Exhibit 10.2

 

EXECUTION VERSION

 

CREDIT AGREEMENT

 

dated as of

 

June 25, 2015

 

among

 

CROWN MEDIA HOLDINGS, INC.,

as the Borrower,

 

The Lenders Party Hereto,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

--------------------------------------------------------------------------------

 

ROYAL BANK OF CANADA

and

U.S. BANK NATIONAL ASSOCIATION,

as Co-Syndication Agents

 

FIFTH THIRD BANK,

as Documentation Agent

 

WELLS FARGO SECURITIES, LLC

FIFTH THIRD BANK

RBC CAPITAL MARKETS(1)

and

U.S. BANK NATIONAL ASSOCIATION,

as Joint Bookrunners and Joint Lead Arrangers

 

--------------------------------------------------------------------------------

(1)           RBC Capital Markets is a brand name for the capital markets
businesses of Royal Bank of Canada and its affiliates.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE I

 

DEFINITIONS

 

 

SECTION 1.01.

Defined Terms

1

SECTION 1.02.

Classification of Loans and Borrowings

34

SECTION 1.03.

Terms Generally

34

SECTION 1.04.

Accounting Terms; GAAP

34

SECTION 1.05.

Payments on Business Days

35

SECTION 1.06.

Times of Day

35

 

 

 

ARTICLE II

 

THE CREDITS

 

 

 

SECTION 2.01.

Commitments

35

SECTION 2.02.

Loans and Borrowings

35

SECTION 2.03.

Requests for Borrowings

36

SECTION 2.04.

Swingline Loans

37

SECTION 2.05.

Letters of Credit

38

SECTION 2.06.

Funding of Borrowings

42

SECTION 2.07.

Interest Elections

42

SECTION 2.08.

Termination and Reduction of Commitments

44

SECTION 2.09.

Repayment of Loans; Evidence of Debt

44

SECTION 2.10.

Prepayment of Loans

45

SECTION 2.11.

Fees

47

SECTION 2.12.

Interest

48

SECTION 2.13.

Alternate Rate of Interest

49

SECTION 2.14.

Increased Costs

49

SECTION 2.15.

Break Funding Payments

50

SECTION 2.16.

Taxes

51

SECTION 2.17.

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

53

SECTION 2.18.

Mitigation Obligations; Replacement of Lenders

55

SECTION 2.19.

Expansion Option

55

SECTION 2.20.

Defaulting Lenders

57

 

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

 

 

SECTION 3.01.

Organization; Powers; Subsidiaries

59

SECTION 3.02.

Authorization; Enforceability

59

SECTION 3.03.

Governmental Approvals; No Conflicts

59

SECTION 3.04.

Financial Statements; Financial Condition; No Material Adverse Change

60

SECTION 3.05.

Title to Real Property

60

SECTION 3.06.

Litigation and Environmental Matters

60

SECTION 3.07.

Compliance with Laws and Agreements

61

 

--------------------------------------------------------------------------------

 

 

 

Page

 

 

 

SECTION 3.08.

Investment Company Status

61

SECTION 3.09.

Taxes

61

SECTION 3.10.

Solvency

61

SECTION 3.11.

Labor Matters

61

SECTION 3.12.

Disclosure

61

SECTION 3.13.

Federal Reserve Regulations

62

SECTION 3.14.

Security Interests

62

SECTION 3.15.

USA PATRIOT Act, Etc.

62

SECTION 3.16.

ERISA

62

SECTION 3.17.

No Default

62

SECTION 3.18.

Copyrights, Trademarks and Other Rights

63

SECTION 3.19.

Fictitious Names

63

 

 

 

ARTICLE IV

 

CONDITIONS

 

 

 

SECTION 4.01.

Initial Credit Events

64

SECTION 4.02.

Each Credit Event

65

 

 

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

 

 

SECTION 5.01.

Financial Statements and Other Information

66

SECTION 5.02.

Notices of Material Events

68

SECTION 5.03.

Existence; Conduct of Business

68

SECTION 5.04.

Payment of Obligations

68

SECTION 5.05.

Maintenance of Properties; Insurance

69

SECTION 5.06.

Inspection Rights

69

SECTION 5.07.

Compliance with Laws; Compliance with Agreements

69

SECTION 5.08.

Use of Proceeds and Letters of Credit

69

SECTION 5.09.

Further Assurances; Additional Security and Guarantees

70

SECTION 5.10.

Quarterly Conference Calls

70

SECTION 5.11.

Post Closing Covenants

71

 

 

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

 

 

SECTION 6.01.

Indebtedness

71

SECTION 6.02.

Liens

73

SECTION 6.03.

Fundamental Changes

75

SECTION 6.04.

Restricted Payments

76

SECTION 6.05.

Investments

77

SECTION 6.06.

Prepayments, Etc., of Indebtedness

79

SECTION 6.07.

Transactions with Affiliates

79

SECTION 6.08.

Changes in Fiscal Year

80

SECTION 6.09.

Financial Covenants

80

SECTION 6.10.

Restrictive Agreements

80

SECTION 6.11.

Dispositions

81

 

--------------------------------------------------------------------------------

 

 

 

Page

 

 

 

SECTION 6.12.

Lines of Business

82

SECTION 6.13.

Sale and Leaseback Transactions

82

SECTION 6.14.

Amendments of Certain Documents

82

SECTION 6.15.

Designation of Subsidiaries

83

SECTION 6.16.

Use of Proceeds

83

 

 

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

 

 

SECTION 7.01.

Events of Default

83

SECTION 7.02.

Application of Proceeds

86

 

 

 

ARTICLE VIII

 

THE ADMINISTRATIVE AGENT

 

 

 

ARTICLE IX

 

MISCELLANEOUS

 

 

 

SECTION 9.01.

Notices

90

SECTION 9.02.

Waivers; Amendments

91

SECTION 9.03.

Expenses; Indemnity; Damage Waiver

93

SECTION 9.04.

Successors and Assigns

95

SECTION 9.05.

Survival

98

SECTION 9.06.

Counterparts; Integration; Effectiveness

98

SECTION 9.07.

Severability

99

SECTION 9.08.

Right of Setoff

99

SECTION 9.09.

Governing Law; Jurisdiction; Consent to Service of Process

99

SECTION 9.10.

WAIVER OF JURY TRIAL

100

SECTION 9.11.

Headings

100

SECTION 9.12.

Confidentiality

100

SECTION 9.13.

Patriot Act

101

SECTION 9.14.

Interest Rate Limitation

101

SECTION 9.15.

No Fiduciary Duty

101

SECTION 9.16.

Judgment Currency

102

 

SCHEDULES:

 

 

 

 

 

Schedule 1.01A

–

Notice Requirements for Borrowings

Schedule 2.01

–

Commitments

Schedule 3.01

–

Subsidiaries

Schedule 3.06(a)

–

Litigation

Schedule 3.18(a)

–

Items of Product

Schedule 3.19

–

Fictitious Names

Schedule 5.11

–

Post-Closing Covenants

Schedule 6.01

–

Existing Indebtedness

Schedule 6.02

–

Existing Liens

Schedule 6.04

–

Existing Benefit Plans

Schedule 6.05

–

Investments

 

--------------------------------------------------------------------------------

 

Schedule 6.07

–

Affiliate Transactions

Schedule 6.10

–

Restrictive Agreements

 

 

 

EXHIBITS:

 

 

 

 

 

Exhibit A

–

Form of Assignment and Assumption

Exhibit B

–

Form of Guaranty

Exhibit C-1

–

Form of Security Agreement

Exhibit C-2

–

Form of Perfection Certificate

Exhibit D-1

–

Form of Borrowing Request

Exhibit D-2

–

Form of Interest Election Request

Exhibit D-3

–

Form of Letter of Credit Issuance Request

Exhibit E-1

–

Form of U.S. Tax Compliance Certificate (Foreign Lenders not Partnerships)

Exhibit E-2

–

Form of U.S. Tax Compliance Certificate (Foreign Lenders Partnerships)

Exhibit E-3

–

Form of U.S. Tax Compliance Certificate (Foreign Participants not Partnerships)

Exhibit E-4

–

Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)

 

--------------------------------------------------------------------------------

 

CREDIT AGREEMENT dated as of June 25, 2015 (this “Agreement”) among CROWN MEDIA
HOLDINGS, INC., a Delaware corporation (the “Borrower”), the LENDERS party
hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent.

 

The parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

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

 

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

 

“Acquired Entity or Business” means each Person, property, business or assets
acquired by the Borrower or a Restricted Subsidiary, to the extent not
subsequently sold, transferred or otherwise disposed of by the Borrower or such
Restricted Subsidiary.

 

“Additional Credit Extension Amendment” means 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 Increased
Commitments, Incremental Term Loans or Replacement Term Loans which shall be
consistent with the applicable provisions of this Agreement relating to
Incremental Term Loans or Replacement Term Loans and otherwise reasonably
satisfactory to the Administrative Agent.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period (or any ABR Borrowing in which interest is determined pursuant
to clause (c) of the definition of “Alternate Base Rate”), an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for the applicable Class of Loans for such Interest Period (after
giving effect to any minimum rate set forth in the definition of LIBO Rate that
is applicable to such Class of Loans) multiplied by (b) the Statutory Reserve
Rate. Notwithstanding anything to the contrary set forth in the foregoing, to
the extent the Adjusted LIBO Rate would be less than 0.00%, then the Adjusted
LIBO Rate shall instead be 0.00%.

 

“Administrative Agent” means Wells Fargo Bank, National Association, in its
capacity as administrative agent for the Lenders hereunder, or any successor
administrative agent.

 

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

 

“Affiliate” means, 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.

 

“Agents” means the Administrative Agent, the Arrangers, the Documentation Agent
and the Syndication Agents.

 

--------------------------------------------------------------------------------

 

“Alternate Base Rate” means, 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 ½ of 1% and (c) the Adjusted LIBO Rate (after
giving effect to any applicable minimum rate set forth therein) 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%, provided that, for the avoidance of
doubt (subject to any minimum rate specified in such definition), the Adjusted
LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen
LIBOR01 Page (or on any successor or substitute page on such screen) at
approximately 11:00 a.m. London time on such day. 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 from and including the effective date
of such change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate, respectively.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption.

 

“Applicable Lender” has the meaning assigned to such term in Section 2.18(b).

 

“Applicable Percentage” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Exposure or Swingline Loans, a percentage equal to a
fraction the numerator of which is the amount of such Lender’s Revolving
Commitment and the denominator of which is the aggregate Revolving Commitments
of all Revolving Lenders (if the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon such Lender’s
share of the aggregate Revolving Credit Exposures at that time), (b) with
respect to the LC Exposure Aggregate Sublimit, a percentage equal to a fraction
the numerator of which is the amount of such Lender’s Revolving Commitment and
the denominator of which is the aggregate Revolving Commitments of all Issuing
Banks and (c) with respect to the Term Loans of any Class, a percentage equal to
a fraction the numerator of which is such Lender’s outstanding principal amount
of the Term Loans of such Class and the denominator of which is the aggregate
outstanding amount of the Term Loans of such Class.

 

“Applicable Rate” means a rate per annum equal to (i) until the first Business
Day immediately following the date on which the first certificate pursuant to
Section 5.01(c) is required to be delivered after the Effective Date, (a) in the
case of Eurodollar Loans, 1.75%, (b) in the case of ABR Loans, 0.75% and (c) in
the case of commitment fees payable pursuant to Section 2.11(a), 0.30% and
(ii) thereafter, the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent certificate received
by the Administrative Agent pursuant to Section 5.01(c):

 

Pricing

 

Consolidated

 

 

 

 

 

Commitment

 

Level

 

Leverage Ratio

 

ABR Loans

 

Eurodollar Loans

 

Fees

 

I

 

< 1.50 to 1.00

 

0.50

%

1.50

%

0.25

%

II

 

> 1.50 to 1.00

 

0.75

%

1.75

%

0.30

%

 

 

but < 2.25 to

 

 

 

 

 

 

 

 

 

1.00

 

 

 

 

 

 

 

III

 

> 2.25 to 1.00

 

1.00

%

2.00

%

0.35

%

 

 

but < 3.00 to

 

 

 

 

 

 

 

 

 

1.00

 

 

 

 

 

 

 

IV

 

> 3.00 to 1.00

 

1.25

%

2.25

%

0.40

%

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a certificate is

 

2

--------------------------------------------------------------------------------

 

required to be delivered pursuant to Section 5.01(c); provided that at the
option of the Administrative Agent or the Required Lenders, the highest pricing
level shall apply (x) as of the first Business Day after the date on which a
certificate was required to have been delivered but was not delivered, and shall
continue to so apply to and including the date on which such certificate is so
delivered (and thereafter the pricing level otherwise determined in accordance
with this definition shall apply) and (y) as of the first Business Day after an
Event of Default shall have occurred and be continuing, and shall continue to so
apply to but excluding the date on which such Event of Default is cured or
waived (and thereafter the pricing level otherwise determined in accordance with
this definition shall apply).

 

“Applicable Transaction Conditions” means, with respect to any transaction, on a
Pro Forma Basis after giving effect to such transaction, (i) no Event of Default
has occurred and is continuing, (ii) in the case of any Restricted Payment or
incurrence of any Incremental Facility or Permitted Junior Lien Debt, no Default
has occurred and is continuing, (iii) the Consolidated Leverage Ratio is not
greater than 4.25:1.00, (iv) the Consolidated Secured Leverage Ratio is not
greater than 2.75:1.00 and (v) in the case of any Restricted Payment or any
Permitted Acquisition, the sum of (x) unrestricted cash and cash equivalents of
the Borrower and its Restricted Subsidiaries plus (y) the excess of the
aggregate amount of Revolving Commitments over the aggregate amount of Revolving
Credit Exposures is not less than $25,000,000.

 

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

 

“Arrangers” means Wells Fargo Securities, LLC, Fifth Third Bank, RBC Capital
Markets and U.S. Bank National Association, in their capacities as joint lead
arrangers and joint bookrunners for this Agreement.

 

“Asset Sale” means any Disposition of Property or series of related Dispositions
of Property pursuant to clause (k) or (m) of Section 6.11 which yields Net Cash
Proceeds to the Borrower or any of its Restricted Subsidiaries in excess of
(i) $2,500,000 in the aggregate for any such Disposition or series of related
Dispositions or (ii) $10,000,000 when aggregated with all other Dispositions
pursuant to clause (k) or (m) of Section 6.11 following the Effective Date,
exclusive of Dispositions described in clause (i) of this definition.

 

“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04 of this Agreement), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the Administrative
Agent.

 

“Attributable Indebtedness” means, when used with respect to any Sale and
Leaseback Transaction, as at the time of determination, the present value
(discounted at a rate equivalent to the Borrower’s then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such Sale and Leaseback
Transaction.

 

“Augmenting Lender” has the meaning assigned to such term in Section 2.19.

 

“Auto-Renewal Letters of Credit” has the meaning assigned to such term in
Section 2.05.

 

“Availability Period” means the period from and including the Effective Date
until, but excluding, the earlier of the Revolving Credit Maturity Date and the
date of termination of the Revolving Commitments in accordance with the
provisions of this Agreement.

 

3

--------------------------------------------------------------------------------

 

“Available Amount” shall mean, at any time (the “Reference Time”), an amount
(which may be negative) equal to:

 

(a)           the sum, without duplication, of:

 

(i)            $50,000,000, plus

 

(ii)           with respect to each ECF Period for which the prepayment pursuant
to Section 2.10(b)(i) has been made prior to the Reference Time, an amount (if
positive) equal to the Excess Cash Flow for such ECF Period minus the ECF
Percentage of such Excess Cash Flow, plus

 

(iii)          the amount of Net Cash Proceeds received by the Borrower (other
than from a Subsidiary) from and including the Business Day immediately
following the Effective Date through and including the Reference Time from
contributions to its common equity or the issuance and sale of its Qualified
Equity Interests, plus

 

(iv)          without duplication of any amount included in the calculation of
Excess Cash Flow, the amount of any distribution in cash or Cash Equivalents
received by the Borrower or any Restricted Subsidiary or received by the
Borrower or any Restricted Subsidiary upon any Disposition, in each case, (i) in
respect of any Investment made by such Person in reliance on
Section 6.05(k) (not to exceed the original amount of such Investment or any
amount that increased or refreshed any Investment “baskets” under this
Agreement) or (ii) from any Unrestricted Subsidiary invested in pursuant to
Section 6.05(k) in the form of a dividend or return on investment (not to exceed
the original amount of Investment in such Unrestricted Subsidiary pursuant to
Section 6.05(k) or any amount that increased or refreshed any Investment
“baskets” under this Agreement), minus

 

(b)           the sum, without duplication, of:

 

(i)            the aggregate amount of Restricted Payments made pursuant to
Sections 6.04(g) and (i) prior to the Reference Time; plus

 

(ii)           the aggregate amount of Investments made in reliance on
Section 6.05(k) prior to the Reference Time; plus

 

(iii)          the aggregate amount of prepayments of Specified Indebtedness
made in reliance on Section 6.06(a)(iii) prior to the Reference Time.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality)

 

4

--------------------------------------------------------------------------------

 

to reject, repudiate, disavow or disaffirm any contracts or agreements made by
such Person.

 

“Beneficial Owner” has the meaning assigned to such term in Rules 13d-3 and
13d-5 under the Exchange Act. The terms “Beneficially Owns” and “Beneficially
Owned” each have corresponding meanings.

 

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

 

“board of directors” means:

 

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

 

(b)           with respect to a partnership, the board of directors of the
general partner of the partnership if the general partner is a corporation, or
the managing member or members or any controlling committee of managers or
members thereof or any board or committee serving a similar management function,
if the general partner is a limited liability company;

 

(c)           with respect to a limited liability company, the managing member
or members or any controlling committee of managers or members thereof or any
board or committee serving a similar management function; and

 

(d)           with respect to any other Person, the individual or board or
committee of such Person serving a management function similar to those
described in clauses (a), (b) or (c) of this definition.

 

“Borrower” has the meaning assigned to such term in the preamble to this
Agreement.

 

“Borrowing” means (a) Revolving Loans of the same 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, (b) Term Loans of a single Class made on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect or (c) a Swingline Loan.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, 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” means, for any period, the additions to property, plant
and equipment and other capital expenditures of the Borrower and its
consolidated Restricted Subsidiaries that are (or are required to be) set forth
in a consolidated statement of cash flows of the Borrower for such period
prepared in accordance with GAAP.

 

“Capital Lease Obligations” of any Person means 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

 

5

--------------------------------------------------------------------------------

 

leases on a balance sheet of such Person under GAAP, and the amount of such
obligations as of any date shall be the capitalized amount thereof determined in
accordance with GAAP that would appear on a balance sheet of such Person
prepared as of such date.

 

“Cash Equivalents” means:

 

(a)           U.S. dollars;

 

(b)           securities issued or directly and fully and unconditionally
guaranteed or insured by the U.S. government or any agency or instrumentality
thereof the securities of which are unconditionally guaranteed as a full faith
and credit obligation of such government with maturities of 24 months or less
from the date of acquisition;

 

(c)           certificates of deposit, time deposits and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any commercial bank having capital and surplus of
not less than $500,000,000;

 

(d)           repurchase obligations for underlying securities of the types
described in clauses (b), (c) and (h) of this definition entered into with any
financial institution meeting the qualifications specified in clause (c) above
and in U.S. dollars;

 

(e)           commercial paper rated at least P-2 by Moody’s or at least A-2 by
S&P and in each case maturing within 12 months after the date of creation
thereof, in U.S. dollars;

 

(f)            marketable short-term money market and similar securities having
a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if
at any time neither Moody’s nor S&P shall be rating such obligations, an
equivalent rating from another rating agency) and in each case maturing within
24 months after the date of creation thereof and in U.S. dollars;

 

(g)           investment funds investing substantially all of their assets in
securities of the types described in clauses (a) through (f) above;

 

(h)           readily marketable direct obligations issued by any state,
commonwealth or territory of the United States or any political subdivision or
taxing authority thereof having an A rating from either Moody’s or S&P with
maturities of 24 months or less from the date of acquisition;

 

(i)            Investments with weighted average maturities of 12 months or less
from the date of acquisition in money market funds rated A (or the equivalent
thereof) or better by S&P or A (or the equivalent thereof) or better by Moody’s
and in each case in U.S. dollars; and

 

(j)            credit card receivables and debit card receivables so long as
such are considered cash equivalents under GAAP and are so reflected on the
Borrower’s balance sheet.

 

Notwithstanding the foregoing, Cash Equivalents shall include amounts
denominated in currencies other than U.S. dollars; provided that such amounts
are converted into U.S. dollars as promptly as practicable and in any event
within ten Business Days following the receipt of such amounts.

 

6

--------------------------------------------------------------------------------

 

“Cash Management Bank” means any Person that was a Lender or an Affiliate of a
Lender on the Effective Date or at the time it entered into an agreement with
the Borrower or any Restricted Subsidiary with respect to Cash Management
Obligations.

 

“Cash Management Obligations” means obligations owed by the Borrower or any
Restricted Subsidiary to any Lender or any Affiliate of a Lender in respect of
(1) any overdraft and related liabilities arising from treasury, depository and
cash management services or any automated clearing house transfers of funds and
(2) the Borrower’s or any Restricted Subsidiary’s participation in commercial
(or purchasing) card programs at the Lender or any Affiliate of a Lender (“card
obligations”).

 

“Casualty Event” means any event that gives rise to the receipt by the Borrower
or any Restricted Subsidiary of any insurance proceeds or condemnation awards in
respect of any Property in excess of (i) $500,000 for any individual event or
series of related events or (ii) $2,000,000 when aggregated with all events that
are excluded as “Casualty Events” following the Effective Date as a result of
clause (i) above.

 

“Change in Control” means the occurrence of any of the following:

 

(a)           the sale, lease or transfer, in one or a series of related
transactions (other than by way of merger or consolidation), of all or
substantially all of the assets of the Borrower and its Restricted Subsidiaries,
taken as a whole, to any Person other than to any Guarantor or Permitted Holder;

 

(b)           the occurrence of any event, transaction or occurrence as a result
of which any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) under the Securities Exchange Act of 1934, or any successor provision (the
“Exchange Act”)) (other than one or more Permitted Holders) is or becomes the
Beneficial Owner, directly or indirectly, of Voting Stock that (a) represents
more than 35% of the voting power of the total outstanding Voting Stock of the
Borrower and (b) represents a greater percentage of the voting power of the
total outstanding Voting Stock of the Borrower than that then Beneficially Owned
by the Permitted Holders;

 

(c)           the adoption by the stockholders of the Borrower of a plan or
proposal for the liquidation or dissolution of the Borrower; or

 

(d)           Hallmark Cards or its wholly owned subsidiaries cease to
(i) collectively beneficially own at least 51% of the voting Equity Interests or
35% of all of the Equity Interests of the Borrower or (ii) have the power to
designate a majority of the board of directors of the Borrower.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
Effective Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Effective Date or (c) compliance by any Lender or any Issuing Bank (or, for
purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender’s or such Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Effective Date; provided that,
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) 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.

 

7

--------------------------------------------------------------------------------

 

“Charges” shall have the meaning set forth in Section 9.14.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term
Loans, Incremental Term Loans, Replacement Term Loans or Swingline Loans.

 

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

 

“Collateral” means all Property and interests in Property and proceeds thereof
now owned or hereafter acquired by any Loan Party in or upon which a Lien is
granted under any Collateral Document.

 

“Collateral Documents” means the Security Agreement, any Mortgages and each
other document executed and delivered by a Loan Party granting or purporting to
grant a Lien on any of its property to secure payment of all or any part of the
Obligations.

 

“Commitment” means a Revolving Commitment or a Term Commitment.

 

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

 

“Consolidated EBITDA” means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period and,

 

(1)           increased (to the extent any such amounts were deducted or
excluded in computing Consolidated Net Income), without duplication, and not
added back in the definition thereof by:

 

(a)           provision for taxes based on income or profits or capital,
including, without limitation, state, franchise and similar taxes and foreign
withholding taxes of such Person paid or accrued during such period (including
payments made or amounts accrued pursuant to any tax-sharing agreement); plus

 

(b)           Consolidated Interest Expense of such Person for such period
(including, if not otherwise included therein, (x) net losses on obligations
under Swap Agreements or other derivative instruments entered into for the
purpose of hedging interest rate risk and (y) costs of surety bonds in
connection with financing activities); plus

 

(c)           the total amount of depreciation and amortization expense
(excluding capitalized film costs), including the amortization of deferred
financing fees, of such Person and its Restricted Subsidiaries for such period
on a consolidated basis and determined in accordance with GAAP; plus

 

(d)           any expenses or charges (other than depreciation or amortization
expense) related to any Equity Offering, any Investment permitted under
Section 6.05, acquisition, disposition, recapitalization or the incurrence of
Indebtedness permitted to be incurred by this Agreement (including a refinancing
thereof) (whether or not successful) or an amendment or modification of any debt
instrument, including

 

(i)            such fees, expenses or charges related to the Transactions, and

 

8

--------------------------------------------------------------------------------

 

(ii)           any amendment or other modification of this Agreement; plus

 

(e)           any other non-cash charges, expenses or losses for such period
(other than write downs or reserves related to inventory or accounts
receivable), excluding any such charge that represents an accrual or reserve for
a cash expenditure for a future period; plus

 

(f)            any costs or expenses incurred by the Borrower or a Restricted
Subsidiary pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement or any stock subscription
or shareholder agreement, to the extent that such costs or expenses are funded
with cash proceeds contributed to the capital of the Borrower or Net Cash
Proceeds of an issuance of Equity Interests of the Borrower (other than
Disqualified Equity Interests), solely to the extent that such Net Cash Proceeds
are excluded from the calculation of the Available Amount; plus

 

(g)           cash receipts (or any netting arrangements resulting in reduced
cash expenditures) not representing Consolidated EBITDA or Consolidated Net
Income in any period to the extent non-cash gains relating to such income were
deducted in the calculation of Consolidated EBITDA pursuant to clause (2) below
for any previous period and not added back; plus

 

(h)           net realized losses from obligations under Swap Agreements or
embedded derivatives that require similar accounting treatment and the
application of Accounting Standard Codification Topic 815, Derivatives and
Hedging, and related pronouncements;

 

(2)           decreased (without duplication) by: (a) non-cash gains increasing
Consolidated Net Income of such Person for such period, excluding any non-cash
gains to the extent they represent the reversal of an accrual or reserve for a
potential cash item that reduced Consolidated EBITDA in any prior period and any
non-cash gains with respect to cash actually received in a prior period so long
as such cash did not increase Consolidated EBITDA in such prior period; plus
(b) any net realized income or gains from obligations under Swap Agreements or
embedded derivatives that require similar accounting treatment and the
application of Accounting Standard Codification Topic 815, Derivatives and
Hedging, and related pronouncements, and

 

(3)           increased or decreased by (without duplication), as applicable,
any adjustments resulting from the application of Accounting Standards
Codification Topic 460, Guarantees, or any comparable regulation.

 

“Consolidated Interest Expense” means, with reference to any period, the
interest expense whether or not paid in cash (including, without limitation,
interest expense under Capital Lease Obligations that is treated as interest in
accordance with GAAP) of the Borrower and its Restricted Subsidiaries calculated
on a consolidated basis for such period in accordance with GAAP.

 

“Consolidated Leverage Ratio” means, for any Test Period, the ratio of
(a) Consolidated Total Indebtedness as of the last day of such Test Period to
(b) Consolidated EBITDA of the Borrower for such Test Period.

 

9

--------------------------------------------------------------------------------

 

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

 

(1)                                 any net after-tax effect of extraordinary,
non-recurring or unusual gains or losses, costs, charges or expenses (including
any such amounts relating to the Transactions), restructuring, severance,
relocation costs and curtailments or modifications to pension and
post-retirement employee benefit plans shall be excluded,

 

(2)                                 the cumulative effect of a change in
accounting principles during such period shall be excluded,

 

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

 

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

 

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

 

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

 

(7)                                 effects of adjustments (including the
effects of such adjustments pushed down to the Borrower and its Restricted
Subsidiaries) in such Person and its Restricted Subsidiaries’ consolidated
financial statements, including adjustments to the inventory, property and
equipment, software and other intangible assets (including favorable and
unfavorable leases and contracts), deferred revenue and debt line items in such
Person and its Restricted Subsidiaries’ consolidated financial statements
pursuant to GAAP resulting from the application of purchase accounting in
relation to any consummated acquisition or the amortization or write-off or
write-down of any amounts thereof, net of taxes, shall be excluded,

 

10

--------------------------------------------------------------------------------

 

(8)                                 any after-tax effect of income (loss) from
the early extinguishment or cancellation of Indebtedness or Obligations under
any Swap Agreement or other derivative instruments shall be excluded,

 

(9)                                 any unrealized net gains and losses
resulting from any obligations under Swap Agreements or embedded derivatives
that require similar accounting treatment and the application of Accounting
Standards Codification Topic 815, Derivatives and Hedging, and related
pronouncements shall be excluded,

 

(10)                          any unrealized net gains and losses resulting from
currency translation gains or losses related to currency remeasurements of
Indebtedness (including any unrealized net gains or losses resulting from hedge
agreements for currency exchange risk) shall be excluded; and

 

(11)                          any net income or loss included in the
consolidated financial statements of such Person and its Restricted Subsidiaries
as noncontrolling interests due to the application of Accounting Standards
Codification Topic 810, Consolidation, shall be excluded.

 

In addition, any expense that reduced Consolidated Net Income for such period
but was actually reimbursed during such period from business interruption
insurance or under indemnification or other reimbursement agreements shall be
excluded from Consolidated Net Income.

 

Notwithstanding the foregoing, for the purpose of the definition of determining
Excess Cash Flow for the purposes of calculating the Available Amount, there
shall be excluded from Consolidated Net Income any income arising from any sale
or other disposition of Investments made by the Borrower and its Restricted
Subsidiaries pursuant to Section 6.05(k), any repurchases and redemptions of
Investments made pursuant to Section 6.05(k) made by the Borrower and its
Restricted Subsidiaries, any repayments of loans and advances which constitute
Investments made pursuant to Section 6.05(k) made to the Borrower or any of its
Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or
any distribution or dividend from an Unrestricted Subsidiary (to the extent the
Investment in such Unrestricted Subsidiary was made pursuant to
Section 6.05(k)), in each case only to the extent such amounts increase the
Available Amount

 

“Consolidated Secured Indebtedness” means, as of any date of determination,
Consolidated Total Indebtedness as of such date, excluding any amount of
Indebtedness included therein that is not secured by a Lien on any Property of
the Borrower or any Restricted Subsidiary as of such date.

 

“Consolidated Secured Leverage Ratio” means, for any Test Period, the ratio of
(a) Consolidated Secured Indebtedness as of the last day of such Test Period to
(b) Consolidated EBITDA of the Borrower for such Test Period.

 

“Consolidated Total Assets” means, as of the date of any determination thereof,
total assets of the Borrower and its Restricted Subsidiaries calculated in
accordance with GAAP on a consolidated basis as of such date.

 

“Consolidated Total Indebtedness” means at any time the sum, without
duplication, of the aggregate principal amount of Indebtedness for borrowed
money of the Borrower and its Restricted Subsidiaries outstanding as of such
time of a type required to be reflected on a balance sheet prepared at such time
on a consolidated basis in accordance with GAAP.

 

11

--------------------------------------------------------------------------------

 

“Consolidated Working Capital” means, at any date, the excess of (a) the sum of
all amounts (other than cash and Cash Equivalents) that would, in conformity
with GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of the Borrower and its Restricted
Subsidiaries at such date, over (b) the sum of all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of the
Borrower and its Restricted Subsidiaries on such date, excluding the current
portion of any Funded Debt. There shall also be excluded from Consolidated
Working Capital to the extent otherwise included therein (i) the current portion
of current and deferred income tax assets and the current portion of current and
deferred income taxes, (ii) all Indebtedness consisting of Loans and LC
Exposure, (iii) the current portion of interest, (iv) the current portion of
deferred revenue, (v) any gains or losses resulting from any reappraisal,
revaluation or write-up or write-down of assets and (vi) the purchase accounting
effects of in process research and development expenses and adjustments to
property, inventory and equipment, software and other intangible assets and
deferred revenue and deferred expenses in component amounts required or
permitted by GAAP and related authoritative pronouncements, as a result of any
Permitted Acquisitions, or the amortization or write-off of any amounts thereof.

 

“Contract Consideration” shall have the meaning assigned to such term in the
definition of “Excess Cash Flow.”

 

“Control” means, with respect to any Person, the power, directly or indirectly,
to direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.

 

“Credit Exposure” means, as to any Lender at any time, the sum of (a) such
Lender’s Revolving Credit Exposure at such time, plus (b) an amount equal to the
aggregate principal amount of its Term Loans outstanding at such time.

 

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

 

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

 

“Defaulting Lender” means any Lender that (a) has failed, within three Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to the Administrative Agent, any Issuing Bank,
the Swingline Lender or any other Lender any other amount required to be paid by
it hereunder, unless, in the case of clause (i) above, such Lender notifies the
Administrative Agent in writing that such failure is the result of such Lender’s
good faith determination that a condition precedent to funding (specifically
identified and including the particular default, if any) has not been satisfied,
(b) has notified the Borrower or the Administrative Agent, any Issuing Bank, the
Swingline Lender or any other Lender in writing, or has made a public statement
to the effect, that it does not intend or expect to comply with (i) any of its
funding obligations under this Agreement (unless such writing or public
statement indicates that such position is based on such Lender’s good faith
determination that a condition precedent (specifically identified and including
the particular default, if any) to funding a Loan under this Agreement cannot be
satisfied) or (ii) its funding obligations generally under other agreements in
which it commits to extend credit, (c) has failed, within three Business Days
after written request by the Administrative Agent, acting in good faith, to
provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Loans and participations in then outstanding
Letters of Credit and Swingline Loans under this Agreement, provided

 

12

--------------------------------------------------------------------------------

 

that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon any Loan Party’s receipt of such certification in form and substance
reasonably satisfactory to it and the Administrative Agent, or (d) has (or such
Lender’s direct or indirect parent entity has) become the subject of a
Bankruptcy Event.

 

“Delayed Term Loan” shall have the meaning assigned to such term in
Section 2.01(a).

 

“Delayed Term Loan Lender” means, at any time, any Lender that has a Delayed
Term Loan Commitment or a Delayed Term Loan at such time.

 

“Delayed Term Loan Commitment” means, as to each Delayed Term Loan Lender, its
obligation to make a Delayed Term Loan pursuant to Section 2.01(a) in an
aggregate amount not to exceed the amount set forth opposite such Delayed Term
Loan Lender’s name on Schedule 2.01 under the caption “Delayed Term Loan
Commitment” or in the Assignment and Assumption pursuant to which such Delayed
Term Loan Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement. The initial
aggregate amount of the Delayed Term Loan Commitments is $245,000,000.

 

“Delayed Term Loan Funding Date” shall have the meaning assigned to such term in
Section 2.01(a).

 

“Delayed Draw Termination Date” means the earlier of (i) the date that is 45
days after the Effective Date and (ii) the date on which the Delayed Term Loan
has been borrowed in accordance with Section 2.01(a).

 

“Disposition” means, with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Disqualified Equity Interests” means any Equity Interest which, by its terms
(or by the terms of any security or other Equity Interests into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition (a) matures or is mandatorily redeemable (other than solely for
Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control, public equity offering or asset sale
so long as any rights of the holders thereof upon the occurrence of a change of
control, public equity offering or asset sale shall be subject to the prior
repayment in full of the Loans and all other Obligations that are accrued and
payable and the termination of the Commitments and the expiration, cancellation,
termination or cash collateralization of any Letters of Credit in accordance
with the terms hereof), (b) is redeemable at the option of the holder thereof
(other than solely for Qualified Equity Interests and except as permitted in
clause (a) above), in whole or in part, (c) requires the scheduled payments of
dividends in cash (for this purpose, dividends shall not be considered required
if the issuer has the option to permit them to accrue, cumulate, accrete or
increase in liquidation preference or if the Borrower has the option to pay such
dividends solely in Qualified Equity Interests), or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Equity Interests
that would constitute Disqualified Equity Interests, in each case, prior to the
date that is 91 days after the Latest Maturity Date, provided, however, that if
such Equity Interest is issued to any plan for the benefit of employees of the
Borrower or its Subsidiaries or by any such plan to such employees, such Equity
Interests shall not constitute Disqualified Equity Interests solely because they
may be required to be repurchased by the Borrower or its Subsidiaries in order
to satisfy applicable statutory or regulatory obligations.

 

13

--------------------------------------------------------------------------------

 

“Documentation Agent” means Fifth Third Bank, in its capacity as documentation
agent for this Agreement.

 

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

 

“Domestic Subsidiary” means a Subsidiary organized under the Laws of the United
States of America, any state thereof or the District of Columbia.

 

“ECF Percentage” means in respect of each ECF Period, 50%; provided that the ECF
Percentage for any such ECF Period shall be (x) 25% if the Consolidated Leverage
Ratio as of the last day of such ECF Period is equal to or less than 3.00 to 1.0
but greater than 2.00 to 1.0 and (y) 0% if the Consolidated Leverage Ratio as of
the last day of such ECF Period is equal to or less than 2.00 to 1.0.

 

“ECF Period” means (i) the six months ending December 31, 2015 and (ii) each
fiscal year of the Borrower thereafter.

 

“Effective Date” means June 25, 2015, the first Business Day on which the
conditions specified in Section 4.01 are satisfied (or waived in accordance with
Section 9.02) and the initial Loans are made hereunder.

 

“Effective Date Term Commitment” means, as to each Term Lender, its obligation
to make a Term Loan pursuant to Section 2.01(a) in an aggregate amount not to
exceed the amount set forth opposite such Term Lender’s name on Schedule 2.01
under the caption “Effective Date Term Commitment” or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement. The aggregate amount of the Effective Date Term Commitment is
$80,000,000.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, imposing liability or
standards of conduct concerning protection of the environment, preservation or
reclamation of natural resources, the management, release or threatened release
of any Hazardous Material or the effect of Hazardous Materials on the
environment or health and safety matters.

 

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

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

“Equity Offering” means any public or private sale of common stock or Preferred
Stock of the Borrower (excluding Disqualified Equity Interests), other than:

 

(1)                                 public offerings with respect to the
Borrower’s common stock registered on Form S-4 or Form S-8; and

 

14

--------------------------------------------------------------------------------

 

(2)           issuances to any Subsidiary of the Borrower.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with 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.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the withdrawal of the
Borrower or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA
during a plan year in which such entity was a “substantial employer” as defined
in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) the occurrence with
respect to any Plan of a failure to satisfy the minimum funding standard under
Section 412 of the Code or Section 302 of ERISA, whether or not waived; (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) a determination that any Plan is, or is expected to be, in “at-risk”
status (within the meaning of Section 430 of the Code or Section 303 of ERISA);
(f) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan
pursuant to Sections 4041(c) or 4042 of ERISA or any Multiem-ployer Plan
pursuant to Section 4041A of ERISA; (g) an event or condition which would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan pursuant to Section 4042 of
ERISA; (h) a failure by the Borrower or any ERISA Affiliate to make a required
contribution to a Multiemployer Plan; (i) the incurrence by the Borrower or any
of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan
or Multiemployer Plan; or (j) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition upon the Borrower or
any of its ERISA Affiliates of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA, or in endangered or critical status
(within the meaning of Section 432 of the Code or Section 305 of ERISA).

 

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

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excess Cash Flow” means, for any period, an amount equal to the excess, if any,
of:

 

(a)           the sum, without duplication, of:

 

(i)            Consolidated Net Income of the Borrower for such period,

 

(ii)           an amount equal to the amount of all non-cash charges (including
depreciation and amortization) to the extent deducted in arriving at such
Consolidated Net Income,

 

15

--------------------------------------------------------------------------------

 

(iii)          an amount equal to the aggregate net non-cash loss on
Dispositions outside the ordinary course of business by the Borrower and the
Restricted Subsidiaries during such period to the extent deducted in arriving at
such Consolidated Net Income,

 

(iv)          decreases in Consolidated Working Capital for such period (other
than any such decreases arising from acquisitions or Dispositions (in each case
outside of the ordinary course of business) by the Borrower and the Restricted
Subsidiaries completed during such period or the application of purchase
accounting), and

 

(v)           cash payments under Swap Agreements during such period received by
the Borrower and the Restricted Subsidiaries;

 

minus

 

(b)           the sum, without duplication, of:

 

(i)            an amount equal to the amount of all non-cash credits included in
arriving at such Consolidated Net Income,

 

(ii)           an amount equal to the aggregate net non-cash gain on
Dispositions outside the ordinary course of business by the Borrower and the
Restricted Subsidiaries during such period to the extent included in arriving at
such Consolidated Net Income,

 

(iii)          without duplication of amounts deducted in determining Excess
Cash Flow in prior periods, the amount of Capital Expenditures made in cash
during such period except to the extent that such Capital Expenditures were
financed with the proceeds of any issuance or sale of Equity Interests or with
the proceeds of any Indebtedness (other than Revolving Loans or Swingline Loans)
of the Borrower or the Restricted Subsidiaries,

 

(iv)          the aggregate amount of all principal payments or prepayments of
Indebtedness of the Borrower and the Restricted Subsidiaries (including (A) the
principal component of payments in respect of Capital Lease Obligations, (B) the
amount of any repayment of Term Loans pursuant to Section 2.09(b) and (C) the
amount of any mandatory prepayment of Term Loans pursuant to
Section 2.10(b)(ii) to the extent required due to an Asset Sale or Casualty
Event that resulted in an increase to Consolidated Net Income and not in excess
of the amount of such increase, but excluding (X) all other prepayments of Term
Loans and (Y) all prepayments of Revolving Loans and Swingline Loans) together
with any premium, make-whole or penalty payments actually paid in cash by the
Borrower and the Restricted Subsidiaries during such period that are required to
be made in connection with any prepayment of Indebtedness, made during such
period (other than in respect of any revolving credit facility to the extent
there is not an equivalent permanent reduction in commitments thereunder),
except to the extent that such payments or prepayments were financed with the
proceeds of any issuance or sale of Equity Interests of the Borrower or with the
proceeds of any other Indebtedness of the Borrower or any Restricted Subsidiary
(other than Revolving Loans or Swingline Loans),

 

(v)           increases in Consolidated Working Capital for such period (other
than any such increases arising from acquisitions or Dispositions (in each case
outside of the ordinary course of business) by the Borrower and the Restricted
Subsidiaries completed during such period or the application of purchase
accounting),

 

16

--------------------------------------------------------------------------------

 

(vi)          cash payments by the Borrower and the Restricted Subsidiaries
during such period in respect of long-term liabilities of the Borrower and the
Restricted Subsidiaries other than Indebtedness,

 

(vii)         without duplication of amounts deducted pursuant to clause
(ix) immediately below in prior periods, the consolidated amount of Investments
made during such period in cash pursuant to clause (b), (d)(ii), (h), (k) (other
than in a Restricted Subsidiary), (l) or (p) of Section 6.05, except to the
extent that such Investments were financed with the proceeds of any issuance or
sale of Equity Interests of the Borrower or with the proceeds of any
Indebtedness of the Borrower or the Restricted Subsidiaries (other than
Revolving Loans or Swingline Loans),

 

(viii)        the amount (without duplication) of Restricted Payments by the
Borrower made in cash during such period pursuant to clause (c), (e) and (h) of
Section 6.04,

 

(ix)          cash expenditures by the Borrower and its Restricted Subsidiaries
in respect of Swap Agreements during such period,

 

(x)           cash payments by the Borrower and the Restricted Subsidiaries
during such period in respect of the acquisition of film rights and film assets,
and

 

(xi)          the aggregate consideration required to be paid in cash by the
Borrower or any of the Restricted Subsidiaries pursuant to binding contracts
(the “Contract Consideration”) entered into prior to or during such period
relating to Permitted Acquisitions, Capital Expenditures or Investments (other
than in a Restricted Subsidiary) pursuant to Section 6.05(k) to be consummated
or made during the fiscal year of the Borrower following the end of such period,
provided that to the extent the aggregate cash consideration paid for such
Permitted Acquisitions, Capital Expenditures or Investments (other than in a
Restricted Subsidiary) pursuant to Section 6.05(k) during such fiscal year
(other than amounts financed with the proceeds of any issuance or sale of Equity
Interests of the Borrower or with the proceeds of any Indebtedness of the
Borrower or its Restricted Subsidiaries (other than Revolving Loans or Swingline
Loans)) is less than the Contract Consideration, the amount of such shortfall
shall be added to the calculation of Excess Cash Flow for such fiscal year.

 

“Excluded Swap Obligation” means, 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 Guarantee 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 Guarantee or security
interest is or becomes illegal.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of any Loan Party under any Loan Document, (a) Taxes
imposed on (or measured by) its net or overall gross income (or capital, net
worth and similar Taxes imposed in lieu thereof) imposed by a jurisdiction as a
result of

 

17

--------------------------------------------------------------------------------

 

such recipient being organized in or having its principal office or applicable
lending office in, such jurisdiction, or as a result of any other present or
former connection between such recipient and such jurisdiction, other than any
connection 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 Documents, (b) any branch profits Taxes under
Section 884(a) of the Code, or any similar Tax, imposed by any jurisdiction
described in (a) above, (c) in the case of a Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.18(b)), any U.S. federal
withholding Tax that is imposed pursuant to a Law in effect at the time such
Lender becomes a party to this Agreement (or designates a new lending office),
except to the extent that such Lender (or its assignor, if any) was entitled,
immediately prior to the time of designation of a new lending office (or
assignment), to receive additional amounts from a Loan Party with respect to
such withholding Tax pursuant to Section 2.16(a), (d) any withholding Tax
attributable to a Lender’s failure to comply with Section 2.16(e) (i.e., failure
to deliver a form that it is legally entitled to deliver) and (e) any U.S.
federal withholding Tax imposed pursuant to FATCA.

 

“Exclusive Copyright License” means any license or agreement of any Loan Party
(whether as licensor or licensee) providing for an exclusive license of a
Copyright or copyrightable work. For the avoidance of doubt, Exclusive Copyright
Licenses include all Filmed Entertainment Licenses.

 

“Existing Credit Agreement” means the Credit Agreement, dated as of July 14,
2011, among the Borrower, the lenders party thereto, and JPMorgan Chase Bank,
N.A., as Administrative Agent, as amended by that certain Amendment No. 1 dated
March 29, 2013.

 

“FATCA” means 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 agreement entered into
pursuant to Section 1471(b)(1) of the Code, as of the date of this Agreement (or
any amended or successor version described above).

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) 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 (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.

 

“Filmed Entertainment Licenses” means all Exclusive Copyright Licenses
pertaining to movies and prime-time series produced for or by a Loan Party.

 

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

 

“Flood Insurance Laws” means, collectively, (i) the National Flood Insurance Act
of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994
as now or hereafter in effect or any successor statute thereto and (iv) the
Flood Insurance Reform Act of 2004 as now or hereafter in effect or any
successor statute thereto.

 

“Foreign Lender” means any Lender that is not a “United States person” within
the meaning of Section 7701(a)(30) of the Code.

 

18

--------------------------------------------------------------------------------

 

“Foreign Subsidiary” means any direct or indirect Subsidiary of the Borrower
that is not a Domestic Subsidiary.

 

“Funded Debt” means all Indebtedness of the Borrower and the Restricted
Subsidiaries for borrowed money that matures more than one year from the date of
its creation or matures within one year from such date that is renewable or
extendable, at the option of the Borrower or the applicable Restricted
Subsidiary, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
Indebtedness in respect of the Loans.

 

“GAAP” means generally accepted accounting principles in the United States of
America, and subject to the terms of Section 1.04.

 

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

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other monetary obligation of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other monetary obligation or to purchase (or to advance
or supply funds for the purchase of) any security for the payment thereof,
(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other monetary obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other monetary obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or monetary obligation; provided
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business. The amount of any Guarantee of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation, or portion thereof,
in respect of which such Guarantee is made and (b) the maximum amount for which
such guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee, unless such primary obligation or the maximum amount
for which such guaranteeing person may be liable are not stated or determinable,
in which case the amount of such Guarantee shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

 

“Guarantors” means (a) each Restricted Subsidiary that is party to the Guaranty
on the Effective Date and (b) each Restricted Subsidiary that becomes a party to
the Guaranty after the Effective Date pursuant to Section 5.09 or otherwise.

 

“Guaranty” means the guaranty, in substantially the form of Exhibit B, executed
by each of the Guarantors.

 

“Hallmark Cards” means Hallmark Cards, Incorporated, a Missouri corporation.

 

“Hallmark Trademark License Agreement” means the Amended and Restated Trademark
License Agreement, dated June 23, 2015, by and between Hallmark Licensing, LLC
and Crown Media United States.

 

19

--------------------------------------------------------------------------------

 

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

 

“HCC” means H C Crown, LLC (f/k/a HC Crown Corp.), a Delaware limited liability
company.

 

“Hedge Bank” means any Person that was a Lender or an Affiliate of a Lender on
the Effective Date or at the time it entered into a Swap Agreement with the
Borrower or any Restricted Subsidiary.

 

“Increased Commitments” has the meaning assigned to such term in Section 2.19.

 

“Increasing Lender” has the meaning assigned to such term in Section 2.19.

 

“Incremental Term Loan” has the meaning assigned to such term in Section 2.19.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding accounts
payable incurred in the ordinary course of business, milestone payments incurred
in connection with any investment or series of related investments, any earn-out
obligation except to the extent such obligation is a liability on the balance
sheet of such Person in accordance with GAAP at the time initially incurred and
deferred or equity compensation arrangements payable to directors, officers or
employees), (e) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on Property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, but limited to the fair
market value of such Property (except to the extent otherwise provided in this
definition), (f) all Guarantees by such Person of Indebtedness of others,
(g) all Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (i) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (j) all
obligations of such Person under any Swap Agreement, (k) all Attributable
Indebtedness, and (l) the maximum fixed redemption or repurchase price of all
Disqualified Equity Interests of such Person. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in such entity, except
to the extent the terms of such Indebtedness expressly provide that such Person
is not liable therefor; provided that “Indebtedness” shall not include current
intercompany liabilities and advances incurred in the ordinary course of
business. For purposes of clause (l), the “maximum fixed redemption or
repurchase price” of any Disqualified Equity Interests that do not have a fixed
redemption or repurchase price shall be calculated in accordance with the terms
of such Disqualified Equity Interests as if such Disqualified Equity Interests
were redeemed or repurchased on any date on which an amount of Indebtedness
outstanding shall be required to be determined pursuant to this Agreement.

 

“Indemnified Taxes” means all Taxes arising from or with respect to any payment
made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, this Agreement or any other Loan Document, other
than Excluded Taxes and Other Taxes.

 

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

 

20

--------------------------------------------------------------------------------

 

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

 

“Insolvency or Liquidation Proceeding” means:

 

(a)           any voluntary or involuntary case or proceeding under any Debtor
Relief Law with respect to any Loan Party;

 

(b)           any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Loan Party or with
respect to a material portion of their respective assets;

 

(c)           any general composition of liabilities or similar arrangement
relating to any Loan Party, whether or not under a court’s jurisdiction or
supervision;

 

(d)           any liquidation, dissolution, reorganization or winding up of any
Loan Party, whether voluntary or involuntary, whether or not under a court’s
jurisdiction or supervision, and whether or not involving insolvency or
bankruptcy; or

 

(e)           any general assignment for the benefit of creditors or any other
marshalling of assets and liabilities of any Loan Party.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07.

 

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December,
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

 

“Interest Period” means, 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, three or six months, or any
other period as may be agreed to by all applicable Lenders, thereafter, as the
Borrower may elect; provided that (i) 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, in the case of a Eurodollar Borrowing only, 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 and
(ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person in any other Person, whether by means of (a) the
purchase or other acquisition of Equity Interests or debt or other securities of
another Person or (b) a loan, advance or capital contribution to, Guarantee of
monetary obligations of, assumption of Indebtedness of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in

 

21

--------------------------------------------------------------------------------

 

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; provided that “Investments” shall
not include intercompany current liabilities and advances incurred in the
ordinary course of business.

 

“Issuing Bank” means Wells Fargo Bank, National Association, Fifth Third Bank,
Royal Bank of Canada (provided that Royal Bank of Canada shall not be required
to issue any Letters of Credit other than standby Letters of Credit), U.S. Bank
National Association and any other Lender that becomes an Issuing Bank in
accordance with Section 2.05(j), in each case in its capacity as an issuer of
Letters of Credit hereunder, and any successors in such capacity as provided in
Section 2.05(j).

 

“Latest Maturity Date” means, as of any date of determination, the latest of the
Revolving Credit Maturity Date, the Term Loan Maturity Date and any maturity
date of any then existing Incremental Facilities.

 

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

 

“Letter of Credit Expiration Date” has the meaning assigned to such term in
Section 2.05(d).

 

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

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.

 

“LC Exposure Aggregate Sublimit” means $15,000,000.

 

“LC Exposure Issuing Bank Sublimit” means, for each Issuing Bank, such Issuing
Bank’s (or its designated Affiliate’s) Applicable Percentage of the LC Exposure
Aggregate Sublimit.

 

“Lenders” means the Persons listed on Schedule 2.01 to this Agreement and any
other Person that shall have become a Lender hereunder pursuant to Section 2.19
or pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the
context otherwise requires, the term “Lenders” includes the Swingline Lender.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page on such screen) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
Dollar deposits in the London interbank market with a maturity comparable to
such Interest Period. In the event that such rate does not appear on such
page (or on any such successor or substitute page), the “LIBO Rate” shall be
determined by reference to such other publicly available service for displaying
interest rates for dollar deposits in the London interbank market as may be
selected by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which Dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

22

--------------------------------------------------------------------------------

 

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

 

“Loan Documents” means this Agreement, the Guaranty, the Collateral Documents
and any promissory notes executed and delivered pursuant to Section 2.09(f) and
any amendments, waivers, supplements or other modifications to any of the
foregoing.

 

“Loan Parties” means, collectively, the Borrower and the Guarantors.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, results of operations or financial condition of the Borrower and the
Restricted Subsidiaries taken as a whole or (b) the validity or enforceability
of this Agreement or any and all other Loan Documents or the rights and remedies
of the Administrative Agent and the Lenders thereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Restricted Subsidiaries in an aggregate principal
amount exceeding $20,000,000. For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of the Borrower or any Restricted
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Restricted Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.

 

“Material Real Property” means, on any date, any real property owned by any Loan
Party with a fair market value as of such date in excess of $5,000,000.

 

“Material Subsidiary” means any Restricted Subsidiary (or group of Restricted
Subsidiaries as to which a specified condition applies) that would be a
“significant subsidiary” under Rule 1-02(w) of Regulation S-X.

 

“Maximum Rate” has the meaning assigned to such term in Section 9.14.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means, collectively, the deeds of trust, trust deeds, deeds to secure
debt, security deeds, hypothecs and mortgages, if any, to be made by the Loan
Parties covering property that is or was Material Real Property at the time the
mortgage, deed of trust, trust deed, deed to secure debt, security deed or
hypothec was granted in favor or for the benefit of the Administrative Agent on
behalf of the Secured Parties in form and substance reasonably satisfactory to
the Administrative Agent pursuant to Section 5.09(b)(C).

 

“Mortgaged Property” means each Material Real Property, if any, which shall be
subject to a Mortgage delivered after the Effective Date pursuant to
Section 5.09(b)(C).

 

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

 

“Net Cash Proceeds” means (a) with respect to any Asset Sale or any Casualty
Event, an amount equal to (i) the sum of cash and Cash Equivalents received in
connection with such Asset Sale or Casualty

 

23

--------------------------------------------------------------------------------

 

Event (including any cash or Cash Equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received (and any such amounts placed into escrow by the
purchaser in connection with any such Asset Sale shall not be deemed to have
been received by the Borrower unless and until such amounts are distributed to
the Borrower) and, with respect to any Casualty Event, any insurance proceeds or
condemnation awards in respect of such Casualty Event actually received by or
paid to or for the account of the Borrower or any Restricted Subsidiary) less
(ii) the sum of (A) the principal amount, premium or penalty, if any, interest
and other amounts on any Indebtedness that is secured by a prior Lien on the
Property subject to such Asset Sale or Casualty Event and that is required to be
repaid (and is repaid) in connection with such Asset Sale or Casualty Event
(other than Indebtedness under the Loan Documents), (B) the out-of-pocket
expenses (including attorneys’ fees, investment banking fees, accounting fees
and other professional and transactional fees, survey costs, title insurance
premiums, and related search and recording charges, transfer taxes, deed or
mortgage recording taxes, other expenses and brokerage, consultant and other
commissions and fees) actually incurred by the Borrower or such Restricted
Subsidiary in connection with such Asset Sale or Casualty Event, (C) taxes paid
or reasonably estimated to be actually payable in connection therewith and
(D) the Borrower’s reasonable estimate of payments required to be made with
respect to unassumed liabilities relating to the Property involved within one
year of such Asset Sale or Casualty Event; provided that “Net Cash Proceeds”
shall include (i) when and as received, any cash or Cash Equivalents received
upon the Disposition of any non-cash consideration received by the Borrower or
any Restricted Subsidiary in any such Asset Sale, (ii) an amount equal to any
reversal (without the satisfaction of any applicable liabilities in cash in a
corresponding amount) of any reserve described in clause (C) above at the time
of such reversal and (iii) an amount equal to any estimated liabilities
described in clause (D) above that have not been satisfied in cash within three
hundred and sixty-five (365) days after such Asset Sale or Casualty Event; and
(b) with respect to the incurrence or issuance of any Indebtedness by the
Borrower or any Restricted Subsidiary or any issuance of Equity Interests by the
Borrower, an amount equal to (i) the sum of the cash received in connection with
such incurrence or issuance less (ii) the attorneys’ fees, investment banking
fees, accountants’ fees, underwriting or other discounts, commissions, costs and
other fees, transfer and similar taxes and other out-of-pocket expenses actually
incurred by the Borrower or such Restricted Subsidiary in connection with such
incurrence or issuance.

 

“Obligations” means all indebtedness (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) and
other monetary obligations of any of the Borrower and its Restricted
Subsidiaries to any of the Lenders, their Affiliates and the Administrative
Agent, individually or collectively (direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured), arising or incurred under this Agreement or any of the
other Loan Documents or any Secured Hedge Agreement (other than, with respect to
any Guarantor that is not a Qualified Eligible Contract Participant Guarantor,
Excluded Swap Obligations of such Guarantor) or Cash Management Obligation
(including under any of the Loans made or reimbursement or other monetary
obligations incurred or any of the Letters of Credit or other instruments at any
time evidencing any thereof), in each case whether now existing or hereafter
arising, whether all such obligations arise or accrue before or after the
commencement of any bankruptcy, insolvency or receivership proceedings (and
whether or not such claims, interest, costs, expenses or fees are allowed or
allowable in any such proceeding).

 

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

 

24

--------------------------------------------------------------------------------

 

the applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other Taxes” means any and all present or future stamp or documentary Taxes or
any other excise or property Taxes arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

 

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

 

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

 

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

 

“Perfection Certificate” means a certificate substantially in the form of
Exhibit C-2.

 

“Permitted Acquisition” means the purchase or other acquisition of property and
assets or businesses of any Person or of assets constituting a business unit, a
line of business or division of such Person, or Equity Interests in a Person
that, upon the consummation thereof, will be a Restricted Subsidiary of the
Borrower (including as a result of a merger or consolidation); provided that the
following conditions are satisfied to the extent applicable:

 

(a)           each applicable Loan Party and any such newly created or acquired
Restricted Subsidiary shall comply with the requirements of Section 5.09, within
the times specified therein;

 

(b)           the aggregate amount of Investments (without duplication for any
Investment made through a series of Investments) made by Loan Parties in Persons
that are not required to become Loan Parties upon consummation of any such
Investment, and do not become Loan Parties as a result of such Investment
(except as otherwise permitted by Section 6.05) shall not exceed (together with
Investments permitted by Section 6.05(c)(iii)) $5,000,000;

 

(c)           the acquired Property, business or Person is in a business
permitted under Section 6.12;

 

(d)           (1) at the time of and immediately after giving effect thereto, no
Event of Default shall have occurred and be continuing and (2) the Applicable
Transaction Conditions shall be satisfied, and satisfaction of such requirements
shall be evidenced by a certificate from a Financial Officer of the Borrower
delivered to the Administrative Agent containing a reasonably detailed
calculation; and

 

(e)           the Borrower shall have delivered to the Administrative Agent, on
behalf of the Lenders, no later than the date on which any such purchase or
other acquisition is consummated, a certificate of a Financial Officer, in form
and substance reasonably satisfactory to the Administrative Agent, certifying
that all of the requirements set forth in this definition have been satisfied or
will be satisfied on or prior to the consummation of such purchase or other
acquisition (or within the time periods required by Section 5.09).

 

“Permitted Debt Securities” means any Indebtedness consisting of notes or loans
under credit agreements, indentures other similar agreements or instruments
incurred or Guaranteed by Loan Parties following the Effective Date; provided
that (i) such Indebtedness does not mature or have scheduled

 

25

--------------------------------------------------------------------------------

 

amortization or scheduled payments of principal and is not subject to mandatory
redemption, repurchase, prepayment or sinking fund obligation (other than
customary offers to repurchase upon a change of control, asset sale or casualty
event and customary acceleration rights after an event of default) prior to the
91st day after the Latest Maturity Date, (ii) such Indebtedness is not secured
by any assets of the Borrower or any of its Restricted Subsidiaries, (iii) such
Indebtedness is not incurred or guaranteed by any Restricted Subsidiaries that
are not Loan Parties, and (iv) the other terms and conditions relating to such
debt securities or loans (other than interest rates and call protection) are not
in the aggregate materially more restrictive than the terms of this Agreement
(or, in the case of notes, the Senior Notes as in effect on the Effective Date)
as determined in good faith by the Borrower.

 

“Permitted Encumbrances” means:

 

(a)           Liens imposed by law for Taxes that (i) are not yet due and
payable or (ii) are being contested in compliance with Section 5.04;

 

(b)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlords’, workmen’s, suppliers’ and other like Liens imposed by law, arising
in the ordinary course of business and securing obligations that are not overdue
by more than sixty (60) days or are being contested in compliance with
Section 5.04;

 

(c)           (i) Liens, pledges and deposits made in the ordinary course of
business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations (including to support letters of
credit or bank guarantees) and (ii) Liens, pledges or deposits in the ordinary
course of business securing liability for premiums or reimbursement or
indemnification obligations of (including obligations in respect of letters of
credit or bank guarantees for the benefit of) insurance carriers providing
insurance to the Borrower or any Restricted Subsidiary;

 

(d)           Liens or deposits to secure the performance of bids, trade
contracts, governmental contracts, tenders, statutory bonds, leases, statutory
obligations, surety, stay, customs, appeal and replevin bonds, performance bonds
and other obligations of a like nature (including those to secure health, safety
and environmental obligations), in each case in the ordinary course of business;

 

(e)           Liens in respect of judgments, decrees, attachments or awards that
do not constitute an Event of Default under Section 7.01(k);

 

(f)            easements, restrictions (including zoning restrictions),
rights-of-way, covenants, licenses, encroachments, protrusions and similar
encumbrances and minor title defects affecting real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially interfere with the ordinary conduct of
business of the Borrower or any Restricted Subsidiary; and

 

(g)           any interest or title of a lessor, sublessor, licensor or
sublicensor under any lease, sublease, license or sublicense entered into by the
Borrower or any other Restricted Subsidiary in the ordinary course of its
business and covering only the assets so leased;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Holders” means Hallmark Cards and its subsidiaries.

 

26

--------------------------------------------------------------------------------

 

“Permitted Junior Lien Debt” means Indebtedness of the Borrower in an aggregate
principal amount of up to the greater of (x) $75,000,000 less the aggregate
amount of Incremental Facilities established under the Dollar Incremental Basket
and (y) such amount (assuming that any Increased Commitments are fully drawn)
that would not result in the Consolidated Secured Leverage Ratio on a Pro Forma
Basis exceeding 2.75:1.00; provided that (i) the Applicable Transaction
Conditions shall be satisfied, (ii) such Indebtedness shall not be guaranteed by
any Person other than the Guarantors and shall not be secured by any assets
other than the Collateral, (iii) the Liens securing such Indebtedness shall be
subordinated to the Liens securing the Obligations pursuant to an intercreditor
agreement containing lien subordination and other customary provisions, which
agreement shall be in form and substance reasonably satisfactory to the
Administrative Agent, (iv) the maturity date of any such indebtedness shall be
no earlier than 91 days after the Latest Maturity Date, (v) the Weighted Average
Life to Maturity of any such Indebtedness shall be no shorter than 91 days
longer than the then Weighted Average Life to Maturity of the Term Loans and
(vi) the mandatory prepayments, covenants and events of default shall be less
restrictive, on customary terms, to the Borrower and its Subsidiaries than the
covenants and events of default hereunder.

 

“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

 

“Permitted Refinancing Indebtedness” means, with respect to any Person, any
modification, refinancing, refunding, renewal, replacement or extension of any
Indebtedness of such Person; provided that (a) the principal amount (or accreted
value, if applicable) thereof does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so modified, refinanced, refunded,
renewed, replaced or extended except by an amount equal to unpaid accrued
interest and premium thereon plus other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such modification, refinancing,
refunding, renewal or extension, (b) other than with respect to Permitted
Refinancing Indebtedness in respect of Indebtedness permitted pursuant to
Section 6.01(e), such modification, refinancing, refunding, renewal or extension
has a final maturity date equal to or later than the earlier of (x) the final
maturity date of the Indebtedness so modified, refinanced, refunded, renewed or
extended and (y) the date that is 91 days after the Latest Maturity Date,
(c) other than with respect to Permitted Refinancing Indebtedness in respect of
Indebtedness permitted pursuant to Section 6.01(e), such modification,
refinancing, refunding, renewal or extension has a Weighted Average Life to
Maturity equal to or greater than the remaining Weighted Average Life to
Maturity of, the Indebtedness being modified, refinanced, refunded, renewed or
extended and (d) to the extent such Indebtedness being modified, refinanced,
refunded, renewed or extended 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 at least as
favorable to the Lenders (in the good faith determination of the Borrower) as
those contained in the documentation governing the Indebtedness being modified,
refinanced, refunded, renewed or extended.

 

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

 

“Physical Materials” shall have the meaning given to such term in the Security
Agreement.

 

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

 

“Post-Acquisition Period” means, with respect to any Permitted Acquisition, the
period beginning on the date such Permitted Acquisition is consummated and
ending on the one-year anniversary of the date on which such Permitted
Acquisition is consummated.

 

27

--------------------------------------------------------------------------------

 

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

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Wells Fargo Bank, National Association as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

“Product” means any movie-of-the-week, episode of a television series,
miniseries, motion picture, film, videotape or other program produced for
television release or for release in any other medium, shown on network, free,
cable, pay and/or other television medium (including without limitation first
run syndication) in each case whether recorded on film, videotape, cassette,
cartridge, disc or on or by any other means, method, process or device whether
now known or hereafter developed. The term “Product” shall include, without
limitation, the scenario, screenplay or script upon which such item of Product
is based, all of the properties thereof, tangible and intangible, and whether
now in existence or hereafter to be made or produced, whether or not in
possession of any of the Loan Parties, and all rights therein and thereto, of
every kind and character.

 

“Pro Forma Adjustments” means, for any applicable period of measurement that
includes all or any part of a fiscal quarter included in the Post-Acquisition
Period, adjustments to the Consolidated EBITDA that are (i) are consistent with
Regulation S-X or (ii) cost savings or synergies that are factually supportable,
reasonably identifiable and set forth in a certificate of a Financial Officer of
the Borrower delivered to Administrative Agent and have been realized at the
time of the pro forma calculation or are reasonably expected to be realized
within twelve months following the consummation of the transaction to which such
pro forma calculation relates, net of additional costs incurred during such
Post-Acquisition Period, in each case in connection with the combination of the
operations of such Acquired Entity or Business with the operations of the
Borrower and its Restricted Subsidiaries and, in each case, which are expected
to have a continuing impact on the consolidated financial results of the
Borrower, calculated assuming that such actions had been taken on, or such costs
had been incurred since, the first day of such period; provided that (x) any
such pro forma increase or decrease to such Consolidated EBITDA shall be without
duplication for cost savings or additional costs already included in such
Consolidated EBITDA for such period of measurement and (y) the increase pursuant
to clause (ii) shall not exceed 10% of Consolidated EBITDA before giving effect
to such increase.

 

“Pro Forma Basis” means, with respect to compliance with any test covenant
hereunder, that (A) to the extent applicable, the Pro Forma Adjustments shall
have been made and (B) all Specified Transactions and the following transactions
in connection therewith shall be deemed to have occurred as of the first day of
the applicable period of measurement in such test or covenant: (a) income
statement items (whether positive or negative) attributable to the Property or
Person subject to such Specified Transaction, (i) in the case of a Disposition
of all or substantially all Equity Interests in any Subsidiary of the Borrower
owned by the Borrower or any of its Restricted Subsidiaries or any division,
product line, or facility used for operations of the Borrower or any of its
Restricted Subsidiaries, shall be excluded, and (ii) in the case of a Permitted
Acquisition or Investment described in the definition of “Specified
Transaction,” shall be included, (b) any retirement of Indebtedness and (c) any
Indebtedness incurred or assumed by the Borrower or any of the Restricted
Subsidiaries in connection therewith and if such Indebtedness has a floating or
formula rate, shall have an implied rate of interest for the applicable period
for purposes of this definition determined by utilizing the rate which is or
would be in effect with respect to such Indebtedness as at the relevant date of
determination.

 

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, Equity Interests.

 

28

--------------------------------------------------------------------------------

 

“Public Lender” has the meaning assigned to such term in Section 5.01.

 

“Qualified Eligible Contract Participant Guarantor” means, in respect of any
Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at
the time the relevant Guarantee or grant of the relevant security interest
becomes effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
or any regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Qualified Equity Interests” means Equity Interests of the Borrower other than
Disqualified Equity Interests.

 

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

 

“Regulation S-X” means Regulation S-X under the Securities Act of 1933, as
amended.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person.

 

“Replacement Term Loans” has the meaning assigned to such term in Section 9.02.

 

“Refinanced Term Loans” has the meaning assigned to such term in Section 9.02.

 

“Required Lenders” means, at any time, Lenders having Credit Exposure and unused
Commitments representing more than 50% of the sum of the total Credit Exposure
and unused Commitments at such time.

 

“Required Revolving Lenders” means, at any time, Lenders having Revolving Credit
Exposures and unused Revolving Commitments representing more than 50% of the sum
of the total Revolving Credit Exposures and unused Revolving Commitments at such
time.

 

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

 

“Restricted Subsidiary” means any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.

 

“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum possible aggregate amount of such Lender’s Revolving
Credit Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) increased from time to time pursuant to
Section 2.19. The initial amount of each Lender’s Revolving Commitment is set
forth on Schedule 2.01 hereto. The initial aggregate amount of the Lenders’
Revolving Commitments is $100,000,000.

 

29

--------------------------------------------------------------------------------

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding amount of such Lender’s Revolving Loans and its LC
Exposure and, except for purposes of Section 2.11(a), Swingline Exposure at such
time.

 

“Revolving Credit Maturity Date” means June 25, 2020.

 

“Revolving Lender” means each Lender that has a Revolving Commitment or that
holds Revolving Loans.

 

“Revolving Loan” means a Loan made pursuant to Section 2.01(b).

 

“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.13.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

 

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, the United Nations Security Council, the European Union or any EU member
state, (b) any Person operating, organized or resident in a Sanctioned Country
or (c) any Person controlled by any such Person.

 

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

 

“SEC” means the Securities and Exchange Commission, any successor thereto and
any analogous Governmental Authority succeeding to any of its principal
functions.

 

“Secured Hedge Agreement” means any Swap Agreement that is entered into by and
between any Loan Party and any Hedge Bank.

 

“Secured Parties” means, collectively, the Administrative Agent, the Issuing
Banks, the Lenders, the Hedge Banks, the Cash Management Banks and any Affiliate
of a Lender to which Obligations are owed, and each co-agent or sub-agent
appointed by the Administrative Agent from time to time pursuant to
Article VIII.

 

“Security Agreement” means the Security Agreement, executed by the Loan Parties
and substantially in the form of Exhibit C-1, together with each other security
agreement supplement executed and delivered pursuant to Section 5.09.

 

“Senior Notes” means the Borrower’s 10.5% senior notes due 2019 outstanding on
the Effective Date.

 

“series” means, with respect to any Incremental Term Loans or Replacement Term
Loans, all such Term Loans that have the same maturity date, amortization and
interest rate provisions and that are designated as part of such “series”
pursuant to the applicable Additional Credit Extension Amendment.

 

30

--------------------------------------------------------------------------------

 

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

 

“specified currency” has the meaning assigned to such term in Section 9.16.

 

“Specified Event of Default” means any Event of Default under clause (a), (b),
(h) or (i) of Section 7.01.

 

“Specified Indebtedness” means (i) Permitted Debt Securities, (ii) Permitted
Junior Lien Debt and (iii) any Permitted Refinancing Indebtedness of any
Indebtedness referred to in clause (i) or (ii) of this definition.

 

“Specified Subsidiary” means each wholly owned Restricted Subsidiary other than
(i) any Restricted Subsidiary that on a consolidated basis with its Subsidiaries
did not have consolidated revenues in excess of 1% of the Borrower’s
consolidated revenues for the most recently ended four fiscal quarter period of
the Borrower for which financial statements have been delivered pursuant to
Section 5.01(a) or (b) and did not have consolidated total assets in excess of
1% of Consolidated Total Assets as of the most recently ended fiscal quarter of
the Borrower for which financial statements have been delivered on or prior to
the Effective Date or pursuant to Section 5.01(a) or (b); provided that upon any
Restricted Subsidiary newly meeting the requirements of clause (i) of this
definition, the Borrower shall be deemed to have acquired a Specified Subsidiary
at such time and shall cause such Subsidiary to comply with the applicable
provisions of Section 5.09 or (ii) a “controlled foreign corporation” under
Section 957 of the Code.

 

“Specified Transaction” means, with respect to any Test Period, any of the
following events occurring after the first day of such Test Period and prior to
the applicable date of determination: (i) any Investment by the Borrower or any
Restricted Subsidiary in any Person (including in connection with a Permitted
Acquisition) other than a Person that was a wholly owned Restricted Subsidiary
on the first day of such period involving consideration paid by the Borrower or
any Restricted Subsidiary in excess of $2,500,000, (ii) any Asset Sale or
Casualty Event, (iii) any incurrence or repayment of Indebtedness (in each case,
other than Revolving Loans, Swingline Loans and borrowings and repayments of
Indebtedness in the ordinary course of business under revolving credit
facilities except to the extent there is a reduction in the related Revolving
Commitments or other revolving credit commitment) and (iv) any Restricted
Payment involving consideration paid by the Borrower or any Restricted
Subsidiary in excess of $1,000,000.

 

“Statutory Reserve Rate” means, with respect to any currency, 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, liquid asset, fees or similar requirements (including any marginal,
special, emergency or supplemental reserves or other requirements) established
by any central bank, monetary authority, the Board, the Financial Services
Authority, the European Central Bank or other Governmental Authority for any
category of deposits or liabilities customarily used to fund loans in such
currency, expressed in the case of each such requirement as a decimal. Such
reserve percentages shall, in

 

31

--------------------------------------------------------------------------------

 

the case of Dollar denominated Loans, include those imposed pursuant to
Regulation D of the Board. Eurodollar Loans shall be deemed to be subject to
such reserve, liquid asset or similar requirements without benefit of or credit
for proration, exemptions or offsets that may be available from time to time to
any Lender under any applicable law, rule or regulation, including Regulation D.
The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve, liquid asset or similar
requirement.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the ordinary voting power for the election of directors or other governing body
are at the time beneficially owned, directly or indirectly, by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.

 

“Subsidiary” means any subsidiary of the Borrower.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, 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; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the
Subsidiaries shall be a Swap Agreement.

 

“Swap Obligation” means, 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.

 

“Swap Termination Value” means, in respect of any one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after the
date such Swap Agreements have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Agreements (which may
include a Lender or any Affiliate of a Lender).

 

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.

 

“Swingline Lender” means Wells Fargo Bank, National Association, in its capacity
as lender of Swingline Loans hereunder, or any successor swingline lender
hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.04.

 

“Swingline Loan Sublimit” means $5,000,000.

 

“Syndication Agents” means Royal Bank of Canada and U.S. Bank National
Association, in their respective capacities as syndication agents for this
Agreement.

 

“Tax Indemnitee” has the meaning assigned to such term in Section 2.16.

 

32

--------------------------------------------------------------------------------

 

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

 

“Term Commitment” means a Delayed Term Loan Commitment or an Effective Date Term
Commitment.

 

“Term Lender” means, at any time, any Lender that has a Term Commitment or a
Term Loan at such time.

 

“Term Loan” means an advance made by the Term Lenders to the Borrower under the
Term Commitments or an Incremental Term Loan, as the context requires.

 

“Term Loan Maturity Date” means June 25, 2020.

 

“Test Period” means the period of four fiscal quarters of the Borrower ending on
a specified date or, if not specified, the latest such period prior to the date
of determination.

 

“Transactions” means, collectively, (a) the initial borrowings of Loans and the
initial issuance (or deemed issuance) of Letters of Credit hereunder, (b) the
repayment and termination or discharge of all Indebtedness outstanding, and the
termination of commitments, under the Existing Credit Agreement, (c) the
redemption (or earlier discharge and satisfaction) of the Senior Notes, (d) the
consummation of any other transactions in connection with the foregoing and
(e) the payment of fees and expenses incurred in connection with any of the
foregoing.

 

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

 

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as the same
may from time to time be in effect in any applicable jurisdiction.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.16.

 

“Unrestricted Subsidiary” means (a) any Subsidiary of an Unrestricted Subsidiary
and (b) any Subsidiary of the Borrower designated by the board of directors of
the Borrower as an Unrestricted Subsidiary pursuant to Section 6.15 on or
subsequent to the Effective Date.

 

“Voting Stock” means, with respect to any Person, the Equity Interests of such
Person that ordinarily has voting power for the election of directors of such
Person, whether at all times or only as long as no senior class of Equity
Interests has such voting power by reason of any contingency.

 

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

 

33

--------------------------------------------------------------------------------

 

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

 

“wholly owned” means, with respect to a Subsidiary of a Person, a Subsidiary of
such Person all of the outstanding Equity Interests of which (other than
(x) director’s qualifying shares and (y) shares issued to foreign nationals to
the extent required by applicable Law) are owned by such Person and/or by one or
more wholly owned Subsidiaries of such Person.

 

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

 

SECTION 1.03.        Terms Generally. Unless separate definitions are provided
for the singular and plural forms of a specified term, the definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented, refinanced, restated, replaced or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person’s successors and assigns, (c) the words
“herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

SECTION 1.04.        Accounting Terms; GAAP.

 

(a)           Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the Effective Date
in GAAP or in the application thereof on the operation of such provision (or if
the Administrative Agent notifies the Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision has been
amended in accordance herewith. In addition, notwithstanding any other provision
contained herein, (i) the definitions set forth in the Loan Documents and any
financial calculations required by the Loan Documents shall be computed to
exclude any change to lease accounting rules from those in effect pursuant to
Financial Accounting Standards Board Accounting Standards Codification 840
(Leases) and other related lease accounting guidance as in effect on the
Effective Date and (ii) all terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred
to herein shall be made, without giving effect to any election under Financial
Accounting Standards Board Accounting Standards Codification 825 (or any other
Financial Accounting

 

34

--------------------------------------------------------------------------------

 

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.

 

(b)           Notwithstanding anything to the contrary herein, for purposes of
determining compliance with any test or covenant or the compliance with or
availability of any basket contained in this Agreement with respect to any Test
Period, the Consolidated Leverage Ratio and Consolidated Secured Leverage Ratio
shall be calculated with respect to such period on a Pro Forma Basis.

 

SECTION 1.05.        Payments on Business Days. When the payment of any
Obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment or performance shall extend to the immediately succeeding Business
Day and such extension of time shall be reflected in computing interest or fees,
as the case may be; provided that, with respect to any payment of interest on or
principal of Eurodollar Loans, if such extension would cause any such payment to
be made in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.

 

SECTION 1.06.        Times of Day. Unless otherwise specified, all references
herein to times of day shall be references to New York City time.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.        Commitments.

 

(a)           The Term Borrowings. Subject to the terms and conditions set forth
herein, each Term Lender hereby agrees to make (i) a Term Loan to the Borrower
on the Effective Date in Dollars in an amount equal to such Term Lender’s
Effective Date Term Commitment and (ii) an additional one-time Term Loan (the
“Delayed Term Loan”) to the Borrower on or before the Delayed Draw Termination
Date (the “Delayed Term Loan Funding Date”), in Dollars in a principal amount
equal to such Lender’s Delayed Term Loan Commitment. Term Loans repaid or
prepaid may not be reborrowed.

 

(b)           The Revolving Credit Borrowings. Subject to the terms and
conditions set forth herein, each Revolving Lender agrees to make Revolving
Loans to the Borrower in Dollars from time to time during the Availability
Period in an aggregate principal amount that will not result in (i) the
aggregate principal amount of such Lender’s Revolving Credit Exposure exceeding
such Lender’s Revolving Commitment or (ii) the aggregate principal amount of the
total Revolving Credit Exposures exceeding the sum of the total Revolving
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

 

SECTION 2.02.        Loans and Borrowings.

 

(a)           Each Loan (other than a Swingline Loan) shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required. Any Swingline Loan shall
be made in accordance with the procedures set forth in Section 2.04.

 

35

--------------------------------------------------------------------------------

 

(b)           Subject to Section 2.13, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each ABR Loan shall only be made in
Dollars. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may
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.

 

(c)           At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(f). Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $500,000. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of ten (10) Eurodollar Borrowings
outstanding.

 

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

 

SECTION 2.03.       Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request in accordance
with the procedures for Borrowings set forth on Schedule 1.01A. Each Borrowing
Request shall be irrevocable and, in the case of a telephonic Borrowing Request,
shall be confirmed promptly by hand delivery or telecopy or transmission by
electronic communication in accordance with Section 9.01(b) to the
Administrative Agent of a written Borrowing Request in a form attached hereto as
Exhibit D-1 and signed by the Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:

 

(i)          the aggregate amount of the requested Borrowing and the Class of
Loans being borrowed;

 

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

 

(iii)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

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

 

(v)          the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.06.

 

If no election as to the Type of Borrowing is specified, then, in the case of a
Revolving Borrowing, the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each
applicable Lender of the details thereof and of the amount of such Lender’s Loan
to be made as part of the requested Borrowing. Notwithstanding anything to the
contrary in Schedule 1.01A, the notice of any Eurodollar Borrowing on the
Effective Date may be

 

36

--------------------------------------------------------------------------------

 

provided on shorter than three Business Days’ prior notice to the extent agreed
by the Administrative Agent.

 

SECTION 2.04.       Swingline Loans.

 

(a)           Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Swingline Loans in Dollars to the Borrower from
time to time during the Availability Period, in an aggregate principal amount at
any time outstanding that will not result in (i) the aggregate principal amount
of outstanding Swingline Loans exceeding the Swingline Loan Sublimit or (ii) the
aggregate principal amount of the total Revolving Credit Exposures exceeding the
total Revolving Commitments; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

(b)           To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request in accordance with the procedures for
Swingline Loans set forth on Schedule 1.01A. The Administrative Agent will
promptly advise the Swingline Lender of any notice of a request for a Swingline
Loan Borrowing received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender or, at the Borrower’s
option, by effecting a wire transfer of such amounts to an account designated by
the Borrower to the Administrative Agent (or, in the case of a Swingline Loan
made to finance the reimbursement of an LC Disbursement as provided in
Section 2.05(f), by remittance to the relevant Issuing Bank) by 3:00 p.m. on the
requested date of such Swingline Loan.

 

(c)           The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m. on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Revolving Lenders. The Administrative Agent shall notify the Borrower
of any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative

 

37

--------------------------------------------------------------------------------

 

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

 

SECTION 2.05.          Letters of Credit.

 

(a)           General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit denominated in Dollars
for its own account or the account of any of its Restricted Subsidiaries
(provided that, upon request of the Issuing Bank, the Borrower shall be a
co-applicant with respect to any Letters of Credit issued for the account of any
Restricted Subsidiary), in a form reasonably acceptable to the Administrative
Agent and the relevant Issuing Bank, at any time and from time to time during
the Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control. With respect
to any Letter of Credit that, by its terms or the terms of any letter of credit
application related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.

 

(b)           Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Issuing Bank) to
the relevant Issuing Bank and the Administrative Agent a notice in the form
attached hereto as Exhibit D-3 requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit, which, in each case, must be received by the Administrative Agent and
the Issuing Bank no later than 12:00 p.m. on the third Business Day prior to the
proposed issuance, amendment, renewal or extension. The relevant Issuing Bank
shall promptly notify the Administrative Agent of, and the Administrative Agent
shall in turn promptly furnish to the Lenders notice of, any such issuance. If
requested by the relevant Issuing Bank, the Borrower also shall submit a letter
of credit application on such Issuing Bank’s standard form in connection with
any request for a Letter of Credit; provided that such letter of credit
application shall not contain terms inconsistent with the terms of this
Agreement and shall not impose any additional obligations, liabilities or Liens
on any Loan Party during the term of this Agreement. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit, the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed the LC Exposure
Aggregate Sublimit, (ii) the LC Exposure of any Issuing Bank shall not exceed
its LC Exposure Issuing Bank Sublimit unless otherwise agreed to by such Issuing
Bank and (iii) subject to Section 2.04, the aggregate principal amount of the
total Revolving Credit Exposures shall not exceed the total Revolving
Commitments.

 

(c)           Auto-Renewal Letters of Credit. If the Borrower so requests in any
notice requesting the issuance of a Letter of Credit, the applicable Issuing
Bank may, in its sole and absolute discretion, agree to issue a Letter of Credit
that has automatic renewal provisions (each, an “Auto-Renewal Letter of
Credit”); provided, that any such Auto-Renewal Letter of Credit must permit the
applicable Issuing Bank to prevent any such renewal at least once in each
twelve-month period (commencing with

 

38

--------------------------------------------------------------------------------

 

the date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day in each such twelve-month period (or
364-day period, as applicable) to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the applicable Issuing Bank, the
Borrower shall not be required to make a specific request to such Issuing Bank
for any such renewal. Once an Auto-Renewal Letter of Credit has been issued,
each Revolving Lender shall be deemed to have authorized (but may not require)
the applicable Issuing Bank to permit the renewal of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date,
provided however, that a Letter of Credit may extend beyond the Letter of Credit
Expiration Date if (i) such Letter of Credit is subject to “back to back” letter
of credit arrangements reasonably satisfactory to the applicable Issuing Bank or
(ii) the Borrower cash collateralizes such Letter of Credit for the benefit of
the applicable Issuing Bank pursuant to arrangements and documentation in form
and substance reasonably satisfactory to the Administrative Agent and the
Issuing Bank (which documents are hereby consented to by the Lenders).

 

(d)           Expiration Date. Each Letter of Credit shall, unless otherwise
agreed by the relevant Issuing Bank, expire at or prior to the close of business
on the earlier of (i) the date one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (ii) the date that is five (5) Business
Days prior to the Revolving Credit Maturity Date (the “Letter of Credit
Expiration Date”).

 

(e)           Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the relevant Issuing Bank or the Revolving
Lenders, such Issuing Bank hereby grants to each Revolving Lender, and each
Revolving Lender hereby acquires from such Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate
amount from time to time available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the relevant Issuing Bank, such Revolving Lender’s Applicable
Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed
by the Borrower on the date due as provided in paragraph (e) of this Section, or
of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

 

(f)            Reimbursement. If an Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent in Dollars an amount equal to
such LC Disbursement on (i) the Business Day that the Borrower receives such
notice, if such notice is received prior to 11:00 a.m. on the day of receipt or
(ii) the Business Day immediately following the day that the Borrower receives
such notice, if such notice is not received prior to such time on the day of
receipt; provided that unless the Borrower elects otherwise, the Borrower shall
be deemed, subject to the conditions to borrowing set forth herein, to have
requested in accordance with Section 2.03 or 2.05 that such payment be financed
with an ABR Revolving Borrowing or, if such amount is less than $1,000,000, a
Swingline Loan in an equivalent amount of such LC Disbursement and, to the
extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Revolving
Lender’s Applicable Percentage thereof. Promptly following receipt of such
notice, each

 

39

--------------------------------------------------------------------------------

 

Revolving Lender shall pay to the Administrative Agent its Applicable Percentage
of the payment then due from the Borrower, in the same manner as provided in
Section 2.06 with respect to Loans made by such Revolving Lender (and
Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the
Revolving Lenders), and the Administrative Agent shall promptly pay to the
relevant Issuing Bank the amounts so received by it from the Revolving Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the relevant Issuing Bank or, to the extent that Revolving
Lenders have made payments pursuant to this paragraph to reimburse such Issuing
Bank, then to such Lenders and such Issuing Bank as their interests may appear.
Any payment made by a Revolving Lender pursuant to this paragraph to reimburse
an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

 

(g)           Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the relevant Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Revolving Lenders nor the
Issuing Banks, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the relevant Issuing Bank; provided that the
foregoing shall not be construed to excuse the relevant Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the relevant Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. In the absence of bad faith, gross
negligence or willful misconduct on the part of the relevant Issuing Bank (as
finally determined by a court of competent jurisdiction), such Issuing Bank
shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
relevant Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.

 

(h)           Disbursement Procedures. The relevant Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The relevant Issuing Bank shall
promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy or transmission by electronic communication in accordance
with Section 9.01(b)) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not

 

40

--------------------------------------------------------------------------------

 

relieve the Borrower of its obligation to reimburse the relevant Issuing Bank
and the Revolving Lenders with respect to any such LC Disbursement (other than
with respect to the timing of such reimbursement obligation set forth in clause
(e) of this Section).

 

(i)            Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(d) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
relevant Issuing Bank, except that interest accrued on and after the date of
payment by any Revolving Lender pursuant to paragraph (e) of this Section to
reimburse such Issuing Bank shall be for the account of such Lender to the
extent of such payment.

 

(j)            Replacement or Addition of Issuing Bank. Any Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent and the successor Issuing Bank. The Administrative Agent shall notify the
Revolving Lenders of any such replacement of an Issuing Bank. At the time any
such replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit. A Lender may become an additional Issuing Bank hereunder at any time
by written agreement among the Borrower, the Administrative Agent and such
Lender. The Administrative Agent shall notify the Revolving Lenders of any such
additional Issuing Bank.

 

(k)           Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, the Required Revolving Lenders) demanding the deposit of
cash collateral pursuant to this paragraph, the Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Revolving Lenders, an amount in cash equal to the
Dollar amount of the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (h) or
(i) of Section 7.01. The Borrower also shall deposit cash collateral for the
benefit of the Issuing Bank(s) pursuant to this paragraph as and to the extent
required by Section 2.20(a)(iii). Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the Borrower’s risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Monies in such account shall
be applied by the Administrative Agent to reimburse the relevant Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the reimbursement obligations
of the Borrower for the LC Exposure at such time or, if the maturity of the
Loans has been accelerated

 

41

--------------------------------------------------------------------------------

 

(but subject to the consent of the Required Revolving Lenders (or, if such cash
collateral is required pursuant to Section 2.20(a)(iii), the Issuing Bank(s)),
be applied to satisfy other obligations of the Borrower under the Loan
Documents. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default or pursuant to
Section 2.20(a), such amount plus any accrued interest or realized profits with
respect to such amounts (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of Default
have been cured or waived or such collateral is no longer required pursuant to
2.20(a), as applicable.

 

SECTION 2.06.          Funding of Borrowings.

 

(a)           Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 2:00
p.m. to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders in an amount equal to such Lender’s
Loan to be made on such date; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account designated by the Borrower in the applicable Borrowing
Request; provided that (x) ABR Revolving Loans made to finance the reimbursement
of an LC Disbursement as provided in Section 2.05(g) shall be remitted by the
Administrative Agent to the relevant Issuing Bank and (y) proceeds of Term Loans
shall be made available to the Borrower on the Effective Date.

 

(b)           Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing. Nothing in this Section 2.06(b) shall
be deemed to relieve any Lender from its obligation to fund its Applicable
Percentage of any Borrowing hereunder or to prejudice any rights which the
Borrower may have against any Lender as a result of any default by such Lender
hereunder.

 

SECTION 2.07.          Interest Elections.

 

(a)           Subject to Section 2.02(b), each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.07. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Loans, which may
not be converted or continued.

 

42

--------------------------------------------------------------------------------

 

(b)           To make an election pursuant to this Section 2.07, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be confirmed promptly by hand delivery or telecopy or
transmission by electronic communication in accordance with Section 9.01(b) to
the Administrative Agent of a written Interest Election Request in a form
attached hereto as Exhibit D-2 or such other form approved by the Administrative
Agent and signed by the Borrower. Notwithstanding any contrary provision herein,
this Section shall not be construed to permit the Borrower to (i) elect an
Interest Period for Eurodollar Loans that does not comply with
Section 2.02(d) or (ii) convert any Borrowing to a Borrowing of a Type not
available under the Class of Commitments pursuant to which such Borrowing was
made.

 

(c)           Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

 

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

 

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

 

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

 

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

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration; provided that if the
Revolving Credit Maturity Date or the Term Loan Maturity Date is within one
month of the Interest Election Request, the Borrower shall be deemed to have
selected an ABR Borrowing for such Borrowing of Revolving Loans or Term Loans,
respectively.

 

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

 

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

 

43

--------------------------------------------------------------------------------

 

SECTION 2.08.          Termination and Reduction of Commitments.

 

(a)           The Term Commitments (other than the Delayed Term Loan
Commitments) shall terminate on the Effective Date upon the borrowing of the
Term Loans advanced on the Effective Date. Unless previously terminated, all
Revolving Commitments shall terminate on the Revolving Credit Maturity Date. The
Delayed Term Loan Commitments shall terminate at 5:00 p.m. on the Delayed Draw
Termination Date.

 

(b)           The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments; provided that (i) each reduction of the
Revolving Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 (or, if less, the remaining amount of
such Commitments) and (ii) the Borrower shall not terminate or reduce the
Revolving Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.10, the aggregate principal amount of the
total Revolving Credit Exposures would exceed the total Revolving Commitments.

 

(c)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Revolving Commitments under paragraph (b) of this
Section at least three (3) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities or instruments of Indebtedness, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Revolving Commitments shall be permanent. Each
reduction of the Revolving Commitments shall be made ratably among the Lenders
in accordance with their respective Revolving Commitments.

 

SECTION 2.09.       Repayment of Loans; Evidence of Debt.

 

(a)           The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan made to the Borrower on the Revolving Credit
Maturity Date in Dollars and (ii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving Credit
Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least ten (10) Business Days
after such Swingline Loan is made; provided that on each date that a Revolving
Loan is made, the Borrower shall repay all Swingline Loans then outstanding.

 

(b)           The Borrower promises to repay, on each date set forth in the
following table, an aggregate principal amount of Term Loans (other than
Incremental Term Loans) equal to the percentage set forth opposite such date of
the aggregate principal amount of Term Loans made on the Effective Date and on
the Delayed Term Loan Funding Date:

 

Date

 

Percentage

June 30, 2016

 

1.250%

September 30, 2016

 

1.250%

December 31, 2016

 

1.250%

March 31, 2017

 

1.250%

June 30, 2017

 

1.250%

 

44

--------------------------------------------------------------------------------

 

Date

 

Percentage

September 30, 2017

 

1.250%

December 31, 2017

 

1.250%

March 31, 2018

 

1.250%

June 30, 2018

 

1.875%

September 30, 2018

 

1.875%

December 31, 2018

 

1.875%

March 31, 2019

 

1.875%

June 30, 2019

 

2.500%

September 30, 2019

 

2.500%

December 31, 2019

 

2.500%

March 31, 2020

 

2.500%

Term Loan Maturity Date

 

72.5% or remaining balance

 

(c)           The Borrower will repay Incremental Term Loans at the dates and in
the amounts set forth in the Additional Credit Extension Amendment relating
thereto.

 

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

 

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

 

(f)            The entries made in the accounts maintained pursuant to paragraph
(d) or (e) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein absent manifest error; provided that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(g)           Any Lender may request that Loans made by it be evidenced by
promissory notes. In such event, the Borrower shall prepare, execute and deliver
to such Lender promissory notes payable to such Lender and its registered
assigns and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory notes and interest thereon shall at all times
(including after assignment pursuant to Section 9.04 of this Agreement) be
represented by one or more promissory notes in such form payable to the payee
named therein and its registered assigns.

 

SECTION 2.10.       Prepayment of Loans.

 

(a)           Optional Prepayments. (i) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing of any Class in whole or in
part, without premium or penalty, subject to Section 2.15 and prior notice in
accordance with paragraph (a)(ii) of this Section.

 

(ii)             The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy or transmission by

 

45

--------------------------------------------------------------------------------

 

electronic communication in accordance with Section 9.01(b)) of any prepayment
hereunder (x) in the case of prepayment of a Eurodollar Borrowing, not later
than 12:00 noon three (3) Business Days before the date of prepayment, (y) in
the case of prepayment of an ABR Borrowing, not later than 12:00 noon on the
date of prepayment or (z) in the case of prepayment of a Swingline Loan, not
later than 12:00 noon on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the Class or Classes of Loans
to be repaid and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by
Section 2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02.
Each prepayment of Term Loans pursuant to this Section 2.10(a) shall be applied
to repayments thereof required pursuant to Section 2.09(b) in the order selected
by the Borrower. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the notice of prepayment. Prepayments pursuant to this
Section 2.10(a) shall be accompanied by accrued interest to the extent required
by Section 2.12 and shall be subject to Section 2.15.

 

(b)           Mandatory Prepayments. (i) No later than 95 days after the end of
each ECF Period (an “ECF Deadline”), the Borrower shall pay to the Term Lenders
an aggregate amount (which shall be applied in accordance with
Section 2.10(b)(v)) equal to (A) the ECF Percentage of Excess Cash Flow, if
positive, for such ECF Period minus (B) the sum of (x) all voluntary prepayments
of Term Loans during such ECF Period (or following the end of such ECF Period if
such voluntary prepayments are made prior to the ECF Deadline for such ECF
Period; it being understood that the amount of any voluntary prepayments applied
to reduce the mandatory prepayment required by this Section 2.10(b)(i) in
respect of one ECF Period may not be applied to reduce such mandatory prepayment
in a subsequent ECF Period) pursuant to Section 2.10(a) and (y) all voluntary
repayments of Revolving Loans during such ECF Period (or following the end of
such ECF Period if such voluntary repayments are made prior to the ECF Deadline
for such ECF Period; it being understood that the amount of any voluntary
repayments applied to reduce the mandatory prepayment required by this
Section 2.10(b)(i) in respect of one ECF Period may not be applied to reduce
such mandatory prepayment in a subsequent ECF Period) pursuant to
Section 2.10(a), to the extent the Revolving Commitments are permanently reduced
by the amount of such repayments, excluding, in all cases pursuant to this
clause (B), any payments or prepayments funded with the proceeds of any issuance
or sale of Equity Interests of the Borrower or with the proceeds of any other
Indebtedness of the Borrower or any Restricted Subsidiary (other than Revolving
Loans or Swingline Loans).

 

(ii)           (A) If the Borrower or any Restricted Subsidiary receives any Net
Cash Proceeds from any Asset Sale or Casualty Event, the Borrower shall pay to
the Term Lenders an amount equal to 100% of such Net Cash Proceeds (which shall
be applied in accordance with Section 2.10(b)(v)) on or prior to the date that
is ten (10) Business Days after the date of actual receipt by the Borrower of
such Net Cash Proceeds; provided that no such prepayment shall be required
pursuant to this Section 2.10(b)(ii)(A) with respect to such Net Cash Proceeds
that the Borrower or any Restricted Subsidiary shall reinvest in accordance with
Section 2.10(b)(ii)(B); provided, further, that the foregoing proviso shall not
apply to any Asset Sale made in reliance on Section 6.11(m).

 

(B)          With respect to any Net Cash Proceeds realized or received with
respect to any Asset Sale or Casualty Event, the Borrower or any Restricted
Subsidiary may, at its option, reinvest or commit to reinvest all or any portion
of such Net Cash Proceeds in assets useful for the Borrower’s or a Restricted
Subsidiary’s business within 12 months following receipt of such Net Cash
Proceeds (and, in the case of such a commitment, the reinvestment contemplated
thereby shall actually have been consummated on or

 

46

--------------------------------------------------------------------------------

 

prior to the date that is the later of (x) 12 months following receipt of such
Net Cash Proceeds and (y) 180 days following the date of the making of such
commitment); provided, further, that any such Net Cash Proceeds that are not so
reinvested within such 12 month period (as such period may be extended as
contemplated by the immediately preceding parenthetical phrase) shall be applied
as set forth in Section 2.10(b)(ii)(A) within five (5) Business Days after the
end of such period;

 

(iii)          If the Borrower or any Restricted Subsidiary incurs or issues any
Indebtedness not expressly permitted to be incurred or issued pursuant to
Section 6.01 (without prejudice to the restrictions therein), the Borrower shall
pay to the Term Lenders an amount equal to 100% of the Net Cash Proceeds
received by the Borrower or any Restricted Subsidiary therefrom (which shall be
applied in accordance with Section 2.10(b)(v)) on or prior to the date that is
five (5) Business Days after the receipt of such Net Cash Proceeds.

 

(iv)          [reserved].

 

(v)           Each prepayment of Term Loans pursuant to this
Section 2.10(b) shall be applied, first, in direct order of maturities, to the
principal repayment installments of Term Loans due within the eight fiscal
quarters following such prepayment, and second, on a pro rata basis to the
remaining principal repayment installments of Term Loans; and unless otherwise
provided herein, each such prepayment shall be paid to the Lenders in accordance
with their respective Applicable Percentages in the outstanding Term Loans.

 

(vi)          Any prepayment of Term Loans pursuant to this
Section 2.10(b) shall be accompanied by accrued interest and shall be subject to
Section 2.15.

 

SECTION 2.11.       Fees.

 

(a)           The Borrower agrees to pay to the Administrative Agent for the
account of each Revolving Lender a commitment fee, which shall accrue at the
Applicable Rate on the daily amount by which the Revolving Commitment of such
Lender exceeds the Revolving Credit Exposure of such Lender during the period
from and including the Effective Date to but excluding the date on which such
Revolving Commitment terminates. Accrued commitment fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Revolving Commitments terminate, commencing on the
first such date to occur after the Effective Date. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

 

(b)           The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Lender’s LC Exposure (excluding any
portion there-of attributable to unreimbursed LC Disbursements following the
date of the applicable LC Disbursement) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure and (ii) to the relevant Issuing Bank a fronting fee, which
shall accrue at the rate agreed or to be agreed upon prior to issuance of any
Letter of Credit by the relevant Issuing Bank between the Borrower and the
relevant Issuing Bank on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) attributable
to Letters of Credit issued by such Issuing Bank during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as such Issuing Bank’s standard and reasonable fees
and commissions

 

47

--------------------------------------------------------------------------------

 

with respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Unless otherwise specified above, participation fees and
fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third (3rd) Business
Day following such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on demand.
Any other fees payable to an Issuing Bank pursuant to this paragraph shall be
payable within ten (10) days after demand. All participation fees and fronting
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

 

(c)           The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

 

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

 

SECTION 2.12.          Interest.

 

(a)           The Loans comprising each ABR Borrowing (including each Swingline
Loan) shall bear interest at the Alternate Base Rate in effect from time to time
plus the Applicable Rate.

 

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

 

(c)           Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Term Loans as provided in paragraph (a) of this Section.

 

(d)           Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Availability Period or a Swingline
Loan), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.

 

(e)           All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate

 

48

--------------------------------------------------------------------------------

 

shall be determined by the Administrative Agent in accordance with the
provisions of this Agreement, and such determination shall be conclusive absent
manifest error.

 

SECTION 2.13.       Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:

 

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

 

(b)           the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders (or notice by telephone or telecopy or transmission by electronic
communication, promptly confirmed in writing) in accordance with
Section 9.01(b) as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

SECTION 2.14.       Increased Costs.

 

(a)        If any Change in Law shall:

 

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

 

(ii)           impose on any Lender or any Issuing Bank or the London interbank
market any other condition or Tax affecting this Agreement or Loans made by such
Lender or any Letter of Credit or participation therein (other than any Excluded
Taxes, or any Indemnified Taxes or Other Taxes indemnified under Section 2.16);

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or of maintaining its
obligation to make any Loan or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder, whether of principal, interest or otherwise, in each
case by an amount deemed by such Lender or such Issuing Bank to be material in
the context of its making of, and participation in, extensions of credit under
this Agreement, then, upon the request of such Lender or such Issuing Bank, the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

 

(b)           If any Lender or any Issuing Bank determines in good faith that
any Change in Law regarding capital or liquidity requirements has or would have
the effect of reducing the rate of return on such Lender’s or such Issuing
Bank’s capital or on the capital of such Lender’s or such Issuing

 

49

--------------------------------------------------------------------------------

 

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

 

(c)           A certificate of a Lender or an Issuing Bank setting forth in
reasonable detail the amount or amounts, and the calculation of such amounts,
necessary to compensate such Lender or such Issuing Bank or its holding company,
as the case may be, as specified in paragraph (a) or (b) of this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or such Issuing Bank, as the case may be, the
amount shown as due on any such certificate within ten (10) Business Days after
receipt thereof.

 

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

 

SECTION 2.15.       Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.10), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.10 and is revoked in
accordance therewith) or (d) the assignment of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by the Borrower pursuant to Section 2.18, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense (excluding loss of
anticipated profit) attributable to such event. Such loss, cost or expense to
any Lender may be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan (and excluding any
Applicable Rate), for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for deposits in
the relevant currency of a comparable amount and period from other banks in the
eurocurrency market. A certificate of any Lender setting forth in reasonable
detail any amount or amounts that such Lender is entitled to receive pursuant to
this Section 2.15 shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown as
due on any such certificate within ten (10) Business Days after receipt thereof.

 

50

--------------------------------------------------------------------------------

 

SECTION 2.16.          Taxes.

 

(a)           Any and all payments by or on account of any obligation of any
Loan Party hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Taxes; provided that if any Loan Party or
other applicable withholding agent shall be required to deduct any Taxes from
any such payments, then (i) the applicable withholding agent shall make such
deductions and timely pay any such Taxes to the relevant Governmental Authority
in accordance with applicable law, and (ii) if the Tax in question is an
Indemnified Tax or Other Tax, the sum payable by the applicable Loan Party shall
be increased as necessary so that after all required deductions for Indemnified
Taxes and Other Taxes (including deductions applicable to additional sums
payable under this Section 2.16) have been made, the Lender (or, in the case of
any amount received by the Administrative Agent for its own account, the
Administrative Agent) receives on the due date a net amount equal to the sum it
would have received had no such deductions been required or made.

 

(b)           In addition, without duplication of Section 2.16(a), the Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

 

(c)           The Loan Parties shall, jointly and severally, indemnify each
Lender and the Administrative Agent (each, a “Tax Indemnitee”), within ten
(10) Business Days after written demand therefor, for the full amount of any
Indemnified Taxes imposed on or attributable to any payments by or on account of
any obligation of any Loan Party hereunder or under any other Loan Document, and
Other Taxes, payable by such Tax Indemnitee (including Indemnified Taxes or
Other Taxes imposed on or attributable to amounts payable under this
Section 2.16), and any reasonable expenses related thereto, whether or not such
Taxes were correctly or legally imposed or asserted by the Governmental
Authority. A certificate as to the amount of such payment or liability prepared
in good faith and delivered by the Tax Indemnitee or by the Agent on its own
behalf or on behalf of another Tax Indemnitee, accompanied by supporting
documentation setting forth in reasonable detail any calculations by which such
determination was made by such Tax Indemnitee, shall be conclusive absent
manifest error.

 

(d)           As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Loan Party to a Governmental Authority, and in any event
within 30 days after any such payment, 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.

 

(e)           Each Lender shall, at such times as are reasonably requested by
the Borrower or the Administrative Agent, provide the Borrower and the
Administrative Agent with any documentation prescribed by Law or reasonably
requested by the Borrower or the Administrative Agent certifying as to any
entitlement of such Lender to an exemption from, or reduction in, any
withholding Tax with respect to any payments to be made to such Lender under any
Loan Document. Each such Lender shall, whenever a lapse in time or change in
circumstances renders such documentation (including any specific documentation
required below in this Section 2.16(e)) obsolete, expired or inaccurate in any
material respect, deliver promptly to the Borrower and the Administrative Agent
updated or other appropriate documentation (including any new documentation
reasonably requested by the Borrower or the Administrative Agent) or promptly
notify the Borrower and the Administrative Agent in writing of its inability to
do so.

 

Without limiting the foregoing:

 

(1)              Each Lender that is not a Foreign Lender shall deliver to the
Borrower and the Administrative Agent on or before the date on which it becomes
a party to this Agreement two

 

51

--------------------------------------------------------------------------------

 

properly completed and duly signed original copies of IRS Form W-9 certifying
that such Lender is exempt from U.S. federal backup withholding.

 

(2)           Each Foreign Lender shall deliver to the Borrower and the
Administrative Agent on or before the date on which it becomes a party to this
Agreement (and from time to time there-after upon the request of the Borrower or
the Administrative Agent) whichever of the following is applicable:

 

(A)          two properly completed and duly signed original copies of IRS
Form W-8BEN or Form W-8BEN-E, as applicable (or any successor forms) claiming
eligibility for the benefits of an income tax treaty to which the United States
is a party, and such other documentation as required under the Code,

 

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

 

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

 

(D)          to the extent a Foreign Lender is not the beneficial owner (for
example, where the Foreign Lender is a partnership or a participating Lender),
two properly completed and duly signed original copies of IRS Form W-8IMY (or
any successor forms) of the Foreign Lender, accompanied by a Form W-8ECI,
Form W-8BEN, Form W-8BEN-E, U.S. Tax Compliance Certificate, Form W-9,
Form W-8IMY or any other required information (or any successor forms) from each
beneficial owner that would be required under this Section 2.16(e) if such
beneficial owner were a Lender, as applicable (provided that, if the Foreign
Lender is a partnership for U.S. federal income tax purposes (and not a
participating Lender) and one or more beneficial owners are claiming the
portfolio interest exemption, the U.S. Tax Compliance Certificate may be
provided by such Foreign Lender on behalf of such beneficial owner), or

 

(E)           two properly completed and duly signed original copies of any
other form prescribed by applicable U.S. federal income tax laws as a basis for
claiming a complete exemption from, or a reduction in, U.S. federal withholding
tax on any payments to such Lender under the Loan Documents.

 

(3)           If a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under Sections 1471 through 1474 of the
Code and to determine whether such Lender has or has not complied with such
Lender’s obligations under such Sections and, if necessary, to determine the
amount to

 

52

--------------------------------------------------------------------------------

 

deduct and withhold from such payment. Solely for purposes of this clause (3),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

Notwithstanding any other provision of this clause (e), a Lender shall not be
required to deliver any form that such Lender is not legally eligible to
deliver. Each Lender hereby authorizes the Administrative Agent to deliver to
the Loan Parties and to any successor Administrative Agent any documentation
provided by such Lender to the Administrative Agent pursuant to this
Section 2.16(e).

 

(f)            If the Administrative Agent or a Lender receives a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by a Loan
Party or with respect to which a Loan Party has paid additional amounts pursuant
to this Section 2.16, it shall promptly pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.16 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender incurred in connection with such refund
(including any Taxes) and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay
such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

(g)           For the avoidance of doubt, the term “Lender,” for purposes of
this Section 2.16, shall include any Swingline Lender and any Issuing Bank.

 

(h)           The Administrative Agent and each Lender shall use commercially
reasonable efforts to cooperate with the Borrower in attempting to recover
Indemnified Taxes and Other Taxes that the Borrower reasonably asserts were
improperly imposed if (i) in the reasonable judgment of the Administrative Agent
or such Lender, as applicable, such cooperation shall not subject the
Administrative Agent or such Lender, as applicable, to any unreimbursed third
party cost or expense or otherwise be materially disadvantageous to the
Administrative Agent or such Lender, as applicable, and (ii) based on advice of
the Borrower’s (or applicable Loan Party’s) independent accountants or external
legal counsel, there is a reasonable basis for such Loan Party to contest with
the applicable Governmental Authority the imposition of such Indemnified Taxes
or Other Taxes; provided, however, that any such attempts shall be at the sole
cost of the Borrower and the Borrower shall indemnify the Administrative Agent
and each Lender for any costs it incurs in connection with complying with this
Section 2.16(h). The Borrower shall have the right to dispute or challenge in a
reasonable manner and only to the extent necessary to protect its rights under
applicable law, and at its sole cost and expense, the imposition of Indemnified
Taxes with the relevant Governmental Authority. In no event will this
Section 2.16(h) relieve the Borrower of its obligation to pay additional amounts
to the Administrative Agent or any Lender under this Section 2.16. Any refund
obtained shall be repaid to the Borrower to the extent provided in
Section 2.16(f).

 

SECTION 2.17.       Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

 

(a)           The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 2:00 p.m. on the date when due, in immediately available
funds, without setoff or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made (i) in Dollars and

 

53

--------------------------------------------------------------------------------

 

(ii) to the Administrative Agent at its offices referred to in Section 9.01 (or
as otherwise directed by the Administrative Agent), except payments to be made
directly to an Issuing Bank or Swingline Lender as expressly provided herein and
except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments denominated in the same currency received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.

 

(b)           If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due here-under, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

 

(c)           If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements and Swingline Loans to any
assignee or participant in accordance with the terms of this Agreement. The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.

 

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

 

54

--------------------------------------------------------------------------------

 

(e)           If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.05(e) or (f), 2.06(b), 2.17(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.

 

SECTION 2.18.      Mitigation Obligations; Replacement of Lenders.

 

(a)           If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations here-under to another of its offices, branches or affiliates, if, in
the good faith judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.14 or 2.17, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable out-of-pocket costs and
expenses incurred by any Lender in connection with any such designation or
assignment. Any Lender claiming reimbursement of such costs and expenses shall
deliver to the Borrower a certificate setting forth such costs and expenses in
reasonable detail which shall be conclusive absent manifest error.

 

(b)           If (i) any Lender requests compensation under Section 2.14,
(ii) if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.16, (iii) if any Lender becomes a Defaulting Lender, (iv) any Lender
is unable to fund its portion of any Loan as a result of any applicable law or
regulation prohibiting, (v) any order, judgment or decree of any Governmental
Authority enjoining, prohibiting or restraining, any Lender from making any Loan
requested by the Borrower or any Issuing Bank or any Lender from issuing,
renewing, extending or increasing the face amount of or participating in the
Letter of Credit requested to be issued, renewed, extended or increased by the
Borrower, or (vi) any Lender fails to grant a consent in connection with any
proposed change, waiver, discharge or termination of the provisions of this
Agreement as contemplated by Section 9.02 for which the consent of each Lender
or each affected Lender is required but the consent of the Required Lenders is
obtained (any Lender referred to in clauses (i), (ii), (iii), (iv), (v) or (vi),
an “Applicable Lender”) , then the Borrower may, at its sole expense and effort,
upon notice to such Applicable Lender and the Administrative Agent, require such
Applicable Lender to assign and delegate (provided that the failure of any such
Applicable Lender to execute an Assignment and Assumption shall not render such
assignment invalid and such assignment shall be recorded in the Register),
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under the Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent, each Issuing Bank and the Swingline Lender, which consent shall not be
unreasonably withheld, to the extent required by Section 9.04, and (ii) such
Applicable Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest) or the Borrower (in the case of all fees and
other amounts).

 

SECTION 2.19.          Expansion Option.

 

(a)           The Borrower may from time to time after the Effective Date elect
to increase the Revolving Commitments (“Increased Commitments”) or increase the
principal amount of any existing

 

55

--------------------------------------------------------------------------------

 

tranche of Term Loans or establish one or more tranches of term loans (each such
increase or new tranche, an “Incremental Term Loan” and, together with any
Increased Commitments, the “Incremental Facilities”), in each case in an
aggregate amount of not less than $10,000,000 so long as, after giving effect
thereto, the aggregate amount of all such Incremental Facilities does not exceed
the greater of (x) $75,000,000 less the aggregate principal amount of Permitted
Junior Lien Debt incurred after the Effective Date (excluding amounts incurred
under clause (y) of the definition of “Permitted Junior Lien Debt”) (this clause
(x), the “Dollar Incremental Basket”) and (y) such amount (assuming that any
Increased Commitments are fully drawn) that would not result in the Consolidated
Secured Leverage Ratio on a Pro Forma Basis exceeding 2.75 to 1.00. The Borrower
may arrange for any such increase or tranche to be provided by one or more
Lenders (each Lender so agreeing to an increase in its Revolving Commitment, or
to participate in such Incremental Term Loan, an “Increasing Lender”), or by one
or more new banks, financial institutions or other entities (each such new bank,
financial institution or other entity, an “Augmenting Lender” and, together with
any Increasing Lender, “Incremental Lenders”), to increase their existing
Revolving Commitment, or to participate in such Incremental Term Loan; provided
that each Incremental Lender shall be subject to the approval of the Borrower
and the Administrative Agent (such consents not to be unreasonably withheld)
and, in the case of an Increased Commitment, each Issuing Bank and Swingline
Lender (such consents not to be unreasonably withheld). Without the consent of
any Lenders other than the relevant Incremental Lenders, this Agreement and the
other Loan Documents may be amended pursuant to an Additional Credit Extension
Amendment as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Borrower, to effect the provisions of this
Section 2.19. Increases and new Revolving Commitments and Incremental Term Loans
created pursuant to this Section 2.19 shall become effective on the date agreed
by the Borrower, the Administrative Agent and the relevant Incremental Lenders
and the Administrative Agent shall notify each Lender thereof. Notwithstanding
the foregoing, no increase in the Revolving Commitments and no Incremental Term
Loan shall be permitted under this paragraph unless on the proposed date of the
effectiveness of such increase in the Revolving Commitments or borrowing of such
Incremental Term Loan, the conditions set forth in paragraphs (a) and (b) of
Section 4.02 and the Applicable Transaction Conditions shall be satisfied and
the Administrative Agent shall have received a certificate to that effect dated
such date and executed by a Financial Officer of the Borrower. On the effective
date of any increase in the Revolving Commitments or any Incremental Term Loans
being made, (i) each relevant Incremental Lender shall make available to the
Administrative Agent such amounts in immediately available funds as the
Administrative Agent shall determine, for the benefit of the other Lenders, as
being required in order to cause, after giving effect to such increase and the
use of such amounts to make payments to such other Lenders, each Lender’s
portion of the outstanding Loans of all the Lenders to equal its Applicable
Percentage of such outstanding Loans, and (ii) on the date of such increase,
there are any Revolving Loans outstanding, such Revolving Loans shall on or
prior to the effectiveness of such Increased Commitments be prepaid to the
extent necessary from the proceeds of additional Revolving Loans made hereunder
by Incremental Lenders, so that, after giving effect to such prepayments and any
borrowings on such date of all or any portion of such Increased Commitments, the
principal balance of all outstanding Revolving Loans owing to each Lender with a
Revolving Commitment is equal to such Lender’s pro rata share (after giving
effect to any nonratable Increased Commitment pursuant to this Section 2.19) of
all then outstanding Revolving Loans. The Administrative Agent and the Lenders
hereby agree that the borrowing notice, minimum borrowing, pro rata borrowing
and pro rata payment requirements contained elsewhere in this Agreement shall
not apply to the transactions effected pursuant to the immediately preceding
sentence. The deemed payments made pursuant to clause (ii) of the immediately
preceding sentence shall be accompanied by payment of all accrued interest on
the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to
indemnification by the Borrower pursuant to the provisions of Section 2.15 if
the deemed payment occurs other than on the last day of the related Interest
Periods. The terms of any Incremental Term Loans shall be as set forth in the
amendment to this Agreement providing for such Incremental Term Loans; provided
that (i) the final maturity date of any Incremental Term Loans shall be (A) no
earlier than the Term Loan Maturity Date and (B) no later than

 

56

--------------------------------------------------------------------------------

 

the then scheduled expiration of the Hallmark Trademark License Agreement,
(ii) the Weighted Average Life to Maturity of such Incremental Term Loans shall
not be shorter than the then remaining Weighted Average Life to Maturity of the
Term Loans, (iii) Incremental Term Loans shall not participate on a greater than
pro rata basis with the Term Loans in any optional or mandatory prepayment
hereunder, (iv) the provisions with respect to payment of interest, original
issue discount and upfront fees shall be as agreed between the Borrower and the
applicable Incremental Lenders and (v) all other terms applicable to such
Incremental Term Loans (other than provisions specified in clauses (i) through
(iv) immediately above) shall be on terms and pursuant to documentation to be
determined, provided that, to the extent such terms and documentation are not
consistent with the Term Loans (except to the extent permitted by clause (i),
(ii) or (iv) immediately above), they shall be reasonably satisfactory to the
Administrative Agent; it being understood that such documentation may add (x) a
covenant for the benefit of only the Lenders of the Incremental Term Loans that
is effective after the Term Loan Maturity Date or for the benefit of all Lenders
and (y) in the case of an Incremental Facility that is marketed to institutional
term loan lenders, a customary “most favored nation” pricing provision for the
benefit of only such Incremental Facility. Any Increased Commitments shall be on
the same terms and conditions as the existing Revolving Commitments except that
the Borrower may pay upfront fees to the Lenders of Increased Commitments.

 

(b)           This Section 2.19 shall override any provisions in Section 9.02 to
the contrary.

 

SECTION 2.20.            Defaulting Lenders.

 

(a)           Notwithstanding any provision of this Agreement to the contrary,
if any Lender becomes a Defaulting Lender, then the following provisions shall
apply for so long as such Lender is a Defaulting Lender:

 

(i)            fees shall cease to accrue on the unfunded portion of the
Revolving Commitment of such Defaulting Lender pursuant to Section 2.11(a);

 

(ii)             the Commitment and Credit Exposure of such Defaulting Lender
shall not be included in determining whether the Required Lenders have taken or
may take any action hereunder (including any consent to any amendment, waiver or
other modification pursuant to Section 9.02), and the voting rights of
Defaulting Lenders shall be limited as specifically provided in Section 9.02(b);

 

(iii)             if the Defaulting Lender is a Revolving Lender and any
Swingline Exposure or LC Exposure exists at the time such Lender becomes a
Defaulting Lender then:

 

(1)           so long as no Event of Default has occurred and is continuing as
to which the Administrative Agent has received written notice from the Borrower
or a Revolving Lender at the time of any such reallocation, the Swingline
Exposure and LC Exposure of such Defaulting Lender shall be reallocated among
the non-Defaulting Lenders in accordance with their respective Applicable
Percentages (disregarding for this purpose the Revolving Commitments of any
Defaulting Lenders for all purposes of such calculation) but only to the extent
that the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such
Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total
of all non-Defaulting Lenders’ Revolving Commitments;

 

(2)           if the reallocation described in clause (1) above cannot, or can
only partially, be effected, the Borrower shall within one (1) Business Day
following notice by the Administrative Agent (x) first, prepay the Defaulting
Lender’s Swingline Exposure

 

57

--------------------------------------------------------------------------------

 

and (y) second, cash collateralize for the benefit of the Issuing Bank only the
Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (1) above)
in accordance with the procedures set forth in Section 2.05(k) for so long as
such LC Exposure is outstanding;

 

(3)           if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (2) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to
Section 2.11(b) with respect to such Defaulting Lender’s LC Exposure during the
period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(4)           if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to clause (1) above, then the fees payable to the Lenders pursuant to
Section 2.11(b) shall be adjusted in accordance with such non-Defaulting
Lenders’ Applicable Percentages; and

 

(5)           if all or any portion of such Defaulting Lender’s LC Exposure is
neither reallocated nor cash collateralized pursuant to clause (1) or (2) above,
then, without prejudice to any rights or remedies of the Issuing Bank or any
other Lender hereunder, all fees that otherwise would have been payable to such
Defaulting Lender (solely with respect to the portion of such Defaulting
Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 2.11(b) with respect to such Defaulting Lender’s LC
Exposure shall be payable to the Issuing Bank until and to the extent that such
LC Exposure is reallocated and/or cash collateralized;

 

(iv)          so long as any Revolving Lender is a Defaulting Lender, the
Swingline Lender shall not be required to fund any Swingline Loan and the
Issuing Bank shall not be required to issue, amend or increase any Letter of
Credit, unless it is satisfied that the related exposure and the Defaulting
Lender’s then outstanding LC Exposure will be 100% covered by the Revolving
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 2.20(a)(iii), and
participating interests in any newly made Swingline Loan or any newly issued or
increased Letter of Credit shall be allocated among non-Defaulting Lenders in a
manner consistent with Section 2.20(a)(iii)(1) (and such Defaulting Lender shall
not participate therein); and

 

(v)           the Borrower may terminate the unused amount of the Commitment of
a Defaulting Lender upon not less than three Business Days’ prior notice to the
Administrative Agent (which will promptly notify the Lenders thereof), and in
such event the provisions of Section 2.17 will apply to all amounts thereafter
paid by the Borrower for the account of such Defaulting Lender that is a Lender
under this Agreement (in each case whether on account of principal, interest,
fees, indemnity or other amounts), provided that such termination will not be
deemed to be a waiver or release of any claim the Borrower, the Administrative
Agent, the Issuing Bank, the Swingline Lender or any other Lender may have
against such Defaulting Lender.

 

(b)           If (i) a Bankruptcy Event with respect to a parent entity of any
Revolving Lender shall occur following the Effective Date and for so long as
such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a
good faith belief that any Revolving Lender has defaulted in fulfilling its
obligations under one or more other agreements in which such Revolving Lender
commits to extend credit, the Swingline Lender shall not be required to fund any
Swingline Loan and the Issuing Bank shall not be required to issue, amend or
increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank,
as the case may be, shall have entered into arrangements with the Borrower or
such

 

58

--------------------------------------------------------------------------------

 

Revolving Lender, satisfactory to the Swingline Lender or the Issuing Bank, as
the case may be, to defease any risk to it in respect of such Lender hereunder.

 

(c)           If the Administrative Agent, the Borrower, the Swingline Lender
and the Issuing Bank each agrees that a Revolving Lender that is a Defaulting
Lender has adequately remedied all matters that caused such Revolving Lender to
be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the
Revolving Lenders shall be readjusted to reflect the inclusion of such Lender’s
Revolving Commitment and on such date such Revolving Lender shall purchase at
par such of the Revolving Loans of the other Revolving Lenders as the
Administrative Agent shall determine may be necessary in order for such
Revolving Lender to hold Revolving Loans in accordance with its Applicable
Percentage (whereupon such Revolving Lender shall cease to be a Defaulting
Lender).

 

ARTICLE III

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders as of the Effective Date and
(except as to representations and warranties made as of a certain date) as of
each date representations and warranties are deemed to be made under
Section 4.02 of this Agreement that:

 

SECTION 3.01.        Organization; Powers; Subsidiaries. Each of the Borrower
and the Restricted Subsidiaries is duly organized, validly existing and in good
standing (to the extent such concept is applicable in the relevant jurisdiction)
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing (to the extent such concept is applicable) in, every
jurisdiction where such qualification is required. Schedule 3.01 hereto
identifies each Subsidiary on the Effective Date, if such Subsidiary is a
Restricted Subsidiary, an Unrestricted Subsidiary or a Specified Subsidiary, the
jurisdiction of its incorporation or organization, the percentage of issued and
outstanding shares of its capital stock or other equity interests owned by the
Borrower and the other Subsidiaries. All of the outstanding Equity Interests, to
the extent owned by the Borrower or any Restricted Subsidiary, of each
Subsidiary are validly issued and outstanding and fully paid and nonassessable
and all Equity Interests indicated on Schedule 3.01 as owned by the Borrower or
another Restricted Subsidiary were owned, beneficially and of record, by the
Borrower or any Restricted Subsidiary on the Effective Date free and clear of
all Liens, other than Liens permitted under Section 6.02. As of the Effective
Date, there were no outstanding commitments or other obligations of the Borrower
or any Restricted Subsidiary to issue, and no options, warrants or other rights
of any Person to acquire, any Equity Interests of any Subsidiary, except as
disclosed on Schedule 3.01.

 

SECTION 3.02.        Authorization; Enforceability. The Transactions are within
each Loan Party’s corporate, limited liability company or partnership powers and
have been duly authorized by all necessary corporate or other organizational
and, if required, equityholder action on the part of such Loan Party and its
equityholders. The Loan Documents have been duly executed and delivered by the
Loan Parties party thereto and constitute a legal, valid and binding obligation
of the Loan Parties party thereto, enforceable against such Loan Parties in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

 

SECTION 3.03.        Governmental Approvals; No Conflicts. The execution and
delivery by each Loan Party of, and the performance by each Loan Party of its
obligations under, each Loan Document to which it is a party, extensions of
credit hereunder, and the use of proceeds of the extensions of credit

 

59

--------------------------------------------------------------------------------

 

hereunder (a) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except for (i) filings
necessary to perfect or maintain the perfection of the Liens on the Collateral
granted by the Loan Parties in favor of the Administrative Agent, (ii) the
approvals, consents, registrations, actions and filings which have been duly
obtained, taken, given or made and are in full force and effect and (iii) those
approvals, consents, registrations or other actions or filings, the failure of
which to obtain or make would not reasonably be expected to have a Material
Adverse Effect, (b) will not violate (i) any applicable law or regulation or
order of any Governmental Authority or (ii) the charter, by-laws or other
organizational documents of any Loan Party, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon any Loan
Party or its assets, or give rise to a right thereunder to require any payment
to be made by any Loan Party, and (d) will not result in the creation or
imposition of any Lien on any material asset of any Loan Party (other than
pursuant to the Loan Documents and Liens permitted by Section 6.02); except with
respect to any violation or default referred to in clause (b)(i) or (c) above,
to the extent that such violation or default would not reasonably be expected to
have a Material Adverse Effect.

 

SECTION 3.04.        Financial Statements; Financial Condition; No Material
Adverse Change.

 

(a)           The Borrower has heretofore furnished to the Lenders the
consolidated balance sheet and statements of earnings, stockholders equity and
cash flows of the Borrower as of and for the years ended December 31, 2014 and
December 31, 2013 reported on by KPMG LLP, independent public accountants, which
financial statements present fairly, in all material respects, the consolidated
financial position and results of operations and cash flows of the Borrower as
of such dates and for such periods in accordance with GAAP.

 

(b)           Since December 31, 2014, no event, circumstance or condition has
occurred or exists that, either individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.05.        Title to Real Property. Each Loan Party has title to, or
valid leasehold interests in, all its material real and personal Property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes and except where the failure
to have such title or interest would not reasonably be expected to have a
Material Adverse Effect. There are no Liens on any of the real or personal
properties owned by the Borrower or any Restricted Subsidiary except for Liens
permitted by Section 6.02.

 

SECTION 3.06.        Litigation and Environmental Matters.

 

(a)           Except as disclosed on Schedule 3.06(a) hereto, there are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Restricted Subsidiaries as to
which there is a reasonable possibility of determination adverse to the Borrower
or such Subsidiaries and that, if determined adversely, would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect. There are no labor controversies pending against or, to the knowledge of
the Borrower, threatened against or affecting the Borrower or any of its
Restricted Subsidiaries which would reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect.

 

(b)           Except with respect to any matters that, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Restricted Subsidiaries (i) has
failed to comply with any applicable Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (ii)

 

60

--------------------------------------------------------------------------------

 

has become subject to any Environmental Liability, (iii) has received notice of
any claim with respect to any Environmental Liability or (iv) knows of any basis
for any Environmental Liability.

 

SECTION 3.07.        Compliance with Laws and Agreements. Each of the Borrower
and its Restricted Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
agreements and other instruments (excluding agreements governing Indebtedness)
binding upon it or its property, except where the failure to do so, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 3.08.        Investment Company Status. Neither the Borrower nor any of
its Restricted Subsidiaries is required to register as an “investment company”
as defined in the Investment Company Act of 1940.

 

SECTION 3.09.        Taxes. The Borrower and each of its Restricted Subsidiaries
has timely filed or caused to be filed (taking into account extensions) all Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes levied or imposed upon them or their Properties, income or assets
otherwise due and payable (including in its capacity as a withholding agent),
except, in each case, (a) Taxes that are being contested in good faith by
appropriate proceedings that stay the enforcement of the tax in question and for
which the Borrower or such Restricted Subsidiary, as applicable, has set aside
on its books reserves to the extent required by GAAP or (b) to the extent that
the failure to make such filing or payment would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect. There
is no current, proposed or, to the Borrower’s knowledge any pending, Tax
assessment, deficiency or other claim against the Borrower or any of its
Restricted Subsidiaries except (i) those being actively contested by the
Borrower or such Restricted Subsidiary in good faith and by appropriate
proceedings that stay the enforcement of the tax in question and for which
adequate reserves have been provided in accordance with GAAP or (ii) those that
would not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.

 

SECTION 3.10.        Solvency. As of the Effective Date and after giving effect
to the Transactions, the Loan Parties, on a consolidated basis, are Solvent.

 

SECTION 3.11.        Labor Matters. Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, (a) there are no
strikes or other labor disputes against the Borrower or any Restricted
Subsidiary pending or, to the knowledge of the Borrower, threatened; (b) hours
worked by and payment made to employees of the Borrower and its Restricted
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Laws dealing with such matters; and (c) all payments due from
the Borrower and its Restricted Subsidiaries on account of employee health and
welfare insurance have been paid or accrued as a liability on the books of the
relevant party. 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 Restricted
Subsidiary is bound, except as would not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 3.12.        Disclosure. None of the reports, financial statements,
certificates or other written information (excluding any financial projections)
furnished by the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder, when
taken as a whole, contains as of the date of such statement, information,
document or certificate was so furnished any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading. The projections contained in the materials referenced above have
been prepared in good faith based upon assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed

 

61

--------------------------------------------------------------------------------

 

as fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein by
a material amount.

 

SECTION 3.13.        Federal Reserve Regulations. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations T, U
and X. Neither the Borrower nor any of its Restricted 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 (as defined in
Regulation U).

 

SECTION 3.14.        Security Interests. The provisions of each Collateral
Document are (or, at the time delivered, will be) effective to create legal and
valid Liens on all the Collateral in respect of which and to the extent that
such Collateral Document purports to create Liens in favor of the Administrative
Agent, for the benefit of the Secured Parties; and upon the proper filing of UCC
financing statements, the proper filing of Mortgages with respect to Material
Real Properties, the proper filing of all recordings with the United States
Patent and Trademark Office and the United States Copyright Office and the
taking of all other actions to be taken pursuant to the terms of the Collateral
Documents, such Liens constitute perfected and continuing Liens on the
Collateral, securing the Obligations, enforceable against the applicable Loan
Party and all third parties to the extent required by the Collateral Documents,
in each case, subject to no other Liens other than Permitted Liens.

 

SECTION 3.15.        USA PATRIOT Act, Etc.

 

(a)           The Borrower and each of its Restricted Subsidiaries is in
compliance, in all material respects, with (i) the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto and (ii) the
Patriot Act. No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.

 

(b)           The Borrower, its Subsidiaries, their respective directors,
officers, employees and agents are in compliance with Anti-Corruption Laws and
applicable Sanctions, in each case, in all material respects. None of (a) the
Borrower, any Subsidiary or any of their respective directors, officers or
employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or
any Subsidiary that will act in any capacity in connection with or benefit from
the credit facility established hereby, is a Sanctioned Person. No Loan or
Letter of Credit, use of proceeds or other transaction contemplated by the
Credit Agreement will violate Anti-Corruption Laws or applicable Sanctions. The
Borrower will not, directly or indirectly, use the proceeds of any Loans or
Letters of Credit, or lend, contribute or otherwise make available such proceeds
to any Person, (i) to fund any activities or business of or with any Person, or
in any country or territory, that, at the time of such funding, is, or whose
government is, the subject of Sanctions, or (ii) in any other manner that would
result in a violation of Sanctions by any Person.

 

SECTION 3.16.        ERISA. Except for those that would not, individually or in
the aggregate, have a Material Adverse Effect, no ERISA Event has occurred or is
reasonably expected to occur.

 

SECTION 3.17.        No Default. No Default has occurred and is continuing or
would result from any credit extension under this Agreement or from the
application of the proceeds therefrom.

 

62

--------------------------------------------------------------------------------

 

SECTION 3.18.        Copyrights, Trademarks and Other Rights.

 

(a)           The items of Product listed on Schedule 3.18(a) hereto comprise
all of the Product in which any Loan Party has any ownership right, title or
interest (either directly, through a joint venture or partnership or license or
otherwise) as of the Effective Date. The existing U.S. copyright registration
number (or if not yet obtained, the registration status) for each of the items
of Product set forth on Schedule 3.18(a) for which any Loan Party owns the
underlying copyright or an interest in copyright are as set forth on Schedule
3.18(a). Schedule 3.18(a) also identifies the location of the Physical Materials
related to each item of Product owned by any Loan Party or to which any Loan
Party has rights of access as of the Effective Date. To each Loan Party’s
knowledge, all items of Product and all component parts thereof do not and will
not (i) violate or infringe upon any copyright, right of privacy, trademark,
patent, trade name, performing right or any literary, dramatic, musical,
artistic, personal, private, several, care, contract, property or copyright
right or any other right of any Person, in any material respect or (ii) contain
any libelous or slanderous material. There is no claim, suit, action or
proceeding pending or, to the knowledge of the Borrower, threatened against any
Loan Party that involves a claim of infringement of, or a material claim
contesting the ownership, validity or any right of any Loan Party in and to, any
copyright or other proprietary right with respect to any item of Product listed
on Schedule 3.18(a), and no Loan Party has any knowledge of any existing
infringement by any other Person of any copyright or other proprietary rights
held by any Loan Party with respect to any item of Product listed on Schedule
3.18(a).

 

(b)           Schedule 10(a) of the Perfection Certificate (i) lists all the
trademarks registered and applied for by any Loan Party as of the Effective Date
and identifies the Loan Party in whose name each such trademark is registered or
applied for, (ii) specifies as to each, the jurisdictions in which such
trademark has been issued or registered (or, if applicable, in which an
application for such issuance or registration has been filed), including the
respective registration or application numbers and applicable dates of
registration or application and (iii) specifies as to each, as applicable,
material licenses, sublicenses and other material agreements (other than any
agreements which relate to the exploitation of an item of Product), to which any
Loan Party is a party and pursuant to which any Person, other than a Loan Party,
is authorized to use such trademark.

 

(c)           All applications and registrations for all copyrights, copyright
licenses and other intellectual property licenses, trademarks, service marks,
trade names and service names held by any Loan Party are valid and in full force
and effect and are not subject to the payment of any Taxes or maintenance fees
or the taking of any other actions by the Loan Parties (other than standard
renewals) to maintain their validity or effectiveness.

 

(d)           Each of the Borrower and its Restricted Subsidiaries owns, or is
licensed or possesses the right to use, all trademarks, tradenames, copyrights,
patents and other intellectual property material to the operation of the
business of the Borrower and the Restricted Subsidiaries, taken as a whole, and,
to the knowledge of the Borrower, the use thereof by the Borrower and its
Restricted Subsidiaries does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.19.        Fictitious Names. None of the Loan Parties has done
business, is doing business or intends to do business other than under its full
corporate or company name (as applicable), including, without limitation, under
any tradename or other doing business name other than as listed on Schedule
3.19.

 

63

--------------------------------------------------------------------------------

 

ARTICLE IV

 

Conditions

 

SECTION 4.01.        Initial Credit Events. The obligations of the Lenders to
make Loans and of the Issuing Banks to issue Letters of Credit on the Effective
Date is subject to satisfaction of each of the following conditions on the
Effective Date:

 

(a)           The Administrative Agent (or its counsel) shall have received from
each party hereto a counterpart of this Agreement signed on behalf of such
party.

 

(b)           The Administrative Agent (or its counsel) shall have received from
each Loan Party a counterpart of the Security Agreement and, except in the case
of the Borrower, the Guaranty signed on behalf of such Loan Party, together
with:

 

(i)            (x) certificates representing all the outstanding Equity
Interests of each Subsidiary owned by any Loan Party (to the extent represented
by certificates) as of the Effective Date (except that certificates representing
shares of Voting Stock of a Foreign Subsidiary may be limited to 65% of the
outstanding shares of Voting Stock of such Foreign Subsidiary) and
(y) promissory notes evidencing all intercompany Indebtedness owed to any Loan
Party by the Borrower or any Subsidiary as of the Effective Date, in each case,
to the extent pledged and required to be delivered by the Security Agreement,
stock powers and instruments of transfer, endorsed in blank, with respect to
such stock certificates and promissory notes;

 

(ii)           all documents and instruments, including Uniform Commercial Code
financing statements and filings with the United States Patent and Trademark
Office and United States Copyright Office, required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Security Agreement;

 

(iii)          certified copies of UCC, United States Patent and Trademark
Office and United States Copyright Office, tax and judgment lien searches,
bankruptcy and pending lawsuit searches or equivalent reports or searches, each
of a recent date listing all effective financing statements, lien notices or
comparable documents that name any Loan Party as debtor and that are filed in
those state and county jurisdictions in which any Loan Party is organized or
maintains its principal place of business and such other searches that are
required by the Perfection Certificate or that the Administrative Agent deems
necessary or appropriate, and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements are
Liens listed on Schedule 6.02 or have been released;

 

(iv)          all other certificates, agreements, including Control Agreements,
access agreements or instruments necessary to perfect the Liens intended to be
created under the Security Agreement in all Chattel Paper, all Instruments, all
Deposit Accounts and all Investment Property of each Loan Party (as each such
term is defined in and to the extent required by the Security Agreement); and

 

(v)           a completed Perfection Certificate dated the Effective Date and
signed by an executive officer or Financial Officer of the Borrower, together
with all attachments contemplated thereby.

 

64

--------------------------------------------------------------------------------

 

(c)           The Administrative Agent shall have received the executed legal
opinions of (i) Holland & Hart LLP, counsel to the Borrower, and (ii) Squire
Patton Boggs (US) LLP, special New York counsel for Borrower, in each case, in
form reasonably satisfactory to the Administrative Agent. The Borrower hereby
requests such counsel to deliver such opinions.

 

(d)           The Administrative Agent shall have received such customary
closing documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good standing
of the Loan Parties, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the Transactions,
all in form and substance reasonably satisfactory to the Administrative Agent
and its counsel.

 

(e)           The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming that the representations and conditions set
forth in Section 4.02 are satisfied on the Effective Date.

 

(f)            The Administrative Agent shall have received evidence reasonably
satisfactory to it that substantially concurrently with the making of the
initial Loans hereunder (i) all Indebtedness under the Existing Credit Agreement
will be repaid, all commitments thereunder will be terminated and all Liens
securing such Indebtedness shall have been released and (ii) the Borrower (or
the trustee for the holders of the Senior Notes, on the Borrower’s behalf) shall
have given notice to redeem all of the Senior Notes to the holders thereof.

 

(g)           The Administrative Agent shall have received a certificate
attesting to the Solvency of the Borrower and its Subsidiaries (taken as a
whole) on the Effective Date after giving effect to the Transactions, from a
Financial Officer of the Borrower.

 

(h)           The Lenders shall have received on or prior to the Effective Date
all documentation and other information reasonably requested in writing by them
no later than five (5) Business Days prior to the Effective Date in order to
allow the Lenders to comply with the Patriot Act.

 

(i)            The Administrative Agent and the Arrangers shall have received,
or will receive from the disbursement of the initial Loans, all fees and other
amounts due and payable on or prior to the Effective Date that have been
invoiced to the Borrower, including reimbursement or payment of all reasonable
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder that have been invoiced to Borrower no later than two (2) days before
the date of the initial Loans, pursuant to invoices that are sufficiently
detailed to describe the services provided and amounts owed in connection with
such services.

 

(j)            The Administrative Agent shall have received a fully executed
copy of the Hallmark Trademark License Agreement in the form provided to the
Administrative Agent prior to the Effective Date.

 

SECTION 4.02.        Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing (but not a conversion or continuation of
Loans) (including, for the avoidance of doubt, the Borrowing of the Delayed Term
Loans), and of the Issuing Banks to issue, amend, renew or extend any Letter of
Credit (including the initial Loans made on the Effective Date) is subject to
the satisfaction of the following conditions:

 

(a)                           The representations and warranties of the Loan
Parties set forth in this Agreement and the other Loan Documents shall be true
and correct in all material respects (except to the extent any such
representation and warranty is qualified by materiality or reference to Material

 

65

--------------------------------------------------------------------------------

 

Adverse Effect, in which case, such representation and warranty shall be true
and correct in all respects) on and as of the date of such Borrowing or the date
of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except that where any representation and warranty is expressly made
as of a specific earlier date, such representation and warranty shall be true
and correct in all material respects (except to the extent any such
representation and warranty is qualified by materiality or reference to Material
Adverse Effect, in which case, such representation and warranty shall be true
and correct in all respects) as of any such earlier date.

 

(b)           At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.

 

(c)           The Borrower shall have provided any required notice of such
Borrowing or issuance, amendment, renewal or extension pursuant to Section 2.03,
2.04 or 2.05, as applicable.

 

Each Borrowing (other than any conversion or continuation of any Borrowing) and
each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date
thereof as to the matters specified in paragraphs (a) and (b) of this
Section 4.02.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

 

SECTION 5.01.        Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent for distribution to the Lenders:

 

(a)           as soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Borrower, commencing with the fiscal
year ending December 31, 2015, the audited consolidated balance sheet of the
Borrower and its Subsidiaries and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by KPMG LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial position and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;

 

(b)           as soon as available, but in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year of
the Borrower, commencing with the fiscal quarter ending June 30, 2015, the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries and
related statements of operations and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of the Borrower’s Financial Officers as
presenting fairly in all material respects the financial position and results of
operations

 

66

--------------------------------------------------------------------------------

 

of the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP, subject to normal year-end audit adjustments and the absence of footnotes;

 

(c)           concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate substantially in form and substance
reasonably acceptable to Administrative Agent and executed by a Financial
Officer of the Borrower (x) certifying as to whether, to the knowledge of such
Financial Officer after reasonable inquiry, a Default has occurred and is
continuing and, if so, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (y) setting forth reasonably detailed
calculations demonstrating compliance with Section 6.09 as of the last day of
the period covered by such financial statements and (z) in the case of the
financial statements referred to in clause (a) only, setting forth a reasonably
detailed calculation of the Excess Cash Flow for the ECF Period covered by such
financial statements;

 

(d)           concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any failure to comply with
Section 6.09 (which certificate may be limited to the extent required by
accounting rules or guidelines or by such accounting firm’s professional
standards and customs of the profession);

 

(e)           promptly after the same become publicly available, copies of all
annual, quarterly and current reports and proxy statements filed by the Borrower
or any Subsidiary with the SEC, or any Governmental Authority succeeding to any
or all of the functions of the SEC;

 

(f)            promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender (through the Administrative Agent) may
reasonably request;

 

(g)           not later than ninety (90) days after the start of each fiscal
year of the Borrower, (i) the annual business plan of the Borrower and its
Subsidiaries for such fiscal year approved by the board of directors of the
Borrower, (ii) forecasts prepared by management of the Borrower for each fiscal
quarter in such fiscal year, (iii) a projected year-end consolidated balance
sheet and income statement and statement of cash flows for the Borrower and
(iv) a statement of the key assumptions (as determined in good faith by the
Borrower) on which such forecasts are based;

 

(h)           simultaneously with the delivery of each set of financial
statements referred to in Sections 5.01(a) and 5.01(b) above, the related
consolidating financial statements reflecting the adjustments necessary to
eliminate the accounts of Unrestricted Subsidiaries (if any) from such
consolidated financial statements; and

 

(i)            concurrently with any delivery of each set of financial
statements referred to in Sections 5.01(a) and 5.01(b) above, a supplement to
the Perfection Certificate indicating any changes to the information required to
be set forth therein or confirming that there has been no change in such
information since the Effective Date or the date of the last delivery thereof.

 

Financial statements and other information required to be delivered pursuant to
Sections 5.01(a), 5.01(b) and 5.01(e) shall be deemed to have been delivered if
such statements and information shall have been posted by the Borrower on its
website or shall have been posted on IntraLinks or similar site to which all of
the Lenders have been granted access or are publicly available on the SEC’s
website pursuant to the EDGAR system.

 

67

--------------------------------------------------------------------------------

 

The Borrower acknowledges that (a) the Administrative Agent will make available
information to the Lenders by posting such information on IntraLinks or similar
electronic means and (b) certain of the Lenders may be “public side” Lenders
(i.e., Lenders that do not wish to receive material non-public information with
respect to the Borrower, its Subsidiaries or their securities) (each, a “Public
Lender”). The Borrower agrees to identify that portion of the information to be
provided to Public Lenders hereunder as “PUBLIC” and that such information will
not contain material non-public information relating to the Borrower or its
Subsidiaries (or any of their securities).

 

SECTION 5.02.        Notices of Material Events. The Borrower will furnish to
the Administrative Agent (for prompt notification to each Lender) prompt (but in
any event within five (5) Business Days) written notice after any Financial
Officer of the Borrower obtains knowledge of the following:

 

(a)           the occurrence of any continuing Default;

 

(b)           the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or, to the knowledge of
the Borrower, affecting the Borrower, or any Restricted Subsidiary, the claim of
which is likely to be determined adversely to the Borrower or such Restricted
Subsidiary and if adversely determined, would reasonably be expected to result
in a Material Adverse Effect;

 

(c)           the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, would reasonably be expected to result in
a Material Adverse Effect;

 

(d)           any other event that has had a Material Adverse Effect;

 

(e)           any proposed material amendment to any material agreements that
are part of the Collateral that would reasonably be anticipated to negatively
impact the value of the Collateral in any material respect; and

 

(f)            any default, amendment or waiver of, or breach under, the
Hallmark Trademark License Agreement.

 

Each notice delivered under this Section 5.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03.        Existence; Conduct of Business. The Borrower will, and will
cause each of its Material Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect (i) its legal
existence, and (ii) the rights, licenses, permits, privileges and franchises
material to the conduct of its business, except, in the case of the preceding
clause (ii), to the extent that the failure to do so would not reasonably be
expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any transaction permitted under Section 6.03 or 6.11.

 

SECTION 5.04.        Payment of Obligations. The Borrower will, and will cause
each of its Restricted Subsidiaries to, pay its Obligations (including Taxes
imposed upon it or any of its properties or assets or in respect of any income,
business or franchises) that, if not paid, would result in a Material Adverse
Effect before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Restricted Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with

 

68

--------------------------------------------------------------------------------

 

GAAP and (c) the failure to make payment pending such contest would not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.05.        Maintenance of Properties; Insurance. The Borrower will,
and will cause each of its Restricted Subsidiaries to, (a) keep and maintain all
Property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted and casualty or condemnation
excepted, except if the failure to do so would not reasonably be expected to
have a Material Adverse Effect, and (b) maintain, with financially sound and
reputable insurance companies or through self-insurance, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations. All property and liability insurance relating to Collateral,
including insurance requested in connection with any after-acquired Material
Real Property, if any, which shall be subject to a Mortgage delivered after the
Effective Date pursuant to Section 5.09(b), shall, as reasonably requested by
the Administrative Agent, name the Administrative Agent as mortgagee (in the
case of property insurance), if applicable, or additional insured on behalf of
the Secured Parties (in the case of liability insurance) or loss payee (in the
case of property insurance), as applicable. If any portion of any Mortgaged
Property is at any time located in an area identified by the Federal Emergency
Management Agency (or any successor agency) as a Special Flood Hazard Area with
respect to which flood insurance is made available under the National Flood
Insurance Act of 1968 (as now or hereafter in effect or any successor act
thereto), then the Borrower shall, or shall cause each Loan Party to
(i) maintain, or cause to be maintained, with a financially sound and reputable
insurer, flood insurance in an amount and otherwise sufficient to comply with
all applicable rules and regulations promulgated pursuant to the Flood Insurance
Laws and (ii) deliver to the Administrative Agent evidence of such compliance in
form and substance reasonably acceptable to the Administrative Agent.

 

SECTION 5.06.        Inspection Rights. The Borrower will, and will cause each
of its Restricted Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and use
commercially reasonable efforts to make its independent accountants available to
discuss the affairs, finances and condition of the Borrower, all during regular
business hours and as often as reasonably requested and in all cases subject to
applicable Law and the terms of applicable confidentiality agreements; provided
that (i) the Lenders will conduct such requests for visits and inspections
through the Administrative Agent and (ii) unless an Event of Default has
occurred and is continuing, (x) such visits and inspections can occur no more
frequently than twice per year and (y) the costs of such visits of any Lender
shall be borne by such Lender.

 

SECTION 5.07.        Compliance with Laws; Compliance with Agreements. The
Borrower will, and will cause each of its Restricted Subsidiaries to, (i) comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property (including without limitation Environmental
Laws) and (ii) perform in all material respects its obligations under material
agreements (other than in respect of Indebtedness) to which it is a party, in
each case except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.08.        Use of Proceeds and Letters of Credit. The proceeds of the
Loans made on the Effective Date will be used solely to repay borrowings under
the Existing Credit Agreement and to pay fees, commissions and expenses in
connection with the Transactions. The proceeds of the Delayed Term Loans will be
used solely to fund the redemption (or earlier satisfaction and discharge) of
the Senior Notes. The Loans and other credit extensions made following the
Effective Date will be used for general corporate purposes (including
acquisitions, other investments and working capital) of the Borrower and its
Subsidiaries. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.

 

69

--------------------------------------------------------------------------------

 

SECTION 5.09.        Further Assurances; Additional Security and Guarantees.

 

(a)           The Borrower shall, and shall cause each applicable Guarantor to,
at the Loan Parties’ expense, comply with the requirements of the Collateral
Documents and promptly take all action reasonably requested by the
Administrative Agent to carry out more effectively the purposes of the
Collateral Documents or that the Administrative Agent deems reasonably necessary
or desirable for the validity, perfection and priority of the Liens on the
Collateral covered thereby subject to no other Liens except as permitted by the
applicable Collateral Document, or use its commercially reasonable efforts to
obtain any consents or waivers as may be necessary or appropriate in connection
therewith.

 

(b)           Upon (i) the formation or acquisition of any Subsidiary by the
Borrower or any Guarantor or upon any Restricted Subsidiary becoming a Specified
Subsidiary (and, in the case of clause (C) below, upon the acquisition of any
Material Real Property by any Loan Party) or (ii) the designation in accordance
with Section 6.15 of any existing Unrestricted Subsidiary as a Restricted
Subsidiary, the Borrower shall, and shall cause each applicable Guarantor to, at
the Borrower’s expense within thirty (30) days after such formation or
acquisition or such longer period as may be reasonably acceptable to the
Administrative Agent:

 

(A)          deliver all certificated Equity Interests of such Subsidiary held
by any Loan Party that are required to be delivered pursuant to the Collateral
Documents to the Administrative Agent together with appropriately completed
stock powers or other instruments of transfer executed in blank by a duly
authorized officer of such Loan Party and all intercompany notes owing from such
Subsidiary to any Loan Party required to be delivered pursuant to the Collateral
Documents together with instruments of transfer executed and delivered in blank
by a duly authorized officer of such Loan Party;

 

(B)          cause each such Specified Subsidiary to execute a supplement to the
Guaranty and the Security Agreement and take all actions reasonably requested by
the Administrative Agent in order to cause the Lien created by the Security
Agreement to be duly perfected to the extent required by such agreement in
accordance with all applicable requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent;

 

(C)          if any Loan Party has acquired any Material Real Property, cause
the applicable Loan Party to deliver to the Administrative Agent to the extent
reasonably requested by the Administrative Agent (i) counterparts of a Mortgage
with respect to such Material Real Property, duly executed and delivered by the
record owner of such property, (ii) a policy or policies of title insurance
issued by a nationally recognized title insurance company insuring the Lien of
each such Mortgage as a valid Lien on the property described therein, together
with such endorsements as the Administrative Agent may reasonably request and in
an amount reasonably satisfactory to the Administrative Agent and (iii) such
existing surveys, if any, UCC-1 fixture filings, existing appraisals, if any,
legal opinions, “life-of-loan” flood hazard determinations, evidence of
insurance, affidavits and other documents as the Administrative Agent may
reasonably request with respect to any such Material Real Property; and

 

(D)          if requested by the Administrative Agent, deliver a customary
opinion of counsel to the Loan Parties with respect to the guarantee and/or
security provided by the applicable Loan Party.

 

SECTION 5.10.        Quarterly Conference Calls. At a time mutually agreed with
the Administrative Agent that is promptly after the delivery of financial
statements required by Sections 5.01(a) and (b)

 

70

--------------------------------------------------------------------------------

 

for each fiscal quarter or fiscal year, as applicable, of the Borrower
(commencing with the fiscal quarter ending June 30, 2015), the Borrower will
cause appropriate financial officers of the Borrower to participate in a
conference call for Lenders to discuss the financial condition and results of
operations of the Borrower and its Subsidiaries for the most recently-ended
period for which financial statements have been delivered; provided the Borrower
may satisfy this requirement through the quarterly earnings conference call.

 

SECTION 5.11.        Post Closing Covenants. The Loan Parties shall execute and
deliver the documents and complete the tasks set forth on Schedule 5.11, in each
case within the time limits specified on such schedule subject to extension by
the Administrative Agent in its sole discretion.

 

ARTICLE VI

 

Negative Covenants

 

From the Effective Date until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

 

SECTION 6.01.        Indebtedness. The Borrower will not create, incur, assume
or permit to exist, and will not permit any of its Restricted Subsidiaries to
create, incur, assume or permit to exist, any Indebtedness, except:

 

(a)           Indebtedness created under the Loan Documents;

 

(b)           Indebtedness existing on the Effective Date and set forth in
Schedule 6.01 and Permitted Refinancing Indebtedness in respect of Indebtedness
permitted by this clause (b) ; provided that (i) the Senior Notes shall be
redeemed on or prior to the date that is 45 days after the Effective Date and no
Permitted Refinancing Indebtedness of the Senior Notes shall be permitted and
(ii) the letter of credit issued under the Existing Credit Agreement referred to
therein shall be terminated on or prior to the date that is 45 days after the
Effective Date and no Permitted Refinancing Indebtedness of such letter of
credit shall be permitted;

 

(c)           Indebtedness permitted by clauses (c) and (f) of Section 6.05;

 

(d)           [Reserved];

 

(e)           Indebtedness incurred to finance the acquisition, lease,
construction, repair, replacement, maintenance, installation or improvement of
any fixed or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to the acquisition thereof, and any
Permitted Refinancing Indebtedness in respect of Indebtedness permitted by this
clause (e); provided that (i) such Indebtedness (other than Permitted
Refinancing Indebtedness permitted above in this clause (e)) is incurred prior
to or within two hundred seventy (270) days after such acquisition or the
completion of such construction, repair, replacement or improvement and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (e) shall
not exceed $25,000,000 at any time outstanding;

 

(f)            Indebtedness in respect of workers compensation claims, health,
disability or other employee benefits or property, casualty or liability
insurance or self-insurance in the ordinary course of business;

 

71

--------------------------------------------------------------------------------

 

(g)           [Reserved];

 

(h)           Indebtedness of Restricted Subsidiaries which are not Guarantors,
provided that Indebtedness shall be permitted to be incurred pursuant to this
clause (h) only if at the time such Indebtedness is incurred the aggregate
principal amount of Indebtedness outstanding pursuant to this clause (h) at such
time (including such Indebtedness) would not exceed the greater of
(x) $5,000,000 and (y) 0.75% of Consolidated Total Assets (as of the most
recently ended fiscal quarter of the Borrower for which financial statements
have been delivered pursuant to Section 5.01(a) or (b));

 

(i)            Indebtedness under Swap Agreements other than those entered into
for speculative purposes;

 

(j)            Indebtedness in respect of bid, performance, surety, stay,
customs, appeal or replevin bonds or performance and completion guarantees and
similar obligations issued or incurred in the ordinary course of business;

 

(k)           Indebtedness in respect of judgments, decrees, attachments or
awards that do not constitute an Event of Default under clause (k) of
Section 7.01;

 

(l)            Indebtedness consisting of bona fide purchase price adjustments,
earn-outs, indemnification obligations, obligations under deferred compensation
or similar arrangements and similar items incurred in connection with
acquisitions and asset sales not prohibited by Section 6.05 or 6.11;

 

(m)          Indebtedness in the form of (x) guarantees of loans and advances to
officers, directors, consultants and employees, in an aggregate amount not to
exceed $5,000,000 at any one time outstanding, and (y) reimbursements owed to
officers, directors, consultants and employees;

 

(n)           Permitted Junior Lien Debt, so long as (x) the Applicable
Transaction Conditions are satisfied at the time of incurrence thereof, (y) the
Borrower shall have given notice to the Administrative Agent at least five
(5) Business Days (or such shorter period agreed to by the Administrative Agent)
prior to the proposed date of incurrence thereof and (z) unless otherwise agreed
to by the Administrative Agent, prior to the incurrence of any such
Indebtedness, the Borrower shall have recorded with the United States Copyright
Office, in accordance with the Security Agreement, all Filmed Entertainment
Licenses at such time and the Administrative Agent’s security interest therein;

 

(o)           Cash Management Obligations and other Indebtedness in respect of
card obligations, netting services, overdraft protections, cash management
services and similar arrangements, in each case, in the ordinary course of
business;

 

(p)           Indebtedness consisting of (x) the financing of insurance premiums
with the providers of such insurance or their affiliates or (y) take-or-pay
obligations contained in supply arrangements, in each case, in the ordinary
course of business;

 

(q)           Indebtedness supported by a Letter of Credit, in a principal
amount not to exceed the face amount of such Letter of Credit;

 

(r)            Permitted Debt Securities, so long as (x) the Applicable
Transaction Conditions are satisfied at the time of incurrence thereof, (y) the
Borrower shall have given notice to the Administrative Agent at least five
(5) Business Days (or such shorter period agreed to by the Administrative Agent)
prior to the proposed date of incurrence thereof and (z) unless otherwise agreed
to by the Administrative Agent, prior to the incurrence of any such
Indebtedness, the Borrower shall have recorded with

 

72

--------------------------------------------------------------------------------

 

the United States Copyright Office, in accordance with the Security Agreement,
all Filmed Entertainment Licenses at such time and the Administrative Agent’s
security interest therein;

 

(s)            other Indebtedness of the Loan Parties; provided that
Indebtedness shall be permitted to be incurred pursuant to this clause (s) only
if at the time such Indebtedness is incurred the aggregate principal amount of
Indebtedness outstanding pursuant to this clause (s) at such time (including
such Indebtedness) would not exceed $30,000,000; and

 

(t)            all premiums (if any), interest (including post-petition
interest), fees, expenses, charges and additional or contingent interest on
obligations described in clauses (a) through (s) above.

 

SECTION 6.02.        Liens. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or permit to exist any
Lien on any Property now owned or hereafter acquired by it, except
(collectively, the “Permitted Liens”):

 

(a)           Permitted Encumbrances;

 

(b)           Liens pursuant to any Loan Document;

 

(c)           any Lien existing on the Effective Date and set forth in Schedule
6.02 and any modifications, replacements, renewals or extensions thereof;
provided that (i) such Lien shall not apply to any other Property of the
Borrower or any Restricted Subsidiary other than (A) improvements and
after-acquired Property that is affixed or incorporated into the Property
covered by such Lien, and (B) proceeds and products thereof, and (ii) such Lien
shall secure only those obligations which it secures on the Effective Date and
any Permitted Refinancing Indebtedness in respect thereof;

 

(d)           any Lien existing on any Property prior to the acquisition thereof
by the Borrower or any Restricted Subsidiary or existing on any Property of any
Person that becomes a Restricted Subsidiary after the Effective Date prior to
the time such Person becomes a Restricted Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such acquisition
or such Person becoming a Restricted Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other Property of the Borrower or any other
Restricted Subsidiary (other than the proceeds or products thereof and other
than improvements and after-acquired property that is affixed or incorporated
into the Property covered by such Lien) and (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Restricted Subsidiary, as the case may be, and Permitted
Refinancing Indebtedness in respect thereof;

 

(e)           Liens on fixed or capital assets acquired, leased, constructed,
repaired, maintained, replaced, installed or improved by the Borrower or any
Restricted Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby (other than Permitted Refinancing
Indebtedness permitted by clause (e) of Section 6.01) are incurred prior to or
within two hundred seventy (270) days after such acquisition or lease or the
completion of such construction, repair, maintenance or replacement,
installation or improvement, (iii) the Indebtedness secured thereby does not
exceed the cost of acquiring, leasing, constructing, repairing, maintaining,
replacing, installing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other Property of the Borrower or any
Restricted Subsidiary except for accessions to such Property, Property financed
by such Indebtedness and the proceeds and products

 

73

--------------------------------------------------------------------------------

 

thereof; provided, further, that individual financings of equipment provided by
one lender may be cross-collateralized to other financings of equipment provided
by such lender;

 

(f)            rights of setoff and similar arrangements and Liens in respect of
Cash Management Obligations and in favor of depository and securities
intermediaries to secure obligations owed in respect of card obligations or any
overdraft and related liabilities arising from treasury, depository and cash
management services or any automated clearing house transfers of funds and fees
and similar amounts related to bank accounts or securities accounts (including
Liens securing letters of credit, bank guarantees or similar instruments
supporting any of the foregoing);

 

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

 

(h)           (i) Liens on assets of a Restricted Subsidiary which is not a Loan
Party securing Indebtedness of such Restricted Subsidiary pursuant to
Section 6.01(h) and (ii) Liens securing Indebtedness permitted under
Section 6.01(p)(x) and applying only to the proceeds of the insurance policy;

 

(i)            Liens (i) on “earnest money” or similar deposits or other cash
advances in connection with acquisitions permitted by Section 6.05 or
(ii) consisting of an agreement to Dispose of any Property in a Disposition
permitted under Section 6.11;

 

(j)            leases, licenses, subleases or sublicenses granted to others in
the ordinary course of business which do not (i) interfere in any material
respect with the business of the Borrower or any Restricted Subsidiary or
(ii) secure any Indebtedness;

 

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

 

(l)            Liens (i) of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection and (ii) attaching
to commodity trading accounts or other commodities brokerage accounts incurred
in the ordinary course of business, including Liens encumbering reasonable
customary initial deposits and margin deposits;

 

(m)          Liens on property or Equity Interests of any Foreign Subsidiary
that is not a Loan Party (to the extent such Equity Interests do not constitute
Collateral), which Liens secure Indebtedness of such Foreign Subsidiary
permitted under Section 6.01;

 

(n)           Liens arising out of conditional sale, title retention,
consignment or similar arrangements for sale of goods entered into by the
Borrower or any Subsidiary in the ordinary course of business permitted by this
Agreement;

 

(o)           Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 6.05;

 

(p)           rights of setoff relating to purchase orders and other agreements
entered into with customers of the Borrower or any Restricted Subsidiary in the
ordinary course of business;

 

74

--------------------------------------------------------------------------------

 

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

 

(r)            Liens on equipment owned by the Borrower or any Restricted
Subsidiary and located on the premises of any supplier and used in the ordinary
course of business and not securing Indebtedness;

 

(s)            any restriction or encumbrance with respect to the pledge or
transfer of the Equity Interests of a Person that is not a Restricted
Subsidiary;

 

(t)            Liens not otherwise permitted by this Section 6.02, provided that
a Lien shall be permitted to be incurred pursuant to this clause (t) only if at
the time such Lien is incurred the aggregate principal amount of the obligations
secured at such time (including such Lien) by Liens outstanding pursuant to this
clause (t) would not exceed $20,000,000;

 

(u)           Liens on any Property of (i) any Loan Party in favor of any other
Loan Party and (ii) any Restricted Subsidiary that is not a Loan Party in favor
of the Borrower or any other Restricted Subsidiary;

 

(v)           Liens arising from UCC financing statement filings regarding
leases and consignments entered into by the Borrower and its Restricted
Subsidiaries in the ordinary course of business;

 

(w)          deposits made by the Borrower or any Restricted Subsidiary or other
security provided to secure liabilities to insurance carriers under insurance or
self-insurance arrangements in the ordinary course of business;

 

(x)           security given by the Borrower or any Restricted Subsidiary to a
public utility or any municipality or governmental authority when required by
such utility or authority in connection with the operations of that Person in
the ordinary course of business;

 

(y)           Liens in favor of various entertainment industry guilds on motion
picture rights required pursuant to collective bargaining agreements with such
guilds securing residuals and other contingent payment rights in respect of such
motion picture rights; and

 

(z)           Liens securing Permitted Junior Lien Debt;

 

provided that, notwithstanding anything in this Section 6.02 to the contrary, no
Liens (other than Liens permitted under clause (z) of this Section 6.02) shall
be permitted on any copyright licenses held by any Loan Party other than
customary restrictions on the transfer of any such licenses that do not restrict
a pledge of any such license to secure the Obligations and refinancings thereof
(or foreclosure thereon).

 

SECTION 6.03.        Fundamental Changes. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Event of Default shall have occurred and be
continuing:

 

(a)           any Restricted Subsidiary (other than the Borrower) may be merged
or consolidated with or into any Person and any Restricted Subsidiary may be
liquidated or dissolved or

 

75

--------------------------------------------------------------------------------

 

change its legal form, in each case in order to consummate any Investment
otherwise permitted by Section 6.05 or Disposition otherwise permitted by
Section 6.11;

 

(b)           any (i) Loan Party may merge or consolidate with any other Person
in a transaction in which a Loan Party is the surviving Person in such merger or
consolidation; provided that (i) any Investment in connection with this clause
(b) is otherwise permitted by Section 6.05 and (ii) if the Borrower is party to
such merger or consolidation, it shall be the surviving Person or it shall
comply with clause (c) below; and

 

(c)           the Borrower may be consolidated with or merged into any Person;
provided that any Investment in connection therewith is otherwise permitted by
Section 6.05; and provided, further, that, simultaneously with such transaction,
(x) the Person formed by such consolidation or into which the Borrower is merged
shall expressly assume all obligations of the Borrower under the Loan Documents,
(y) the Person formed by such consolidation or into which the Borrower is merged
shall be a corporation organized under the laws of a State in the United States
and shall take all actions as may be required to preserve the enforceability of
the Loan Documents and validity and perfection of the Liens of the Collateral
Documents and (z) the Borrower shall have delivered to the Administrative Agent
an officer’s certificate and an opinion of counsel, each stating that such
merger or consolidation and such supplement to this Agreement or any Collateral
Document comply with this Agreement, confirming the validity and perfection of
security interests in assets of the Borrower and such other matters reasonably
requested by the Administrative Agent.

 

SECTION 6.04.    Restricted Payments. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except

 

(a)           the Borrower or any Restricted Subsidiary may declare and pay
dividends or other distributions with respect to its Equity Interests payable
solely in shares of its Equity Interests (other than Disqualified Equity
Interests) or options to purchase Equity Interests (other than Disqualified
Equity Interests), but, in the case of a Restricted Subsidiary, such dividends
and distributions shall be made on a pro rata basis to all equityholders;

 

(b)           Restricted Subsidiaries may declare and make Restricted Payments
(i) ratably with respect to their Equity Interests or (ii) to the Borrower or
any other Restricted Subsidiary;

 

(c)           the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other equity benefit plans for present or
former officers, directors, consultants or employees of the Borrower and its
Restricted Subsidiaries (i) in existence on the Effective Date and listed on
Schedule 6.04 and (ii) other such plans adopted following the Effective Date in
an aggregate amount pursuant to this subclause (ii) not to exceed $3,000,000 in
any fiscal year (with unused amounts of such base amount available for use in
the next succeeding fiscal year subject to a maximum of $6,000,000 in any
calendar year);

 

(d)           [reserved];

 

(e)           fees and expenses (including franchise or similar taxes) required
to maintain the corporate existence, customary salary, bonus and other benefits
payable to, and indemnities provided on behalf of, officers and employees of
HCC, if applicable, and general corporate overhead expenses of HCC, in each case
to the extent such fees and expenses are attributable to the ownership or
operation of the Borrower, if applicable, and its Restricted Subsidiaries;
provided that for so long as HCC owns no

 

76

--------------------------------------------------------------------------------

 

assets other than Equity Interests in the Borrower, such fees and expenses shall
be deemed for purposes of this clause (e) to be so attributable to such
ownership or operation;

 

(f)            repurchases of Equity Interests in the Borrower or any Restricted
Subsidiary deemed to occur upon exercise of stock options or warrants if such
Equity Interests represent a portion of the exercise price of such options or
warrants;

 

(g)           the Borrower and its Restricted Subsidiaries may make other
Restricted Payments; provided that at the time of such Restricted Payment and
after giving effect thereto (i) the Applicable Transaction Conditions are
satisfied and (ii) on a Pro Forma Basis, (x) the Consolidated Secured Leverage
Ratio would be equal to or less than 2.00 to 1.00, or (y) the Consolidated
Secured Leverage Ratio would be equal to or less than 2.50 to 1.00 but greater
than 2.00 to 1.00; provided that the aggregate amount of Restricted Payments
made pursuant to this clause (y) shall not exceed the Available Amount or
(z) the Consolidated Secured Leverage Ratio would be equal to or less than 2.75
to 1.00 but greater than 2.50 to 1.00; provided that the aggregate amount of
Restricted Payments made pursuant to this clause (z) shall not exceed
$10,000,000;

 

(h)           for so long as the Borrower is a member of a consolidated,
combined or similar income Tax group of which a direct or indirect parent
company of the Borrower is the common parent, the Borrower may make Restricted
Payments in amounts required for such parent company to pay foreign, U.S.
federal, state, and/or local consolidated, combined or similar income Taxes, in
accordance with the Federal Income Tax Sharing Agreement dated March 11, 2003,
and the State Tax Sharing Agreement dated May 9, 2000, each as in effect on the
Effective Date or as thereafter amended in a manner not adverse to the Lenders
in any material respect; and

 

(i)            the Borrower may pay annual dividends not in excess of 6% of Net
Cash Proceeds of any offering of Qualified Equity Interests following the
Effective Date.

 

SECTION 6.05.      Investments. The Borrower will not, and will not allow any of
its Restricted Subsidiaries to make or hold any Investments, except:

 

(a)           Investments by the Borrower or a Restricted Subsidiary in cash and
Cash Equivalents;

 

(b)           loans or advances to officers, directors, consultants and
employees of the Borrower and the Subsidiaries (i) for reasonable and customary
business-related travel, entertainment, relocation and analogous ordinary
business purposes, (ii) in connection with such Person’s purchase of Equity
Interests of the Borrower and (iii) for purposes not described in the foregoing
subclauses (i) and (ii), in an aggregate principal amount outstanding not to
exceed $5,000,000;

 

(c)           Investments by (i) any Loan Party in any other Loan Party,
(ii) any Restricted Subsidiary that is not a Loan Party in any other Restricted
Subsidiary that is not a Loan Party, and (iii) any Loan Party in any Restricted
Subsidiary that is not a Loan Party; provided that an Investment shall be
permitted to be made pursuant to this subclause (iii) only if at the time such
Investment is made the aggregate amount of Investments outstanding at such time
(including such Investment) pursuant to this subclause (iii) (valued at cost and
net of any return representing a return of capital in respect of any such
Investment) would not exceed, when combined with the amount of consideration
paid by Loan Parties in connection with Permitted Acquisitions for assets that
are not acquired by Loan Parties or Restricted Subsidiaries that do not become
Loan Parties, $10,000,000.

 

77

--------------------------------------------------------------------------------

 

(d)           (i) Investments consisting of extensions of credit in the nature
of accounts receivable or notes receivable arising from the grant of trade
credit in the ordinary course of business, and (ii) Investments (including debt
obligations and Equity Interests) received in satisfaction or partial
satisfaction thereof from financially troubled account debtors and other credits
to suppliers in the ordinary course of business or received in connection with
the bankruptcy or reorganization of suppliers and customers or in settlement of
delinquent obligations of, or other disputes with, customers and suppliers
arising in the ordinary course of business or upon the foreclosure with respect
to any secured Investment or other transfer of title with respect to any secured
Investment;

 

(e)           Investments resulting from the creation of a Lien permitted under
Section 6.02 and Investments resulting from Dispositions permitted under clauses
(k) or (m) of Section 6.11;

 

(f)            Investments existing on the Effective Date in Restricted
Subsidiaries or as set forth on Schedule 6.05 and any modification, replacement,
renewal, reinvestment or extension thereof; provided that the amount of the
original Investment is not increased except by the terms of such Investment or
as otherwise permitted by this Section 6.05;

 

(g)           Investments in Swap Agreements permitted under Section 6.01(i);

 

(h)           Permitted Acquisitions;

 

(i)            Investments consisting of licensing of intellectual property
pursuant to joint marketing arrangements with other Persons;

 

(j)            Investments in the ordinary course of business consisting of
endorsements for collection or deposit;

 

(k)           any other Investment; provided that at the time of such Investment
and after giving effect thereto (i) the Applicable Transaction Conditions are
satisfied and (ii) on a Pro Forma Basis, (x) the Consolidated Secured Leverage
Ratio would be equal to or less than 2.00 to 1.00, or (y) the Consolidated
Secured Leverage Ratio would be equal to or less than 2.50 to 1.00 but greater
than 2.00 to 1.00; provided that the aggregate amount of Investments made
pursuant to this clause (y) and outstanding at such time (valued at cost and net
of any return representing a return of capital in respect of any such
Investment) shall not exceed the Available Amount or (z) the Consolidated
Secured Leverage Ratio would be equal to or less than 2.75 to 1.00 but greater
than 2.50 to 1.00; provided that the aggregate amount of Investments pursuant to
this clause (z) and outstanding at such time (valued at cost and net of any
return representing a return of capital in respect of any such Investment) shall
not exceed $10,000,000;

 

(l)            advances of payroll payments, fees or other compensation to
officers, directors, consultants or employees, in the ordinary course of
business;

 

(m)          Investments to the extent that payment for such Investments is made
solely with Qualified Equity Interests;

 

(n)           transactions permitted by Section 6.07(c) or (e), to the extent
constituting Investments;

 

(o)           Investments held by a Restricted Subsidiary acquired after the
Effective Date or of a Person merged or consolidated with the Borrower or a
Restricted Subsidiary in accordance with Section 6.03 after the Effective Date,
in each case to the extent that such Investments were not made in

 

78

--------------------------------------------------------------------------------

 

contemplation of or in connection with such acquisition, merger or consolidation
and were in existence on the date of such acquisition, merger or consolidation;
and

 

(p)       lease, utility and other similar deposits in the ordinary course of
business.

 

SECTION 6.06.       Prepayments, Etc., of Indebtedness.

 

(a)           The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to
the scheduled maturity thereof in any manner (it being understood that payments
of regularly scheduled interest shall be permitted) any Specified Indebtedness,
except (i) refinancing of Specified Indebtedness with the Net Cash Proceeds of
any Permitted Refinancing Indebtedness in respect thereof, (ii) the conversion
of any Specified Indebtedness to Equity Interests (other than Disqualified
Equity Interests) of the Borrower, and (iii) other prepayments, redemptions,
purchases, defeasances and other payments in respect of Specified Indebtedness;
provided that at the time of any payment and after giving effect thereto (a) the
Applicable Transaction Conditions are satisfied and (b) on a Pro Forma Basis,
(x) the Consolidated Secured Leverage Ratio would be equal to or less than 2.00
to 1.00, (y) the Consolidated Secured Leverage Ratio would be equal to or less
than 2.50 to 1.00 but greater than 2.00 to 1.00; provided that the aggregate
amount of such payments made pursuant to this clause (y) shall not exceed the
Available Amount, or (z) the Consolidated Secured Leverage Ratio would be equal
to or less than 2.75 to 1.00 but greater than 2.50 to 1.00; provided that the
aggregate amount of such payments made pursuant to this clause (z) shall not
exceed $10,000,000.

 

(b)           The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, amend, modify or change in any manner materially adverse to the
interests of the Lenders any term or condition of any Specified Indebtedness.

 

SECTION 6.07.       Transactions with Affiliates. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to make any payment to, sell,
assign, lease or otherwise transfer any Property to, or purchase, lease or
otherwise acquire any Property from, or otherwise engage in any other
transactions with, any of its Affiliates, involving aggregate payments or
consideration in excess of $2,000,000, except (a) at prices and on terms and
conditions that are not materially less favorable to the Borrower or such
Restricted Subsidiary (in the good faith determination of the Borrower) as could
reasonably be obtained in a comparable transaction by the Borrower or such
Restricted Subsidiary at the time of such transaction on an arm’s-length basis
from unrelated third parties, (b) transactions between or among the Borrower and
its Restricted Subsidiaries and any entity that becomes a Restricted Subsidiary
as a result of such transaction not involving any other Affiliate, (c) the
payment of customary compensation and benefits and reimbursements of
out-of-pocket costs to, and the provision of customary indemnity on behalf of,
directors, officers, consultants, employees and members of the Boards of
Directors of the Borrower or such Restricted Subsidiary, (d) Restricted Payments
and other payments permitted under Section 6.04 or 6.05(b) or (c),
(e) employment, incentive, benefit, consulting and severance arrangements
entered into in the ordinary course of business with officers, directors,
consultants and employees of the Borrower or its Restricted Subsidiaries,
(f) the transactions pursuant to the agreements set forth in Schedule 6.07 or
any amendment or extension or renewal thereof thereto to the extent such an
amendment, extension or renewal is not materially more disadvantageous to the
Lenders (as determined in good faith by the Borrower) when taken as a whole as
compared to the applicable agreement as in effect on the Effective Date, (g) the
issuance of Qualified Equity Interests and the granting of registration or other
customary rights in connection therewith, (h) the existence of, and the
performance by the Borrower or any Restricted Subsidiary of its obligations
under the terms of, any limited liability company agreement, limited partnership
or other organizational document or securityholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
is a party on the Effective Date and which is set forth on

 

79

--------------------------------------------------------------------------------

 

Schedule 6.07, and similar agreements that it may enter into thereafter;
provided that the existence of, or the performance by the Borrower or any
Restricted Subsidiary of obligations under, any amendment to any such existing
agreement or any such similar agreement entered into after the Effective Date
shall only be permitted by this Section 6.07(h) to the extent it is not more
adverse to the interest of the Lenders in any material respect when taken as a
whole (in the good faith determination of the Borrower) than any of such
documents and agreements as in effect on the Effective Date, (i) consulting
services to joint ventures in the ordinary course of business and any other
transactions between or among the Borrower, its Restricted Subsidiaries and
joint ventures that are Affiliates of the Borrower solely as a result of the
Borrower’s or a Restricted Subsidiary’s Investments therein in the ordinary
course of business and (j) transactions with landlords, customers, clients,
suppliers, joint venture partners or purchasers or sellers of goods and
services, in each case in the ordinary course of business and not otherwise
prohibited by this Agreement.

 

SECTION 6.08.       Changes in Fiscal Year. The Borrower will cause its fiscal
year to end on December 31 of each calendar year.

 

SECTION 6.09.       Financial Covenants.

 

(a)           Consolidated Leverage Ratio. The Borrower will not permit the
Consolidated Leverage Ratio as of the last day of any fiscal quarter, commencing
with the quarter ending June 30, 2015, to be greater than 4.50 to 1.00.

 

(b)           Consolidated Secured Leverage Ratio. The Borrower will not permit
the Consolidated Secured Leverage Ratio as of the last day of any fiscal
quarter, commencing with the quarter ending June 30, 2015, to be greater than
3.00 to 1.00.

 

SECTION 6.10.      Restrictive Agreements. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
(A) prohibits, restricts or imposes any condition upon the ability of any
Restricted Subsidiary that is not a Guarantor to pay dividends or other
distributions with respect to holders of its Equity Interests, or (B) prohibits,
restricts or imposes any condition upon the pledge of any assets of any Loan
Party to secure the Obligations or any refinancing thereof; provided that the
foregoing shall not apply to (i) prohibitions, restrictions and conditions
imposed by law or by this Agreement, (ii) prohibitions, restrictions and
conditions arising in connection with any Disposition permitted by Section 6.11
with respect to the Property subject to such Disposition pending the
consummation of such Disposition, (iii) restrictions in effect on the Effective
Date and listed on Schedule 6.10, (iv) agreements or arrangements binding on a
Restricted Subsidiary at the time such Restricted Subsidiary becomes a
Restricted Subsidiary of the Borrower (and not entered into in contemplation
thereof) or any permitted extension, refinancing or renewal of, or any amendment
or modification to, any such agreement or arrangement so long as any such
extension, refinancing, renewal, amendment or modification is not materially
more restrictive (in the good faith determination of the Borrower) than such
agreement or arrangement, (v) prohibitions, restrictions and conditions set
forth in Indebtedness of a Restricted Subsidiary that is not a Loan Party which
is permitted by this Agreement (which prohibition, restriction or condition
applies only to such Restricted Subsidiary or its assets), (vi) agreements or
arrangements that are customary provisions in joint venture agreements and other
similar agreements or arrangements applicable to joint ventures,
(vii) prohibitions, restrictions or conditions of the type described in clause
(A) imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such prohibitions, restrictions or conditions apply only to the
Restricted Subsidiaries incurring or Guaranteeing such Indebtedness,
(viii) customary provisions in leases, subleases, licenses, sublicenses or
permits so long as such prohibitions, restrictions or conditions relate only to
the property subject thereto, (ix) customary provisions in leases restricting
the assignment or subletting thereof, (x) customary provisions restricting
assignment or transfer of any contract (but not

 

80

--------------------------------------------------------------------------------

 

prohibiting a pledge thereof) entered into in the ordinary course of business or
otherwise permitted hereunder, (xi) prohibitions, restrictions or conditions on
cash or other deposits imposed by customers under contracts entered into in the
ordinary course of business and (xii) prohibitions, restrictions or conditions
imposed by a Lien permitted by Section 6.02 with respect to the transfer of the
Property subject thereto.

 

SECTION 6.11.    Dispositions. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, make any Disposition, except:

 

(a)           Dispositions of obsolete or worn out Property and Dispositions of
Property no longer used or useful in the conduct of the business of the Borrower
and the Restricted Subsidiaries, in each case, in the ordinary course of
business;

 

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

 

(c)           Dispositions of Property to the extent that (i) such Property is
exchanged for credit against the purchase price of similar replacement Property
or (ii) the proceeds of such Disposition are promptly applied to the purchase
price of such replacement Property;

 

(d)           Dispositions of Property (i) to a Restricted Subsidiary; provided
that if the transferor of such Property is a Loan Party, the transferee thereof
must be a Loan Party and (ii) to the extent such transaction constitutes an
Investment permitted under Section 6.05;

 

(e)           Dispositions permitted by Sections 6.03 and 6.04 and Liens
permitted by Section 6.02;

 

(f)            Dispositions of cash and Cash Equivalents;

 

(g)           Dispositions of accounts receivable in connection with the
collection or compromise thereof (other than in connection with financing
transactions);

 

(h)           leases, subleases, licenses or sublicenses (including the grant of
distribution rights and exhibition rights), in each case in the ordinary course
of business and which do not materially interfere with the business of the
Borrower and the Restricted Subsidiaries and which do not effectively constitute
a complete transfer of the lease or license; provided that licenses and
sublicenses by the Borrower and the Restricted Subsidiaries shall also be
consistent with past practices prior to the Closing Date;

 

(i)            the sublicensing of unused rights in film assets in the ordinary
course of business and consistent with past practices prior to the Closing Date
not to exceed $10,000,000 for all such transactions in any calendar year;

 

(j)            transfers of Property to the extent subject to Casualty Events;

 

(k)           any Disposition of Property; provided that (i) at the time of such
Disposition (other than any such Disposition made pursuant to a legally binding
commitment entered into at a time when no Event of Default exists), no Event of
Default shall exist or would result from such Disposition, (ii) at the time of
any such Disposition, the aggregate book value of all property Disposed of in
reliance on this clause (k) (including such Disposition) would not exceed
$40,000,000 in the aggregate and (iii) with respect to any Disposition pursuant
to this clause (k) for a purchase price in excess of $5,000,000, the Borrower or
a Restricted Subsidiary shall receive not less than 75% of such consideration in
the form

 

81

--------------------------------------------------------------------------------

 

of cash or Cash Equivalents; provided, however, that for the purposes of this
clause (iii), each of the following shall be deemed to be cash: any liabilities
(as shown on the Borrower’s or such Restricted Subsidiary’s most recent balance
sheet provided hereunder or in the footnotes thereto) of the Borrower or such
Restricted Subsidiary, other than Specified Indebtedness or liabilities that are
by their terms subordinated to the payment in cash of the Obligations, that are
assumed by the transferee with respect to the applicable Disposition and for
which the Borrower and all of the Restricted Subsidiaries shall have been
validly released by all applicable creditors in writing;

 

(l)            Dispositions of Investments in, and issuances of any Equity
Interests in, joint ventures to the extent required by, or made pursuant to
customary buy/sell arrangements between, the joint venture parties set forth in
joint venture arrangements and similar binding arrangements; and

 

(m)          any Disposition of Property; provided that (i) at the time of such
Disposition (other than any such Disposition made pursuant to a legally binding
commitment entered into at a time when no Event of Default exists), no Event of
Default shall exist or would result from such Disposition, (ii) at the time of
any such Disposition, the aggregate book value of all property Disposed of in
reliance on this clause (m) would not exceed $75,000,000 in the aggregate,
(iii) with respect to any Disposition pursuant to this clause (m) for a purchase
price in excess of $5,000,000, the Borrower or a Restricted Subsidiary shall
receive not less than 75% of such consideration in the form of cash or Cash
Equivalents; provided, however, that for the purposes of this clause (iii), each
of the following shall be deemed to be cash: any liabilities (as shown on the
Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided
hereunder or in the footnotes thereto) of the Borrower or such Restricted
Subsidiary, other than Specified Indebtedness and liabilities that are by their
terms subordinated to the payment in cash of the Obligations, that are assumed
by the transferee with respect to the applicable Disposition and for which the
Borrower and all of the Restricted Subsidiaries shall have been validly released
by all applicable creditors in writing and (iv) the Borrower shall prepay Term
Loans in an amount up to the Net Cash Proceeds received from such Disposition in
the manner and to the extent required by Section 2.10(b);

 

provided that any Disposition of any Property to the extent classified pursuant
to one or more of Sections 6.11(k) and (m) shall be for no less than the fair
market value of such Property at the time of such Disposition determined in good
faith by the Borrower.

 

SECTION 6.12.       Lines of Business. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage to any material extent in
any business substantially different from the businesses of the type conducted
by the Borrower and its Restricted Subsidiaries on the date of execution of this
Agreement and businesses reasonably related, ancillary or complementary thereto
and reasonable extensions thereof.

 

SECTION 6.13.       Sale and Leaseback Transactions. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into any arrangement, directly or indirectly, whereby they will sell or
transfer any Property, real or personal, used or useful in their business,
whether now owned or hereafter acquired, and thereafter rent or lease such
Property or other Property that they intend to use for substantially the same
purpose or purposes as the Property sold or transferred (“Sale and Leaseback
Transaction”) unless (i) the sale of such Property is permitted by Section 6.11
and (ii) any Lien arising in connection with the use of such Property by any
Loan Party or a Restricted Subsidiary is permitted by Section 6.02.

 

SECTION 6.14.       Amendments of Certain Documents. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, amend or otherwise modify
(a) any of its Organization Documents in a manner materially adverse to the
Administrative Agent or the Lenders, as determined in good faith by the
Borrower, or (b) any term or condition of any Specified Indebtedness or the
Hallmark Trademark

 

82

--------------------------------------------------------------------------------

 

License Agreement in any manner materially adverse to the interests of the
Administrative Agent or the Lenders, as determined in good faith by the
Borrower.

 

SECTION 6.15.       Designation of Subsidiaries. The board of directors of the
Borrower may at any time after the Effective Date designate any Restricted
Subsidiary as an Unrestricted Subsidiary (including any newly acquired or newly
formed Restricted Subsidiary at or prior to the time it is so acquired or
formed) or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that
(a) immediately before and after such designation, no Default shall have
occurred and be continuing, (b) immediately after giving effect to such
designation, the Borrower and its Restricted Subsidiaries shall be in
compliance, on a Pro Forma Basis, with the covenants set forth in Section 6.09,
(c) notwithstanding anything else in this Section 6.15 to the contrary, any
Unrestricted Subsidiary that has been redesignated a Restricted Subsidiary may
not be subsequently redesignated as an Unrestricted Subsidiary and (d) no
Subsidiary may be designated as an Unrestricted Subsidiary if it is a
“Restricted Subsidiary” for the purpose of any Specified Indebtedness. The
designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an
Investment by the Borrower or the relevant Restricted Subsidiary (as applicable)
therein at the date of designation in an amount equal to the fair market value
of the Borrower’s or such relevant Restricted Subsidiary’s (as applicable)
investment therein, as determined in good faith by such Borrower or such
relevant Restricted Subsidiary, and the Investment resulting from such
designation must otherwise be in compliance with Section 6.05. The designation
of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the
incurrence at the time of designation of any Indebtedness or Liens of such
Subsidiary existing at such time. As of the Effective Date, there are no
Unrestricted Subsidiaries of the Borrower. No Subsidiary shall be designated an
Unrestricted Subsidiary if after giving effect to such designation, the
Unrestricted Subsidiaries taken as a whole would constitute a Material
Subsidiary (with references to Restricted Subsidiary in the definition of
Material Subsidiary being to Subsidiary).

 

SECTION 6.16.       Use of Proceeds. The Borrower will not request any Loan or
Letter of Credit, and the Borrower shall not use, and shall procure that its
Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Loan or Letter of Credit (A) in
furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (B) to fund any activities or business of
or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any
manner that would result in the violation of any Sanctions applicable to any
party hereto.

 

ARTICLE VII

 

Events of Default

 

SECTION 7.01.       Events of Default. If any of the following events (“Events
of Default”) shall occur and be continuing:

 

(a)           the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

 

(b)           the Borrower shall fail to pay (i) any interest on any Loan or any
fee payable under or as required by any Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of five (5) Business Days or (ii) any other amount (other than an amount
referred to in clause (a) or (b)(i) of this Section 7.01) payable under or as
required by any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of ten
(10) Business Days;

 

83

--------------------------------------------------------------------------------

 

(c)           any representation or warranty made by the Borrower or by or on
behalf of any Restricted Subsidiary in this Agreement or any other Loan Document
or any amendment or modification thereof or waiver thereunder, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other document delivered by or on behalf of
any Loan Party in connection with this Agreement or any other Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to have
been incorrect in any material respect when made or deemed made;

 

(d)           the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a), 5.03(i) (with respect to
the Borrower only) or 5.08 or Article VI;

 

(e)           any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Section 7.01) or any other Loan Document, and
such failure shall continue unremedied for a period of thirty (30) days after
written notice thereof from the Administrative Agent to the Borrower;

 

(f)            the Borrower or any Restricted Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable,
or if a grace period shall be applicable to such payment under the agreement or
instrument under which such Indebtedness was created, beyond such applicable
grace period;

 

(g)           the Borrower or any Restricted Subsidiary shall default in the
performance of any obligation in respect of any Material Indebtedness that
results in such 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 both, but after giving effect to any applicable grace period)
the holder or holders of such Material Indebtedness or any trustee or agent on
its or their behalf to cause such Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity (other than solely in Qualified Equity Interests);
provided that this clause (g) 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;

 

(h)           (i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (A) liquidation, reorganization or other relief
in respect of the Borrower or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (B) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, or (ii) an order or decree approving or ordering
any of the foregoing shall be entered and, in any such case, such proceeding,
petition, order or decree shall continue undismissed or unstayed for sixty (60)
days;

 

(i)            the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of any proceeding or petition described in clause (h) of this
Section 7.01, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Material Subsidiary or for a substantial part of its assets,
(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 or (vi) take any corporate action for the purpose of effecting any
of the foregoing;

 

84

--------------------------------------------------------------------------------

 

(j)            the Borrower or any Material Subsidiary shall become generally
unable, admit in writing its inability generally or fail generally to pay its
debts as they become due;

 

(k)           one or more final, non-appealable judgments for the payment of
money in an aggregate amount in excess $10,000,000 (to the extent due and
payable and not covered by insurance as to which the relevant insurance company
has not denied coverage) shall be rendered against the Borrower or any
Restricted Subsidiary or any combination thereof and the same shall remain
unpaid or undischarged for a period of forty-five (45) consecutive days during
which execution shall not be bonded or effectively stayed, or any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the assets of the Borrower and the
Restricted Subsidiaries, taken as a whole, and is not released, vacated or fully
bonded within forty-five (45) days after its issue or levy;

 

(l)            an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, would reasonably be expected to
result in a Material Adverse Effect;

 

(m)          a Change in Control shall occur; or

 

(n)           any material provision of any Loan Document or any security
interest purported to be created by any Collateral Document (with respect to a
material portion of the security interest purported to be covered by the
Collateral Documents), at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder (including as a
result of a transaction permitted under Section 6.03 or 6.11) or the
satisfaction in full of all the Obligations (other than contingent
indemnification or reimbursement obligations and the termination of all
Commitments and Letters of Credit) ceases to be in full force and effect, or any
Collateral Document shall cease to give the Administrative Agent, for the
benefit of the Secured Parties, the Liens, rights, powers and privileges
purported to be created and granted under such Collateral Document (including a
perfected first priority security interest in and Lien on all of the Collateral
thereunder, other than priorities granted in respect of Permitted Liens (except
as otherwise expressly provided in such Collateral Document)) with respect to a
material portion of the Collateral purported to be covered by the Collateral
Documents; or any Loan Party contests in writing the validity or enforceability
of any provision of any Loan Document; or any Loan Party denies in writing that
it has any or further liability or obligation under any Loan Document (other
than as a result of repayment in full of the Obligations (other than contingent
indemnification or reimbursement obligations) and termination of the Commitments
and Letters of Credit), or purports in writing to revoke or rescind any Loan
Document;

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section 7.01), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder and
under the other Loan Documents, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Section 7.01, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other Obligations
accrued hereunder and under the other Loan Documents, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.

 

85

--------------------------------------------------------------------------------

 

SECTION 7.02.       Application of Proceeds. After the exercise of remedies
provided for in Section 7.01 (or after the Loans have automatically become
immediately due and payable and the LC Exposure has automatically been required
to be cash collateralized as set forth in Section 2.05(k)) and irrespective of
any other provision of any Loan Document to the contrary, any amounts (including
cash, equity securities, debt securities or any other Property; provided that if
any such amounts are not in the form of cash, then the amount of such securities
or other Property applied to each of clauses First through Last below shall be
an amount with a fair market value equal to the stated amount required to be
applied pursuant to each such clause) received on account of the Obligations
(whether received as a consequence of the exercise of such remedies or as a
distribution out of any proceeding in respect of or commenced under any
Insolvency or Liquidation Proceeding) shall be turned over to the Administrative
Agent (to the extent not received directly by the Administrative Agent) and
applied by the Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including attorney costs payable under Section 9.03 and amounts payable under
Article II) payable to the Administrative Agent in its capacity as such
(irrespective of when such amounts were incurred or accrued or whether any such
amounts are allowed in any Insolvency or Liquidation Proceeding) until paid in
full in cash;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest (including
attorney costs payable under Section 9.03 and amounts payable under Article II))
payable to the Lenders, Swingline Lender and the Issuing Bank(s) (in their
capacities as such), ratably among them in proportion to the amounts described
in this clause Second payable to them (irrespective of when such amounts were
incurred or accrued or whether any such amounts are allowed in any Insolvency or
Liquidation Proceeding) until paid in full in cash;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and LC Disbursements, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them (irrespective of when such amounts were incurred or accrued or whether any
such amounts are allowed in any Insolvency or Liquidation Proceeding) until paid
in full in cash;

 

Fourth, (x) to payment of that portion of the Obligations constituting
(i) unpaid principal of the Loans and LC Disbursements, (ii) amounts owing in
respect of Cash Management Obligations, ratably among the Lenders and Cash
Management Banks in proportion to the respective amounts described in this
clause Fourth held by them (irrespective of when such amounts were incurred or
accrued or whether any such amounts are allowed in any Insolvency or Liquidation
Proceeding) until such amounts are paid in full in cash and (y) to the
Administrative Agent for the account of the Issuing Bank, to cash collateralize
that portion of LC Exposure comprised of the aggregate undrawn amount of Letters
of Credit and (iii) unpaid principal of the Swap Termination Value under Swap
Agreements, ratably among the Secured Parties in proportion to the respective
amounts described in this clause Fifth held by them until paid in full in cash;

 

Fifth, to the payment of all other Obligations of the Loan Parties that are due
and payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured Parties on
such date (irrespective of when such amounts were incurred or accrued or whether
any such amounts are allowed in any Insolvency or Liquidation Proceeding) until
paid in full in cash; and

 

86

--------------------------------------------------------------------------------

 

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

 

Subject to Section 2.05(k), amounts used to cash collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as cash collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above and, if no
Obligations remain outstanding, to the Borrower.

 

Notwithstanding the foregoing, (a) amounts received from the Borrower or any
Guarantor that is not a Qualified Eligible Contract Participant Guarantor shall
not be applied to the Obligations that are Excluded Swap Obligations (it being
understood, that in the event that any amount is applied to Obligations other
than Excluded Swap Obligations as a result of this clause (a), the
Administrative Agent shall make such adjustments as it determines are
appropriate to distributions pursuant to clause Fourth above from amounts
received from Qualified Eligible Contract Participant Guarantors to ensure, as
nearly as possible, that the proportional aggregate recoveries with respect to
Obligations described in clause Fourth above by the holders of any Excluded Swap
Obligations are the same as the proportional aggregate recoveries with respect
to other Obligations pursuant to clause Fourth above) and (b) Obligations
arising under Secured Hedge Agreements and Cash Management Obligations shall be
excluded from the application described above if the Administrative Agent has
not received written notice thereof, together with such supporting documentation
as the Administrative Agent may request, from the Cash Management Bank or Hedge
Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to
this Agreement that has given the notice contemplated by the preceding sentence
shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Administrative Agent pursuant to the terms of Article VIII
hereof for itself and its Affiliates as if a “Lender” party hereto.

 

ARTICLE VIII

 

The Administrative Agent

 

(a)           Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof and the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.

 

(b)           The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.

 

(c)           To the extent required by any applicable laws, the Administrative
Agent may withhold from any payment to any Lender an amount equivalent to any
applicable withholding Tax. Without limiting or expanding the provisions of
Section 2.16, each Lender shall indemnify and hold harmless the Administrative
Agent against, within 10 days after written demand therefor, any and all Taxes
and any and all related losses, claims, liabilities and expenses (including
fees, charges and disbursements of any counsel for the Administrative Agent)
incurred by or asserted against the Administrative Agent as a result of the
failure of the Administrative Agent to properly withhold any Tax from amounts
paid to or for the account of such Lender for any reason (including, without
limitation, because

 

87

--------------------------------------------------------------------------------

 

the appropriate form was not delivered or not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstance
that rendered the exemption from, or reduction of, withholding Tax ineffective).
A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender under this Agreement or any
other Loan Document against any amount due the Administrative Agent under this
clause (c). The agreements in this clause (c) shall survive the resignation
and/or replacement of the Administrative Agent, any assignment of rights by, or
the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all other Obligations. The term “Lender”
shall, for purposes of this clause (c), include any Swingline Lender and any
Issuing Bank.

 

(d)           The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided herein), and (c) except as expressly set forth herein,
the Administrative Agent shall not have any duty to disclose, and shall not 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 or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided herein) or in the absence of its own bad faith, gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

(e)           The Administrative 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 or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts in the absence of gross negligence or willful misconduct.

 

(f)            The Administrative Agent may perform any and all of its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and

 

88

--------------------------------------------------------------------------------

 

any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

 

(g)           The Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Banks and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower and
(unless an Event of Default shall have occurred and be continuing) with the
consent of the Borrower (which consent of the Borrower shall not be unreasonably
withheld or delayed), to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Banks, appoint a successor Administrative Agent which
shall be a bank with capital and surplus of at least $50,000,000. Whether or not
a successor has been appointed, the resignation of the Administrative Agent
shall become effective on the 30th day after the retiring Administrative Agent
gives notice of its resignation. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

 

(h)           Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent 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
Administrative Agent 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,
any related agreement or any document furnished hereunder or thereunder.

 

(i)            The Lenders irrevocably agree:

 

(i)            that any Lien on any Property granted to or held by the
Administrative Agent under any Loan Document shall be automatically released
(A) upon termination of the Commitments and payment in full of all Obligations
(other than (x) obligations under Secured Hedge Agreements, (y) Cash Management
Obligations and (z) contingent reimbursement and indemnification obligations not
yet accrued and payable) and the expiration or termination of all Letters of
Credit, (B) at the time the Property subject to such Lien is transferred or to
be transferred as part of or in connection with any transfer permitted hereunder
to any Person (other than any transfer by a Loan Party to another Loan Party),
(C) subject to Section 9.02, if the release of such Lien is approved, authorized
or ratified in writing by the Required Lenders (or such greater number of
Lenders as may be required pursuant to Section 9.02), or (D) if the Property
subject to such Lien is owned by a Guarantor, upon release of such Guarantor
from its obligations under its Guaranty pursuant to clause (iii) below;

 

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

 

89

--------------------------------------------------------------------------------

 

(iii)          that any Guarantor shall be automatically released from its
obligations under the applicable Guaranty if such Person ceases to be a
Specified Subsidiary as a result of a transaction permitted under this
Agreement.

 

Upon request by the Administrative Agent at any time, the Required Lenders (or
such greater number of Lenders as may be required pursuant to Section 9.02) will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of Property, or to release
any Guarantor from its obligations under the applicable Guaranty and Collateral
Documents pursuant to this paragraph (i). If any Lender does not respond to any
request by the Administrative Agent for such confirmation within ten
(10) Business Days after such request has been made, such Lender will be deemed
to have confirmed the Administrative Agent’s authority described above. In each
case as specified in this paragraph (i), the Administrative Agent will (and each
Lender irrevocably authorizes the Administrative Agent to), at the Borrower’s
expense, execute and deliver to the applicable Loan Party such documents as such
Loan Party may reasonably request to evidence the release or subordination of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to evidence the release of such Guarantor from its
obligations under its Guaranty and the Security Agreement, in each case in
accordance with the terms of the Loan Documents and this paragraph (i); provided
that at the request of the Administrative Agent, the Borrower shall execute and
deliver an officer’s certificate, in form and substance reasonably satisfactory
to the Administrative Agent, certifying such compliance.

 

(j)            None of the Persons identified in this Agreement as an
“arranger”, “bookrunner”, “syndication agent” or “documentation agent” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than, if applicable, those applicable to all Lenders as such.
Without limiting the foregoing, none of such Lenders shall have or be deemed to
have a fiduciary relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to the relevant Persons in their capacity as an
Arranger, Documentation Agent or Syndication Agents as it makes with respect to
the Administrative Agent in the preceding paragraph.

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01.      Notices.

 

(a)           Except in the case of notices and other communications expressly
permitted to be given by telephone or other electronic communications (and
subject to paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy or
transmission by electronic communication, as follows:

 

(i)            if to the Borrower, to Crown Media Holdings, Inc., Legal and
Business Affairs, at 12700 Ventura Boulevard, Suite 200, Studio City, CA 91604,
Attention of Charles Stanford (Facsimile No: 818-755-2452; email:
charlesstanford@crownmedia.com) and (in the case of a notice of a Default) to
Holland & Hart LLP, at 6380 South Fiddlers Green Circle, Suite 500, Greenwood
Village, CO 80111, Suite 500, Attention of Amy L. Bowler (Facsimile No. 303
290-1606; email: abowler@hollandhart.com);

 

(ii)           if to the Administrative Agent, to Wells Fargo Bank, National
Association, 1525 West W.T. Harris Blvd. MACD1109-019, Charlotte, North Carolina
28262, Attention of Syndication Agency Services (Telecopy No. (704) 427-5480;
email: agencyservices.request@wellsfargo.com);

 

90

--------------------------------------------------------------------------------

 

(iii)          if to the Issuing Bank, to it at Wells Fargo Bank, National
Association, 1445 Ross Avenue, Suite 2320, Dallas, Texas 75202, Attention of
Marguerite Burtzlaff (Telecopy No. (214) 661-1256; email:
marguerite.c.burtzlaff@wellsfargo.com) or if an additional Issuing Bank is
appointed, to it at the address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the other
parties;

 

(iv)          if to the Swingline Lender, to it at Wells Fargo Bank, National
Association, 1525 West W.T. Harris Blvd. MACD1109-019, Charlotte, North Carolina
28262, Attention of Syndication Agency Services (Telecopy No. (704) 427-5480;
email: agencyservices.request@wellsfargo.com); and

 

(v)           if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

 

(b)           Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

 

(c)           Any party hereto may change its address, electronic mail address
or telecopy number for notices and other communications hereunder by notice to
the other parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been given (i) on the date transmitted by facsimile (except any notice
so transmitted after 5:00 p.m. shall be deemed delivered on the next Business
Day of the recipient) or (ii) on the date received or rejected as shown on the
return receipt in the case of notices delivered by mail or shown on the tracking
report for notices delivered by overnight delivery.

 

SECTION 9.02.        Waivers; Amendments.

 

(a)           No failure or delay by the Administrative Agent, any Issuing Bank
or any Lender in exercising any right or power 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 Issuing Banks and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or any Issuing Bank may have had notice or
knowledge of such Default at the time.

 

(b)           Except as otherwise set forth in this Agreement or any other Loan
Document (with respect to such Loan Document), neither this Agreement nor any
other Loan Document nor any provision hereof or thereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall:

 

91

--------------------------------------------------------------------------------

 

(i)            increase the Commitment of any Lender without the written consent
of each Lender directly and adversely affected thereby, it being understood that
a waiver of any condition precedent set forth in Section 4.02 or the waiver of
any Default or mandatory prepayment shall not constitute an increase of any
Commitment of any Lender, but that any waiver of any condition set forth in
Section 4.02 following the Effective Date (other than for the borrowing of
Delayed Term Loans) shall require the consent of the Required Revolving Lenders
and for a borrowing of Delayed Term Loans shall require the consent of Lenders
holding a majority of the Delayed Term Loan Commitments;

 

(ii)           reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest or premium thereon, or reduce any fees payable
hereunder, without the written consent of each Lender directly and adversely
affected thereby; provided that only the consent of the Required Lenders shall
be necessary to amend Section 2.12(c) or to waive any obligation of the Borrower
to pay interest at the rate set forth therein;

 

(iii)          postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender directly and adversely affected thereby, it being
understood that the waiver of (or amendment to the terms of) any mandatory
prepayment of the Term Loans shall not constitute a postponement of any date
scheduled for the payment of principal or interest;

 

(iv)          change Section 2.17(b) or (c) in a manner that would alter the pro
rata sharing of payments required thereby or Section 7.02, without the written
consent of each adversely affected Lender;

 

(v)           change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder without the written
consent of each Lender;

 

(vi)          release all or substantially all (as measured by value rather than
by number) of the Guarantors from their obligations under the Security
Agreement, without the written consent of each Lender;

 

(vii)         release all or substantially all of the Collateral from the Lien
of the Collateral Documents, without the written consent of each Lender;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, any Issuing Bank or the
Swingline Lender hereunder without the prior written consent of the
Administrative Agent, the relevant Issuing Bank or the Swingline Lender, as the
case may be; or

 

(viii)        amend any provision of Section 7.02 without the consent of each
Lender adversely affected thereby.

 

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that (a) the Commitment of such Lender may not be increased or extended,
or amounts due to it reduced (other than by way of payment) or the payment date
of any outstanding amounts owing to it extended, without the consent of such
Lender, (b) a Defaulting Lender may approve or disapprove of any change to
Section 2.17(b) or (c) that would alter the pro rata sharing of payments
required thereby, and (c) any waiver, amendment or modification

 

92

--------------------------------------------------------------------------------

 

requiring the consent of all Lenders or each affected Lender that by its terms
affects any Defaulting Lender more adversely than other affected Lenders shall
require the consent of the Defaulting Lender.

 

Notwithstanding the foregoing, this Agreement and the other Loan Documents may
be amended (or amended and restated) with the written consent of the Required
Lenders, the Administrative Agent and the Borrower (i) to add one or more
additional credit facilities to this Agreement (including in replacement of any
existing credit facility or portion thereof) and to permit the extensions of
credit from time to time outstanding thereunder and the accrued interest and
fees in respect thereof to share ratably in the benefits of this Agreement and
the other Loan Documents with the Term Loans and Revolving Credit Exposures and
the accrued interest and fees in respect thereof and (ii) to include
appropriately the Lenders holding such credit facilities in any determination of
the Required Lenders or Required Revolving Lenders; provided that the final
maturity date of such credit facilities shall be no later than the then
scheduled expiration of the Hallmark Trademark License Agreement.

 

In addition, notwithstanding the foregoing, this Agreement and the other Loan
Documents may be amended with the written consent of the Administrative Agent,
the Borrower and the Lenders providing the Replacement Term Loans (as defined
below) to permit the refinancing of all outstanding Term Loans of any
Class (“Refinanced Term Loans”) with a replacement term loan tranche
(“Replacement Term Loans”) hereunder; provided that (a) the aggregate principal
amount of such Replacement Term Loans shall not exceed the aggregate principal
amount of such Refinanced Term Loans, (b) the Applicable Rate for such
Replacement Term Loans shall not be higher than the Applicable Rate for such
Refinanced Term Loans, (c) the Weighted Average Life to Maturity of such
Replacement Term Loans shall not be shorter than the Weighted Average Life to
Maturity of such Refinanced Term Loans at the time of such refinancing (except
to the extent of nominal amortization for periods where amortization has been
eliminated as a result of prepayment of the Term Loans), (d) the final maturity
date of such Replacement Term Loans shall be no later than the then scheduled
expiration of the Hallmark Trademark License Agreement and (e) all other terms
applicable to such Replacement Term Loans shall be substantially identical to,
or less favorable to the Lenders providing such Replacement Term Loans than,
those applicable to such Refinanced Term Loans, except to the extent necessary
to provide for covenants and other terms applicable to any period after the
latest final maturity of the Term Loans in effect immediately prior to such
refinancing.

 

Notwithstanding anything in this Section 9.02 to the contrary, (a) technical and
conforming modifications to the Loan Documents may be made with the consent of
the Borrower and the Administrative Agent to the extent necessary (i) to
integrate any Incremental Term Loans or any Increased Commitments or (ii) to
cure any error or defect and (b) without the consent of any Lender or the
Issuing Bank, the Loan Parties and the Administrative Agent or any collateral
agent may (in their respective sole discretion, or shall, to the extent required
by any Loan Document) enter into any amendment, modification or waiver of any
Loan Document, or enter into any new agreement or instrument, to effect the
granting, perfection, protection, expansion or enhancement of any security
interest in any Collateral or additional property to become Collateral for the
benefit of the Secured Parties or as required by local law to give effect to, or
protect any security interest for benefit of the Secured Parties, in any
property or so that the security interests therein comply with applicable law or
this Agreement or in each case to otherwise enhance the rights or benefits of
any Lender under any Loan Document.

 

SECTION 9.03.        Expenses; Indemnity; Damage Waiver.

 

(a)           The Borrower shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
limited, in the case of legal expenses, to the reasonable and documented fees,
charges and disbursements of a single counsel for the Administrative Agent (and,
if necessary, one local counsel in each applicable jurisdiction and regulatory
counsel),

 

93

--------------------------------------------------------------------------------

 

in connection with the syndication of the credit facilities provided for herein,
the preparation and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all reasonable and documented out-of-pocket expenses
incurred by the relevant Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all reasonable and documented out-of-pocket
expenses incurred by the Administrative Agent, any Issuing Bank or any Lender,
limited, in the case of legal expenses, to the reasonable and documented fees,
charges and disbursements of a single counsel for the Administrative Agent and
another single counsel for all other Lenders (and, if necessary, one local
counsel in each applicable jurisdiction and regulatory counsel), in connection
with the enforcement or protection of its rights in connection with this
Agreement, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such reasonable
and documented out-of-pocket expenses incurred during any workout, restructuring
or negotiations in respect of such Loans or Letters of Credit. For the avoidance
of doubt, this Section 9.03(a) shall not apply to Taxes, except any Taxes that
represent losses, claims, damages or liabilities arising from any non-Tax claim.

 

(b)           The Borrower shall indemnify each Agent, each Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities, penalties and related
reasonable and documented out-of-pocket expenses, limited, in the case of legal
expenses, to the reasonable and documented fees, charges and disbursements of a
single counsel for the Agents (and their related Persons) and another single
counsel for all other Indemnitees (and, if necessary, one local counsel in each
applicable jurisdiction and one additional counsel for each Indemnitee in the
event of conflicts of interest), incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the consummation of the Transactions or any other transactions contemplated
hereby and the syndication of the Revolving Commitments and Term Loans by the
Arrangers, (ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by any Issuing Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) to the extent relating to or arising from any of the foregoing, any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto
and regardless of whether such claim is brought by the Borrower, any of its
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 (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the bad
faith, gross negligence or willful misconduct of such Indemnitee or any of its
officers, directors, employees, Affiliates or controlling Persons or (y) except
in the case of any Agent or Issuing Bank (in its capacity as such), arise from
disputes solely among Indemnitees and do not involve any conduct by the Borrower
or any of its Affiliates or (z) results from a claim brought by any Loan Party
against an Indemnitee for a material breach of such Indemnitee’s obligations
hereunder or under any other Loan Documents if such Loan Party has obtained a
final and non-appealable judgment in its favor on such claim as determined by a
court of competent jurisdiction. For the avoidance of doubt, this
Section 9.03(b) shall not apply to Taxes, except any Taxes that represent
losses, claims, damages or liabilities 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, an Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this

 

94

--------------------------------------------------------------------------------

 

Section, each Lender severally agrees to pay to the Administrative Agent, the
relevant Issuing Bank or the Swingline Lender, 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; 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, such Issuing Bank or the Swingline Lender in its capacity
as such.

 

(d)           To the extent permitted by applicable law, no party to this
Agreement shall assert, and each such party hereby waives, any claim against any
other party, 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, any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof; provided that
this Section 9.03(d) shall not affect the obligation of the Borrower to
indemnify any Indemnitee hereunder or any other obligations of any party
expressly set forth in the Loan Documents.

 

(e)           All amounts due under this Section shall be payable not later than
fifteen (15) days after written demand therefor; provided, however, that an
Indemnitee shall promptly refund any amount received under this Section 9.03 to
the extent that there is a final judicial or arbitral determination that such
Indemnitee was not entitled to indemnification rights with respect to such
payment pursuant to the express terms of this Section 9.03.

 

SECTION 9.04.        Successors and Assigns.

 

(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) except as expressly permitted hereunder, the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Arrangers, the
Syndication Agents and the Documentation Agent and the Related Parties of each
of the Administrative Agent, the Arrangers, the Syndication Agents, the
Documentation Agent, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)           (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (other than the
Borrower, its Affiliates and natural persons) 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) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:

 

(A)          the Borrower; provided that that the Borrower shall be deemed to
have consented to an assignment unless it shall have objected thereto by written
notice to the Administrative Agent within seven (7) Business Days after having
received notice thereof; provided, further, that no consent of the Borrower
shall be required for (I) an assignment of a Term Loan prior to the completion
of the primary syndication of the Term Loans (as determined by the
Administrative Agent), (II) an assignment of a Term Loan to a Lender, an
Affiliate of a Lender or an Approved Fund, (III) an assignment of a Revolving
Commitment to a Revolving Lender or (IV) if a Specified Event of Default has
occurred and is continuing, any other assignment;

 

95

--------------------------------------------------------------------------------

 

(B)          the Administrative Agent; and

 

(C)          the Issuing Banks and Swingline Lender; provided that no consent of
any Issuing Bank or Swingline Lender shall be required for an assignment of all
or any portion of a Term Loan.

 

(ii)           Assignments shall be subject to the following additional
conditions:

 

(A)          except in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$2,500,000 or, in the case of a Term Loan, $1,000,000, unless each of the
Borrower and the Administrative Agent otherwise consent;

 

(B)          each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement, provided that this clause shall not be construed to prohibit the
assignment of a proportionate part of all the assigning Lender’s rights and
obligations in respect of one Class of Commitments or Loans;

 

(C)          the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and

 

(D)          the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

(iii)          Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 9.03 with respect to facts and circumstances occurring
prior to the effective date of such assignment). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

(iv)          The Administrative Agent, acting for this purpose as a
non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and

 

96

--------------------------------------------------------------------------------

 

principal amount (and related interest amounts) of the Loans and LC
Disbursements 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 Issuing Banks
and the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, any Issuing Bank and (with respect to
its own interest only) any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

 

(v)           Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.04(c),
2.05(e) or (f), 2.06(b), 2.17(d) or 9.03(c), the Administrative Agent shall have
no obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall have
been made in full, together with all accrued interest thereon. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

 

(c)           (i) Any Lender may, without the consent of or notice to the
Borrower, the Administrative Agent, the Issuing Banks or the Swingline Lender,
sell participations to one or more banks or other entities other than the
Borrower or any of its Affiliates (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Administrative Agent, the Issuing
Banks and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and the other Loan Documents and to approve any
amendment, modification or waiver of any provision of this Agreement or the
other Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to
Section 9.02(b) that directly affects such Participant. Subject to paragraph
(c)(iii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the
requirements and limitations of such Sections and Section 2.18) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Sections 2.17
and 2.18 as though it were a Lender.

 

(ii)           Each Lender that sells a participation shall, acting solely for
this purpose as a non-fiduciary agent of the Borrower, maintain a register on
which it enters the name and address of each Participant and the principal
amounts (and related interest amounts) of each participant’s interest in the
Loans or other obligations under this Agreement (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register to any Person (including the identity of any
participant or any information relating to a participant’s interest in any
Commitments, Loans or its other obligations under this Agreement) except to the
extent that the relevant parties, acting reasonably and in good faith, determine
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. Unless otherwise required by the Internal Revenue
Service (“IRS”), any disclosure

 

97

--------------------------------------------------------------------------------

 

required by the foregoing sentence shall be made by the relevant Lender directly
and solely to the IRS. The entries in the Participant Register shall be
conclusive absent manifest error, and the Borrower, the Administrative Agent and
each Lender shall treat each person whose name is recorded in the Participant
Register as the owner of the participation in question for all purposes of this
Agreement notwithstanding any notice to the contrary.

 

(iii)          A Participant shall not be entitled to receive any greater
payment under Section 2.14, 2.15 or 2.16 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless such entitlement to a greater payment results from a change
in any Law after the sale of the participation takes place.

 

(iv)          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 without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

(v)           Notwithstanding any other provision of this Agreement, no Lender
will assign its rights and obligations under this Agreement, or sell
participations in its rights and/or obligations under this Agreement, to any
Person who is (i) listed on the Specially Designated Nationals and Blocked
Persons List maintained by the U.S. Department of Treasury Office of Foreign
Assets Control (“OFAC”) and/or on any other similar list maintained by OFAC
pursuant to any authorizing statute, executive order or regulation or
(ii) either (A) included within the term “designated national” as defined in the
Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (B) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg.
49079 (published September 25, 2001) or similarly designated under any related
enabling legislation or any other similar executive orders.

 

SECTION 9.05.        Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, any Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any other Loan Document or
any provision hereof or thereof.

 

SECTION 9.06.        Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective when it shall have been executed
by the Administrative Agent and

 

98

--------------------------------------------------------------------------------

 

when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or pdf shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 9.07.        Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 9.08.        Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final and in whatever currency denominated) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the Obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

 

SECTION 9.09.        Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           This Agreement shall be construed in accordance with and governed
by the law of the State of New York (without regard to the conflict of law
principles thereof to the extent that the application of the laws of another
jurisdiction would be required thereby).

 

(b)           Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding shall be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court, except that nothing in this
Section 9.09 shall limit the ability of the Administrative Agent to enforce the
provisions of any Loan Document against any Loan Party in any other
jurisdiction. 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.
The foregoing shall not affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to this Agreement against any
other party or its properties in the courts of any jurisdiction.

 

(c)           Each of the parties hereto 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 any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

99

--------------------------------------------------------------------------------

 

(d)           Each party to this Agreement irrevocably consents to service of
process mailed by registered certified mail to the address provided for notices
in Section 9.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

SECTION 9.10.        WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 9.11.        Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 9.12.        Confidentiality. Each of the Administrative Agent, the
Issuing Banks and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates and to its and its Affiliates’ directors, officers, partners,
members, employees, managers, administrators, trustees and agents, including
accountants, legal counsel and other advisors solely for the purpose of, or
otherwise directly in connection with this Agreement (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential
pursuant to the terms hereof), (b) to the extent requested or required by any
Governmental Authority or by the National Association of Insurance Commissioners
or any representative thereof, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process (provided, however,
that, to the extent practicable and permitted by law, the Borrower has been
notified prior to such disclosure so that the Borrower may seek, at the
Borrower’s sole expense, a protective order or other appropriate remedy), (d) to
any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder
(provided, however, to the extent practicable and permitted by law, the Borrower
is notified prior to such disclosure so that the Borrower may seek, at the
Borrower’s sole expense, a protective order or other appropriate remedy),
(f) subject to an agreement for the benefit of the Borrower containing
provisions at least as restrictive as those of this Section, to (i) any assignee
or any prospective assignee of any of its rights or obligations under this
Agreement (and to any Participant or prospective Participant in any of its
rights or obligations under this Agreement) or (ii) any direct or indirect
actual or prospective party (or its managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors and other
representatives) to any swap or derivative or similar transaction under which
payments are to be made by reference to the Borrower and its obligations, this
Agreement or payments hereunder, (g) with the consent of the Borrower, (h) to
any ratings agency or the CUSIP Bureau or any similar organization or (i) to the
extent such Information (x) becomes publicly available other than as a result of
a breach of this Section or, to the knowledge of such disclosing person, as a
result of a breach of a confidentiality agreement with any other Person or
(y) that is or becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis from a source other than the Borrower
not in violation of any obligation of confidentiality. For the purposes of this
Section,

 

100

--------------------------------------------------------------------------------

 

“Information” means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is publicly
available (other than as a result of a breach of this Section) to the
Administrative Agent, any Issuing Bank or any Lender prior to disclosure by the
Borrower.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION FURNISHED TO IT PURSUANT TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY 3INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND THEIR AFFILIATES
AND RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS
DEVELOPED CUSTOMARY PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC
INFORMATION INTENDED TO COMPLY WITH APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS, AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN
ACCORDANCE WITH SUCH CUSTOMARY PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL
AND STATE SECURITIES LAWS. NOTHING IN THE FOREGOING SHALL (I) PREVENT ANY LENDER
FROM DISCLOSING INFORMATION TO THE EXTENT PERMITTED BY THE IMMEDIATELY PRECEDING
PARAGRAPH OR (II) DIMINISH THE OBLIGATION OF THE BORROWER TO IDENTIFY
INFORMATION THAT MAY BE PROVIDED TO PUBLIC LENDERS IN ACCORDANCE WITH THE FINAL
PARAGRAPH OF SECTION 5.01.

 

SECTION 9.13.        Patriot Act. Each Lender that is subject to the
requirements of the Patriot Act hereby notifies each Loan Party that pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the Patriot Act.

 

SECTION 9.14.        Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which
are treated as interest on such Loan under applicable Law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with applicable Law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.

 

SECTION 9.15.        No Fiduciary Duty. In connection with all aspects of each
transaction contemplated by this Agreement, the Borrower acknowledges and
agrees, and acknowledges the other Loan Parties’ understanding, that (i) each
transaction contemplated by this Agreement is an arm’s-length commercial
transaction, between the Loan Parties, on the one hand, and the Agents and the
Lenders, on the other hand, (ii) in connection with each such transaction and
the process leading thereto, the Agents and the Lenders will act solely as
principals and not as agents or fiduciaries of the Loan Parties or any of their
stockholders, affiliates, creditors, employees or any other party, (iii) neither
the Agents nor any Lender will assume an advisory or fiduciary responsibility in
favor of the Borrower or any of its Affiliates with respect to any of the
transactions contemplated hereby or the process leading thereto (irrespective of
whether any Agent or any Lender has advised or is currently advising any Loan
Party on other matters) and neither any Agent nor any Lender will have any
obligation to any Loan Party or any of its Affiliates with respect to the
transactions contemplated in this Agreement except the obligations expressly set
forth

 

101

--------------------------------------------------------------------------------

 

herein, (iv) the Agents and each Lender may be engaged in a broad range of
transactions that involve interests that differ from those of the Loan Parties
and their affiliates, and (v) neither the Agent nor any Lender has provided or
will provide any legal, accounting, regulatory or tax advice with respect to any
of the transactions contemplated hereby and the Loan Parties have consulted and
will consult their own legal, accounting, regulatory, and tax advisors to the
extent it deems appropriate. The matters set forth in this Agreement and the
other Loan Documents reflect an arm’s-length commercial transaction between the
Loan Parties, on the one hand, and the Agents and the Lenders, on the other
hand. the Borrower agrees that the Loan Parties shall not assert any claims that
any Loan Party may have against any Agent or any Lender based on any breach or
alleged breach of fiduciary duty.

 

SECTION 9.16.        Judgment Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder in Dollars (the “specified currency”) into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase the specified
currency with such other currency at the Administrative Agent’s main New York
City office on the Business Day preceding that on which final, non-appealable
judgment is given. The obligations of the Borrower in respect of any sum due to
any Lender or the Administrative Agent hereunder shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only to
the extent that on the Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or the Administrative Agent (as the case may be)
may in accordance with normal, reasonable banking procedures purchase the
specified currency with such other currency. If the amount of the specified
currency so purchased is less than the sum originally due to such Lender or the
Administrative Agent, as the case may be, in the specified currency, the
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Administrative Agent, as the case may be, against such loss, and
if the amount of the specified currency so purchased exceeds (a) the sum
originally due to any Lender or the Administrative Agent, as the case may be, in
the specified currency and (b) any amounts shared with other Lenders as a result
of allocations of such excess as a disproportionate payment to such Lender under
Section 2.17, such Lender or the Administrative Agent, as the case may be,
agrees to remit such excess to the Borrower.

 

[Signature Pages Follow]

 

102

--------------------------------------------------------------------------------

 

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

 

 

 

CROWN MEDIA HOLDINGS, INC., as the Borrower

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew Rooke

 

 

 

Name:

Andrew Rooke

 

 

 

Title:

Executive Vice President and

 

 

 

 

Chief Financial Officer

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

 

individually as a Lender, as the Swingline Lender, as the Issuing Bank and as
Administrative Agent

 

 

 

 

 

 

 

 

 

 

By:

/s/ Reginald M. Goldsmith III

 

 

 

Name:

Reginald M. Goldsmith III

 

 

 

Title:

Managing Director

 

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

Royal Bank of Canada,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edward Valderrama

 

 

 

Name: Edward Valderrama

 

 

 

Title: Authorized Signatory

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

U.S. Bank National Association,

 

 

Individually as a Lender and as a Joint Lead Arranger

 

 

 

 

 

 

 

 

By:

/s/ Tim Landro

 

 

 

Name:

Tim Landro

 

 

 

Title:

Vice President

 

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

FIFTH THIRD BANK,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Eric Oberfield

 

 

 

Name: Eric Oberfield

 

 

 

Title: Vice President

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

Bank of America, N.A.

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew Koenig

 

 

 

Name:

Matthew Koenig

 

 

 

Title:

Senior Vice President

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gerardo B. Loera

 

 

 

Name:

Gerardo B. Loera

 

 

 

Title:

Executive Director

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

Bank of the West,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Brad Conley

 

 

 

Name:

Brad Conley

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

 

If a second signature is necessary:

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

Branch Banking and Trust Company,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Elizabeth Willis

 

 

 

Name: Elizabeth Willis

 

 

 

Title: Vice President

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

COMMERCE BANK,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jeffrey M. Turner

 

 

 

Name:

Jeffrey M. Turner

 

 

 

Title:

Vice President

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

FIRST HAWAIIAN BANK,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Dawn Hofmann

 

 

 

Name: Dawn Hofmann

 

 

 

Title: Senior Vice President

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

 

Manufacturers Bank,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Sean Walker

 

 

 

Name:

Sean Walker

 

 

 

Title:

Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

If a second signature is necessary:

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

[Crown Media – Credit Agreement]

 

--------------------------------------------------------------------------------