Exhibit 10.40

EXECUTION VERSION

 

 

 

$145,000,000

CREDIT AGREEMENT

dated as of

June 11, 2013,

among

SCHOOL SPECIALTY, INC.,

as Borrower

THE LENDERS PARTY HERETO

and

CREDIT SUISSE AG,

as Administrative Agent and Collateral Agent

CREDIT SUISSE SECURITIES (USA) LLC

as Sole Bookrunner and Sole Lead Arranger

 

 

 

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Table of Contents

 

      Page   ARTICLE I    DEFINITIONS   

SECTION 1.01. Defined Terms

     1   

SECTION 1.02. Terms Generally

     31   

SECTION 1.03. Pro Forma Calculations

     31   

SECTION 1.04. Classification of Loans and Borrowings

     33    ARTICLE II    THE CREDITS   

SECTION 2.01. Commitments

     33   

SECTION 2.02. Loans

     33   

SECTION 2.03. Borrowing Procedure

     34   

SECTION 2.04. Evidence of Debt; Repayment of Loans

     34   

SECTION 2.05. Fees

     35   

SECTION 2.06. Interest on Loans

     35   

SECTION 2.07. Default Interest

     35   

SECTION 2.08. Alternate Rate of Interest

     36   

SECTION 2.09. Termination of Term Loan Commitments

     36   

SECTION 2.10. Conversion and Continuation of Borrowings

     36   

SECTION 2.11. Repayment of Term Borrowings

     37   

SECTION 2.12. Voluntary Prepayment

     37   

SECTION 2.13. Mandatory Prepayments

     38   

SECTION 2.14. Increased Costs; Capital Adequacy

     39   

SECTION 2.15. Change in Legality

     40   

SECTION 2.16. Breakage

     41   

SECTION 2.17. Pro Rata Treatment

     41   

SECTION 2.18. Sharing of Setoffs

     41   

SECTION 2.19. Payments

     42   

SECTION 2.20. Taxes

     42   

SECTION 2.21. Assignment of Commitments under Certain Circumstances; Duty to
Mitigate

     46   

SECTION 2.22. Incremental Facilities

     47   

SECTION 2.23. Amend and Extend Transactions

     48    ARTICLE III    REPRESENTATIONS AND WARRANTIES   

SECTION 3.01. Organization; Powers

     49   

SECTION 3.02. Authorization

     50   

SECTION 3.03. Enforceability

     50   

SECTION 3.04. Governmental Approvals

     50   

SECTION 3.05. Financial Statements

     50   

SECTION 3.06. No Material Adverse Effect

     51   

 

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SECTION 3.07. Title to Properties; Possession under Leases

     51   

SECTION 3.08. Subsidiaries

     52   

SECTION 3.09. Litigation; Compliance with Laws

     52   

SECTION 3.10. Agreements

     52   

SECTION 3.11. Federal Reserve Regulations

     52   

SECTION 3.12. Investment Company Act

     52   

SECTION 3.13. Use of Proceeds

     52   

SECTION 3.14. Taxes

     52   

SECTION 3.15. No Material Misstatements

     53   

SECTION 3.16. Employee Benefit Plans

     53   

SECTION 3.17. Environmental Matters

     53   

SECTION 3.18. Insurance

     54   

SECTION 3.19. Security Documents

     54   

SECTION 3.20. Location of Real Property and Leased Premises

     55   

SECTION 3.21. Intellectual Property

     55   

SECTION 3.22. Labor Matters

     55   

SECTION 3.23. Solvency

     55   

SECTION 3.24. Senior Indebtedness

     55   

SECTION 3.25. Sanctioned Persons

     55   

SECTION 3.26. Foreign Corrupt Practices Act

     55   

SECTION 3.27. Anti-Terrorism Law

     56    ARTICLE IV    CONDITIONS OF LENDING   

SECTION 4.01. Conditions of Borrowing

     56    ARTICLE V    AFFIRMATIVE COVENANTS   

SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties

     59   

SECTION 5.02. Insurance

     59   

SECTION 5.03. Obligations and Taxes

     60   

SECTION 5.04. Financial Statements, Reports, etc.

     61   

SECTION 5.05. Litigation and Other Notices

     62   

SECTION 5.06. Information Regarding Collateral

     63   

SECTION 5.07. Maintaining Records; Access to Properties and Inspections;
Maintenance of Ratings

     63   

SECTION 5.08. Use of Proceeds

     63   

SECTION 5.09. Employee Benefits

     63   

SECTION 5.10. Compliance with Environmental Laws

     64   

SECTION 5.11. Further Assurances

     64   

SECTION 5.12. Interest Rate Protection

     65   

SECTION 5.13. Post-Closing Obligations.

     65   

 

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ARTICLE VI    NEGATIVE COVENANTS   

SECTION 6.01. Indebtedness

     65   

SECTION 6.02. Liens

     67   

SECTION 6.03. Sale and Lease-Back Transactions

     69   

SECTION 6.04. Investments, Loans and Advances

     69   

SECTION 6.05. Mergers and Consolidations

     71   

SECTION 6.06. Dispositions

     71   

SECTION 6.07. Restricted Payments; Restrictive Agreements

     73   

SECTION 6.08. Transactions with Affiliates

     74   

SECTION 6.09. Business of the Borrower and Subsidiaries

     75   

SECTION 6.10. Other Indebtedness and Agreements

     75   

SECTION 6.11. Capital Expenditures

     75   

SECTION 6.12. Interest Coverage Ratio

     76   

SECTION 6.13. Maximum Net Total Leverage Ratio

     76   

SECTION 6.14. Fiscal Year

     77    ARTICLE VII    EVENTS OF DEFAULT   

SECTION 7.01. Events of Default

     77   

SECTION 7.02. Application of Proceeds

     79   

SECTION 7.03. Right to Cure

     79    ARTICLE VIII    THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT   

SECTION 8.01. Appointment and Authority

     80   

SECTION 8.02. Rights as a Lender

     80   

SECTION 8.03. Exculpatory Provisions

     80   

SECTION 8.04. Reliance by Administrative Agent

     81   

SECTION 8.05. Delegation of Duties

     81   

SECTION 8.06. Resignation of the Administrative Agent

     81   

SECTION 8.07. Non-Reliance on Administrative Agent and Other Lenders

     82   

SECTION 8.08. No Other Duties, etc.

     82   

SECTION 8.09. Agent May File Proofs of Claim

     82   

SECTION 8.10. Collateral and Guarantee Matters

     83   

SECTION 8.11. Intercreditor Agreement

     84    ARTICLE IX    MISCELLANEOUS   

SECTION 9.01. Notices; Electronic Communications

     84   

SECTION 9.02. Survival of Agreement

     86   

SECTION 9.03. Binding Effect

     87   

 

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SECTION 9.04. Successors and Assigns

     87   

SECTION 9.05. Expenses; Indemnity

     92   

SECTION 9.06. Right of Setoff

     93   

SECTION 9.07. Waivers; Amendment

     93   

SECTION 9.08. Interest Rate Limitation

     95   

SECTION 9.09. Entire Agreement

     95   

SECTION 9.10. WAIVER OF JURY TRIAL

     95   

SECTION 9.11. Severability

     96   

SECTION 9.12. Counterparts

     96   

SECTION 9.13. Headings

     96   

SECTION 9.14. Applicable Law

     96   

SECTION 9.15. Jurisdiction; Consent to Service of Process

     96   

SECTION 9.16. Electronic Execution of Assignments

     97   

SECTION 9.17. Confidentiality

     97   

SECTION 9.18. Lender Action

     98   

SECTION 9.19. USA PATRIOT Act Notice

     98   

SECTION 9.20. No Fiduciary Duty

     98   

SECTION 9.21. Release of Collateral and Guarantees

     98   

 

SCHEDULES      

Schedule 1.01(a)

   -    Guarantors

Schedule 1.01(b)

   -    Immaterial Subsidiaries

Schedule 1.01(c)

   -    Mortgaged Properties

Schedule 1.01(d)

   -    Business Optimization Expenses

Schedule 2.01(a)

   -    Lenders and Commitments

Schedule 3.08

   -    Subsidiaries

Schedule 3.18

   -    Insurance

Schedule 3.19(a)

   -    UCC Filing Offices

Schedule 3.19(c)

   -    Mortgage Filing Offices

Schedule 3.20

   -    Owned Real Property

Schedule 4.02(a)

   -    Local Counsel

Schedule 5.14

   -    Post-Closing Obligations

Schedule 6.01(a)

   -    Existing Indebtedness

Schedule 6.02(a)

   -    Existing Liens

Schedule 6.04(a)

   -    Existing Investments

Schedule 6.07(b)

   -    Existing Restrictions and Conditions EXHIBITS      

Exhibit A

   -    Form of Administrative Questionnaire

Exhibit B

   -    Form of Affiliate Subordination Agreement

Exhibit C

   -    Form of Assignment and Acceptance

Exhibit D

   -    Form of Borrowing Request

Exhibit E

   -    Form of Compliance Certificate

Exhibit F

   -    Form of Guarantee and Collateral Agreement

Exhibit G

   -    Form of Interest Election Request

Exhibit H

   -    Reserved

Exhibit I

   -    Form of Local Counsel Opinion

Exhibit J

   -    Form of Term Note

 

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Exhibit K-1

   -    Form of U.S. Tax Compliance Certificate

Exhibit K-2

   -    Form of U.S. Tax Compliance Certificate

Exhibit K-3

   -    Form of U.S. Tax Compliance Certificate

Exhibit K-4

   -    Form of U.S. Tax Compliance Certificate

Exhibit L

   -    Auction Procedures

Exhibit M

   -    Form of ABL Intercreditor Agreement

 

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CREDIT AGREEMENT dated as of June 11, 2013 (this “Agreement”), among SCHOOL
SPECIALTY, INC., a Delaware corporation (the “Borrower”), the Lenders (such term
and each other capitalized term used but not defined in these introductory
statements having the meaning given it in Article I) and CREDIT SUISSE AG, as
administrative agent (in such capacity, including any successor thereto, the
“Administrative Agent”) and as collateral agent (in such capacity, including any
successor thereto, the “Collateral Agent”) for the Lenders.

The Borrower and certain of its Subsidiaries are currently debtors in
reorganization proceedings (the “Bankruptcy Proceedings”) under Chapter 11 of
the Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”).

The Borrower filed an Amended Joint Plan of Reorganization on April 24, 2013
(the “April 24 Plan” and as the same may be amended, modified and supplemented,
the “Plan of Reorganization”) with the Bankruptcy Court pursuant to which it
expects to be reorganized and emerge from the Bankruptcy Proceedings. The Plan
of Reorganization is described in, and included as an exhibit to, the Borrower’s
Amended Disclosure Statement filed on April 24, 2013 (the “Disclosure
Statement”).

The Borrower has requested that substantially concurrently with the consummation
of the Plan of Reorganization, the Lenders extend credit in the form of Term
Loans to the Borrower on the Closing Date, in an aggregate principal amount of
$145,000,000. In addition, the Borrower has also requested that certain other
lenders extend credit to the Borrower and certain of its domestic subsidiaries
in the form of the ABL Facility, in an aggregate principal amount outstanding
not to exceed $175,000,000 pursuant to the ABL Credit Agreement. The proceeds of
the Term Loans, together with the proceeds of loans incurred under the ABL
Credit Agreement, are to be used by the Borrower (a) in accordance with the Plan
of Reorganization, which provides for, among other things, the (i) repayment in
full of all obligations under the DIP ABL Credit Agreement and partial repayment
of obligations under the DIP Term Credit Agreement, (ii) termination of any
commitment to make extensions of credit under the Existing Credit Agreements,
and (iii) release of all collateral securing the obligations under the Existing
Credit Agreement, (b) to pay the Transaction Costs and (c) for other general
corporate purposes.

The Lenders are willing to extend such credit to the Borrower on the terms and
subject to the conditions set forth herein. Accordingly, the parties hereto
agree as follows:

ARTICLE I

Definitions

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

“ABL Administrative Agent” means Bank of America, N.A., in its capacity as
administrative agent and collateral agent under the ABL Facility Documentation,
or any successor or assign, or any replacement administrative agent and
collateral agent under the ABL Facility Documentation.

“ABL Credit Agreement” means that certain credit agreement dated as of the date
hereof, among the Borrower, certain Subsidiaries of the Borrower party thereto,
the lenders party thereto and the ABL Administrative Agent, as the same may be
amended, restated, modified, supplemented, extended, renewed, refunded, replaced
or refinanced from time to time in one or more agreements (in each case with the
same or new lenders, institutional investors or agents), including any agreement
extending the

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maturity thereof or otherwise restructuring all or any portion of the
Indebtedness thereunder or increasing the amount loaned or issued thereunder or
altering the maturity thereof, in each case as and to the extent permitted by
the ABL Intercreditor Agreement.

“ABL Facility” means the asset-based revolving credit facility, including a
letter of credit subfacility, under the ABL Credit Agreement.

“ABL Facility Documentation” means the ABL Credit Agreement and all security
agreements, guarantees, pledge agreements and other agreements or instruments
executed in connection therewith.

“ABL Intercreditor Agreement” shall mean the intercreditor agreement dated as of
the Closing Date among the Administrative Agent, the Collateral Agent, the ABL
Administrative Agent and the Loan Parties, substantially in the form attached as
Exhibit M, as the same may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time in accordance therewith and
herewith.

“ABR Loan” or “ABR Borrowing” shall mean a Loan or a Borrowing consisting of
Loans bearing interest at a rate determined by reference to the Alternate Base
Rate.

“Acquired Entity” shall have the meaning assigned to such term in
Section 6.04(g).

“Additional Credit Extension Amendment” shall mean an amendment to this
Agreement (which may, at the option of the Administrative Agent, be in the form
of an amendment and restatement of this Agreement) providing for any
(a) Incremental Term Loan Commitments pursuant to Section 2.22 or (b) Extended
Term Loans pursuant to Section 2.23, which shall be consistent with the
applicable provisions of this Agreement and otherwise satisfactory to the
parties thereto. Each Additional Credit Extension Amendment shall be executed by
the Administrative Agent (for the amendments effected in such Additional Credit
Extension Amendment), the Loan Parties and the other parties specified in the
applicable Section of this Agreement (but not any other Lender). Any Additional
Credit Extension Amendment may include conditions for delivery of opinions of
counsel and other documentation consistent with the conditions in Section 4.01,
all to the extent reasonably requested by the Administrative Agent or the other
parties to such Additional Credit Extension Amendment.

“Additional Lender” shall mean, at any time, any Person that is not an existing
Lender and that agrees to provide any portion of any Incremental Term Loans or
Incremental Term Loan Commitments in accordance with Section 2.22 pursuant to an
Additional Credit Extension Amendment; provided that such Additional Lender
shall be an Eligible Assignee.

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum equal to the product of (i) the
LIBO Rate in effect for such Interest Period and (ii) Statutory Reserves;
provided that, with respect to Term Loans, the Adjusted LIBO Rate shall not be
less than 1.0% per annum. The Adjusted LIBO Rate will be adjusted automatically
as to all Eurodollar Borrowings then outstanding as of the effective date of any
change in the Statutory Reserves.

“Administrative Agent” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(a).

 

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“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time by
the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified;
provided that, for purposes of Section 6.08 and Section 9.04(b)(iii), the term
“Affiliate” shall also include any Person that directly or indirectly owns 5% or
more of any class of Equity Interests of the Person specified or that is an
officer or director of the Person specified.

“Affiliate Subordination Agreement” shall mean an Affiliate Subordination
Agreement in the form of Exhibit B pursuant to which intercompany obligations
and advances owed by any Loan Party are subordinated to the Obligations.

“Affiliated Lender” shall mean any Affiliate of the Borrower, other than the
Borrower or any Subsidiary of the Borrower.

“Affiliated Lender Group” shall mean two or more Affiliated Lenders that are
Affiliates of each other (other than by reason of being an Affiliate of the
Borrower).

“Agents” shall have the meaning assigned to such term in Article VIII.

“Aggregate Incremental Amount” shall mean, at any time, the sum of the aggregate
principal amount of Incremental Term Loans incurred at or prior to such time.

“Agreement” shall have the meaning assigned to such term in the introductory
statement hereto.

“Agreement Value” shall mean, for each Hedging Agreement, on any date of
determination, the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or the applicable Subsidiary would be required to
pay if such Hedging Agreement was terminated on such date.

“All-in Yield” shall mean, as to any Indebtedness, the effective interest rate
with respect thereto as reasonably determined by the Administrative Agent taking
into account the interest rate, margin, original issue discount, upfront fees
and eurodollar rate floor or base rate floor; provided that original issue
discount and upfront fees shall be equated to interest rate assuming a four-year
life to maturity of such Indebtedness (or, if less, the stated life to maturity
at the time of the incurrence of such Indebtedness); provided further that
“All-in Yield” shall not include arrangement, underwriting, structuring or
similar fees paid to agents or arrangers or fees that are not paid ratably to
the market with respect to such Indebtedness.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1.00% and (c) the Adjusted LIBO
Rate for a one month Interest Period on such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus 1.00%; provided that
such rate shall not be less than 2.00%; provided further that for the purpose of
clause (c), the Adjusted LIBO Rate for any day shall be based on the rate
determined on such day at approximately 11 a.m. (London time) by reference to
the British Bankers’ Association Interest Settlement Rates (or the successor
thereto if the British Bankers’ Association is no longer making a LIBO Rate
available) for deposits in Dollars (as set forth by any service selected by the
Administrative Agent that has been nominated by the British Bankers’ Association
as an authorized vendor for the purpose of displaying such rates (or the
successor

 

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thereto if the British Bankers’ Association is no longer making a LIBO Rate
available)). If the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms of the definition thereof, the Alternate Base Rate
shall be determined without regard to clause (b) of the preceding sentence until
the circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective on the effective
date of such change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate, as the case may be.

“Anti-Terrorism Laws” shall have the meaning assigned to such term in
Section 3.27.

“Applicable Margin” shall mean, for any day (a) with respect to any Eurodollar
Term Loan, 8.50% per annum, and (b) with respect to any ABR Term Loan, 7.50% per
annum.

“Approved Fund” shall mean, with respect to any Lender that is a fund or
commingled investment vehicle that invests in bank loans, any other fund that
invests in bank loans and is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.

“April 24 Plan” shall have the meaning assigned to such term in the introductory
statement to this Agreement.

“Arranger” shall mean Credit Suisse Securities (USA) LLC.

“Asset Sale” shall mean any Disposition by the Borrower or any Subsidiary
pursuant to Sections 6.06(i), 6.06(n), 6.06(r), 6.06(s) and 6.06(t) (other than
a Disposition generating Net Cash Proceeds of less than $500,000).

“Asset Sale Proceeds Pledged Account” shall mean an account subject to a control
agreement in favor of the Collateral Agent.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in the form of Exhibit C or such other form (including electronic documentation
generated by MarkitClear or other electronic platform) as shall be approved by
the Administrative Agent.

“Auction Procedures” shall mean the auction procedures with respect to Dutch
Auctions set forth in Exhibit L hereto.

“Available Amount” shall mean, at the time any determination thereof is to be
made, the greater of (x) $0 and (y) the sum, without duplication, of (1) $1
million plus (2) Cumulative Retained Excess Cash Flow, plus, (3) Cumulative
Equity Issuances, plus (4) Declined Proceeds, in each case at such time and to
the extent Not Otherwise Applied.

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

“Bankruptcy Court” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

 

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“Bankruptcy Proceedings” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

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

“Borrower” shall have the meaning assigned to such term in the introductory
statement to this Agreement.

“Borrower Materials” shall have the meaning assigned to such term in
Section 9.01.

“Borrower Notice” shall have the meaning assigned to such term in the definition
of Real Estate Collateral Requirements.

“Borrowing” shall mean Loans of the same Class and Type made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.

“Borrowing Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit D, or such other
form as shall be approved by the Administrative Agent.

“Breakage Event” shall have the meaning assigned to such term in Section 2.16.

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
banks in New York City are authorized or required by law to close; provided
that, when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in Dollar
deposits in the London interbank market.

“Capital Expenditures” shall mean, for any period, (a) the additions to
property, plant and equipment, capitalized investment and development costs, and
other capital expenditures of the Borrower and its consolidated 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 and (b) Capital
Lease Obligations incurred by the Borrower and its consolidated Subsidiaries
during such period, but excluding in each case any such expenditure made to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such
property, to the extent such expenditure is made with insurance proceeds,
condemnation awards or damage recovery proceeds relating to any such damage,
loss, destruction or condemnation.

“Capital Lease Obligations” of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

“Carson-Dellosa Drag-Along Sale” means a Disposition of the entirety of the Loan
Parties’ Equity Interests in Carson-Dellosa Publishing, LLC, pursuant to the
exercise by the CJE Members (as defined in the Operating Agreement of
Carson-Dellosa Publishing, LLC) of their “drag-along rights” so as to require
the Loan Parties to dispose of such Equity Interests in accordance with the
terms of Section 11.6 of the Operating Agreement of Carson-Dellosa Publishing,
LLC.

 

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“Cash Management Bank” shall mean, with respect to any Cash Management
Obligations, any Person that at the time such Cash Management Obligations were
incurred was a Lender or an Affiliate of a Lender.

“Cash Management Obligation” shall mean obligations owed by any Loan Party or
Subsidiary to any Cash Management Bank in respect of any overdraft and related
liabilities arising from treasury, depositary and cash management services or
any automated clearing house transfer of funds or in respect of any credit card
or similar services.

A “Change in Control” shall be deemed to have occurred if (a) any “person” or
“group” (within the meaning of Rule 13d-5 of the Exchange Act as in effect on
the date hereof), other than the Permitted Investors, shall own, directly or
indirectly, beneficially or of record, shares representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower, (b) a majority of the seats (other than vacant
seats) on the board of directors of the Borrower shall at any time be occupied
by persons who were neither (i) nominated by the board of directors of the
Borrower nor (ii) appointed by directors so nominated or (c) any change in
control (or similar event, however denominated) with respect to the Borrower or
any Subsidiary shall occur under and as defined in any indenture or agreement in
respect of the ABL Facility Documentation and the Specified Unsecured
Prepetition Debt.

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

“Charges” shall have the meaning assigned to such term in Section 9.08.

“Class” when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, is a Term Loan, Incremental
Term Loan or Extended Term Loan and (b) any Commitment, refers to whether such
Commitment is a Term Loan Commitment, Incremental Term Loan Commitment or a
Commitment in respect of a Class of Loans to be made pursuant to an Extension
Offer.

“Closing Date” shall mean June 11, 2013.

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

“Collateral” shall mean the “Collateral” as defined in any Security Document and
shall include any Mortgaged Property.

“Collateral Agent” shall have the meaning assigned to such term in the
introductory statements to this Agreement.

 

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“Commitment” shall mean, with respect to any Lender, such Lender’s Term Loan
Commitment.

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

“Communications” shall have the meaning assigned to such term in Section 9.01.

“Compliance Certificate” shall mean a compliance certificate in the form of
Exhibit E.

“Confidential Information Memorandum” shall mean the Confidential Information
Memorandum of the Borrower dated May 2013.

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated EBITDA” shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, the Consolidated Net Income
of the Borrower and its Subsidiaries for such period plus (a) the sum of (in
each case without duplication and to the extent the respective amounts described
in subclauses (i) through (x) of this clause (a) reduced such Consolidated Net
Income (and were not excluded therefrom or added thereto) for the respective
period for which Consolidated EBITDA is being determined):

(i) provision for Taxes based on income, profits or capital of the Borrower and
its Subsidiaries for such period, including, without limitation, state,
franchise and similar Taxes;

(ii) Consolidated Interest Expense (and to the extent not included in interest
expense, (x) all cash dividend payments (excluding items eliminated in
consolidation) on any series of preferred stock or Disqualified Stock and
(y) costs of surety bonds in connection with financing activities) of the
Borrower and its Subsidiaries for such period;

(iii) depreciation and amortization expenses of the Borrower and its
Subsidiaries for such period including the amortization of intangible assets,
deferred financing fees and capitalized software expenditures and amortization
of unrecognized prior service costs;

(iv)  (A) non-recurring, unusual or extraordinary charges for such period,
(B) business optimization expenses and other restructuring charges or reserves
(which, for the avoidance of doubt, shall include the effect of inventory
optimization programs, facility closure, facility consolidations, duplicative
facility costs, retention, severance, systems establishment costs, contract
termination costs, future lease commitments and excess pension charges), and
(C) cash expenses relating to earn outs and similar obligations; provided that
the aggregate amount to be added back pursuant to this clause (iv) shall not
exceed, (1) for the fiscal year ending April 26, 2014, $7,000,000, (2) for the
fiscal year ending April 25, 2015, 10% of Consolidated EBITDA (determined before
giving effect to the addback in this clause (iv)) for such period plus any
unused addback amount remaining from the prior fiscal year, and (3) for each
fiscal year thereafter, 10% of Consolidated EBITDA (determined before giving
effect to the addback in this clause (iv)) for such period;

 

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(v) any other non-cash charges; provided, that for purposes of this
subclause (v) of this clause (a), any non-cash charges or losses shall be
treated as cash charges or losses in any subsequent period during which cash
disbursements attributable thereto are made (but excluding, for the avoidance of
doubt, amortization of a prepaid cash item that was paid in a prior period);

(vi) any expenses or charges (other than depreciation or amortization expense as
described in the preceding clause (iii)) related to any issuance of Equity
Interests, investment, acquisition, disposition, recapitalization or the
incurrence, modification or repayment of Indebtedness permitted to be incurred
by the ABL Facility Documentation (including Permitted Refinancings thereof),
whether or not successful, including (x) such fees, expenses or charges related
to the Credit Facilities, the ABL Facility and the Specified Unsecured
Prepetition Debt and (y) any amendment or other modification of the Obligations
or other Indebtedness;

(vii) non-cash expenses in connection with expensing stock options or other
equity compensation grants for such period;

(viii) costs associated with, or in anticipation of, or preparation for,
compliance with the requirements of the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations promulgated in connection therewith and public
company costs;

(ix) to the extent deducted from Consolidated Net Income for such period,
(A) cash fees, costs, expenses, commissions and other cash charges paid on or
before June 30, 2013 (or, September 15, 2013 in the case of the payment on any
Delayed Admin Claims) in connection with the ABL Facility, the Credit
Facilities, the Specified Unsecured Prepetition Debt, the Bankruptcy
Proceedings, the Plan of Reorganization and the transactions contemplated by the
foregoing, including in connection with the termination or settlement of
executory contracts, professional and accounting fees, costs and expense,
management incentive, employee retention or similar plans, and litigation and
settlements (but excluding interest and fees accruing after the Closing Date
hereunder); provided that the aggregate amount to be added back pursuant to this
clause (ix)(A) for all such periods shall not exceed $53,000,000 (provided, that
to the extent such charges associated with this Agreement and the other Loan
Documents or the ABL Facility are capitalized and recognized over the life of
the Term Loans and the loans under the ABL Facility, respectively, then such
amount shall be reduced to the extent of such capitalization) and (B) any
make-whole payment required to be paid in connection with the make-whole
litigation in the chapter 11 cases, in an aggregate amount to be added back to
this clause (ix)(B) not to exceed $25,000,000; and

(x) for the fiscal year ended April 26, 2014, solely in connection with the
asset divestitures set forth on Schedule 1.01(d), business optimization expenses
and other restructuring charges or reserves (which, for the avoidance of doubt,
shall include the effect of inventory optimization programs, facility closure,
facility consolidations, duplicative facility costs, retention, severance,
systems establishment costs, contract termination costs, future lease
commitments and excess pension charges); provided, that with respect to each
business optimization expense or other restructuring charge, a responsible
officer of the Borrower shall have delivered to the Administrative Agent an
officer’s certificate specifying and quantifying such expense or charge;
provided further that the aggregate amount to be added back pursuant to this
clause (x) shall not exceed $3,000,000;

 

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minus (b) the sum of (without duplication) non-cash items increasing
Consolidated Net Income of the Borrower and its Subsidiaries for such period
(but excluding any such items (A) in respect of which cash was received in a
prior period or will be received in a future period or (B) which represent the
reversal of any accrual of, or cash reserve for, anticipated cash charges that
reduced Consolidated EBITDA in any prior period (and was not added back pursuant
to this definition)), minus (c) non-recurring, unusual or extraordinary gains
increasing Consolidated Net Income of the Borrower and its subsidiaries for such
period to the extent non-recurring, unusual or extraordinary losses could be
added back for such period, and minus (d) any cash payments made in respect of
non-cash charges added back in a prior period. Consolidated EBITDA shall be
deemed to be equal to (i) for the fiscal quarter ended July 28, 2012, $38.8
million, (ii) for the fiscal quarter ended October 27, 2012, $34.8 million,
(iii) for the fiscal quarter ended January 26, 2013, -$17.3 million, and
(iv) for the fiscal quarter ended April 27, 2013, -$9.1 million.

“Consolidated Interest Expense” shall mean, for any period, the sum of (a) the
interest expense (including imputed interest expense in respect of Capital Lease
Obligations and commitment fees, letter of credit fees and other fees incurred
in connection with this Agreement) of the Borrower and the Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP, plus (b) any
interest accrued during such period in respect of Indebtedness of the Borrower
or any Subsidiary that is required to be capitalized rather than included in
consolidated interest expense for such period in accordance with GAAP plus
(c) cash dividends on any series of preferred stock or Disqualified Stock. For
purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by the Borrower or any Subsidiary
with respect to interest rate Hedging Agreements. For purposes of determining
the Interest Coverage Ratio for the period of four consecutive quarters ended
July 27, 2013, October 26, 2013 and January 25, 2014, Consolidated Interest
Expense shall be deemed to be equal to (a) the Consolidated Interest Expense for
the fiscal quarter ended July 27, 2013, multiplied by 4, (b) the Consolidated
Interest Expense for the two consecutive fiscal quarters ended October 26, 2013,
multiplied by 2 and (c) the Consolidated Interest Expense for the three
consecutive fiscal quarters ended January 25, 2014, multiplied by 4/3,
respectively.

“Consolidated Net Income” shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, net income for such period
but excluding net income (or loss) attributable to the equity method of
accounting unless such net income has been distributed by way of an ordinary
dividend in cash to the Borrower or any Subsidiary.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Credit Facilities” shall mean the term loan facilities provided for by this
Agreement.

“Cumulative Equity Issuances” shall mean, on any date of determination, 100% of
the aggregate net cash proceeds from capital contributions or any other issuance
or sale after the Closing Date of Qualified Capital Stock of the Borrower.

 

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“Cumulative Retained Excess Cash Flow” shall mean, on any date of determination,
the excess of (a) the cumulative amount of Excess Cash Flow for each full fiscal
year of the Borrower ended on or prior to such date, commencing with the fiscal
year ending on April 26, 2014, minus (b) the portion of such Excess Cash Flow
which was required to be applied to prepay Term Loans pursuant to
Section 2.13(c) (without giving effect to clause (y) thereof).

“Current Asset Collateral” means all the “ABL Priority Collateral” as defined in
the ABL Intercreditor Agreement.

“Current Assets” shall mean, at any time, the consolidated current assets (other
than cash and Permitted Investments) of the Borrower and the Subsidiaries at
such time.

“Current Liabilities” shall mean, at any time, (a) the consolidated current
liabilities of the Borrower and the Subsidiaries at such time, but excluding,
without duplication, the current portion of any long-term Indebtedness and
(b) revolving loans, swingline loans and letter of credit obligations under the
ABL Facility or any other revolving credit facility.

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

“Declined Proceeds” shall have the meaning specified in Section 2.13(g).

“Default” shall mean any event or condition which upon notice, lapse of time or
both would constitute an Event of Default.

“Delayed Admin Claims” shall mean those Allowed Administrative Claims (as
defined in the Plan of Reorganization) whose holders have agreed to delay
payment to no earlier than August 31, 2013.

“Disclosure Statement” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

“Disposition” shall mean, with respect to any Person, (a) the sale, transfer,
license, lease or other disposition (by way of merger, casualty, condemnation or
otherwise) of any property or asset of such Person (including, without
limitation, any sale and leaseback transaction and the sale of any Equity
Interest owned by such Person) to any other Person and (b) the issuance of
Equity Interests by a subsidiary of such Person to any other Person.

“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
first anniversary of the Latest Maturity Date in effect at the time such Equity
Interest is issued or (b) is convertible into or exchangeable (unless at the
sole option of the issuer thereof) for (i) debt securities or (ii) any Equity
Interest referred to in clause (a) above, in each case at any time prior to the
first anniversary of the Latest Maturity Date in effect at the time such Equity
Interest is issued.

 

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“Dollars” or “$” shall mean lawful money of the United States of America.

“Domestic Subsidiaries” shall mean all Subsidiaries other than Foreign
Subsidiaries.

“Dutch Auction” shall mean an auction conducted by the Borrower or any
Subsidiary in order to purchase Term Loans as contemplated by Section 9.04(h) in
accordance with the Auction Procedures.

“ECF Percentage” shall mean, with respect to any fiscal year of the Borrower, if
the Net Total Leverage Ratio as of the end of such fiscal year is (x) greater
than 3.00:1.00, 50%, (y) equal to or less than 3.00:1.00 but greater than
2.00:1.00, 25% and (z) equal to or less than 2.00:1.00, 0%.

“Eligible Assignee” shall mean any Person that meets the requirements to be an
assignee under Section 9.04(b)(iii).

“Engagement Letter” shall mean the Engagement Letter, dated April 29, 2013,
between the Borrower and the Arranger, as amended from time to time.

“Environmental Laws” shall mean all former, current and future federal, state,
local, supranational, and foreign laws (including statutory and common law),
treaties, regulations, rules, ordinances, codes, decrees, injunctions,
judgments, governmental restrictions or requirements, directives, orders
(including consent orders), permits, and agreements in each case, relating to
the indoor or outdoor environment, natural resources, human health and safety
(as it relates to exposure to hazardous materials) or the presence, Release of
or exposure to pollutants, contaminants, wastes, chemicals or otherwise
hazardous materials, or the generation, manufacture, processing, distribution,
use, treatment, storage, transport, recycling, disposal or handling of, or the
arrangement for such activities, with respect to any pollutants, contaminants,
wastes, chemicals or otherwise hazardous materials.

“Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
indemnities, expenses and costs (including administrative oversight costs,
natural resource damages and remediation costs), whether known or unknown,
actual or potential, vested or unvested, or contingent or otherwise, arising out
of or relating to (a) any Environmental Law, (b) the generation, manufacture,
processing, distribution, use, treatment, storage, transport, recycling,
disposal or handling of, or the arrangement for such activities, with respect to
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
presence or 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” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any Person and any option, warrant or other
right entitling the holder thereof to purchase or otherwise acquire any such
equity interest.

“Equity Issuance” shall mean any issuance or sale by the Borrower or any
Subsidiary of any Equity Interests of the Borrower or any such Subsidiary, as
applicable, except in each case for (a) any issuance or sale to the Borrower or
any Subsidiary, (b) any issuance of directors’ qualifying shares, and (c) sales
or issuances of common stock of the Borrower to management or employees of the
Borrower or any Subsidiary under any employee stock option or stock purchase
plan or employee benefit plan in existence from time to time and (d) sales or
issuances of Equity Interests of the Borrower to any Permitted Investor.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code. For the avoidance of doubt, when any provision of this
Agreement relates to a past event or period of time, the term “ERISA Affiliate”
includes any person who was, as to the time of such past event or period of
time, an “ERISA Affiliate” within the meaning of the preceding sentence.

“ERISA Event” shall mean (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) the
requirements of Section 4043(b) of ERISA apply with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan, (c) a determination
that any Plan is or is reasonably expected to be in “at risk” status (within the
meaning of Section 430 of the Code or Section 303 of ERISA), (d) the filing
pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, (e) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA (other than non-delinquent premiums payable to
the PBGC under Sections 4006 and 4007 of ERISA), (f) the termination, or the
filing of a notice of intent to terminate, any Plan pursuant to Section 4041(c)
of ERISA, (g) the receipt by the Borrower or any of its ERISA Affiliates from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan,
(h) the cessation of operations at a facility of the Borrower or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA,
(i) conditions contained in Section 303(k)(1)(A) of ERISA for imposition of a
lien shall have been met with respect to any Plan, (j) the receipt by the
Borrower or any of its ERISA Affiliates of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, “insolvent” (within the
meaning of Section 4245 of ERISA), in “reorganization” (within the meaning of
Section 4241 of ERISA), or in “endangered” or “critical” status (within the
meaning of Section 432 of the Code or Section 304 of ERISA), (k) the occurrence
of a non-exempt “prohibited transaction” with respect to which the Borrower or
any of the Subsidiaries is a “disqualified person” (within the meaning of
Section 4975 of the Code) or a “party in interest” (within the meaning of
Section 406 of ERISA) or with respect to which the Borrower, any such Subsidiary
or their respective ERISA Affiliates could otherwise be liable, or (l) any other
event or condition with respect to a Plan or Multiemployer Plan that could
result in liability of the Borrower or any Subsidiary.

“Eurodollar Loan” or “Eurodollar Borrowing” shall mean a Loan or a Borrowing
consisting of Loans bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

“Events of Default” shall have the meaning assigned to such term in
Section 7.01.

“Evidence of Flood Insurance” shall have the meaning assigned to such term in
the definition of Real Estate Collateral Requirements.

 

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“Excess Cash Flow” shall mean, for any fiscal year of the Borrower, the excess
of (a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal
year and (ii) the decrease, if any, in Current Assets minus Current Liabilities
from the beginning to the end of such fiscal year over (b) the sum, without
duplication, of

(i) the amount of any Taxes payable in cash by the Borrower and the Subsidiaries
with respect to such fiscal year;

(ii) Consolidated Interest Expense for such fiscal year paid in cash;

(iii) Capital Expenditures, made in cash in accordance with Section 6.11 during
such fiscal year, except to the extent financed with the proceeds of
Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or
other proceeds that would not be included in Consolidated EBITDA;

(iv) permanent repayments or prepayments of Indebtedness (other than prepayments
of Loans under Section 2.12 or Section 2.13), including any premium, make-whole
or penalty payments related thereto, made in cash by the Borrower and the
Subsidiaries during such fiscal year, but only to the extent that the
Indebtedness so prepaid by its terms cannot be reborrowed or redrawn and such
prepayments do not occur in connection with a refinancing of all or any portion
of such Indebtedness;

(v) the amount by which Consolidated Net Income was increased to determine
Consolidated EBITDA pursuant to clauses (iv), (vi), (ix) and (x) of the
definition of “Consolidated EBITDA” to the extent representing a cash payment
during such period;

(vi) cash used during such fiscal year to finance Permitted Acquisitions or
other acquisitions permitted hereunder not constituting Permitted Acquisitions
or (without duplication) to be used to finance Permitted Acquisitions or other
acquisitions permitted hereunder not constituting Permitted Acquisitions for
which a binding agreement was entered into during such fiscal year, in each case
except to the extent financed (or proposed to be financed) with the proceeds of
Indebtedness (other than ABL Facility loans), equity issuances, Asset Sale
proceeds, casualty proceeds, condemnation proceeds or other proceeds that would
not be included in Consolidated EBITDA;

(vii) cash used to pay deferred acquisition consideration (including earn-outs),
except to the extent such cash is from proceeds of Indebtedness (other than ABL
Facility loans), equity issuances, Asset Sale proceeds, casualty proceeds,
condemnation proceeds or other proceeds that would not be included in
Consolidated EBITDA;

(viii) cash expenditures during such period in respect of long-term liabilities
other than Indebtedness, except to the extent financed (or proposed to be
financed) with the proceeds of Indebtedness (other than ABL Facility loans),
equity issuances, Asset Sale proceeds, casualty proceeds, condemnation proceeds
or other proceeds that would not be included in Consolidated EBITDA;

(ix) cash expenditures in respect of Hedge Agreements during such period to the
extent not reflected in the computation of Consolidated EBITDA or Consolidated
Interest Expense;

 

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(x) cash expenditures during such period with respect to retention bonuses to
the extent added back in calculating Consolidated EBITDA; and

(xi) the increase, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Subsidiary” shall mean Domestic Subsidiaries that are (i) subsidiaries
of Foreign Subsidiaries, (ii) Immaterial Subsidiaries, (iii) prohibited by
applicable law, rule or regulation from providing a Guarantee of the Credit
Facilities or which Guarantee would require governmental (including regulatory)
consent, approval, license or authorization (provided that this clause
(iii) shall not apply if such consent, approval, license or authorization has
been received, and provided further that the Borrower shall have used
commercially reasonable efforts to obtain any such consent, approval, license or
authorization required), (iv) not Wholly Owned by the Borrower or any of its
Subsidiaries or (v) any Subsidiary that owns no material assets other than
Equity Interests in one or more Foreign Subsidiaries.

“Excluded Swap Obligations” shall mean with respect to any Guarantor, 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,
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 and the
regulations thereunder at the time the Guaranty of such Guarantor or the grant
of such security interest becomes effective with respect to such Swap
Obligation. 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 Guaranty or security
interest is or becomes illegal.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Recipient or required to be withheld or deducted from a payment to
a Recipient, (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of such Recipient being organized under the laws of, or
having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Loan or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan or Commitment (other than pursuant to an
assignment request by the Borrower under Section 2.21(a)) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 2.20, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 2.20(g) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

“Executive Order” shall have the meaning assigned to such term in Section 3.24.

“Existing Credit Agreements” shall mean (a) that certain Debtor-in-Possession
Credit Agreement, dated as of January 31, 2013, among the Borrower and certain
of its subsidiaries party thereto, as borrowers, the lenders party thereto, as
lenders, and Wells Fargo Capital Finance, LLC, as administrative

 

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agent (the “DIP ABL Credit Agreement”) and (b) that certain Senior Secured Super
Priority Debtor-in-Possession Credit Agreement, dated as of February 27, 2013,
among the Borrower and certain of its subsidiaries party thereto, as borrowers,
the guarantors party thereto, as guarantors, the lenders party thereto, as
lenders, and U.S. Bank National Association, as administrative agent (the “DIP
Term Credit Agreement”).

“Extended Term Loans” shall mean any Class of Term Loans the maturity of which
shall have been extended pursuant to Section 2.23.

“Extension” shall have the meaning assigned to such term in Section 2.23(a).

“Extension Offer” shall have the meaning assigned to such term in
Section 2.23(a).

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof and any agreements
entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published 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 that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Claims Account” means (i) the account holding the Fee Claim Reserve Amount
pursuant to Article III.B.2 of the Plan of Reorganization, and (ii) the account
holding any Delayed Admin Claims that the Borrower may fund into such account
(and which may be subject to an escrow agreement).

“Fee Claim Reserve Amount” shall have the meaning assigned to such term in the
Plan of Reorganization.

“Fee Letter” shall mean the Fee Letter, dated April 29, 2013, between the
Borrower and the Arranger, as amended from time to time.

“Fees” shall mean the Administrative Agent Fees.

“Financial Covenants” shall mean the covenants contained in Sections 6.12 and
6.13 of this Agreement.

“Financial Officer” of any Person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such Person.

“First Lien Debt” means Total Debt that is secured by Liens that are not
expressly subordinated to the Liens securing the Obligations pursuant to a
customary intercreditor agreement; provided that debt under the ABL Facility
shall be deemed to be First Lien Debt to the extent included in Total Debt.

“Flood Laws” shall have the meaning assigned to such term in the definition of
Real Estate Collateral Requirements.

 

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“Foreign Lender” shall mean (a) with respect to a Borrower that is a U.S.
Person, a Lender that is not a U.S. Person and (b) with respect to a Borrower
that is not a U.S. Person, a Lender that is resident or organized under the laws
of a jurisdiction other than that in which the Borrower is resident for tax
purposes.

“Foreign Subsidiary” shall mean any Subsidiary that is a “controlled foreign
corporation” within the meaning of Section 957 of the Code (and any subsidiary
of such person).

“GAAP” shall mean United States generally accepted accounting principles applied
on a basis consistent with the financial statements delivered pursuant to
Section 4.01(n).

“Governmental Authority” shall mean any federal, state, local, supranational or
foreign court or governmental agency, registry, authority, instrumentality or
regulatory body.

“Granting Lender” shall have the meaning assigned to such term in
Section 9.04(f).

“Guarantee” of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation or (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 other
obligation; provided that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business.

“Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral
Agreement, in the form of Exhibit F, among the Borrower, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.

“Guarantors” shall mean each Subsidiary listed on Schedule 1.01(a), and each
other Subsidiary that is or becomes a party to the Guarantee and Collateral
Agreement.

“Hazardous Materials” shall mean (a) any petroleum products, derivatives or
byproducts and all other hydrocarbons, coal ash, radon gas, lead, asbestos and
asbestos-containing materials, toxic mold, urea formaldehyde foam insulation,
polychlorinated biphenyls, infectious or medical wastes and chlorofluorocarbons
and all other ozone-depleting substances, (b) any pollutant, contaminant, waste
or chemical or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substance, waste or material, or any substance, waste or
material having any constituent elements displaying any of the foregoing
characteristics or (c) any substance, waste or material that is prohibited,
limited or regulated by or pursuant to or which can form the basis for liability
under any Environmental Law.

“Hedging Agreement” shall mean any agreement with respect to any swap, forward,
future or derivative transaction or option, cap or collar agreements or similar
agreement involving, or settled by reference to, one or more interest or
exchange rates, currencies or commodities, or economic, financial or pricing
indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions.

 

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“Immaterial Subsidiary” shall mean any Subsidiary that, together with its
Subsidiaries, (a) did not, as of the last day of the fiscal quarter of the
Borrower most recently ended for which financial statements have been delivered
pursuant to Section 5.04(a) or 5.04(b), have assets with a value in excess of
2.5% of the consolidated total assets of the Borrower and its Subsidiary as of
such day or, have revenues in excess of 2.5% of total revenues of the Borrower
and the Subsidiaries on a consolidated basis for the four fiscal quarters then
ended, and (b) taken together with all other Immaterial Subsidiaries did not, as
of the last day of the fiscal quarter of the Borrower most recently ended for
which financial statements have been delivered pursuant to Section 5.04(a) or
5.04(b), have assets with a value in excess of 5.0% of the consolidated total
assets of the Borrower and its Subsidiary as of such day or, have revenues in
excess of 5.0% of total revenues of the Borrower and the Subsidiaries on a
consolidated basis for the four fiscal quarters then ended; provided that a
Subsidiary satisfying the foregoing requirements shall only qualify as an
Immaterial Subsidiary to the extent listed on Schedule 1.01(b) as of the Closing
Date or subsequently designated by the Borrower as an Immaterial Subsidiary in
writing to the Administrative Agent; provided further that the Borrower may at
any time designate an Immaterial Subsidiary as no longer being a Material
Subsidiary by notice in writing to the Administrative Agent, and such Subsidiary
shall thereafter not be an Immaterial Subsidiary (unless subsequently designated
as an Immaterial Subsidiary as contemplated hereby).

“Incremental Cap” shall mean, at any time, $25,000,000.

“Incremental Pro Forma Basis” shall mean, with respect to any financial ratio
test hereunder, that compliance with such test at any time shall be determined
(a) on a Pro Forma Basis giving effect to any Incremental Loans incurred at or
prior to such time, (b) assuming any Incremental Term Loan Commitments
established at or prior to such time are fully drawn and (c) without netting the
proceeds of the Incremental Term Loans to be incurred at such time in reliance
upon such financial ratio test.

“Incremental Term Loan Commitment” shall mean the commitment of any Lender,
established pursuant to Section 2.22, to make an Incremental Term Loan to the
Borrower.

“Incremental Term Loan Lender” shall mean a Lender with an Incremental Term Loan
Commitment or an outstanding Incremental Term Loan.

“Incremental Term Loans” shall mean additional Term Loans made by one or more
Incremental Term Loan Lenders to the Borrower pursuant to their Incremental Term
Loan Commitments.

“Indebtedness” of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) 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 obligations secured thereby have been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) net obligations of such Person under any

 

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Hedging Agreements, valued at the Agreement Value thereof, (j) all obligations
of such Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any Disqualified Stock Interests of such Person or any
other Person or any warrants, rights or options to acquire such Disqualified
Stock, valued, in the case of redeemable preferred interests, at the greater of
its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (k) all obligations of such Person as an account party in respect of
letters of credit and (l) all obligations of such Person in respect of bankers’
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any partnership in which such Person is a general partner, other than to the
extent that the instrument or agreement evidencing such Indebtedness expressly
limits the liability of such person in respect thereof.

“Indemnified Taxes” shall mean (a) 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 and (b) to the extent not otherwise described
in (a), Other Taxes.

“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).

“Information” shall have the meaning assigned to such term in Section 9.17.

“Intellectual Property” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.

“Interest Coverage Ratio” shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
payable in cash (excluding, for the avoidance of doubt, interest that is paid in
kind) for such period.

“Interest Election Request” shall mean a request by the Borrower in accordance
with the terms of Section 2.10 and substantially in the form of Exhibit G or
such other form as shall be approved by the Administrative Agent.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last
Business Day of each March, June, September and December and (b) with respect to
any Eurodollar Borrowing, the last day of the Interest Period applicable to such
Borrowing and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months’ duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months’ duration been
applicable to such Borrowing.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one (1), two (2), three (3) or
six (6) months thereafter, 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 begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c), end on the
last Business Day of the calendar month at the end of such Interest Period and
(c) no Interest Period for any Borrowing shall extend beyond the applicable
Maturity Date. Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day 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.

 

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“Investment” shall mean, 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 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. For purposes of compliance with Section 6.04, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment but giving
effect to any returns or distributions of capital or repayment of principal
actually received in cash by such Person with respect thereto, whether by
disposition, return on capital, dividend or otherwise.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended from time to time.

“IRS” shall mean the United States Internal Revenue Service.

“Latest Maturity Date” shall mean, at any time, the latest maturity or
expiration date applicable to any Loan or Commitment (or, if so specified,
applicable to the specified Loans or Commitments of the Class thereof) hereunder
at such time.

“Lenders” shall mean (a) the Persons listed on Schedule 2.01(a) (other than any
such Person that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any Person that has become a party hereto as a Lender
pursuant to an Assignment and Acceptance, Additional Credit Extension Amendment
or otherwise in accordance with this Agreement.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two (2) Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers’ Association Interest Settlement Rates for deposits in Dollars (as set
forth by any service selected by the Administrative Agent that has been
nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rates) (or the successor thereto if
the British Bankers’ Association is no longer making a LIBO Rate available) for
a period equal to such Interest Period; provided that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of this
definition, the “LIBO Rate” shall be the interest rate per annum determined by
the Administrative Agent to be the average of the rates per annum at which
deposits in Dollars are offered for such relevant Interest Period to major banks
in the London interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two (2) Business Days
prior to the beginning of such Interest Period.

“Lien” shall mean (a) with respect to any asset, (i) any mortgage, deed of
trust, lien (statutory or other), pledge, hypothecation, assignment, deposit
arrangement, encumbrance, license, charge preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever in or on
such asset (including any conditional sale or other title retention agreement,
capital lease, any easement, right of way or other encumbrance on title to real
property) and (ii) the interest of a vendor or a lessor

 

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under any conditional sale agreement, capital lease or title retention agreement
(or any financing lease having substantially the same effect as any of the
foregoing) relating to such asset and (b) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

“Loan Documents” shall mean this Agreement, the Security Documents, the ABL
Intercreditor Agreement, the Notes and any other document executed in connection
with the foregoing.

“Loan Parties” shall mean the Borrower and the Guarantors.

“Loans” shall mean the Term Loans.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect” shall mean (a) a materially adverse effect on the
business, assets, liabilities, operations, financial condition, or operating
results of the Borrower and the Subsidiaries, taken as a whole, (b) a material
impairment of the ability of the Borrower or any other Loan Party to perform any
of its obligations under any Loan Document to which it is or will be a party or
(c) a material impairment of the rights and remedies of or benefits available to
the Lenders under any Loan Document.

“Material Indebtedness” shall mean Indebtedness (other than the Loans) or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower or any Subsidiary in an aggregate principal amount exceeding
$2,500,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the Agreement Value of such Hedging
Agreement at such time.

“Maturity Date” shall mean June 11, 2019 (or if such day is not a Business Day,
the next preceding Business Day).

“Maximum Rate” shall have the meaning assigned to such term in Section 9.08.

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

“Mortgaged Properties” shall mean, initially, the owned real properties of the
Loan Parties specified on Schedule 1.01(c), and shall include each other parcel
of real property and improvements thereto with respect to which a Mortgage is
granted pursuant to Section 5.11.

“Mortgages” shall mean the mortgages, deeds of trust, deeds to secure debt and
other similar security documents delivered pursuant to clause (i) of
Section 4.01(i) or pursuant to Section 5.11, each in the form of Exhibit H with
such changes thereto as shall be acceptable to the Collateral Agent, including
all such changes as may be required to account for local law matters.

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

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale, the cash
proceeds (including cash proceeds subsequently received (but only as and when
received) in respect of noncash consideration initially received), net of
(i) selling expenses (including broker’s and advisors fees or commissions, legal
fees, transfer and similar taxes and the Borrower’s good faith estimate of
income taxes paid or payable in connection with such sale), (ii) amounts
provided as a reserve, in accordance with GAAP, against any

 

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liabilities under any indemnification obligations or purchase price adjustment
associated with such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, such amounts shall constitute
Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any,
interest and other amounts on any Indebtedness for borrowed money which is
secured by the asset sold in such Asset Sale to the extent such Indebtedness is
required to be repaid either (x) with such proceeds or (y) because the asset
sold is removed from a borrowing base supporting such Indebtedness (in each
case, other than (x) Indebtedness hereunder and (y) any such Indebtedness
assumed by the purchaser of such asset); provided that, if (x) the Borrower
shall deliver a certificate of a Financial Officer to the Administrative Agent
at the time of receipt thereof setting forth the Borrower’s intent to reinvest
such proceeds in productive assets of a kind then used or usable in the business
of the Borrower and its Subsidiaries within 12 months of receipt of such
proceeds and (y) no Default or Event of Default shall have occurred and shall be
continuing at the time of such certificate or at the proposed time of the
application of such proceeds, such proceeds shall not constitute Net Cash
Proceeds except to the extent (i) not so used or contractually committed (with a
Person other than an Affiliate of the Borrower) to be so used at the end of such
12-month period and (ii) if so committed within such 12-month period, not so
used on or before day that is 180 days from the date of such commitment, at
which time such proceeds shall be deemed to be Net Cash Proceeds; provided,
further, that upon receipt of any such proceeds, the Borrower or applicable
Subsidiary shall either (x) deposit such proceeds into the Asset Sale Proceeds
Pledged Account or (y) invest such proceeds in a Permitted Investment that is
subject to a first-priority lien in favor of the Collateral Agent for the
benefit of the Secured Parties, and such proceeds shall remain in such Asset
Sale Proceeds Pledged Account or invested in such Permitted Investments until
reinvested pursuant to this definition or applied in accordance with
Section 2.13; and (b) with respect to any issuance or incurrence of Indebtedness
or any Equity Issuance, the cash proceeds thereof, net of all taxes and
customary fees, commissions, costs, prepayment premiums and other expenses
incurred in connection therewith or in connection with the use of proceeds
thereof.

“Net First Lien Leverage Ratio” shall mean, on any date, the ratio of (a) First
Lien Debt on such date minus Unrestricted Cash, to (b) Consolidated EBITDA for
the period of four consecutive fiscal quarters most recently ended on or prior
to such date.

“Net Total Leverage Ratio” shall mean, on any date, the ratio of (a) Total Debt
on such date minus Unrestricted Cash, to (b) Consolidated EBITDA for the period
of four consecutive fiscal quarters most recently ended on or prior to such
date.

“NFIP” shall have the meaning assigned to such term in the definition of Real
Estate Collateral Requirements.

“Notes” shall mean any promissory notes evidencing the Term Loans, as
applicable, executed and delivered pursuant to Section 2.04(e) and in the form
of Exhibit J, respectively.

“Notice of Grant of Security Interest in Copyrights” shall have the meaning
assigned to such term in the Guarantee and Collateral Agreement.

“Notice of Grant of Security Interest in Patents” shall have the meaning
assigned to such term in the Guarantee and Collateral Agreement.

“Notice of Grant of Security Interest in Trademarks” shall have the meaning
assigned to such term in the Guarantee and Collateral Agreement.

 

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“Not Otherwise Applied” shall mean, with reference to any amount described in
the definition of “Available Amount”, that such amount was not previously
applied or is not currently being applied to make or permit the making of
investments, Restricted Payments or prepayments of Indebtedness hereunder or to
exercise any Cure Rights pursuant to Section 7.03. The Borrower shall promptly
notify the Administrative Agent of any application of the Available Amount as
contemplated hereunder.

“Obligations” shall mean (i) all principal of all Loans, all interest (including
Post-Petition Interest) on such Loans and all other amounts now or hereafter
payable by the Borrower pursuant to the Loan Documents, (ii) all obligations of
a Loan Party to any Qualified Counterparty under any Secured Hedging Agreements,
excluding in the case of this clause (ii), the Excluded Swap Obligations and
(iii) all obligations of a Loan Party to any Cash Management Bank under any
Secured Cash Management Agreements.

“OFAC” shall have the meaning assigned to such term in Section 3.25.

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between such Recipient and
the jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, property, excise, mortgage, recording, filing or similar Taxes that
arise from any payment made under, from the execution, delivery, recording,
performance, enforcement or registration of, from the receipt or perfection of a
security interest under, or otherwise with respect to, any Loan Document, except
any such Taxes that are Other Connection Taxes imposed with respect to an
assignment (other than an assignment made pursuant to Section 2.21(a)).

“Participant” shall have the meaning assigned to such term in Section 9.04(d).

“Participant Register” shall have the meaning assigned to such term in
Section 9.04(d).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

“Perfection Certificate” shall mean the Perfection Certificate substantially in
the form of Exhibit B to the Guarantee and Collateral Agreement.

“Permitted Acquisition” shall have the meaning assigned to such term in
Section 6.04(g).

“Permitted Cure Securities” shall mean any equity securities (other than
Disqualified Stock) of the Borrower designated as Permitted Cure Securities in a
certificate delivered by the Borrower to the Administrative Agent that are
issued in connection with Cure Rights being exercised by the Borrower under
Section 7.03.

 

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“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of issuance thereof;

(b) investments in commercial paper maturing within 270 days from the date of
issuance thereof and having, at such date of acquisition, the highest credit
rating obtainable from Moody’s or from S&P;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits at the
date of acquisition thereof of not less than $500,000,000 and that issues (or
the parent of which issues) commercial paper rated at least “Prime 1” (or the
then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by
S&P;

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above;

(e) investments in “money market funds” within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through
(d) above; and

(f) other short-term investments utilized by Foreign Subsidiaries in accordance
with normal investment practices for cash management in investments of a type
analogous to the foregoing.

“Permitted Investors” shall mean any holder of Equity Interests in the Borrower
as of the date of effectiveness of the Plan of Reorganization and any Affiliate
of such Person, in each case, other than a natural Person, the Borrower or any
of its Subsidiaries.

“Permitted Refinancing” shall mean, with respect to any Person, any
modification, refinancing, refunding, renewal or extension of any Indebtedness
of such Person (the “Refinanced Indebtedness”); 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 Refinanced Indebtedness except
by an amount equal to any interest capitalized with, any premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection
with such modification, refinancing, refunding, renewal or extension, (b) 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 longer than the then-remaining weighted
average life to maturity of, the Refinanced Indebtedness, (c) if the Refinanced
Indebtedness is subordinated in right of payment to the Obligations, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms not materially less favorable,
taken as a whole, to the Lenders as those contained in the documentation
governing the Refinanced Indebtedness, (d) at the time thereof, no Default or
Event of Default shall have occurred and be continuing, (e) if the Refinanced
Indebtedness is secured, the terms and conditions relating to collateral of any
such modified, refinanced, refunded, renewed or extended Indebtedness, taken as
a whole, are not materially less favorable to the Loan Parties than the terms
and conditions with respect to the Collateral of the Refinanced Indebtedness,
taken as a whole (and the Liens on any Collateral securing any such modified,
refinanced, refunded, renewed or extended Indebtedness shall have the same (or
lesser) priority as the Refinanced Indebtedness relative to the Liens on the
Collateral securing the Obligations), and (f) such modification, refinancing,
refunding, renewal or

 

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extension is incurred by the Person who is the obligor on the Refinanced
Indebtedness. In the case of any Permitted Refinancing of the ABL Facility, such
Permitted Refinancing must also be permitted under the ABL Intercreditor
Agreement.

“Permitted Surety Bonds” means unsecured guarantees and reimbursement
obligations incurred in the ordinary course of business with respect to surety
and appeal bonds, performance bonds, bid bonds, appeal bonds, completion
guarantee and similar obligations.

“Permitted Unsecured Debt” shall mean any Indebtedness incurred by the Borrower
in the form of one or more series of secured or unsecured loans or notes;
provided that (i) the final maturity date of any such Indebtedness shall be no
earlier than 91 days following the Latest Maturity Date, (ii) the terms of such
Indebtedness shall not provide for any scheduled repayment, mandatory
redemption, sinking fund obligations or other payment (other than periodic
interest payments) prior to the date that is 91 days following the Latest
Maturity Date in effect at the time such Permitted Unsecured Debt is issued,
other than customary offers to purchase upon a change of control, asset sale or
casualty or condemnation event and customary acceleration rights upon an event
of default, (iii) such Indebtedness shall be unsecured, (iv) none of the
obligors or guarantors with respect to such Indebtedness shall be a Person that
is not a Loan Party and (v) the terms and conditions (excluding any
subordination, pricing, fees, rate floors, discounts, premiums and optional
prepayment or redemption terms) of such Indebtedness, taken as a whole, shall
not be materially less favorable to the Loan Parties than those applicable to
the Term Loans, except for covenants or other provisions applicable only to
periods after the Latest Maturity Date in effect at the time such Permitted
Unsecured Debt is issued.

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

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) that is covered by Section 4021 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is or, if such plan were terminated under
Section 4069 of ERISA, would be, deemed to be an “employer” as defined in
Section 3(5) of ERISA.

“Plan Confirmation Order” shall mean an order entered by the Bankruptcy Court in
the Bankruptcy Proceedings confirming the Plan of Reorganization pursuant to
section 1129 of the Bankruptcy Code.

“Plan of Reorganization” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

“Plan of Reorganization Confirmation Requirements” shall mean:

 

  (1) the April 24 Plan and the Disclosure Statement shall not have been
amended, modified or supplemented in any manner that could be reasonably
expected to adversely affect the interests of the Agent or the Lenders in their
capacities as such in connection with the Term Facility without the consent of
the Arranger; it being understood that any amendment to the April 24 Plan
providing for the assumption or incurrence by any Loan Party of any Material
Indebtedness or other material liability not otherwise contemplated by the
April 24 Plan and the Disclosure Statement shall be deemed to adversely affect
the interests of the Agent and the Lenders;

 

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  (2) the pro forma capital and ownership structure of the Loan Parties shall be
substantially as described in the April 24 Plan and the Disclosure Statement,
and the Arranger shall be reasonably satisfied with the Loan Parties’
organizational documents and shareholder arrangements of the Loan Parties, in
each case as the same will exist after giving effect to the consummation of the
Transactions;

 

  (3) all conditions precedent to the effectiveness of the Plan of
Reorganization shall have been satisfied or, in the case of condition (6) of
Section VIII.B of the Plan of Reorganization, shall be simultaneously satisfied
(and, in each case, not waived without the consent of the Arranger, not to be
unreasonably withheld);

 

  (4) the effective date of the Plan of Reorganization shall have occurred and
the substantial consummation (as defined in Section 1101 of the Bankruptcy Code)
of the Plan of Reorganization each shall occur contemporaneously with the
Closing Date; and

 

  (5) the Bankruptcy Court shall have entered the Plan Confirmation Order, which
order (i) shall be in form and substance satisfactory to the Arranger with
respect to any provision of the Plan Confirmation Order related to the Loan
Documents or Term Loans, and otherwise reasonably satisfactory to the Arranger,
(ii) shall approve the Loan Documents, authorize the Borrower’s and the
Guarantors’ performance thereunder and be consistent with the Loan Documents
with regard to any terms therein reasonably related to the Loan Documents,
(iii) shall be, on the Closing Date, in full force and effect, unstayed and
final and non-appealable, (iv) shall not be, on the Closing Date, subject to a
motion to stay, a motion for rehearing or reconsideration or a petition for a
writ of certiorari and (v) after entry shall not have been amended, supplemented
or otherwise modified without the written consent of the Arranger (not to be
unreasonably withheld with respect to any amendment, supplement or modification
not related to the Loan Documents or Term Loans), reversed or vacated.

“Platform” shall have the meaning assigned to such term in Section 9.01.

“Post-Petition Interest” shall mean any interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of any one or more of the Loan Parties (or would
accrue but for the operation of applicable Debtor Relief Laws), whether or not
such interest is allowed or allowable as a claim in any such proceeding.

“Prime Rate” shall mean the rate of interest per annum determined from time to
time by Credit Suisse AG as its prime rate in effect at its principal office in
New York City and notified to the Borrower. The prime rate is a rate set by
Credit Suisse AG based upon various factors including Credit Suisse AG’s costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such rate.

“Pro Forma Basis” shall mean, for purposes of calculating compliance with the
Financial Covenants or any other financial ratio or tests, such calculation
shall be made in accordance with Section 1.03.

“Pro Forma Transaction” shall mean any Investment that results in a Person
becoming a Subsidiary, any Permitted Acquisition, any Disposition that results
in a Subsidiary ceasing to be a Subsidiary, any Investment constituting an
acquisition of assets constituting a business unit, line of

 

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business or division of another Person or a Disposition of a business unit, line
of business or division of the Borrower or any Subsidiary, in each case whether
by merger, consolidation, amalgamation or otherwise and any other transaction
that by the terms of this Agreement requires a financial ratio or test to be
determined on a “Pro Forma Basis” or to be given “pro forma effect”.

“Public Lender” shall have the meaning assigned to such term in Section 9.01.

“Qualified Capital Stock” of any Person shall mean any Equity Interest of such
Person that is not Disqualified Stock.

“Qualified Counterparty” shall mean, with respect to any Hedging Agreement, any
counterparty thereto that, at the time such Hedging Agreement was entered into,
was a Lender, the Administrative Agent, an Arranger or any of their respective
Affiliates.

“Real Estate Collateral Requirements” shall mean the requirement that within 90
days of the Closing Date, with respect to the Mortgaged Properties listed on
Schedule 1.01(c) and thereafter as required by Section 5.11, the Collateral
Agent shall have received a Mortgage for each Mortgaged Property in form and
substance reasonably acceptable to the Collateral Agent and suitable for
recording or filing, together, with respect to each Mortgage for any property
located in the United States, the following documents: (a) a fully paid policy
of title insurance (or “pro forma” or marked up commitment having the same
effect of a title insurance policy) (i) in a form approved by the Collateral
Agent insuring the Lien of the Mortgage encumbering such property as a valid
first priority Lien, subject to Liens permitted by Section 6.02 herein, (ii) in
an amount reasonably satisfactory to the Collateral Agent, but in no event
exceeding One Hundred Ten Percent (110%) of the value of such property as
determined by the appraisal report delivered pursuant to subsection (d) herein
or in the event that no such appraisal is ordered, as reasonably agreed upon by
the Borrower and the Collateral Agent, (iii) issued by a nationally recognized
title insurance company reasonably satisfactory to the Collateral Agent (the
“Title Company”) and (iv) that includes (A) such coinsurance and direct access
reinsurance as the Collateral Agent may deem necessary or desirable and (B) such
endorsements or affirmative insurance required by the Collateral Agent and which
are available at commercially reasonable rates in the jurisdiction where the
applicable Mortgaged Property is located, (b) with respect to any property
located in any jurisdiction in which a zoning endorsement is not available (or
for which a zoning endorsement is not available at a premium that is not
excessive), if requested by the Collateral Agent, a zoning compliance letter
from the applicable municipality or a zoning report from Planning and Zoning
Resource Corporation (or another person acceptable to the Collateral Agent), in
each case reasonably satisfactory to the Collateral Agent, (c) upon the request
of the Collateral Agent, a survey certified to Collateral Agent and the Title
Company in form and substance reasonably satisfactory to the Collateral Agent,
(d) upon the request of the Collateral Agent, an appraisal complying with the
requirements of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, by a third-party appraiser selected by the Collateral Agent, (e) an
opinion of local counsel reasonably acceptable to the Collateral Agent and in
form and substance satisfactory to the Collateral Agent, (f) if requested by any
Lender, notwithstanding the first sentence of this definition, solely with
respect to this item (f), no later than three (3) Business Days prior to the
Closing Date, the following documents and instruments, in order to comply with
the National Flood Insurance Reform Act of 1994 and related legislation
(including the regulations of the Board of Governors of the Federal Reserve
System) (“Flood Laws”): (1) a completed standard flood hazard determination
form, (2) if the improvement(s) to the improved real property is located in a
special flood hazard area, a notification to the Borrower (“Borrower Notice”)
and, if applicable, notification to the Borrower that flood insurance coverage
under the National Flood Insurance Program (“NFIP”) is not available because the
community does not participate in the NFIP, (3) documentation evidencing the
Borrower’s receipt of the Borrower

 

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Notice and (4) if the Borrower Notice is required to be given and flood
insurance is available in the community in which the property is located, a copy
of the flood insurance policy, the Borrower’s application for a flood insurance
policy plus proof of premium payment, a declaration page confirming that flood
insurance has been issued, or such other evidence of flood insurance
satisfactory to the Collateral Agent (any of the foregoing being “Evidence of
Flood Insurance”), (g) upon the reasonable request of the Collateral Agent,
Phase I environmental site assessment reports prepared in accordance with the
current ASTM E1527 standard (“Phase Is”) (to the extent not already provided)
and reliance letters for such Phase Is (which Phase Is and reliance letters
shall be in form and substance reasonably acceptable to the Collateral Agent)
and any other environmental information as the Collateral Agent shall reasonably
request, and (h) such other instruments and documents (including consulting
engineer’s reports and lien searches) as the Collateral Agent shall reasonably
request.

“Recipient” shall mean (a) the Administrative Agent and (b) any Lender, as
applicable.

“Register” shall have the meaning assigned to such term in Section 9.04(c).

“Reinvestment Right” shall have the meaning set forth in the definition of “Net
Cash Proceeds.”

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective officers, directors, employees, agents,
advisors, representatives, controlling persons, members, successors and
permitted assigns of such Person and such Person’s Affiliates.

“Release” shall mean any actual or threatened release, spill, emission, leaking,
dumping, injection, pouring, pumping, deposit, disposal, discharge, dispersal,
leaching or migration into or through the indoor or outdoor environment,
including the air, soil and ground and surface water or into, through, within or
upon any building, structure, facility or fixture.

“Repayment Date” shall have the meaning assigned to such term in
Section 2.11(a).

“Required Lenders” shall mean, at any time, Lenders having Loans and unused Term
Loan Commitments representing more than 50% of the sum of all Loans outstanding
and unused Term Loan Commitments at such time.

“Resignation Effective Date” shall have the meaning assigned to such term in
Section 8.06.

“Responsible Officer” of any Person shall mean any executive officer or
Financial Officer of such Person and any other officer or similar official
thereof responsible for the administration of the obligations of such Person in
respect of this Agreement.

“Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in the
Borrower or any 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 Subsidiary.

“S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.

 

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“SEC” shall mean the Securities and Exchange Commission.

“Secured Cash Management Obligations” shall mean any Cash Management Obligations
owed by a Loan Party to any Cash Management Bank.

“Secured Hedging Agreement” shall mean any Hedging Agreement entered into by the
Loan Party and a Qualified Counterparty.

“Secured Parties” shall have the meaning assigned to such term in the Guarantee
and Collateral Agreement.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Security Documents” shall mean the Mortgages, the Guarantee and Collateral
Agreement, the ABL Intercreditor Agreement and each of the security agreements,
mortgages and other agreements, instruments and documents executed and delivered
pursuant to any of the foregoing or pursuant to Section 5.11.

“Solvent” shall mean, (a) the sum of the liabilities (including contingent
liabilities) of the Borrower and the subsidiaries, on a consolidated basis, does
not exceed the fair value of the present assets of the Borrower and the
Subsidiaries, on a consolidated basis, (b) the present fair saleable value of
the assets of the Borrower and the Subsidiaries, on a consolidated basis, is
greater than the total amount that will be required to pay the probable
liabilities (including contingent liabilities) of the Borrower and the
Subsidiaries as they become absolute and matured, (c) the capital of the
Borrower and the Subsidiaries, on a consolidated basis, is not unreasonably
small in relation to their business as contemplated on the date hereof, and
(d) the Borrower and the Subsidiaries, on a consolidated basis, have not
incurred and do not intend to incur, or believe that they will incur, debts or
liabilities, including current obligations beyond their ability to pay such
debts or other liabilities as they become due (whether at maturity or
otherwise).

“Specified Unsecured Prepetition Debt” means any payment or distribution in
respect of the Allowed General Unsecured Claims or Allowed Trade Unsecured
Claims (as such terms are defined in the Plan of Reorganization) that is made in
accordance with Sections IV.E, IV.F and V.I of the Plan of Reorganization.

“SPV” shall have the meaning assigned to such term in Section 9.04(f).

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) established by the Board
and any other banking authority, domestic or foreign, to which the
Administrative Agent or any Lender (including any branch, Affiliate or other
fronting office making or holding a Loan) is subject for Eurocurrency
Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.

 

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“subsidiary” shall mean, with respect to any Person (herein referred to as the
“parent”), any corporation, partnership, limited liability company, association
or other business 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 more than 50% of the general partnership interests are, at the time any
determination is being made, owned, Controlled or held, or (b) that is, at the
time any determination is made, 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” shall mean any subsidiary of the Borrower.

“Swap Obligation” shall mean, with respect to any Guarantor, any obligation to
pay or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act
(including without limitation any Secured Hedging Agreement).

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

“Term Borrowing” shall mean a Borrowing comprised of Term Loans.

“Term Lender” shall mean a Lender with a Term Loan Commitment or an outstanding
Term Loan.

“Term Loan Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Term Loans hereunder as set forth on Schedule 2.01(a), or
in the Assignment and Acceptance pursuant to which such Lender assumed its Term
Loan Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04.

“Term Loans” shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01, any Incremental Term Loans made by the Lenders to the
Borrower pursuant to Section 2.22 and any Extended Term Loans made by the
Lenders to the Borrower pursuant to Section 2.23.

“Test Period” shall have the meaning assigned to such term in Section 1.03(b).

“Title Company” shall have the meaning assigned to such term in the definition
of Real Estate Collateral Requirements.

“Total Debt” shall mean, at any time, (a) the total Indebtedness of the Borrower
and the Subsidiaries at such time (excluding (i) loans and letters of credit
under the ABL Facility and (ii) Indebtedness of the type described in clauses
(g), (i), (k) and (l) of the definition thereof, except, (x) in the case of such
clauses (k) and (l), to the extent of any unreimbursed drawings thereunder and
(y) in the case of clause (g), Guarantees of Indebtedness not otherwise excluded
from the calculation of “Total Debt”) and (b) the arithmetic average of the
aggregate amount of loans and unreimbursed letter of credit drawings under the
ABL Facility as of the last day of each of the previous four fiscal quarters;
provided that for calculations of “Total Debt” made before July 25, 2014, the
amount of debt in respect of the ABL Facility shall be (i) deemed to be
$22,400,000 for calculations before October 26, 2013 and (ii) equal to the
aggregate amount of loans and unreimbursed letter of credit drawings under the
ABL Facility (a) as of October 26, 2013, for calculations on or after
October 26, 2013 but before January 25, 2014, (b) as of October 26, 2013 and
January 25, 2014, divided by two, for calculations on or after January 25, 2014
but before April 26, 2014 and (c) as of October 26, 2013, January 25, 2014 and
April 26, 2014, divided by

 

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three, for calculations on or after April 26, 2014 but before July 26, 2014,
provided, further, that (i) for the avoidance of doubt, Total Debt shall include
Specified Unsecured Prepetition Debt and (ii) reimbursement obligations with
respect to Permitted Surety Bonds that have not been drawn shall not constitute
Total Debt.

“Transaction Costs” shall mean the fees, costs and expenses incurred in
connection with the Transactions.

“Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party
and the funding of the Term Loans on the Closing Date, (b) the execution and
delivery of the ABL Facility Documentation, (c) the consummation of the Plan of
Reorganization and any other transactions in connection with the foregoing on
the Closing Date, (d) the repayment of the obligations under Existing Credit
Agreements and the termination of the commitments thereunder and the security
interests in respect thereof on the Closing Date in accordance with the Plan of
Reorganization and (e) the payment on the Closing Date of the Transaction Costs.

“Type” when used in respect of any Loan or Borrowing, shall refer to the Rate by
reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall mean the
Adjusted LIBO Rate and the Alternate Base Rate.

“Unfunded Pension Liability” shall mean, with respect to any Plan at any time,
the amount of any of its unfunded benefit liabilities as defined in
Section 4001(a)(18) of ERISA.

“Unrestricted Cash” shall mean cash or cash equivalents of the Borrower or any
of its Subsidiaries that would not appear as “restricted” on a consolidated
balance sheet of the Borrower or any of its Subsidiaries and are not subject to
Liens other than Liens arising by operation of law and Liens securing the
Obligations and the “ABL Obligations” (as defined in the ABL Intercreditor
Agreement), not to exceed $15,000,000.

“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“U.S. Person” shall mean any Person (a)(i) that is not disregarded as separate
from its owner for U.S. federal income tax purposes and (ii) that is a “United
States Person” as defined in Section 7701(a)(30) of the Code or (b)(i) that is
disregarded as separate from its owner for U.S. federal income tax purposes and
(ii) whose regarded owner for U.S. federal income tax purposes is a “United
States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning assigned to such term
in Section 2.20(g).

“Wholly Owned Subsidiary” of any Person shall mean a subsidiary of such Person
of which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, 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.

 

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“Withdrawal Liability” shall mean 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 and the Administrative Agent.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both 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,” and
the words “asset” and “property” shall be construed as having 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. The words
“herein”, “hereto”, “hereof” and “hereunder” and words of similar import when
used in any Loan Document shall refer to such Loan Document as a whole and not
to any particular provision thereof. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document or any other agreement,
instrument or document shall mean such document as amended, restated,
supplemented or otherwise modified from time to time, but only to the extent
that such amendment, restatements, supplements or modifications are not
prohibited by this Agreement, (b) references to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such law, (c) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided that if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any provision of this Agreement or the other
Loan Documents to eliminate the effect of any change in GAAP occurring after the
date of this Agreement on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend any provision of this Agreement or the other Loan Documents) regardless of
whether any such notice is given before or after such change in GAAP, then such
provision shall be interpreted on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such provision is amended in a manner satisfactory to the Borrower
and the Required Lenders and (d) 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 (i) without giving effect to any election under
Accounting Standards Codification 825-10-25 (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any Indebtedness or other liabilities of the Borrower or any Subsidiary
at “fair value”, as defined therein, (ii) without giving effect to any treatment
of Indebtedness in respect of convertible debt instruments under Accounting
Standards Codification 470-20 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal
amount thereof and (iii) in a manner such that the determination of whether a
lease is to be treated as an operating lease or capital lease shall be made
without giving effect to any change in accounting for leases pursuant to GAAP
resulting from the implementation of proposed Accounting Standards Update (ASU)
Leases (Topic 840) issued August 17, 2010.

SECTION 1.03. Pro Forma Calculations. (a) Notwithstanding anything to the
contrary herein, the Interest Coverage Ratio, the Net First Lien Leverage Ratio
and the Net Total Leverage Ratio shall be calculated in the manner prescribed by
this Section 1.03; provided that

 

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notwithstanding anything to the contrary herein, when calculating any such ratio
for the purpose of any mandatory prepayment provision hereunder or compliance
with the Financial Covenants, the events set forth in clause (b), (c) and
(d) below that occurred subsequent to the end of the applicable Test Period
shall not be given pro forma effect.

(b) For purposes of calculating the Interest Coverage Ratio, the Net First Lien
Leverage Ratio and the Net Total Leverage Ratio, Pro Forma Transactions (and the
incurrence or repayment of any Indebtedness in connection therewith) that have
been consummated (i) during the applicable period of four consecutive fiscal
quarters for which such financial ratio is being determined (the “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 Pro Forma Transactions (and any
increase or decrease in Consolidated EBITDA and the component financial
definitions used therein attributable to any Pro Forma Transaction) had occurred
on the first day of the applicable Test Period.

(c) If pro forma effect is to be given to a Pro Forma Transaction, the pro forma
calculations shall be made in good faith by a financial or accounting
Responsible Officer of the Borrower and include only those adjustments that
would be permitted or required by Regulation S-X together with those adjustments
that (a) have been certified by a Financial Officer of the Borrower as having
been prepared in good faith based upon reasonable assumptions and (b) are
(i) directly attributable to the Pro Forma Transaction with respect to which
such adjustments are to be made, (ii) expected to have a continuing impact on
the Loan Parties, (iii) factually supportable and reasonably identifiable, and
(iv) based on reasonably detailed written assumptions reasonably acceptable to
the Administrative Agent. For the avoidance of doubt, all pro forma adjustments
shall be consistent with, and subject to the caps and limits set forth in, the
applicable definitions herein. To the extent compliance with the Financial
Covenants is being tested prior to the first test date under the Financial
Covenants, in order to determine the permissibility of an action by the Borrower
or its Subsidiaries, such compliance shall be tested against the ratios for the
first test date.

(d) In the event that the Borrower or any Subsidiary incurs (including by
assumption or guarantees) or repays (including by redemption, repayment,
retirement or extinguishment) any Indebtedness included in the calculations of
the Net Total Leverage Ratio, the Net First Lien Leverage Ratio or the Interest
Coverage Ratio (other than Indebtedness incurred or repaid under any revolving
credit facility in the ordinary course of business for working capital purposes)
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 Net Total Leverage Ratio, the Net First Lien Leverage Ratio or
the Interest Coverage Ratio, as applicable, 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 first day of the applicable Test Period.

SECTION 1.04. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Term
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Term Loan”). Borrowings also may be classified and referred to by
Class (e.g., a “Term Credit Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Term Credit Borrowing”).

 

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ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions and relying upon
the representations and warranties set forth herein and in the other Loan
Documents, each Term Lender agrees, severally and not jointly, to make a Term
Loan to the Borrower on the Closing Date in a principal amount not to exceed its
Term Loan Commitment. Amounts repaid or prepaid in respect of Term Loans may not
be reborrowed.

SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Commitments; provided that the failure of any Lender to make any Loan
shall not in itself relieve any other Lender of its obligation to lend hereunder
(it being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be made by such other
Lender). The Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $1,000,000 and not less than
$5,000,000 or (ii) equal to the remaining available balance of the applicable
Commitments.

(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided further that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than five (5) Eurodollar
Borrowings outstanding hereunder at any time.

(c) Each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds to such account in
New York City as the Administrative Agent may designate not later than 1:00
p.m., New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the amounts
so received to the respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender
(i) in the case of a Eurodollar Loan, prior to the date of any Borrowing and
(ii) in the case of an ABR Loan prior to 1:00 p.m., New York City time, on the
date of any Borrowing, in either case that such Lender will not make available
to the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (c) above and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If the Administrative Agent shall have so made funds available then, to the
extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower to but excluding the date such amount is repaid to the
Administrative Agent at (A) in the case of the Borrower, a rate per annum equal
to the interest rate applicable at the time to the Loans comprising such
Borrowing and (B) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Lender’s Loan as part of such Borrowing for purposes of
this Agreement.

 

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SECTION 2.03. Borrowing Procedure. In order to request a Borrowing, the Borrower
shall notify the Administrative Agent of such request in writing or by telephone
(a) in the case of a Eurodollar Borrowing, not later than 1:00 p.m., New York
City time, three (3) Business Days before a proposed Borrowing and (b) in the
case of an ABR Borrowing, not later than 1:00 p.m., New York City time, one
(1) Business Day before a proposed Borrowing. Each such notice shall be
irrevocable, and any telephonic notice shall be confirmed promptly by delivery
of a written Borrowing Request and shall specify the following information:
(i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing;
(ii) the date of such Borrowing (which shall be a Business Day); (iii) the
number and location of the account to which funds are to be disbursed; (iv) the
amount of such Borrowing and (v) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto; provided that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in
Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. The Administrative Agent shall promptly advise
the applicable Lenders of any notice given pursuant to this Section 2.03 (and
the contents thereof), and of each Lender’s pro rata share of the requested
Borrowing.

SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the principal amount of each Term Loan of such Lender as provided in
Section 2.11.

(b) 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 from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.

(c) The Administrative Agent shall, in accordance with its customary practice,
maintain accounts in which it will record (i) the amount of each Loan made
hereunder, the Class and Type thereof and, if applicable, the Interest Period
applicable thereto, the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and
(ii) the amount of any sum received by the Administrative Agent hereunder from
the Borrower or any Guarantor and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) and
(c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; 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 obligations of the Borrower to repay the Loans in
accordance with their terms.

(e) Any Lender may request that Loans made by it hereunder be evidenced by a
Note. In such event, the Borrower shall execute and deliver to such Lender a
Note payable to such Lender and its registered assigns. Notwithstanding any
other provision of this Agreement, in the event any Lender shall request and
receive such a Note, the interests represented by such Note shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more Notes payable to the payee named
therein or its registered assigns.

 

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SECTION 2.05. Fees. (a) The Borrower agrees to pay to the Administrative Agent,
for its own account, the administrative fees set forth in the Fee Letter at the
times and in the amounts specified therein (the “Administrative Agent Fees”).

(b) In the event all or any portion of the Term Loans are prepaid (or
effectively refinanced through an amendment or repricing) for any reason (other
than a mandatory prepayment pursuant to Section 2.13(a) or 2.13(c)) prior to the
second anniversary of the Closing Date, the Borrower shall pay to the
Administrative Agent for the ratable account of each Term Lender a prepayment
premium equal to (i) 2.00% of the principal amount of Term Loans repaid,
repriced or refinanced (if such prepayment, repricing or refinancing occurs on
or prior to the first anniversary of the Closing Date) and (iii) 1.00% of the
principal amount of Term Loans repaid, repriced or refinanced (if such
prepayment, repricing or refinancing occurs on or prior to the second
anniversary of the Closing Date and after the first anniversary of the Closing
Date). Such amounts shall be due and payable on the date of effectiveness of
such prepayment, repricing or refinancing.

(c) The Borrower agrees to pay on the Closing Date to each Term Lender party to
this Agreement on the Closing Date, as compensation for the funding of such Term
Lender’s Term Loan, a closing fee in an amount equal to 2.0% of the stated
principal amount of such Term Lenders’ Term Loan. Such fees may be paid to each
Term Lender out of the proceeds of such Term Loan as and when funded on the
Closing Date. Such closing fees will be in all respects fully earned, due and
payable on the Closing Date and non-refundable and non-creditable thereafter.

(d) All Fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.

SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 365 or 366, as
applicable, days at all times and calculated from and including the date of such
Borrowing to but excluding the date of repayment thereof) at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin in effect from time
to time.

(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin in effect from time to time.

(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

SECTION 2.07. Default Interest. (a) All amounts not paid when due hereunder
shall bear interest (after as well as before judgment), payable on demand,
(i) in the case of principal, at the rate otherwise applicable to such Loan
pursuant to Section 2.06 plus 2.00% per annum and (ii) in all other cases, at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 360 days at all times) equal to the rate that would be applicable to
an ABR Loan plus 2.00% per annum.

 

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SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion,
that on the day two (2) Business Days prior to the commencement of any Interest
Period for a Eurodollar Borrowing the Administrative Agent shall have determined
that (a) Dollar deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank market, (b) the
rates at which such Dollar deposits are being offered will not adequately and
fairly reflect the cost to the majority of Lenders of making or maintaining
Eurodollar Loans during such Interest Period or (c) reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or fax notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or Section 2.10 shall be deemed to be a request for an ABR
Borrowing. Each determination by the Administrative Agent under this
Section 2.08 shall be conclusive absent manifest error.

SECTION 2.09. Termination of Term Loan Commitments. The Term Loan Commitments
shall automatically terminate upon the making of the Term Loans on the Closing
Date.

SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have
the right at any time upon written or telephonic notice to the Administrative
Agent (a) not later than 1:00 p.m., New York City time, one (1) Business Day
prior to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing,
(b) not later than 1:00 p.m., New York City time, three (3) Business Days prior
to conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period and (c) not later than 1:00 p.m., New York City
time, three (3) Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Borrowing to another permissible Interest
Period, subject in each case to the following:

(i) each conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;

(ii) if less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;

(iii) each conversion shall be effected by each Lender and the Administrative
Agent by recording for the account of such Lender the new Borrowing of such
Lender resulting from such conversion and reducing the Borrowing (or portion
thereof) of such Lender being converted by an equivalent principal amount;
accrued interest on any Eurodollar Loan (or portion thereof) being converted
shall be paid by the Borrower at the time of conversion;

(iv) if any Eurodollar Borrowing is converted at a time other than the end of
the Interest Period applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Lenders pursuant to Section 2.16;

(v) any portion of a Borrowing maturing or required to be repaid in less than
one month may not be converted into or continued as a Eurodollar Borrowing;

 

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(vi) any portion of a Eurodollar Borrowing that cannot be continued as a
Eurodollar Borrowing by reason of the immediately preceding clause (v) shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing; and

(vii) After the occurrence and during the continuance of an Event of Default
under Section 7.01(b), (c), (f) or (g) or, upon notice to the Borrower from the
Administrative Agent given at the request of the Required Lenders, any other
Event of Default, no outstanding Loan may be converted into, or continued as, a
Eurodollar Loan.

Each such telephonic notice shall be irrevocable and shall be confirmed promptly
by delivery of an Interest Election Request pursuant to this Section 2.10 and
shall specify (a) the identity and amount of the Borrowing that the Borrower
requests be converted or continued, (b) whether such Borrowing is to be
converted to or continued as a Eurodollar Borrowing or an ABR Borrowing, (c) if
such notice requests a conversion, the date of such conversion (which shall be a
Business Day) and (d) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Administrative Agent
shall promptly advise the Lenders of any notice given pursuant to this
Section 2.10 and of each Lender’s pro rata share of any converted or continued
Borrowing. If the Borrower shall not have given notice in accordance with this
Section 2.10 to continue any Borrowing into a subsequent Interest Period (and
shall not otherwise have given notice in accordance with this Section 2.10 to
convert such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be converted into an ABR Borrowing.

SECTION 2.11. Repayment of Term Borrowings. (a) Commencing on the last Business
Day of September 2013, the Borrower shall pay to the Administrative Agent, for
the account of the Term Lenders, on the last Business Day of each September,
December, March and June occurring prior to the Maturity Date (each, a
“Repayment Date”), a principal amount of the Term Loans (as adjusted from time
to time pursuant to 2.12 and 2.13(e)) equal to 0.25% of the original principal
amount of the Term Loans, together in each case with accrued and unpaid interest
on the principal amount to be paid to but excluding the date of such payment.

(b) To the extent not previously paid, all Term Loans shall be due and payable
on the Maturity Date together with accrued and unpaid interest on the principal
amount to be paid to but excluding the date of payment.

(c) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.

SECTION 2.12. Voluntary Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon at
least three (3) Business Days’ prior written notice (or telephonic notice
promptly confirmed by written notice) in the case of Eurodollar Loans, or
written notice (or telephonic notice promptly confirmed by written notice) at
least one (1) Business Day prior to the date of prepayment in the case of ABR
Loans, to the Administrative Agent before 1:00 p.m., New York City time;
provided that each partial prepayment shall be in an amount that is an integral
multiple of $500,000 and not less than $2,000,000 (or such lesser amount as may
remain outstanding).

 

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(b) Voluntary prepayments of Term Loans shall be applied as directed by the
Borrower to the remaining scheduled installments of principal due in respect of
the Term Loans under Section 2.11.

(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein; provided that a notice of prepayment
may state that such notice is conditioned upon the effectiveness of other
financing arrangements, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent prior to 1:00 p.m. on the specified
effective date) if such condition is not satisfied; provided further that the
provisions of Section 2.16 shall apply with respect to any such revocation or
extension. All prepayments under this Section 2.12 shall be subject to
Section 2.16 and Section 2.05(b) but otherwise without premium or penalty. All
prepayments under this Section 2.12 shall be accompanied by accrued and unpaid
interest on the principal amount to be prepaid to but excluding the date of
payment.

SECTION 2.13. Mandatory Prepayments. (a) Not later than the fifth Business Day
following the receipt by the Borrower or any Subsidiary of Net Cash Proceeds
from any Asset Sale (other than with respect to Current Asset Collateral so long
as the ABL Facility is in effect), the Borrower shall prepay outstanding Term
Loans in an amount equal to 100% of such Net Cash Proceeds in accordance with
Section 2.13(e); provided that the Borrower shall not be required to apply Net
Cash Proceeds from any Asset Sale (or series of related Asset Sales) in
accordance with this clause (a) to the extent (x) the Net Cash Proceeds from
such Asset Sale (or series of related Asset Sales) do not exceed $2,000,000 or
(y) the aggregate Net Cash Proceeds received from all Asset Sales since the
Closing Date do not exceed $5,000,000. In the case of Net Cash Proceeds received
by the Borrower in connection with Asset Sales contemplated by Section 6.06(s),
the proviso in the preceding sentence shall not apply and the Net Cash Proceeds
(calculated without giving effect to any reinvestment right set forth in the
definition thereof or any required prepayment of the ABL Facility) of the Asset
Sales contemplated by Section 6.06(s) shall be allocated between the ABL
Facility and the Term Facility as contemplated by the ABL Intercreditor
Agreement, and then 100% of such Net Cash Proceeds that would be received by the
Collateral Agent on behalf of the Secured Parties pursuant to such allocation
shall be applied to prepay the Term Loan in accordance with the first sentence
of this clause (a) (without giving effect to the proviso thereto) until the Net
Total Leverage Ratio is no greater than 3.00:1.00 on a Pro Forma Basis, after
which the remaining Net Cash Proceeds may either be (i) reinvested pursuant to
the reinvestment provisions set forth in the definition of Net Cash Proceeds or
(ii) applied to prepay the Term Loan and to make Restricted Payments (in equal
amounts), in each case so long as the Net Total Leverage Ratio remains no
greater than 3.00:1.00 on a Pro Forma Basis. Dividends distributed pursuant to
the preceding sentence shall not exceed $50,000,000 over the life of the Term
Facility.

(b) Reserved.

(c) No later than the earlier of (i) ninety (90) days after the end of each
fiscal year of the Borrower, commencing with the fiscal year ending on April 26,
2014, and (ii) the date on which the financial statements with respect to such
period are delivered pursuant to Section 5.04(a), the Borrower shall prepay
outstanding Term Loans in accordance with Section 2.13(e) in an aggregate
principal amount equal to (x) the ECF Percentage of Excess Cash Flow for the
fiscal year then ended minus (y) voluntary prepayments of Term Loans during such
fiscal year but only to the extent that the Indebtedness so prepaid by its terms
cannot be reborrowed or redrawn and such prepayments do not occur in connection
with a refinancing of all or any portion of such Indebtedness.

 

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(d) Not later than the fifth Business Day following the receipt by the Borrower
or any Subsidiary of Net Cash Proceeds from the issuance or incurrence of
Indebtedness for borrowed money (other than any cash proceeds from the issuance
of Indebtedness permitted pursuant to Section 6.01), the Borrower shall prepay
outstanding Term Loans in an amount equal to 100% of such Net Cash Proceeds in
accordance with Section 2.13(e).

(e) Mandatory prepayments of outstanding Term Loans under this Agreement shall
be applied in direct order of maturity to the remaining scheduled installments
of principal due in respect of the Term Loans under Section 2.11.

(f) The Borrower shall deliver to the Administrative Agent, at the time of each
prepayment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) (other than in connection
with a mandatory prepayment under Section 2.13(a)) at least three (3) Business
Days prior written notice of such prepayment. Each notice of prepayment shall
specify the prepayment date, the Type of each Loan being prepaid and the
principal amount of each Loan (or portion thereof) to be prepaid. All
prepayments of Borrowings under this Section 2.13 shall be subject to
Section 2.05(b) and Section 2.16, but shall otherwise be without premium or
penalty, and shall be accompanied by accrued and unpaid interest on the
principal amount to be prepaid to but excluding the date of payment.

(g) Each Term Lender may reject all (but not less than all) of its applicable
share of any mandatory prepayment (such declined amounts, the “Declined
Proceeds”) of Term Loans required to be made pursuant to this Section 2.13 by
providing written notice (each, a “Rejection Notice”) to the Administrative
Agent no later than 5:00 p.m., New York City time, one (1) Business Day after
the date of such Lender’s receipt of notice from the Administrative Agent
regarding such prepayment. If a Lender fails to deliver a Rejection Notice to
the Administrative Agent within the time frame specified above such failure will
be deemed an acceptance of the total amount of such mandatory prepayment of
Loans. Any Declined Proceeds shall be retained by the Borrower and may be used
for any purpose not prohibited by this Agreement.

SECTION 2.14. Increased Costs; Capital Adequacy. (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 which is reflected in the Adjusted LIBO Rate);

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Loans made by
such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making or maintaining any Loan or to reduce
the amount of any sum received or receivable by such Lender or such other
Recipient hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such other Recipient, as the case may be,
upon demand such additional amount or amounts as will compensate such Lender or
such other Recipient, as the case may be, for such additional costs incurred or
reduction suffered.

 

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(b) If any Lender shall have determined that any Change in Law regarding capital
adequacy or liquidity requirements has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s
holding company, if any, as a consequence of this Agreement or the Loans made to
a level below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy or liquidity) then from time to time the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender or such other Recipient setting forth the amount
or amounts necessary to compensate such Lender, or such other Recipient or the
holding company, as applicable, as specified in paragraph (a) or (b) above shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or such other Recipient the amount shown as due
on any such certificate delivered by it within ten (10) days after its receipt
of the same.

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

SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods) and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans, whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
or to continue a Eurodollar Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such or to convert a Eurodollar Loan into an ABR Loan,
as the case may be), unless such declaration shall be subsequently withdrawn;
and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.

 

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In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.

(b) For purposes of this Section 2.15, a notice to the Borrower by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on
the last day of the Interest Period then applicable to such Eurodollar Loan; in
all other cases such notice shall be effective on the date of receipt by the
Borrower.

SECTION 2.16. Breakage. The Borrower shall indemnify each Lender against any
loss (excluding loss of anticipated profits) or expense that such Lender may
sustain or incur as a consequence of (a) any event, other than a default by such
Lender in the performance of its obligations hereunder, which results in
(i) such Lender receiving or being deemed to receive any amount on account of
the principal of any Eurodollar Loan prior to the end of the Interest Period in
effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or
the conversion of the Interest Period with respect to any Eurodollar Loan, in
each case other than on the last day of the Interest Period in effect therefor,
or (iii) any Eurodollar Loan to be made by such Lender (including any Eurodollar
Loan to be made pursuant to a conversion or continuation under Section 2.10) not
being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being called a
“Breakage Event”) or (b) any default in the making of any payment or prepayment
required to be made hereunder. In the case of any Breakage Event, such loss
shall include an amount equal to the excess, as reasonably determined by such
Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is the
subject of such Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or that would have been
in effect) for such Loan over (ii) the amount of interest likely to be realized
by such Lender in redeploying the funds released or not utilized by reason of
such Breakage Event for such period. A certificate of any Lender setting forth
any amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Borrower and shall be conclusive absent
manifest error.

SECTION 2.17. Pro Rata Treatment. Except as otherwise expressly provided herein,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each reduction of the Term Loan Commitments
and each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type (excluding, for the avoidance of doubt, any assignments to
a Borrower or its Subsidiaries in accordance with the terms of this Agreement)
shall be allocated pro rata among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender’s portion
of any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole Dollar amount.

SECTION 2.18. Sharing of Setoffs. 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 or other Obligations hereunder
resulting in such Lender receiving payment of a proportion of the aggregate
amount of its Loans and accrued interest thereon or other such obligations
greater than its pro rata share thereof as provided herein, then the Lender
receiving such greater proportion shall (a) notify the Administrative Agent of
such fact, and (b) purchase (for cash at face value) participations in the Loans
and such other obligations of the other Lenders, or make such other

 

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adjustments as shall be equitable, 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 and other amounts
owing them; provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(ii) the provisions of this Section 2.18 shall not be construed to apply to
(x) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement, or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or Commitments to any assignee or participant, other than to the Borrower
or any of its Affiliates (as to which the provisions of this paragraph shall
apply.

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 each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.

SECTION 2.19. Payments. (a) The Borrower shall make each payment (including
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder or under any other Loan Document not later than 1:00 p.m., New York
City time, on the date when due in immediately available Dollars, without
setoff, defense 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. Each such payment shall be made to the Administrative Agent at
its offices at Eleven Madison Avenue, New York, NY 10010. The Administrative
Agent shall promptly distribute to each Lender any payments received by the
Administrative Agent on behalf of such Lender.

(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.

SECTION 2.20. Taxes. (a) For the avoidance of doubt, for purposes of this
Section 2.20, the term “applicable law” includes FATCA.

(b) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.20) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

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(c) Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for the payment
of, any Other Taxes.

(d) Indemnification by the Loan Parties. The Borrower shall, and shall cause the
other Loan Parties to, jointly and severally indemnify each Recipient, within 10
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 2.20) payable or paid by such Recipient (including
amounts withheld or deducted from a payment to such Recipient) and any
reasonable out-of-pocket expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(d) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

(f) Evidence of Payments. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 2.20, such
Loan Party 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.

(g) Status of Lenders and Agents. (i) Any Lender that is entitled to an
exemption from or reduction of withholding Tax with respect to payments made
under any Loan Document shall deliver to the Borrower and the Administrative
Agent, at the time or times reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Borrower or
the Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements and to satisfy any such information reporting
requirements.

 

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Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.20(g)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement, from time to time thereafter upon the reasonable
request of the Borrower or the Administrative Agent and pursuant to
Section 2.20(g)(iv), executed originals of IRS Form W-9 certifying that such
Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement, from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent and pursuant to Section 2.20(g)(iv), whichever of the following is
applicable:

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(ii) executed originals of IRS Form W-8ECI;

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Sections 871(h) or 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit K-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(iv) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit K-2 or
Exhibit K-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of

 

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such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit K-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement, from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent and pursuant to Section 2.20(g)(iv), executed originals of any other form
prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding Tax, duly completed, 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; and

(D) if a payment made to a Recipient under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Recipient 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
Recipient shall deliver to the Borrower and the 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 or pursuant to Section 2.20(g)(iv) 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 and to determine that such Recipient has complied with
such Recipient’s obligations under FATCA or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

(iii) On or prior to the Closing Date and each subsequent date on which a
successor Administrative Agent is appointed hereunder, from time to time
thereafter upon the reasonable request of the Borrower and pursuant to
Section 2.20(g)(iv), the Administrative Agent will provide the Borrower with an
executed original IRS Form W-8IMY certifying on Part I and Part IV of such IRS
Form W-8IMY that it is a U.S. branch that has agreed to be treated as a U.S.
person for U.S. federal withholding tax purposes with respect to payments
received by it from the Borrower (or, in the case of a successor Administrative
Agent, such properly completed and executed applicable IRS Form W-8 or W-9 as
will permit payments to such successor Administrative Agent (solely in its
capacity as an Administrative Agent hereunder) to be made without withholding or
at a reduced rate of withholding if such successor Administrative Agent is
entitled to such exemption or reduction of withholding tax.

(iv) Each Recipient agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify the Borrower and the
Administrative Agent in writing of its legal inability to do so.

(h) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.20 (including by
the payment of additional amounts pursuant to this Section 2.20), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity

 

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payments made under this Section 2.20 with respect to the Taxes giving rise to
such refund), net of all reasonable out-of-pocket expenses (including Taxes
imposed on the receipt of such refund) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (h) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (h), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (h) to the extent the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(i) Survival. Each party’s obligations under this Section 2.20 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

SECTION 2.21. Assignment of Commitments under Certain Circumstances; Duty to
Mitigate. (a) In the event (i) any Lender delivers a certificate requesting
compensation pursuant to Section 2.14, (ii) any Lender delivers a notice
described in Section 2.15, (iii) the Borrower is required to pay any Indemnified
Taxes or additional amounts with respect thereto to any Lender or any
Governmental Authority on account of any Lender pursuant to Section 2.20 or
(iv) any Lender refuses to consent to any amendment, waiver or other
modification of any Loan Document requested by the Borrower that requires the
consent of a greater percentage of the Lenders than the Required Lenders or from
all affected Lenders and such amendment, waiver or other modification is
consented to by the Required Lenders, then, in each case, the Borrower may, at
its sole expense and effort (including with respect to the processing and
recordation fee referred to in Section 9.04(b)), upon notice to such Lender, as
the case may be, and the Administrative Agent, require such Lender to transfer
and assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement (or, in the case of clause (iv) above, all of its interests,
rights and obligations with respect to the Class of Loans or Commitments that is
the subject of the related consent, amendment, waiver or other modification) to
an Eligible Assignee that shall assume such assigned obligations (and, with
respect to clause (iv) above, shall consent to such requested amendment, waiver
or other modification); provided that (x) such assignment shall not conflict
with any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction, and (y) the Borrower or such assignee shall have
paid to the affected Lender in immediately available funds an amount equal to
the sum of the principal of and interest accrued to the date of such payment on
the outstanding Loans of such Lender, respectively, plus all Fees and other
amounts accrued for the account of such Lender hereunder with respect thereto
(including any amounts under Sections 2.14 and 2.16 and, if applicable, the
prepayment fee pursuant to Section 2.05(b)); provided further that if prior to
any such transfer and assignment the circumstances or event that resulted in
such Lender’s claim for compensation under Section 2.14, notice under
Section 2.15 or the amounts paid pursuant to Section 2.20, as the case may be,
cease to cause such Lender to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, cease to have the
consequences specified in Section 2.15 or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of

 

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any action taken by such Lender pursuant to paragraph (b) below), or if such
Lender shall waive its right to claim further compensation under Section 2.14 in
respect of such circumstances or event, shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under Section 2.20 in
respect of such circumstances or event or shall consent to the proposed
amendment, waiver, consent or other modification, as the case may be, then such
Lender shall not thereafter be required to make any such transfer and assignment
hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable
power of attorney (which power is coupled with an interest) to execute and
deliver, on behalf of such Lender, as assignor, any Assignment and Acceptance
necessary to effectuate any assignment of such Lender’s interests hereunder in
the circumstances contemplated by this Section 2.21(a).

(b) If (i) any Lender shall request compensation under Section 2.14, (ii) any
Lender delivers a notice described in Section 2.15 or (iii) the Borrower is
required to pay any Indemnified Taxes or additional amount with respect thereto
to any Lender or any Governmental Authority on account of any Lender pursuant to
Section 2.20, then such Lender shall use reasonable efforts (which shall not
require such Lender to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) except in the case of a requirement to pay Indemnified
Taxes or additional amounts with respect thereto pursuant to Section 2.20, to
file any certificate or document reasonably requested in writing by the Borrower
or (y) to assign its rights (other than its existing rights to payments pursuant
to Section 2.14 or Section 2.20) and delegate and transfer its obligations
hereunder to another of its offices, branches or affiliates, if such filing or
assignment would reduce its claims for compensation under Section 2.14 or
Section 2.20 enable it to withdraw its notice pursuant to Section 2.15 or would
reduce amounts payable pursuant to Section 2.20, as the case may be, in the
future. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such filing or assignment,
delegation and transfer.

SECTION 2.22. Incremental Facilities. (a). The Borrower may, by written notice
to the Administrative Agent from time to time, request Incremental Term Loan
Commitments in an amount such that, after giving effect thereto, the Aggregate
Incremental Amount does not exceed the Incremental Cap. Such notice shall set
forth (i) the amount of the Incremental Term Loan Commitments being requested
(which shall be in minimum increments of $1,000,000 and a minimum amount of
$5,000,000), (ii) the date on which such Incremental Term Loan Commitments are
requested to become effective (which shall not be less than ten (10) Business
Days nor more than sixty (60) days after the date of such notice (or such longer
or shorter periods as the Administrative Agent shall agree)) and (iii) whether
such Incremental Term Loan Commitments are commitments to make Term Loans of the
same Class as the Term Loans or commitments to make Term Loans of a different
Class than the Term Loans. The Borrower may seek Incremental Term Loan
Commitments from existing Lenders (each of which shall be entitled to agree or
decline to participate in its sole discretion) or any Additional Lender.

(b) It shall be a condition precedent to the effectiveness of any Incremental
Term Loan Commitment and the incurrence of the Incremental Term Loans that
(i) no Default or Event of Default shall have occurred and be continuing
immediately prior to or immediately after giving effect to such Incremental Term
Loan Commitment or the incurrence of such Incremental Term Loan, as applicable,
(ii) the Borrower would be in compliance with the Financial Covenants and the
Net First Lien Leverage Ratio shall not exceed 3.25:1.00, in each case
determined on an Incremental Pro Forma Basis as of the last day of the most
recently ended fiscal quarter for which financial statements have been delivered
pursuant to Section 5.04(a) or 5.04(b), (iii) the representations and warranties
set forth in Article III and in each other Loan Document shall be true and
correct in all material respects on and as of the date such Incremental Term
Loan Commitments become effective and the Incremental Term Loans are incurred
and (iv) the terms of such Incremental Term Loan Commitments and the Incremental
Loans thereunder shall comply with Section 2.22(c).

 

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(c) The terms of the Incremental Term Loans shall be determined by the Borrower
and the Incremental Term Lenders and set forth in an Additional Credit Extension
Amendment; provided that (i) the final maturity date of any Incremental Term
Loans shall be no earlier than the Latest Maturity Date in effect at the time,
(ii) the average life to maturity of the Incremental Term Loans shall be no
shorter than the remaining average life to maturity of the Term Loans, (iii) the
Incremental Term Loans will rank pari passu in right of payment and with respect
to security with the Term Loans and the borrower and guarantors of the
Incremental Term Loans shall be the same as the Borrower and Guarantors with
respect to the Term Loans, (iv) if the All-in Yield on such Incremental Term
Loans exceeds the initial All-in Yield of the Term Loans by more than 50 basis
points (the amount of such excess above 50 basis points being referred to herein
as the “Yield Differential”), then the Applicable Margin (at each level) for the
Term Loans shall automatically be increased by the Yield Differential, effective
upon the making of such Incremental Term Loans and (v) to the extent the terms
of the Incremental Term Loans are inconsistent with the terms set forth herein
(except as set forth in clause (i) through (iv) above), such terms shall be
reasonably satisfactory to the Administrative Agent.

(d) In connection with any Incremental Term Loan Commitments, the Borrower, the
Administrative Agent and each applicable Incremental Term Loan Lender shall
execute and deliver to the Administrative Agent an Additional Credit Extension
Amendment and such other documentation as the Administrative Agent shall
reasonably specify to evidence the Incremental Term Loan Commitment of each
Incremental Term Loan Lender. The Administrative Agent shall promptly notify
each Lender as to the effectiveness of each Additional Credit Extension
Amendment. Any Additional Credit Extension Amendment may, without consent of any
other Lender, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Borrower, to effect the provisions of this
Section 2.22, including any amendments necessary to establish the Incremental
Term Loans and/or Incremental Term Commitments as a new Class or tranche of Term
Loans and such other technical amendments as may be necessary or appropriate in
the reasonable opinion of the Administrative Agent and the Borrower in
connection with the establishment of such new Class or tranche, in each case on
terms consistent with this Section 2.22.

SECTION 2.23. Amend and Extend Transactions. (a) The Borrower may, by written
notice to the Administrative Agent from time to time, request an extension
(each, an “Extension”) of the Maturity Date of any Class of Loans and
Commitments to the extended maturity date specified in such notice. Such notice
shall set forth (i) the amount of the applicable Class of Term Loans to be
extended (which shall be in minimum increments of $1,000,000 and a minimum
amount of $5,000,000), (ii) the date on which such Extension is requested to
become effective (which shall be not less than ten (10) Business Days nor more
than sixty (60) days after the date of such Extension (or such longer or shorter
periods as the Administrative Agent shall agree)) and (iii) identifying the
relevant Class of Term Loans to which such Extension relates. Each Lender of the
applicable Class shall be offered (an “Extension Offer”) an opportunity to
participate in such Extension on a pro rata basis and on the same terms and
conditions as each other Lender of such Class pursuant to procedures established
by, or reasonably acceptable to, the Administrative Agent. If the aggregate
principal amount of Term Loans (calculated on the face amount thereof) in
respect of which Lenders shall have accepted the relevant Extension Offer shall
exceed the maximum aggregate principal amount of Term Loans, as applicable,
requested to be extended by the Borrower pursuant to such Extension Offer, then
the Term Loans of Lenders of the applicable Class shall be extended ratably up
to such maximum amount based on the respective principal amounts (but not to
exceed actual holdings of record) with respect to which such Lenders have
accepted such Extension Offer. The Borrower may effect no more than four
Extensions pursuant to this Section 2.23.

 

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(b) It shall be a condition precedent to the effectiveness of any Extension that
(i) no Default or Event of Default shall have occurred and be continuing
immediately prior to and immediately after giving effect to such Extension,
(ii) the representations and warranties set forth in Article III and in each
other Loan Document shall be true and correct in all material respects on and as
of the date of such Extension and (iii) the terms of such Extended Term Loans
shall comply with Section 2.23(c).

(c) The terms of each Extension shall be determined by the Borrower and the
applicable extending Lender and set forth in an Additional Credit Extension
Amendment; provided that (i) the final maturity date of any Extended Term Loan
shall be no earlier than the Latest Maturity Date at the time of the extension,
(ii) the average life to maturity of the Extended Term Loans shall be no shorter
than the remaining average life to maturity of the existing Term Loans extended
thereby, (iii) the Extended Term Loans will rank pari passu (or more junior) in
right of payment, guarantee and with respect to security with the existing Term
Loans and the borrower and guarantors of the Extended Term Loans shall be the
same as the borrower and guarantors with respect to the existing Term Loans,
(iv) the interest rate margin, rate floors, fees, original issue discounts and
premiums applicable to any Extended Term Loan shall be determined by the
Borrower and the applicable extending Lender and (v) to the extent the terms of
the Extended Term Loans are inconsistent with the terms set forth herein (except
as set forth in clause (i) through (iv) above), such terms shall be reasonably
satisfactory to the Administrative Agent.

(d) In connection with any Extension, the Borrower, the Administrative Agent and
each applicable extending Lender shall execute and deliver to the Administrative
Agent an Additional Credit Extension Amendment and such other documentation as
the Administrative Agent shall reasonably specify to evidence the Extension. The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Extension. Any Additional Credit Extension Amendment may, without the
consent of any other Lender, effect such amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent and the Borrower, to implement the terms of
any such Extension Offer, including any amendments necessary to establish
Extended Term Loans as a new Class or tranche of Term Loans, and such other
technical amendments as may be necessary or appropriate in the reasonable
opinion of the Administrative Agent and the Borrower in connection with the
establishment of such new Class or tranche (including to preserve the pro rata
treatment of the extended and non-extended Classes or tranches), in each case on
terms consistent with this Section 2.23).

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Administrative Agent, the Collateral
Agent and each of the Lenders on the Closing Date and on each other date
contemplated by Article IV that:

SECTION 3.01. Organization; Powers. The Borrower and each of the Subsidiaries
(a) is duly organized and/or established, as the case may be, validly existing
and in good standing under the laws of the jurisdiction of its organization or
establishment, as applicable, (b) has all requisite power and authority to own
its property and assets and to carry on its business as now conducted and as
proposed to be conducted except where the failure to have the same could not
reasonably be expected to have a Material Adverse Effect, (c) is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not

 

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reasonably be expected to result in a Material Adverse Effect, and (d) has the
power and authority to execute, deliver and perform its obligations under each
of the Loan Documents and each other agreement or instrument contemplated
thereby to which it is or will be a party and, in the case of the Borrower, to
borrow hereunder.

SECTION 3.02. Authorization. The Transactions (a) have been duly authorized by
all requisite corporate or limited liability company, as applicable, and, if
required, stockholder or member, as applicable, action and (b) will not
(i) violate (A) any provision of (1) law, statute, rule or regulation, or
(2) the certificate or articles of incorporation, partnership agreement or other
constitutive documents or by-laws of the Borrower or any Subsidiary, (B) any
order of any Governmental Authority or (C) any provision of any indenture,
agreement or other instrument to which the Borrower or any Subsidiary is a party
or by which any of them or any of their property is or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with the giving of
notice or lapse of time or both) a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument except, in
the case of each of clauses (i) (other than (A)(2)) or (ii), where such
violation, breach or default could not reasonably be expected to result in a
Material Adverse Effect or (iii) result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary (other than any Lien created
hereunder or under the Security Documents).

SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party thereto will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority or
third party is or will be required in connection with the Transactions, except
for (a) the filing of Uniform Commercial Code financing statements and filings
of the Notice of Grant of Security Interest in Patents, the Notice of Grant of
Security Interest in Trademarks and the Notice of Grant of Security Interest in
Copyrights with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, (b)recordation of the Mortgages and
(c) such as have been made or obtained and are in full force and effect or where
the failure to obtain which could not reasonably be expected to have a Material
Adverse Effect.

SECTION 3.05. Financial Statements. (a) The Borrower has, heretofore, delivered
to the Lenders the consolidated balance sheets and related statements of income,
stockholder’s equity and cash flows (i) of the Borrower and its consolidated
Subsidiaries as of and for the fiscal year ended April 28, 2012, audited by and
accompanied by the opinion of Deloitte and Touche LLP, independent public
accountants and (ii) of the Borrower and its consolidated Subsidiaries as of and
for each of the three fiscal quarters thereafter, certified by its chief
financial officer. Such financial statements present fairly the financial
condition and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of the Borrower and its consolidated Subsidiaries as of the dates
thereof. Such financial statements were prepared in accordance with GAAP applied
on a consistent basis, subject, in the case of unaudited financial statements,
to year-end audit adjustments and the absence of footnotes.

 

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(b) The Borrower has, heretofore, delivered to the Lenders its unaudited pro
forma consolidated balance sheet and related pro forma statements of income,
stockholder’s equity and cash flows as of April 27, 2013, prepared giving effect
to the Transactions as if they had occurred, with respect to such balance sheet,
on such date and, with respect to such other financial statements, on the first
day of the 12-month period ending on such date. Such pro forma financial
statements have been prepared in good faith by the Borrower, based on the
assumptions used to prepare the pro forma financial information contained in the
Confidential Information Memorandum (which assumptions are believed by the
Borrower on the date hereof and on the Closing Date to be reasonable), are based
on the best information available to the Borrower as of the date of delivery
thereof, accurately reflect, in all material respects, all adjustments required
to be made to give effect to the Transactions and present fairly on a Pro Forma
Basis the estimated consolidated financial position of the Borrower and its
consolidated Subsidiaries as of such date and for such period, assuming that the
Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.

(c) The forecasts of consolidated balance sheets income statements and cash flow
statements of the Borrower and its Subsidiaries for each fiscal year ending
after the Closing Date until the fourth anniversary of the Closing Date, copies
of which have been furnished to the Administrative Agent prior to the Closing
Date, and all projections delivered pursuant to Section 5.04(e), have been
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were believed to be reasonable at the time made and at the time such
forecasts and projections were made available, it being understood that
projections as to future events are not to be viewed as facts and actual results
may vary materially from such projections and forecast.

SECTION 3.06. No Material Adverse Effect. Since April 23, 2013, no event or
circumstance has occurred that has had, or could reasonably be expected to have,
a Material Adverse Effect or a material adverse effect on the Transactions.

SECTION 3.07. Title to Properties; Possession under Leases. (a) Each of the
Borrower and the Subsidiaries has, in all material respects, good and marketable
title to, valid leasehold interests in, or easements, licenses or other limited
property interests in, all its properties that are necessary for the operation
of their respective businesses as currently conducted and as proposed to be
conducted, free and clear of all Liens (other than Liens permitted by
Section 6.02).

(b) Each of the Borrower and the Subsidiaries has complied with all material
obligations under all material leases to which it is a party and all such leases
are in full force and effect. Each of the Borrower and the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.

(c) As of the Closing Date, (i) no real property or other assets material to the
Borrower and its Subsidiaries is affected by any fire or other casualty (whether
or not covered by insurance) and (ii) the Borrower has not received any notice
of, nor has any knowledge of, any pending or contemplated condemnation
proceeding (or any sale or disposition thereof in lieu of condemnation)
affecting any real property or other assets material to the Borrower or its
Subsidiaries.

(d) As of the Closing Date, none of the Borrower or any of the Subsidiaries is
obligated under any right of first refusal, option or other contractual right to
sell, assign or otherwise dispose of any Mortgaged Property or any interest
therein.

 

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SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing Date a
list of all Subsidiaries and the percentage ownership interest of the Borrower
therein. The shares of capital stock or other ownership interests so indicated
on Schedule 3.08 are fully paid and nonassessable and are owned by the Borrower,
directly or indirectly, free and clear of all Liens (other than Liens created
under the Security Documents, the ABL Facility Documentation and nonconsensual
Liens permitted by Section 6.02).

SECTION 3.09. Litigation; Compliance with Laws. (a) There are no actions, suits
or proceedings at law or in equity or by or before any Governmental Authority
now pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Subsidiary or any business, property or rights of
any such Person (i) that involve any Loan Document or the Transactions or
(ii) that could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.

(b) None of the Borrower or any of the Subsidiaries or any of their respective
material properties or assets is in violation of, nor will the continued
operation of their material properties and assets as currently conducted
violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c) Certificates of occupancy and permits are in effect for each Mortgaged
Property as currently constructed, and true and complete copies of such
certificates of occupancy have been delivered to the Collateral Agent as
mortgagee with respect to each Mortgaged Property.

SECTION 3.10. Agreements. None of the Borrower or any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default has resulted or could reasonably
be expected to result in a Material Adverse Effect.

SECTION 3.11. Federal Reserve Regulations. (a) None of the Borrower or any of
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying Margin
Stock.

(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation T, U or X.

SECTION 3.12. Investment Company Act. None of the Borrower or any Subsidiary is
required to register as an “investment company,” as defined in the Investment
Company Act.

SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the Loans
only for the purposes specified in the introductory statement to this Agreement.

SECTION 3.14. Taxes. Each of the Borrower and the Subsidiaries has filed or
caused to be filed all material U.S. federal, state, local and foreign tax
returns or materials required to have been filed by it and has paid or caused to
be paid all material Taxes due and payable by it and all assessments received by
it, except Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or the applicable Subsidiary, as
applicable, shall have set aside on its books adequate reserves.

 

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SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule (excluding the projections, forecasts or other
forward-looking information and financial information referred to below)
furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto contained, contains or will contain as of
the date the same was or is furnished any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not materially misleading; provided that, to the extent any
such information, report, financial statement, exhibit or schedule was based
upon or constitutes a forecast or projection, the Borrower represents and
warrants only that such materials are based upon good faith estimates and
assumptions believed by management to be reasonable at the time made, in light
of the circumstances under which they were made and at the time furnished (and
based upon accounting principles consistent with the historical audited
financial statements of the Borrower), and due care in the preparation of such
information, report, financial statement, exhibit or schedule (it being
understood that forecasts and projections are subject to uncertainties and that
there can be no assurance such results will be achieved).

SECTION 3.16. Employee Benefit Plans. Except as would not reasonably be expected
to result in a Material Adverse Effect, with respect to each employee benefit
plan as defined in Section 3(3) of ERISA, the Borrower and its Subsidiaries are
in compliance with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, has resulted or could reasonably be expected to result
in a Material Adverse Effect. There exists no Unfunded Pension Liability with
respect to any Plans that could reasonably be expected to result in a Material
Adverse Effect.

SECTION 3.17. Environmental Matters. (a) Except with respect to any matters
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, none of the Borrower or any of the
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.

(b) Except with respect to any matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect:
(i) each Mortgaged Property is and has been in compliance with all Environmental
Law and has obtained, maintained and complied with any permit, license or other
approval required under any Environmental Law, (ii) there are no Environmental
Liabilities that have arisen or exist in connection with or in any way relating
to any of the Mortgaged Property and (iii) none of the Borrower or any of the
Subsidiaries knows of any basis for any Environmental Liability in connection
with or in any way relating to any of the Mortgaged Property.

(c) There has been no material environmental investigation, study, audit, test,
review or other analysis conducted that is within the possession, custody or
control of the Borrower or any of the Subsidiaries in relation to the current or
prior business the Borrower or any Subsidiary or any property or facility now or
previously owned, leased or operated by the Borrower or any Subsidiary,
including the Mortgaged Properties, which has not been delivered to the Lenders
at least five days prior to the date hereof.

 

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(d) For purposes of this Section, the terms “Borrower” and “Subsidiary” shall
include any business or business entity which is, in whole or in part, a
predecessor of the Borrower or any Subsidiary.

SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all material insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and its Subsidiaries have insurance in such amounts
and covering such risks and liabilities as are in accordance with normal
industry practice.

SECTION 3.19. Security Documents. (a) The Guarantee and Collateral Agreement,
upon execution and delivery thereof by the parties thereto, will create in favor
of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (other than the
Mortgaged Property) and the proceeds thereof and (i) when the Pledged Collateral
(as defined in the Guarantee and Collateral Agreement) is delivered to the
Collateral Agent, the Lien created under Guarantee and Collateral Agreement
shall constitute a fully perfected first priority Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Pledged
Collateral, in each case prior and superior in right to any other Person, and
(ii) when the financing statements in appropriate form are filed in the offices
specified on Schedule 3.19(a), the Lien created under the Guarantee and
Collateral Agreement will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the Collateral
described in such statements (other than Intellectual Property), in each case
prior and superior in right to any other Person, other than with respect to
Liens expressly permitted by Section 6.02.

(b) Upon the recordation of the Notice of Grant of Security Interest in Patents,
the Notice of Grant of Security Interest in Trademarks and the Notice of Grant
of Security Interest in Copyrights substantially in the form of Exhibit B,
Exhibit C and Exhibit D, respectively, to the Guarantee and Collateral Agreement
with the United States Patent and Trademark Office and the United States
Copyright Office, as applicable, together with the financing statements in
appropriate form filed in the offices specified on Schedule 3.19(a), the Lien
created under the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Intellectual Property consisting of material issued or
pending United States patents, material registered or pending United States
trademarks and material registered United States copyrights in which a security
interest may be perfected by filing in the United States and its territories and
possessions, in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by Section 6.02 (it being
understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a Lien
on United States registered trademarks, issued patents, trademark and patent
applications and registered copyrights acquired by the Loan Parties after the
date hereof).

(c) Upon due execution and delivery thereof, each Mortgage will be effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable first priority Lien on all of the
applicable Loan Party’s right, title and interest in and to the Mortgaged
Property thereunder and the proceeds thereof, and when such Mortgage is filed in
the offices specified on Schedule 3.19(c), such Mortgage shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of such Loan Party in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any other Person,
other than with respect to Liens expressly permitted by Section 6.02.

 

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SECTION 3.20. Location of Real Property. Schedule 3.20 lists completely and
correctly as of the Closing Date all real property owned by the Borrower and the
Subsidiaries and the addresses thereof.

SECTION 3.21. Intellectual Property. The Borrower and each Subsidiary owns or is
licensed to use all intellectual property material to its respective business,
and neither the use thereof nor the conduct of their respective businesses
infringes, misappropriates or otherwise violates the intellectual property
rights of any other Person, except for any such infringements, misappropriations
and other violations that could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect.

SECTION 3.22. Labor Matters. As of the date hereof and the Closing Date, there
are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary
pending or, to the knowledge of the Borrower, threatened. Except as would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, the hours worked by and payments made to employees of
the Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. The consummation of the Transactions will not give
rise to any right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Borrower or any
Subsidiary is bound.

SECTION 3.23. Solvency. Immediately after the consummation of the Transactions
to occur on the Closing Date, the Borrower and its Subsidiaries, taken as a
whole, are Solvent.

SECTION 3.24. Senior Indebtedness. The Obligations constitute “Senior Debt” and
“Designated Senior Debt” under and as defined in any subordinated Indebtedness
that is a Material Indebtedness.

SECTION 3.25. Sanctioned Persons. None of the Borrower or any Subsidiary nor, to
the knowledge of the Borrower, any director, officer, agent, employee or
Affiliate of the Borrower or any Subsidiary is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Borrower will not directly or indirectly
use the proceeds of the Loans or otherwise make available such proceeds to any
Person, for the purpose of financing the activities of any Person currently
subject to any U.S. sanctions administered by OFAC.

SECTION 3.26. Foreign Corrupt Practices Act. Each of the Borrower, the
Subsidiaries and their respective directors, officers, agents, employees, and
any person acting for or on behalf of the Borrower or such Subsidiaries has
complied with, and will comply with, the U.S. Foreign Corrupt Practices Act, as
amended from time to time, or any other applicable anti-bribery or
anti-corruption law, and it and they have not made, offered, promised, or
authorized, and will not make, offer, promise, or authorize, whether directly or
indirectly, any payment, of anything of value to: (a) an executive, official,
employee or agent of a governmental department, agency or instrumentality, (b) a
director, officer, employee or agent of a wholly or partially government-owned
or government-controlled company or business, (c) a political party or official
thereof, or candidate for political office or (d) an executive, official,
employee or agent of a public international organization (e.g., the
International

 

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Monetary Fund or the World Bank) (“Government Official”); while knowing or
having a reasonable belief that all or some portion will be used for the purpose
of: (i) influencing any act, decision or failure to act by a Government Official
in his or her official capacity, (ii) inducing a Government Official to use his
or her influence with a government or instrumentality to affect any act or
decision of such government or entity or (iii) securing an improper advantage;
in order to obtain, retain, or direct business.

SECTION 3.27. Anti-Terrorism Law. Neither the Borrower nor any of the
Subsidiaries is in violation of any legal requirement relating to any laws with
respect to terrorism or money laundering (“Anti-Terrorism Laws”), including
Executive Order No. 13224 on Terrorist Financing effective September 24, 2001
(the “Executive Order”) and the USA PATRIOT Act.

ARTICLE IV

Conditions of Lending

The obligations of the Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions:

SECTION 4.01. Conditions of Borrowing. On the Closing Date:

(a) The Administrative Agent shall have received a notice of such Borrowing as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.02).

(b) The representations and warranties set forth in Article III and in each
other Loan Document shall be true and correct in all material respects on and as
of the Closing 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.

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

(d) The Administrative Agent shall have received, on behalf of itself, the
Lenders, a favorable written opinion of (i) Paul, Weiss, Rifkind, Wharton &
Garrison LLP, counsel for the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent and (ii) each local counsel listed on
Schedule 4.02(a), dated as of the Closing Date and substantially to the effect
set forth in Exhibit 4.02(A), in each case dated the Closing Date.

(e) The Administrative Agent shall have received (i) a copy of the certificate
or articles of incorporation (or comparable organizational document), including
all amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State (or comparable entity) of the jurisdiction of its
organization, and a certificate as to the good standing (where such concept is
applicable) of each Loan Party as of a recent date, from such Secretary of State
(or comparable entity), (ii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of such Loan Party
as in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of Directors (or
comparable governing body) of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such Loan Party is a
party and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force

 

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and effect, (C) that the certificate or articles of incorporation (or comparable
organizational document) of such Loan Party have not been amended since the date
of the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; and (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to
clause (ii) above.

(f) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b), and (c) of
this Section 4.01.

(g) Contemporaneously with the closing, the Administrative Agent shall have
received all Fees, all fees payable under the Fee Letter and all other amounts
due and payable on or prior to the Closing Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Loan Document.

(h) The Administrative Agent shall have received duly executed counterparts of
this Agreement from each party hereto.

(i) (i) the Administrative Agent shall have received duly executed counterparts
of each Security Document required to be executed at Closing from each party
thereto and (ii) the Security Documents shall be in full force and effect on the
Closing Date and the Collateral Agent on behalf of the Secured Parties shall
have a perfected security interest in the Collateral of the type and priority
described in each Security Document.

(j) The Collateral Agent shall have received a Perfection Certificate with
respect to the Loan Parties dated the Closing Date and duly executed by a
Responsible Officer of the Borrower, and shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the states (or other jurisdictions) of formation
of such Persons, in which the chief executive office of each such Person is
located and in the other jurisdictions in which such Persons maintain property,
in each case as indicated on such Perfection Certificate, together with copies
of the financing statements (or similar documents) disclosed by such search, and
accompanied by evidence reasonably satisfactory to the Collateral Agent that the
Liens indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been or will be contemporaneously released
or terminated (or are otherwise required to be released pursuant to the terms of
a payoff letter reasonably acceptable to Collateral Agent).

(k) The Administrative Agent shall have received a copy of, or a certificate as
to coverage under, the insurance policies required by Section 5.02 and the
applicable provisions of the Security Documents, each of which shall be endorsed
or otherwise amended to include a customary lender’s loss payable endorsement
and to name the Collateral Agent as additional insured, in form and substance
reasonably satisfactory to the Administrative Agent.

(l) The Borrower shall have used commercially reasonable efforts to obtain a
public corporate credit rating from S&P and a public corporate family rating
from Moody’s, in each case with respect to the Borrower, and public ratings for
the Term Facility from each of S&P and Moody’s.

 

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(m) All principal, premium, if any, interest, fees and other amounts due or
outstanding under the Existing Credit Agreements shall have been or will be,
substantially simultaneously with the initial funding of the Loans on the
Closing Date, repaid, restructured or reinstated as expressly contemplated by
the Plan of Reorganization, the commitments thereunder terminated and all
guarantees and security in support thereof discharged and released, and the
Administrative Agent shall have received reasonably satisfactory evidence
thereof (it being understood and agreed that such evidence shall be payoff
letters from the administrative agents under the Existing Credit Agreements
reasonably satisfactory to the Administrative Agent, or, if such letters are not
available, appropriate provisions reasonably satisfactory to the Administrative
Agent in the Plan Confirmation Order confirming such discharge and release).
Immediately after giving effect to the Transactions and the other transactions
contemplated hereby, the Borrower and the Subsidiaries shall have outstanding no
Indebtedness or preferred stock other than (a) Indebtedness outstanding under
this Agreement and (b) other Indebtedness permitted under this Agreement.

(n) The Lenders shall have received the financial statements and opinion
referred to in Section 3.05.

(o) The Administrative Agent shall have received a certificate from the chief
financial officer of the Borrower certifying that each of the Loan Parties after
giving effect to the Transactions to occur on the Closing Date, is Solvent.

(p) All requisite Governmental Authorities and third parties shall have approved
or consented to the Transactions and the other transactions contemplated hereby
to the extent required or reasonably requested by the Agent, all applicable
appeal periods shall have expired and there shall not be any pending or
threatened litigation, governmental, administrative or judicial action that has
resulted or could reasonably be expected to restrain, prevent or impose
burdensome conditions on the Transactions or the other transactions contemplated
hereby (other than the Plan Confirmation Order, which is addressed in paragraph
(s) of this Section 4.01).

(q) The Lenders shall have received, at least five (5) days prior to the Closing
Date, to the extent requested, all documentation and other information required
by regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act.

(r) The ABL Facility Documentation shall have been executed and delivered on
terms reasonably satisfactory to the Lenders, with a copy delivered to the
Administrative Agent.

(s) Each of the Plan of Reorganization Confirmation Requirements shall have been
satisfied or waived with the consent of Arranger.

Notwithstanding anything to the contrary herein or in any other Loan Document,
it is understood and agreed that to the extent any security interest in any
Collateral is not or cannot be perfected (or, in the case of Mortgages, granted)
or any Real Estate Collateral Requirements satisfied on or before the Closing
Date (other than the perfection of the security interests in Equity Interests of
the Borrower and the Domestic Subsidiaries (to the extent required under the
terms of the Guarantee and Collateral Agreement) and assets with respect to
which a Lien may be perfected by the filing of a financing statement under the
UCC or an intellectual property notice filing with the United States Patent and
Trademark Office or the United States Copyright Office) after the Loan Parties’
use of commercially reasonable efforts to do so, then the perfection (or, in the
case of Mortgages, grant) of a security interest in such Collateral or, if

 

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applicable, failure to satisfy any Real Estate Collateral Requirement, shall not
constitute a condition precedent to availability of the Credit Facilities on the
Closing Date, but instead shall be required to be perfected (or, in the case of
Mortgages, granted) within 90 days after the Closing Date (which period may be
extended with the consent of the Collateral Agent in is sole discretion)
pursuant to arrangements to be mutually agreed by the Administrative Agent and
the Borrower acting reasonably.

ARTICLE V

Affirmative Covenants

The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full, unless
the Required Lenders shall otherwise consent in writing, the Borrower will, and
will cause each of the Subsidiaries to:

SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties. (a) Do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except as otherwise expressly permitted
under Section 6.05.

(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations and intellectual property material to the conduct of
its business; maintain and operate such business in substantially the manner in
which it is presently conducted and operated and comply in all material respects
with all applicable laws, rules, regulations and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted.

(c) The Loan Parties shall, and shall cause each Subsidiary to (i) maintain,
preserve, and protect all of its material properties and equipment necessary in
the operation of its business in good working order, repair and condition,
casualty or condemnation excepted, (ii) make all necessary renewals, repairs,
replacements, modifications, improvements, upgrades, extensions and additions
thereof or thereto in accordance with prudent industry practice in order that
the business carried on in connection therewith may be properly conducted at all
times and (iii) keep all material leases to which any Loan Party is a party in
full force and effect.

SECTION 5.02. Insurance. (a) Keep its insurable properties adequately insured at
all times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses operating in the same or similar locations, including
public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it and maintain such other insurance
as may be required by law.

(b) Cause all such policies covering any Collateral to be endorsed or otherwise
amended to include a customary lender’s loss payable endorsement, in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent, which endorsement shall provide that, from and after the Closing Date, if
the insurance carrier shall have received written notice from the Administrative
Agent or the Collateral Agent of the occurrence of an Event of Default, the
insurance carrier shall pay all proceeds otherwise payable to the Borrower or
the Loan Parties under such policies directly to the

 

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Collateral Agent; cause all such policies to provide that neither the Borrower,
the Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a “Replacement Cost Endorsement,” without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver original or certified copies of all such
policies to the Collateral Agent; cause each such policy to provide that it
shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days’ prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days’ prior written
notice thereof by the insurer to the Administrative Agent and the Collateral
Agent and deliver to the Administrative Agent and the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent and the Collateral
Agent) together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.

(c) If at any time the area in which the Premises (as defined in the Mortgages)
are located is designated (i) a “flood hazard area” in any Flood Insurance Rate
Map published by the Federal Emergency Management Agency (or any successor
agency), obtain flood insurance, if so requested by any Lender, in such total
amount as the Administrative Agent, the Collateral Agent or the Required Lenders
may from time to time require and otherwise comply with the NFIP as set forth in
the Flood Laws or (ii) a “Zone 1” area, obtain earthquake insurance in such
total amount as the Administrative Agent, the Collateral Agent or the Required
Lenders may from time to time require. Following the Closing Date, the Borrower
shall deliver to the Collateral Agent annual renewals of the flood insurance
policy or annual renewals of a force-placed flood insurance policy for each
Mortgaged Property if flood insurance for such Mortgaged Property was requested
by any Lender. In connection with any amendment to this Agreement pursuant to
which any increase, extension, or renewal of Loans is contemplated, the Borrower
shall, if requested by any Lender, cause to be delivered to the Collateral Agent
for any Mortgaged Property, a Flood Determination Form, Borrower Notice and
Evidence of Flood Insurance, as applicable.

(d) With respect to any Mortgaged Property, carry and maintain comprehensive
general liability insurance including the “broad form CGL endorsement” and
coverage on an occurrence basis against claims made for personal injury
(including bodily injury, death and property damage) and umbrella liability
insurance against any and all claims, in no event for a combined single limit of
less than that which is customary for companies in the same or similar
businesses operating in the same or similar locations, naming the Collateral
Agent as an additional insured, on forms satisfactory to the Collateral Agent.

(e) Notify the Administrative Agent and the Collateral Agent promptly whenever
any separate insurance concurrent in form or contributing in the event of loss
with that required to be maintained under this Section 5.02 is taken out by any
Loan Party and promptly deliver to the Administrative Agent and the Collateral
Agent a duplicate original copy of such policy or policies.

SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other obligations
promptly and in accordance with their terms and pay and discharge promptly when
due all Taxes, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided that such payment and discharge shall not be required with respect to
any such Tax

 

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so long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings, the Borrower shall have set aside on its books adequate
reserves with respect thereto in accordance with GAAP, such contest operates to
suspend collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien and, in the case of a Mortgaged Property, there is no risk
of forfeiture of such property.

SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower,
furnish to the Administrative Agent, which shall furnish to each Lender:

(a) within 120 days after the end of the 2013 fiscal year and within 90 days
after each fiscal year thereafter, its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal year and the results of its operations and the operations of such
Subsidiaries during such year, together with comparative figures for the
immediately preceding fiscal year, all audited by Deloitte & Touche LLP or other
independent public accountants of recognized national standing and accompanied
by an opinion of such accountants (which opinion shall be without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements fairly present the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, together with a customary
“management discussion and analysis” provision;

(b) within 60 days after the end of the first quarter of the 2014 fiscal year,
and thereafter 45 days after the end of each of the first three fiscal quarters
of each fiscal year, its consolidated balance sheet and related statements of
income, stockholders’ equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, and, other than with respect to quarterly reports during the
remainder of the first fiscal year after the Closing Date, comparative figures
for the same periods in the immediately preceding fiscal year, all certified by
one of its Financial Officers as fairly presenting the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments, together with a customary “management
discussion and analysis” provision;

(c) Reserved;

(d) concurrently with any delivery of financial statements under paragraph
(a) or (b) above, a certificate of a Financial Officer in the form of Exhibit E
(i) certifying that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (ii) setting forth computations in reasonable detail satisfactory to
the Administrative Agent demonstrating compliance with the Financial Covenants
and, in the case of a certificate delivered with the financial statements
required by paragraph (a) above, setting forth the Borrower’s calculation of
Excess Cash Flow and Available Amount (and any utilization thereof during such
period);

(e) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such statements
(which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) certifying that as of the last day of
the immediately preceding fiscal year no Event of Default or Default has
occurred with respect to the Financial Covenants or, if such an Event of Default
or Default has occurred, specifying the extent thereof in reasonable detail;

 

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(f) within 30 days after the beginning of each fiscal year of the Borrower, a
detailed consolidated budget for such fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and
cash flows as of the end of and for such fiscal year and setting forth the
assumptions used for purposes of preparing such budget) and, promptly when
available, any significant revisions of such budget;

(g) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed to its shareholders, as the
case may be;

(h) promptly after the receipt thereof by the Borrower or any of the
Subsidiaries, a copy of any “management letter” received by any such Person from
its certified public accountants and the management’s response thereto;

(i) promptly after the request by any Lender, all documentation and other
information that such Lender reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act; and

(j) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent
and each Lender prompt written notice of the following:

(a) any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with respect
thereto;

(b) the filing or commencement of, or any threat or notice of intention of any
Person to file or commence, any action, suit or proceeding, whether at law or in
equity or by or before any Governmental Authority, against the Borrower or any
Affiliate thereof that has resulted or could reasonably be expected to result in
a Material Adverse Effect or that relates to any Loan Party with respect to the
Plan of Reorganization or the Plan Confirmation Order;

(c) any development that has resulted or could reasonably be expected to result
in a Material Adverse Effect; and

(d) any change in (i) the Borrower’s public corporate rating by S&P or public
corporate family rating by Moody’s or (ii) the ratings of the Credit Facilities
by S&P or Moody’s, or any notice from either such agency indicating its intent
to effect such a change or to place the Borrower or the Credit Facilities on a
“CreditWatch” or “WatchList” or any similar list, in each case with negative
implications, or its cessation of, or its intent to cease, rating the Borrower
or the Credit Facilities.

 

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SECTION 5.06. Information Regarding Collateral. (a) Furnish to the
Administrative Agent prompt written notice of any change (i) in the corporate
name of any Loan Party, (ii) in the jurisdiction of organization or formation of
any Loan Party, (iii) in any Loan Party’s identity or corporate structure or
(iv) in any Loan Party’s Federal Taxpayer Identification Number. The Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.

(b) In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer setting forth the information required pursuant to Section 2
of the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section 5.06.

SECTION 5.07. Maintaining Records; Access to Properties and Inspections;
Maintenance of Ratings. (a) Keep proper books of record and account in which
full, true and correct entries in all material respects in conformity with GAAP
or, with respect to Subsidiaries organized outside of the United States, the
local accounting standards applicable to the relevant jurisdiction, and all
requirements of law are made of all dealings and transactions in relation to its
business and activities. Each Loan Party will, and will cause each of its
subsidiaries to, permit any representatives designated by the Administrative
Agent to visit and inspect the financial records and the properties of such
Person at reasonable times and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent to discuss the affairs,
finances and condition of such Person with the officers thereof and independent
accountants therefor; provided that unless an Event of Default has occurred and
is continuing, such right shall be limited to one time per year.

(b) In the case of the Borrower, use commercially reasonable efforts to cause
the Credit Facilities to be continuously rated by S&P and Moody’s, and in the
case of the Borrower, use commercially reasonable efforts to maintain a public
corporate rating from S&P and a public corporate family rating from Moody’s, in
each case in respect of the Borrower.

SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans only for the
purposes specified in the introductory statement to this Agreement.

SECTION 5.09. Employee Benefits. (a) Comply in all material respects with the
provisions of ERISA and the Code applicable to employee benefit plans as defined
in Section 3(3) of ERISA, (b) furnish to the Administrative Agent as soon as
possible after, and in any event within ten days after any responsible officer
of the Borrower or any ERISA Affiliate knows or has reason to know that, any
ERISA Event has occurred or is reasonably expected to occur that, alone or
together with any other ERISA Event that has occurred or is reasonably expected
to occur that has resulted or could reasonably be expected to result in a
Material Adverse Effect on the Borrower or any ERISA Affiliate, a statement of a
Financial Officer of the Borrower setting forth details as to such ERISA Event
and the action, if any, that the Borrower proposes to take with respect thereto
and (c) promptly and in any event within 30 days after the filing thereof with
the United States Department of Labor, furnish to the Administrative Agent
copies of each Schedule SB (Actuarial Information) to the Annual Report (Form
5500 Series) with respect to each Plan.

 

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SECTION 5.10. Compliance with Environmental Laws. Comply, and cause all lessees
and any other Person leasing or occupying its properties to comply, in all
material respects with all applicable Environmental Laws; obtain and renew all
material environmental permits necessary for its operations and properties; and
conduct any remedial action in accordance with Environmental Laws; provided that
none of the Borrower or any Subsidiary shall be required to undertake any
remedial action to the extent that its obligation to do so is being contested by
the Borrower or any Subsidiary in good faith and by proper proceedings,
appropriate reserves are being maintained with respect to such circumstances in
accordance with GAAP and any such delay or inaction with respect to such
remedial action does not violate any Environmental Law.

SECTION 5.11. Further Assurances. (a) Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust) that may be required under applicable law, or that
the Required Lenders, the Administrative Agent or the Collateral Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and priority of the security interests created or intended to be created by the
Security Documents.

(b) If, following the Closing Date, any Domestic Subsidiary (other than any
Excluded Subsidiary) is acquired or organized, or any Domestic Subsidiary ceases
to be an Excluded Subsidiary, the Borrower shall promptly (and in any event
within 30 days (or such longer period as the Collateral Agent shall agree) of
such event) (i) notify the Collateral Agent thereof, (ii) cause such Domestic
Subsidiary to become a Loan Party by executing the Guarantee and Collateral
Agreement (or a supplement thereto in the form specified therein), (iii) cause
(A) the Equity Interests of such Domestic Subsidiary, (B) the Equity Interests
of any Domestic Subsidiary (other than any Domestic Subsidiary described in
clauses (i) or (v) of the definition of “Excluded Subsidiary”) owned by such
Domestic Subsidiary and (C) 65% of the Equity Interests of any Foreign
Subsidiary or any Subsidiary described in clause (v) of the definition of
Excluded Subsidiary that (in each case) is not directly or indirectly owned by a
Foreign Subsidiary, and that (in each case) is owned by such Domestic
Subsidiary, to be pledged to the Collateral Agent on a first-priority basis and
deliver to the Collateral Agent all certificates or other instruments
representing such Equity Interests, together with stock powers or other
instruments of transfer with respect thereto endorsed in blank to the extent
required by the Security Documents (subject to the ABL Intercreditor Agreement),
(iv) promptly (and, in the case of any security interests in real property, as
soon as reasonably practicable) cause all documents and instruments, including
Uniform Commercial Code financing statements and Mortgages, required by law or
reasonably requested by the Collateral Agent to be filed, registered or recorded
to create the Liens intended to be created by the Security Documents and perfect
or record such Liens to the extent, and with the priority, required by the
Security Documents, to be filed, registered or recorded or delivered to the
Collateral Agent for filing, registration or recording, in each case except with
respect to any Excluded Collateral (as defined in the Security Agreement),
(v) cause each Loan Party to take all other action required by law, under the
Security Documents or reasonably requested by the Collateral Agent to perfect,
register and/or record the Liens granted by it thereunder and (vi) cause to be
delivered to the Lenders all such instruments and documents (including legal
opinions, title insurance policies and lien searches) as the Collateral Agent
shall reasonably request to evidence compliance with this Section 5.11(b). For
the avoidance of doubt and notwithstanding anything to the contrary, no Domestic
Subsidiary shall be required to provide a Guarantee of any Excluded Swap
Obligation.

 

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(c) If any fee owned real property, is acquired by any Loan Party after the
Closing Date, having a value in excess of $2,000,000 the Borrower will notify
the Collateral Agent thereof, and, if requested by the Collateral Agent or the
Required Lenders, the Borrower will, no later than 90 days after such
acquisition, cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be requested by the Collateral
Agent to grant and perfect such Liens, including the satisfaction of the Real
Estate Collateral Requirements, all at the expense of the U.S. Borrower.

SECTION 5.12. Interest Rate Protection. No later than the 90th day after the
Closing Date (unless a later date is otherwise agreed to by the Administrative
Agent), the Borrower shall enter into, and for a minimum of three years
thereafter maintain, Secured Hedging Agreements reasonably acceptable to the
Administrative Agent that result in at least 50% of the aggregate principal
amount of the outstanding Term Loans as of such date being effectively subject
to a fixed or maximum interest rate reasonably acceptable to the Administrative
Agent.

SECTION 5.13. Post-Closing Obligations.

(a) Real Property Collateral. On or before a date which is 90 days following the
Closing Date (unless a later date is otherwise agreed to by the Administrative
Agent), the Real Estate Collateral Requirements shall have been satisfied.

(b) Other. Take all such actions as shall be set forth on Schedule 5.14 within
the time periods specified on Schedule 5.14 (unless a later date is otherwise
agreed to by the Administrative Agent).

ARTICLE VI

Negative Covenants

The Borrower covenants and agrees with each Lender that until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document have been paid
in full (other than contingent indemnification and expense reimbursement
obligations for which no claim has been made), unless the Required Lenders shall
otherwise consent in writing, the Borrower will not, nor will it cause or permit
any of the Subsidiaries to:

SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:

(a) Indebtedness existing on the date hereof and set forth on Schedule 6.01(a)
and any Permitted Refinancing thereof;

(b) Indebtedness created hereunder and under the other Loan Documents;

(c) Indebtedness created under the ABL Facility Documentation, not to exceed an
aggregate principal amount of $192,500,000, and any Permitted Refinancing
thereof;

(d) Intercompany Indebtedness of the Borrower and the Subsidiaries to the extent
permitted by Section 6.04(c); provided that any such Indebtedness that is owed
by a Loan Party to a Subsidiary that is not a Loan Party is subordinated to the
Obligations pursuant to an Affiliate Subordination Agreement;

 

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(e) (i) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets;
provided that (A) such Indebtedness is incurred prior to or within 180 days
after such acquisition or the completion of such construction or improvement and
(B) the aggregate principal amount of Indebtedness permitted by this
Section 6.01(e), when combined with the aggregate principal amount of all
Capital Lease Obligations incurred pursuant to Section 6.01(f) shall not exceed
$5,000,000 at any time outstanding and (ii) any Permitted Refinancing of any
such Indebtedness;

(f) Capital Lease Obligations and purchase money obligations in an aggregate
principal amount, when combined with the aggregate principal amount of all
Indebtedness incurred pursuant to Section 6.01(e), shall not exceed $5,000,000
at any time outstanding;

(g) Indebtedness under performance bonds or with respect to workers’
compensation claims, in each case incurred in the ordinary course of business;

(h) (i) Indebtedness acquired or assumed in connection with any Permitted
Acquisition or other acquisition permitted under Section 6.04; provided that
(A) such Indebtedness exists at the time of such Permitted Acquisition or other
acquisition and is not created in contemplation of or in connection with such
Permitted Acquisition or other acquisition, (B) immediately before and after
such Person becomes a Subsidiary, no Default or Event of Default shall have
occurred and be continuing and (C) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(h) shall not exceed $5,000,000 at
any time outstanding and (ii) any Permitted Refinancing of any such
Indebtedness;

(i) Indebtedness in respect of Hedging Agreements that are (i) required by
Section 5.12 or (ii) entered into in the ordinary course of business and not for
speculative purposes;

(j) (i) Permitted Unsecured Debt of the Borrower or any Subsidiary incurred to
finance any acquisition permitted by Section 6.04(g); provided that Indebtedness
shall be permitted under this paragraph (j) only if, at the time of the
incurrence thereof, (A) no Default or Event of Default has occurred and is
continuing at such time, (B) (x) the Net Total Leverage Ratio calculated on a
Pro Forma Basis shall be no greater than 3.75:1.00, and (ii) Permitted
Refinancing of any such Indebtedness;

(k) Permitted Surety Bonds in an aggregate amount outstanding at any one time
not to exceed $30,000,000;

(l) Indebtedness consisting of unsecured guarantees arising with respects to
customary indemnification obligations to purchasers in connection with
Dispositions;

(m) financing of insurance premiums in the ordinary course of business;

(n) Indebtedness incurred in respect of credit cards, credit card processing
services, debit cards, stored value cards, purchase cards (including so-called
“procurement cards” or “P-cards”), or cash management services, netting
services, overdraft protection, and other like services, in each case incurred
in the ordinary course of business;

(o) unsecured Indebtedness owing to former employees, officers or directors (or
any spouses, ex-spouses, or estates of any of the foregoing) incurred in
connection with the repurchase by Borrower of the Equity Interests of Borrower
that have been issued to such Persons, so long as (i) no Default or Event of
Default has occurred and is continuing or would result from the incurrence of
such Indebtedness, and (ii) the aggregate amount of all such Indebtedness
outstanding at any one time does not exceed $500,000;

 

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(p) Specified Unsecured Prepetition Debt or any Permitted Refinancing thereof,
in an aggregate principal amount not to exceed $60,000,000;

(q) Accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case on Indebtedness that otherwise
constitutes Indebtedness permitted under this Section 6.01;

(r) Indebtedness incurred by Subsidiaries that are not Loan Parties in an
aggregate principal amount not exceed $2,500,000;

(s) to the extent constituting Indebtedness, customary purchase price
adjustments, earn outs, indemnification obligations, unsecured guarantees
thereof and similar items of the Borrower or any of its Subsidiaries in
connection with Permitted Acquisitions, other acquisitions permitted under
Section 6.04, Asset Sales or other Dispositions;

(t) to the extent constituting Indebtedness, the Fee Claim Reserve Amounts and
the Delayed Admin Claims; and

(u) other Indebtedness of the Borrower or the Subsidiaries in an aggregate
principal amount not exceeding $5,000,000 at any time outstanding.

SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including Equity Interests or other securities of any
Person, including the Borrower or any Subsidiary) now owned or hereafter
acquired by it or on any income or revenues or rights in respect of any thereof,
except:

(a) Liens on property or assets of the Borrower and its Subsidiaries existing on
the date hereof and set forth on Schedule 6.02(a); provided that such Liens
shall secure only those obligations which they secure on the date hereof and any
Permitted Refinancing thereof;

(b) any Lien created under the Loan Documents;

(c) first-priority Liens on the Current Asset Collateral and second-priority
Liens on other Collateral, each in favor of the ABL Administrative Agent and
subject to the ABL Intercreditor Agreement, as collateral security for the
repayment of obligations incurred by the Borrower under the ABL Facility
Documentation (and any Permitted Refinancings thereof);

(d) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or assets of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary, as the case may be; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, (ii) such Lien does not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien secures
only those obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be;

(e) Liens for Taxes not yet due or which are being contested in compliance with
Section 5.03;

 

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(f) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business and securing amounts not
overdue for a period of more than 30 days, or, if more than 30 days overdue,
(i) which are being contested in compliance with Section 5.03 or (ii) with
respect to which the failure to make payment could not reasonably be expected to
have a Material Adverse Effect;

(g) pledges and deposits made in the ordinary course of business in compliance
with workmen’s compensation, unemployment insurance and other social security
laws or regulations;

(h) deposits to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

(i) zoning restrictions, easements, rights-of-way, restrictions on use of real
property, minor defects or irregularities of title and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;

(j) security interests in Indebtedness permitted by Section 6.01(e) and 6.01(f)
provided that (i) such security interests are incurred, and the Indebtedness
secured thereby is created, within 180 days after such acquisition, construction
or improvement, (ii) the Indebtedness secured thereby does not exceed the lesser
of the cost or the fair market value of such assets at the time of such
acquisition, construction or improvement and (iii) such security interests do
not apply to any other property or assets of the Borrower or any Subsidiary,
other than any proceeds, products, accessions or improvements with respect to
such assets; provided that individual financings of such assets provided by one
lender may be cross-collateralized to other financings of fixed or capital
assets provided by such lender;

(k) judgment Liens securing judgments not constituting an Event of Default under
Section 7.01(i);

(l) Liens securing Indebtedness permitted by Section 6.01(i) (provided that such
Liens may be incurred under the ABL Facility Documentation or the Loan
Documents, but not both);

(m) Liens on assets of Foreign Subsidiaries; provided that (i) such Liens do not
extend to, or encumber, assets that constitute Collateral or the Equity
Interests of the Borrower or any Domestic Subsidiary (or the Equity Interests of
any first-tier Foreign Subsidiary) and (ii) such Liens extending to the assets
of any Foreign Subsidiary secure only Indebtedness permitted to be incurred by
Foreign Subsidiaries pursuant to Section 6.01;

(n) any license or sub-license entered into in the ordinary course of business
and the interest of any non-exclusive licensors under license agreements
(including, for the avoidance of doubt, relating to intellectual property);

(o) any interest or title or right of a lessor or sub-lessor under any lease or
sub-lease entered into in the ordinary course of business and covering only the
assets so leased;

(p) Liens arising from precautionary UCC financing statements filed in
connection with operating leases;

 

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(q) bankers’ Liens, rights of setoff and other similar Liens existing solely
with respect to cash and Permitted Investments on deposit in one or more
accounts maintained by the Borrower or any of its Subsidiaries (including any
restriction on the use of such cash and Permitted Investment), in each case
granted in the ordinary course of business in favor of the bank or banks with
which such accounts are maintained, securing amounts owing to such bank or banks
with respect to cash management and operating account arrangements, including
those involving pooled accounts and netting arrangements; provided that in no
case shall any such Liens secure (either directly or indirectly) the repayment
of any Indebtedness;

(r) Liens on cash earnest money deposits made in connection with Permitted
Acquisitions or other acquisitions permitted under Section 6.04;

(s) Liens on Equity Interests in joint ventures securing obligations of such
entities, and options, put and call arrangements, rights of first refusal and
similar rights related to Equity Interests in joint ventures;

(t) Liens in favor of the Borrower or any Subsidiary securing Indebtedness
permitted under Section 6.01(d);

(u) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under Section 6.01(m) hereof;

(v) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties not yet delinquent in connection with the
importation of goods in the ordinary course of business;

(w) Liens arising in connection with the Fee Claims Account; and

(x) other Liens securing liabilities in an aggregate amount not to exceed
$5,000,000 at any time outstanding.

SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred unless (a) the sale or transfer of such
property is permitted by Section 6.06 and (b) any Capital Lease Obligations or
Liens arising in connection therewith are permitted by Sections 6.01 and 6.02,
as the case may be.

SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any
Investment in a Person except:

(a) Investments existing on the date hereof and set forth on Schedule 6.04;

(b) Permitted Investments;

 

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(c) Investments in the Borrower or any Subsidiary; provided that (i) any such
Investments in the form of loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged to the Collateral Agent for the ratable
benefit of the Secured Parties pursuant to the Guarantee and Collateral
Agreement, (ii) any such Investments in the form of Equity Interests held by a
Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement
(subject to any limitations applicable to voting stock of a Foreign Subsidiary
referred to therein) and (iii) the amount of such Investments made from the
Closing Date by Loan Parties in Subsidiaries that are not Loan Parties shall not
exceed $2,500,000;

(d) Investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

(e) the Borrower and the Subsidiaries may make loans and advances in the
ordinary course of business in accordance with their usual practice to their
respective employees so long as the aggregate principal amount thereof at any
time outstanding (determined without regard to any write-downs or write-offs of
such loans and advances) shall not exceed $1,000,000;

(f) the Borrower and the Subsidiaries may enter into Hedging Agreements that
(i) are required by Section 5.12 or (ii) are entered into the ordinary course of
business and not for speculative purposes;

(g) the Borrower or any Subsidiary may acquire all or substantially all the
assets of a Person or line of business of such Person or not less than 75% of
the Equity Interests of a Person (referred to herein as the “Acquired Entity”);
provided that (i) the Acquired Entity shall be in a similar line of business as
that of the Borrower and the Subsidiaries as conducted during the current and
most recent calendar year and (ii) at the time of such transaction (A) both
before and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing, (B) (x) the Net Total Leverage Ratio,
calculated on a Pro Forma Basis, shall be no greater than 3.75:1.00 and (y) the
Borrower shall be in compliance on a Pro Forma Basis with the financial covenant
in Section 6.13, determined as of the most recently completed fiscal quarter
ending prior to such transaction for which the financial statements required by
Section 5.04(a) or 5.04(b) have been delivered, (C) the total consideration paid
in connection with such acquisition and any other acquisitions pursuant to this
Section 6.04(g) (including any Indebtedness of the Acquired Entity that is
assumed by the Borrower or any Subsidiary following such acquisition and any
payments following such acquisition pursuant to earn-out provisions or similar
obligations) shall not in the aggregate exceed $50,000,000, of which not more
than $5,000,000 shall be with respect to Persons that do not become Loan Parties
or assets that are not owned by Loan Parties, (D) the Borrower shall have
delivered a certificate of a Financial Officer, certifying as to the foregoing
and containing reasonably detailed calculations in support thereof, in form and
substance satisfactory to the Administrative Agent and (E) the Borrower shall
comply, and shall cause the Acquired Entity to comply, with the applicable
provisions of Section 5.11 and the Security Documents (any acquisition of an
Acquired Entity meeting all the criteria of this Section 6.04(g) being referred
to herein as a “Permitted Acquisition”);

(h) to the extent constituting an Investment, Capital Expenditures permitted by
Section 6.11;

(i) Investments consisting of the non-cash portion of the sales price received
for Dispositions permitted by Section 6.06;

(j) lease, utility and other deposits or advances in the ordinary course of
business;

 

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(k) cash earnest money deposits made in connection with Permitted Acquisitions
or other acquisitions permitted by Section 6.04;

(l) investments in the ordinary course of business consisting of endorsements
for collection or deposit;

(m) acquisitions of, investments in, and loans and advances to, joint ventures,
so long as the aggregate amount invested, loaned or advanced pursuant to this
paragraph (m) on or after the Closing Date (determined without regard to any
write-downs or write-offs of such investments, loans or advances) does not at
any time outstanding exceed $5,000,000;

(n) Investments of any Person existing at the time such person becomes a
Subsidiary, or consolidates, amalgamates or merges with the Borrower or any of
the Subsidiaries (including in connection with a Permitted Acquisition) (but
excluding investments in subsidiaries which must be otherwise permitted by this
Section 6.04) so long as such investments were not made in contemplation of such
person becoming a Subsidiary or of such consolidation, amalgamation or merger;
and

(o) in addition to Investments permitted by paragraphs (a) through (n) above,
additional Investments by the Borrower and the Subsidiaries so long as the
aggregate amount invested, loaned or advanced pursuant to this paragraph
(o) (determined without regard to any write-downs or write-offs of such
Investments) does not exceed (x) $5,000,000 plus (y) the Available Amount
(subject, in the case of this clause (y), to the absence of any Default and the
Net Total Leverage Ratio not exceeding 2.75:1.00 on a Pro Forma Basis as of the
last day of the most recently completed fiscal quarter ending prior to such
transaction for which the financial statements required by Section 5.04(a) or
5.04(b) have been delivered) in the aggregate.

SECTION 6.05. Mergers and Consolidations. Merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of related transactions) all or substantially all the assets of the
Borrower, except that (i) if at the time thereof and immediately after giving
effect thereto no Event of Default or Default shall have occurred and be
continuing (x) any Wholly Owned Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, and (y) any
Subsidiary may merge into or consolidate with any other Subsidiary in a
transaction in which the surviving entity is a Subsidiary (provided that if any
party to any such transaction is a Loan Party, the surviving entity of such
transaction shall be a Loan Party) and (ii) the Borrower and the Subsidiaries
may make Permitted Acquisitions and other Investments permitted by Section 6.04.

SECTION 6.06. Dispositions. Dispose of any property or assets, other than:

(a) Dispositions of damaged, worn-out, obsolete or surplus equipment and
property (including intellectual property no longer material to the business of
the Borrower or any of the Subsidiaries) no longer used or useful in the
business of the Borrower and its Subsidiaries, in each case in the ordinary
course of business;

(b) Dispositions of inventory in the ordinary course of business;

(c) Dispositions of Permitted Investments;

 

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(d) Dispositions between and among the Borrower and the Subsidiaries; provided
that if the transferor in such a transaction is a Loan Party, then either
(x) the transferee must be a Loan Party, (y) the aggregate amount of all
Dispositions made pursuant to this clause (d)(y) shall not exceed $2,500,000 in
the aggregate, or (z) the portion of any such Disposition made for less than
fair market value and any non-cash consideration received in exchange for such
Disposition shall in each case constitute an Investment in such Subsidiary and
must be otherwise permitted hereunder;

(e) Dispositions among Subsidiaries that are not Loan Parties;

(f) the sale of services, or the termination of any contracts, in each case in
the ordinary course of business;

(g) the granting of Liens permitted by Section 6.02;

(h) the sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof;

(i) any involuntary loss, damage or destruction of property, or any involuntary
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, or confiscation or requisition of use of property;

(j) the leasing or subleasing of assets of Borrower or its Subsidiaries in the
ordinary course of business;

(k) the sale or issuance of Equity Interests (other than Disqualified Equity
Interests) of Borrower;

(l)  (i) the lapse of registered patents, trademarks, copyrights and other
intellectual property of Borrower and its Subsidiaries to the extent not
economically desirable in the conduct of their business or (ii) the abandonment
of patents, trademarks, copyrights or other intellectual property rights in the
ordinary course of business.

(m) the making of Restricted Payments that are expressly permitted to be made
pursuant to this Agreement;

(n) a Carson-Dellosa Drag-Along Sale;

(o) Contributions of assets to joint ventures and other dispositions
constituting Investments, in each case to the extent permitted under
Section 6.04;

(p) Dispositions of investments in joint ventures and other non-wholly owned
entities to the extent required by, or made pursuant to buy/sell arrangements
between the parties set forth in, joint venture arrangements, shareholder
agreements, and similar binding arrangements;

(q) Dispositions constituting the licensing or cross-licensing of intellectual
property in the ordinary course of business;

(r) sale leaseback transactions with respect to property having an aggregate
fair market value not to exceed $5,000,000;

 

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(s) Dispositions of the businesses referred to on Schedule 1.01(d); provided
that (i) at the time of such Disposition, no Default or Event of Default shall
have occurred and be continuing or would result from such Disposition, (ii) 85%
of the aggregate sale price from such disposition shall be paid in cash and
(iii) the Net Cash Proceeds of such Dispositions are applied in accordance with
Section 2.13(a); and

(t) Dispositions not otherwise permitted hereunder; provided that (i) at the
time of such Disposition, no Default or Event of Default shall have occurred and
be continuing or would result from such Disposition, (ii) not less than
seventy-five percent (75%) of the aggregate sale price from such disposition
shall be paid in cash, (iii) the aggregate Net Cash Proceeds of all Dispositions
pursuant to this paragraph (t) shall not exceed $15,000,000 in any fiscal year
and (iv) all such Dispositions shall be for at least the fair market value of
the assets or property subject to such Disposition.

SECTION 6.07. Restricted Payments; Restrictive Agreements. (a) Declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so; except

(i) any Subsidiary may declare and pay dividends or make other distributions
ratably to its equity holders;

(ii) so long as no Event of Default or Default shall have occurred and be
continuing or would result therefrom, the Borrower may repurchase its Equity
Interests owned by employees of the Borrower or the Subsidiaries or make
payments to employees of the Borrower or the Subsidiaries upon termination of
employment in connection with the exercise of stock options, stock appreciation
rights or similar equity incentives or equity based incentives pursuant to
management incentive plans or in connection with the death or disability of such
employees in an aggregate amount not to exceed $1,000,000 in any fiscal year;

(iii) Restricted Payments from certain Asset Sale proceeds as contemplated by
the second sentence of Section 2.13(a), in an amount not to exceed $50,000,000;
and

(iv) other Restricted Payments in an amount not to exceed the Available Amount
(subject to the absence of any Default and the Net Total Leverage Ratio not
exceeding 2.50:1.00 on a Pro Forma Basis as of the last day of the most recently
completed fiscal quarter ending prior to such transaction for which the
financial statements required by Section 5.04(a) or 5.04(b) have been
delivered).

(b) Enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (ii) the ability of any Subsidiary to pay
dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(A) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, (B) the foregoing shall not apply to restrictions and
conditions existing on the date hereof as set forth on Schedule 6.07(b)
(including any extensions or renewals thereof), (C) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale; provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (D) the foregoing shall not apply to customary provisions
in licenses and sub-licenses restricting the assignment thereof, (E) the
foregoing

 

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shall not apply to restrictions and conditions imposed on any Foreign Subsidiary
by the terms of any Indebtedness of such Foreign Subsidiary permitted to be
incurred hereunder, (F) clause (i) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (G) clause
(i) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof, (H) the foregoing shall not apply
to restrictions and conditions contained in the ABL Facility Documentation;
(I) the foregoing shall not apply to any agreement or other instrument of a
Person acquired by the Borrower or any Subsidiary which was in existence at the
time of such acquisition (but not created in contemplation thereof or in
connection therewith), which restriction or condition is not applicable to any
Person or the properties or assets of any Person, other than the Person and its
Subsidiaries, or the property or assets of the person and its Subsidiaries, so
acquired; (J) the foregoing shall not apply to customary provisions in joint
venture agreements, shareholder agreements and similar agreements applicable to
joint ventures and other non-wholly owned entities; and (K) the foregoing shall
not apply to any restrictions or conditions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or other obligations
referred to in clauses (A) through (J) above, provided that the restrictions and
conditions contained in such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Borrower no more restrictive than those restrictions
and conditions in effect immediately prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing under the applicable contract, instrument or other obligation.

SECTION 6.08. Transactions with Affiliates. Sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except:

(a) transactions between or among Loan Parties,

(b) any Restricted Payment permitted by Section 6.07;

(c) any Investment permitted by Section 6.04;

(d) any transaction in the ordinary course of business between the Borrower or a
Subsidiary and its own employee stock option plan that is approved by the
Borrower or such Subsidiary in good faith;

(e) mergers, consolidations, amalgamations, liquidations, dissolutions and
transfers of assets permitted by Sections 6.05;

(f) the Borrower or any Wholly Owned Subsidiary may engage in transactions with
any Wholly Owned Subsidiary that are consistent with past practice and that the
Borrower determines to be in the best interests of the Borrower and the
Subsidiaries to the extent otherwise permitted hereunder;

(g) the Borrower or any Subsidiary may engage in any of the foregoing
transactions at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties; and

(h) any such transaction (or series of related transactions) that has a value of
less than $1,000,000.

 

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SECTION 6.09. Business of the Borrower and Subsidiaries. Engage at any time in
any business or business activity other than the business currently conducted by
them and business activities reasonably incidental thereto.

SECTION 6.10. Other Indebtedness and Agreements. (a) Permit (i) any amendment to
the ABL Facility Documentation, except as permitted by the ABL Intercreditor
Agreement, (ii) any waiver, supplement, modification, amendment, termination or
release of any indenture, instrument or agreement pursuant to which any Material
Indebtedness of the Borrower or any of the Subsidiaries (other than the ABL
Facility Documentation) is outstanding if the effect of such waiver, supplement,
modification, amendment, termination or release would materially increase the
obligations of the obligor or confer additional material rights on the holder of
such Indebtedness in a manner adverse to the Borrower, any of the Subsidiaries
or the Lenders or would permit payment thereunder otherwise prohibited by
Section 6.10(b), provided that nothing in this Section 6.10(a) shall prohibit a
Permitted Refinancing of any Indebtedness permitted by Section 6.01, or
(iii) any waiver, supplement, modification or amendment of its certificate of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents, to the extent any such waiver, supplement,
modification or amendment would be adverse to the Lenders in any material
respect.

(b) Optionally prepay, redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any Indebtedness
that is subordinated or secured on a junior-lien basis, or constitutes Permitted
Unsecured Debt, except (x) Permitted Refinancings of Indebtedness permitted by
Section 6.01 and (y) in an amount not to exceed the Available Amount (subject to
the absence of any Default and the Net Total Leverage Ratio not exceeding
2.75:1.00 on a Pro Forma Basis as of the last day of the most recently completed
fiscal quarter ending prior to such transaction for which the financial
statements required by Section 5.04(a) or 5.04(b) have been delivered); provided
that in no event shall this Section 6.10(b) prohibit any prepayments of the
Indebtedness under the ABL Facility Documentation or, to the extent constituting
Indebtedness, payments in respect of the Fee Claim Reserve Amount or the Delayed
Admin Claims.

SECTION 6.11. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiaries in any period set forth
below to exceed the amount set forth below for such period:

 

Fiscal Year

Ending

   Amount  

2014

   $ 22,000,000   

2015

   $ 25,000,000   

2016

   $ 25,000,000   

2017

   $ 25,000,000   

2018

   $ 25,000,000   

2019

   $ 25,000,000   

 

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Notwithstanding the foregoing, the amount of permitted Capital Expenditures set
forth above shall be increased (but not decreased) in respect of any fiscal year
commencing with the fiscal year ending on April 25, 2015, by (a) the amount of
unused permitted Capital Expenditures for the immediately preceding fiscal year
less (b) an amount equal to unused Capital Expenditures carried forward to such
preceding fiscal year.

SECTION 6.12. Interest Coverage Ratio. Beginning with the fiscal quarter ending
October 26, 2013, permit the Interest Coverage Ratio for any period of four
consecutive fiscal quarters, in each case taken as one accounting period, ending
on the last day of a fiscal quarter set forth below to be less than the ratio
set forth opposite such fiscal quarter below:

 

Fiscal Quarter

Ending in

   Interest
Coverage
Ratio  

October 2013

     1.75:1.00   

January 2014

     2.00:1.00   

April 2014

     2.00:1.00   

July 2014

     2.45:1.00   

October 2014

     2.45:1.00   

January 2015

     2.65:1.00   

April 2015

     2.65:1.00   

July 2015

     2.65:1.00   

October 2015

     2.85:1.00   

January 2016

     2.85:1.00   

April 2016

     2.85:1.00   

July 2016 and thereafter

     3.05:1.00   

SECTION 6.13. Maximum Net Total Leverage Ratio. Beginning with the fiscal
quarter ending October 26, 2013, permit the Net Total Leverage Ratio on the last
day of a fiscal quarter set forth below to be greater than the ratio set forth
opposite such date below:

 

Fiscal Quarter

Ending in

   Net Total
Leverage
Ratio  

October 2013

     5.65:1.00   

January 2014

     5.25:1.00   

April 2014

     5.25:1.00   

July 2014

     4.90:1.00   

October 2014

     4.45:1.00   

January 2015

     4.40:1.00   

April 2015

     4.40:1.00   

July 2015

     4.40:1.00   

October 2015

     4.40:1.00   

January 2016

     4.40:1.00   

April 2016

     4.10:1.00   

July 2016

     4.05:1.00   

October 2016

     4.05:1.00   

January 2017

     4.05:1.00   

April 2017 and thereafter

     3.85:1.00      

 

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SECTION 6.14. Fiscal Year. With respect to the Borrower, change their fiscal
year-end to a date other than the last Saturday of each April.

ARTICLE VII

Events of Default

SECTION 7.01. Events of Default. In case of the happening of any of the
following events (“Events of Default”):

(a) any representation or warranty made or deemed made in or in connection with
any Loan Document or the borrowings hereunder, or any representation, warranty,
statement or information contained in any report, certificate, financial
statement or other instrument furnished in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;

(b) default shall be made in the payment of 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 by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or any Fee
or any other amount (other than an amount referred to in (b) above) due under
any Loan Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of five (5) Business Days;

(d) default shall be made in the due observance or performance by the Borrower
or any Subsidiary of any covenant, condition or agreement contained in
Section 5.01(a), 5.05 or 5.08 or in Article VI.

(e) default shall be made in the due observance or performance by the Borrower
or any Subsidiary of any covenant, condition or agreement contained in any Loan
Document (other than those specified in (b), (c) or (d) above) and such default
shall continue unremedied for a period of 30 days after the notice thereof from
the Administrative Agent to the Borrower (which notice shall also be given at
the request of any Lender);

(f) (i) the Borrower or any Subsidiary shall fail to pay any principal or
interest, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable beyond the period of grace, if
any, provided in the instrument or agreement pursuant to which such Indebtedness
was created, or (ii) any other event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
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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 clause (ii) shall
not apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Subsidiary, or of a substantial part of the
property or assets of the Borrower or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
the property or assets of the Borrower or a Subsidiary or (iii) the winding-up
or liquidation of the Borrower or any Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered, provided that this paragraph
(g) shall not apply to any Immaterial Subsidiary;

(h) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Subsidiary
or for a substantial part of the property or assets of the Borrower or any
Subsidiary, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing; provided that this paragraph
(h) shall not apply to any Immaterial Subsidiary;

(i) one or more judgments (excluding judgments related to the make-whole
litigation in the Bankruptcy Proceeding) shall be rendered against the Borrower,
any Subsidiary or any combination thereof and the same shall remain undischarged
for a period of 45 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of the Borrower or any Subsidiary to enforce
any such judgment and such judgment either (i) is for the payment of money in an
aggregate uninsured amount (to the extent not covered by independent third-party
insurance as to which the insurer has been notified of such judgment and does
not deny coverage) in excess of $5,000,000 or (ii) is for injunctive relief and
has resulted or could reasonably be expected to result in a Material Adverse
Effect;

(j) an ERISA Event shall have occurred or is reasonably expected to occur that,
when taken either alone or together with all other such ERISA Events, has
resulted or could reasonably be expected to result in a Material Adverse Effect;

(k) the ABL Intercreditor Agreement, any Guarantee under the Guarantee and
Collateral Agreement for any reason shall cease to be in full force and effect
(other than in accordance with its terms), or any Guarantor shall deny in
writing that it has any further liability under the Guarantee and Collateral
Agreement (other than as a result of the discharge of such Guarantor in
accordance with the terms of the Loan Documents);

 

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(l) any security interest purported to be created by any Security Document shall
cease to be, or shall be asserted by the Borrower or any other Loan Party not to
be, a valid, perfected (except as otherwise expressly provided in this Agreement
or such Security Document) security interest in the securities, assets or
properties covered thereby; or

(m) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), 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 forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

SECTION 7.02. Application of Proceeds. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, the proceeds of any sale of, or other realization upon, all
or any part of the Collateral shall be applied in the order specified in the
Guarantee and Collateral Agreement.

SECTION 7.03. Right to Cure. Notwithstanding anything to the contrary contained
in Article VII, in the event that the Borrower fails to comply with the
requirements of any Financial Covenant with respect to any fiscal quarter end,
from the last day of such fiscal quarter until the expiration of the 10th
Business Day subsequent to the date the certificate calculating compliance with
such Financial Covenant is required to be delivered pursuant to Section 5.04(d),
the Borrower shall have the right to issue Permitted Cure Securities for cash or
otherwise receive cash capital contributions in the form of common equity
(collectively, the “Cure Right”), and upon the receipt by the Borrower of such
cash (the “Cure Amount”) and written notice to the Administrative Agent, such
Financial Covenants for such period shall be recalculated by increasing
Consolidated EBITDA by the amount of such Cure Amount; provided that (a) in each
four-fiscal quarter period, there shall be at least two (2) fiscal quarters in
which the Cure Right is not exercised, (b) the Cure Right may be exercised no
more than four (4) times during the term of this Agreement, (c) the Cure Amount
shall be no greater than the amount required for purposes of curing the
non-compliance with such Financial Covenant, (d) the Cure Amount shall be
applied solely to determine compliance with the Financial Covenants in
accordance with this Section 7.03, and shall be disregarded for the purpose of
determining pricing, financial ratio-based conditions or any baskets with
respect to the covenants set forth herein, (e) the Cure Right shall not result
in any pro forma reduction of Indebtedness for the purpose of calculating the
Financial Covenants and (f) the Cure Amount received by the Borrower shall be
used to prepay the Term Loans. If, after giving effect to the foregoing
recalculations, the Borrower shall be in compliance with the requirements of
such Financial Covenant, then the Borrower shall be deemed to have satisfied the
requirements of the Financial Covenants, as of the

 

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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 of or
Default with respect to such Financial Covenant that had occurred shall be
deemed cured for purposes of this Agreement. To the extent a fiscal quarter for
which such Financial Covenant is recalculated as a result of a Cure Right is
included in the calculation of a Financial Covenant in a subsequent fiscal
period, the Cure Amount shall be included in the Consolidated EBITDA for such
fiscal quarter in such subsequent fiscal period.

ARTICLE VIII

The Administrative Agent and the Collateral Agent

SECTION 8.01. Appointment and Authority. Each Lender hereby irrevocably appoints
the Administrative Agent and the Collateral Agent (for purposes of this Article
VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the “Agents”) its agent, and authorizes the Agents to take such
actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article VIII are solely
for the benefit of the Agents and the Lenders, and neither the Borrower nor any
other Loan Party shall have rights as a third-party beneficiary of any of such
provisions. It is understood and agreed that the use of the term “Agent” or
“agent” herein or in any other Loan Documents (or any other similar term) with
reference to an Agent, is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between the contracting
parties. Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized to (a) execute any and all documents (including releases)
with respect to the Collateral and the rights of the Secured Parties with
respect thereto, as contemplated by and in accordance with the provisions of
this Agreement and the Security Documents and (b) negotiate, enforce or settle
any claim, action or proceeding affecting the Lenders in their capacity as such,
at the direction of the Required Lenders, which negotiation, enforcement or
settlement will be binding upon each Lender.

SECTION 8.02. Rights as a Lender. The institution serving as the Administrative
Agent and/or the Collateral Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender, and may exercise the
same as though it were not an Agent, and such bank and its Affiliates may accept
deposits from, lend money to, own securities of, 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 it were not
an Agent hereunder.

SECTION 8.03. Exculpatory Provisions. Neither Agent shall have any duties or
obligations except those expressly set forth in the Loan Documents, and its
duties hereunder shall be administrative in nature. Without limiting the
generality of the foregoing, (a) neither Agent shall be subject to any fiduciary
or other implied duties, regardless of whether a Default or an Event of Default
has occurred and is continuing, (b) neither Agent shall have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that such Agent is
instructed in writing to exercise by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.07), provided that no Agent shall be required to take any
action that, in its opinion or the opinion of its counsel, may expose such Agent
to liability or that is contrary to any Loan Document or applicable law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law and (c) except as expressly set forth
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duty to disclose, nor shall it be liable for the failure to disclose, any
information relating to the Borrower or any of the Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent and/or
Collateral Agent or any of its Affiliates in any capacity. Neither Agent shall
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 such Agent shall in good faith believe to be
necessary under the circumstances as provided in Section 9.07, or in the absence
of its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final and nonappealable judgment. Neither Agent shall
be deemed to have knowledge of any Default or Event of Default unless and until
written notice thereof is given to such Agent by the Borrower or a Lender, and
neither Agent shall be responsible for or 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, (iv) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, (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 such Agent or (vi) compliance by Affiliated Lenders
with the terms of Section 9.04(h).

SECTION 8.04. Reliance by Administrative Agent. Each Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person. Each Agent may also rely upon any statement
made to it orally or by telephone and believed by it to have been made by the
proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan that
by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender prior to the making of such Loan. Each 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.

SECTION 8.05. Delegation of Duties. Each Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
subagents appointed by it. Each Agent and any such subagent may perform any and
all its duties and exercise its rights and powers by or through their respective
Related Parties. The exculpatory provisions of the preceding paragraphs shall
apply to any such subagent and to the Related Parties of each Agent and any such
subagent, and shall apply to their respective activities in connection with the
syndication of the Credit Facilities as well as activities as Agent. No Agent
shall be responsible for the negligence or misconduct of any subagents except to
the extent that a court of competent jurisdiction determines in a final and
nonappealable judgment that such Agent acted with gross negligence or willful
misconduct in the selection of such subagents.

SECTION 8.06. Resignation of the Administrative Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, either Agent
may resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, (or such earlier day
as shall be agreed by the Required Lenders) (the “Resignation Effective Date”),
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on behalf of the Lenders, appoint a successor Agent which shall be a bank with
an office in New York, New York, or an Affiliate of any such bank. If no
successor Agent has been appointed pursuant to the immediately preceding
sentence by the Resignation Effective Date, such Agent’s resignation shall
become effective and the Required Lenders shall thereafter perform all the
duties of such Agent hereunder and/or under any other Loan Document until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
and/or Collateral Agent, as the case may be. Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to,
and become vested with, all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The Administrative Agent Fees payable by the Borrower to
a successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent’s
resignation hereunder, the provisions of this Article VIII and Section 9.05
shall continue in effect for the benefit of such retiring Agent, its subagents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while acting as Agent.

SECTION 8.07. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender acknowledges that it has, independently and without reliance upon the
Agents or any other Lender 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 Agents or any other Lender 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
or any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.

SECTION 8.08. No Other Duties, etc. Notwithstanding any other provision of this
Agreement or any provision of any other Loan Document, the Arranger is named as
such for recognition purposes only, and in its capacity as such shall have no
duties, responsibilities or liabilities with respect to this Agreement or any
other Loan Document; it being understood and agreed that the Arranger shall be
entitled to all indemnification and reimbursement rights in favor of the Agents
provided herein and in the other Loan Documents. Without limitation of the
foregoing, the Arranger, in its capacity as such shall not, by reason of this
Agreement or any other Loan Document, have any fiduciary relationship in respect
of any Lender, Loan Party or any other Person.

SECTION 8.09. Agent May File Proofs of Claim. In case of the pendency of any
proceeding under any Debtor Relief Law, each Agent (irrespective of whether the
principal of any Loan or Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Agent
shall have made any demand on the Borrower) shall be entitled and empowered (but
not obligated) by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and each Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, each Agent and their respective agents and counsel and all other
amounts due the Lenders and each Agent under Sections 2.05 and 9.05) allowed in
such judicial proceeding; and

(ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to such Agent and, in the event that such
Agent shall consent to the making of such payments directly to the Lenders, to
pay to such Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of such Agent and its agents and counsel, and any
other amounts due such Agent under Sections 2.05 and 9.05.

SECTION 8.10. Collateral and Guarantee Matters. (a) The Lenders irrevocably
authorize the Collateral Agent, at its option and in its sole discretion:

(i) to release any Lien on any property granted to, or held by, the Collateral
Agent under any Loan Document (x) on or after the date that the Obligations
(other than contingent indemnity and expense reimbursement obligations as to
which no claim has been made) have been paid in full and the Commitments have
been terminated, (y) with respect to any property that is sold or otherwise
disposed of or to be sold or otherwise disposed of as part of or in connection
with any sale or other disposition permitted under the Loan Documents or (z), if
approved, authorized or ratified in writing by the Required Lenders (or such
other number of Lenders as shall be required hereunder);

(ii) to subordinate any Lien on any property granted to, or held by, the
Collateral Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 6.02(j); and

(iii) to release any Subsidiary from its obligations under the Loan Documents if
such Person ceases to be a Subsidiary as a result of a transaction permitted
under the Loan Documents.

(b) Upon request by the Collateral Agent at any time, the Required Lenders will
confirm in writing, the Collateral Agent’s authority to release or subordinate
its interest in particular types or items of property, or to release any
Subsidiary from its obligations under the Loan Documents pursuant to this
Section 8.10.

(c) Except as otherwise expressly set forth herein or in the Guarantee and
Collateral Agreement, no Cash Management Bank or Qualified Counterparty that
obtains the benefits of any Guarantee pursuant to the Guarantee and Collateral
Agreement or any Collateral by virtue of the provisions hereof or of 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 VIII 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
and obligations with respect to any Secured Hedging Agreement unless the
Administrative Agent has received written notice of such obligations, together
with such supporting documentation as the Administrative Agent may request, from
the applicable Cash Management Bank or Qualified Counterparty, as the case may
be.

(d) The Collateral Agent shall not be responsible for, or have a duty to,
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of any Collateral, the existence, priority or
perfection of the Collateral Agent’s Lien thereon, or any certificate prepared
by any Loan Party in connection therewith, nor shall the Collateral Agent be
responsible or liable to the Lenders for any failure to monitor or maintain any
portion of the Collateral.

 

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SECTION 8.11. Intercreditor Agreements.

(a) The Administrative Agent and the Collateral Agent are authorized to enter
into the ABL Intercreditor Agreement and the parties hereto acknowledge that the
ABL Intercreditor Agreement is binding upon them. Each Lender (i) hereby
consents to the subordination of the Liens on the Current Asset Collateral
securing the Obligations on the terms set forth in the ABL Intercreditor
Agreement with respect to the parity nature of the Liens on the Collateral,
(ii) hereby agrees that it will be bound by and will take no actions contrary to
the provisions of the ABL Intercreditor Agreement and (iii) hereby authorizes
and instructs the Administrative Agent and Collateral Agent to enter into the
ABL Intercreditor Agreement and to subject the Liens on the Collateral securing
the Obligations to the provisions thereof.

(b) The Administrative Agent and the Collateral Agent are authorized to enter
into customary intercreditor agreements in order to subordinate Liens otherwise
permitted by Section 6.02 to the Liens granted in favor of the Collateral Agent
to secure the Obligations.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices; Electronic Communications. Except for notices and other
communications expressly permitted to be given by telephone hereunder (and
except as provided in this Section 9.01), 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, as follows:

(a) if to the Borrower, to it at School Specialty, Inc., W6313 Design Drive,
Greenville, WI 54942, Attention of Michael P. Lavelle (Fax No. 920-882-5863,
Email: michael.lavelle@schoolspecialty.com);

(b) if to the Administrative Agent, to Credit Suisse AG, Eleven Madison Avenue,
New York, NY 10010, Attention of: Sean Portrait, Fax No. 212-322-2291, Email:
agency.loanops@credit-suisse.com;

(c) if to the Collateral Agent, to Credit Suisse AG, Cayman Islands Branch,
Eleven Madison Avenue, New York, NY 10010, Attention of: Nirmala Durgana, Loan
Operations – Boutique Management, Telephone No. 212-538-3525, Email:
list.ops-collateral@credit-suisse.com; and

(d) if to a Lender, to it at its address (or fax number) set forth on Schedule
2.01(a) or in the Assignment and Acceptance pursuant to which such Lender shall
have become a party hereto.

All notices and other communications given to any party hereto, in accordance
with the provisions of this Agreement, shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service, or sent by
fax or on the date five (5) Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01, or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01. As agreed to among the Borrower, the Administrative Agent and the
applicable Lenders from time to time, notices and other communications may also
be delivered by e-mail to the e-mail address of a representative of the
applicable Person provided from time to time by such Person.

 

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The Borrower hereby agrees, unless directed otherwise by the Administrative
Agent or unless the electronic mail address referred to below has not been
provided by the Administrative Agent to the Borrower, that it will, and will
cause its Subsidiaries to, provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to the Loan Documents or to the Lenders under
Article V, including all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (i) is or relates to a Borrowing Request or a notice
pursuant to Section 2.10, (ii) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date therefor,
(iii) provides notice of any Default or Event of Default under this Agreement or
any other Loan Document or (iv) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or any Borrowing
or other extension of credit hereunder (all such nonexcluded communications
being referred to herein collectively as “Communications”), by transmitting the
Communications in an electronic/soft medium that is properly identified in a
format acceptable to the Administrative Agent to an electronic mail address as
directed by the Administrative Agent. In addition, the Borrower agrees, and
agrees to cause its Subsidiaries, to continue to provide the Communications to
the Administrative Agent or the Lenders, as the case may be, in the manner
specified in the Loan Documents but only to the extent requested by the
Administrative Agent.

The Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders materials and/or information provided by, or on behalf
of, the Borrower hereunder (collectively, the “Borrower Materials”) by posting
the Borrower Materials on Intralinks or another similar electronic system (the
“Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material nonpublic information with respect
to the Borrower or their respective securities) (each, a “Public Lender”). The
Borrower hereby agrees that, at the request of the Administrative Agent, (i) all
Borrower Materials that are to be made available to Public Lenders 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 Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent and the Lenders to treat such Borrower
Materials as not containing any material nonpublic information with respect to
the Borrower or its securities for purposes of United States Federal and state
securities laws (provided that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 9.16), (iii) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated as “Public Investor” and (iv) the
Administrative Agent shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not marked as “Public Investor.” Notwithstanding the foregoing, the
following Borrower Materials shall be deemed to be marked “PUBLIC,” unless the
Borrower notifies the Administrative Agent in writing (including by email)
promptly prior to their intended distribution after the Borrower has had a
reasonable opportunity to review the Borrower Materials that any such document
contains material nonpublic information: (1) the Loan Documents, (2) any
notification of changes in the terms of the Credit Facilities and (3) all
information delivered pursuant to Section 5.04(a), Section 5.04(b) and
Section 5.04(d).

Each Public Lender agrees to cause at least one individual at or on behalf of
such Public Lender to at all times have selected the “Private Side Information”
or similar designation on the content declaration screen of the Platform in
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with such Public Lender’s compliance procedures and applicable law, including
United States Federal and state securities laws, to make reference to
Communications that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to the Borrower or its securities for purposes of United States
Federal or state securities laws.

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE
AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD-PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT
OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED
PARTIES HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR
DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR
EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN
PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE
INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A
FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH
PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its electronic mail address set forth above shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Loan Documents. Each Lender agrees that receipt of notice to
it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform shall constitute effective delivery of the
Communications to such Lender for purposes of the Loan Documents. Each Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s electronic mail address to
which the foregoing notice may be sent by electronic transmission and that the
foregoing notice may be sent to such e-mail address. Nothing herein shall
prejudice the right of the Administrative Agent or any Lender to give any notice
or other communication pursuant to any Loan Document in any other manner
specified in such Loan Document.

SECTION 9.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lenders and shall survive the making by the Lenders of the Loans,
regardless of any investigation made by the Lenders or on their behalf, 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 or any other Loan Document is outstanding and unpaid and so long as
the Commitments have not been terminated. The provisions of Sections 2.14, 2.16,
2.20 and 9.05 shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document or any investigation made
by or on behalf of the Administrative Agent, the Collateral Agent or any Lender.

 

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SECTION 9.03. Binding Effect. Subject to Section 4.01, this Agreement shall
become effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto.

SECTION 9.04. Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor
any other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender, and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an assignee in accordance with the
provisions of Section 9.04(b), (ii) by way of participation in accordance with
the provisions of Section 9.04(d) or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 9.04(e) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in Section 9.04(d)
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent, the Collateral Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees (other than as provided in Sections 9.04(b)(v) and 9.04(b)(vi) below)
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);
provided that (in each case with respect to any Class) any such assignment shall
be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and/or the Loans at the time owing to it (in each case with
respect to any Class) or contemporaneous assignments to related Approved Funds
that equal at least the amount specified in Section 9.04(b)(i)(B) in the
aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in Section 9.04(b)(i)(A), the aggregate amount of
the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the applicable Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Acceptance, as of the Trade Date) shall not
be less than $1,000,000, unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed).

 

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(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate Classes
on a non-pro rata basis.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by paragraph Section 9.04(b)(i)(B) and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default described in
Section 7.01(b), 7.01(c), 7.01(g) or 7.01(h) has occurred and is continuing at
the time of such assignment, (y) such assignment is to a Lender, an Affiliate of
a Lender or an Approved Fund or (z) such assignment is in connection with the
primary syndication of the Commitment or Loans; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five (5) Business
Days after having received notice thereof; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any Term
Loans unless such assignment is to a Lender, an Affiliate of a Lender or an
Approved Fund.

(iv) Assignment and Assumption. The parties to each assignment shall (A) execute
and deliver to the Administrative Agent an Assignment and Acceptance via an
electronic settlement system acceptable to the Administrative Agent or (B) if
previously agreed with the Administrative Agent, manually execute and deliver to
the Administrative Agent an Assignment and Acceptance, in each case, together
with a processing and recordation fee of $3,500; provided that the
Administrative Agent may, in its sole discretion, elect to waive or reduce such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire (in which the assignee shall designate one or more credit contacts
to whom all syndicate level information (which may contain material nonpublic
information about 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) and all applicable tax forms.

(v) No Assignment to Certain Persons. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries except pursuant to
Section 9.04(g) or Section 9.04(h)).

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural Person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance, 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

 

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and Acceptance covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16, 2.20 and
9.05, with respect to facts and circumstances occurring prior to the effective
date of such assignment as well as to any Fees accrued for its account and not
yet paid. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 9.04(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amounts (and stated interest) 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, the Collateral 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. The Register
shall be available for inspection by the Borrower and any Lender (with respect
to any entry relating to such Lender’s Loans), at any reasonable time and from
time to time upon reasonable prior notice.

Upon its receipt of, and consent to, a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above, if applicable, and the written consent of the Administrative Agent
and, if required, the Borrower to such assignment and any applicable tax forms,
the Administrative Agent shall (i) accept such Assignment and Acceptance and
(ii) promptly record the information contained therein in the Register. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural Person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Collateral 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. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 9.05(c) with respect to any
payments made by such Lender to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver with respect to the following:
decreasing any fees payable to such Participant hereunder or the amount of
principal of or the rate at which interest is payable on the Loans in which such
Participant has an interest, or extending any scheduled principal payment date
or date fixed for the payment of interest on the Loans in which such Participant
has an interest, increasing or extending the Commitments in which such
Participant has an interest or releasing Guarantors (other than in connection

 

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with the sale of any Guarantor in a transaction permitted by Section 6.05) or
all or substantially all of the Collateral). The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15, 2.16 and
2.20 (subject to the requirements and limitations therein, including the
requirements under Section 2.20 (it being understood that the documentation
required under Section 2.20(g) shall be delivered to the participating Lender)))
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 9.04(b); provided that such Participant
(A) agrees to be subject to the provisions of Sections 2.21 as if it were an
assignee under Section 9.04(b)) and (B) shall not be entitled to receive any
greater payment under Sections 2.14, 2.15, 2.16 or 2.20, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation. Each Lender that sells a participation agrees, at the
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower to effectuate the provisions of Section 2.21 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.06 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.18 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an 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
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans or its other obligations under
any Loan Document) to any Person except to the extent that such disclosure is
necessary 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 such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(f) Special Purpose Vehicles. 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 (1) nothing herein shall constitute a commitment by any SPV to
make any Loan and (2) 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, it
will not institute against, or join any other Person in instituting against,
such SPV any bankruptcy,

 

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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 and/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 nonpublic 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

(g) Assignments to Affiliated Lenders. Notwithstanding anything in this
Agreement to the contrary, any Term Lender may, at any time, assign all or a
portion of its Term Loans on a non-pro rata basis to an Affiliated Lender
through open-market purchases; provided that:

(i) the Affiliated Lender shall identify itself as an “Affiliated Lender” in the
applicable Assignment and Acceptance;

(ii) for purposes of any amendment, waiver or modification of this Agreement, or
any other Loan Document (including pursuant to Section 9.07), or any vote in
connection with any plan of reorganization, the principal amount of all Term
Loans (including Incremental Term Loans) held by Affiliated Lenders, to the
extent greater than 33.3% of the principal amount of Term Loans voting with
respect to such matter, shall be disregarded (in the numerator as well as the
denominator), and such voting exclusion shall be allocated among the Affiliated
Lenders on a pro rata basis; and

(iii) the aggregate principal amount of Term Loans held at any one time by an
Affiliated Lender Group may not exceed 25% of the aggregate outstanding
principal amount of all Term Loans.

Each Affiliated Lender that is a Term Lender hereunder agrees to comply with the
terms of this Section 9.04(g).

(h) Assignments to the Borrower or its Subsidiaries. Notwithstanding anything in
this Agreement to the contrary, any Term Lender may, at any time, assign all or
a portion of its Term Loans on a non-pro rata basis to the Borrower or any
Subsidiary through Dutch Auctions open to all Term Lenders on a pro rata basis,
subject to the following limitations:

(i) the Borrower and each Subsidiary (as applicable) shall represent and
warrant, or state that it is unable to represent and warrant, as of the date of
any such assignment, that neither it nor any of its respective directors or
officers has any material non-public information with respect to the Borrower or
the Subsidiaries or any of their respective securities that has not been
disclosed to the Term Lenders generally (other than because such Term Lenders do
not wish to receive material non-public information with respect to the Borrower
or the Subsidiaries or any of their respective securities) prior to such date to
the extent such information could reasonably be expected to have a material
effect upon, or otherwise be material, to such Term Lender’s decision to assign
Term Loans to the Borrower or such Subsidiary (as applicable);

 

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(ii) immediately upon the effectiveness of such assignment of Term Loans from a
Term Lender to the Borrower or any Subsidiary, such Term Loans and all rights
and obligations as a Term Lender related thereto shall, for all purposes under
this Agreement, the other Loan Documents and otherwise, be deemed to be
irrevocably prepaid, terminated, extinguished, cancelled and of no further force
and effect and the Borrower and such Subsidiary (as applicable) shall neither
obtain nor have any rights as a Term Lender hereunder or under the other Loan
Documents by virtue of such assignment;

(iii) the Borrower and each Subsidiary shall not use the proceeds of any loans
from the ABL Facility for any such assignment; and

(iv) no Default or Event of Default shall have occurred and be continuing.

SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all reasonable
and documented out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent and the Arranger (and each of their respective Affiliates) in
connection with the syndication of the Credit Facilities and the preparation and
administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent, the
Arranger (and each of their respective Affiliates) or any Lender in connection
with the enforcement or protection of its rights in connection with the
Engagement Letter, the Fee Letter, this Agreement and the other Loan Documents
or in connection with the Loans made hereunder, including (i) the fees, charges
and disbursements of Davis Polk & Wardwell LLP, counsel for the Administrative
Agent and the Collateral Agent, and, (ii) in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
single counsel for the Administrative Agent, the Collateral Agent, the Arranger
and the Lenders (and each of their respective Affiliates).

(b) The Borrower agrees to indemnify the Administrative Agent, the Collateral
Agent, each Lender and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel (which is limited to one firm of counsel
for such Indemnitees taken as a whole and, if necessary, a single local counsel
in each appropriate jurisdiction for all such Indemnitees, taken as a whole and,
in the case of an actual or perceived conflict of interest where the Indemnitees
affected by such conflict inform the Administrative Agent of such conflict and
thereafter retain their own counsel, of another firm of counsel) and consultant
or other expert fees, charges and disbursements, incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a result of
(i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby (including the
syndication of the Credit Facilities), (ii) the use of the proceeds of the
Loans, (iii) any Environmental Liability related in any way to the Loan Parties,
any of their respective subsidiaries or predecessors or any property currently
or formerly owned, leased or operated by the Loan Parties or any of their
respective subsidiaries or predecessors, including the Mortgaged Properties, or
(iv) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (and regardless of
whether such matter is initiated by the Borrower, any other Loan Party or any of
their respective Affiliates or any other Person); provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
primarily from (i) the gross negligence, bad faith or willful misconduct of such
Indemnitee, (ii) a material breach of such Indemnitee’s funding obligations

 

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pursuant to Sections 2.01 and 2.02, or (iii) any claims or any litigation or
other proceeding that does not involve an act or omission of the Borrower or any
of its Affiliates and is brought by an Indemnitee against another Indemnitee
(other than any claim, litigation or other proceeding brought against the
Arranger, Administrative Agent or Collateral Agent in its capacity as such).
This Section 9.05(b) shall not apply with respect to Taxes other than any Taxes
that represent losses, claims, damages, liabilities and related expenses 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, the Collateral Agent, or the Arranger (or
each of their respective Affiliates) under paragraph (a) or (b) of this
Section 9.05, each Lender severally agrees to pay to the Administrative Agent,
the Collateral Agent or the Arranger (or each of their respective Affiliates),
as the case may be, such Lender’s pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; (including any such unpaid amount in respect of a claim asserted
by such Lender); 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, the Collateral Agent or the
Arranger (or each of their respective Affiliates) in its capacity as such. For
purposes hereof, a Lender’s “pro rata share” shall be determined based upon its
share of the sum of the outstanding Term Loans and unused Commitments at the
time.

(d) To the extent permitted by applicable law, the Borrower shall not assert,
and the Borrower hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan or the use of the proceeds thereof.

(e) The provisions of this Section 9.05 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent or any Lender. All amounts due under this Section 9.05 shall be payable on
written demand therefor.

SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

SECTION 9.07. Waivers; Amendment (a) No failure or delay of the Administrative
Agent, the Collateral Agent or any Lender in exercising any power or right
hereunder or under any other 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, the
Collateral Agent and the Lenders hereunder and

 

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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
this Agreement or any other Loan Document or consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. 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.

(b) No Loan Document or provision thereof may be waived, amended or modified
except, in the case of this Agreement, by an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, by an agreement or agreements in writing entered into by
the parties thereto with the consent of the Required Lenders, except as provided
in clauses (i) through (vi) below. Notwithstanding the foregoing, no such
agreement shall:

(i) decrease the principal amount of, or extend the maturity of or any scheduled
principal payment date or date for the payment of any interest on any Loan, or
waive or excuse any such payment or any part thereof or decrease the rate of
interest on any Loan, without the prior written consent of each Lender directly
adversely affected thereby,

(ii) increase or extend the Commitment or decrease or extend the date for
payment of any Fees of any Lender without the prior written consent of such
Lender (and if there is an increase or extension of a Lender’s Commitment, the
prior written consent of the Required Lenders shall also be required),

(iii) amend or modify the pro rata requirements of Section 2.17, the provisions
of Section 9.04(a) relating to an assignment or other transfer by the Borrower
or any other Loan Party of any of its rights or obligations hereunder or release
all or substantially all of the Guarantors (other than in connection with the
sale of such Guarantor in a transaction permitted by Section 6.06) or all or
substantially all of the Collateral, without the prior written consent of each
Lender,

(iv) change the provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of collateral and payments due to
Lenders holding Loans or Commitments of one Class differently from the rights of
Lenders holding Loans or Commitments of any other Class without the prior
written consent of (1) Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each adversely affected Class and (2) the
Required Lenders,

(v) modify the protections afforded to an SPV pursuant to the provisions of
Section 9.04(f) without the written consent of such SPV; or

(vi) reduce the percentage contained in the definition of the term “Required
Lenders” or the provision of this Section 9.07 without the prior written consent
of each Lender (it being understood that with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially the same
basis as the Term Loan Commitments on the date hereof);

 

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provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or the Collateral Agent
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent or the Collateral Agent, respectively;

(c) The Administrative Agent and the Borrower may amend any Loan Document (i) to
correct administrative errors or omissions, or to effect administrative changes
that are not adverse to any Lender, (ii) to make modifications contemplated by
Section 2.22 and 2.23 pursuant to an Additional Credit Extension Amendment,
(iii) to correct, amend, cure any ambiguity, inconsistency, defect or correct
any typographical error or other manifest error in this Agreement or any other
Loan Document, (iv) to comply with local law or advice of local counsel in
respect of a Security Document or (v) to cause a Security Document to be
consistent with this Agreement and other Loan Documents. Notwithstanding
anything to the contrary contained herein, such amendment shall become effective
without any further consent of any other party to such Loan Document.

SECTION 9.08. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively, the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 9.08 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

SECTION 9.09. Entire Agreement. This Agreement, the Fee Letter and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Unless otherwise specified therein, any other
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any Person (other than the parties hereto and thereto, their
respective successors and assigns permitted hereunder and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Collateral Agent and the Lenders) any rights, remedies, obligations
or liabilities under or by reason of this Agreement or the other Loan Documents.

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 RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. 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 AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.

 

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SECTION 9.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 9.12. Counterparts. 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, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission or other customary means of electronic transmission (e.g. “pdf”)
shall be as effective as delivery of a manually signed counterpart of this
Agreement.

SECTION 9.13. 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 are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 9.14. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) AND ANY CLAIM, CONTROVERSY
OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT OR ANY SUCH OTHER LOAN
DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR
TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The Borrower
hereby irrevocably and unconditionally agrees that it will not commence any
action, litigation or proceeding of any kind or description, whether in law or
equity, whether in contract or tort or otherwise, against the Administrative
Agent, any Lender or any Related Party of the foregoing in any way relating to
this Agreement or any other Loan Document (except as otherwise expressly stated
therein) or the transactions relating hereto or thereto, in any forum other than
any New York State court or Federal court of the United States of America
sitting in the borough of Manhattan in New York City, and any appellate court
from any thereof, 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 this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against the Borrower or its properties in the courts of any
jurisdiction.

(b) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of, or relating to, this Agreement or the other Loan Documents in any New
York State or Federal court. 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.

 

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(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 9.16. Electronic Execution of Assignments. (a) 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.

SECTION 9.17. Confidentiality. Each of the Administrative Agent, the Collateral
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ Related Parties (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority or quasi-regulatory authority (such
as the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) in connection with the exercise of any remedies hereunder or under
the other Loan Documents or any suit, action or proceeding relating to the
enforcement of its rights hereunder or thereunder, (e) to any other party hereto
and, subject to an agreement containing provisions no less restrictive than this
Section 9.17, to (i) any actual or prospective assignee of or Participant in any
of its rights or obligations under this Agreement and the other Loan Documents
or (ii) any actual or prospective counterparty (or its advisors) to any swap,
derivative or other transaction under which payments are to be made by reference
to the Borrower or any Subsidiary or any of their respective obligations, this
Agreement or payments hereunder, (f) with the consent of the Borrower, (g) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section 9.17, or (y) becomes available to the
Administrative Agent, any Lender or any of their selective Affiliates on a
non-confidential basis from a source other than the Borrower, (h) on a
confidential basis to (x) any rating agency in connection with rating the
Borrower or its Subsidiaries or the Credit Facilities hereunder or (y) the CUSIP
Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers with respect to the facilities or (i) market data
collectors, similar service providers to the lending industry and service
providers to the Administrative Agent in connection with the administration and
management of this Agreement and the Loan Documents. For the purposes of this
Section 9.17, “Information” shall mean all information received from the
Borrower and related to the Borrower or its business, other than any such
information that was available to the Administrative Agent, the Collateral Agent
or any Lender on a nonconfidential basis prior to its disclosure by the
Borrower; provided that, in the case of Information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 9.17 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 its own confidential information.

 

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SECTION 9.18. Lender Action. Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan
Documents (including the exercise of any right of setoff, rights on account of
any banker’s lien or similar claim or other rights of self-help), or institute
any actions or proceedings, or otherwise commence any remedial procedures, with
respect to any Collateral or any other property of any such Loan Party, unless
expressly provided for herein or in any other Loan Document, without the prior
written consent of the Administrative Agent. The provisions of this Section 9.18
are for the sole benefit of the Lenders and shall not afford any right to, or
constitute a defense available to, any Loan Party.

SECTION 9.19. USA PATRIOT Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act, it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify the
Borrower in accordance with the USA PATRIOT Act.

SECTION 9.20. No Fiduciary Duty. Each Agent, each Lender and their respective
Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”),
may have economic interests that conflict with those of the Loan Parties, their
stockholders and/or their Affiliates. Each Loan Party agrees that nothing in the
Loan Documents or otherwise will be deemed to create an advisory, fiduciary or
agency relationship or fiduciary or other implied duty between any Lender, on
the one hand, and such Loan Party, its stockholders or its Affiliates, on the
other. The Loan Parties acknowledge and agree that (i) the transactions
contemplated by the Loan Documents (including the exercise of rights and
remedies hereunder and thereunder) are arm’s-length commercial transactions
between Lenders, on the one hand, and the Loan Parties, on the other, and
(ii) in connection therewith and with the process leading thereto, (x) no Lender
has assumed an advisory or fiduciary responsibility in favor of any Loan Party,
its stockholders or its Affiliates with respect to the transactions contemplated
hereby (or the exercise of rights or remedies with respect thereto) or the
process leading thereto (irrespective of whether any Lender has advised, is
currently advising or will advise any Loan Party, its stockholders or its
Affiliates on other matters) or any other obligation to any Loan Party except
the obligations expressly set forth in the Loan Documents and (y) each Lender is
acting solely as principal and not as the agent or fiduciary of any Loan Party,
its management, stockholders, creditors or any other Person. Each Loan Party
acknowledges and agrees that it has consulted its own legal and financial
advisors to the extent it deemed appropriate and that it is responsible for
making its own independent judgment with respect to such transactions and the
process leading thereto. Each Loan Party agrees that it will not claim that any
Lender has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to such Loan Party, in connection with such
transaction or the process leading thereto.

SECTION 9.21. Release of Collateral and Guarantees. (a) All security interests
and Liens granted or created under the Security Documents shall automatically
terminate when all the Obligations (other than contingent indemnification and
expense reimbursement obligations for which no claim has been made) have been
paid in full and the Lenders have no further commitment to lend under this
Agreement.

(b) A Guarantor shall automatically be released from its obligations under the
Security Documents and all security interests and Liens granted in the
Collateral of such Guarantor shall be automatically released upon the
consummation of any transaction permitted by this Agreement as a result of which
such Guarantor ceases to be a Guarantor or a Subsidiary;

 

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(c) (i) Upon any sale or other transfer by any Loan Party of any Collateral that
is permitted under this Agreement to any person that is not the Borrower or a
Guarantor, and (ii) upon the effectiveness of any written consent to the release
of the security interest or Lien granted under the Security Documents in any
Collateral pursuant to Section 9.07.

(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c) above, the Collateral Agent shall promptly execute and deliver to any
Loan Party, at such Loan Party’s expense, all Uniform Commercial Code
termination statements and other documents that such Loan Party shall reasonably
request to evidence such termination, release or subordination. Any execution
and delivery of documents pursuant to his Section 9.21 shall be without recourse
to or representation or warranty by the Collateral Agent or any Secured Party.
Without limiting the provisions of Section 9.05(a), the Borrower shall reimburse
the Collateral Agent upon demand for all reasonable and documented costs and out
of pocket expenses, including the reasonable and documented fees, charges and
expenses of counsel, incurred by it in connection with any action contemplated
by this Section 9.21.

 

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

 

SCHOOL SPECIALTY, INC., by  

/s/ Michael P. Lavelle

  Name: Michael P. Lavelle   Title: President and Chief Executive Officer

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent and Collateral
Agent, by  

/s/ William O’Daly

  Name: William O’Daly   Title: Authorized Signatory

 

by  

/s/ Philipp Horat

  Name: Philipp Horat   Title: Authorized Signatory

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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender, by  

/s/ William O’Daly

  Name: William O’Daly   Title: Authorized Signatory

 

by  

/s/ Philipp Horat

  Name: Philipp Horat   Title: Authorized Signatory

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Schedules to Credit Agreement (Term Loan)

Schedule 1.01(a)

Guarantors

 

Guarantor

  

Jurisdiction of Organization

  

Type of Organization

1.     Califone International, Inc.    Delaware    Corporation 2.     Childcraft
Education Corp.    New York    Corporation 3.     ClassroomDirect.com, LLC   
Delaware    Limited Liability Company 4.     Delta Education, LLC    Delaware   
Limited Liability Company 5.     Premier Agendas, Inc.    Washington   
Corporation 6.     Sportime, LLC    Delaware    Limited Liability Company 7.
    Bird-In-Hand Woodworks, Inc.    New Jersey    Corporation

 

S-1

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Schedule 1.01(b)

Immaterial Subsidiaries

 

1. Frey Scientific, Inc.

 

2. Sax Arts & Crafts, Inc.

 

S-2

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Schedule 1.01(c)

Mortgaged Properties

 

Record Owner

  

Address

School Specialty, Inc.    3525 S. Ninth Street

Salina, KS 67401

 

S-3

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Schedule 1.01(d)

Business Optimization Expenses

 

1. Disposition of the EPS Literacy and Intervention business line of the
Accelerated Learning Group segment (which may include the ThinkMath! product
line).

 

2. Disposition of the Premier Agendas student planner business line of the
Accelerated Learning Group segment.

 

3. Disposition of the business line of the Accelerated Learning Group segment,
including brands such as FOSS (Full Option Science System), Frey Scientific,
Delta Science Modules, Delta Education, CPO Science, Neo/SCI and ThinkMath!.

 

S-4

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Schedule 2.01(a)

Lenders and Commitments

 

Lender Name

  

Commitment Amount

Credit Suisse AG

   $145,000,000

 

S-5

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Schedule 3.08

Subsidiaries

 

Subsidiary

  

Percentage

Ownership

Interest of

the

Borrower

1.      Califone International, Inc.

   100%

2.      Childcraft Education Corp.

   100%

3.      ClassroomDirect.com, LLC

   100%

4.      Delta Education, LLC

   100%

5.      Frey Scientific, Inc.

   100%

6.      Premier Agendas, Inc.

   100%

7.      Sax Arts & Crafts, Inc.

   100%

8.      Sportime, LLC

   100%

9.      Premier School Agendas, Ltd.

   100%

10.     Select Agendas, Corp.

   100%

11.     Bird-In-Hand Woodworks, Inc.

   100%

 

S-6

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Schedule 3.18

Insurance

 

Insurer

  

Policy Type

  

Coverage

    

Deductibles

    

Policy #

Affiliated FM    Property/Equipment    $  435,000,000       $ 100,000      
EM732

Endurance American Specialty Insurance Company

   Excess California Earthquake    $ 10,000,000       $ 100,000      
CPN10003743000

AGCS Marine Insurance Company (Allianz)

   Ocean Cargo    $ 1,500,000       $ 2,000       OC 96019100

Admiral Insurance Company

   General Liability    $ 2,000,000       $ 50,000       CA 000005586-09

Sentry Insurance Company

   Commercial Auto    $ 1,000,000       $ 1,000       90-04547-03

Sentry Insurance Company

   Workers Compensation    $ 1,000,000       $ 350,000       90-04547-02 H&
&WI             90-04547-01 All
Other

ACE American Insurance Company

   Foreign Liability    $ 2,000,000       $ 1,000       PHFD37930659

National Union Fire Insurance Co. of Pittsburgh (Chartis)

   Umbrella Liability    $ 25,000,000       $ 25,000       13273329

Federal Insurance Company (Chubb)

   Excess Liability    $ 25,000,000       $ —         7976-73-69

Illinois National Insurance Company (Chartis)

   Directors & Officers Liability    $ 10,000,000         $0 Non indemnifiable
      01-166-65-19            $500,000 Securities                  $350,000 All
Other      

Illinois National Insurance Company (Chartis)

   Directors & Officers Liability    $ 10,000,000        
  $0 Non
indemnifiable   
      Tail Policy            $500,000 Securities                  $350,000 All
Other      

Federal Insurance Company (Chubb)

   1st Excess Directors & Officers Liability    $ 10,000,000       $ —        
8157-7351

Federal Insurance Company (Chubb)

   1st Excess Directors & Officers Liability    $ 10,000,000       $ —        
Tail Policy Axis Insurance Company    2nd Excess Directors & Officers Liability
   $ 5,000,000       $ —         MCN762576/01/2012

Axis Insurance Company

   2nd Excess Directors & Officers Liability    $ 5,000,000       $ —        
Tail Policy

Beazley Insurance Company

   3rd Excess Directors & Officers Liability    $ 5,000,000       $ —        
V15VK8120401

Beazley Insurance Company

   3rd Excess Directors & Officers Liability    $ 5,000,000       $ —        
Tail Policy

Travelers Casualty and Surety Company of America

   Employment Practices Liability    $ 3,000,000       $ 250,000       105673447

 

S-7

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Lloyds of London

   Media Professional Liability    $ 5,000,000       $ 50,000       B0180C121619

Federal Insurance Company (Chubb)

   Fiduciary Liability    $  10,000,000         $0 Non indemnifiable      
6803-3234            $50,000 Securities                  $10,000 All Other      

Federal Insurance Company (Chubb)

   Fiduciary Liability    $ 10,000,000        
  $0 Non
indemnifiable   
      Tail Policy            $50,000 Securities                  $10,000 All
Other      

Federal Insurance Company (Chubb)

   Crime    $ 5,000,000       $ 100,000       8151-9737

U.S. Specialty Ins. Co. (PA)

   Special Crime    $ 5,000,000       $ —         U712-85722

Berkley Regional Insurance

   Surety Bonds    $ 30,000,000       $ —         N/A

 

S-8

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Schedule 3.19(a)

UCC Filing Offices

 

Loan Party

  

Filing Office

1.     School Specialty, Inc.    Delaware 2.     Califone International, Inc.   
Delaware 3.     Childcraft Education Corp.    New York 4.
    ClassroomDirect.com, LLC    Delaware 5.     Delta Education, LLC    Delaware
6.     Premier Agendas, Inc.    Washington 7.     Sportime, LLC    Delaware 8.
    Bird-In-Hand Woodworks, Inc.    New Jersey

 

S-9

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Schedule 3.19(c)

Mortgage Filing Offices

Register of Deeds, Saline County, Kansas.

 

S-10

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Schedule 3.20

Owned Real Property

 

Record Owner

  

Address

School Specialty, Inc.    3525 S. Ninth Street

Salina, KS 67401

 

S-11

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Schedule 4.02(a)

Local Counsel

 

1. Dorsey & Whitney LLP

 

2. Day Pitney LLP

 

3. Young Conway Stargatt & Taylor, LLP

 

S-12

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Schedule 5.14

Post-Closing Obligations

 

1. Within 20 days after the Closing Date, each Grantor (as defined in the
Guarantee and Collateral Agreement) shall deliver to the Collateral Agent a
Notice of Grant of Security Interest in Copyrights (as defined in the Guarantee
and Collateral Agreement) in respect of all Exclusive Copyright Licenses (as
defined in the Guarantee and Collateral Agreement), the schedules thereto
setting forth (a) the name and date of and the parties to such Exclusive
Copyright Licenses, and (b) to the extent referenced in such Exclusive Copyright
Licenses, the titles and the United States Copyright registration numbers of all
works of authorship or copyrights that are the subject of such Exclusive
Copyright Licenses.

 

2. Within 5 Business Days (or such later date as the Collateral Agent may agree
in its discretion) after the Closing Date, to the extent required by the terms
of the Credit Agreement and the Guarantee and Collateral Agreement, each
applicable Loan Party shall deliver to the Collateral Agent deposit account
control agreements in form and substance reasonably satisfactory to the
Collateral Agent.

 

S-13

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Schedule 6.01(a)

Existing Indebtedness

 

1. Capital Lease Obligations in respect of lease for the distribution center at
100 Paragon Parkway, Mansfield, OH 44903.

 

2. Reimbursement obligations in respect of the letter of credit #672484 issued
by JPMorgan in favor of Employers Insurance Company of Wausau, dated as of
June 1, 2013 and periodically extended with a current outstanding balance of
$250,000 and expiring on September 1, 2013 (the “JPM Letter of Credit”).

 

3. Reimbursement obligations in respect of the letter of credit #5183 issued by
Comerica in favor of DEI SCEP, dated as of September 15, 2010 and periodically
extended with a current outstanding balance of $700,000 and expiring on
October 1, 2013 (the “Comerica Letter of Credit”).

 

4. To the extent constituting Indebtedness, the Prepetition Escrowed Amounts (as
defined in the Plan of Reorganization) in an aggregate principal amount of
$25,000,000.

 

5. Indebtedness consisting of the “Covered Letters of Credit” as defined in that
certain Standby Letter of Credit, dated as of June 11, 2013, issued by Bank of
America in favor of Wells Fargo in an aggregate amount of $5,199,700.

 

S-14

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Schedule 6.02(a)

Existing Liens

 

1. Liens arising in connection with the cash collateralization of the Comerica
Letter of Credit.

 

2. Liens arising in connection with the cash collateralization of the JPM Letter
of Credit.

 

3. Liens arising in connection with the Prepetition Escrowed Amounts (as defined
in the Plan of Reorganization) in an aggregate principal amount of $25,000,000.

 

S-15

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Schedule 6.04(a)

Existing Investments

 

1. 35% interest in Carson-Dellosa Publishing, LLC (joint venture).

 

S-16

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Schedule 6.07(b)

Existing Restrictions and Conditions

None.

 

S-17