party;
provided that the aggregate principal amount of Indebtedness of which the
primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan
Party outstanding in reliance on this clause (xxv) shall not exceed, at the time
of incurrence thereof and after giving Pro Forma Effect thereto, the greater of
$40,000,000 and 10% of Consolidated EBITDA for the most recently ended Test
Period as of such time;

(xxvi) (A) Indebtedness incurred to finance a Permitted Acquisition; provided
that (i) if such Indebtedness is secured by Liens on the CF Debt Priority
Collateral on a first priority basis, the First Lien Leverage Ratio after giving
Pro Forma Effect to the incurrence of such Indebtedness and such Permitted
Acquisition is less than or equal to either (x) 6.50 to 1.00 or (y) the First
Lien Leverage Ratio immediately prior to the incurrence of such Indebtedness and
such Permitted Acquisition for the most recently ended Test Period as of such
time, (ii) if such Indebtedness is secured by Liens on the CF Debt Priority
Collateral on a junior priority basis, the Secured Leverage Ratio after giving
Pro Forma Effect to the incurrence of such Indebtedness and such Permitted
Acquisition is less than or equal to either (x) 6.50 to 1.00 or (y) the Secured
Leverage Ratio immediately prior to the incurrence of such Indebtedness and such
Permitted Acquisition for the most recently ended Test Period as of such time
and (iii) if such Indebtedness is unsecured or secured by assets that are not
Collateral, either (I) the Interest Coverage Ratio after giving Pro Forma Effect
to the incurrence of such Indebtedness and such Permitted Acquisition is equal
to or greater than (x) 2.0 to 1.0 or (y) the Interest Coverage Ratio immediately
prior to the incurrence of such Indebtedness and such Permitted Acquisition for
the most recently ended Test Period as of such time or (II) the Total Leverage
Ratio after giving Pro Forma Effect to the incurrence of such Indebtedness and
such Permitted Acquisition is less than or equal to either (x) 6.50 to 1.00 or
(y) the Total Leverage Ratio immediately prior to the incurrence of such
Indebtedness and such Permitted Acquisition for the most recently ended Test
Period as of such time and (ii) to the extent secured by Liens on Collateral,
such Liens shall be junior in priority relative to the Liens on the ABL Priority
Collateral securing the Secured Obligations and senior in priority relative to
the Liens on the CF Debt Priority Collateral securing the Secured Obligations,
in each case pursuant to an ABL Intercreditor Agreement and (B) any

 

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Permitted Refinancing of Indebtedness incurred pursuant to the foregoing clause
(A); provided that the aggregate principal amount of Indebtedness of which the
primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan
Party outstanding in reliance on this clause and clauses (vii), (xiv) above
shall not exceed, at the time of incurrence thereof and after giving Pro Forma
Effect thereto, the greater of $80,000,000 and 20% of Consolidated EBITDA for
the most recently ended Test Period as of such time;

(xxvii) Indebtedness in the form of Capital Lease Obligations arising out of any
Sale Leaseback and any Permitted Refinancing thereof; and

(xxviii) all premiums (if any), interest (including post-petition interest),
fees, expenses, charges and additional or contingent interest on obligations
described in clauses (i) through (xxix) above.

(b) The Borrower will not, nor will it permit any Restricted Subsidiary to,
issue any preferred Equity Interests or any Disqualified Equity Interests,
except (A) in the case of the Borrower, preferred Equity Interests that are
Qualified Equity Interests and (B) in the case of any Restricted Subsidiary,
preferred Equity Interests or Disqualified Equity Interests issued to and held
by the Borrower or any Restricted Subsidiary.

For purposes of determining compliance with this Section 6.01, in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
Indebtedness described in clauses (i) through (xxviii) above), the Borrower
shall, in its sole discretion, classify and reclassify or later divide, classify
or reclassify such item of Indebtedness (or any portion thereof) and will only
be required to include the amount and type of such Indebtedness in one or more
of the above clauses; provided that all Indebtedness outstanding under the Loan
Documents will be deemed to have been incurred in reliance only on the exception
in clause (i).

SECTION 6.02 Liens. The Borrower will not, nor will it permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, except:

(i) Liens created under the Loan Documents;

(ii) Permitted Encumbrances;

(iii) Liens existing on Effective Date; provided that any Lien securing
Indebtedness or other obligations in excess of $2,500,000 individually shall
only be permitted if set forth on Schedule 6.02, and any modifications,
replacements, renewals or extensions thereof; provided that (1) such modified,
replacement, renewal or extension Lien does not extend to any additional
property other than (a) after-acquired property that is affixed or incorporated
into the property covered by such Lien and (b) proceeds and products thereof,
and (2) the obligations secured or benefited by such modified, replacement,
renewal or extension Lien are permitted by Section 6.01;

(iv) Liens securing Indebtedness permitted under Section 6.01(a)(v) or (xxvii);
provided that (A) such Liens attach concurrently with or within 270 days after
the acquisition, repair, replacement, construction or improvement (as
applicable) of the property subject to such Liens, (B) such Liens do not at any
time encumber any property other than the property financed by such
Indebtedness, except for accessions to such property and the proceeds and the
products thereof, and any lease of such property (including accessions thereto)
and the proceeds and

 

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products thereof and (C) with respect to Capital Lease Obligations, such Liens
do not at any time extend to or cover any assets (except for accessions to or
proceeds of such assets) other than the assets subject to such Capital Lease
Obligations; provided, further, that individual financings of equipment provided
by one lender may be cross collateralized to other financings of equipment
provided by such lender;

(v) leases, licenses, subleases, sublicenses or other similar rights granted to
others that do not (A) interfere in any material respect with the business of
the Borrower and the Restricted Subsidiaries, taken as a whole or (B) secure any
Indebtedness;

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

(vii) Liens (A) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code or similar provision of other applicable law on items in the
course of collection and (B) in favor of a banking institution arising as a
matter of law encumbering deposits (including the right of setoff) and that are
within the general parameters customary in the banking industry;

(viii) Liens (A) on cash advances or escrow deposits in favor of the seller of
any property to be acquired in an Investment permitted pursuant to Section 6.04
to be applied against the purchase price for such Investment or otherwise in
connection with any escrow arrangements with respect to any such Investment or
any Disposition permitted under Section 6.05 (including any letter of intent or
purchase agreement with respect to such Investment or Disposition) or
(B) consisting of an agreement to dispose of any property in a Disposition
permitted under Section 6.05, in each case, solely to the extent such Investment
or Disposition, as the case may be, would have been permitted on the date of the
creation of such Lien;

(ix) Liens on property of any Restricted Subsidiary that is not a Loan Party,
which Liens secure Indebtedness of such Restricted Subsidiary or another
Restricted Subsidiary that is not a Loan Party, in each case permitted under
Section 6.01;

(x) Liens granted by a Restricted Subsidiary that is not a Loan Party in favor
of any Loan Party, Liens granted by a Restricted Subsidiary that is not a Loan
Party in favor of Restricted Subsidiary that is not a Loan Party and Liens
granted by a Loan Party in favor of any other Loan Party;

(xi) Liens existing on property at the time of its acquisition or existing on
the property of any Person at the time such Person becomes a Restricted
Subsidiary, in each case after the date hereof (other than Liens on the Equity
Interests of any Person that becomes a Restricted Subsidiary); provided that
(A) such Lien was not created in contemplation of such acquisition or such
Person becoming a Restricted Subsidiary, (B) such Lien does not extend to or
cover any other assets or property (other than the proceeds or products thereof
and other than after-acquired property subject to a Lien securing Indebtedness
and other obligations incurred prior to such time and which Indebtedness and
other obligations are permitted hereunder that require or include, pursuant to
their terms at such time, a pledge of after-acquired property, it being
understood that such requirement shall not be permitted to apply to any property
to which such requirement would not have applied but for such acquisition) and
(C) the Indebtedness secured thereby is permitted under Section 6.01(a)(v) or
(vii);

 

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(xii) any interest or title of a lessor under leases (other than leases
constituting Capital Lease Obligations) entered into by the Borrower or any of
the Restricted Subsidiaries in the ordinary course of business;

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

(xiv) Liens deemed to exist in connection with Investments in repurchase
agreements under clause (e) of the definition of the term “Permitted
Investments”;

(xv) 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 and not for speculative
purposes;

(xvi) Liens that are contractual rights of setoff (A) relating to the
establishment of depository relations with banks not given in connection with
the incurrence of Indebtedness, (B) 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 and the Restricted Subsidiaries or
(C) relating to purchase orders and other agreements entered into with customers
of the Borrower or any Restricted Subsidiary in the ordinary course of business;

(xvii) ground leases in respect of real property on which facilities owned or
leased by the Borrower or any of the Restricted Subsidiaries are located;

(xviii) Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;

(xix) Liens on the Collateral securing Indebtedness permitted pursuant to
Section 6.01(a)(xviii) and 6.01(a)(xxvi); provided that any Liens on Collateral
securing any Indebtedness pursuant to this clause are junior in priority
relative to the Liens on the ABL Priority Collateral securing the Secured
Obligations and senior in priority relative to the Liens on the CF Debt Priority
Collateral securing the Secured Obligations, and the agent or other
representative for the lenders or holders of such Indebtedness has become a
party to the ABL Intercreditor Agreement or another intercreditor agreement
reasonably acceptable to the Administrative Agent;

(xx) other Liens; provided that at the time of incurrence of the obligations
secured thereby (after giving Pro Forma Effect to any such obligations) the
aggregate outstanding face amount of obligations secured by Liens existing in
reliance on this clause (xx) shall not exceed the greater of $150,000,000 and
15% of Consolidated EBITDA for the Test Period then last ended; provided that in
each case, any Liens on ABL Priority Collateral securing any Indebtedness of a
Loan Party pursuant to this clause are junior to the Liens securing the Secured
Obligations and the agent or other representative for the lenders or holders of
any Material Indebtedness secured under this clause shall have become a party to
the ABL Intercreditor Agreement and/or another intercreditor agreement
reasonably acceptable to the Administrative Agent;

(xxi) Liens on cash and Permitted Investments used to satisfy or discharge
Indebtedness; provided such satisfaction or discharge is permitted hereunder;

 

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(xxii) receipt of progress payments and advances from customers in the ordinary
course of business to the extent the same creates a Lien on the related
inventory and proceeds thereof;

(xxiii) Liens on cash or Permitted Investments securing Swap Agreements in the
ordinary course of business submitted for clearing in accordance with applicable
Requirements of Law;

(xxiv) Liens on deposits taken by a Restricted Subsidiary that constitutes a
regulated bank incurred in connection with the taking of such deposits; and

(xxv) additional Liens; provided that (A) at the time any such Lien is incurred,
the applicable Payment Conditions are satisfied; (B) no Event of Default shall
have occurred and be continuing and (C) in each case, any Liens on ABL Priority
Collateral securing any Indebtedness pursuant to this clause are junior to the
Liens securing the Secured Obligations and the agent or other representative for
the lenders or holders of such Indebtedness has become a party to the ABL
Intercreditor Agreement or another intercreditor agreement reasonably acceptable
to the Administrative Agent.

For purposes of determining compliance with this Section 6.02, in the event that
any Lien meets the criteria of more than one of the categories of Liens
described in clauses (i) through (xxv) above (or any subclause contained therein
or any defined term used therein), the Borrower may, in its sole discretion,
classify and reclassify or later divide, classify or reclassify such Lien (or
any portion thereof) and will only be required to include the amount and type of
such Lien in one or more of the above clauses; provided that all Liens securing
the Secured Obligations as of the Effective Date will be deemed to have been
incurred in reliance only on the applicable exception in clause (i).

SECTION 6.03 Fundamental Changes.

(a) The Borrower will not, nor will it permit any Restricted Subsidiary to,
merge into or consolidate or amalgamate with any other Person, or permit any
other Person to merge into or amalgamate or consolidate with it, or liquidate or
dissolve, except that:

(i) any Restricted Subsidiary may merge into or amalgamate or consolidate with,
or liquidate or dissolve into (A) the Borrower; provided that the Borrower shall
be the continuing or surviving Person or (B) one or more other Restricted
Subsidiaries; provided that when any Subsidiary Loan Party is merging,
amalgamating with, or liquidating or dissolving into, another Restricted
Subsidiary either (1) the continuing or surviving Person shall be a Subsidiary
Loan Party or (2) if the continuing or surviving Person is not a Subsidiary Loan
Party, the acquisition of such Subsidiary Loan Party by such surviving
Restricted Subsidiary is permitted under Section 6.04;

(ii) any Restricted Subsidiary 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 the Restricted Subsidiaries and is not materially
disadvantageous to the Lenders;

(iii) any Restricted Subsidiary may make a Disposition of all or substantially
all of its assets (upon voluntary liquidation or otherwise) to another
Restricted Subsidiary; provided that if the transferor in such a transaction is
a Loan Party, then either (A) the transferee must be a Loan Party, (B) to the
extent constituting an Investment, such Investment must be an Investment in a
Restricted Subsidiary that is not a Loan Party permitted by Section 6.04 or
(C) to the extent constituting a Disposition to a Restricted Subsidiary that is
not a Loan Party, such Disposition is permitted under Section 6.05 and is for
Fair Market Value and any promissory note or other non-cash consideration
received in respect thereof is an Investment in a Restricted Subsidiary that is
not a Loan Party permitted by Section 6.04;

 

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(iv) the Borrower may merge, amalgamate or consolidate with, or liquidate or
dissolve into, any other Person; provided that (A) the Borrower shall be the
continuing or surviving Person or (B) if the Person formed by or surviving any
such merger or consolidation is not the Borrower (any such Person, the
“Successor Borrower”), (1) the Successor Borrower shall be an entity organized
or existing under the laws of the United States or any political subdivision
thereof (2) the Successor Borrower shall expressly assume all the obligations of
the Borrower under this Agreement and the other Loan Documents to which the
Borrower is a party pursuant to a supplement hereto or thereto in form and
substance reasonably satisfactory to the Administrative Agent, (3) each Loan
Party other than the Borrower, unless it is the other party to such merger,
amalgamation, consolidation, liquidation or dissolution shall have reaffirmed,
pursuant to an agreement in form and substance reasonably satisfactory to the
Administrative Agent, that its Guarantee of, and grant of any Liens as security
for, the Secured Obligations shall apply to the Successor Borrower’s obligations
under this Agreement and (4) the Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer and an opinion of
counsel, each stating that such merger, amalgamation or consolidation complies
with this Agreement; provided, further, that (x) if such Person is not a Loan
Party, no Event of Default exists after giving effect to such merger,
amalgamation, consolidation, liquidation or dissolution and (y) if the foregoing
requirements are satisfied, the Successor Borrower will succeed to, and be
substituted for, the Borrower under this Agreement and the other Loan Documents;
provided, further, that the Borrower agrees to provide any documentation and
other information about the Successor Borrower as shall have been reasonably
requested in writing by any Lender through the Administrative Agent that such
Lender shall have reasonably determined is required by regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including Title III of the USA Patriot Act;

(v) [reserved];

(vi) any Restricted Subsidiary may merge, consolidate or amalgamate with any
other Person in order to effect an Investment permitted pursuant to
Section 6.04; provided that the continuing or surviving Person shall be a
Restricted Subsidiary, which together with each of the Restricted Subsidiaries,
shall have complied with the requirements of Sections 5.11 and 5.12;

(vii) the Borrower and the Restricted Subsidiaries may consummate the
Transactions; and

(viii) any Restricted Subsidiary may effect a merger, dissolution, liquidation
consolidation or amalgamation to effect a Disposition permitted pursuant to
Section 6.05.

SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, nor will it permit any Restricted Subsidiary to, make or hold
any Investment, except:

(a) Permitted Investments at the time such Permitted Investment is made;

(b) loans or advances to officers, directors and employees of the Borrower and
the Restricted Subsidiaries (i) for reasonable and customary business-related
travel, entertainment, relocation and analogous ordinary business purposes,
(ii) in connection with such Person’s purchase of Equity Interests in the
Borrower (or any direct or indirect parent thereof) (provided that the amount of
such loans and

 

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advances made in cash to such Person shall be contributed by the Borrower in
cash as common equity or Qualified Equity Interests) and (iii) for purposes not
described in the foregoing clauses (i) and (ii); provided that at the time of
incurrence thereof and after giving Pro Forma Effect thereto, the aggregate
principal amount outstanding in reliance on this clause (iii) shall not to
exceed $10,000,000;

(c) Investments (i) by the Borrower or any Restricted Subsidiary in any Loan
Party, (ii) by any Restricted Subsidiary that is not a Loan Party in any other
Restricted Subsidiary that is also not a Loan Party, (iii) by the Borrower or
any Restricted Subsidiary (A) in any Restricted Subsidiary; provided that
(i) the aggregate amount of such Investments made by Loan Parties after the
Effective Date in Restricted Subsidiaries that are not Loan Parties in reliance
on this clause (iii)(A) shall not exceed, at the time of incurrence thereof and
after giving Pro Forma Effect thereto, the greater of 12.5% of Consolidated
EBITDA and $20,000,000 and (ii) no Event of Default has occurred and is
continuing, (B) in any Restricted Subsidiary that is not a Loan Party,
constituting an exchange of Equity Interests of such Restricted Subsidiary for
Indebtedness of such Subsidiary or (C) constituting Guarantees of Indebtedness
or other monetary obligations of Restricted Subsidiaries that are not Loan
Parties owing to any Loan Party, (iv) by the Borrower or any Restricted
Subsidiary in Restricted Subsidiaries that are not Loan Parties so long as such
transactions is part of a series of simultaneous transactions that result in the
proceeds of the initial Investment being invested in one or more Loan Parties
(or, if the initial proceeds were held at a Restricted Subsidiary that is not a
Loan Party, a Restricted Subsidiary that is not a Loan Party) and (v) by the
Borrower or any Restricted Subsidiary in any Restricted Subsidiary that is not a
Loan Party, consisting of the contribution of Equity Interests of any other
Restricted Subsidiary that is not a Loan Party so long as the Equity Interests
of the transferee Restricted Subsidiary is pledged to secure the Secured
Obligations;

(d) Investments consisting of prepayments to suppliers in the ordinary course of
business;

(e) Investments consisting of extensions of trade credit in the ordinary course
of business;

(f) Investments (i) existing or contemplated on the date hereof and set forth on
Schedule 6.04(f) and any modification, replacement, renewal, reinvestment or
extension thereof and (ii) Investments existing on the date hereof by the
Borrower or any Restricted Subsidiary in the Borrower or any Restricted
Subsidiary and any modification, renewal or extension thereof; provided that the
amount of the original Investment is not increased except by the terms of such
Investment to the extent as set forth on Schedule 6.04(f) or as otherwise
permitted by this Section 6.04;

(g) Investments in Swap Agreements permitted under Section 6.01;

(h) promissory notes and other non-cash consideration received in connection
with Dispositions permitted by Section 6.05;

(i) Permitted Acquisitions;

(j) the Transactions;

(k) Investments in the ordinary course of business consisting of endorsements
for collection or deposit and customary trade arrangements with customers
consistent with past practices;

(l) Investments (including debt obligations and Equity Interests) received in
connection with the bankruptcy or reorganization of suppliers and customers,
from financially troubled account debtors or in settlement of delinquent
obligations of, or other disputes with, customers and suppliers or upon the
foreclosure with respect to any secured Investment or other transfer of title
with respect to any secured Investment;

 

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(m) loans and advances to the Borrower (or any direct or indirect parent
thereof) in lieu of, and not in excess of the amount of (after giving effect to
any other loans, advances or Restricted Payments in respect thereof), Restricted
Payments to the extent permitted to be made to the Borrower (or such parent) in
accordance with Section 6.08(a);

(n) [reserved];

(o) other Investments and other acquisitions; provided that at the time any such
Investment or other acquisition is made, the aggregate outstanding amount of all
Investments made in reliance on this clause (o) together with the aggregate
amount of all consideration paid in connection with all other acquisitions made
in reliance on this clause (o) (including the aggregate principal amount of all
Indebtedness assumed in connection with any such other acquisition), shall not
exceed the sum of (i) the greater of $40,000,000 and 37.5% of Consolidated
EBITDA for the most recently ended Test Period after giving Pro Forma Effect to
the making of such Investment or other acquisition, plus (ii) the Available
Equity Amount that is Not Otherwise Applied as in effect immediately prior to
the time of making of such Investment;

(p) advances of payroll payments to employees in the ordinary course of
business;

(q) Investments and other acquisitions to the extent that payment for such
Investments is made with Qualified Equity Interests of the Borrower (or any
direct or indirect parent thereof); provided that (i) such amounts used pursuant
to this clause (q) shall not increase the Available Equity Amount and (ii) any
amounts used for such an Investment or other acquisition that are not Qualified
Equity Interests of Holdings (or any direct or indirect parent thereof) shall
otherwise be permitted pursuant to this Section 6.04;

(r) Investments of a Subsidiary acquired after the Effective Date or of a Person
merged or consolidated with any Subsidiary in accordance with this Section and
Section 6.03 after the Effective 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;

(s) non-cash Investments in connection with tax planning and reorganization
activities; provided that after giving effect to any such activities, the
security interests of the Lenders in the Collateral, taken as a whole, would not
be materially impaired;

(t) Investments consisting of Liens, Indebtedness, fundamental changes,
Dispositions and Restricted Payments permitted (other than by reference to this
Section 6.04(t)) under Sections 6.01, 6.02, 6.03, 6.05 and 6.08, respectively;

(u) so long as immediately after giving effect to any such Investment no Event
of Default has occurred and is continuing, other Investments and other
acquisitions (other than Investments constituting Permitted Acquisitions);
provided that, at the time any such Investment is made, the applicable Payment
Conditions are satisfied;

(v) contributions to a “rabbi” trust for the benefit of employees, directors,
consultants, independent contractors or other service providers or other grantor
trust subject to claims of creditors in the case of a bankruptcy of a Loan
Party;

 

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(w) to the extent that they constitute Investments, purchases and acquisitions
of inventory, supplies, materials or equipment or purchases, acquisitions,
licenses or leases of other assets, Intellectual Property, or other rights, in
each case in the ordinary course of business;

(x) Investments in Subsidiaries in the form of receivables and related assets
required in connection with a Permitted Receivables Financing (including the
contribution or lending of cash and cash equivalents to Subsidiaries to finance
the purchase of such assets from the Borrower or other Restricted Subsidiaries
or to otherwise fund required reserves); and

(y) Investments by an Unrestricted Subsidiary entered into prior to the day such
Unrestricted Subsidiary is redesignated as a Restricted Subsidiary pursuant to
the definition of “Unrestricted Subsidiary”.

For purposes of determining compliance with this Section 6.04, in the event that
any Investment (or portion thereof) meets the criteria of more than one of the
categories of Investments described in clauses (i) through (y) above (or any
subclause contained therein or any defined term used therein), the Borrower may,
in its sole discretion, classify and reclassify or later divide, classify or
reclassify (based on circumstances existing on the date of such
reclassification) such Investment (or any portion thereof) and will only be
required to include the amount and type of such Investment in one or more of the
above clauses.

SECTION 6.05 Asset Sales. The Borrower will not, nor will it permit any
Restricted Subsidiary to, (i) sell, transfer, lease, license or otherwise
dispose of any asset, including any Equity Interest owned by it or (ii) permit
any Restricted Subsidiary to issue any additional Equity Interest in such
Restricted Subsidiary (other than issuing directors’ qualifying shares, nominal
shares issued to foreign nationals to the extent required by applicable
Requirements of Law and other than issuing Equity Interests to the Borrower or a
Restricted Subsidiary in compliance with Section 6.04(c)) (each, a
“Disposition”); provided, that, notwithstanding the foregoing, the issuance or
sale of Equity Interests of the Borrower following the IPO shall not constitute
a “Disposition”, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business and Dispositions of
property no longer used or useful, or economically practicable to maintain, in
the conduct of the business of the Borrower and the Restricted Subsidiaries
(including allowing any registration or application for registration of any
Intellectual Property that is no longer used or useful, or economically
practicable to maintain, to lapse or go abandoned);

(b) Dispositions of inventory and other assets in the ordinary course of
business;

(c) Dispositions of property to the extent that (i) such property is exchanged
for credit against the purchase price of similar replacement property or (ii) an
amount equal to the Net Proceeds of such Disposition are promptly applied to the
purchase price of such replacement property;

(d) Dispositions of property to the Borrower or a Restricted Subsidiary;
provided that if the transferor in such a transaction is a Loan Party, then
either (i) the transferee must be a Loan Party, (ii) to the extent constituting
an Investment, such Investment must be an Investment in a Restricted Subsidiary
that is not a Loan Party permitted by Section 6.04 or (iii) to the extent
constituting a Disposition to a Restricted Subsidiary that is not a Loan Party,
such Disposition is for Fair Market Value and any promissory note or other
non-cash consideration received in respect thereof is an Investment in a
Restricted Subsidiary that is not a Loan Party permitted by Section 6.04;

 

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(e) Dispositions permitted by Section 6.03, Investments permitted by
Section 6.04, Restricted Payments permitted by Section 6.08 and Liens permitted
by Section 6.02, in each case, other than by reference to this Section 6.05(e);

(f) [Reserved];

(g) Dispositions of Permitted Investments;

(h) Dispositions of accounts receivable in connection with the collection or
compromise thereof (including sales to factors or other third parties);

(i) leases, subleases, licenses or sublicenses, in each case in the ordinary
course of business and that do not materially interfere with the business of the
Borrower and the Restricted Subsidiaries, taken as a whole;

(j) transfers of property subject to Casualty Events upon receipt of the Net
Proceeds of such Casualty Event;

(k) Dispositions of property to Persons other than the Borrower or any of the
Restricted Subsidiaries (including (x) the sale or issuance of Equity Interests
in a Restricted Subsidiary and (y) any Sale Leaseback) not otherwise permitted
under this Section 6.05; provided that (i) such Disposition is made for Fair
Market Value and (ii) with respect to any Disposition pursuant to this clause
(k) for a purchase price in excess of $10,000,000 for any transaction or series
of related transactions, the Borrower or a Restricted Subsidiary shall receive
not less than 75% of such consideration in the form of cash or Permitted
Investments; provided, however, that for the purposes of this clause (ii), (A)
any liabilities (as shown on the most recent balance sheet of the Borrower
provided hereunder or in the footnotes thereto) of the Borrower or such
Restricted Subsidiary, other than liabilities that are by their terms
subordinated in right of payment to the Loan Document Obligations, that are
assumed by the transferee with respect to the applicable Disposition and for
which the Borrower and the Restricted Subsidiaries shall have been validly
released by all applicable creditors in writing, shall be deemed to be cash,
(B) any securities received by the Borrower or such Restricted Subsidiary from
such transferee that are converted by the Borrower or such Restricted Subsidiary
into cash or Permitted Investments (to the extent of the cash or Permitted
Investments received) within 180 days following the closing of the applicable
Disposition, shall be deemed to be cash and (C) any Designated Non-Cash
Consideration received by the Borrower or such Restricted Subsidiary in respect
of such Disposition having an aggregate Fair Market Value, taken together with
all other Designated Non-Cash Consideration received pursuant to this clause
(k) that is at that time outstanding, not in excess (at the time of receipt of
such Designated Non-Cash Consideration) of the greater of (x) $96,000,000 and
(y) 2.0% of Consolidated Total Assets for the most recently ended Test Period,
with the Fair Market Value of each item of Designated Non-Cash Consideration
being measured at the time received and without giving effect to subsequent
changes in value, shall be deemed to be cash;

(l) Dispositions of Investments in joint ventures to the extent required by, or
made pursuant to customary buy/sell arrangements between, the joint venture
parties set forth in joint venture arrangements and similar binding
arrangements;

(m) Dispositions of any assets (including Equity Interests) (i) acquired in
connection with any Permitted Acquisition or other Investment permitted
hereunder, which assets are not used or useful to the core or principal business
of the Borrower and the Restricted Subsidiaries and (ii) made to obtain the
approval of any applicable antitrust authority in connection with a Permitted
Acquisition;

 

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(n) transfers of condemned property as a result of the exercise of “eminent
domain” or other similar powers to the respective Governmental Authority or
agency that has condemned the same (whether by deed in lieu of condemnation or
otherwise), and transfers of property arising from foreclosure or similar action
or that have been subject to a casualty to the respective insurer of such real
property as part of an insurance settlement;

(o) Dispositions of property for Fair Market Value not otherwise permitted under
this Section 6.05 having an aggregate purchase price not to exceed $100,000,000;
and

(p) the sale or discount (with or without recourse) and related assets in
connection with a Permitted Receivables Financing.

(q) Dispositions of Equity Interests of the Borrower in connection with any
management incentive plan or other equity based compensation plan, in each case,
established with respect to such Person and approved by such Person’s Board of
Directors.

Notwithstanding the foregoing, if ABL Priority Collateral with a value in excess
of $30,000,000 is the subject of any Disposition pursuant to this Section 6.05
(other than Section 6.05(b) (solely with respect to inventory) and any
Disposition to a Loan Party), the Borrower shall deliver an updated Borrowing
Base Certificate giving pro forma effect thereto.

SECTION 6.06 [Reserved].

SECTION 6.07 Negative Pledge. The Borrower will not, and will not permit any
Restricted Subsidiary to, enter into any agreement, instrument, deed or lease
that prohibits or limits the ability of any Loan Party to create, incur, assume
or suffer to exist any Lien upon any of their respective properties or revenues,
whether now owned or hereafter acquired, for the benefit of the Secured Parties
with respect to the Secured Obligations or under the Loan Documents; provided
that the foregoing shall not apply to:

(a) restrictions and conditions imposed by (i) Requirements of Law, (ii) any
Loan Document, (iii) any documentation relating to any Permitted Receivables
Financing, (iv) [reserved] and (v) any documentation governing any Permitted
Refinancing incurred to refinance any such Indebtedness referenced in clauses
(i) through (iv) above; provided that with respect to Indebtedness referenced in
(A) clause (iv) above, such restrictions shall be no more restrictive in any
material respect than the restrictions and conditions in the Loan Documents or,
in the case of Junior Financing, are market terms at the time of issuance and
(B) clause (iv) above, such restrictions shall not expand the scope in any
material respect of any such restriction or condition contained in the
Indebtedness being Refinanced;

(b) customary restrictions and conditions existing on the Effective Date and any
extension, renewal, amendment, modification or replacement thereof, except to
the extent any such amendment, modification or replacement expands the scope of
any such restriction or condition;

(c) restrictions and conditions contained in agreements relating to the sale of
a Subsidiary or any assets pending such sale; provided that such restrictions
and conditions apply only to the Subsidiary or assets that is or are to be sold
and such sale is permitted hereunder;

(d) customary provisions in leases, licenses and other contracts restricting the
assignment thereof;

(e) restrictions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement to the extent such restriction applies only to the
property securing by such Indebtedness;

 

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(f) any restrictions or conditions set forth in any agreement in effect at any
time any Person becomes a Restricted Subsidiary (but not any modification or
amendment expanding the scope of any such restriction or condition); provided
that such agreement was not entered into in contemplation of such Person
becoming a Restricted Subsidiary and the restriction or condition set forth in
such agreement does not apply to the Borrower or any Restricted Subsidiary;

(g) restrictions or conditions in any Indebtedness permitted pursuant to
Section 6.01 that is incurred or assumed by Restricted Subsidiaries that are not
Loan Parties to the extent such restrictions or conditions are no more
restrictive in any material respect than the restrictions and conditions in the
Loan Documents or, in the case of Junior Financing, are market terms at the time
of issuance and are imposed solely on such Restricted Subsidiary and its
Subsidiaries;

(h) restrictions on cash (or Permitted Investments) or other deposits imposed by
agreements entered into in the ordinary course of business (or other
restrictions on cash or deposits constituting Permitted Encumbrances);

(i) restrictions set forth on Schedule 6.07 and any extension, renewal,
amendment, modification or replacement thereof, except to the extent any such
amendment, modification or replacement expands the scope of any such restriction
or condition;

(j) customary provisions in joint venture agreements and other similar
agreements applicable to joint ventures permitted by Section 6.02 and applicable
solely to such joint venture and entered into in the ordinary course of
business; and

(k) customary net worth provisions contained in real property leases entered
into by Subsidiaries, so long as the Borrower has determined in good faith that
such net worth provisions could not reasonably be expected to impair the ability
of the Borrower and its Subsidiaries to meet their ongoing obligations.

SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness; Certain
Amendments.

(a) The Borrower will not, nor will it permit any Restricted Subsidiary to pay
or make, directly or indirectly, any Restricted Payment, except:

(i) The Borrower and each Restricted Subsidiary may make Restricted Payments to
the Borrower or any other Restricted Subsidiary; provided that in the case of
any such Restricted Payment by a Restricted Subsidiary that is not a
wholly-owned Subsidiary of the Borrower, such Restricted Payment is made to the
Borrower, any Restricted Subsidiary and to each other owner of Equity Interests
of such Restricted Subsidiary based on their relative ownership interests of the
relevant class of Equity Interests;

(ii) [reserved];

(iii) the Borrower may declare and make dividend payments or other distributions
payable solely in the Equity Interests of such Person;

(iv) Restricted Payments made to consummate the Transactions and pay fees and
expenses related thereto;

(v) repurchases of Equity Interests in the Borrower (or Restricted Payments by
the Borrower to allow repurchases of Equity Interest in any direct or indirect
parent of the Borrower) deemed to occur upon exercise of stock options or
warrants if such Equity Interests represent a portion of the exercise price of
such stock options or warrants;

 

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(vi) Restricted Payments to the Borrower which the Borrower may use to redeem,
acquire, retire or repurchase its Equity Interests (or any options, warrants,
restricted stock units or stock appreciation rights issued with respect to any
of such Equity Interests) (or make Restricted Payments to allow any of the
Borrower’s direct or indirect parent companies to so redeem, retire, acquire or
repurchase their Equity Interests) held by current or former officers, managers,
consultants, directors and employees (or their respective spouses, former
spouses, successors, executors, administrators, heirs, legatees or distributees)
of the Borrower (or any direct or indirect parent thereof) and the Restricted
Subsidiaries, upon the death, disability, retirement or termination of
employment of any such Person or otherwise in accordance with any stock option
or stock appreciation rights plan, any management, director and/or employee
stock ownership or incentive plan, stock subscription plan, employment
termination agreement or any other employment agreements or equity holders’
agreement; provided that the aggregate amount of Restricted Payments permitted
by this clause (vi) after the Effective Date, together with the aggregate amount
of loans and advances to the Borrower made pursuant to Section 6.04(m) in lieu
thereof, shall not exceed the sum of (A) $10,000,000 in any fiscal year of the
Borrower and (B) the amount in any fiscal year equal to the cash proceeds of key
man life insurance policies received by the Borrower or the Restricted
Subsidiaries after the Effective Date; provided that any unused portion of the
preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal
year may be carried forward to succeeding fiscal years;

(vii) Restricted Payments in cash to the Borrower and, where applicable, the
Borrower may make Restricted Payments in cash:

(A) the proceeds of which shall be used by the Borrower to pay (or to make
Restricted Payments to allow any direct or indirect parent of the Borrower to
pay), for any taxable period for which the Borrower and/or any of its
Subsidiaries are members of a consolidated, combined or unitary tax group for
U.S. federal and/or applicable state, local or foreign income Tax purposes of
which a direct or indirect parent of the Borrower is the common parent (a “Tax
Group”), the portion of any U.S. federal, state, local or foreign Taxes (as
applicable) of such Tax Group for such taxable period that are attributable to
the income of the Borrower and/or its Subsidiaries; provided that Restricted
Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax
liability that the Borrower and/or its Subsidiaries (as applicable) would have
incurred were such Taxes determined as if such entity(ies) were a stand-alone
taxpayer or a stand-alone group (but taking into account only such Tax
attributes that are actually available to the Borrower and/or its Subsidiaries
under applicable law for such taxable period); and provided, further, that
Restricted Payments under this clause (A) in respect of any Taxes attributable
to the income of any Unrestricted Subsidiaries of the Borrower may be made only
to the extent that such Unrestricted Subsidiaries have made cash payments for
such purpose to Borrower or its Restricted Subsidiaries;

(B) the proceeds of which shall be used by the Borrower to pay (or to make
Restricted Payments to allow any direct or indirect parent of the Borrower to
pay) (1) its operating expenses incurred in the ordinary course of business and
other corporate overhead costs and expenses (including administrative, legal,
accounting and similar expenses payable to third parties) that are reasonable
and customary and incurred in the ordinary course of business, (2) any
reasonable and customary indemnification claims made by directors or officers of
the Borrower (or any parent thereof) attributable to the

 

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ownership or operations of the Borrower and the Restricted Subsidiaries,
(3) fees and expenses (x) due and payable by any of the Borrower and the
Restricted Subsidiaries and (y) otherwise permitted to be paid by the Borrower
and the Restricted Subsidiaries under this Agreement and (4) payments that would
otherwise be permitted to be paid directly by the Borrower or the Restricted
Subsidiaries pursuant to Section 6.09(iii);

(C) the proceeds of which shall be used by the Borrower to pay (or to make
Restricted Payments to allow any direct or indirect parent of the Borrower to
pay) franchise and similar Taxes, and other fees and expenses, required to
maintain its corporate existence;

(D) the proceeds of which shall be used by the Borrower to make Restricted
Payments permitted by Section 6.08(a)(v) or Section 6.08(a)(vi);

(E) to finance any Investment permitted to be made pursuant to Section 6.04
other than Section 6.04(m); provided that (1) such Restricted Payment shall be
made substantially concurrently with the closing of such Investment and (2) the
Borrower shall, immediately following the closing thereof, cause (x) all
property acquired (whether assets or Equity Interests but not including any
loans or advances made pursuant to Section 6.04(b)) to be contributed to the
Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to
merge into or consolidate with the Borrower or any of the Restricted
Subsidiaries to the extent such merger or consolidation is permitted in
Section 6.03) in order to consummate such Investment, in each case in accordance
with the requirements of Sections 5.11 and 5.12;

(F) the proceeds of which shall be used to pay customary salary, bonus and other
benefits payable to officers and employees of the Borrower or any direct or
indirect parent company of the Borrower to the extent such salaries, bonuses and
other benefits are attributable to the ownership or operation of the Borrower
and the Restricted Subsidiaries; and

(G) the proceeds of which shall be used by the Borrower to pay (or to make
Restricted Payments to allow any direct or indirect parent thereof to pay) fees
and expenses related to any equity or debt offering not prohibited by this
Agreement (whether or not such offering is successful);

(viii) [reserved];

(ix) redemptions in whole or in part of any of its Equity Interests for another
class of its Equity Interests or with proceeds from substantially concurrent
equity contributions or issuances of new Equity Interests; provided that such
new Equity Interests contain terms and provisions at least as advantageous to
the Lenders in all respects material to their interests as those contained in
the Equity Interests redeemed thereby;

(x) payments made or expected to be made in respect of withholding or similar
Taxes payable by any future, present or former employee, director, manager or
consultant and any repurchases of Equity Interests in consideration of such
payments including deemed repurchases in connection with the exercise of stock
options and the vesting of restricted stock and restricted stock units;

 

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(xi) the Borrower may (a) pay cash in lieu of fractional Equity Interests in
connection with any dividend, split or combination thereof or any Permitted
Acquisition (or other similar Investment) and (b) honor any conversion request
by a holder of convertible Indebtedness and make cash payments in lieu of
fractional shares in connection with any such conversion and may make payments
on convertible Indebtedness in accordance with its terms;

(xii) the declaration and payment of Restricted Payments on the Borrower’s
common stock (or the payment of Restricted Payments to any direct or indirect
parent company of the Borrower to fund a payment of dividends on such company’s
common stock), following consummation of the IPO; provided that the aggregate
amount of Restricted Payments made pursuant to this clause (xii) in any fiscal
year shall not exceed an amount equal to 6.0% of the aggregate net cash proceeds
of such IPO received by or contributed to the Borrower;

(xiii) payments made or expected to be made by the Borrower or any Restricted
Subsidiary in respect of withholding or similar taxes payable upon exercise of
Equity Interests by any future, present or former employee, director, officer,
manager or consultant (or their respective controlled Affiliates or Immediate
Family Members) and any repurchases of Equity Interests deemed to occur upon
exercise of stock options or warrants if such Equity Interests represent a
portion of the exercise price of such options or warrants or required
withholding or similar taxes;

(xiv) additional Restricted Payments; provided that (A) at the time any such
Restricted Payment is made, the applicable Payment Conditions are satisfied and
(B) no Event of Default shall have occurred and be continuing; and

(xv) the distribution, by dividend or otherwise, of shares of 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 Permitted Investments).

(b) The Borrower will not, nor will it permit any Restricted Subsidiary to make
or pay, directly or indirectly, any payment or other distribution (whether in
cash, securities or other property) of or in respect of principal of or interest
on any Junior Financing, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Junior Financing (the foregoing, “Restricted Debt Payments”),
except:

(i) payment of regularly scheduled interest and principal payments as, in the
form of payment and when due in respect of any Indebtedness, other than payments
in respect of any Junior Financing prohibited by the subordination provisions
thereof;

(ii) refinancings of Indebtedness with proceeds of Indebtedness permitted to be
incurred under Section 6.01;

(iii) the conversion of any Junior Financing to Equity Interests (other than
Disqualified Equity Interests) of the Borrower or any of its direct or indirect
parent companies;

(iv) prepayments, redemptions, purchases, defeasances and other payments in
respect of Junior Financings prior to their scheduled maturity in an aggregate
amount, when taken together with the aggregate amount of loans and advances to
the Borrower made pursuant to Section 6.04(m) in lieu of Restricted Payments
permitted by this clause (iv) not to exceed the sum of (A) an amount at the time
of making any such Restricted Debt Payment and together with any

 

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other Restricted Debt Payment made utilizing this clause (A) so long as no Event
of Default shall have occurred and be continuing, or would result therefrom, not
to exceed the greater of $20,000,000 and 20% of Consolidated EBITDA for the most
recently ended Test Period after giving Pro Forma Effect to the making of such
prepayment, redemption, purchase, defeasance or other payment plus (B) the
Available Equity Amount that is Not Otherwise Applied; and

(v) prepayments, redemptions, purchases, defeasances and other payments in
respect of Junior Financings prior to their scheduled maturity; provided that
(A) no Event of Default shall have occurred or result therefrom and (B) at the
time of any such payment made pursuant to this Section 6.08(b)(v), the
applicable Payment Conditions are satisfied.

(c) The Borrower will not, nor will it permit any Restricted Subsidiary to,
amend or modify any documentation governing any Junior Financing if the effect
of such amendment or modification (when taken as a whole) is materially adverse
to the Lenders.

Notwithstanding anything herein to the contrary, the foregoing provisions of
Section 6.08 will not prohibit the payment of any Restricted Payment or the
consummation of any irrevocable redemption, purchase, defeasance or other
payment within 60 days after the date of declaration thereof or the giving of
such irrevocable notice, as applicable, if at the date of declaration or the
giving of such notice such payment would have complied with the provisions of
this Agreement.

For purposes of determining compliance with (i) Section 6.08(a), in the event
that any Restricted Payment meets the criteria of more than one of the
categories of Restricted Payments described in clauses (a)(i) through (a)(xv)
above (or any subclause contained therein or any defined term used therein), the
Borrower may, in its sole discretion, classify and reclassify or later divide,
classify or reclassify (based on circumstances existing on the date of such
reclassification) such Restricted Payment (or any portion thereof) and will only
be required to include the amount and type of such Restricted Payment in one or
more of the above clauses and (ii) Section 6.08(b), in the event that any
Restricted Debt Payment meets the criteria of more than one of the categories of
Restricted Debt Payments described in clauses (b)(i) through (b)(v) above (or
any subclause contained therein or any defined term used therein), the Borrower
may, in its sole discretion, classify and reclassify or later divide, classify
or reclassify (based on circumstances existing on the date of such
reclassification) such Restricted Debt Payment (or any portion thereof) and will
only be required to include the amount and type of such Restricted Debt Payment
in one or more of the above clauses.

SECTION 6.09 Transactions with Affiliates. The Borrower will not, nor will it
permit any Restricted Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except

(i) (A) transactions with the Borrower or any Restricted Subsidiary and
(B) transactions involving aggregate payments or consideration of less than
$20,000,000;

(ii) on terms substantially as favorable to the Borrower or such Restricted
Subsidiary as would be obtainable by such Person at the time in a comparable
arm’s-length transaction with a Person other than an Affiliate;

(iii) (i) the Transactions and the payment of fees and expenses related to the
Transactions and (ii) the performance of the IPO Separation Agreements (as in
effect on the Effective Date or as amended or modified (when taken as a whole)
in a manner that is not materially adverse to the Lenders);

 

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(iv) issuances of Equity Interests of the Borrower to the extent otherwise
permitted by this Agreement;

(v) employment and severance arrangements between the Borrower and the
Restricted Subsidiaries and their respective officers and employees in the
ordinary course of business or otherwise in connection with the Transactions
(including loans and advances pursuant to Sections 6.04(b) and 6.04(p));

(vi) payments by the Borrower (and any direct or indirect parent thereof) and
the Restricted Subsidiaries pursuant to tax sharing agreements among the
Borrower (and any such parent thereof) and the Restricted Subsidiaries on
customary terms to the extent attributable to the ownership or operation of the
Borrower and the Restricted Subsidiaries;

(vii) the payment of customary fees and reasonable out-of-pocket costs to, and
indemnities provided on behalf of, directors, officers and employees of the
Borrower (or any direct or indirect parent company thereof) and the Restricted
Subsidiaries in the ordinary course of business to the extent attributable to
the ownership or operation of the Borrower and the Restricted Subsidiaries;

(viii) transactions pursuant to permitted agreements in existence or
contemplated on the Effective Date and set forth on Schedule 6.09 or any
amendment thereto to the extent such an amendment is not adverse to the Lenders
in any material respect;

(ix) Restricted Payments permitted under Section 6.08;

(x) customary payments (including related indemnities and expense
reimbursements) by the Borrower and any of the Restricted Subsidiaries to the
Sponsors made for any financial advisory, consulting, financing, underwriting or
placement services or in respect of other investment banking activities
(including in connection with acquisitions, divestitures or financings), which
payments are approved by the majority of the members of the Board of Directors
or a majority of the disinterested members of the Board of Directors of such
Person in good faith including the payment of management and monitoring fees to
certain of the Sponsors (or management companies of the Sponsors) in amounts
contemplated by the services agreement entered into as of the Effective Date and
any termination or success fees payable thereunder in connection with the early
termination of such agreement);

(xi) the issuance or transfer of Equity Interests (other than Disqualified
Equity Interests) of the Borrower to any Permitted Holder or to any former,
current or future director, manager, officer, employee or consultant (or any
Affiliate of any of the foregoing) of the Borrower, any of the Subsidiaries or
any direct or indirect parent thereof; and

(xii) transactions in connection with any Permitted Receivables Financing.

SECTION 6.10 Fixed Charge Coverage Ratio. The Borrower will not permit its Fixed
Charge Coverage Ratio for any Test Period to be lower than 1.00 to 1.00;
provided that such Fixed Charge Coverage Ratio will only be tested (a) on the
date on which a Compliance Period begins, as of the last day of the Test Period
ending immediately prior to the date on which such Compliance Period shall have
commenced, and (b) as of the last day of each Test Period thereafter until such
Compliance Period is no longer continuing.

 

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ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01 Events of Default. If any of the following events (any such event,
an “Event of Default”) shall occur:

(a) any Loan Party shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;

(b) any Loan Party shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in paragraph (a) of this Section)
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any of the Restricted Subsidiaries in or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in completing any request for a
Borrowing via the Portal, shall prove to have been incorrect in any material
respect when made or deemed made, and such incorrect representation or warranty
(if curable) shall remain incorrect for a period of 30 days after notice thereof
from the Administrative Agent to the Borrower;

(d) the Borrower or any of the Restricted Subsidiaries shall fail to observe or
perform any covenant, condition or agreement contained in Sections 5.02(a), 5.04
(with respect to the existence of the Borrower), 5.10, 5.17 (during a Cash
Dominion Period only) or in Article VI; provided that any Event of Default under
Section 6.10 is subject to cure as provided in Section 7.03 and an Event of
Default with respect to such Section shall not occur until the Cure Expiration
Date;

(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document (other than those specified in
paragraph (a), (b) or (d) of this Section), and such failure shall continue
unremedied for a period of 30 days (or 5 Business Days (or 3 Business Days in
the case of a Weekly Borrowing Base Certificate) in the case of Section 5.01(i))
after notice thereof from the Administrative Agent to the Borrower;

(f) the Borrower or any of the Restricted Subsidiaries shall fail to make any
payment (whether of principal, interest or otherwise and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall become due
and payable (after giving effect to any applicable grace period);

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with
all applicable grace periods having expired) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity,
provided that this paragraph (g) shall not apply to (i) secured Indebtedness
that becomes due as a result of the sale, transfer or other disposition
(including as a result of a casualty or condemnation event) of the property or
assets securing such Indebtedness (to the extent such sale, transfer or other
disposition is not prohibited under this Agreement) or (ii) termination events
or similar events occurring under any Swap Agreement that constitutes Material
Indebtedness (it being understood that paragraph (f) of this Section will apply
to any failure to make any payment required as a result of any such termination
or similar event);

 

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(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, court protection, reorganization,
examination or other relief in respect of the Borrower or any Material
Subsidiary or its debts, or of a material part of its assets, under any federal,
state, provincial or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, interim
receiver, trustee, administrator, monitor, liquidator, custodian, examiner,
sequestrator, conservator, liquidator or similar official for the Borrower or
any Material Subsidiary or for a material part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed or unstayed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;

(i) the Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, court protection,
reorganization, arrangement, consolidation, examination or other relief under
any federal, state, provincial or foreign bankruptcy, insolvency, receivership,
arrangement or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in paragraph (h) of this Section, (iii) apply
for or consent to the appointment of a receiver, interim receiver, trustee,
administrator, monitor, liquidator, custodian, examiner, sequestrator,
conservator, liquidator or similar official or similar official for the Borrower
or any Material Subsidiary or for a material part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding or (v) make a general assignment for the benefit of creditors;

(j) one or more enforceable judgments for the payment of money in an aggregate
amount in excess of $33,000,000 (to the extent not covered by insurance as to
which the insurer has been notified of such judgment or order and has not denied
its obligation) shall be rendered against any Loan Party, any of the Restricted
Subsidiaries or any combination thereof and the same shall remain undischarged
for a period of 60 consecutive days during which execution shall not be
effectively stayed, or any judgment creditor shall legally attach or levy upon
assets of such Loan Party that are material to the businesses and operations of
the Loan Parties and the Restricted Subsidiaries, taken as a whole, to enforce
any such judgment;

(k) (i) an ERISA Event occurs that has resulted or could reasonably be expected
to result in liability of any Loan Party under Title IV of ERISA in an aggregate
amount that could reasonably be expected to result in a Material Adverse Effect
or (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 that could reasonably be expected to result in a
Material Adverse Effect, in each case, that, individually or in the aggregate,
has resulted or could reasonably be expected to result in a Material Adverse
Effect;

(l) any Lien purported to be created under any Security Document shall cease to
be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien
on any material portion of the Collateral, except (i) as a result of the sale or
other disposition of the applicable Collateral to a Person that is not a Loan
Party in a transaction permitted under the Loan Documents, (ii) as a result of
the Administrative Agent’s failure to (A) maintain possession of any stock
certificates, promissory notes or other instruments delivered to it under the
Security Documents or (B) file Uniform Commercial Code continuation statements
or similar filings, (iii) as to Collateral consisting of real property, to the
extent that such losses are covered by a lender’s title insurance policy and
such insurer has not denied coverage or (iv) as a result of acts or omissions of
the Administrative Agent or any Lender;

 

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(m) any material provision of any Loan Document or any Guarantee of the Loan
Document Obligations shall for any reason be asserted by any Loan Party not to
be a legal, valid and binding obligation of any Loan Party thereto other than as
expressly permitted hereunder or thereunder;

(n) any Guarantees by the Borrower or any Subsidiary Loan Party pursuant to the
Guarantee Agreement shall cease to be in full force and effect (in each case,
other than in accordance with the terms of the Loan Documents);

(o) a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (h) or (i) of this Section), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in paragraph (h) or
(i) of this Section, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.

SECTION 7.02 Application of Proceeds. After the exercise of remedies or
acceleration of the Loans provided for in Section 7.01, any amounts received on
account of the Secured Obligations shall be applied as follows:

(a) any amounts received on account of the Secured Obligations (other than
proceeds of the Collateral) shall, subject to the provisions of Sections 2.20
and 2.24(i), be applied ratably by the Administrative Agent, in the following
order:

First, to the payment of all reasonable costs and out-of-pocket expenses, fees,
commissions and taxes of such sale, collection or other realization including,
without limitation, compensation to the Administrative Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred by the
Administrative Agent in connection therewith (other than in respect of Secured
Cash Management Obligations, Secured Bank Product Obligations or Secured Swap
Obligations);

Second, to the payment of all other reasonable costs and out-of-pocket expenses
of such sale, collection or other realization including, without limitation,
costs and expenses and all costs, liabilities and advances made or incurred by
the other Secured Parties in connection therewith (other than in respect of
Secured Cash Management Obligations, Secured Bank Product Obligations or Secured
Swap Obligations);

Third, to interest then due and payable on the any Swingline Loans;

Fourth, to the principal balance of the Swingline Loans outstanding until the
same has been prepaid in full;

 

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Fifth, to interest then due and payable on Revolving Loans and other amounts due
pursuant to Sections 2.13, 2.14 and 2.15;

Sixth, to cash collateralize all LC Exposures (to the extent not otherwise cash
collateralized pursuant to the terms hereof) plus any accrued and unpaid
interest thereon;

Seventh, to the principal balance of Revolving Exposure then outstanding and all
Secured Obligations on account of Noticed Hedges (in an amount not to exceed the
associated Secured Hedge Reserves), on account of Noticed Cash Management
Obligations (in an amount not to exceed the aggregate amount of the associated
Secured Cash Management Reserves) and on account of Bank Product Obligations (in
an amount not to exceed the aggregate amount of the associated Bank Product
Reserves) with Secured Parties, pro rata;

Eighth, to all other Secured Obligations pro rata; and

Ninth, the balance, if any, as required by the ABL Intercreditor Agreement or,
in the absence of any such requirement, to the Person lawfully entitled thereto
(including the applicable Loan Party or its successors or assigns).

Amounts used to cash collateralize the aggregate undrawn amount of Letters of
Credit pursuant to clause Sixth above shall be applied to satisfy drawings under
such Letters of Credit as they occur. If any amount remains on deposit as cash
collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Secured Obligations, if any,
in the order set forth above. Amounts distributed with respect to any Secured
Cash Management Obligations or Secured Swap Obligations shall be the lesser of
the maximum Secured Cash Management Obligations or Secured Swap Obligations, as
applicable, under the Facility last reported to the Administrative Agent or the
actual Secured Cash Management Obligations or Secured Swap Obligations, as
applicable, as calculated by the methodology reported to the Administrative
Agent for determining the amount due. The Administrative Agent shall have no
obligation to calculate the amount to be distributed with respect to any Secured
Cash Management Obligations, Secured Bank Product Obligations or Secured Swap
Obligations, and may request a reasonably detailed calculation of such amount
from the applicable Secured Party. If a Secured Party fails to deliver such
calculation within five days following request by the Administrative Agent, the
Administrative Agent may assume the amount to be distributed is zero.

In the event that any such proceeds are insufficient to pay in full the items
described in clauses First through Eighth of this Section 7.02(a), the Loan
Parties shall remain liable for any deficiency. Notwithstanding the foregoing
provisions, this Section 7.02 is subject to the provisions of the ABL
Intercreditor Agreement.

(b) any proceeds of Collateral received by the Administrative Agent shall be
applied ratably in the following order:

First, to the payment of all reasonable costs and out-of-pocket expenses, fees,
commissions and taxes of such sale, collection or other realization including,
without limitation, compensation to the Administrative Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred by the
Administrative Agent in connection therewith due from the Loan Parties (other
than in respect of Secured Cash Management Obligations, Secured Bank Product
Obligations or Secured Swap Obligations);

 

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Second, to the payment of all other reasonable costs and out-of-pocket expenses
of such sale, collection or other realization including, without limitation,
costs and expenses and all costs, liabilities and advances made or incurred by
the other Secured Parties in connection therewith (other than in respect of
Secured Cash Management Obligations, Secured Bank Product Obligations or Secured
Swap Obligations) due from the Loan Parties;

Third, to interest then due and payable on any Swingline Loans;

Fourth, to the principal balance of any Swingline Loans outstanding until the
same has been prepaid in full;

Fifth, to interest then due and payable on Revolving Loans and other amounts due
pursuant to Sections 2.13, 2.14 and 2.15;

Sixth, to the principal balance of any Protective Advances then outstanding;

Seventh, to cash collateralize all LC Exposure (to the extent not otherwise cash
collateralized pursuant to the terms hereof) plus any accrued and unpaid
interest thereon;

Eighth, to the principal balance of Revolving Exposure then outstanding and
Secured Obligations of the Loan Parties on account of Noticed Hedges (in an
amount not to exceed the associated Secured Hedge Reserves), on account of
Noticed Cash Management Obligations (in an amount not to exceed the aggregate
amount of the associated Secured Cash Management Reserves) and on account of
Bank Product Obligations (in an amount not to exceed the aggregate amount of the
associated Bank Product Reserves) with Secured Parties, pro rata;

Ninth, to all other Secured Obligations pro rata; and

Tenth, the balance, if any, as required by the ABL Intercreditor Agreement or,
in the absence of any such requirement, to the Person lawfully entitled thereto
(including the applicable Loan Party or its successors or assigns).

(c) Notwithstanding the foregoing, Excluded Swap Obligations with respect to any
Guarantor shall not be paid with amounts received from such Guarantor or its
assets, but appropriate adjustments shall be made with respect to payments from
other Loan Parties to preserve the allocation to Secured Obligations otherwise
set forth in Section 4.02 of the Collateral Agreement and/or the similar
provisions in the other Security Documents.

SECTION 7.03 Cure Right.

(a) Notwithstanding anything to the contrary contained in this Article VII, in
the event that the Borrower fails to comply with the requirements of
Section 6.10, until the expiration of the 10th Business Day subsequent to the
later of (x) the first day of the applicable Compliance Period or (y) the date
the Compliance Certificate is required to be delivered pursuant to
Section 5.01(c) for the applicable Test Period (the “Cure Expiration Date”), the
Borrower (or any direct or indirect parent thereof) shall have the right to
issue Permitted Cure Securities for cash or otherwise receive cash contributions
to (or in the case of any direct or indirect parent of the Borrower, receive
equity interests in the Borrower for its cash contributions to) the capital of
the Borrower (collectively, the “Cure Right”), and upon contribution of such
cash in return for common Equity Interests of the Borrower (the “Cure Amount”)
pursuant to the exercise by the Borrower of such Cure Right, the Fixed Charge
Coverage Ratio under Section 6.10 shall be recalculated giving effect to the
following pro forma adjustments:

 

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(i) EBITDA shall be increased with respect to such applicable fiscal quarter and
any Test Period that contains such fiscal quarter, solely for the purpose of
measuring the Fixed Charge Coverage Ratio under Section 6.10 and not for any
other purpose under this Agreement, by an amount equal to the Cure Amount;

(ii) [reserved]; and

(iii) if, after giving effect to the foregoing pro forma adjustments, the
Borrower shall then be in compliance with Section 6.10, the Borrower shall be
deemed to have satisfied the requirements of Section 6.10 as of the relevant
date of determination with the same effect as though there had been no failure
to comply therewith at such date, and the applicable breach or default of
Section 6.10 that had occurred shall be deemed cured for purposes of this
Agreement.

(b) Notwithstanding anything herein to the contrary, (i) in each twelve calendar
month period there shall be at least two three-calendar month periods during
which the Cure Right is not exercised, (ii) there shall be no more than five
Cure Rights exercised during the term of this Agreement, (iii) the Cure Amount
shall be no greater than the amount required for purposes of complying with
Section 6.10 and (iv) all Cure Amounts shall be disregarded for purposes of
determining any baskets or ratios with respect to the other covenants contained
in the Loan Documents and for purposes of determining Excess Availability and
Specified Excess Availability.

(c) Notwithstanding anything to the contrary contained in Section 7.01, upon
contribution of the Cure Amount (and designation thereof) by the Borrower, the
requirements of Section 6.10 shall be deemed satisfied and complied with as of
the end of the relevant fiscal quarter with the same effect as though there had
been no failure to comply with the requirements of Section 6.10 and any Event of
Default under Section 6.10 (and any other Default as a result thereof) shall be
deemed not to have occurred for purposes of the Loan Documents.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01 The Administrative Agent.

Each of the Lenders hereby irrevocably appoints Wells Fargo Bank, National
Association to serve as Administrative Agent and trustee under the Loan
Documents and authorizes the Administrative Agent to take such actions and to
exercise such powers as are delegated to the Administrative Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent and the Lenders, and none of the Borrower or any other
Loan Party shall have any rights as a third party beneficiary of any such
provisions. Further, the Administrative Agent shall also act as the “collateral
agent” under the Loan Documents, and each of the Lenders (including in its
capacities as a Person to whom any Secured Obligations are owed) and each of the
Issuing Banks hereby irrevocably appoints and authorizes the Administrative
Agent to act as the agent of such Lender or Issuing Bank for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Loan Document Obligations, together
with such powers and discretion as are reasonably incidental thereto. In this
connection, the Administrative Agent, as “collateral agent” and any co-agents,
sub-agents, trustees and attorneys-in-fact appointed by the Administrative Agent
pursuant to this Section 8.01 for purposes of holding or enforcing any Lien on
the Collateral (or any portion thereof) granted under the Security Documents, or
for exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of
this Article VIII (including paragraph 13 hereof) and Article IX (as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents) as if set forth in full herein with respect thereto.

 

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Each Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not Administrative Agent hereunder and without
any duty to account therefor to the Lenders.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or to exercise any discretionary power, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in the Loan Documents);
provided that the Administrative Agent shall not be required to take any action
that, in its opinion, may expose the Administrative Agent to liability or that
is contrary to any Loan Document or applicable law, and (c) except as expressly
set forth in the Loan Documents, no Administrative Agent shall have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any Subsidiary or any other Affiliate of any of the
foregoing that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary, or as the Administrative
Agent shall believe in good faith to be necessary, under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to the Administrative Agent for the account of the
Lenders and, except with respect to Events of Default of which the
Administrative Agent has actual knowledge, unless the Administrative Agent shall
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default, and stating that such
notice is a “notice of default.” The Administrative Agent promptly will notify
the Lenders of its receipt of any such notice or of any Event of Default of
which the Administrative Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and the Administrative Agent of such Event of Default. Each Lender
shall be solely responsible for giving any notices to its Participants, if any.
Subject to the succeeding paragraph, the Administrative Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with Article VII; provided, that unless and
until the Administrative Agent has received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable. The Administrative Agent shall not be responsible for nor have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent or
satisfaction of any condition that expressly refers to the matters described
therein being

 

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acceptable or satisfactory to the Administrative Agent. The Administrative Agent
shall have no obligation to any Lenders (or other Secured Parties) to 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 books and records or properties of any Loan Party or its
Subsidiaries. The Administrative Agent shall have no liability to any Lender,
any Loan Party or any of their respective Affiliates if any request for a Loan,
Letter of Credit or other extension of credit was not authorized by the
Borrower.

The Administrative Agent shall be entitled to rely, and shall not incur any
liability for relying, upon any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person (including, if applicable, a Responsible Officer or Financial
Officer of such Person). The Administrative Agent also may rely, and shall not
incur any liability for relying, upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person (including, if
applicable, a Financial Officer or a Responsible Officer of such Person). The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

The Administrative Agent may perform any of and all its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any of and all their duties and
exercise their rights and powers through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as the
Administrative Agent.

Subject to the appointment and acceptance of a successor as provided in this
paragraph, the Administrative Agent may resign upon 30 days’ notice to the
Lenders and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, with the Borrower’s consent (unless an
Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is
continuing), to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If, at the time that the Administrative Agent’s resignation is
effective, it is acting as the Swingline Lender, such resignation shall also
operate to effectuate its resignation as the Swingline Lender and it shall
automatically be relieved of any further obligation to make Swingline Loans. If
no such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may (but shall not be obligated to) on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be (a) an Approved Bank with an
office in New York, New York, or an Affiliate of any such Approved Bank and
(b) approved by the Borrower (unless an Event of Default under Section 7.01(a),
(b), (h) or (i) has occurred and is continuing); provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment by the date that is 35 days
after the relevant notice of resignation was given by the Administrative Agent,
then such resignation shall nonetheless become effective (the earlier to occur
of the date upon which the retiring Administrative Agent is replaced and the
date such resignation otherwise becomes effective, the “Resignation Effective
Date”).

If the Person serving as the Administrative Agent is a Defaulting Lender, the
Required Lenders and the Borrower may, to the extent permitted by applicable
law, by notice in writing to such Person remove such Person as Administrative
Agent and, with the consent of the Borrower, appoint a successor.

 

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If no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days (the “Removal Effective
Date”), then such removal shall nonetheless become effective in accordance with
such notice on the Removal Effective Date.

With effect from the Resignation Effective Date or the Removal Effective Date
(as applicable) (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except (i) that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Loan Documents,
the retiring or removed Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is
appointed and (ii) with respect to any outstanding payment obligations) and
(2) except for any indemnity payments or other amounts then owed to the retiring
or removed Administrative Agent, all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender directly, until such time, if any, as the Required
Lenders appoint a successor Administrative Agent as provided for above. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or removed) Administrative Agent (other
than any rights to indemnity payments or other amounts owed to the retiring or
removed Administrative Agent as of the Resignation Effective Date or the Removal
Effective Date, as applicable), and the retiring or removed Administrative Agent
shall be discharged from all of its duties and obligations hereunder and under
the other Loan Documents as set forth in this Section. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring or removed Administrative Agent’s resignation or
removal hereunder and under the other Loan Documents, the provisions of this
Article and Section 9.04 shall continue in effect for the benefit of such
retiring or removed Administrative Agent, its sub agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of
them while the retiring or removed Administrative Agent was acting as
Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent, any Joint Bookrunner or any other Lender, or any of
the Related Parties of any of the foregoing, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, any
Joint Bookrunner or any other Lender, or any of the Related Parties of any of
the foregoing, and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder. Except for
notices, reports, and other documents expressly herein required to be furnished
to the Lenders by the Administrative Agent, the Administrative Agent shall not
have any duty or responsibility to provide any Lender (or other Secured Party)
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower or any other Person party to a Loan Document that may come into the
possession of the Administrative Agent. Each Lender (and each other Secured
Party) acknowledges that the Administrative Agent does not have any duty or
responsibility, either initially or on a continuing basis (except to the extent,
if any, that is expressly specified herein) to provide such Lender (or Secured
Party) with any credit or other information with respect to the Borrower, its
Affiliates or any of their respective business, legal, financial or other
affairs, and irrespective of whether such information came into the
Administrative Agent’s or its Affiliates’ or representatives’ possession before
or after the date on which such Lender became a party to this Agreement.

 

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The Administrative Agent may incur and pay expenses on behalf of the Lenders to
the extent the Administrative Agent reasonably deems necessary or appropriate
for the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, attorneys’ fees and
expenses, fees and expenses of financial accountants, advisors, consultants, and
appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to
maintain the Collateral, solely to the extent the Borrower is obligated to
reimburse the Administrative Agent or Lenders for such expenses pursuant to this
Agreement; provided that the foregoing shall not create any reimbursement
obligation on the part of the Borrower that is otherwise inconsistent with
Section 9.03(a). The Administrative Agent is authorized and directed to deduct
and retain sufficient amounts from payments or proceeds of the Collateral
received by the Administrative Agent to reimburse the Administrative Agent for
such out-of-pocket costs and expenses prior to the distribution of any amounts
to Lenders. In the event the Administrative Agent is not reimbursed for such
costs and expenses by the Loan Parties and their Subsidiaries, each Lender
hereby agrees that it is and shall be obligated to pay to the Administrative
Agent such Lender’s ratable share thereof. If the transactions contemplated
hereby are consummated, each of the Lenders on a ratable basis, shall indemnify
and defend the Administrative Agent (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do
so) from and against any and all indemnified liabilities; provided, that no
Lender shall be liable for the payment to the Administrative Agent of any
portion of such liabilities resulting solely from such Person’s gross negligence
or willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make a Revolving Loan or other extension of
credit hereunder. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for such Lender’s ratable share
of any costs or out of pocket expenses (including attorneys, accountants,
advisors, and consultants fees and expenses) 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 or any other Loan Document to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this paragraph shall survive the
payment of all Secured Obligations hereunder and the resignation or replacement
of the Administrative Agent.

Each Lender, by delivering its signature page to this Agreement and funding its
Loans on the Effective Date, or delivering its signature page to an Assignment
and Assumption or Incremental Facility Amendment pursuant to which it shall
become a Lender hereunder, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Loan Document and each other document required
to be delivered to, or be approved by or satisfactory to, the Administrative
Agent or the Lenders on the Effective Date.

The Administrative Agent shall have no obligation whatsoever to any of the
Lenders (i) to verify or assure that the Collateral exists or is owned by a Loan
Party or any of its Subsidiaries or is cared for, protected, or insured or has
been encumbered, (ii) to verify or assure that the Administrative Agent’s Liens
have been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, (iii) to verify or assure
that any particular items of Collateral meet the eligibility criteria applicable
in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or
eliminate any particular reserve hereunder or to determine whether the amount of
any reserve is appropriate or not, or (v) to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Administrative Agent pursuant to any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission, or event related thereto, subject to the terms and conditions
contained herein, the Administrative Agent may act in any manner it may deem
appropriate, in its sole discretion given the Administrative Agent’s own
interest in the Collateral in its capacity as one of the Lenders and that the
Administrative Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing, except as otherwise expressly provided
herein.

 

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No Lender shall have any right individually to realize upon any of the
Collateral or to enforce any Guarantee of the Secured Obligations, it being
understood and agreed that all powers, rights and remedies under the Loan
Documents, in connection with any Loan, Letter of Credit or otherwise in its
capacity as a Lender, may be exercised solely by the Administrative Agent on
behalf of the Lenders in accordance with the terms thereof. In the event of a
foreclosure by the Administrative Agent on any of the Collateral pursuant to a
public or private sale or other disposition, the Administrative Agent or any
Lender may be the purchaser or licensor of any or all of such Collateral at any
such sale or other disposition, and the Administrative Agent, as agent for and
representative of the Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Required Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any collateral payable by the
Administrative Agent on behalf of the Lenders at such sale or other disposition.
Each Lender, whether or not a party hereto, will be deemed, by its acceptance of
the benefits of the Collateral and of the Guarantees of the Secured Obligations,
to have agreed to the foregoing provisions.

Notwithstanding anything herein to the contrary, neither any Joint Bookrunner
nor any Person named on the cover page of this Agreement as a Lead Arranger, a
Syndication Agent, a Co-Manager, a Senior Managing Agent or a Co-Documentation
Agent have any duties or obligations under this Agreement or any other Loan
Document (except in its capacity as a Lender), but all such Persons shall have
the benefit of the indemnities provided for hereunder, including under
Section 9.03, fully as if named as an indemnitee or indemnified person therein
and irrespective of whether the indemnified losses, claims, damages, liabilities
and/or related expenses arise out of, in connection with or as a result of
matters arising prior to, on or after the effective date of any Loan Document.

To the extent required by any applicable law, the Administrative Agent may
withhold from any payment to any Lender an amount equivalent to any applicable
withholding tax. Without limiting or expanding the provisions of Section 2.15,
each Lender shall, and does hereby, indemnify the Administrative Agent against,
and shall make payable in respect thereof within 30 days after demand therefor,
any and all Taxes and any and all related losses, claims, liabilities and
expenses (including fees, charges and disbursements of any counsel for the
Administrative Agent) incurred by or asserted against the Administrative Agent
by the U.S. Internal Revenue Service or any other Governmental Authority as a
result of the failure of the Administrative Agent to properly withhold tax from
amounts paid to or for the account of such Lender for any reason (including,
without limitation, because the appropriate form was not delivered or not
property executed, or because such Lender failed to notify the Administrative
Agent of a change in circumstance that rendered the exemption from, or reduction
of withholding tax ineffective). 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. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under this Agreement or any other Loan Document against any
amount due the Administrative Agent under this paragraph. The agreements in this
paragraph shall survive the resignation and/or replacement of the Administrative
Agent, any assignment of rights by, or the replacement of, a Lender and the
repayment, satisfaction or discharge of all other obligations under any Loan
Document.

The Administrative Agent hereby appoints each other Lender as its agent (and
each Lender hereby accepts such appointment) for the purpose of perfecting the
Administrative Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the UCC can be perfected by possession or control.
Should any Lender obtain possession or control of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver possession or control of
such Collateral to the Administrative Agent or in accordance with the
Administrative Agent’s instructions.

 

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Each party to this Agreement hereby appoints the Administrative Agent to act as
its agent under and in connection with the relevant Security Documents,
acknowledges that the Administrative Agent is the beneficiary of the parallel
debt referred to in the relevant Security Documents and the Administrative Agent
will accept the parallel debt arrangements reflected in the relevant Security
Documents on its behalf and will enter into the relevant Security Documents as
pledgee in its own name.

By becoming a party to this Agreement, each Lender:

(a) is deemed to have requested that the Administrative Agent furnish such
Lender, promptly after it becomes available, a copy of each field examination
report respecting any Loan Party or its Subsidiaries (each, a “Report”) prepared
by or at the request of the Administrative Agent, and the Administrative Agent
shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that the Administrative Agent does not
(i) make any representation or warranty as to the accuracy of any Report, and
(ii) shall not be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that the Administrative Agent or other party performing
any field examination will inspect only specific information regarding the Loan
Parties and their Subsidiaries and will rely significantly upon the Borrower’s
and its Subsidiaries’ books and records, as well as on representations of
Borrower’s personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding the Loan Parties and their Subsidiaries and their operations, assets,
and existing and contemplated business plans in a confidential manner in
accordance with this Agreement, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold the Administrative Agent and
any other Lender preparing a Report harmless from any action the indemnifying
Lender may take or fail to take or any conclusion the indemnifying Lender may
reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to the
Borrower, or the indemnifying Lender’s participation in, or the indemnifying
Lender’s purchase of, a loan or loans of the Borrower, and (ii) to pay and
protect, and indemnify, defend and hold the Administrative Agent, and any such
other Lender preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including, attorneys’
fees and costs) incurred by the Administrative Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who
might obtain all or part of any Report through the indemnifying Lender.

In addition to the foregoing, any Lender may from time to time request of the
Administrative Agent in writing that the Administrative Agent provide to such
Lender a copy of any report or document provided by any Loan Party or its
Subsidiaries to the Administrative Agent that has not been contemporaneously
provided by such Loan Party or such Subsidiary to such Lender, and, upon receipt
of such request, the Administrative Agent promptly shall provide a copy of same
to such Lender.

Notwithstanding that certain of the Loan Documents now or hereafter may have
been or will be executed only by or in favor of the Administrative Agent in its
capacity as such, and not by or in favor of the Lenders, any and all obligations
on the part of the Administrative Agent (if any) to make any credit available
hereunder shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing

 

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contained herein shall confer upon any Lender any interest in, or subject any
Lender to any liability for, or in respect of, the business, assets, profits,
losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in this Article XVIII, no Lender shall have any liability for
the acts of any other Lender. No Lender shall be responsible to the Borrower or
any other Person for any failure by any other Lender to fulfill its obligations
to make credit available hereunder, nor to advance for such Lender or on its
behalf, nor to take any other action on behalf of such Lender hereunder or in
connection with the financing contemplated herein.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by fax, e-mail or other electronic transmission, as follows:

(a) If to the Borrower, to (A) it at Chewy, Inc., 1855 Griffin Road, Suite
B-428, Dania Beach, FL 33004, Attn: Mario Marte, (Phone (786) 320-7111, Email:
mmarte@chewy.com) and (B) to c/o/ BC Partners, Inc., 667 Madison Avenue, New
York, New York 10064, Attn: Michael Chang (Phone (212) 891-2880, Email:
Michael.Chang@BCPartners.com) and David Leland (Phone (212) 891-2880, Email:
David.Leland@BCPartners.com);

(b) If to the Administrative Agent, to Wells Fargo Bank, National Association at
One Boston Place, 19th Floor, MAC J9214-180, Boston, MA 02108, Attn: Jai
Alexander, (Phone 617-854-4347, Email: jai.alexander@wellsfargo.com); and

(c) if to any other Lender, to it at its address (or fax number or email
address) set forth in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by fax or other electronic
transmission shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).

The Borrower may change its address, email or facsimile number for notices and
other communications hereunder by notice to the Administrative Agent, the
Administrative Agent may change its address, email or facsimile number for
notices and other communications hereunder by notice to the Borrower and any
Lender may change its address, email or facsimile number for notices and other
communications hereunder by notice to the Administrative Agent. Notices and
other communications to the Lenders hereunder may also be delivered or furnished
by electronic transmission (including email and Internet or intranet websites)
pursuant to procedures reasonably approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender pursuant to Article
II if such Lender, as applicable, has notified the Administrative Agent that it
is incapable of receiving notices under such Article by electronic transmission.

 

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Each Loan Party hereby appoints the Borrower as its agent for all purposes
relevant to this Agreement and each of the other Loan Documents, including the
giving and receipt of notices, it being understood that the Borrower will
receive the proceeds of the Initial Loans on the Effective Date.

Notwithstanding anything herein or in any other Loan Document providing for the
delivery of any Approved Electronic Communication by any other means, the Loan
Parties shall deliver all Approved Electronic Communications to the
Administrative Agent by properly transmitting such Approved Electronic
Communications in an electronic/soft medium in a format reasonably acceptable to
the Administrative Agent to Jai Alexander (Email: jai.alexander@wellsfargo.com)
or such other electronic mail address (or similar means of electronic delivery)
as the Administrative Agent may notify to the Borrower (which notice shall be
effective upon acknowledgement of receipt thereof by the Borrower). Nothing in
this paragraph shall prejudice the right of the Administrative Agent or any
Lender Party to deliver any Approved Electronic Communication to any Loan Party
in any manner authorized in this Agreement or to request that the Borrower
effect delivery in such manner.

Each of the Lenders and each Loan Party agrees that the Administrative Agent
may, but shall not be obligated to, make the Approved Electronic Communications
available to the Lender Parties by posting such Approved Electronic
Communications on IntraLinks™, SyndTrak or a substantially similar electronic
platform chosen by the Administrative Agent to be its electronic transmission
system (the “Approved Electronic Platform”). Although the Approved Electronic
Platform and its primary web portal are secured with generally-applicable
security procedures and policies implemented or modified by the Administrative
Agent from time to time (including, as of the Effective Date, a dual firewall
and a User ID/Password Authorization System) and the Approved Electronic
Platform is secured through a single-user-per-deal authorization method whereby
each user may access the Approved Electronic Platform only on a deal-by-deal
basis, each of the Lender Parties and each Loan Party acknowledges and agrees
that the distribution of material through an electronic medium is not
necessarily secure and that there are confidentiality and other risks associated
with such distribution. In consideration for the convenience and other benefits
afforded by such distribution and for the other consideration provided
hereunder, the receipt and sufficiency of which is hereby acknowledged, each of
the Lender Parties and each Loan Party hereby approves distribution of the
Approved Electronic Communications through the Approved Electronic Platform and
understands and assumes the risks of such distribution.

SECTION 9.02 Waivers; Amendments.

(a) No failure or delay by the Administrative Agent or any Lender in exercising
any right or power under any Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time. No notice or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances.

 

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(b) Except as provided in Section 2.12(b) with respect to any alternate rate of
interest, Section 2.18 with respect to any Incremental Commitments and
Section 2.22 with respect to any Permitted Amendment, neither any Loan Document
nor any provision thereof may be waived, amended or modified except, in the case
of this Agreement, pursuant to an agreement or agreements in writing entered
into by the Borrower, the Administrative Agent (to the extent that such waiver,
amendment or modification does not affect the rights, duties, privileges or
obligations of the Administrative Agent under this Agreement, the Administrative
Agent shall execute such waiver, amendment or other modification to the extent
approved by the Required Lenders) and the Required Lenders or, in the case of
any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders,
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender (it being understood that a waiver of
any Default, Event of Default, mandatory prepayment or mandatory reduction of
the Commitments shall not constitute an extension or increase of any Commitment
of any Lender), (ii) reduce the principal amount of any Loan (it being
understood that a waiver of any Default, Event of Default, mandatory prepayment
or mandatory reduction of the Commitments shall not constitute a reduction or
forgiveness in principal) or reduce the rate of interest thereon, or reduce any
fees payable hereunder, without the written consent of each Lender directly and
adversely affected thereby (it being understood that any change to the
definitions of Average Excess Availability or Average Revolving Loan Utilization
or in the component definitions thereof shall not constitute a reduction of
interest or fees), provided that only the consent of the Required Lenders shall
be necessary to waive any obligation of the Borrower to pay default interest
pursuant to Section 2.11(f), (iii) postpone the maturity of any Loan (it being
understood that a waiver of any Default, Event of Default, mandatory prepayment
or mandatory reduction of the Commitments shall not constitute an extension of
any maturity date), or any date for the payment of any interest or fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender directly and adversely affected thereby, (iv) change any
of the provisions of this Section without the written consent of each Lender
directly and adversely affected thereby, provided that any such change which is
in favor of a Class of Lenders holding Loans maturing after the maturity of
other Classes of Lenders (and only takes effect after the maturity of such other
Classes of Loans or Commitments) will require the written consent of the
Required Lenders with respect to each Class directly and adversely affected
thereby, (v) change any of the provisions of this Section or the percentage set
forth in the definition of “Required Lenders” or “Super Majority Lenders” or any
other provision of any Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vi) release all or substantially all the
value of the Guarantees under the Guarantee Agreement (except as expressly
provided in the Loan Documents) without the written consent of each Lender
(other than a Defaulting Lender or a Disqualified Lender), (vii) release all or
substantially all the Collateral from the Liens of the Security Documents,
without the written consent of each Lender (other than a Defaulting Lender or a
Disqualified Lender) (except as expressly provided in the Loan Documents),
(viii) increase any advance rates under the definition of Borrowing Base
(provided that the foregoing shall not impair the ability of the Administrative
Agent to add, remove, reduce or increase reserves against the ABL Priority
Collateral included in the Borrowing Base in its Permitted Discretion) without
the written consent of each Lender (other than a Defaulting Lender) adversely
affected thereby, (ix) change any of the provisions of Section 2.16(b) or
Section 7.02 without the written consent of each Lender (other than a Defaulting
Lender) directly and adversely affected thereby, (x) change the priority of the
ABL Priority Collateral to any priority subordinated to such initial priority
without the written consent of each Lender (other than a Defaulting Lender)
except as expressly provided in the Loan Documents, or (xi) other than as set
forth under clause (viii), change the definition of Borrowing Base (provided
that the foregoing shall not impair the ability of the Administrative Agent to
add, remove, reduce or increase reserves against the ABL Priority Collateral
included in the Borrowing Base in its Permitted Discretion), or any of the
component definitions thereof which result in increased Excess Availability
without the written consent of the Super Majority Lenders under the Facility;
provided, further, that (A) no such agreement shall amend, modify or

 

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otherwise affect the rights or duties of the Administrative Agent without the
prior written consent of the Administrative Agent, (B) no such agreement shall
amend, modify or otherwise affect the rights or duties of an Issuing Bank
without the prior written consent of such Issuing Bank, (C) no such agreement
shall amend, modify or otherwise affect the rights or duties of the Swingline
Lender without the prior written consent of the Swingline Lender, (D) the
Administrative Agent may, from time to time on and after the Effective Date,
without any further consent of any Lender, Issuing Bank or counterparty to any
Secured Cash Management Obligation, Secured Bank Product Obligation or Secured
Swap Obligation, enter into an ABL Intercreditor Agreement and amendments to,
amendments and restatements of, and/or replacements of, such ABL Intercreditor
Agreement, and enter into any other intercreditor agreement with the collateral
agent or other representatives of the holders of Indebtedness that is permitted
to be secured by a Lien on the Collateral that is permitted under this
Agreement, in each case in order to effect the first-priority Liens of the ABL
Priority Collateral and to provide for certain additional rights, obligations
and limitations in respect of, any Liens required by the terms of this Agreement
to be junior priority Liens or other Liens that are, in each case, incurred in
accordance with Article VI of this Agreement, and to establish certain relative
rights as between the holders of the Secured Obligations and the holders of the
Indebtedness secured by such Liens; provided that the definition of ABL Priority
Collateral shall not be amended or modified without the consent of the Required
Lenders, and (E) any provision of this Agreement or any other Loan Document may
be amended by an agreement in writing entered into by the Borrower and the
Administrative Agent to cure any ambiguity, omission, defect or inconsistency.
Notwithstanding the foregoing, (a) this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (i) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents;
provided that such credit facilities shall be pari passu or junior in terms of
priority of Collateral and payment with the Secured Obligations and (ii) to
include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders on substantially the same basis as the
Lenders prior to such inclusion, (b) this Agreement and other Loan Documents may
be amended or supplemented by an agreement or agreements in writing entered into
by the Administrative Agent and the Borrower or any Loan Party as to which such
agreement or agreements is to apply, without the need to obtain the consent of
any Lender, to include additional “parallel debt” or similar provisions, and any
authorizations or granting of powers by the Lenders and the other Secured
Parties in favor of the Administrative Agent, in each case required to create in
favor of the Administrative Agent any security interest contemplated to be
created under this Agreement, or to perfect any such security interest, where
the Administrative Agent shall have been advised by its counsel that such
provisions are necessary or advisable under local law for such purpose (with the
Borrower hereby agreeing to, and to cause its subsidiaries to, enter into any
such agreement or agreements upon reasonable request of the Administrative Agent
promptly upon such request) and (c) upon notice thereof by the Borrower to the
Administrative Agent with respect to the inclusion of any previously absent
financial maintenance covenant, this Agreement shall be amended by an agreement
in writing entered into by the Borrower and the Administrative Agent without the
need to obtain the consent of any Lender to include such covenant on the date of
the incurrence of the applicable Indebtedness to the extent required by the
terms of such definition or section.

(c) In connection with any proposed amendment, modification, waiver or
termination (a “Proposed Change”) requiring the consent of all Lenders or all
directly and adversely affected Lenders, if the consent of the Required Lenders
to such Proposed Change is obtained, but the consent to such Proposed Change of
other Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in paragraph (b) of this Section being
referred to as a “Non-Consenting Lender”), then, so long as the Lender that is
acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may,
at its sole expense and effort, upon notice to such Non-Consenting Lender and
the Administrative Agent, require such Non-Consenting Lender to assign and
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without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an Eligible Assignee that shall assume such obligations (which Eligible
Assignee may be another Lender, if a Lender accepts such assignment), provided
that (a) the Borrower shall have received the prior written consent of the
Administrative Agent to the extent such consent would be required under
Section 9.04(b) for an assignment of Loans or Commitments, as applicable, which
consent shall not unreasonably be withheld, (b) such Non-Consenting Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts, payable to
it hereunder from the Eligible Assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (c) unless waived, the Borrower or such Eligible Assignee
shall have paid to the Administrative Agent the processing and recordation fee
specified in Section 9.04(b).

(d) Notwithstanding anything in this Agreement or the other Loan Documents to
the contrary, the Loans of any Lender that is at the time a Defaulting Lender
shall not have any voting or approval rights under the Loan Documents and shall
be excluded in determining whether all Lenders (or all Lenders of a Class), all
affected Lenders (or all affected Lenders of a Class) or the Required Lenders
have taken or may take any action hereunder (including any consent to any
amendment or waiver pursuant to this Section 9.02); provided that (i) any
waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender that affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender and
(ii) the Commitment of such Defaulting Lender may not be increased or extended
without the consent of such Defaulting Lender (it being understood that any
Commitments or 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).

(e) [Reserved].

(f) Notwithstanding anything to the contrary contained in this Section 9.02, the
Guarantee, the Security Documents and related documents executed by Subsidiaries
in connection with this Agreement and the other Loan Documents 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 the Guarantee, Security Documents or other document to be
consistent with this Agreement and the other Loan Documents (including by adding
additional parties as contemplated herein).

SECTION 9.03 Expenses; Indemnity; Damage Waiver.

(a) The Borrower shall pay, if the Effective Date occurs, (i) all reasonable and
documented or invoiced out of pocket expenses incurred by the Administrative
Agent and its Affiliates (without duplication), including the reasonable fees,
charges and disbursements of Davis Polk & Wardwell LLP and to the extent
reasonably determined by the Administrative Agent to be necessary one local
counsel in each applicable jurisdiction or otherwise retained with the
Borrower’s consent (not to be unreasonably withheld, conditioned or delayed), in
each case for the Administrative Agent, and to the extent retained with the
Borrower’s consent (not to be unreasonably withheld, conditioned or delayed),
consultants, in connection with their due diligence investigation, the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof and (ii) all reasonable and documented or invoiced
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of counsel for the Administrative
Agent and the Lenders, in connection with the enforcement or protection of its
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this Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans; provided that such counsel shall be
limited to one lead counsel and one local counsel in each applicable
jurisdiction and, in the case of an actual or perceived conflict of interest,
one additional counsel per affected party.

(b) The Borrower shall indemnify each Agent, each Lender and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and reasonable and documented or invoiced out-of-pocket
fees and expenses of one counsel and one local counsel in each applicable
jurisdiction (and, in the case of an actual or perceived conflict of interest,
where the Indemnitee affected by such conflict notifies the Borrower of the
existence of such conflict and thereafter retains its own counsel, one
additional counsel for such affected Indemnitee) for all Indemnitees (which may
include a single special counsel acting in multiple jurisdictions), incurred by
or asserted against any Indemnitee by any third party or by the Borrower or any
Subsidiary arising out of, in connection with, or as a result of (i) the
execution or delivery of any Letter of Credit, Issuer Document, Loan Document or
any other agreement or instrument contemplated thereby, the performance by the
parties to the Letters of Credit, Issuer Documents, Loan Documents of their
respective obligations thereunder or the consummation of the Transactions or any
other transactions contemplated thereby, (ii) any Loan or Letter of Credit or
the use of the proceeds therefrom, (iii) to the extent in any way arising from
or relating to any of the foregoing, any actual or alleged presence or Release
of Hazardous Materials on, at or from any property currently or formerly owned
or operated by the Borrower or any Restricted Subsidiary, or any other
Environmental Liability, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any Subsidiary and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (i) are determined by a court of competent jurisdiction by
final, non-appealable judgment to have resulted from the gross negligence, bad
faith or willful misconduct of, or a material breach of the Letters of Credit,
Issuer Documents or Loan Documents by, such Indemnitee or its Related Parties or
(ii) any dispute between and among indemnified persons that does not involve an
act or omission by the Borrower or any of the Restricted Subsidiaries except
that each Agent, the Lead Arrangers and the Joint Bookrunners shall be
indemnified in their capacities as such to the extent that none of the
exceptions set forth in clause (i) applies to such Person at such time. This
paragraph shall not apply to Taxes other than any Taxes with respect to losses,
claims or damages arising from any non-Tax claim.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent under paragraph (a) or (b) of this Section,
and without limiting the Borrower’s obligation to do so, each Lender severally
agrees to pay to the Administrative Agent such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent in its
capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be
determined based upon its share of the aggregate outstanding Loans and unused
Commitments at the time. The obligations of the Lenders under this paragraph
(c) are subject to the last sentence of Section 2.02 (which shall apply mutatis
mutandis to the Lenders’ obligations under this paragraph (c)).

(d) To the fullest extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee (i) for any damages
arising from the use by others of information or other materials obtained
through telecommunications, electronic or other information transmission systems
(including the Platform or otherwise via the Internet), provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
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competent jurisdiction by final, non-appealable judgment to have resulted from
the gross negligence or willful misconduct of, or a material breach of the
Letters of Credit, Issuer Documents or Loan Documents by, such Indemnitee or its
Related Parties, or (ii) on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, any Letters of Credit,
Issuer Document, Loan Document or any agreement or instrument contemplated
thereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.

(e) All amounts due under this Section shall be payable not later than 10
Business Days after written demand therefor; provided, however, that any
Indemnitee shall promptly refund an indemnification payment received hereunder
to the extent that there is a final judicial determination that such Indemnitee
was not entitled to indemnification with respect to such payment pursuant to
this Section 9.03.

SECTION 9.04 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 (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. 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 paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) (i) Subject to the conditions set forth in paragraphs (b)(ii) and (f) below,
any Lender may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it under the Facility) with the
prior written consent (such consent (except with respect to assignments to
competitors of the Borrower) not to be unreasonably withheld or delayed) of
(A) the Borrower, provided that no consent of the Borrower shall be required
(x) if an Event of Default under Section 7.01(a), (b), (h) or (i) has occurred
and is continuing or (y) for assignments to existing Revolving Lenders; and
provided, further, that the Borrower shall have the right to withhold its
consent to any assignment if, in order for such assignment to comply with
applicable law, the Borrower would be required to obtain the consent of, or make
any filing or registration with, any Governmental Authority, (B) the
Administrative Agent, and (C) the Swingline Lender, the Administrative Agent,
and each Issuing Bank under the Facility. Notwithstanding anything in this
Section 9.04 to the contrary, if the consent of the Borrower is otherwise
required by this paragraph with respect to any assignment of Loans, and the
Borrower has not given the Administrative Agent written notice of its objection
to such assignment within 15 Business Days after written notice to the Borrower,
the Borrower shall be deemed to have consented to such assignment.

(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender, an Affiliate or branch of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the trade date specified in the Assignment and Assumption with
respect to such assignment or, if no trade date is so specified, as of the date
the Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent) shall not be less than the Dollar Equivalent of
$10,000,000 and integral multiples of the Dollar Equivalent

 

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of $1,000,000 in excess thereof, in each case unless the Borrower and the
Administrative Agent otherwise consent (such consent not to be unreasonably
withheld or delayed), provided that no such consent of the Borrower shall be
required if an Event of Default under Section 7.01(a), (b), (h) or (i) has
occurred and is continuing, (B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement, provided that this clause (B) shall not be
construed to prohibit assignment of a proportionate part of all the assigning
Lender’s rights and obligations in respect of one Class of Commitments or Loans,
(C) 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 (x) the Administrative Agent may,
in its sole discretion, elect to waive such processing and recordation fee in
the case of any assignment and (y) such fee shall not apply in respect of
assignments by any Person who was a Revolving Lender (or an Affiliate of a
Person who was a Revolving Lender) on the Effective Date); provided that
assignments made pursuant to Section 2.17(b) or Section 9.02(c) shall not
require the signature of the assigning Lender to become effective and (D) the
assignee, if it shall not be a Lender, shall deliver to the Borrower and the
Administrative Agent any tax forms required by Section 2.15(e) and shall deliver
to the Administrative Agent an Administrative Questionnaire in which the
assignee designates one or more credit contacts to whom all syndicate-level
information (which may contain material non-public information about the
Borrower, the Loan Parties and their Related Parties or their respective
securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws,
including Federal and state securities laws.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(v)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party hereto 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 (and
subject to the obligations and limitations of) Sections 2.13, 2.14 and 2.15 and
9.03 and to any fees payable hereunder that have accrued for such Lender’s
account but have not yet been paid). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 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 paragraph
(c)(i) of this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it, and principal and interest amount 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. In addition, the Administrative Agent shall maintain on the
Register information regarding the designation, and revocation of designation,
of any Lender as a Defaulting Lender. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

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(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire and any tax forms required by Section 2.15(e) (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

(vi) The words “execution,” “signed,” “signature” and words of like import in
any Assignment and Assumption shall be deemed to include electronic signatures
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act or any other similar state laws based on the Uniform
Electronic Transactions Act.

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative
Agent, any Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other Persons (other than to a Person that is not an Eligible
Assignee; provided that for the purposes of this provision, Disqualified Lenders
shall be deemed to be Eligible Assignees unless a list of Disqualified Lenders
has been made available to all Lenders by the Borrower) (a “Participant”),
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) 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 the Loan Documents and to approve any amendment,
modification or waiver of any provision of the 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, modification or waiver
described in the first proviso to Section 9.02(b) that directly and adversely
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of (and
subject to the obligations and limitations of) Sections 2.13, 2.14 and 2.15 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided that such Participant agrees to be subject to
Section 9.08 as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.13 or Section 2.15 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 consent (not to be unreasonably withheld or delayed).

(iii) Each Lender that sells a participation 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 stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”), provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register to any Person (including the identity of any Participant or
any information relating to a Participant’s interest in any Commitments, Loans
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Document) except to the extent that such disclosure is necessary in connection
with a Tax audit or other proceeding to establish that such Commitment, Loan, or
other obligation is in registered form under Section 5f.103-1(c) of the United
States Treasury Regulations. The entries in the Participant Register shall be
conclusive (absent manifest error), and each Person whose name is recorded in
the Participant Register pursuant to the terms hereof shall be treated as a
Participant for all purposes of this Agreement, notwithstanding notice to the
contrary.

(d) Any Lender may, without the consent of the Borrower or the Administrative
Agent, at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank or
other central bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

(e) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPV”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement, provided that (i) nothing
herein shall constitute a commitment by any SPV to make any Loan and (ii) if an
SPV elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPV hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPV shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, such party will not
institute against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 9.04, any SPV
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity or credit support to or for the account of such SPV
to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPV.

(f) No Lender may assign any portion of its Commitments or Loans hereunder to
any Disqualified Lender or to the Borrower or any Affiliate of the Borrower.

(g) Notwithstanding anything herein or in any other Loan Document to the
contrary, the Administrative Agent shall not (i) except to the extent of its own
gross negligence or willful misconduct in taking or failing to take any action,
be responsible for, have any liability with respect to, or have any duty to
ascertain, inquire into, monitor or enforce, compliance with the provisions of
this Agreement relating to Disqualified Lenders or have any liability with
respect to or arising out of any assignment or participation of Loans or
Commitments to any Disqualified Lender and (ii) except to the extent arising out
of its or its Related Parties’ gross negligence or willful misconduct, have any
liability with respect to any disclosure of confidential information to any
Disqualified Lender.

 

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SECTION 9.05 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to any Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.13, 2.14 and 2.15 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Commitments or the termination of this Agreement or any
provision hereof. Notwithstanding the foregoing or anything else to the contrary
set forth in this Agreement, in the event that, in connection with the
refinancing or repayment in full of the credit facilities provided for herein,
an Issuing Bank shall have provided to the Administrative Agent a written
consent to the release of the Revolving Lenders from their obligations hereunder
with respect to any Letter of Credit issued by such Issuing Bank (whether as a
result of the obligations of the Borrower (and any other account party) in
respect of such Letter of Credit having been collateralized in full by a deposit
of cash with such Issuing Bank or being supported by a letter of credit that
names such Issuing Bank as the beneficiary thereunder, or otherwise), then from
and after such time such Letter of Credit shall cease to be a “Letter of Credit”
outstanding hereunder for all purposes of this Agreement and the other Loan
Documents, and the Revolving Lenders shall be deemed to have no participations
in such Letter of Credit, and no obligations with respect thereto, under
Section 2.05(e) or (f).

SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent or the syndication of the Loans and Commitments
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Agreement.

SECTION 9.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08 Right of Setoff. If an Event of Default under Section 7.01(a), (b),
(h) or (i) shall have occurred and be continuing, each Lender and each Issuing
Bank is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, in whatever currency) at any time
held and other obligations (in whatever currency) at any time owing by such
Lender or Issuing Bank to or for the credit or the account of the Borrower
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under this Agreement held by such Lender or Issuing Bank, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations are owed to a branch or office of such Lender or
Issuing Bank different from the branch or office holding such deposit or
obligated on such Indebtedness. The applicable Lender or Issuing Bank shall
notify the Borrower and the Administrative Agent of such setoff and application,
provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such setoff and application under this Section. The
rights of each Lender and each Issuing Bank under this Section are in addition
to other rights and remedies (including other rights of setoff) that such Lender
or Issuing Bank may have. Notwithstanding the foregoing, no amount set off from
any Guarantor shall be applied to any Excluded Swap Obligation of such
Guarantor.

SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process; Process
Agent.

(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each of parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of the Supreme Court of
the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York sitting in New York County,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to any Loan Document, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in any Loan Document shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to any Loan Document against the Borrower or its properties
in the courts of any jurisdiction.

(c) Each of parties hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to any Loan Document in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in any Loan Document
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

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SECTION 9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12 Confidentiality.

(a) The Administrative Agent and the Lenders agree to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees,
trustees and agents, including accountants, legal counsel and other agents and
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 and any failure of such Persons to comply
with this Section 9.12 shall constitute a breach of this Section 9.12 by the
relevant Administrative Agent or the relevant Lender, as applicable), (b) (x) to
the extent requested by any governmental or regulatory (including
self-regulatory) authority, required by applicable law or by any subpoena or
similar legal process or (y) necessary in connection with the exercise of
remedies; provided that, (i) in each case, unless prohibited by applicable law
or court order, each Lender and the Administrative Agent shall notify the
Borrower of any request by any governmental or regulatory (including
self-regulatory) agency or representative thereof (other than any such request
in connection with an examination of the financial condition of such Lender by
such governmental or regulatory (including self-regulatory) agency or other
examinations of such Lender by such governmental regulatory (including
self-regulatory) agency) for disclosure of any such non-public information prior
to disclosure of such information and (ii) in the case of clause (y) only, each
Lender and the Administrative Agent shall use reasonable best efforts to ensure
that such Information is kept confidential in connection with the exercise of
such remedies, and provided, further, that in no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
by the Borrower or any of their Subsidiaries, (c) to any other party to this
Agreement, (d) subject to an agreement containing confidentiality undertakings
substantially similar to those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any Swap Agreement relating to any Loan Party
or their Subsidiaries and its obligations under the Loan Documents, (e) with the
consent of the Borrower, in the case of Information provided by the Borrower or
any Subsidiary, (f) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower, (g) to any ratings agency or the CUSIP
Service Bureau on a confidential basis, (h) to the extent that such information
is independently developed by the Administrative Agent or any Lender or (i) for
purposes of establishing a “due diligence” defense. In addition, the Agents and
the Lenders may disclose the existence of this Agreement and publicly available
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Agents and the
Lenders in connection with the administration and management of this Agreement,
the other Loan Documents, the Commitments and the Borrowings hereunder. For the
purposes of this Section, “Information” means all information received from the
Borrower relating to the Borrower, any Subsidiary or their business, other than
any such information that is available to the Administrative Agent or any Lender
on a nonconfidential basis prior to disclosure by the Borrower. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

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(b) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12(a)
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER, THE LOAN PARTIES AND THEIR 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.

(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS FURNISHED BY
THE BORROWER OR THE APPLICABLE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT, WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
REPRESENTS TO THE BORROWER AND THE APPLICABLE AGENT THAT IT HAS IDENTIFIED IN
ITS ADMINISTRATIVE 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 9.13 Patriot Act. Each Lender, each Issuing Bank and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies each Loan
Party that pursuant to the requirements of Title III of the USA Patriot Act; the
Beneficial Ownership Regulation, and other applicable anti-money laundering,
anti-terrorist financing, economic or trade sanctions and “know your client”
policies, regulations, laws or rules (collectively, including any guidelines or
orders thereunder, “AML Legislation”) it is required to obtain, verify and
record information that identifies each Loan Party, which information includes
the legal name and address of such Loan Party and other information that will
allow such Lender, Issuing Bank or Administrative Agent, as applicable, to
identify each Loan Party in accordance with the Title III of the USA Patriot
Act; the Beneficial Ownership Regulation and/or the AML Legislation.

SECTION 9.14 Judgment Currency.

(a) If, for the purpose of obtaining judgment in any court, it is necessary to
convert a sum owing hereunder in one currency into another currency, each party
hereto agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.

(b) The obligations of the Loan Parties in respect of any sum due to any party
hereto or any holder of any obligation owing hereunder (the “Applicable
Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due
hereunder (the “Agreement Currency”), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the applicable Loan Parties
agree, as a separate obligation and notwithstanding any such judgment, to
indemnify the Applicable Creditor against such loss. The obligations of the
Borrower under this Section shall survive the termination of this Agreement and
the payment of all other amounts owing hereunder.

 

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SECTION 9.15 Release of Liens and Guarantees. A Loan Party shall automatically
be released from its obligations under the Loan Documents, and all security
interests created by the Security Documents in Collateral owned by such
Subsidiary Loan Party shall be automatically released, (1) upon the consummation
of any transaction permitted by this Agreement as a result of which such
Subsidiary Loan Party ceases to be a Restricted Subsidiary (including pursuant
to a merger with a Subsidiary that is not a Loan Party or a designation as an
Unrestricted Subsidiary) or (2) upon the request of the Borrower, in connection
with a transaction permitted under this Agreement, as a result of which such
Subsidiary Loan party ceases to be a wholly-owned Subsidiary; provided that, in
either case, if ABL Priority Collateral with a value in excess of $30,000,000 is
owned by such subsidiary, the Borrower shall deliver an updated Borrowing Base
Certificate giving pro forma effect thereto. Upon (i) any sale or other transfer
by any Loan Party (other than to the Borrower or any Subsidiary Loan Party) of
any Collateral in a transaction permitted under this Agreement or (ii) the
effectiveness of any written consent to the release of the security interest
created under any Security Document in any Collateral or the release of any Loan
Party from its Guarantee under the Guarantee Agreement pursuant to Section 9.02,
the security interests in such Collateral created by the Security Documents or
such guarantee shall be automatically released. Upon termination of the
aggregate Commitments and payment in full of all Loan Document Obligations
(other than contingent indemnification obligations), all obligations under the
Loan Documents and all security interests created by the Security Documents
shall be automatically released. In connection with any termination or release
pursuant to this Section, the Administrative Agent shall execute and deliver to
any Loan Party, at such Loan Party’s expense, all documents that such Loan Party
shall reasonably request to evidence such termination or release. Any execution
and delivery of documents pursuant to this Section shall be without recourse to
or warranty by the Administrative Agent. The Lenders irrevocably authorize the
Administrative Agent to release or subordinate any Lien on any property granted
to or held by the Administrative Agent under any Loan Document to the holder of
any Lien on such property that is permitted by Section 6.02(iv) or (xii) to the
extent required by the terms of the obligations secured by such Liens pursuant
to documents reasonably acceptable to the Administrative Agent).

SECTION 9.16 No Fiduciary Relationship. The Borrower and each Loan Party, on
behalf of itself and its subsidiaries, agrees that in connection with all
aspects of the transactions contemplated hereby and any communications in
connection therewith, the Borrower, each Loan Party, the other Subsidiaries and
their Affiliates, on the one hand, and the Administrative Agent, the Lenders,
the Issuing Banks and their respective Affiliates and branches, on the other
hand, will have a business relationship that does not create, by implication or
otherwise, any fiduciary duty on the part of the Administrative Agent, the
Lenders, the Issuing Banks or any of their respective Affiliates or branches,
and no such duty will be deemed to have arisen in connection with any such
transactions or communications.

SECTION 9.17 Secured Cash Management Obligations, Secured Bank Product
Obligations and Secured Swap Obligations. Except as otherwise expressly set
forth herein or in any Guarantee or any Security Document, no party to any
Secured Cash Management Obligation, Secured Bank Product Obligation or Secured
Swap Obligation that obtains the benefits of Section 7.02, any Guarantee or any
Collateral by virtue of the provisions hereof or of any Guarantee or any
Security Document shall have any right to notice of any action or to consent to,
direct or object to any action hereunder or under any other Loan Document or
otherwise in respect of the Collateral (including the release or impairment of
any Collateral) other than in its capacity as a Lender and, in such case, only
to the extent expressly provided in the Loan Documents. Notwithstanding any
other provision of this Article IX to the contrary, the Administrative Agent
shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Secured Cash Management
Obligations, Secured Bank Product Obligations and Secured Swap Obligations
unless the Administrative Agent has received written notice of such Secured Cash
Management Obligations, Secured Bank Product Obligations or Secured Swap
Obligations, together with such supporting documentation as the Administrative
Agent may request, from the applicable Agent, Lender or Affiliate of an Agent or
Lender party thereto.

 

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SECTION 9.18 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by: (a) the application of any Write-Down and Conversion Powers by an
EEA Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if
applicable: (i) a reduction in full or in part or cancellation of any such
liability; (ii) a conversion of all, or a portion of, such liability into shares
or other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or (iii) the variation of the terms
of such liability in connection with the exercise of the write-down and
conversion powers of any EEA Resolution Authority.

SECTION 9.19 Certain ERISA Matters

(i) Each Lender (x) represents and warrants, as of the date such Person became a
Lender under the Agreement and (y) covenants, from the date such Person became a
Lender under the Agreement to the date such Person ceases being a Lender party
to the Agreement, for the benefit of the Administrative Agent and its
Affiliates, and not, for the avoidance of doubt, to or for the benefit of the
Borrower or any other Loan Party, that at least one of the following is and will
be true:

(1) such Lender is not using “plan assets” (within the meaning of 29 CFR §
2510.3- 101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans
with respect to such Lender’s entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments or this
Agreement,

(2) the transaction exemption set forth in one or more prohibited transaction
class exemption issued by the U.S. Department of Labor, as any such exemption
may be amended from time to time (“PTEs”), such as PTE 84-14 (a class exemption
for certain transactions determined by independent qualified professional asset
managers), PTE 95-60 (a class exemption for certain transactions involving
insurance company general accounts), PTE 90-1 (a class exemption for certain
transactions involving insurance company pooled separate accounts), PTE 91-38 (a
class exemption for certain transactions involving bank collective investment
funds) or PTE 96-23 (a class exemption for certain transactions determined by
in-house asset managers), is applicable with respect to such Lender’s entrance
into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and the Agreement,

(3) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PT E 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Letters of
Credit, the Commitments and the Agreement, (C) the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and the Agreement satisfies the requirements of sub-sections
(b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such
Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied
with respect to such Lender’s entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments and the
Agreement, or

 

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(4) such other representation, warranty and covenant as may be agreed in writing
between the Administrative Agent, the Borrower, and such Lender.

(ii) In addition, unless either (1) sub-clause (1) in the immediately preceding
clause (i) is true with respect to a Lender or (2) a Lender has provided another
representation, warranty and covenant in accordance with sub-clause (4) in the
immediately preceding clause (i), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent and not, for the avoidance of doubt, to or for the benefit
of the Borrower or any other Loan Party, that the Administrative Agent is not a
fiduciary with respect to the assets of such Lender involved in such Lender’s
entrance into, participation in, administration of and performance of the Loans,
the Letters of Credit, the Commitments and this Agreement (including in
connection with the reservation or exercise of any rights by the Administrative
Agent under this Agreement, any Loan Document or any documents related hereto or
thereto).

SECTION 9.20 Intercreditor Agreements.

(a) Notwithstanding anything to the contrary herein, the ABL Intercreditor
Agreement shall be deemed to be reasonable and acceptable to the Administrative
Agent and the Lenders, and the Administrative Agent and the Lenders shall be
deemed to have consented to the use of such intercreditor agreement (and to the
Administrative Agent’s execution thereof) in connection with any Indebtedness
permitted to be incurred, issued and/or assumed by the Borrower or any of its
Subsidiaries pursuant to Section 6.01 and expressly contemplated as being
subject to the ABL Intercreditor Agreement.

Notwithstanding anything to the contrary set forth herein, to the extent the
Administrative Agent enters into an ABL Intercreditor Agreement or any other
intercreditor agreement in accordance with the terms hereof, this Agreement will
be subject to the terms and provisions of such ABL Intercreditor Agreement or
other intercreditor agreement. In the event of any inconsistency between the
provisions of this Agreement and any such ABL Intercreditor Agreement or other
Intercreditor Agreement, the provisions of the ABL Intercreditor Agreement or
such other intercreditor agreement govern and control. The Lenders acknowledge
and agree that the Administrative Agent is authorized to, and the Administrative
Agent agrees that with respect to any applicable secured Indebtedness permitted
to be incurred under this Agreement and expressly contemplated as being subject
to such ABL Intercreditor Agreement or such other intercreditor agreement, upon
request by the Borrower, it shall, enter into an ABL Intercreditor Agreement or
any other intercreditor agreement, as applicable, in accordance with the terms
hereof. The Lenders hereby authorize the Administrative Agent to (a) enter into
any such ABL Intercreditor Agreement or any such other intercreditor agreement,
(b) bind the Lenders on the terms set forth in such ABL Intercreditor Agreement
or any such other intercreditor agreement and (c) perform and observe its
obligations under such ABL Intercreditor Agreement or any such other
intercreditor agreement.

SECTION 9.21 Acknowledgement Regarding any Supported OFCs. To the extent that
the Loan Documents provide support, through a guarantee or otherwise, for Swap
Agreements or any other agreement or instrument that is a QFC (such support,
“QFC Credit Support” and each such QFC a “Supported QFC”), the parties
acknowledge and agree as follows with respect to the resolution power of the
Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act
and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(together with the regulations promulgated thereunder, the “U.S. Special
Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support
(with the provisions below applicable notwithstanding that the Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the
State of New York and/or of the United States or any other state of the United
States):

 

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(a) In the event a Covered Entity that is party to a Supported QFC (each, a
“Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such
QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution
Regime if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by the laws of the United
States or a state of the United States. In the event a Covered Party or a BHC
Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under the Loan Documents that might
otherwise apply to such Supported QFC or any QFC Credit Support that may be
exercised against such Covered Party are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if the Supported QFC and the Loan Documents were governed by
the laws of the United States or a state of the United States. Without
limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

(b) As used in this Section 9.21, the following terms have the following
meanings:

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

 

  (i)

a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b);

 

  (ii)

a “covered bank” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 47.3(b); or

 

  (iii)

a “covered FSI” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

[Signature pages follow.]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

CHEWY, INC.,

as the Borrower

By:  

/s/ Mario Marte                

Name:   Mario Marte Title:   Chief Financial Officer

 

[Signature Page to ABL Credit Agreement]

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WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, an Issuing Bank
and a Revolving Lender By:  

/s/ Jai Alexander

Name:   Jai Alexander Title:   Director

 

[Signature Page to ABL Credit Agreement]

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JPMorgan Chase Bank, N.A., as an Issuing Bank and a Revolving Lender By:  

/s/ John Kushnerick

  Name: John Kushnerick   Title: Executive Director

 

[Signature Page to ABL Credit Agreement]

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Bank of America, N.A., as an Issuing Bank and a Revolving Lender By:  

/s/ Peter M. Walther

  Name: Peter M. Walther   Title: Senior Vice President

 

 

[Signature Page to ABL Credit Agreement]

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UBS AG, Stamford Branch, as Revolving Lender By:  

/s/ Darlene Arias

  Name: Darlene Arias   Title: Director By:  

/s/ Houssem Daly

  Name: Houssem Daly   Title: Associate Director

 

 

[Signature Page to ABL Credit Agreement]

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MORGAN STANLEY SENIOR FUNDING, INC., as a Revolving Lender By:  

/s/ Michael King

  Name: Michael King   Title: Vice President

 

 

[Signature Page to ABL Credit Agreement]

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Royal Bank of Canada as a Revolving Lender By:  

/s/ Pierre Noriega

  Name: Pierre Noriega   Title: Authorized Signatory

 

[Signature Page to ABL Credit Agreement]

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Barclays Bank PLC, as a Revolving Lender By:  

/s/ Christopher Aitkin

  Name: Christopher Aitkin   Title: Vice President

 

[Signature Page to ABL Credit Agreement]