Exhibit 10.1

 

Execution Version

 

RESTATEMENT AMENDMENT

 

RESTATEMENT AMENDMENT, dated as of November 5, 2012 (this “Amendment”), among
MATTRESS HOLDING CORP., a Delaware corporation., as borrower (the “Borrower”),
MATTRESS HOLDCO, INC., a Delaware corporation (“Holdings”), the Subsidiary
Guarantors, and UBS AG, Stamford Branch, as Administrative Agent.

 

PRELIMINARY STATEMENTS

 

A.                                    Borrower has entered into that certain
credit agreement dated as of January 18, 2007, as amended and restated as of
February 16, 2007, as further amended by that certain Amendment No. 1 thereto
dated June 28, 2011 and that certain Revolver Increase Joinder dated May 1, 2012
(as further amended, amended and restated, modified or changed, the “Existing
Credit Agreement”), with MATTRESS HOLDCO, INC., a Delaware corporation
(“Holdings”), the Subsidiary Guarantors party thereto, the Lenders, UBS
SECURITIES LLC, as sole arranger and sole bookrunner and as syndication agent,
UBS LOAN FINANCE LLC, as swingline lender (in such capacity, “Swingline
Lender”), and UBS AG, STAMFORD BRANCH, as issuing bank (in such capacity,
“Issuing Bank”), as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders and as collateral agent, and other parties thereto. 
Capitalized terms not otherwise defined in this Amendment have the same meanings
as specified in the Second Amended and Restated Credit Agreement (as defined
below) or, if not defined therein, in the Existing Credit Agreement.

 

B.                                    The parties hereto wish to amend and
restate the Existing Credit Agreement in its entirety on the terms set forth in
the Second Amended and Restated Credit Agreement to, among other things, extend
the maturity and increase the Applicable Margin of a portion of the Term Loans,
extend the maturity and increase the Applicable Margin on all of Revolving
Commitments, and increase the aggregate amount of the Revolving Commitments.

 

C.                                    UBS Securities LLC shall be the sole lead
arranger and bookrunner for the transactions contemplated by this Amendment.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the sufficiency and receipt of all of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.  Definitions.

 

(a)                                 “Additional Revolving Commitments” shall
mean, with respect to any person, the commitment, if any, of such person to
establish Revolving Commitments, or, in the case of an Existing Revolving
Lender, to increase such Existing Revolving Lender’s existing Revolving
Commitment, in each case under the Second Amended and Restated Credit Agreement
as of the Second Amendment and Restatement Effective Date in the aggregate
principal amount set forth on Schedule I to the Additional Revolving Commitment
Lender Addendum executed and delivered to the Administrative Agent by such
person.  The aggregate amount of the Additional Revolving Commitments is
$100,000,000.

 

(b)                                 “Additional Revolving Commitment Lender
Addendum” shall mean an Additional Revolving Commitment Lender Addendum in the
form of Annex C hereto, executed and delivered to the Administrative Agent prior
to the Consent Deadline.

 

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(c)                                  “Additional Revolving Lender” shall mean
any person who is not an Existing Revolving Lender who executes and delivers an
Additional Revolving Commitment Lender Addendum to the Administrative Agent
prior to the Consent Deadline.

 

(d)                                 “Consent” means a consent to this Amendment
substantially in the form of Annex A hereto.

 

(e)                                  “Existing Term Loan” shall mean a “Term
Loan” as defined in the Existing Credit Agreement.

 

(f)                                   “Existing Term Loan Lender” shall mean a
“Term Loan Lender” as defined in the Existing Credit Agreement.

 

(g)                                  “Term B-1 Loan” shall mean the term loans
described as “Term B-1 Loans” in Sections 3(b) and (c).

 

(h)                                 “Term B-1 Loan Lender” shall mean a person
in its capacity as a holder of a Term B-1 Loan.  For the avoidance of doubt, the
same person may be both a Term B-1 Loan Lender and a Term B-2 Lender.

 

(i)                                     “Term B-2 Loan” shall mean any Existing
Term Loan, to the extent the Existing Term Loan Lender with respect to which has
delivered a Consent to the Administrative Agent (or its representative) prior to
the Consent Deadline (as defined below) in the capacity of an “Extending Term
Lender”.

 

(j)                                    “Term B-2 Loan Lender” shall mean a
person in its capacity as a holder of a Term B-2 Loan.  For the avoidance of
doubt, the same person may be both a Term B-1 Loan Lender and a Term B-2 Lender.

 

SECTION 2.  Amendment and Restatement.  Effective as of the Second Amendment and
Restatement Effective Date, and subject to the terms and conditions set forth
herein, (i) the Existing Credit Agreement is hereby amended and restated in the
form of Annex B hereto (the Existing Credit Agreement, as so amended and
restated, being referred to as the “Second Amended and Restated Credit
Agreement”) and (ii) the Exhibits attached hereto hereby replace in their
entirety the corresponding Exhibits attached to the Existing Credit Agreement,
if any, or constitute new Exhibits to the Second Amended and Restated Credit
Agreement, as applicable.

 

SECTION 3.  Extension of Certain of the Term Loans.

 

(a)                                 On the Second Amendment and Restatement
Effective Date, the Existing Term Loans of each Existing Term Lender in an
aggregate principal amount set forth under “Term Loans—Extended Amount” (the
“Applicable Extended Amount” with respect to such Existing Term Loan) on the
Consent executed and delivered by such Existing Term Loan Lender shall be
converted and automatically reclassified into Term B-2 Loans in an aggregate
principal amount equal to the Applicable Extended Amount, and shall be in effect
and outstanding under the Second Amended and Restated Credit Agreement on the
terms and conditions set forth therein applicable to Term B-2 Loans.  The
Administrative Agent may, in consultation with Borrower, establish minimum
amounts and minimum increments in which the Existing Term Loans may be converted
to Term B-2 Loans.

 

(b)                                 Any Existing Term Loan (i) the Existing Term
Loan Lender with respect to which shall have executed a Consent prior to Consent
Deadline in the capacity of a “Non-Extending Term

 

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Lender” or (ii) not executed a Consent prior to the Consent Deadline, shall in
each case be deemed from and after the Second Amendment and Restatement
Effective Date to be a “Term B-1 Loan” in an aggregate principal amount equal to
the amount of such Existing Term Loan immediately prior to the occurrence of the
Second Amendment and Restatement Effective Date, and such Term B-1 Loan shall be
in effect and outstanding under the Second Amended and Restated Credit Agreement
on the terms and conditions set forth therein applicable to Term B-1 Loans.

 

(c)                                  Any Existing Term Loan, the Existing Term
Loan Lender with respect to which shall have executed a Consent prior to the
Consent Deadline in the capacity of an “Extending Term Lender”, in an aggregate
principal amount less than the Applicable Extended Amount with respect to such
Existing Term Loan shall be deemed to be a “Term B-1 Loan” in an aggregate
principal amount equal to the excess of the aggregate principal amount of such
Existing Term Loan over such Applicable Extended Amount, and such Term B-1 Loan
shall be in effect and outstanding under the Second Amended and Restated Credit
Agreement on the terms and conditions set forth therein applicable to Term B-1
Loans.

 

SECTION 4.  Concerning the Revolving Commitments.  Each Existing Revolving
Lender that executes and delivers a Consent or Additional Revolving Commitment
Lender Addendum hereby consents to this Amendment and the extension of the
Revolving Commitments set forth in the Second Amended and Restated Credit
Agreement.  Each Additional Revolving Lender that accepts an Additional
Revolving Commitment pursuant to a fully executed Additional Revolving
Commitment Lender Addendum delivered to the Administrative Agent shall be deemed
to be a Revolving Lender, have consented to this amendment and have a Revolving
Commitment under the Second Amended and Restated Credit Agreement in the amount
set forth in the Additional Revolving Commitment Lender Addendum of such
person.  Each outstanding Revolving Loan, Swingline Loan, and Letter of Credit
under the Existing Credit Agreement shall be deemed an outstanding Revolving
Loan, Swingline Loan, and Letter of Credit, as applicable, under the Second
Amended and Restated Credit Agreement.  Each Revolving Lender that is a
Revolving Lender prior to the Second Amendment and Restatement Effective Date
(an “Existing Revolving Lender”) shall assign to any Additional Revolving
Lender, and such Additional Revolving Lenders shall purchase from each Existing
Revolving Lender, at the principal amount thereof, such interests in the
Revolving Loans and participation interests in LC Exposure and Swingline Loans
outstanding on the Second Amendment and Restatement Effective Date as shall be
necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans and participation interests in LC Exposure and
Swingline Loans will be held by Existing Revolving Lenders and Additional
Revolving Lenders ratably in accordance with their Revolving Commitments after
giving effect to such increased Revolving Commitments.

 

SECTION 5.  Conditions of Effectiveness.  This Amendment and the amendment and
restatement of the Existing Credit Agreement as set forth in Section 2 hereof
shall become effective as of the first date (such date being referred to as the
“Second Amendment and Restatement Effective Date”; it being understood that the
Second Amendment and Restatement Date shall be the “Restatement Effective Date”
under the Second Amended and Restated Credit Agreement) when each of the
following conditions shall have been satisfied:

 

(a)                                 Execution of Documents.  The Administrative
Agent shall have received (i) this Amendment, duly executed and delivered by the
Borrower and each Guarantor, (ii) Consents from the Required Lenders and (iii) a
Consent or Additional Revolving Commitment Lender Addendum from each Revolving
Lender.

 

(b)                                 Consent Fee.  The Administrative Agent shall
have received from the Borrower a consent fee payable in dollars for the account
of each Lender that has returned an executed Consent to this Amendment to the
Administrative Agent prior to 5:00 p.m., New York City time, on October 16, 2012
(the “Consent Deadline”) equal to 0.10% of the sum of (x) the aggregate
principal amount of Existing Term Loans, if any, held by such Lender as of the
Consent Deadline with respect to which a consent was

 

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delivered plus (y) the aggregate amount of the Revolving Commitment, if any, of
such Lender as of the Consent Deadline with respect to which a Consent was
delivered.

 

(c)                                  Extension Fee.  The Administrative Agent
shall have received from the Borrower an extension fee payable in dollars for
the account of each Lender that has returned an executed Consent to this
Amendment to the Administrative Agent prior to the Consent Deadline equal to the
sum of (x) 0.15% of the aggregate principal amount of Existing Term Loans
converted into Term B-2 Loans by such Lender pursuant to this Amendment plus
(y) 0.15% of the aggregate amount of the Revolving Commitment, if any, of such
Lender as of the Consent Deadline with respect to which a Consent was delivered.

 

(d)                                 Certificate of Responsible Officer.  The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower, certifying the conditions set forth in Sections 4.02(b) and
(c) of the Second Amended and Restated Credit Agreement shall have been
satisfied on and as of the Second Amendment and Restatement Effective Date.

 

(e)                                  Fees.  UBS Securities LLC and its
affiliates shall have received on the Second Amendment and Restatement Effective
Date all fees separately agreed to with the Borrower and the reasonable fees and
expenses of Cahill Gordon & Reindel LLP as counsel to such firms shall have been
paid, in each case to the extent invoiced at least one Business Day prior to the
Second Amendment and Restatement Effective Date.

 

(f)                                   Notes.  Each Lender that requests a Note
pursuant to Section 8 hereof at least three (3) Business Days prior to the
Second Amendment and Restatement Effective Date shall have received an executed
Note as provided for therein.

 

(g)                                  Legal Opinion.  The Administrative Agent
shall have received a customary legal opinion of Ropes & Gray addressed to it
and the Lenders.

 

(h)                                 Perfection Certificate and Lien Searches. 
The Administrative Agent shall have received (i) an updated perfection
certificate with respect to the Loan Parties in form and substance consistent
with such certificates previously delivered to the Administrative Agent and
(ii) copies of a recent Lien and judgment search in the respective jurisdictions
of organization of each of the Loan Parties.

 

(i)                                     Solvency Certificate.  The
Administrative Agent shall have received a solvency certificate substantially in
the form of Exhibit O to the Existing Credit Agreement and dated the Second
Amendment and Restatement Effective Date and signed by the principal financial
officer of Borrower.

 

(j)                                    Minimum Conversion Amount.  A minimum of
60% of the aggregate principal amount of existing Term Loans shall have been
converted into Term B-2 Loans pursuant to this Amendment.

 

The Administrative Agent shall notify Borrower and Lenders in writing when this
Amendment and the amendment and restatement of the Existing Credit Agreement
have become effective.

 

SECTION 6.  Representations and Warranties.  Borrower represents and warrants as
follows as of the date hereof:

 

(a)                                 The execution, delivery and performance by
each Loan Party of this Amendment have been duly authorized by all necessary
corporate or other organizational action.  The execution,

 

4

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delivery and performance by each Loan Party of this Amendment will not
(i) violate the Organizational Documents of such person, (ii) violate any
Requirement of Law applicable to such person, (iii) violate or result in a
default or require any consent or approval under any indenture, agreement or
other instrument binding upon such person or its property, or give rise to a
right thereunder to require any payment to be made by such person, except for
violations, defaults, failures to obtain any consent or approval or the creation
of such rights that could not reasonably be expected to result in a Material
Adverse Effect, and (iv) will not result in the creation or imposition of any
Lien on any property of such person, except Liens created by the Loan Documents
and Permitted Liens.

 

(b)                                 This Amendment has been duly executed and
delivered by each Loan Party.  Each of this Amendment, the Second Amended and
Restated Credit Agreement and each other Loan Document to which such person is a
party, after giving effect to the amendments pursuant to this Amendment,
constitutes a legal, valid and binding obligation of such person, enforceable
against such person in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

SECTION 7.  Reference to and Effect on the Credit Agreement and the Loan
Documents; Reaffirmation.

 

(a)                                 Except as expressly set forth herein or in
the Second Amended and Restated Credit Agreement, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of, or otherwise
affect the rights and remedies of the Lenders, the Administrative Agent,
Borrower or the other Loan Parties under the Existing Credit Agreement or any
other Loan Document, and shall not alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Existing Credit Agreement or any other Loan Document, all of which are ratified
and affirmed in all respects and shall continue in full force and effect.

 

(b)                                 This Amendment constitutes a Loan Document.

 

(c)                                  On and after the effectiveness of this
Amendment, each reference to the Credit Agreement in any other Loan Document
shall mean and be a reference to the Second Amended and Restated Credit
Agreement.

 

(d)                                 Each Loan Party hereby expressly
acknowledges the terms of this Amendment and the Second Amended and Restated
Credit Agreement and reaffirms, as of the date hereof, (i) the covenants and
agreements contained in each Loan Document to which it is a party, including, in
each case, such covenants and agreements as in effect immediately after giving
effect to this Amendment, the Second Amended and Restated Credit Agreement and
the transactions contemplated hereby and (ii) its guarantee of the Secured
Obligations (including, without limitation, in respect of the Term B-1 Loans and
Term B-2 Loans and the Secured Obligations arising under any extensions of
credit made in reliance on the Additional Revolving Commitments) under the
Second Amended and Restated Credit Agreement, as applicable, and its grant of
Liens on the Collateral to secure the Secured Obligations (including, without
limitation, in respect of the Term B-1 Loans and Term B-2 Loans and the Secured
Obligations arising under any extensions of credit made in reliance on the
Additional Revolving Commitments) pursuant to the Security Documents.

 

SECTION 8.  Replacement Notes.  Borrower shall provide to each Lender executing
this Amendment, if requested by it through the Administrative Agent, one or more
replacement Notes payable to the order of such Lender duly executed by the
Borrower, evidencing such Lender’s Term B-1 Loans,

 

5

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Revolving Loans or Term B-2 Loans, if any; provided that such Lender shall have
returned to the Borrower any Note held by it for cancellation.

 

SECTION 9.  Execution in Counterparts.  This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery by facsimile or
electronic transmission of an executed counterpart of a signature page to this
Amendment shall be effective as delivery of an original executed counterpart of
this Amendment.

 

SECTION 10.  Notices.  All communications and notices hereunder shall be given
as provided in the Second Amended and Restated Credit Agreement.

 

SECTION 11.  Severability. If any provision of this Amendment is held to be
illegal, invalid or unenforceable, the legality, validity and enforceability of
the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby.  The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

SECTION 12.  Successors.  The terms of this Amendment shall be binding upon, and
shall inure for the benefit of, the parties hereto and their respective
successors and assigns.

 

SECTION 13.  Governing Law.  This Amendment (and each Consent) shall be governed
by, and construed in accordance with, the law of the State of New York.

 

[The remainder of this page is intentionally left blank]

 

6

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

 

MATTRESS HOLDING CORP.

 

 

 

 

 

 

By:

/s/ James R. Black

 

Name:

James R. Black

 

Title:

Vice President and Treasurer

 

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MATTRESS HOLDCO INC.

 

 

 

 

 

By:

/s/ James R. Black

 

 

Name:

James R. Black

 

 

Title:

Vice President and Treasurer

 

 

 

 

 

 

 

 

 

MATTRESS FIRM, INC.

 

 

 

 

 

 

 

By:

/s/ James R. Black

 

 

Name:

James R. Black

 

 

Title:

Executive Vice President, Chief Financial Officer and

 

 

Treasurer

 

 

 

 

 

 

 

 

 

MATTRESS FIRM — VISION PARK, LLC

 

 

 

 

 

MATTRESS FIRM — ARIZONA, LLC

 

 

 

 

 

METROPOLITAN MATTRESS CORPORATION

 

 

 

 

 

MAGGIE’S ENTERPRISES, LLC

 

 

 

 

 

THE MATTRESS VENTURE, LLC

 

 

 

 

 

MGHC HOLDING CORPORATION

 

 

 

 

 

MATTRESS GIANT ACQUISITION CORPORATION

 

 

 

 

 

MATTRESS GIANT CORPORATION

 

 

 

 

 

MGC MEMBERSHIP CORPORATION

 

 

 

 

 

MGIANT GENPAR, LLC

 

 

 

 

 

MGIANT LIMPAR, LLC

 

 

 

 

 

 

 

By:

/s/ James R. Black

 

 

Name:

James R. Black

 

 

Title:

Vice President and Treasurer

 

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UBS AG, STAMFORD BRANCH,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Irja R. Otsa

 

Name:

Irja R. Otsa

 

Title:

Associate Director, Banking Products Services, US

 

 

 

 

 

 

 

By:

/s/ David Urban

 

Name:

David Urban

 

Title:

Associate Director, Banking Products Services, US

 

2

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ANNEX A

 

CONSENT to the Restatement Amendment, dated as of November 5, 2012 (the
“Amendment”) among MATTRESS HOLDING CORP., a Delaware corporation., as borrower
(the “Borrower”), MATTRESS HOLDCO, INC., a Delaware corporation (“Holdings”),
the Subsidiary Guarantors, and UBS AG, Stamford Branch, as Administrative Agent.

 

By executing this signature page:

 

(i) as an “Extending Term Lender”, the undersigned institution agrees (A) to the
terms of the Amendment and the Second Amended and Restated Credit Agreement and
(B) on the terms and subject to the conditions set forth in the Amendment and
the Second Amended and Restated Credit Agreement, to extend, convert and
reclassify its existing Term Loans as Term B-2 Loans in up to the amounts
reflected in accordance with Section 3 of the Amendment,

 

(ii) as a Revolving Credit Lender, the undersigned institution agrees to the
terms of the Amendment and the Second Amended and Restated Credit Agreement
(including the extension of the maturity of its Revolving Commitments), and

 

(iii) as an existing Term Lender that is not an Extending Term Lender (any such
Lender, a “Non-Extending Term Lender”), the undersigned institution agrees to
the terms of the Amendment and the Second Amended and Restated Credit Agreement,
but not to extend and reclassify its existing Term Loans, if any, as Term B-2
Loans.

 

Name of Lender:

 

 

 

Executing as an Extending Term Lender:

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

For any Institution requiring a second signature line:

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

 

If you are electing to extend all of your Term Loans simply write all in the
Extended Amount box below and there is no need to fill in the Existing Amount
box.

 

Term Loans

 

Existing Amount

 

Extended Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executing as a Non-Extending Term Lender:

 

Executing as a Revolving Lender:

by

 

 

by

 

 

 

 

 

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

For any Institution requiring a second signature line:

 

For any Institution requiring a second signature line:

by

 

 

by

 

 

 

 

 

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

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ANNEX B

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of November 5, 2012,

 

among

 

MATTRESS HOLDING CORP.,
as Borrower,

 

MATTRESS HOLDCO, INC.
and

 

THE OTHER GUARANTORS PARTY HERETO,
as Guarantors,

 

THE LENDERS PARTY HERETO
and

 

UBS SECURITIES LLC,
as Sole Arranger, Sole Bookmanager and Syndication Agent,

and

 

UBS AG, STAMFORD BRANCH,
as Issuing Bank, Administrative Agent and Collateral Agent,

and

 

UBS LOAN FINANCE LLC,
as Swingline Lender,

and

 

AMEGY BANK NATIONAL ASSOCIATION,
as Documentation Agent

 

Cahill Gordon & Reindel LLP

80 Pine Street

New York, NY  10005

829359

 

 

 

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TABLE OF CONTENTS

 

Section

 

Page

 

 

 

ARTICLE I

 

DEFINITIONS

 

 

 

SECTION 1.01

Defined Terms

1

SECTION 1.02

Classification of Loans and Borrowings

38

SECTION 1.03

Terms Generally

38

SECTION 1.04

Accounting Terms; GAAP

38

SECTION 1.05

Resolution of Drafting Ambiguities

39

SECTION 1.06

Effect of Restatement

39

 

 

 

ARTICLE II

 

THE CREDITS

 

 

 

SECTION 2.01

Revolving Commitments and Term Loans

39

SECTION 2.02

Loans

40

SECTION 2.03

Borrowing Procedure

41

SECTION 2.04

Evidence of Debt; Repayment of Loans

42

SECTION 2.05

Fees

43

SECTION 2.06

Interest on Loans

44

SECTION 2.07

Termination and Reduction of Commitments

45

SECTION 2.08

Interest Elections

45

SECTION 2.09

Amortization of Term Borrowings

46

SECTION 2.10

Optional and Mandatory Prepayments of Loans

46

SECTION 2.11

Alternate Rate of Interest

50

SECTION 2.12

Yield Protection

51

SECTION 2.13

Breakage Payments

52

SECTION 2.14

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

52

SECTION 2.15

Taxes

54

SECTION 2.16

Mitigation Obligations; Replacement of Lenders

57

SECTION 2.17

Swingline Loans

58

SECTION 2.18

Letters of Credit

59

SECTION 2.19

Increase in Commitments

65

SECTION 2.20

Defaulting Lenders

67

 

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

 

 

SECTION 3.01

Organization; Powers

69

SECTION 3.02

Authorization; Enforceability

69

SECTION 3.03

No Conflicts

69

SECTION 3.04

Financial Statements; Projections

70

SECTION 3.05

Properties

70

SECTION 3.06

Intellectual Property

71

 

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Page

 

 

 

SECTION 3.07

Equity Interests and Subsidiaries

72

SECTION 3.08

Litigation; Compliance with Laws

72

SECTION 3.09

Agreements

72

SECTION 3.10

Federal Reserve Regulations

73

SECTION 3.11

Investment Company Act

73

SECTION 3.12

Use of Proceeds

73

SECTION 3.13

Taxes

73

SECTION 3.14

No Material Misstatements

73

SECTION 3.15

Labor Matters

73

SECTION 3.16

Solvency

74

SECTION 3.17

Employee Benefit Plans

74

SECTION 3.18

Environmental Matters

74

SECTION 3.19

Insurance

75

SECTION 3.20

Security Documents

76

SECTION 3.21

[Intentionally Omitted]

76

SECTION 3.22

Anti-Terrorism Law

77

SECTION 3.23

[Intentionally Omitted]

77

 

 

 

ARTICLE IV

 

CONDITIONS TO CREDIT EXTENSIONS

 

 

 

SECTION 4.01

Conditions to Effectiveness and Initial Credit Extension

77

SECTION 4.02

Conditions to All Credit Extensions

77

SECTION 4.03

Conditions to Effectiveness

78

 

 

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

 

 

SECTION 5.01

Financial Statements, Reports, etc.

79

SECTION 5.02

Litigation and Other Notices

81

SECTION 5.03

Existence; Businesses and Properties

81

SECTION 5.04

Insurance

82

SECTION 5.05

Taxes

83

SECTION 5.06

Employee Benefits

84

SECTION 5.07

Maintaining Records; Access to Properties and Inspections; Annual Meetings

84

SECTION 5.08

Use of Proceeds

84

SECTION 5.09

Compliance with Environmental Laws; Environmental Reports

84

SECTION 5.10

[Intentionally Omitted]

85

SECTION 5.11

Additional Collateral; Additional Guarantors

85

SECTION 5.12

Security Interests; Further Assurances

86

SECTION 5.13

Information Regarding Collateral

86

 

 

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

 

 

SECTION 6.01

Indebtedness

87

SECTION 6.02

Liens

88

 

ii

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Page

 

 

 

SECTION 6.03

[Intentionally Omitted]

91

SECTION 6.04

Investment, Loan and Advances

91

SECTION 6.05

Mergers and Consolidations

92

SECTION 6.06

Asset Sales

93

SECTION 6.07

Acquisitions

93

SECTION 6.08

Dividends

94

SECTION 6.09

Transactions with Affiliates

95

SECTION 6.10

Financial Covenants

96

SECTION 6.11

Prepayments of Other Indebtedness; Modifications of Organizational Documents and
Other Documents, etc.

97

SECTION 6.12

Limitation on Certain Restrictions on Subsidiaries

97

SECTION 6.13

Limitation on Issuance of Capital Stock

98

SECTION 6.14

Limitation on Creation of Subsidiaries

98

SECTION 6.15

Business

99

SECTION 6.16

Limitation on Accounting Changes

99

SECTION 6.17

Fiscal Year

99

SECTION 6.18

[Intentionally Omitted]

99

SECTION 6.19

No Further Negative Pledge

99

SECTION 6.20

Anti-Terrorism Law; Anti-Money Laundering

99

SECTION 6.21

Embargoed Person

100

 

 

 

ARTICLE VII

 

GUARANTEE

 

 

 

SECTION 7.01

The Guarantee

100

SECTION 7.02

Obligations Unconditional

100

SECTION 7.03

Reinstatement

101

SECTION 7.04

Subrogation; Subordination

102

SECTION 7.05

Remedies

102

SECTION 7.06

Instrument for the Payment of Money

102

SECTION 7.07

Continuing Guarantee

102

SECTION 7.08

General Limitation on Guarantee Obligations

102

SECTION 7.09

Release of Guarantors

102

SECTION 7.10

Right of Contribution

103

 

 

 

ARTICLE VIII

 

EVENTS OF DEFAULT

 

 

 

SECTION 8.01

Events of Default

103

SECTION 8.02

Rescission

105

SECTION 8.03

Application of Proceeds

106

SECTION 8.04

Right to Cure

106

 

 

 

ARTICLE IX

 

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

 

 

SECTION 9.01

Appointment and Authority

107

SECTION 9.02

Rights as a Lender

107

 

iii

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Page

 

 

 

SECTION 9.03

Exculpatory Provisions

107

SECTION 9.04

Reliance by Agent

108

SECTION 9.05

Delegation of Duties

109

SECTION 9.06

Resignation of Agent

109

SECTION 9.07

Non-Reliance on Agent and Other Lenders

109

SECTION 9.08

No Other Duties, etc.

109

SECTION 9.09

Withholding Taxes

110

 

 

 

ARTICLE X

 

MISCELLANEOUS

 

 

 

SECTION 10.01

Notices

110

SECTION 10.02

Waivers; Amendment

113

SECTION 10.03

Expenses; Indemnity; Damage Waiver

116

SECTION 10.04

Successors and Assigns

117

SECTION 10.05

Survival of Agreement

120

SECTION 10.06

Counterparts; Integration; Effectiveness

121

SECTION 10.07

Severability

121

SECTION 10.08

Right of Setoff

121

SECTION 10.09

Governing Law; Jurisdiction; Consent to Service of Process

121

SECTION 10.10

Waiver of Jury Trial

122

SECTION 10.11

Headings

122

SECTION 10.12

Treatment of Certain Information; Confidentiality

122

SECTION 10.13

USA PATRIOT Act Notice

123

SECTION 10.14

Interest Rate Limitation

123

SECTION 10.15

[Intentionally Omitted]

123

SECTION 10.16

Obligations Absolute

123

 

 

 

 

 

 

ANNEXES

 

 

 

 

 

Annex I-A

Term B-1 Loan Amortization Table

 

Annex I-B

Term B-2 Loan Amortization Table

 

Annex II

Consolidated EBITDA

 

 

 

 

 

 

 

 

iv

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This CREDIT AGREEMENT (this “Agreement”) dated as of November 5, 2012, among
MATTRESS HOLDING CORP., a Delaware corporation., as borrower (the “Borrower”),
MATTRESS HOLDCO, INC., a Delaware corporation (“Holdings”), the Subsidiary
Guarantors (such term and each other capitalized term used but not defined
herein having the meaning given to it in Article I), the Lenders, UBS SECURITIES
LLC, as sole arranger and sole bookrunner (in such capacity, “Arranger”) and as
syndication agent (in such capacity, “Syndication Agent”), UBS LOAN FINANCE LLC,
as swingline lender (in such capacity, “Swingline Lender”), AMEGY BANK NATIONAL
ASSOCIATION, as documentation agent (in such capacity, “Documentation Agent”),
and UBS AG, STAMFORD BRANCH, as issuing bank (in such capacity, “Issuing Bank”),
as administrative agent (in such capacity, “Administrative Agent”) for the
Lenders and as collateral agent (in such capacity, “Collateral Agent”) for the
Secured Parties and the Issuing Bank.

 

RECITALS:

 

The Borrower, the Guarantors party thereto, the Administrative Agent, the
Collateral Agent and the lenders party thereto from time to time (the “Existing
Lenders”) are parties to that certain Credit Agreement, dated as of January 18,
2007, as amended and restated as of February 16, 2007, as further amended by
that certain Amendment No. 1 thereto dated June 28, 2011 and that certain
Revolver Increase Joinder dated May 1, 2012 (as further amended, modified or
supplemented from time to time before the date hereof, the “Existing Credit
Agreement”), pursuant to which the Existing Lenders extended or committed to
extend credit under the Existing Credit Agreement in the form of (a) term loans
in an aggregate principal amount of $225.0 million, and (b) revolving loans, in
an aggregate principal committed amount at any time outstanding not in excess of
$35.0 million.

 

Subject to the satisfaction of the conditions set forth in the Restatement
Amendment, dated as of November 5, 2012 (the “Restatement Amendment”) among the
Borrower, the Guarantors party thereto, the Administrative Agent, the Collateral
Agent, the Lenders party thereto, the Existing Credit Agreement is hereby
amended and restated in its entirety as follows:

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

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

 

“ABR Loan” shall mean any ABR Term Loan or ABR Revolving Loan.

 

“ABR Revolving Loan” shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

 

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

 

“ABR Term B-1 Loan” shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

 

“ABR Term B-2 Loan” shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

 

“ABR Term Loan” shall mean any ABR Term B-1 Loan or any ABR Term B-2 Loan.

 

“Acquired Entity or Business” shall mean any Person, property, business or asset
acquired by Borrower or any Subsidiary, to the extent not subsequently sold,
transferred or otherwise disposed of by Borrower or such Subsidiary.

 

“Acquired Indebtedness” shall mean (a) with respect to any person that becomes a
Subsidiary after the Restatement Effective Date as a result of a Permitted
Acquisition, Indebtedness of such person and its subsidiaries existing at the
time such person becomes a Subsidiary that was not incurred in connection with,
or in contemplation of, such Permitted Acquisition and (b) with respect to
Holdings or any Subsidiary, any Indebtedness of a person (other than Borrower or
a Subsidiary) existing at the time such person is merged with or into Holdings
or a Subsidiary in connection with a Permitted Acquisition, or Indebtedness
expressly assumed by Holdings or any Subsidiary in connection with a Permitted
Acquisition, which Indebtedness was not, in any case, incurred by such other
person in connection with, or in contemplation of, such Permitted Acquisition.

 

“Acquisition Consideration” shall mean the purchase consideration for any
Permitted Acquisition and all other payments by Holdings or any of its
Subsidiaries in exchange for, or as part of, or in connection with, any
Permitted Acquisition, whether paid in cash or by exchange of Equity Interests
or of properties or otherwise and whether payable at or prior to the
consummation of such Permitted Acquisition or deferred for payment at any future
time, whether or not any such future payment is subject to the occurrence of any
contingency, and includes any and all Earn-out Obligations.

 

“Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, (a) an interest rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) determined by the Administrative Agent
to be equal to the LIBOR Rate for such Eurodollar Borrowing in effect for such
Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto and includes each other person appointed as the successor
pursuant to Article X.

 

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

 

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

 

“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified;
provided, however, that, for purposes of Section 6.09, the term “Affiliate”
shall also include (i) any person that directly or indirectly owns more than 10%
of any class of Equity Interests of the person specified or (ii) any person that
is an executive officer or director of the person specified.

 

2

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

 

“Agents” shall mean the Arranger, the Documentation Agent, the Syndication
Agent, the Administrative Agent and the Collateral Agent; and “Agent” shall mean
any of them.

 

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

 

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upward,
if necessary, to the nearest 1/100th of 1%) equal to the greatest of (a) the
Base Rate in effect on such day, (b) the Federal Funds Effective Rate in effect
on such day plus 0.50% and (c) except with respect to the Term B-1 Loans, the
Adjusted LIBOR Rate for an Interest Period of one-month beginning on such day
(or if such day is not a Business Day, on the immediately preceding Business
Day) plus 100 basis points.  If the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the preceding
sentence until the circumstances giving rise to such inability no longer exist. 
Any change in the Alternate Base Rate due to a change in the Base Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Base Rate or the Federal Funds Effective Rate, respectively.

 

“Anti-Terrorism Laws” shall have the meaning assigned to such term in
Section 3.22.

 

“Applicable Margin” shall mean, for any day, (i) with respect to any Term B-1
Loan, (x) 1.25% with respect to any ABR Term B-1 Loan and (y) 2.25% with respect
to any Eurodollar Term B-1 Loan, (ii) with respect to any Term B-2 Loan,
(x) 2.50% with respect to any ABR Term B-2 Loan and (y) 3.50% with respect to
any Eurodollar Term B-2 Loan and (iii) with respect to any Revolving Loan or
Swingline Loan, (x) 2.50% with respect to any ABR Borrowing and (y) 3.50% with
respect to any Eurodollar Borrowing.  For any Commitment Fee, the applicable
percentage shall be as set forth below:

 

Total Leverage Ratio

 

Commitment Fee

 

Level I
> 2.0:1.0

 

0.50

%

Level II
< 2.0:1.0

 

0.375

%

 

Each change in the Applicable Margin resulting from a change in the Total
Leverage Ratio shall be effective with respect to all Revolving Loans and
Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.01(a) or (b) and Section 5.01(d), respectively, indicating such change
until the date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change.  Notwithstanding the
foregoing, the Total Leverage Ratio shall be deemed to be in Level I at any time
during which Borrower has failed to deliver the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(d),
respectively, and shall continue to so apply to but excluding the date on which
such financial statements and certificates required are so delivered (from which
point the Total Leverage Ratio otherwise determined in accordance with this
definition shall apply). From the Restatement Effective Date until the first
date following the Restatement Effective Date on which financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(d),
respectively, to be delivered, Level I shall be applicable.

 

3

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

 

“Approved Fund” shall mean any Fund 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.

 

“Arranger” and “Arrangers” shall have the meaning assigned to such term in the
preamble hereto.

 

“Asset Sale” shall mean (a) any conveyance, sale, lease, sublease, assignment,
transfer or other disposition (including by way of merger or consolidation and
including any Sale and Leaseback Transaction) of any property excluding sales of
assets and dispositions of cash and cash equivalents, in each case, in the
ordinary course of business, by Holdings or any of its Subsidiaries (other than
Refranchising Sales) and (b) any issuance or sale of any Equity Interests of any
Subsidiary of Holdings, in each case, to any person other than (i) Holdings,
(ii) Borrower, (iii) any Subsidiary Guarantor or (iv) other than for purposes of
Section 6.06, any other Subsidiary.

 

“Assignment and Assumption” shall mean an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.04(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit B, or any other form approved by the
Administrative Agent.

 

“Auto-Renewal Letter of Credit” shall have the meaning assigned to such term in
Section 2.18(c)(ii).

 

“Base Rate” shall mean, for any day, a rate per annum that is equal to the
corporate base rate of interest established by the Administrative Agent from
time to time; each change in the Base Rate shall be effective on the date such
change is effective.  The corporate base rate is not necessarily the lowest rate
charged by the Administrative Agent to its customers.

 

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

 

“Board of Directors” shall mean, with respect to any person, (i) in the case of
any corporation, the board of directors of such person and (ii) in any other
case, the functional equivalent of the foregoing.

 

“Borrower” shall have the meaning assigned to such term in the preamble hereto.

 

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

 

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

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in New York City are authorized or required by law to close;
provided, however, 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.

 

4

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

 

“Capital Assets” shall mean, with respect to any person, all equipment, fixed
assets and Real Property or improvements of such person, or replacements or
substitutions therefor or additions thereto, that, in accordance with GAAP, have
been or should be reflected as additions to property, plant or equipment on the
consolidated statement of cash flows of such person.

 

“Capital Expenditures” shall mean, for any period, without duplication, all
expenditures made directly or indirectly by Holdings and its Subsidiaries during
such period for Capital Assets (whether paid in cash or other consideration,
financed by the incurrence of Indebtedness or accrued as a liability), but
excluding (i) expenditures made in connection with the replacement, substitution
or restoration of property from proceeds that are not otherwise required to be
used to prepay the Loans pursuant to Section 2.10(f) or Section 2.10(c) and
(ii) any portion of such expenditures attributable solely to acquisitions of
property, plant and equipment in Permitted Acquisitions or other Investments and
(iii) expenditures that are accounted for as capital expenditures by Holdings or
any of its Subsidiaries and that actually are paid for, or reimbursed to
Holdings or any of its Subsidiaries in cash or Investments, by a person other
than Holdings or any of its Subsidiaries and for which neither Holdings nor any
of its Subsidiaries has provided or is required to provide or incur, directly or
indirectly, any consideration or obligation (other than rent) in respect of such
expenditures to such person or any other person (whether before, during or after
such period).  For purposes of this definition, the purchase price of equipment
or other fixed assets that are purchased simultaneously with the trade-in of
existing assets or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount by which such purchase price
exceeds the credit granted by the seller of such assets for the assets being
traded in at such time or the amount of such insurance proceeds, as the case may
be.

 

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

 

“Carry-Back Amount” has the meaning specified in Section 6.10(c).

 

“Cash Equivalents” shall mean, as to any person, (a) securities issued, or
directly, unconditionally and fully guaranteed or insured, by the United States
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having maturities of
not more than one year from the date of acquisition by such person; (b) time
deposits and certificates of deposit, Eurodollar time deposits or bankers’
acceptances of any Lender or any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the laws
of the United States, any state thereof or the District of Columbia having,
capital and surplus aggregating in excess of $500.0 million and a rating of “A”
(or such other similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) with maturities of not more than one year from the date of
acquisition by such person; (c) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in
clause (a) above entered into with any bank meeting the qualifications specified
in clause (b) above, which repurchase obligations are secured by a valid
perfected security interest in the underlying securities; (d) commercial paper
issued by any person incorporated in the United States rated at least A-1 or the
equivalent thereof by Standard & Poor’s Rating Service or at least P-1 or the
equivalent thereof by Moody’s Investors Service Inc., and in each case maturing
not more than one year after the date of acquisition by such person;
(e) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (a) through (d) above;
(f) demand deposit and savings deposit accounts maintained in the ordinary
course of business; and (g) in the case of Foreign Subsidiaries, Investments
made locally of a type comparable to those described in clauses (a) — (f) of
this definition.

 

5

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

 

“Cash Interest Expense” shall mean, Consolidated Interest Expense paid or
payable by Borrower and its Subsidiaries in cash less cash interest income
received or receivable by Borrower and its Subsidiaries, in each case for such
period.

 

“Casualty Event” shall mean any loss of title, any loss of, damage to or any
destruction of, or any condemnation or other taking (including by any
Governmental Authority) of, any property of Holdings or any of its
Subsidiaries.  “Casualty Event” shall include but not be limited to any taking
of all or any part of any Real Property of any person or any part thereof, in or
by condemnation or other eminent domain proceedings pursuant to any Requirement
of Law, or by reason of the temporary requisition of the use or occupancy of all
or any part of any Real Property of any person or any part thereof by any
Governmental Authority, civil or military, or any settlement in lieu thereof.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. and all implementing
regulations.

 

A “Change in Control” shall be deemed to have occurred if:

 

(a)                                 Holdings at any time ceases to own 100% of
the Equity Interests of Borrower;

 

(b)                                 (i) any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or
more Permitted Holders for purposes of determining such “person” or “group”, is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause such person or group shall
be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of Voting Stock of
Holdings representing more than 35% of the voting power of the total outstanding
Voting Stock of Holdings and (ii)  the Permitted Holders (collectively) shall,
directly or indirectly, own, or have the power to vote or direct the voting of,
Voting Stock of Holdings representing a lesser percentage of the voting power of
the total outstanding Voting Stock of Holdings than such “person” or “group”; or

 

(c)                                  during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of Holdings (together with any new directors whose election to such
Board of Directors or whose nomination for election was approved by a vote of a
majority of the members of the Board of Directors of Holdings, which members
comprising such majority are then still in office and were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of Holdings;

 

provided, that a Change in Control under clause (b) or (c) shall not be deemed
to have occurred if and for so long as the Permitted Holders own, directly or
indirectly, or have the power to vote or direct the voting of, Voting Stock with
sufficient voting power to elect a majority of directors to the Board of
Directors of Holdings.

 

For purposes of this definition, a person shall not be deemed to have beneficial
ownership of Equity Interests subject to a stock purchase agreement, merger
agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.

 

“Change in Law” shall mean the occurrence, after the date of this Agreement, of
any of the following:  (a) the adoption or taking into effect of any law,
treaty, order, policy, rule or regulation, (b) any change in any law, treaty,
order, policy, rule or regulation or in the administration, interpretation

 

6

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

 

or application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline or directive (whether or not having the force
of law) by any Governmental Authority; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all rules or directives thereunder or issued in connection
therewith and (y) all rules or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Charges” shall have the meaning assigned to such term in Section 10.14.

 

“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,
Term B-1 Loans, Term B-2 Loans or Swingline Loans and, when used in reference to
any Commitment, refers to whether such Commitment is a Revolving Commitment or
Swingline Commitment, in each case, under this Agreement as originally in effect
or pursuant to Section 2.19, of which such Loan, Borrowing or Commitment shall
be a part.

 

“Closing Date” shall mean January 18, 2007.

 

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

 

“Collateral” shall mean, collectively, all of the Security Agreement Collateral,
the Mortgaged Property and all other property of whatever kind and nature
subject or purported to be subject from time to time to a Lien under any
Security Document.

 

“Collateral Agent” shall have the meaning assigned to such term in the preamble
hereto.

 

“Commercial Letter of Credit” shall mean any letter of credit or similar
instrument issued for the purpose of providing credit support in connection with
the purchase of materials, goods or services by Borrower or any of its
Subsidiaries in the ordinary course of their businesses.

 

“Commitment” shall mean, with respect to any Revolving Lender, such Lender’s
Revolving Commitment or Swingline Commitment, and any Commitment to make Term
Loans or Revolving Loans of a new Class extended by such Lender as provided in
Section 2.19.

 

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

 

“Communications” shall have the meaning assigned to such term in
Section 10.01(d).

 

“Companies” shall mean Holdings and its Subsidiaries; and “Company” shall mean
any one of them.

 

“Compliance Certificate” shall mean a certificate of a Financial Officer
substantially in the form of Exhibit D.

 

“Consolidated Amortization Expense” shall mean, for any period, the amortization
expense of Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

 

7

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“Consolidated Current Assets” shall mean, as at any date of determination, the
total assets of Borrower and its Subsidiaries which may properly be classified
as current assets on a consolidated balance sheet of Borrower and its
Subsidiaries in accordance with GAAP, excluding unrestricted cash, deferred tax
assets and unrestricted Cash Equivalents but including all restricted cash and
Cash Equivalents.

 

“Consolidated Current Liabilities” shall mean, as at any date of determination,
the total liabilities of Borrower and its Subsidiaries which may properly be
classified as current liabilities on a consolidated balance sheet of Borrower
and its Subsidiaries in accordance with GAAP, excluding deferred tax liabilities
and the then current portion of any Indebtedness.

 

“Consolidated Depreciation Expense” shall mean, for any period, the depreciation
expense of Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, adjusted by (x) adding thereto, in each case only to the extent
(and in the same proportion) deducted in determining such Consolidated Net
Income and without duplication (and with respect to the portion of Consolidated
Net Income attributable to any Subsidiary of Borrower (other than a Subsidiary
Guarantor) only if a corresponding amount would be permitted at the date of
determination to be distributed to Borrower by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its
Organizational Documents and all agreements or instruments (excluding any Loan
Document) and Requirements of Law applicable to such Subsidiary or its
equityholders):

 

(a)                                 Consolidated Interest Expense for such
period,

 

(b)                                 Consolidated Amortization Expense for such
period,

 

(c)                                  Consolidated Depreciation Expense for such
period,

 

(d)                                 Consolidated Tax Expense for such period,

 

(e)                                  costs and expenses related to any equity
offering, permitted Investment, acquisition, disposition or any incurrence (or
early extinguishment) of Indebtedness permitted by this Agreement (in each case
whether or not consummated) and the Transaction Expenses,

 

(f)                                   any non-cash compensation charges,
including any such charges arising from stock options, restricted stock grants
or other equity incentive programs, any costs or expenses incurred by Borrower
or a 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, so long as any such costs or expenses
(other than non-cash charges) are funded with cash proceeds contributed to the
capital of Borrower or net cash proceeds of an issuance of Equity Interests of
Borrower (other than Disqualified Equity Interests),

 

(g)                                  the aggregate amount of all other non-cash
charges reducing Consolidated Net Income (excluding any non-cash charge that
results in an accrual of a reserve for cash charges in any future period) for
such period,

 

(h)                                 to the extent actually reimbursed, expenses
incurred to the extent covered by indemnification provisions in any agreement in
connection with the Transactions, any acquisition consummated prior to the
Restatement Effective Date or a Permitted Acquisition,

 

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(i)                                     to the extent covered by insurance and
actually reimbursed, or, so long as Borrower has made a determination that there
exists reasonable evidence that such amount will in fact be reimbursed by the
insurer and only to the extent that such amount is in fact reimbursed within 120
days of the date of such evidence (with a deduction for any amount so added back
to the extent not so reimbursed within such 120 days), expenses with respect to
liability or casualty events or business interruption,

 

(j)                                    (1) Board of Directors expenses, (2) to
the extent paid or accrued prior to the Restatement Effective Date, (A) expenses
to Sponsor permitted under the Management Services Agreement, including fees and
disbursements of consultants and advisors retained by Sponsor and (B) management
fees and closing fees to Sponsor in the amounts and at the times specified in
the Management Services Agreement and (3) reimbursement of expenses paid in
compliance with Section 6.09(c), and

 

(k)                                 all other non-recurring items reducing
Consolidated Net Income for such period, including, but not limited to,
pre-opening, opening, closing and consolidation costs and expenses; provided
that the aggregate amount of all non-recurring cash items added back for such
period shall not exceed $10.0 million, and

 

(y) subtracting therefrom:

 

(i)                                     the aggregate amount of all non-cash
items increasing Consolidated Net Income (other than (A) the accrual of revenue
or recording of receivables in the ordinary course of business and (B) the
reversal of any accrual of a reserve referred to in the parenthetical in clause
(f) of this definition (other than any such reversal that results from a cash
payment)) for such period; and

 

(ii)                                  all other non-recurring items increasing
Consolidated Net Income for such period.

 

For purposes of determining the Total Leverage Ratio and Consolidated Interest
Coverage Ratio, Consolidated EBITDA shall be calculated on a Pro Forma Basis to
give effect to the Transactions, any Permitted Acquisition and Material Asset
Sale consummated at any time on or after the first day of the Test Period
thereof as if each such Material Asset Sale had been consummated on the day
prior to the first day of such period and as if the Transactions and each such
Permitted Acquisition had been effected on the first day of such period.

 

“Consolidated Indebtedness” shall mean, as at any date of determination, the
aggregate amount of all Indebtedness of Borrower and its Subsidiaries, in an
amount that would be reflected on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP, minus all unrestricted cash and
unrestricted Cash Equivalents on hand of Borrower and its Subsidiaries, in an
amount that would be reflected on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP.

 

“Consolidated Interest Coverage Ratio” shall mean, for any Test Period, the
ratio of (x) Consolidated EBITDA for such Test Period to (y) Cash Interest
Expense for such Test Period.

 

“Consolidated Interest Expense” shall mean, for any period, the total
consolidated interest expense of Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP plus, without
duplication:

 

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(a)                                 imputed interest on Capital Lease
Obligations of Borrower and its Subsidiaries for such period;

 

(b)                                 commissions, discounts and other fees and
charges owed by Borrower or any of its Subsidiaries with respect to letters of
credit securing financial obligations, bankers’ acceptance financing and
receivables financings for such period;

 

(c)                                  amortization of debt issuance costs, debt
discount or premium and other financing fees and expenses incurred by Borrower
or any of its Subsidiaries for such period including, without limitation, net
costs under Hedging Agreements dealing with interest rates and any commitment
fees payable thereunder;

 

(d)                                 cash contributions to any employee stock
ownership plan or similar trust made by Borrower or any of its Subsidiaries to
the extent such contributions are used by such plan or trust to pay interest or
fees to any person (other than Borrower or a Wholly Owned Subsidiary) in
connection with Indebtedness incurred by such plan or trust for such period;

 

(e)                                  all interest paid or payable with respect
to discontinued operations of Borrower or any of its Subsidiaries for such
period;

 

(f)                                   the interest portion of any deferred
payment obligations of Borrower or any of its Subsidiaries for such period; and

 

(g)                                  all interest on any Indebtedness of
Borrower or any of its Subsidiaries of the type described in clause (f) or
(k) of the definition of “Indebtedness” for such period; and

 

provided that, other than for purposes of calculating Consolidated EBITDA,
(a) to the extent directly related to the Transactions, debt issuance costs,
debt discount or premium and other financing fees and expenses shall be excluded
from the calculation of Consolidated Interest Expense and (b) Consolidated
Interest Expense shall be calculated after giving effect to Hedging Agreements
related to interest rates (including associated costs), but excluding unrealized
gains and losses with respect to such Hedging Agreements.

 

For purposes of determining Consolidated Interest Coverage Ratio, Consolidated
Interest Expense shall be calculated on a Pro Forma Basis to give effect to any
Indebtedness incurred, assumed or permanently repaid or extinguished during the
relevant Test Period in connection with any Permitted Acquisition and Material
Asset Sale consummated at any time on or after the first day of the Test Period
thereof as if such incurrence, assumption, repayment or extinguishing had been
effected on the first day of such period.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net
income (or loss) of Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from such
net income (to the extent otherwise included therein), without duplication:

 

(a)                                 the net income (or loss) of any person
(other than a Subsidiary of Borrower) in which any person (other than Borrower
and its Subsidiaries) has an ownership interest, except to the extent that cash
in an amount equal to any such income has actually been received by Borrower or
(subject to clause (b) below) any of its Subsidiaries during such period;

 

10

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(b)                                 the net income of any Subsidiary of Borrower
(other than any Subsidiary Guarantor) during such period to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
of that income is not permitted by operation of the terms of its Organizational
Documents or any agreement, instrument or Requirement of Law applicable to that
Subsidiary during such period, except that Borrower’s equity in net loss of any
such Subsidiary for such period shall be included in determining Consolidated
Net Income;

 

(c)                                  any gain (or loss), together with any
related provisions for taxes on any such gain (or the tax effect of any such
loss), realized during such period by Borrower or any of its Subsidiaries upon
any Asset Sale (other than any dispositions in the ordinary course of business)
by Borrower or any of its Subsidiaries;

 

(d)                                 gains and losses due solely to fluctuations
in currency values and the related tax effects determined in accordance with
GAAP for such period;

 

(e)                                  earnings resulting from any reappraisal,
revaluation or write-up of assets;

 

(f)                                   unrealized gains and losses with respect
to Hedging Obligations for such period;

 

and

 

(g)                                  any extraordinary or non-recurring gain (or
extraordinary or non-recurring loss), together with any related provision for
taxes on any such gain (or the tax effect of any such loss), recorded or
recognized by Borrower or any of its Subsidiaries during such period.

 

For purposes of this definition of “Consolidated Net Income,” Consolidated Net
Income shall be reduced (to the extent not already reduced thereby as an expense
of the Borrower and its subsidiaries in respect thereof) by the amount of any
payments to or on behalf of Holdings made pursuant to Sections 6.08(c) and (d).

 

Notwithstanding any of the foregoing, Consolidated Net Income shall be
calculated for any period without giving effect to purchase accounting or
similar adjustments required or permitted by GAAP in connection with any
Permitted Acquisition.

 

“Consolidated Tax Expense” shall mean, for any period, the tax expense of
Borrower and its Subsidiaries, for such period, determined on a consolidated
basis in accordance with GAAP.

 

“Contested Collateral Lien Conditions” shall mean, with respect to any Permitted
Lien of the type described in clauses (a), (b) and (f) of Section 6.02, the
following conditions:

 

(a)                                 Borrower shall cause any proceeding
instituted contesting such Lien to stay the sale or forfeiture of any portion of
the Collateral on account of such Lien;

 

(b)                                 Borrower shall maintain, to the extent it
deems appropriate or is required by GAAP, cash reserves in an amount sufficient
to pay and discharge such Lien and the Administrative Agent’s reasonable
estimate of all interest and penalties related thereto; and

 

(c)                                  such Lien shall in all respects be subject
and subordinate in priority to the Lien and security interest created and
evidenced by the Security Documents, except (x) if and to the extent that the
Requirement of Law creating, permitting or authorizing such Lien provides that
such Lien is or must be superior to the Lien and security interest created and
evidenced by the Se-

 

11

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curity Documents and (y) for Permitted Collateral Liens which are permitted to
be senior to the Lien and security interest created and evidenced by the
Security Documents.

 

“Contingent Obligation” shall mean, as to any person, any obligation, agreement,
understanding or arrangement of such person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of such person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor; (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation; (d) with respect to bankers’ acceptances,
letters of credit and similar credit arrangements, until a reimbursement
obligation arises (which reimbursement obligation shall constitute
Indebtedness); or (e) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or any product
warranties.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such person may be liable, whether
singly or jointly, pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such person is required to
perform thereunder) as determined by such person in good faith.

 

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

 

“Control Agreement” shall have the meaning assigned to such term in the Security
Agreement.

 

“Controlled Investment Affiliate” shall mean, as to any person, any other person
which directly or indirectly is in Control of, is Controlled by, or is under
common Control with, such person and is organized by such person (or any person
Controlling such person) primarily for making equity or debt investments in
Parent or other portfolio companies.

 

“Credit Extension” shall mean, as the context may require, (i) the making of a
Loan by a Lender or (ii) the issuance of any Letter of Credit, or the amendment,
extension or renewal of any existing Letter of Credit, by the Issuing Bank.

 

“Cumulative Growth Amount” shall mean, on any date of determination, the sum of,
without duplication,

 

(A)                               the amount of Net Cash Proceeds of Permitted
Equity Issuances (other than any Cure Amount) after the Restatement Effective
Date to the extent that such Net Cash Proceeds shall have been actually received
by Borrower (including through a capital contribution of such Net Cash Proceeds
by Holdings to Borrower) on or prior to such date of determination, minus

 

(B)                               the sum at the time of determination of
(i) the aggregate amount of Investments made since the Restatement Effective
Date pursuant to Section 6.04(p), (ii) the aggregate amount of Divi-

 

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dends made since the Restatement Effective Date pursuant to Section 6.08(g),
(iii) the aggregate amount of Capital Expenditures made since the Restatement
Effective Date pursuant to Section 6.10(c), (iv) the aggregate amount of
prepayments or redemption of Subordinated Indebtedness made since the
Restatement Effective Date pursuant to Section 6.11(a)(ii) and (v) the aggregate
amount of Acquisition Consideration consisting of payments made in reliance on
the Cumulative Growth Amount since the Restatement Effective Date.

 

If the Cumulative Growth Amount is being used simultaneously for more than one
purpose hereunder, the Cumulative Growth Amount shall only be allowed to be used
for all such purposes if the Cumulative Growth Amount would be sufficient to
cover all such purposes after giving effect to all such simultaneous uses.

 

“Cure Amount” shall have the meaning specified in Section 8.04.

 

“Cure Right” shall have the meaning specified in Section 8.04.

 

“Debt Issuance” shall mean the incurrence by Holdings or any of its Subsidiaries
of any Indebtedness after the Restatement Effective Date (other than as
permitted by Section 6.01).

 

“Debt Service” shall mean, for any period, Cash Interest Expense for such period
plus scheduled principal amortization of all Indebtedness (other than Earn-out
Obligations) for such period.

 

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

 

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

 

“Defaulting Lender” means, subject to Section 2.20, any Revolving Lender that
(a) has failed to (i) fund all or any portion of its Loans within two Business
Days of the date such Loans were required to be funded hereunder unless such
Revolving Lender notifies the Administrative Agent and the Borrower in writing
that such failure is the result of such Revolving Lender’s determination that
one or more conditions precedent to funding (each of which conditions precedent,
together with any applicable default, shall be specifically identified in such
writing) has not been satisfied, or (ii) pay to the Administrative Agent, any
Issuing Bank, any Swingline Lender or any other Lender any other amount required
to be paid by it hereunder (including in respect of its participation in Letters
of Credit or Swingline Loans) within two Business Days of the date when due,
(b) has notified the Borrower, the Administrative Agent or any Issuing Bank or
Swingline Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Revolving Lender’s obligation
to fund a Loan hereunder and states that such position is based on such
Revolving Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable default, shall be specifically
identified in such writing or public statement) cannot be satisfied), (c) has
failed, within three Business Days after written request by the Administrative
Agent or the Borrower, to confirm in writing to the Administrative Agent and the
Bor rower that it will comply with its prospective funding obligations hereunder
(provided that such Revolving Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon receipt of such written confirmation by the
Administrative Agent and the Borrower), or (d) has, or has a direct or indirect
parent company that has, (i) become the subject of a proceeding under any Debtor
Relief Law, or (ii) had appointed for it a receiver, custodian, conservator,
trustee, administrator, assignee for the benefit of creditors

 

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or similar person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity; provided that a
Revolving Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Revolving Lender or any
direct or indirect parent company thereof by a Governmental Authority so long as
such ownership interest does not result in or provide such Revolving Lender 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
Revolving Lender (or such Governmental Authority) to reject, repudiate, disavow
or disaffirm any contracts or agreements made with such Revolving Lender.  Any
determination by the Administrative Agent that a Revolving Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Revolving Lender shall
be deemed to be a Defaulting Lender (subject to Section 2.20) upon delivery of
written notice of such determination to the Borrower, each Issuing Bank, each
Swingline Lender and each Revolving Lender.

 

“Default Rate” shall have the meaning assigned to such term in Section 2.06(c).

 

“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable (other than solely in exchange for Qualified Capital
Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at
the option of the holder thereof, in whole or in part, on or prior to 6 months
following the Final Maturity Date, (b) is convertible into or exchangeable
(unless at the sole option of the issuer thereof) for (i) debt securities or
(ii) any Equity Interests referred to in (a) above, in each case at any time on
or prior to 6 months following the Final Maturity Date, or (c) contains any
repurchase obligation which may come into effect prior to payment in full of all
Obligations other than repurchase obligations with respect to Holding’s common
Equity Interests issued to employees and directors of Holdings and its
Subsidiaries upon death, disability, retirement, severance or termination of
employment or service and which provide that any repurchase obligation shall not
be effective during the continuance of an Event of Default or if such purchase
of Holding’s Equity Interest would not otherwise be permitted by this Agreement
or would result in an Event of Default under this Agreement and customary change
of control or asset sale proceeds repurchase obligations and which may come into
effect prior to payment in full of all Obligations (other than indemnity
obligations under the Loan Documents that are not then due and payable and for
which no events or claims that could give rise thereto are then pending or
outstanding).

 

“Dividend” with respect to any person shall mean that such person has declared
or paid a dividend or returned any equity capital to the holders of its Equity
Interests or authorized or made any other distribution, payment or delivery of
property (other than Qualified Capital Stock of such person) or cash to the
holders of its Equity Interests as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for consideration any of its Equity
Interests outstanding (or any options or warrants issued by such person with
respect to its Equity Interests), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for consideration any of the Equity Interests of such
person outstanding (or any options or warrants issued by such person with
respect to its Equity Interests).  Without limiting the foregoing, “Dividends”
with respect to any person shall also include all payments made or required to
be made by such person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes.

 

“Documentation Agent” shall have the meaning assigned to such term in the
preamble hereto.

 

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

 

“Earn-out Obligation” shall mean any payment representing the purchase price and
any assumptions of Indebtedness, “earn-outs” and other agreements to make any
payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any person or business; provided that any Earn-out Obligation
shall be valued at any time at the amount reasonably estimated at such time by
the chief financial officer of Borrower to be required to be paid by any Loan
Party based on Borrower’s reasonable projections and discount rate and, upon
request by the Administrative Agent or in connection with any Permitted
Acquisition as set forth below, set forth in an officer’s certificate signed by
the chief financial officer of Borrower and delivered to the Administrative
Agent; provided, further, that the amount actually paid with respect to any
Earn-out Obligation included as Acquisition Consideration in connection with any
Permitted Acquisition in excess of the amount estimated at the time of such
Permitted Acquisition shall be included in Acquisition Consideration or any
dollar threshold contained in this Agreement, but shall not create or result in
a Default under Section 6.04 or 6.07 if the amount in such clause is exceeded
solely by virtue of any underestimate of the amount of such Earn-out
Obligation.  In connection with any Permitted Acquisition, the calculation of
any Earn-out Obligation comprising Acquisition Consideration shall be set forth
in an officer’s certificate signed by the chief financial officer of Borrower
and delivered to the Administrative Agent on or prior to the date of such
Permitted Acquisition.

 

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund, and (d) any other person (other than a natural person)
approved by (i) the Administrative Agent, (ii) in the case of any assignment of
a Revolving Commitment, the Issuing Bank and the Swingline Lender, and
(iii) unless an Event of Default pursuant to Section 8.01(a), (b), (g) or
(h) has occurred and is continuing and except with respect to syndication of the
Commitments and Loans by the Arrangers during the Syndication Period, Borrower
(each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include Borrower or
any of Borrower’s Affiliates or Subsidiaries.

 

“Embargoed Person” shall have the meaning assigned to such term in Section 6.21.

 

“Environment” shall mean ambient air, indoor air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources, the workplace or as otherwise defined in
any Environmental Law.

 

“Environmental Claim” shall mean any claim, notice, demand, order, action, suit,
proceeding or other communication alleging liability for or obligation with
respect to any investigation, remediation, removal, cleanup, response,
corrective action, damages to natural resources, personal injury, property
damage, fines, penalties or other costs resulting from, related to or arising
out of (i) the presence, Release or threatened Release in or into the
Environment of Hazardous Material at any location or (ii) any violation or
alleged violation of any Environmental Law, and shall include any claim seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence,
Release or threatened Release of Hazardous Material or alleged injury or threat
of injury to health, safety or the Environment.

 

“Environmental Law” shall mean any and all present and future treaties, laws,
statutes, ordinances, regulations, rules, decrees, orders, judgments, consent
orders, consent decrees, code or other binding requirements, and the common law,
relating to protection of public health or the Environment, the Release or
threatened Release of Hazardous Material, natural resources or natural resource
damages, or occupational safety or health, and any and all Environmental
Permits.

 

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“Environmental Permit” shall mean any permit, license, approval, registration,
notification, exemption, consent or other authorization required by or from a
Governmental Authority under Environmental Law.

 

“Equity Interest” shall mean, with respect to any person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or nonvoting), of equity of such person,
including, if such person is a partnership, partnership interests (whether
general or limited) and any other interest or participation that confers on a
person the right to receive a share of the profits and losses of, or
distributions of property of, such partnership, whether outstanding on or issued
after the Restatement Effective Date, but excluding debt securities convertible
or exchangeable into such equity.

 

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

 

“ERISA Affiliate” shall mean, with respect to any person, any trade or business
(whether or not incorporated) that, together with such person, 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” shall mean (a) any “reportable event,” as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan (other
than an event for which the 30-day notice period is waived by regulation);
(b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the failure to make by its due date a required
installment under Section 412 or 430 of the Code with respect to any Plan or the
failure to make any required contribution to a Multiemployer Plan; (d) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (e) the incurrence by any Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(f) the receipt by any Company or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (g) the incurrence by any Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; (h) the receipt by any Company or its ERISA Affiliates of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (i) the “substantial
cessation of operations” within the meaning of Section 4062(e) of ERISA with
respect to a Plan; (j) the making of any amendment to any Plan which could
result in the imposition of a lien or the posting of a bond or other security;
and (k) the occurrence of a nonexempt prohibited transaction (within the meaning
of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be
expected to result in liability to any Company.

 

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

 

“Eurodollar Loan” shall mean any Eurodollar Revolving Loan or Eurodollar Term
Loan.

 

“Eurodollar Revolving Borrowing” shall mean a Borrowing comprised of Eurodollar
Revolving Loans.

 

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“Eurodollar Revolving Loan” shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

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

 

“Eurodollar Term B-1 Loan” shall mean any Term B-1 Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

“Eurodollar Term B-2 Loan” shall mean any Term B-2 Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

“Eurodollar Term Loan” shall mean any Eurodollar Term B-1 Loan or Eurodollar
Term B-2 Loan.

 

“Event of Default” shall have the meaning assigned to such term in Section 8.01.

 

“Excess Amount” shall have the meaning assigned to such term in Section 2.10(h).

 

“Excess Cash Flow” shall mean, for any Excess Cash Flow Period, Consolidated
EBITDA for such Excess Cash Flow Period, minus, without duplication:

 

(a)                                 Debt Service for such Excess Cash Flow
Period;

 

(b)                                 any permanent repayments of Indebtedness (so
long as not already reflected in Debt Service and excluding optional prepayments
of the Term Loans made pursuant to Section 2.10(a)) made by Holdings and its
Subsidiaries during such Excess Cash Flow Period;

 

(c)                                  Capital Expenditures during such Excess
Cash Flow Period (excluding Capital Expenditures made in such Excess Cash Flow
Period where a certificate in the form contemplated by the following
clause (d) was previously delivered with respect to such Capital Expenditures)
that are paid in cash (other than Capital Expenditures financed with the Net
Cash Proceeds from Permitted Equity Issuances);

 

(d)                                 Capital Expenditures that Borrower or any of
its Subsidiaries shall, during such Excess Cash Flow Period, become obligated to
make but that are not made during such Excess Cash Flow Period (other than
Capital Expenditures financed with the Net Cash Proceeds from Permitted Equity
Issuances); provided that Borrower shall deliver a certificate to the
Administrative Agent not later than 90 days after the end of such Excess Cash
Flow Period, signed by a Responsible Officer of Borrower and certifying that
such Capital Expenditures will be made in the following Excess Cash Flow Period;

 

(e)                                  the aggregate amount of investments made in
cash during such period pursuant to Sections 6.04(e), (i) and (n) (except to the
extent financed with the Net Cash Proceeds from Permitted Equity Issuances);

 

(f)                                   taxes of Borrower and its Subsidiaries
that were paid in cash (and any related interest or penalties paid in cash)
during such Excess Cash Flow Period or will be paid within six months after the
end of such Excess Cash Flow Period and for which reserves have been
established;

 

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(g)                                  the absolute value of the difference, if
negative, of the amount of Net Working Capital at the end of the prior Excess
Cash Flow Period less the amount of Net Working Capital at the end of such
Excess Cash Flow Period;

 

(h)                                 losses excluded from the calculation of
Consolidated Net Income by operation of clause (c) or (g) of the definition
thereof that are paid in cash during such Excess Cash Flow Period;

 

(i)                                     [Intentionally Omitted];

 

(j)                                    the amount of any Earn-out Obligation
paid or payable during such Excess Cash Flow Period;

 

(k)                                 reimbursement of Board of Directors expenses
and expenses paid in compliance with Section 6.09(c);

 

(l)                                     costs and expenses paid in cash related
to any equity offering, permitted Investment, acquisition, disposition or any
incurrence (or early extinguishment) of Indebtedness permitted by this Agreement
(in each case whether or not consummated) or directly incurred in connection
with the Transactions;

 

(m)                             to the extent actually reimbursed, expenses
incurred to the extent covered by indemnification provisions in any agreement in
connection with any acquisition consummated prior to the Restatement Effective
Date or a Permitted Acquisition;

 

(n)                                 to the extent covered by insurance and
actually reimbursed, or, so long as Borrower has made a determination that there
exists reasonable evidence that such amount will in fact be reimbursed by the
insurer and only to the extent that such amount is in fact reimbursed within 120
days of the date of such evidence (with a deduction for any amount so added back
to the extent not so reimbursed within such 120 days), expenses with respect to
liability or casualty events or business interruption;

 

(o)                                 all other non-recurring cash items added
back to Consolidated Net Income pursuant to clause (k) of the definition of
“Consolidated EBITDA”;

 

and

 

(p) any gains resulting from Refranchising Sales;

 

provided that any amount deducted pursuant to any of the foregoing clauses that
will be paid after the close of such Excess Cash Flow Period shall not be
deducted again in a subsequent Excess Cash Flow Period;

 

plus, without duplication:

 

(i)                                     the difference, if positive, of the
amount of Net Working Capital at the end of the prior Excess Cash Flow Period
less the amount of Net Working Capital at the end of such Excess Cash Flow
Period;

 

(ii)                                  all proceeds received during such Excess
Cash Flow Period of any Indebtedness to the extent used to finance any Capital
Expenditure (other than Indebtedness under this Agree-

 

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ment to the extent there is no corresponding deduction to Excess Cash Flow above
in respect of the use of such borrowings);

 

(iii)                               to the extent any permitted Capital
Expenditures referred to in clause (d) above do not occur in the Excess Cash
Flow Period specified in the certificate of Borrower provided pursuant to clause
(d) above, such amounts of Capital Expenditures that were not so made in the
Excess Cash Flow Period specified in such certificates;

 

(iv)                              any return on or in respect of investments
received in cash during such period, which investments were made pursuant to
Section 6.04(e), (i) or (l) (other than investments made from the Cumulative
Growth Amount);

 

(v)                                 income or gain excluded from the calculation
of Consolidated Net Income by operation of clause (c) or (g) of the definition
thereof that is realized in cash during such Excess Cash Flow Period (except to
the extent such gain is subject to Section 2.10(c), (d), or (f)); and

 

(vi)                              if deducted in the computation of Consolidated
EBITDA, interest income.

 

“Excess Cash Flow Period” shall mean (i) the period taken as one accounting
period commencing on April 1, 2007 and ending on January 31, 2008 and (ii) each
fiscal year of Borrower thereafter.

 

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

 

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the 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) any
Taxes imposed on or measured by its net income (however denominated), franchise,
net worth or similar Taxes imposed on it (in lieu of net income Taxes) and
branch profits Taxes imposed on it, in each case, by a jurisdiction (or any
political subdivision thereof) as a result of the recipient being organized or
having its principal office or its applicable lending office in such
jurisdiction, or as a result of doing business in or having another connection
with such jurisdiction (other than a business or other connection deemed to
arise solely by virtue of having executed, delivered, become a party to,
performed its obligations under, enforced or received payment under this
Agreement or any other Loan Document and/or by virtue of any of the transactions
contemplated under such documents), including (for the avoidance of doubt) any
backup withholding in respect of any such Taxes (pursuant to current
Section 3406 of the Code or otherwise), (b) in the case of a Foreign Lender or
Issuing Bank, any U.S. federal withholding tax that (i) is imposed on amounts
payable to such Person pursuant to Requirements of Law in effect at the time
such Foreign Lender becomes a party hereto (or designates a new lending office),
except (x) to the extent that such Person (or its assignor, if any) was
entitled, immediately prior to such designation of a new lending office (or
assignment), to receive additional amounts from Borrower with respect to such
withholding tax pursuant to Section 2.15(a) or (y) if such Foreign Lender is an
assignee pursuant to a request by Borrower under Section 2.16, (c) any U.S.
federal withholding tax imposed on a Person that is attributable to such
Person’s failure to comply with Sections 2.15(e), 2.15(g) and/or 2.15(h) as
applicable or (d) any U.S. federal withholding tax that is imposed pursuant to
FATCA.

 

“Executive Order” shall have the meaning assigned to such term in Section 3.22.

 

“Existing Credit Agreement” shall have the meaning assigned to such term in the
recitals above.

 

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“Existing Term Loan” means the Term Loans (under and as defined in the Existing
Credit Agreement).

 

“Existing Term Loan Lender” means each Term Loan Lender (under and as defined in
the Existing Credit Agreement).

 

“Existing Lien” shall have the meaning assigned to such term in Section 6.02(c).

 

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

 

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System of the United States arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day for such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

 

“Fee Letter” shall mean the confidential Fee Letter, dated January 10, 2007,
among UBS Loan Finance LLC, UBS Securities LLC and Holdings.

 

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the LC
Participation Fees and the Fronting Fees.

 

“Final Maturity Date” shall mean the latest of the Revolving Maturity Date, the
Term B-1 Loan Maturity Date, the Term B-2 Loan Maturity Date and any Incremental
Term Loan Maturity Date applicable to existing Incremental Term Loans, as of any
date of determination.

 

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

 

“FIRREA” shall mean the Federal Institutions Reform, Recovery and Enforcement
Act of 1989, as amended.

 

“Foreign Lender” shall mean any Lender that is not a U.S. Person.

 

“Foreign Subsidiary” shall mean a Subsidiary that is organized under the laws of
a jurisdiction other than the United States or any state thereof or the District
of Columbia.

 

“Fronting Fee” shall have the meaning assigned to such term in Section 2.05(c).

 

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

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis.

 

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

 

“Governmental Real Property Disclosure Requirements” shall mean any Requirement
of Law of any Governmental Authority requiring notification of the buyer,
lessee, mortgagee, assignee or other transferee of any Real Property, facility,
establishment or business, or notification, registration or filing to or with
any Governmental Authority, in connection with the sale, lease, mortgage,
assignment or other transfer (including any transfer of control) of any Real
Property, facility, establishment or business, of the actual or threatened
presence or Release in or into the Environment, or the use, disposal or handling
of Hazardous Material on, at, under or near the Real Property, facility,
establishment or business to be sold, leased, mortgaged, assigned or
transferred.

 

“Guaranteed Obligations” shall have the meaning assigned to such term in
Section 7.01.

 

“Guarantees” shall mean the guarantees issued pursuant to Article VII by the
Guarantors.

 

“Guarantors” shall mean initially Holdings and the Subsidiary Guarantors
(excluding any of Holdings or a Subsidiary released from it Guarantee pursuant
to the terms hereof).

 

“Hazardous Materials” shall mean the following:  hazardous substances; hazardous
wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound
containing PCBs; asbestos or any asbestos-containing materials in any form or
condition; radon or any other radioactive materials including any source,
special nuclear or by-product material; petroleum, crude oil or any fraction
thereof; and any other pollutant or contaminant or chemicals, wastes, materials,
compounds, constituents or substances, subject to regulation or which can give
rise to liability under any Environmental Laws.

 

“Hedging Agreement” shall mean any swap, cap, collar, forward purchase or
similar agreements or arrangements dealing with interest rates, currency
exchange rates or commodity prices, either generally or under specific
contingencies.

 

“Hedging Obligations” shall mean obligations under or with respect to Hedging
Agreements.

 

“Holdings” shall have the meaning assigned to such term in the preamble hereto.

 

“Increase Effective Date” shall have the meaning assigned to such term in
Section 2.19(a).

 

“Incremental Term Loan” shall have the meaning assigned to such term in
Section 2.19(c)(i).

 

“Incremental Term Loan Commitment” shall have the meaning assigned to such term
in Section 2.19(a).

 

“Incremental Term Loan Maturity Date” shall have the meaning assigned to such
term in Section 2.19(c)(iv).

 

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“Increase Joinder” shall have the meaning assigned to such term in
Section 2.19(c).

 

“Indebtedness” of any person shall mean, 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 upon which interest charges are customarily paid or
accrued; (d) all obligations of such person under conditional sale or other
title retention agreements relating to property purchased by such person;
(e) all obligations of such person issued or assumed as the deferred purchase
price of property or services (including Earn-out Obligations to the extent not
paid after becoming due and payable but excluding trade accounts payable and
accrued obligations incurred in the ordinary course of business); (f) all
Indebtedness of others secured by any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, but
limited to the fair market value of such property; (g) all Capital Lease
Obligations, Purchase Money Obligations and synthetic lease obligations of such
person; (h) all Hedging Obligations to the extent required to be reflected on a
balance sheet of such person; (i) [Intentionally Omitted]; (j) all obligations
of such person for the reimbursement of any obligor in respect of letters of
credit, letters of guaranty, bankers’ acceptances and similar credit
transactions; and (k) all Contingent Obligations of such person in respect of
Indebtedness or obligations of others of the kinds referred to in
clauses (a) through (j) above.  The Indebtedness of any person shall include the
Indebtedness of any other entity (including any partnership in which such person
is a general partner) to the extent such person is liable therefor as a result
of such person’s ownership interest in or other relationship with such entity,
except (other than in the case of general partner liability) to the extent that
terms of such Indebtedness expressly provide that such person is not liable
therefor.  In no event will obligations or liabilities in respect of any
Qualified Capital Stock constitute Indebtedness hereunder.

 

“Indemnified Taxes” shall mean all Taxes other than Excluded Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 10.03(b).

 

“Information” shall have the meaning assigned to such term in Section 10.12.

 

“Insurance Policies” shall mean the insurance policies and coverages required to
be maintained by each Loan Party which is an owner of Mortgaged Property with
respect to the applicable Mortgaged Property pursuant to Section 5.04 and all
renewals and extensions thereof.

 

“Insurance Requirements” shall mean, collectively, all provisions of the
Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Loan Party which is an owner of Mortgaged Property
and applicable to the Mortgaged Property or any use or condition thereof.

 

“Intellectual Property” shall have the meaning assigned to such term in
Section 3.06(a).

 

“Intercompany Note” shall mean a promissory note substantially in the form of
Exhibit P.

 

“Interest Election Request” shall mean a request by Borrower to convert or
continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.08(b), substantially in the form of Exhibit E.

 

“Interest Payment Date” shall mean (a) with respect to any ABR Loan (including
Swingline Loans), the last Business Day of each April, July, October and
January to occur during any

 

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period in which such Loan is outstanding, (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 Loan 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, (c) with respect to any Revolving Loan or
Swingline Loan, the Revolving Maturity Date or such earlier date on which the
Revolving Commitments are terminated and (d) with respect to any Term Loan, the
Term B-1 Loan Maturity Date, the Term B-2 Loan Maturity Date or an Incremental
Term Loan Maturity Date, as the case may be.

 

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, if each affected Lender so agrees, nine or twelve months) thereafter, as
Borrower may elect; provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (b) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period.  For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

 

“Investments” shall have the meaning assigned to such term in Section 6.04.

 

“Issuing Bank” shall mean, as the context may require, (a) UBS AG, Stamford
Branch, in its capacity as issuer of Letters of Credit issued by it; (b) any
other Lender that may become an Issuing Bank pursuant to Sections 2.18(j) and
(k) in its capacity as issuer of Letters of Credit issued by such Lender; or
(c) collectively, all of the foregoing.

 

“Joinder Agreement” shall mean a joinder agreement substantially in the form of
Exhibit F.

 

“LC Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.18.  The amount of the LC Commitment shall
initially be $15.0 million, but in no event exceed the Revolving Commitment.

 

“LC Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a drawing under a Letter of Credit.

 

“LC Exposure” shall mean at any time the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all Reimburse ment Obligations outstanding at such time. 
The LC Exposure of any Revolving Lender at any time shall mean its Pro Rata
Percentage of the aggregate LC Exposure at such time.

 

“LC Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

 

“LC Request” shall mean a request by Borrower in accordance with the terms of
Section 2.18(b) and substantially in the form of Exhibit H, or such other form
as shall be approved by the Administrative Agent.

 

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“Leases” shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.

 

“Lender” shall mean (a) any Term B-1 Loan Lender, Term B-2 Loan Lender,
Revolving Lender or lender under an Incremental Term Loan Commitment, as
applicable and (b) any financial institution that has become a party hereto
pursuant to an Assignment and Assumption, other than, in each case, any such
financial institution that has ceased to be a party hereto pursuant to an
Assignment and Assumption.  Unless the context clearly indicates otherwise, the
term “Lenders” shall include the Swingline Lender.

 

“Letter of Credit” shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of Borrower and on behalf of Borrower or its
Subsidiaries pursuant to Section 2.18.

 

“Letter of Credit Expiration Date” shall mean the date which is five days prior
to the Revolving Maturity Date.

 

“LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent to be
the arithmetic mean (rounded upward, if necessary, to the nearest 1/100th of 1%)
of the offered rates for deposits in dollars with a term comparable to such
Interest Period that appears on the Telerate British Bankers Assoc. Interest
Settlement Rates Page (as defined below) at approximately 11:00 a.m., London,
England time, on the second full Business Day preceding the first day of such
Interest Period; provided, however, that (i) if no comparable term for an
Interest Period is available, the LIBOR Rate shall be determined using the
weighted average of the offered rates for the two terms most nearly
corresponding to such Interest Period and (ii) if there shall at any time no
longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page,
“LIBOR Rate” shall mean, with respect to each day during each Interest Period
pertaining to Eurodollar Borrowings comprising part of the same Borrowing, the
rate per annum equal to the rate at which the Administrative Agent is offered
deposits in dollars at approximately 11:00 a.m., London, England time, two
Business Days prior to the first day of such Interest Period in the London
interbank market for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to its portion of
the amount of such Eurodollar Borrowing to be outstanding during such Interest
Period.  “Telerate British Bankers Assoc. Interest Settlement Rates Page” shall
mean the display designated as Page 3750 on the Telerate System Incorporated
Service (or such other page as may replace such page on such service for the
purpose of displaying the rates at which dollar deposits are offered by leading
banks in the London interbank deposit market).

 

“Lien” shall mean, with respect to any property, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, claim, charge, collateral assignment,
hypothecation, security interest or encum brance of any kind or any arrangement
to provide priority or preference or any filing of any financing statement under
the UCC or any other similar notice of lien under any similar notice or
recording statute of any Governmental Authority, including any easement,
right-of-way or other encumbrance on title to Real Property, in each of the
foregoing cases whether voluntary or imposed by law, and any agreement to give
any of the foregoing; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such property; and (c) in the case of securities (other
than securities representing an interest in a joint venture), any purchase
option, call or similar right of a third party with respect to such securities.

 

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“Loan Documents” shall mean this Agreement, amendments and joinders to this
Agreement (including, without limitation, the Restatement Amendment), the
Letters of Credit, the Notes (if any), and the Security Documents and, solely
for purposes of paragraph (e) of Section 8.01, and the Fee Letter.

 

“Loan Parties” shall mean Holdings, Borrower and the Subsidiary Guarantors.

 

“Loans” shall mean, as the context may require, a Revolving Loan, a Term Loan,
or a Swingline Loan (and shall include any Replacement Term Loans and any Loans
contemplated by Section 2.19).

 

“Management Services Agreement” means the Amended Management Agreement by and
among Sponsor, Mattress Intermediate Holdings, Inc., Borrower and Mattress
Firm, Inc., dated as of March 20, 2009, as terminated by the Notice and
Termination Agreement by and among Sponsor, Mattress Intermediate
Holdings, Inc., Borrower and Mattress Firm, Inc., dated as of October 25, 2011.

 

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

 

“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, property, results of operations or condition, financial or otherwise,
of Holdings and its Subsidiaries, taken as a whole; (b) material impairment of
the ability of the Loan Parties (taken as a whole) to fully and timely perform
any of their payment obligations under any Loan Document; (c) material
impairment of the rights of or benefits or remedies available to the Lenders or
the Collateral Agent under any Loan Document; or (d) a material adverse effect
on the Liens in favor of the Collateral Agent (for its benefit and for the
benefit of the other Secured Parties) on the Collateral or the priority of such
Liens.

 

“Material Asset Sale” shall mean any disposition of property or series of
related dispositions of property that yields gross proceeds to Borrower or any
of its Subsidiaries in excess of $10.0 million and for which separate financial
statements are reasonably capable of being prepared.

 

“Material Indebtedness” shall mean any Indebtedness (other than the Loans and
Letters of Credit) or Hedging Obligations of Holdings or any of its Subsidiaries
in an aggregate outstanding principal amount exceeding $10.0 million.  For
purposes of determining Material Indebtedness, the “principal amount” in respect
of any Hedging Obligations of any Loan Party at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Loan Party
would be required to pay if the related Hedging Agreement were terminated at
such time.

 

“Material Subsidiary” shall mean any Subsidiary of Borrower whose consolidated
net income accounts for more than 5% of the consolidated net income of Borrower
and its Subsidiaries, or the value of whose net assets exceeds 5% of
consolidated total assets of Borrower and its Subsidiaries.

 

“Maximum Rate” shall have the meaning assigned to such term in Section 10.14.

 

“Mortgage” shall mean an agreement, including, but not limited to, a mortgage,
deed of trust or any other document, creating and evidencing a Lien on a
Mortgaged Property which shall be reasonably satisfactory to the Collateral
Agent, in each case, with such schedules and including such provisions as shall
be necessary in the reasonable judgment of the Collateral Agent to conform such
document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.

 

“Mortgaged Property” shall mean each Real Property, if any, which shall be
subject to a Mortgage delivered after the Closing Date pursuant to
Section 5.11(c).

 

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“Multiemployer Plan” shall mean a multiemployer plan within the meaning of
Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company or any
ERISA Affiliate is then making or accruing an obligation to make contributions;
(b) to which any Company or any ERISA Affiliate has within the preceding five
plan years made contributions; or (c) with respect to which any Company could
incur liability.

 

“Net Cash Proceeds” shall mean:

 

(a)                                 with respect to any Asset Sale (other than
any issuance or sale of Equity Interests), the cash proceeds received by
Holdings or any of its Subsidiaries (including cash proceeds subsequently
received (as and when received by Holdings or any of its Subsidiaries) in
respect of non-cash consideration initially received) net of (i) selling
expenses (including reasonable brokers’ fees or commissions, legal, accounting
and other professional and transactional fees, transfer and similar Taxes and
Borrower’s good faith estimate of income or similar Taxes paid or payable in
connection with such sale and any other Taxes paid or payable as a result of, or
in connection with, the satisfaction of the repayment obligation under
Section 2.10, including, without limitations, any Tax imposed on an actual or
deemed distribution of such cash proceeds by any Subsidiary of the Borrower);
(ii) amounts provided as a reserve, in accordance with GAAP, against (x) any
liabilities under any indemnification obligations associated with such Asset
Sale or (y) any other liabilities retained by Holdings or any of its
Subsidiaries associated with the properties sold in such Asset Sale (provided
that, to the extent and at the time any such amounts are released from such
reserve, such amounts shall constitute Net Cash Proceeds); (iii) Borrower’s good
faith estimate of payments required to be made with respect to unassumed
liabilities relating to the properties sold within 365 days of such Asset Sale
(provided that, to the extent such cash proceeds are not used to make payments
in respect of such unassumed liabilities within 365 days of such Asset Sale,
such cash proceeds shall constitute Net Cash Proceeds); and (iv) the principal
amount, premium or penalty, if any, interest and other amounts on any
obligations which are secured by a Lien on the properties sold in such Asset
Sale (so long as such Lien was permitted to encumber such properties under the
Loan Documents at the time of such sale) and which is repaid with such proceeds
(other than any such Indebtedness assumed by the purchaser of such properties);

 

(b)                                 with respect to any Debt Issuance or any
other issuance or sale of Equity Interests by Holdings or any of its
Subsidiaries, the cash proceeds thereof, net of customary fees, commissions,
costs and other expenses incurred in connection therewith, (including, without
limitations, any Taxes paid or payable in connection with such Debt Issuance or
any other issuance or sale of Equity Interests or any Tax that is paid or
payable as a result of, or in connection with, the satisfaction of the repayment
obligation under Section 2.10, including, without limitations, any Tax imposed
on an actual or deemed distribution of such cash proceeds by any Subsidiary of
the Borrower); and

 

(c)                                  with respect to any Casualty Event, the
cash insurance proceeds, condemnation awards and other compensation received in
respect thereof, net of all reasonable costs and expenses incurred in connection
with the collection of such proceeds (including, without limitations, any Taxes
paid or payable in connection with the collection of such proceeds or any Tax
that is paid or payable as a result of, or in connection with, the satisfaction
of the repayment obligation under Section 2.10, including, without limitations,
any Tax imposed on an actual or deemed distribution of such cash proceeds by any
Subsidiary of the Borrower), and the reasonable cost of putting any real estate
in a safe and secured condition, awards or other compensation in respect of such
Casualty Event.

 

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“Net Working Capital” shall mean, at any time, Consolidated Current Assets at
such time minus Consolidated Current Liabilities at such time.

 

“Non-Defaulting Revolving Lender” shall mean at any time there shall exist a
Defaulting Lender or Defaulting Lenders, each Revolving Lender that is not a
Defaulting Lender at such time.

 

“Notes” shall mean any notes evidencing the Term B-1 Loans, Revolving Loans,
Swingline Loans or Term B-2 Loans,  issued pursuant to this Agreement, if any,
substantially in the form of Exhibit K-1, K-2, Exhibit K-3 or K-4, respectively.

 

“Obligations” shall mean (i) the unpaid principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by Borrower and the other Loan
Parties under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of Reimbursement Obligations, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower and the other Loan Parties under this
Agreement and the other Loan Documents.

 

“OFAC” shall have the meaning assigned to such term in Section 3.22(b)(v).

 

“Officers’ Certificate” shall mean, as to any person, a certificate executed by
the chairman of the Board of Directors (if an officer), the chief executive
officer, the president or any one of the Financial Officers of such person, each
in his or her official (and not individual) capacity.

 

“Organizational Documents” shall mean, with respect to any person, (i) in the
case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.

 

“Other Taxes” shall mean all present or future stamp or documentary Taxes or any
other excise, recording, transfer or similar Taxes, arising from any payment
made or required to be made hereunder or under any other Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document but excluding, for the avoidance of doubt,
any Excluded Tax.

 

“Parent Company” shall mean each of Holdings and each Subsidiary thereof that
directly or indirectly owns Equity Interests of Borrower.

 

“Participant” shall have the meaning assigned to such term in Section 10.04(d).

 

“Patriot Act” shall have the meaning assigned to such term in Section 10.13.

 

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

 

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“Perfection Certificate” shall mean a certificate in the form of Exhibit L-1 or
any other form approved by the Collateral Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

 

“Perfection Certificate Supplement” shall mean a certificate supplement in the
form of Exhibit L-2 or any other form approved by the Collateral Agent.

 

“Permitted Acquisition” shall mean any transaction or series of related
transactions for the direct or indirect (a) acquisition of all or substantially
all of the property of any person, or of any business unit or division of any
person; (b) acquisition of in excess of 50% of the Equity Interests of any
person, and otherwise causing such person to become a Subsidiary of such person;
or (c) merger or consolidation or any other combination with any person, if each
of the following conditions is met:

 

(i)                                     no Default then exists or would result
therefrom;

 

(ii)                                  after giving effect to such transaction on
a Pro Forma Basis, Borrower shall be in compliance with all covenants set forth
in Section 6.10 as of the most recent Test Period (assuming, for purposes of
Section 6.10, that such transaction, and all other Permitted Acquisitions
consummated since the first day of the relevant Test Period for each of the
financial covenants set forth in Section 6.10 ending on or prior to the date of
such transaction, had occurred on the first day of such relevant Test Period);

 

(iii)                               no Company shall, in connection with any
such transaction, assume or remain liable with respect to any Indebtedness or
other liability (including any material tax or ERISA liability) of the related
seller or the business, person or properties acquired, except to the extent such
Indebtedness or other liability would be permitted to be incurred by a Loan
Party hereunder, and any other such liabilities or obligations not permitted to
be assumed or otherwise supported by any Company hereunder shall be paid in full
or released as to the business, persons or properties being so acquired on or
before the consummation of such acquisition;

 

(iv)                              the person or business to be acquired shall
be, or shall be engaged in, a business of the type that Borrower and the
Subsidiaries are permitted to be engaged in under Section 6.15 and the property
acquired in connection with any such transaction shall be made subject to the
Lien of the Security Documents (to the extent required herein or therein) and
shall be free and clear of any Liens, other than Permitted Collateral Liens;

 

(v)                                 [intentionally omitted];

 

(vi)                              all transactions in connection therewith shall
be consummated in accordance with all applicable material Requirements of Law;

 

(vii)                           with respect to any transaction involving
Acquisition Consideration of more than $20.0 million, unless the Administrative
Agent shall otherwise consent, Borrower shall have provided the Administrative
Agent and the Lenders with (A) historical financial statements (or if the
acquisition is not for all of the assets or Equity Interests, then pro forma for
the assets or Equity Interests being acquired) for the last three fiscal years
(or, if less, the number of years available) of the person or business to be
acquired (audited or unaudited as available) and unaudited financial statements
thereof for the most recent interim period which are available, (B) reasonably
detailed projections for the lesser of (x) the succeeding five years pertaining
to the person or business to be acquired and (y) the number of years until the
Final Maturity Date and updated projections for Borrower after giving effect to
such transaction, (C) a reasonably detailed description of

 

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all material information relating thereto and copies of all material
documentation pertaining to such transaction, and (D) all such other information
and data relating to such transaction or the person or business to be acquired
as may be reasonably requested by the Administrative Agent or the Required
Lenders;

 

(viii)                        with respect to any transaction involving
Acquisition Consideration of more than $10.0 million, on or prior to the
proposed date of consummation of the transaction, Borrower shall have delivered
to the Agents and the Lenders an Officers’ Certificate certifying that (A) such
transaction complies with this definition (which shall have attached thereto
reasonably detailed backup data and calculations showing such compliance), and
(B) such transaction could not reasonably be expected to result in a Material
Adverse Effect;

 

(ix)                              the Acquisition Consideration (exclusive of
any amounts financed from the Cumulative Growth Amount or paid with Equity
Interests of any Parent Company (other than Holdings)) for such acquisition
shall not exceed $50.0 million, and the aggregate amount of the Acquisition
Consideration (exclusive of payments in an amount not to exceed the Cumulative
Growth Amount (as calculated immediately prior to any payments hereunder) or
paid with Equity Interests of any Parent Company (other than Holdings)) for all
Permitted Acquisitions since the Closing Date shall not exceed $200.0 million;
and

 

(x)                                 in the case of an acquisition of Equity
Interests or assets of a Foreign Subsidiary, after giving effect to any such
acquisition, not more than 10% of the assets of Holdings and its Subsidiaries
shall be located outside of the United States.

 

“Permitted Collateral Liens” shall mean (a) in the case of Collateral other than
Mortgaged Property, the Liens described in clauses (a), (b), (c), (d), (e), (f),
(g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u) and
(v) of Section 6.02 and (b) in the case of Mortgaged Property, “Permitted
Collateral Liens” shall mean the Liens described in clauses (a), (b), (c), (d),
(e), (g), (i), (l), (k), (t) and (u) of Section 6.02.

 

“Permitted Cure Securities” shall mean equity securities (other than
Disqualified Capital Stock) of Holdings designated as Permitted Cure Securities
in a certificate delivered by Borrower to the Administrative Agent that are
issued in connection with Cure Rights being exercised by Borrower under
Section 6.10(d) (the net proceeds of which are contributed to the common equity
of Borrower).

 

“Permitted Equity Issuance” means any sale or issuance of any Qualified Capital
Stock of Holdings or a capital contribution to Holdings in respect of its Equity
Interests.

 

“Permitted Holders” shall mean J.W. Childs Associates, L.P., J.W. Childs Equity
Partners III, L.P., JWC Fund III Co-Invest, LLC, Mr. John W. Childs, Jim R.
Black, R. Stephen Stagner, and any institution designated by any Permitted
Holder to which such Permitted Holder transfers voting Equity Interests for cash
consideration of up to $30.0 million as consented to by the Required Lenders in
their reasonable judgment, and, in each case, their respective Controlled
Investment Affiliates.

 

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

 

“Permitted Refinancing” shall mean, with respect to any Person, any
modification, refinancing, refunding, renewal or extension or any Indebtedness
of such Person; provided, that, (a) the principal amount (or accreted value, if
applicable) thereof does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so modified, refinanced, refunded, renewed or
extended except by an amount equal to unpaid accrued interest and premium
thereon plus other reasonable amounts paid,

 

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and fees and expenses reasonably incurred, in connection with such modification
refinancing, refunding, renewal or extension and by an amount equal to any
existing commitments unutilized thereunder, (b) such modification, renewal,
refinancing, funding or extension has a final maturity date, and has a weighted
average life to maturity of, equal to or later than the final maturity date of
the Indebtedness being modified, refinanced, refunded, renewed or extended
(excluding the effects of nominal amortization in the amount of no greater than
one percent per annum and prepayments of Indebtedness), (c) the covenants,
events of default, subordination and other provisions thereof (including any
guarantees thereof) shall be, in the aggregate, no less favorable in any
material respect to the Lenders than those contained in the Indebtedness being
modified, refinanced, refunded, renewed or extended and (d) the obligors
thereunder shall not be different and the guarantees or security thereof shall
not be any greater than the Indebtedness being modified, refinanced, refunded,
renewed or extended.

 

“Permitted Tax Distributions” shall mean payments, dividends or distributions by
Borrower to Holdings (which may be further paid, dividended or distributed to
any direct or indirect parent of Holdings) in order to pay consolidated or
combined federal, state or local Taxes attributable to Borrower’s and each of
its Subsidiaries which are not in excess of the lesser of (i) the Tax
liabilities that would have been payable by Borrower and its Subsidiaries as a
stand-alone consolidated or combined Tax group (less any taxes payable directly
by Borrower or any of its Subsidiaries), or (ii) the actual Tax liabilities of
the Holdings group on a consolidated or combined basis or, if a direct or
indirect parent of Holdings is the parent of the consolidated or combined Tax
group, the Tax liabilities that would have been payable by Holdings, Borrower
and its Subsidiaries as a stand-alone consolidated or combined Tax group (less
any Taxes payable directly by Holdings, Borrower or any of its Subsidiaries).

 

“person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, unlimited company or government or other entity.

 

“Plan” shall mean 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 which is maintained or contributed to by any Company or
its ERISA Affiliate or with respect to which any Company could incur liability
(including under Section 4069 of ERISA).

 

“Platform” shall have the meaning assigned to such term in Section 10.01(d).

 

“Post-Increase Revolving Lenders” shall have the meaning assigned to such term
in Section 2.19(d).

 

“Pre-Increase Revolving Lenders” shall have the meaning assigned to such term in
Section 2.19(d).

 

“Premises” shall have the meaning assigned thereto in the applicable Mortgage.

 

“Pro Forma Basis” shall mean on a basis in accordance with GAAP, in the good
faith determination of the chief financial officer of Borrower or Holdings, and
otherwise reasonably satisfactory to the Administrative Agent.  Pro forma
calculations made pursuant to the definition of the term “Pro Forma Basis” shall
be determined in good faith by a Responsible Officer of Borrower or Holdings
and, for any fiscal period ending on or prior to the first anniversary of an
asset acquisition or asset disposition, in each case, permitted hereunder, may
include adjustments to reflect operating expense reductions and other operating
improvements or synergies reasonably expected to result from such asset
acquisition or asset disposition, for purposes of determining compliance with
the covenants set forth in Section 6.10, such adjustments may reflect additional
operating expense reductions and other additional operating im-

 

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provements or synergies that would not be includable in pro forma financial
statements prepared in accordance with Regulation S-X but that are reasonably
anticipated by Borrower or Holdings to be realizable in connection with such
asset acquisition or asset disposition in the 12-month period following the
consummation of such asset acquisition or asset disposition are estimated on a
good faith basis by Borrower or Holdings, and are reasonably satisfactory to the
Administrative Agent.  Borrower or Holdings shall deliver to the Administrative
Agent a certificate of a Financial Officer of Borrower or Holdings setting forth
such demonstrable or additional operating expense reductions and other operating
improvements or synergies and information and calculations supporting them in
reasonable detail.

 

“Pro Rata Percentage” of any Revolving Lender at any time shall mean the
percentage of the total Revolving Commitments of all Revolving Lenders
represented by such Lender’s Revolving Commitment; provided that for purposes of
Sections 2.20(b) and (c), “Pro Rata Percentage” shall mean the percentage of the
total Revolving Commitments (disregarding the Revolving Commitment of any
Defaulting Lender to the extent its LC Exposure is reallocated to the
non-Defaulting Lenders or cash collateralized pursuant to Section 2.20(b))
represented by such Lender’s Revolving Commitment.

 

“property” shall mean any right, title or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including Equity Interests or other ownership interests of any
person and whether now in existence or owned or hereafter entered into or
acquired, including all Real Property.

 

“Purchase Money Obligation” shall mean, for any person, the obligations of such
person in respect of Indebtedness (including Capital Lease Obligations) incurred
for the purpose of financing all or any part of the purchase price of any
property (including Equity Interests of any person) or the cost of installation,
construction or improvement of any property and any refinancing thereof;
provided, however, that (i) such Indebtedness is incurred within one year after
such acquisition, installation, construction or improvement of such property by
such person and (ii) the amount of such Indebtedness does not exceed 100% of the
cost of such acquisition, installation, construction or improvement, as the case
may be.

 

“Qualified Capital Stock” of any person shall mean any Equity Interests of such
person that are not Disqualified Capital Stock.

 

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold or other estate) in and to any and all parcels of or
interests in real property owned or leased by any person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures.

 

“Refinanced Term Loans” shall have the meaning assigned to such term in
Section 10.02(e).

 

“Refranchising Sale” shall mean any sale of franchises (including store
development agreements, real estate and other related assets whether repurchased
or internally developed), in the ordinary course of business.

 

“Register” shall have the meaning assigned to such term in Section 10.04(c).

 

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

 

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

 

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

 

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

 

“Reimbursement Obligations” shall mean Borrower’s obligations under
Section 2.18(e) to reimburse LC Disbursements.

 

“Related Parties” shall mean, with respect to any person, such person’s
Affiliates and the partners, directors, officers, employees, agents, trustees
and advisors of such person and of such person’s Affiliates.

 

“Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.

 

“Replacement Term Loans” shall have the meaning assigned to such term in
Section 10.02(e).

 

“Required Class Lenders” shall mean (i) with respect to Term Loans, Lenders
having more than 50% of all Term Loans outstanding and (ii) with respect to
Revolving Loans, Required Revolving Lenders.

 

“Required Lenders” shall mean Lenders having more than 50% of the sum of all
outstanding principal amounts in respect of the Loans outstanding, LC Exposure
and unused Revolving Commitments.

 

“Required Revolving Lenders” shall mean Lenders having more than 50% of all
Revolving Commitments or, after the Revolving Commitments have terminated, more
than 50% of all Revolving Exposure; provided that the Revolving Commitments held
or deemed held by any Defaulting Lender shall be excluded for purposes of making
a determination of Required Revolving Lenders.

 

“Requirements of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including any and all laws, judgments, orders, decrees,
ordinances, rules, regulations, statutes or case law.

 

“Response” shall mean (a) “response” as such term is defined in CERCLA, 42
U.S.C. § 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to (i) clean up, remove, treat, abate or in
any other way address any Hazardous Material in the environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection
with, or as a precondition to, or to determine the necessity of the activities
described in, clause (i) or (ii) above.

 

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

 

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“Restatement Amendment” has the meaning set forth in the recitals above.

 

“Restatement Effective Date” means November 5, 2012.

 

“Revolving Availability Period” shall mean the period from and including the
Restatement Effective Date to but excluding the earlier of (i) the Business Day
preceding the Revolving Maturity Date and (ii) the date of termination of the
Revolving Commitments.

 

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

 

“Revolving Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans hereunder up to the amount set
forth on Schedule I hereto or by an Increase Joinder, or in the Assignment and
Assumption pursuant to which such Lender assumed its Revolving Commitment, as
applicable, as the same may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04.  The aggregate
amount of the Lenders’ Revolving Commitments on the Restatement Effective Date
is $100 million.

 

“Revolving Exposure” shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Revolving Loans of
such Lender, plus the aggregate amount at such time of such Lender’s LC
Exposure, plus the aggregate amount at such time of such Lender’s Swingline
Exposure.

 

“Revolving Lender” shall mean a Lender with a Revolving Commitment.

 

“Revolving Loan” shall mean a Loan made by the Lenders to Borrower pursuant to
Section 2.01(b).  Each Revolving Loan shall either be an ABR Revolving Loan or a
Eurodollar Revolving Loan.

 

“Revolving Maturity Date” shall mean January 18, 2015 or, if such date is not a
Business Day, the first Business Day thereafter.

 

“Sale and Leaseback Transaction” shall mean any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purposes or purposes as the property
being sold or transferred.

 

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

 

“Secured Obligations” shall mean (a) the Obligations, (b) the payment and
performance of all obligations of Borrower and the other Loan Parties under each
Hedging Agreement entered into with any counterparty that is a Secured Party and
(c) the payment and performance of all obligations of Borrower and the other
Loan Parties (including overdrafts and related liabilities) under each Treasury
Services Agreement entered into with any counterparty that is a Secured Party.

 

“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent, each other Agent, the Lenders and each counterparty to a
Hedging Agreement or Treasury Services Agreement if at the date of entering into
such Hedging Agreement or Treasury Services Agreement such person was a Lender
or an Affiliate of a Lender and such person executes and delivers to the Admin-

 

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istrative Agent a letter agreement in form and substance acceptable to the
Administrative Agent pursuant to which such person (i) appoints the Collateral
Agent as its agent under the applicable Loan Documents and (ii) agrees to be
bound by the provisions of Sections 10.03 and 10.09 as if it were a Lender.

 

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

 

“Securities Collateral” shall have the meaning assigned to such term in the
Security Agreement.

 

“Security Agreement” means the Security Agreement, dated as of the Closing Date,
among the Loan Parties and Collateral Agent for the benefit of the Secured
Parties, as reaffirmed by the Restatement Amendment and as further amended,
supplemented or modified from time to time.

 

“Security Agreement Collateral” shall mean all property pledged or granted as
collateral pursuant to the Security Agreement (a) on the Closing Date or
(b) thereafter pursuant to Section 5.11.

 

“Security Documents” shall mean the Security Agreement, the Mortgages and each
other security document or pledge agreement delivered in accordance with
applicable local or foreign law to grant a valid, perfected security interest in
any property as collateral for the Secured Obligations, and all UCC or other
financing statements or instruments of perfection required by this Agreement,
the Security Agreement, any Mortgage or any other such security document or
pledge agreement to be filed with respect to the security interests in property
and fixtures created pursuant to the Security Agreement or any Mortgage and any
other document or instrument utilized to pledge or grant or purport to pledge or
grant a security interest or lien on any property as collateral for the Secured
Obligations.

 

“Sponsor” shall mean J.W. Childs Associates, L.P. and its Affiliates.

 

“Standby Letter of Credit” shall mean any standby letter of credit or similar
instrument issued for the purpose of supporting (a) workers’ compensation
liabilities of Borrower or any of its Subsidiaries, (b) the obligations of
third-party insurers of Borrower or any of its Subsidiaries arising by virtue of
the laws of any jurisdiction requiring third-party insurers to obtain such
letters of credit, (c) performance, payment, deposit or surety obligations of
Borrower or any of its Subsidiaries if required by a Requirement of Law or other
purposes that are typical in accordance with custom and practice in the industry
or (d) Indebtedness of Borrower or any of its Subsidiaries permitted to be
incurred under Section 6.01.

 

“Statutory Reserves” shall mean for any Interest Period for any Eurodollar
Borrowing in dollars, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the United
States Federal Reserve System in New York City with deposits exceeding one
billion dollars against “Eurocurrency liabilities” (as such term is used in
Regulation D).  Eurodollar Borrowings shall be deemed to constitute Eurodollar
liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.

 

“Subordinated Indebtedness” shall mean Indebtedness of Borrower or any Guarantor
that is by its terms subordinated in right of payment to the Obligations of
Borrower and such Guarantor, as applicable.

 

“Subsidiary” shall mean, with respect to any person (the “parent”) at any date,
(i) any corporation, limited liability company, association or other business
entity of which securities or other

 

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ownership interests representing more than 50% of the voting power of all Equity
Interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Board of Directors thereof are, as of such date, owned,
controlled or held by the parent and/or one or more subsidiaries of the parent,
(ii) any partnership (a) the sole general partner or the managing general
partner of which is the parent and/or one or more subsidiaries of the parent or
(b) the only general partners of which are the parent and/or one or more
subsidiaries of the parent and (iii) any other person that is otherwise
Controlled by the parent and/or one or more subsidiaries of the parent.  Unless
the context requires otherwise, “Subsidiary” refers to a Subsidiary of Borrower.

 

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(b) to
this Agreement, and each other Subsidiary that is or becomes a party to this
Agreement pursuant to Section 5.11, but excluding any Subsidiary released from
its Guarantee pursuant to the terms hereunder.

 

“Survey” shall mean a survey of any Mortgaged Property (and all improvements
thereon) which is (a) (i) prepared by a surveyor or engineer licensed to perform
surveys in the jurisdiction where such Mortgaged Property is located, (ii) dated
(or redated) not earlier than six months prior to the date of delivery thereof
unless (A) otherwise agreed by the Collateral Agent or (B) there shall have
occurred within six months prior to such date of delivery any exterior
construction on the site of such Mortgaged Property or any easement, right of
way or other interest in the Mortgaged Property has been granted or become
effective through operation of law or otherwise with respect to such Mortgaged
Property which, in either case, can be depicted on a survey, in which events, as
applicable, such survey shall be dated (or redated) after the completion of such
construction or if such construction shall not have been completed as of such
date of delivery, not earlier than 20 days prior to such date of delivery, or
after the grant or effectiveness of any such easement, right of way or other
interest in the Mortgaged Property, (iii) certified by the surveyor (in a manner
reasonably acceptable to the Administrative Agent) to the Administrative Agent,
the Collateral Agent and the Title Company, (iv) complying in all respects with
the minimum detail requirements of the American Land Title Association as such
requirements are in effect on the date of preparation of such survey and
(v) sufficient for the Title Company to remove all standard survey exceptions
from the title insurance policy (or commitment) relating to such Mortgaged
Property and issue the endorsements of the type required by
Section 4.01(o)(iii) or (b) otherwise acceptable to the Collateral Agent.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
loans pursuant to Section 2.17, as the same may be reduced from time to time
pursuant to Section 2.07 or Section 2.17.  The amount of the Swingline
Commitment shall initially be $5.0 million, but shall in no event exceed the
Revolving Commitment.

 

“Swingline Exposure” shall mean at any time the aggregate principal amount at
such time of all outstanding Swingline Loans.  The Swingline Exposure of any
Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

 

“Swingline Lender” shall have the meaning assigned to such term in the preamble
hereto.

 

“Swingline Loan” shall mean any loan made by the Swingline Lender pursuant to
Section 2.17.

 

“Syndication Agent” shall have the meaning assigned to such term in the preamble
hereto.

 

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“Tax Return” shall mean all returns, statements, filings, attachments and other
documents or certifications required to be filed in respect of Taxes.

 

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

 

“Term B-1 Loan” has the meaning assigned to such term in the Restatement
Amendment.

 

“Term B-2 Loan” has the meaning assigned to such term in the Restatement
Amendment; provided that any Term B-1 Loan that is converted into a Term B-2
Loan pursuant to Section 2.21 shall be deemed a Term B-2 Loan.

 

“Term B-2 Loan Conversion Document” means an instrument substantially in the
form of Exhibit R.

 

“Term B-1 Loan Lender” has the meaning assigned to such term in the Restatement
Amendment.

 

“Term B-2 Loan Lender” has the meaning assigned to such term in the Restatement
Amendment; provided that any Term B-1 Loan Lender that converts its Term B-1
Loan into a Term B-2 Loan pursuant to Section 2.21 shall be deemed a Term B-2
Loan Lender in its capacity as a holder of such Term B-2 Loan.

 

“Term B-1 Loan Maturity Date” shall mean January 18, 2014 or, if such date is
not a Business Day, the first Business Day thereafter.

 

“Term B-2 Loan Maturity Date” shall mean January 18, 2016 or, if such date is
not a Business Day, the first Business Day thereafter.

 

“Term B-1 Borrowing” shall mean a Borrowing comprised of Term B-1 Loans.

 

“Term B-2 Borrowing” shall mean a Borrowing comprised of Term B-1 Loans.

 

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

 

“Term Loan” shall mean the collective reference to the Term B-1 Loans and the
Term B-2 Loans.  Each Term Loan shall either be an ABR Term Loan or a Eurodollar
Term Loan.

 

“Term Loan Lender” shall mean any Term B-1 Loan Lender or any Term B-2 Loan
Lender.

 

“Term Loan Repayment Date” shall have the meaning assigned to such term in
Section 2.09.

 

“Test Period” shall mean, at any time, the four consecutive fiscal quarters of
Borrower then last ended (in each case taken as one accounting period) for which
financial statements have been or are required to be delivered pursuant to
Section 5.01(a) or (b).

 

“Title Company” shall mean any title insurance company as shall be retained by
Borrower and reasonably acceptable to the Administrative Agent.

 

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“Title Policy” shall have the meaning assigned to such term in Section 5.11(c).

 

“Total Leverage Ratio” shall mean, at any date of determination, the ratio of
Consolidated Indebtedness on such date to Consolidated EBITDA for the Test
Period then most recently ended.

 

“Total Term Loans” means at any time the outstanding principal amount of Term
Loans.

 

“Transactions” means the entering into of this Agreement and the other Loan
Documents, the exchange of the Loans hereunder and the other transactions
contemplated under the Restatement Amendment or hereunder on the Restatement
Effective Date.

 

“Transaction Expenses” means any fees and expenses incurred or paid by Holdings,
the Borrower or any of its (or their) Subsidiaries in connection with the
Transactions.

 

“Transferred Guarantor” shall have the meaning assigned to such term in
Section 7.09.

 

“Treasury Services Agreement” shall mean any agreement relating to treasury,
depositary and cash management services or automated clearinghouse transfer of
funds.

 

“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 LIBOR Rate or the Alternate Base Rate.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time
(except as otherwise specified) in any applicable state or jurisdiction.

 

“U.S. Person” shall mean any person that is a United States person within the
meaning of Section 7701(a)(30) of the Code.

 

“United States” shall mean the United States of America.

 

“Voting Stock” shall mean, with respect to any person, any class or classes of
Equity Interests pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect members of the Board of Directors of
such person.

 

“Wholly Owned Subsidiary” shall mean, as to any person, (a) any corporation 100%
of whose capital stock (other than directors’ qualifying shares) is at the time
owned by such person and/or one or more Wholly Owned Subsidiaries of such person
and (b) any partnership, association, joint ven ture, limited liability company
or other entity in which such person and/or one or more Wholly Owned
Subsidiaries of such person have a 100% equity interest at such time.

 

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

 

“Yield” shall mean, as to any Indebtedness, the yield thereof, whether in the
form of interest rate, margin, OID, upfront fees, a an Adjusted LIBOR Rate or
Alternative Base Rate floor or otherwise, in each case incurred or payable by
the Borrower generally to the Lenders; provided that OID and upfront fees shall
be equated to interest rate assuming a 4-year life to maturity (or, if less, the
stated life to

 

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maturity at the time of its incurrence of the applicable Indebtedness); and
provided, further, that “Yield” shall not include arrangement fees, structuring
fees, commitment fees, and underwriting fees (regardless of whether paid in
whole or in part to any or all Lenders) or other similar fees not paid to all
Lenders of such Indebtedness.

 

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,”
“Borrowing of Term Loans”) or by Type (e.g., a “Eurodollar Borrowing”) or by
Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

SECTION 1.03                                Terms Generally.  The definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be construed to have the same meaning and
effect as the word “shall.”  Unless the context requires otherwise (a) any
definition of or reference to any Loan Document, 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 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, (e) any reference to any law or regulation herein shall refer to
such law or regulation as amended, modified or supplemented from time to time,
(f) 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 and
(g) “on,” when used with respect to the Mortgaged Property or any property
adjacent to the Mortgaged Property, means “on, in, under, above or about.” 
Except as expressly stated otherwise, “fair market value” shall be deemed to be
as determined in the good faith of the Borrower.

 

SECTION 1.04                                Accounting Terms; GAAP.  Except as
otherwise expressly provided herein, all financial statements to be delivered
pursuant to this Agreement shall be prepared in accordance with GAAP as in
effect from time to time and all terms of an accounting or financial nature
shall be construed and interpreted in accordance with GAAP, as in effect from
time to time. In the event that any “Accounting Change” (as defined below) shall
occur and Borrower notifies the Administrative Agent that Borrower requests an
amendment to any provision hereof to eliminate the effect of such Accounting
Change on the operation of such provision, regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof, then
Borrower and the Administrative Agent agree to enter into negotiations in order
to amend such provision of this Agreement so as to reflect equitably such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers’ financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made.  Until such time as such an
amendment shall have been executed and delivered by Borrower, the Administrative
Agent and the Required Lenders, such provisions in this Agreement shall continue
to be calculated or construed as if such Accounting Changes had not occurred. 
“Accounting Changes” refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.

 

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SECTION 1.05                                Resolution of Drafting Ambiguities. 
Each Loan Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of the Loan Documents to which it is
a party, that it and its counsel reviewed and participated in the preparation
and negotiation hereof and thereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation hereof or thereof.

 

SECTION 1.06                                   Effect of Restatement.  This
Agreement shall, except as otherwise expressly set forth herein, supersede the
Existing Credit Agreement from and after the Restatement Effective Date with
respect to the transactions hereunder and with respect to the Loans and Letters
of Credit outstanding under the Existing Credit Agreement as of the Restatement
Effective Date.  The parties hereto acknowledge and agree, however, that
(a) this Agreement and all other Loan Documents executed and delivered herewith
do not constitute a novation, payment and reborrowing or termination of the
Obligations under the Existing Credit Agreement and the other Loan Documents as
in effect prior to the Restatement Effective Date, (b) such Obligations are in
all respects continuing with only the terms being modified as provided in this
Agreement and the other Loan Documents, (c) the Liens and security interests in
favor of the Collateral Agent for the benefit of the Secured Parties and the
Issuing Bank securing payment of such Obligations are in all respects continuing
and in full force and effect with respect to all Obligations and (d) all
references in the other Loan Documents to the “Credit Agreement” shall be deemed
to refer without further amendment to the Existing Credit Agreement as amended
and restated by this Agreement.

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01                                Revolving Commitments and Term
Loans.  .

 

(a)                                 Prior to the Restatement Effective Date,
each Existing Term Loan Lender (or its predecessor in interest) made an Existing
Term Loan to Borrower in a principal amount equal to its Term Loan Commitment
(under and as defined in the Existing Credit Agreement).

 

(b)                                 On the Restatement Effective Date, in
accordance with, and upon the terms and conditions set forth in, the Restatement
Amendment, certain Existing Term Loans are being converted and reclassified to
Term B-2 Loans.

 

(c)                                  On the Restatement Effective Date, in
accordance with, and upon the terms and conditions set forth in, the Restatement
Amendment, Existing Term Loans to the extent not converted to Term B-2 Loans,
are deemed to be classified as Term B-1 Loans.

 

(d)                                 Subject to the terms and conditions herein
set forth, each Revolving Lender agrees, severally and not jointly, to make
Revolving Loans to Borrower, to make Revolving Loans to Borrower, at any time
and from time to time on or after the Restatement Effective Date until the
earlier of (i) the Revolving Maturity Date and (ii) the termination of the
Revolving Commitment of such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in such
Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment.  Each
outstanding Revolving Loan, Swingline Loan, and Letter of Credit under the
Existing Credit Agreement shall be deemed an outstanding Revolving Loan,
Swingline Loan, and Letter of Credit, as applicable, under this Agreement.

 

(e)                                  On the Restatement Effective Date, (i) Term
B-1 Loans and Term B-2 Loans shall be deemed made as Eurodollar Loans in an
amount equal to the principal amount of the Ex-

 

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isting Term Loans from which such Term B-1 Loans and Term B-2 Loans were
reclassified pursuant to the Restatement Amendment that were outstanding as
Eurodollar Loans at the time of such reclassification (such Term B-1 Loans and
Term B-2 Loans to correspond in amount to Existing Term Loans so reclassified of
a given Interest Period), (ii) Interest Periods for the Term B-1 Loans and Term
B-2 Loans described in clause (i) above shall end on the same dates as the
Interest Periods applicable to the corresponding Existing Term Loans described
in clause (i) above, and the LIBOR Rate applicable to such Term B-1 Loans and
Term B-2 Loans during such Interest Periods shall be the same as those
applicable to the Existing Term Loans so reclassified, and (iii) Term B-1 Loans
Term B-2 Loans shall be deemed made as ABR Loans in amount equal to the
principal amount of Existing Term Loans from which such Term B-1 Loans and Term
B-2 Loans were reclassified pursuant to the Restatement Amendment that were
outstanding as ABR Loans at the time of reclassification.

 

(f)                                   No reclassification of outstanding
Existing Term Loans as Term B-1 Loans or Term B-2 Loans on the Restatement
Effective Date shall constitute a voluntary or mandatory payment or prepayment
for purposes of this Agreement.

 

(g)                                  On and after the Restatement Effective
Date, each Lender that holds a Note shall be entitled to surrender such Note to
Borrower against delivery of a new Note completed in conformity with
Section 2.04(c) evidencing the Loans held by such Lender on or after the
Restatement Effective Date; provided that if any such Note is not so
surrendered, then from and after the Restatement Effective Date such Note shall
be deemed to evidence the Loans then held by such Lender.

 

Amounts paid or prepaid in respect of Term Loans may not be reborrowed.  Within
the limits set forth in clause (d) above and subject to the terms, conditions
and limitations set forth herein, Borrower may borrow, pay or prepay and
reborrow Revolving Loans.

 

SECTION 2.02                                Loans.

 

(a)                                 Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided that the failure of
any Lender to make its Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender).  Except for Loans deemed made pursuant to
Section 2.18(e)(ii), (x) ABR Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $100,000 and not
less than $500,000 or (ii) equal to the remaining available balance of the
applicable Commitments and (y) the Eurodollar Loans comprising any Borrowing
shall be in an aggregate principal amount that is (i) an integral multiple of
$100,000 and not less than $1.0 million or (ii) equal to the remaining available
balance of the applicable Commitments.

 

(b)                                 Subject to Sections 2.11 and 2.12, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as
Borrower may request pursuant to Section 2.03.  Each Lender may at its option
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of Borrower to repay such Loan in accordance
with the terms of this Agreement.  Borrowings of more than one Type may be
outstanding at the same time; provided that Borrower shall not be entitled to
request any Borrowing that, if made, would result in more than ten Eurodollar
Borrowings under the Revolving Loans and ten Eurodollar Borrowings under the
Term Loans outstanding hereunder at any one time.  For pur-

 

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poses of the foregoing, Borrowings having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate
Borrowings.

 

(c)                                  Except with respect to Loans deemed made
pursuant to Section 2.18(e)(ii), each Lender shall make each Loan to be made by
it hereunder on the proposed date thereof by wire transfer of immediately
available funds to such account in New York City as the Administrative Agent may
designate not later than 2:00 p.m., New York City time, and the Administrative
Agent shall promptly credit the amounts so received to an account as directed by
Borrower in the applicable Borrowing Request maintained with the Administrative
Agent or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders.

 

(d)                                 Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s portion
of such Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the date of such Borrowing
in accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount.  If the Administrative Agent shall have so made funds
available, then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such amount is repaid
to the Administrative Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) 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.  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement, and
Borrower’s obligation to repay the Administrative Agent such corresponding
amount pursuant to this Section 2.02(d) shall cease.  Any payment by Borrower
shall be without prejudice to any claim Borrower may have against a Lender that
shall have failed to make such payment to the Administrative Agent.

 

(e)                                  Notwithstanding any other provision of this
Agreement, Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date, Term B-1 Loan Maturity Date, Term
B-2 Loan Maturity Date or Incremental Term Loan Maturity Date, as applicable.

 

SECTION 2.03                                Borrowing Procedure.  To request a
Revolving Borrowing or Term Borrowing, Borrower shall deliver, by hand delivery,
telecopier or electronic mail (in pdf form and then followed by the original via
overnight mail), a duly completed and executed Borrowing Request to the
Administrative Agent (i) in the case of a Eurodollar Borrowing, not later than
2:00 p.m., New York City time, three Business Days before the date of the
proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, on the date of the proposed Borrowing.  Each
Borrowing Request shall be irrevocable and shall specify the following
information in compliance with Section 2.02:

 

(a)                                 whether the requested Borrowing is to be a
Borrowing of Revolving Loans or Term Loans;

 

(b)                                 the aggregate amount of such Borrowing;

 

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

 

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

 

(e)                                  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”;

 

(f)                                   the location (which shall be an account in
the United States) and number of Borrower’s account to which funds are to be
disbursed; and

 

(g)                                  that the conditions set forth in
Sections 4.02(b)-(d) have been satisfied as of the date of the notice.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then 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 Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.04                                Evidence of Debt; Repayment of
Loans.

 

(a)                                 Promise to Repay.  Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Term Loan Lender, the principal amount of each Term Loan of such Term
Loan Lender as provided in Section 2.09, (ii) to the Administrative Agent for
the account of each Revolving Lender, the then unpaid principal amount of each
Revolving Loan of such Revolving Lender on the Revolving Maturity Date and
(iii) to the Swingline Lender, the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving 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 five Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing is made, Borrower shall
repay all Swingline Loans that were outstanding on the date such Borrowing was
requested.

 

(b)                                 Lender and Administrative Agent Records. 
Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Indebtedness of Borrower to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.  The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type and
Class 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 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.  The entries made in the accounts maintained pursuant to this
paragraph shall be prima facie evidence of the existence and amounts of the
obligations therein recorded to the extent consistent with the Register and in
any case where such accounts are in conflict or otherwise inconsistent with the
entries in the Register, the entries in the Register shall govern for all
purposes of this Agreement; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of Borrower to repay the Loans in accordance
with their terms.

 

(c)                                  Promissory Notes.  Any Lender by written
notice to Borrower (with a copy to the Administrative Agent) may request that
Loans of any Class made by it be evidenced by a promissory note.  In such event,
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in the form

 

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of Exhibit K-1, K-2 or K-3 or K-4, as the case may be.  Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the payee named therein (or its
registered assigns).

 

SECTION 2.05                                Fees.

 

(a)                                 Commitment Fee.  Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Lender a commitment
fee (a “Commitment Fee”) equal to the Applicable Margin with respect to the
commitment fee per annum on the average daily unused amount of the Revolving
Commitments of such Revolving Lenders.  Accrued Commitment Fees shall be payable
in arrears (A) on the last Business Day of January, April, July, October of each
year, commencing on the Restatement Effective Date (it being understood,
notwithstanding the foregoing, that the accrued Commitment Fees under the
Existing Credit Agreement through the Restatement Effective Date shall, to the
extent not otherwise paid prior to such date, be due and payable hereunder on
the last Business Day of October 2012), and (B) on the date on which such
Revolving Commitment terminates.  Commitment Fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).  For purposes of computing
Commitment Fees with respect to Revolving Commitments, a Revolving Commitment of
a Lender shall be deemed to be used to the extent of the outstanding Revolving
Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender
shall be disregarded for such purpose).

 

(b)                                 Administrative Agent Fees.  Borrower agrees
to pay to the Administrative Agent, for its own account, the administrative fees
payable in the amounts and at the times separately agreed upon between Borrower
and the Administrative Agent (the “Administrative Agent Fees”).

 

(c)                                  LC and Fronting Fees.  Borrower agrees to
pay (i) to the Administrative Agent for the account of each Revolving Lender a
participation fee (“LC Participation Fee”) with respect to its participations in
Letters of Credit, which shall accrue at a rate equal to the Applicable Margin
from time to time used to determine the interest rate on Eurodollar Revolving
Loans pursuant to Section 2.06 on the average daily amount of such Lender’s LC
Exposure (excluding any portion thereof attributable to Reimbursement
Obligations) during the period from and including the Restatement 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 Issuing Bank a fronting fee (“Fronting Fee”), which
shall accrue at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to Reimbursement
Obligations) during the period from and including the Restatement 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 (and
accrued and unpaid fronting fees under the Existing Credit Agreement shall be
included in the first such payment after the Restatement Effective Date), as
well as the Issuing Bank’s customary fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  Accrued LC Participation Fees and Fronting Fees shall be
payable in arrears (i) on the last Business Day of January, April, July,
October of each year, commencing on the Restatement Effective Date (it being
understood, notwithstanding the foregoing, that the accrued LC Participation
Fees and Fronting Fees under the Existing Credit Agreement through the
Restatement Effective Date shall, to the extent not otherwise paid prior to such
date, be due and payable hereunder on the last Business Day of October 2012),
and (ii) on the date on which the Revolving Commitments terminate.  Any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand.  Any other fees payable to the Issuing Bank pursuant to
this paragraph shall be payable within 10 days after demand therefor.  All LC
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).

 

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

 

SECTION 2.06                                Interest on Loans.

 

(a)                                 ABR Loans.  Subject to the provisions of
Section 2.06(c), the Loans comprising each ABR Borrowing, including each
Swingline Loan, shall bear interest at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin in effect from time to time.

 

(b)                                 Eurodollar Loans.  Subject to the provisions
of Section 2.06(c), the Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBOR Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin in effect from
time to time.

 

(c)                                  Default Rate.  Notwithstanding the
foregoing, during the continuance of an Event of Default occurring under
Section 8.01(a), (b), (g) or (h), all Obligations shall, to the extent permitted
by applicable law, bear interest, after as well as before judgment, at a per
annum rate equal to (i) in the case of principal and premium, if any, of or
interest on any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section 2.06 or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Revolving Loans as provided
in Section 2.06(a) (in either case, the “Default Rate”).

 

(d)                                 Interest Payment Dates.  Accrued interest on
each Loan shall be payable in arrears on each Interest Payment Date for such
Loan (and accrued and unpaid interest under the Existing Credit Agreement for
such Loan shall be paid on the first Interest Payment Date for such Loan
following the Restatement Effective Date); provided that (i) interest accrued
pursuant to Section 2.06(c) 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 or a Swingline Loan without a permanent reduction in Revolving
Commitments), 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)                                  Interest Calculation.  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 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 or Adjusted
LIBOR Rate shall be determined by the Administrative Agent in accordance with
the provisions of this Agreement and such determination shall be conclusive
absent manifest error.

 

(f)                                   Restatement Effective Date.  For the
avoidance of doubt, for all periods prior to the Restatement Effective Date, all
interest on Revolving Loans, Swingline Loans and Existing Term Loans shall bear
interest at the rate applicable thereto under the Existing Credit Agreement, and
for all periods from and after the Restatement Effective Date, interest on all
Revolving Loans, Swingline Loans, Term B-1 Loans and Term B-2 Loans shall bear
interest at the rate provided for herein.

 

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SECTION 2.07                                Termination and Reduction of
Commitments.

 

(a)                                 Termination of Commitments.  The Revolving
Commitments, the Swingline Commitment and the LC Commitment shall automatically
terminate on the Revolving Maturity Date.

 

(b)                                 Optional Terminations and Reductions.  At
its option, Borrower may at any time terminate, or from time to time permanently
reduce, the Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$100,000 and not less than $1.0 million and (ii) the Revolving Commitments shall
not be terminated or reduced if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.10, the aggregate
amount of Revolving Exposures would exceed the aggregate amount of Revolving
Commitments.

 

(c)                                  Borrower Notice.  Borrower shall notify the
Administrative Agent in writing of any election to terminate or reduce the
Commitments under Section 2.07(b) at least three 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 Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Commitments delivered by Borrower
may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by 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 Commitments of
any Class shall be permanent.  Each reduction of the Commitments of any
Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.

 

SECTION 2.08                                Interest Elections.

 

(a)                                 Generally.  Each Revolving Borrowing and
Term 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,
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.  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.  Notwithstanding anything to the
contrary, Borrower shall not be entitled to request any conversion or
continuation that, if made, would result in more than ten Eurodollar Borrowings
under the Revolving Loans and ten Eurodollar Borrowings under the Term Loans
outstanding hereunder at any one time.  This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.

 

(b)                                 Interest Election Notice.  To make an
election pursuant to this Section, Borrower shall deliver, by hand delivery,
telecopier or electronic mail (in pdf form and then followed by the original via
overnight mail), a duly completed and executed Interest Election Request to the
Administrative Agent not later than the time that a Borrowing Request would be
required under Section 2.03 if Borrower were requesting a Revolving Borrowing or
Term Borrowing of the Type resulting from such election to be made on the
effective date of such election.  Each Interest Election Request shall be
irrevocable.  Each 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, or if outstanding Borrowings

 

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are being combined, allocation 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 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 Borrower shall be deemed to have selected
an Interest Period of one month’s duration.

 

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

 

(c)                                  Automatic Conversion to ABR Borrowing.  If
an Interest Election Request with respect to a Eurodollar Borrowing is not
timely delivered prior to the end of the Interest Period applicable thereto,
then, unless such Borrowing is repaid as provided herein, at the end of such
Interest Period such Borrowing shall be converted to an ABR Borrowing. 
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing, the Administrative Agent or the Required Lenders may
require, by notice to Borrower, that (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.

 

SECTION 2.09                                Amortization of Term Borrowings. 
Borrower shall pay to the Administrative Agent, for the account of the Term B-1
Loan Lenders, on the dates set forth on Annex I-A, or if any such date is not a
Business Day, on the immediately preceding Business Day (each such date, a “Term
B-1 Loan Repayment Date”), a principal amount of the Term B-1 Loans equal to the
amount set forth on Annex I-A for such date (as adjusted from time to time
pursuant to Section 2.10(h)), together in each case with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of such
payment.  To the extent not previously paid, all Term B-1 Loans shall be due and
payable on the Term B-1 Loan Maturity Date. Borrower shall pay to the
Administrative Agent, for the account of the Term B-2 Loan Lenders, on the dates
set forth on Annex I-B, or if any such date is not a Business Day, on the
immediately preceding Business Day (each such date, a “Term B-2 Loan Repayment
Date” and, together with a Term B-1 Loan Repayment Date, a “Term Loan Repayment
Date”), a principal amount of the Term B-2 Loans equal to the amount set forth
on Annex I-B for such date (as adjusted from time to time pursuant to
Section 2.10(h)), together in each case with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such payment.  To the
extent not previously paid, all Term B-2 Loans shall be due and payable on the
Term B-2 Loan Maturity Date

 

SECTION 2.10                                Optional and Mandatory Prepayments
of Loans.

 

(a)                                 Optional Prepayments.  Borrower shall have
the right at any time and from time to time to prepay any Borrowing, in whole or
in part, subject to the requirements of this Section 2.10; provided that each
partial prepayment shall be in an amount that is an integral multiple of
$500,000 and not less than $500,000 or, if less, the outstanding principal
amount of such Borrowing.

 

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(b)                                 Revolving Loan Prepayments.

 

(i)                                     In the event of the termination of all
the Revolving Commitments, Borrower shall, on the date of such termination,
repay or prepay all its outstanding Revolving Borrowings and all outstanding
Swingline Loans and replace all outstanding Letters of Credit, collateralize all
outstanding Letters of Credit with a supporting letter of credit reasonably
acceptable to the Issuing Bank from an issuer reasonably satisfactory to the
Issuing Bank, or cash collateralize all outstanding Letters of Credit in
accordance with the procedures set forth in Section 2.18(i).

 

(ii)                                  In the event of any partial reduction of
the Revolving Commitments, then (x) at or prior to the effective date of such
reduction, the Administrative Agent shall notify Borrower and the Revolving
Lenders of the sum of the Revolving Exposures after giving effect thereto and
(y) if the sum of the Revolving Exposures would exceed the aggregate amount of
Revolving Commitments after giving effect to such reduction, then Borrower
shall, on the date of such reduction, first, repay or prepay Swingline Loans,
second, repay or prepay Revolving Borrowings and third, replace outstanding
Letters of Credit, collateralize all outstanding Letters of Credit with a
supporting letter of credit reasonably acceptable to the Issuing Bank from an
issuer reasonably satisfactory to the Issuing Bank, or cash collateralize
outstanding Letters of Credit in accordance with the procedures set forth in
Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.

 

(iii)                               In the event that the sum of all Lenders’
Revolving Exposures exceeds the Revolving Commitments then in effect, Borrower
shall, without notice or demand, immediately first, repay or prepay Revolving
Borrowings, and second, replace outstanding Letters of Credit, collateralize all
outstanding Letters of Credit with a supporting letter of credit reasonably
acceptable to the Issuing Bank from an issuer reasonably satisfactory to the
Issuing Bank, or cash collateralize outstanding Letters of Credit in accordance
with the procedures set forth in Section 2.18(i), in an aggregate amount
sufficient to eliminate such excess.

 

(iv)                              In the event that the aggregate LC Exposure
exceeds the LC Commitment then in effect, Borrower shall, without notice or
demand, immediately replace outstanding Letters of Credit, collateralize all
outstanding Letters of Credit with a supporting letter of credit from an issuer
reasonably satisfactory to the Issuing Bank, or cash collateralize outstanding
Letters of Credit in accordance with the procedures set forth in
Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.

 

(c)                                  Asset Sales.  Not later than five Business
Days following the receipt of any Net Cash Proceeds of any Asset Sale by
Holdings or any of its Subsidiaries, Borrower shall make prepayments in
accordance with Sections 2.10(h) and (i) in an aggregate amount equal to 100% of
such Net Cash Proceeds; provided that:

 

(i)                  no such prepayment shall be required under this
Section 2.10(c)(i) with respect to (A) any Asset Sale permitted by
Section 6.06(a), (c), (d), (e) (solely with respect to mergers and
consolidations among Loan Parties and/or their Subsidiaries), (f), (g), (h),
(i), (j) and (k), (B) the disposition of property which constitutes a Casualty
Event, or (C) Asset Sales for fair market value resulting in no more than
$2.0 million in Net Cash Proceeds per Asset Sale (or series of related Asset
Sales) and less than $6.0 million in Net Cash Proceeds in any fiscal year (and
thereafter only such Net Cash Proceeds in excess of $6.0 million shall be
required to be applied to prepayment in accordance with this Section 2.10(c));
provided that clause (C) shall not apply in the case of any Asset Sale described
in clause (b) of the definition thereof; and

 

(ii)               so long as no Default shall then exist or would arise
therefrom, such proceeds shall not be required to be so applied on such date to
the extent that Borrower shall have delivered

 

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an Officers’ Certificate to the Administrative Agent on or prior to the fifth
Business Day following such date stating that such Net Cash Proceeds are
expected to be used to purchase replacement assets or repair such assets, or to
purchase assets used or useful in the business of Borrower and its Subsidiaries,
or to acquire 100% of the Equity Interests of any person that owns such assets
or engages in a business of the type that Borrower and its Subsidiaries are
permitted to be engaged in under Section 6.14 and, in each case, otherwise in
compliance with the terms of this Agreement, no later than 365 days following
the date of such Asset Sale (which Officers’ Certificate shall set forth the
estimates of the proceeds to be so expended); provided that if all or any
portion of such Net Cash Proceeds is not so reinvested within such 365-day
period, such unused portion shall be applied on the last day of such period as a
mandatory prepayment as provided in this Section 2.10(c); provided, further,
that if the property subject to such Asset Sale constituted Collateral, then all
property purchased with the Net Cash Proceeds thereof pursuant to this
subsection shall be made subject to the Lien of the applicable Security
Documents in favor of the Collateral Agent, for its benefit and for the benefit
of the other Secured Parties in accordance with Sections 5.11 and 5.12.

 

(d)                                 Debt Issuance.  Not later than five Business
Days following the receipt of any Net Cash Proceeds of any Debt Issuance by
Holdings or any of its Subsidiaries, Borrower shall make prepayments in
accordance with Sections 2.10(h) and (i) in an aggregate amount equal to 100% of
such Net Cash Proceeds.

 

(e)                                  [Intentionally Omitted].

 

(f)                                   Casualty Events.  Not later than five
Business Days following the receipt of any Net Cash Proceeds in excess of $2.0
million from a Casualty Event by Holdings or any of its Subsidiaries, Borrower
shall make prepayments in accordance with Sections 2.10(h) and (i) in an
aggregate amount equal to 100% of such excess Net Cash Proceeds; provided that:

 

(i)                                     such proceeds shall not be required to
be so applied on such date to the extent that Borrower shall have delivered an
Officers’ Certificate to the Administrative Agent on or prior to such date
stating that such proceeds are expected to be used to purchase replacement
assets or repair such assets, or to purchase assets used or useful in the
business of Borrower and its Subsidiaries, or to acquire 100% of the Equity
Interests of any person that owns such assets or engages in a business of the
type that Borrower and its Subsidiaries are permitted to be engaged in under
Section 6.15 and, in each case, otherwise in compliance with the terms of the
Agreement no later than 365 days following the date of receipt of the entire
amount of such proceeds; provided that such time may be extended by an
additional 90 days if, on or prior to the 365th day following the date of
receipt of such proceeds, Borrower delivers an Officers’ Certificate to the
Administrative Agent detailing the intended use of such proceeds and certifying
that the proceeds will be used to replace the assets subject to such Casualty
Event; provided that if the property subject to such Casualty Event constituted
Collateral under the Security Documents, then all property purchased with the
Net Cash Proceeds thereof pursuant to this subsection shall be made subject to
the Lien of the applicable Security Documents in favor of the Collateral Agents,
for its benefit and for the benefit of the other Secured Parties in accordance
with Sections 5.11 and 5.12; and

 

(ii)                                  if any portion of such Net Cash Proceeds
shall not be so applied within such 365-day period (or such longer period to the
extent extended pursuant to the first proviso to clause (i) above), such unused
portion shall be applied within 5 business days after the end of such period as
a mandatory prepayment as provided in this Section 2.10(f).

 

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(g)                                  Excess Cash Flow.  No later than the
earlier of (i) 120 days after the end of each Excess Cash Flow Period and
(ii) 15 days after the date on which the financial statements with respect to
such fiscal year in which such Excess Cash Flow Period occurs are delivered
pursuant to Section 5.01(a), Borrower shall make prepayments in accordance with
Sections 2.10(h) and (i) in an aggregate amount equal to 50.0% of Excess Cash
Flow for the Excess Cash Flow Period then ended; provided, however, that if the
Total Leverage Ratio as of the end of such Fiscal Year is less than 4.0:1.0,
then the amount of such prepayment for such Fiscal Year shall be reduced to an
amount equal to 25.0% of such Excess Cash Flow; provided, further, that if the
Leverage Ratio as of the end of such Fiscal Year is less than 2.5:1.0, then the
amount of such prepayment for such Fiscal Year shall be reduced to an amount
equal to 0% of such Excess Cash Flow; provided, further, however, that the
amount required to be prepaid pursuant to this clause (g) shall be reduced
dollar-for-dollar by the amount of any voluntary prepayments of Term Loans other
than to the extent financed using the proceeds of incurrence of Indebtedness.

 

(h)                                 Application of Prepayments.  Prior to any
optional or mandatory prepayment hereunder, Borrower shall select the Borrowing
or Borrowings to be prepaid and shall specify such selection in the notice of
such prepayment pursuant to Section 2.10(i), subject to the provisions of this
Section 2.10(h).  Any optional prepayments of Loans pursuant to
Section 2.10(a) shall be applied, at the option of Borrower (which option shall
be set forth in the notice referred to in the first sentence of this clause (h))
to (x) repay then outstanding Revolving Loans or (y) to repay then outstanding
Term Loans in the manner directed by Borrower; provided, that, notwithstanding
Section 2.14(b)(ii), with respect to any such optional prepayment, (A) as
between the Term B-1 Loans and the Term B-2 Loans, the Borrower may elect to
solely repay the Term B-1 Loans prior to any repayment on the Term B-2 Loans or
apportion an amount of such repayment such that the principal amount of Term B-1
Loans (together with accrued and unpaid interest thereon) are repaid on a pro
rata basis or a greater than pro rata basis (but in any event not less than a
pro rata basis) than the principal amount of Term B-2 Loans (together with
accrued and unpaid interest thereon) repaid, (B) and in the case of any
repayment pursuant to clause (A) above, amounts paid in respect of the Term B-1
Loans or the Term B-2 Loans shall be made ratably across such Term B-1 Loans or
Term B-2 Loans, as applicable.  Any mandatory prepayments of Term Loans pursuant
to Section 2.10(c), (d), (f) or (g) shall be applied to reduce scheduled
prepayments required under Section 2.09, first, to such scheduled prepayments
due for the next four Term Loan Repayment Dates (ratably among the scheduled
prepayments due in respect of the Term B-1 Loans and the Term B-2 Loans)
following such prepayment and, second, on a pro rata basis among the prepayments
remaining to be made on each remaining Term Loan Repayment Date.  After
application of mandatory prepayments of Term Loans described above in this
Section 2.10(h) and to the extent there are mandatory prepayment amounts
remaining after such application, the Revolving Commitments shall be permanently
reduced ratably among the Revolving Lenders in accordance with their applicable
Revolving Commitments in an aggregate amount equal to such excess, and Borrower
shall comply with Section 2.10(b).

 

Amounts to be applied pursuant to this Section 2.10 to the prepayment of Term
Loans and Revolving Loans shall be applied, as applicable, first to reduce
outstanding ABR Term Loans and ABR Revolving Loans, respectively.  Any amounts
remaining after each such application shall be applied to prepay Eurodollar Term
Loans or Eurodollar Revolving Loans, as applicable.  Notwithstanding the
foregoing, if the amount of any prepayment of Loans required under this
Section 2.10 shall be in excess of the amount of the ABR Loans at the time
outstanding (an “Excess Amount”), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of Borrower, the Excess Amount shall be
either (A) deposited in an escrow account on terms satisfactory to the
Collateral Agent and applied to the prepayment of Eurodollar Loans on the last
day of the then next-expiring Interest Period for Eurodollar Loans; provided
that (i) interest in respect of such Excess Amount shall continue to accrue
thereon at the rate provided hereunder for the Loans which such Excess Amount is
intended to repay until such Excess Amount shall have been used in full to repay
such Loans and (ii) at any time while an Event of Default has occurred and is
continuing, the

 

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Administrative Agent may, and upon written direction from the Required Lenders
shall, apply any or all proceeds then on deposit to the payment of such Loans in
an amount equal to such Excess Amount or (B) prepaid immediately, together with
any amounts owing to the Lenders under Section 2.13.

 

(i)                                     Notice of Prepayment.  Borrower shall
notify the Administrative Agent (and, in the case of prepayment of a Swingline
Loan, the Swingline Lender) by written notice of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Borrowing, not later than 1:00 p.m., New
York City time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment and (iii) in the case of
prepayment of a Swingline Loan, not later than 2:00 p.m., New York City time, on
the date of prepayment.  Each such notice shall be irrevocable; provided that,
if a notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.07, then such notice
of prepayment may be revoked if such termination is revoked in accordance with
Section 2.07.  Each such notice shall specify the prepayment date, the principal
amount of each Borrowing or portion thereof to be prepaid and (i) in the case of
a mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment and (ii) in the case of any optional prepayment pursuant to
Section 2.10(a), as permitted by Section 2.10(h), the allocation of such
prepayment as between the Term B-1 Loans and the Term B-2 Loans to the extent
such prepayment shall not be applied ratably across all Term Loans.  Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof.  Such notice to the Lenders may be by telecopier or electronic
mail.  Each partial prepayment of any Borrowing shall be in an amount that would
be permitted in the case of a Credit Extension of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment.  Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing and otherwise in accordance with
this Section 2.10.  Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.06.

 

SECTION 2.11                                   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 final and conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBOR Rate for
such Interest Period; or

 

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

 

then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.

 

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SECTION 2.12                                Yield Protection.

 

(a)                                 Increased Costs Generally.  If any Change in
Law shall:

 

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

 

(ii)                        subject any Lender or the Issuing Bank to any Tax of
any kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Loan made by it, or change
the basis of Taxation of payments to such Lender or the Issuing Bank in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.15 and
any Excluded Tax payable by such Lender or the Issuing Bank); or

 

(iii)                     impose on any Lender or the Issuing Bank or the London
interbank market any other condition, cost or expense affecting this Agreement
or Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;

 

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 such Loan), or to increase the cost to such Lender, the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company, if any, of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or any other amount), then, upon
request of such Lender or the Issuing Bank, Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

 

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

 

(c)                                  Certificates for Reimbursement.  A
certificate of a Lender or the Issuing Bank setting forth in reasonable detail
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.12 and delivered to Borrower (with a copy to the Administrative
Agent) shall be conclusive absent manifest error.  Borrower shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the
part of any Lender or the Issuing Bank to demand compensation pursuant to this
Section 2.12 shall not constitute a waiver of such Lender’s

 

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

 

SECTION 2.13                                Breakage Payments.  In the event of
(a) the payment or prepayment, whether optional or mandatory, of any principal
of any Eurodollar Loan earlier than the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan earlier than the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Revolving Loan or Eurodollar Term Loan on the date
specified in any notice delivered pursuant hereto or (d) the assignment of any
Eurodollar Loan earlier than the last day of the Interest Period applicable
thereto as a result of a request by Borrower pursuant to Section 2.16(b), then,
in any such event, Borrower shall compensate each Lender for the loss, cost and
expense (excluding, in any case, loss of anticipated profit) attributable to
such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall 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 LIBOR
Rate that would have been applicable to such Loan, 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 dollar deposits of a comparable amount and period from other
banks in the Eurodollar 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 2.13 shall be delivered to Borrower (with a copy to the
Administrative Agent) and shall be conclusive and binding absent manifest
error.  Borrower shall pay such Lender the amount shown as due on any such
certificate within 5 days after receipt thereof.

 

SECTION 2.14                                Payments Generally; Pro Rata
Treatment; Sharing of Setoffs.

 

(a)                                 Payments Generally.  Borrower shall make
each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest, fees or Reimbursement Obligations, or
of amounts payable under Section 2.12, 2.13, 2.15 or 10.03, or otherwise) on or
before the time expressly required hereunder or under such other Loan Document
for such payment (or, if no such time is expressly required, prior to 2:00 p.m.,
New York City time), on the date when due, in immediately available funds,
without setoff, deduction or counterclaim.  Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for purposes of
calculating interest thereon.  All such payments shall be made to the
Administrative Agent at its offices at 677 Washington Boulevard, Stamford,
Connecticut, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.12, 2.13, 2.15 and 10.03 shall be made directly to the persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the persons specified therein.  The Administrative Agent shall distribute any
such payments received by it for the account of any other person to the
appropriate recipient promptly following receipt thereof.  If any payment under
any Loan Document shall be due on a day that is not a Business Day, unless
specified otherwise, 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.  All
payments under each Loan Document shall be made in dollars, except as expressly
specified otherwise.

 

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(b)                                 Pro Rata Treatment.

 

(i)                  Each payment by Borrower of interest in respect of the
Loans shall be applied to the amounts of such obligations owing to the Lenders
pro rata according to the respective amounts then due and owing to the Lenders.

 

(ii)               Except to the extent set forth in the proviso to the second
sentence of Section 2.10(h), each payment on account of principal of the Term
Loans shall be allocated among the Term Loan Lenders pro rata based on the
principal amount of the Term Loans held by the Term Loan Lenders.  Each payment
by Borrower on account of principal of the Revolving Borrowings shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Loans then held by the Revolving Lenders.

 

(c)                                  Insufficient Funds.  If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, Reimbursement Obligations, interest and fees
then due hereunder, such funds shall be applied (i) first, toward payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, toward payment of principal and Reimbursement Obligations then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and Reimbursement Obligations then due to such parties.

 

(d)                                 Sharing of Set-Off.  If any Lender (and/or
the Issuing Bank, which shall be deemed a “Lender” for purposes of this
Section 2.14(d)) shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other Obligations resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of its Loans and accrued interest thereon or
other Obligations greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and such other obligations of the other Lenders, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and other amounts owing them, provided that:

 

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

 

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

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Requirements of Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.  If under applicable bankruptcy,
insolvency or any similar law any Secured Party receives a secured claim in lieu
of a setoff or counterclaim to which this Section 2.14(d) applies, such Secured
Party shall to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the

 

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rights to which the Secured Party is entitled under this Section 2.14(d) to
share in the benefits of the recovery of such secured claim.

 

(e)                                  Borrower Default.  Unless the
Administrative Agent shall have received notice from Borrower prior to the date
on which any payment is due to the Administrative Agent for the account of the
Lenders or the Issuing Bank hereunder that Borrower will not make such payment,
the Administrative Agent may assume that Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due.  In such event, if Borrower has not in fact made such payment, then each of
the Lenders or the 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 the 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.

 

(f)                                   Lender Default.  If any Lender shall fail
to make any payment required to be made by it pursuant to Section 2.02(c),
2.14(e), 2.17(d), 2.18(d), 2.18(e) or 10.03(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 2.15                                Taxes.

 

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

 

(b)                                 Payment of Other Taxes by Borrower.  Without
limiting the provisions of paragraph (a) above, Borrower shall timely pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
Requirements of Law.

 

(c)                                  Indemnification by Borrower.  Borrower
shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 10 business days after written demand (accompanied by a certificate
complying with the requirements set forth below) therefor for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or at tributable to amounts payable under this
Section 2.15) payable by the Administrative Agent, such Lender or the Issuing
Bank, as the case may be, and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate setting forth the amount of such payment or liability
delivered to Borrower by a Lender or the Issuing Bank (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender or the Issuing Bank, setting forth in reasonable detail the
manner in which such amount was determined, shall be conclusive absent manifest

 

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error.  If Indemnified Taxes were not correctly or legally asserted, the
Administrative Agent, the Issuing Bank or such Lender shall, upon the Borrower’s
request and at the expense of the Loan Parties, provide such documents to the
Borrower in form and substance satisfactory to the Administrative Agent, as the
Borrower may reasonably request, to enable the applicable Loan Party to contest
such Indemnified Taxes pursuant to appropriate proceedings then available to
such Loan Party (so long as neither such contest nor the provision of such
documents to the Borrower shall, in the good faith determination of the
Administrative Agent, the Issuing Bank or the Lender, have a reasonable
likelihood of resulting in any liability of, or any material adverse consequence
or unreimbursed cost to, the Administrative Agent, the Issuing Bank or such
Lender and doing so is otherwise permitted under applicable law as determined by
the Administrative Agent, the Issuing Bank or such Lender). This
Section 2.15(c) shall not be construed to require the Administrative Agent, any
Lender or the Issuing Bank to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Loan
Parties or any other person.

 

(d)                                 Evidence of Payments.  As soon as
practicable (but in no event later than 30 days) after any payment of
Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority,
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

(e)                                  Status of Lenders.  To the extent that a
Foreign Lender is legally eligible to do so, such Foreign Lender shall deliver
to Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Lender becomes
a Lender under this Agreement (and from time to time thereafter upon the request
of Borrower or the Administrative Agent, but only if such Foreign Lender is
legally eligible to do so), whichever of the following is applicable:

 

(i)                           duly completed original copies of Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to
which the United States of America is a party,

 

(ii)                        duly completed original copies of Internal Revenue
Service Form W-8ECI,

 

(iii)                     in the case of a Foreign Lender claiming the benefits
of the exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate, in substantially the form of Exhibit Q to the Existing Credit
Agreement, or any other similar form approved by the Administrative Agent (each,
a “Non-Bank Certificate”), to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code,
or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code, and that no interest payments are effectively connected with a U.S.
trade or business of such Lender and (y) duly completed copies of Internal
Revenue Service Form W-8BEN,

 

(iv)                    to the extent a Foreign Lender is not the beneficial
owner (for example, where a Foreign Lender is a partnership or a participating
Lender), IRS Form W-8IMY, accompanied by a Form W-8ECI, Form W-BEN, Non-Bank
Certificate, Form W-9, Form W-8IMY and any other required information (or any
successor forms) from each beneficial owner that would be required under this
Section 2.15(e) if such beneficial owner were a Lender, as applicable (provided
that, if the Foreign Lender is a partnership (and not a participating Lender)
and one or more beneficial owners are claiming the portfolio interest exemption,
the Non-Bank Certificate may be provided by such Foreign Lender on behalf of
such beneficial owner(s)), or

 

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(v)              any other form prescribed by applicable Requirements of Law as
a basis for claiming exemption from or a reduction in United States federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable Requirements of Law to permit Borrower to
determine the withholding or deduction required to be made.

 

Each Foreign Lender shall promptly update any documentation previously delivered
under this Section 2.15(e) upon the obsolescence, expiration or invalidity of
any such documentation (including as a result of any change in a Lender’s
circumstances) or promptly notify Borrower and the Administrative Agent in
writing of its inability to do so.

 

(f)                                   Treatment of Certain Refunds.  If the
Administrative Agent, a Lender or the Issuing Bank determines, in its reasonable
discretion, that it has received a refund of any Indemnified Taxes or Other
Taxes as to which it has been indemnified by any Loan Party or with respect to
which any Loan Party has paid additional amounts pursuant to this Section, it
shall pay to Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Loan Parties under
this Section with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that Borrower, upon the request of the Administrative
Agent, such Lender or the Issuing Bank, agrees to repay the amount paid over to
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or the Issuing
Bank in the event the Administrative Agent, such Lender or the Issuing Bank is
required to repay such refund to such Governmental Authority.  This paragraph
shall not be construed to require the Administrative Agent, any Lender or the
Issuing Bank to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to Borrower or any other
person.  Notwithstanding anything to the contrary, in no event will any
indemnitee be required to pay any amount to Borrower the payment of which would
place such indemnitee in a less favorable net after-tax position than such
indemnitee would have been in if the additional amounts giving rise to such
refund of any Indemnified Taxes or Other Taxes had never been paid.

 

(g)                                  U.S. Lenders.  Each Lender who is a U.S.
Person on or prior to the date of its execution and delivery of this Agreement,
on or prior to the date on which it becomes a Lender, in the case of an
assignee, and from time to time thereafter if requested in writing by Borrower
or the Administrative Agent, shall provide Borrower and the Administrative Agent
with duplicate executed originals of Internal Revenue Service Form W-9, or any
successor form, certifying that such Lender is entitled to exemption from United
States backup withholding tax.

 

Each U.S. Lender shall promptly update any documentation previously delivered
under this Section 2.15(e) upon the obsolescence, expiration or invalidity of
any such documentation (including as a result of any change in a Lender’s
circumstances) or promptly notify Borrower and the Administrative Agent in
writing of its inability to do so.

 

(h)                                 Administrative Agent.  An Administrative
Agent that is not a U.S. Person, shall deliver to the Borrower on or prior to
the date such person becomes the Administrative Agent (and at such other times
as are reasonably requested by the Borrower), two properly completed and duly
signed original copies of Internal Revenue Service Form W-8ECI (or any successor
forms) and a withholding certificate that satisfies the requirements of Treasury
Regulation Sections 1.1441-1(b)(2)(iv) and 1.1441-1(e)(3)(v) as applicable to a
U.S. branch that has agreed to be treated as a U.S. person for withholding tax
purposes.  An Administrative Agent that is a U.S. Person, shall deliver to the
Borrower on or prior to the date such person becomes the Administrative Agent
(and at such other times as are reasonably requested by the Borrower), two
executed originals of Internal Revenue Service Form W-9, or any successor form,

 

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certifying that such Lender is entitled to exemption from United States backup
withholding tax.  In addition, the Administrative Agent shall update such
previously delivered forms and certificate if such form and/or certificate
becomes inaccurate or otherwise invalid by reason of a lapse of time or change
in circumstances.

 

(i)                                     FATCA Documentation.  If a payment made
to a Lender or an Administrative Agent under any Loan Document would be subject
to U.S. federal withholding Tax imposed under FATCA if such person were to fail
to comply with the applicable requirements of FATCA, such Person shall deliver
to 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 and such
additional documentation reasonably requested by the Borrower and the
Administrative Agent as may be necessary for the Borrower or the Administrative
Agent to comply with their obligations under FATCA and to determine the amount,
if any, to deduct and withhold from such payment.  Solely for purposes of this
clause (i), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

(j)                                    Definition of Lender.  For the avoidance
of doubt, the term “Lender” shall, for all purposes of this Section 2.15,
include any Issuing Bank.

 

SECTION 2.16                                Mitigation Obligations; Replacement
of Lenders.

 

(a)                                 Designation of a Different Lending Office. 
If any Lender requests compensation under Section 2.12, or requires Borrower to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, 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 hereunder to
another of its offices, branches or affiliates, if, in the reasonable judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.12 or 2.15, 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 in any material respect to
such Lender.  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.  A certificate setting forth in reasonable detail such costs and
expenses submitted by such Lender to Borrower shall be conclusive absent
manifest error.

 

(b)                                 Replacement of Lenders.  If any Lender
requests compensation under Section 2.12, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation
to fund Loans hereunder, or if Borrower exercises its replacement rights under
Section 10.02(d), then Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.04), all of its interests,
rights and obligations under this Agreement and the other Loan Documents to an
Eligible Assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that:

 

(i)                           the Administrative Agent shall have been paid the
processing and recordation fee specified in Section 10.04(b);

 

(ii)                        such 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 and under the other Loan Documents
(including any amounts under Section 2.13), from the assignee (to the extent of

 

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such outstanding principal and accrued interest and fees) or Borrower (in the
case of all other amounts;

 

(iii)                     in the case of any such assignment resulting from a
claim for compensation under Section 2.12 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments thereafter; and

 

(iv)                    such assignment does not conflict with applicable
Requirements of Law.

 

A Lender shall not be required to make any such assignment or delegation if,
with respect to an exercise by Borrower of its rights under this
Section 2.16(b) resulting from a claim for compensation by such Lender under
Section 2.12, such Lender withdraws or waives such claim within 10 Business Days
of such Lender’s receipt of the notice to such Lender of Borrower’s intent to
exercise of its rights under this Section 2.16(b) referred to above.

 

SECTION 2.17                                Swingline Loans.

 

(a)                                 Swingline Commitment.  Subject to the terms
and conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to Borrower from time to time during the Revolving 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 $5.0
million or (ii) the sum of the total Revolving 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,
Borrower may borrow, repay and reborrow Swingline Loans.

 

(b)                                 Swingline Loans.  To request a Swingline
Loan, Borrower shall deliver, by hand delivery, telecopier or electronic mail
(in pdf form and then followed by the original via overnight mail), a duly
completed and executed Borrowing Request to the Administrative Agent and the
Swingline Lender, not later than 2:00 p.m., New York City time, on the day of a
proposed Swingline Loan.  Each such notice shall be irrevocable and shall
specify the requested date (which shall be a Business Day) and the amount of the
requested Swingline Loan.  Each Swingline Loan shall be an ABR Loan.  The
Swingline Lender shall make each Swingline Loan available to Borrower to an
account as directed by Borrower in the applicable Borrowing Request maintained
with the Administrative Agent (or, in the case of a Swingline Loan made to
finance the reimbursement of an LC Disbursement as provided in Section 2.18(e),
by remittance to the Issuing Bank) by 4:00 p.m., New York City time, on the
requested date of such Swingline Loan.  Borrower shall not request a Swingline
Loan if at the time of or immediately after giving effect to the Extension of
Credit contemplated by such request a Default has occurred and is continuing or
would result therefrom.  Swingline Loans shall be made in minimum amounts of
$100,000 and integral multiples of $50,000 above such amount.

 

(c)                                  Prepayment.  Borrower shall have the right
at any time and from time to time to repay any Swingline Loan, in whole or in
part, upon giving written notice to the Swingline Lender and the Administrative
Agent before 2:00 p.m., New York City time, on the proposed date of repayment.

 

(d)                                 Participations.  The Swingline Lender may at
any time in its discretion by written notice given to the Administrative Agent
(provided such notice requirement shall not apply if the Swingline Lender and
the Administrative Agent are the same entity) not later than 11:00 a.m., New
York City time, on the next succeeding Business Day following such notice
require the Revolving Lenders to acquire participations on such Business Day in
all or a portion of the Swingline Loans then outstanding.  Such notice shall
specify the aggregate amount of Swingline Loans in which Revolving Lenders will
par-

 

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ticipate.  Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Revolving Lender, specifying in such notice such
Lender’s Pro Rata 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 Pro Rata 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 (so long as such
payment shall not cause such Lender’s Revolving Exposure to exceed such Lender’s
Revolving Commitment).  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 2.02(c) with respect to Loans made by such
Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment
obligations of the Revolving 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 Borrower of any
participations in any Swingline Loan acquired by the Revolving Lenders 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 Borrower (or other party on behalf
of 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, as their interests may appear.  The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve Borrower of any
default in the payment thereof.

 

SECTION 2.18                                Letters of Credit.

 

(a)                                 General.  Subject to the terms and
conditions set forth herein, Borrower may request the Issuing Bank, and the
Issuing Bank agrees, to issue Letters of Credit for its own account or the
account of a Subsidiary in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the
Revolving Availability Period (provided that Borrower shall be a co-applicant,
and be jointly and severally liable, with respect to each Letter of Credit
issued for the account of a Subsidiary).  The Issuing Bank shall have no
obligation to issue, and Borrower shall not request the issuance of, any Letter
of Credit at any time if after giving effect to such issuance, the LC Exposure
would exceed the LC Commitment or the total Revolving Exposure would exceed the
total Revolving Commitments.  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 Borrower to, or
entered into by Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

 

(b)                                 Request for Issuance, Amendment, Renewal,
Extension; Certain Conditions and Notices.  To request the issuance of a Letter
of Credit or the amendment, renewal or extension of an outstanding Letter of
Credit, Borrower shall deliver, by hand or telecopier (or transmit by other
electronic communication, if arrangements for doing so have been approved by the
Issuing Bank), an LC Request to the Issuing Bank and the Administrative Agent
not later than 2:00 p.m. on the third Business Day preceding the requested date
of issuance, amendment, renewal or extension (or such later date and time as is
acceptable to the Issuing Bank).

 

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A request for an initial issuance of a Letter of Credit shall specify in form
and detail reasonably satisfactory to the Issuing Bank:

 

(i)                           the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day);

 

(ii)                        the amount thereof;

 

(iii)                     the expiry date thereof (which shall not be later than
the close of business on the Letter of Credit Expiration Date);

 

(iv)                    the name and address of the beneficiary thereof;

 

(v)                       whether the Letter of Credit is to be issued for its
own account or for the account of one of its Subsidiaries (provided that
Borrower shall be a co-applicant, and therefore jointly and severally liable,
with respect to each Letter of Credit issued for the account of a Subsidiary);

 

(vi)                    the documents to be presented by such beneficiary in
connection with any drawing thereunder;

 

(vii)                 the full text of any certificate to be presented by such
beneficiary in connection with any drawing thereunder; and

 

(viii)              such other matters as the Issuing Bank may reasonably
require.

 

A request for an amendment, renewal or extension of any outstanding Letter of
Credit shall specify in form and detail reasonably satisfactory to the Issuing
Bank:

 

(i)                           the Letter of Credit to be amended, renewed or
extended;

 

(ii)                        the proposed date of amendment, renewal or extension
thereof (which shall be a Business Day);

 

(iii)                     the nature of the proposed amendment, renewal or
extension; and

 

(iv)                    such other matters as the Issuing Bank may reasonably
require.

 

If requested by the Issuing Bank, Borrower also shall submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request
for a Letter of Credit.  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, 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 Commitment, (ii) the total Revolving Exposures
shall not exceed the total Revolving Commitments and (iii) the conditions set
forth in Section 4.02 otherwise in respect of such issuance, amendment, renewal
or extension shall have been satisfied.  Unless the Issuing Bank shall agree
otherwise, no Letter of Credit shall be in an initial amount less than $10,000,
in the case of a Commercial Letter of Credit, or $50,000, in the case of a
Standby Letter of Credit.

 

Upon the issuance of any Letter of Credit or amendment, renewal, extension or
modification to a Letter of Credit, the Issuing Bank shall promptly notify the
Administrative Agent, who shall promptly notify each Revolving Lender, thereof,
which notice shall be accompanied by a copy of such

 

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Letter of Credit or amendment, renewal, extension or modification to a Letter of
Credit and the amount of such Lender’s respective participation in such Letter
of Credit pursuant to Section 2.18(d).  On the first Business Day of each
calendar month, the Issuing Bank shall provide to the Administrative Agent a
report listing all outstanding Letters of Credit and the amounts and
beneficiaries thereof and the Administrative Agent shall promptly provide such
report to each Revolving Lender.

 

(c)                                  Expiration Date.

 

(i)                           Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) in the case of a Standby Letter of
Credit, (x) the date which is one year after the date of the issuance of such
Standby Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (y) the Letter of Credit
Expiration Date and (ii) in the case of a Commercial Letter of Credit, (x) the
date that is 360 days after the date of issuance of such Commercial Letter of
Credit (or, in the case of any renewal or extension thereof, 360 days after such
renewal or extension) and (y) the Letter of Credit Expiration Date.

 

(ii)                        If Borrower so requests in any Letter of Credit
Request, the 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 Issuing Bank to prevent any such renewal at least once in
each twelve-month period (commencing with 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 to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise directed by the Issuing Bank, Borrower shall
not be required to make a specific request to the Issuing Bank for any such
renewal.  Once an Auto-Renewal Letter of Credit has been issued, the Revolving
Lenders shall be deemed to have authorized (but may not require) the Issuing
Bank to permit the renewal of such Letter of Credit at any time to an expiry
date not later than the earlier of (i) one year from the date of such renewal
and (ii) the Letter of Credit Expiration Date; provided that the Issuing Bank
shall not permit any such renewal if (x) the Issuing Bank has determined that it
would have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions of
Section 2.18(l) or otherwise), or (y) it has received notice on or before the
day that is two Business Days before the date which has been agreed upon
pursuant to the proviso of the first sentence of this paragraph, (1) from the
Administrative Agent that any Revolving Lender directly affected thereby has
elected not to permit such renewal or (2) from the Administrative Agent, any
Lender or Borrower that one or more of the applicable conditions specified in
Section 4.02 are not then satisfied.

 

(d)                                 Participations.  By the issuance of a Letter
of Credit (or an amendment to a Letter of Credit increasing the amount thereof)
and without any further action on the part of the Issuing Bank or the Lenders,
the Issuing Bank hereby irrevocably grants to each Revolving Lender, and each
Revolving Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Revolving Lender’s Pro Rata Percentage of the
aggregate amount available to be drawn under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Revolving Lender’s Pro Rata Percentage of
each LC Disbursement made by the Issuing Bank and not reimbursed by Borrower on
the date due as provided in Section 2.18(e), or of any reimbursement payment
required to be refunded to 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, or
expiration, termination or collateralization of any Letter of Credit in
accordance with the terms of this Agreement and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.

 

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(e)                                  Reimbursement.

 

(i)                           If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement
by paying to the Issuing Bank an amount equal to such LC Disbursement not later
than 3:00 p.m., New York City time, on the date that such LC Disbursement is
made if Borrower shall have received notice of such LC Disbursement prior to
11:00 a.m., New York City time, on such date, or, if such notice has not been
received by Borrower prior to such time on such date, then not later than
3:00 p.m., New York City time, on the Business Day immediately following the day
that Borrower receives such notice; provided that Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with
Section 2.03 that such payment be financed with ABR Revolving Loans or Swingline
Loans in an equivalent amount and, to the extent so financed, Borrower’s
obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Loans or Swingline Loans.

 

(ii)                        If Borrower fails to make such payment when due, the
Issuing Bank shall notify the Administrative Agent and the Administrative Agent
shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from Borrower in respect thereof and such Revolving Lender’s
Pro Rata Percentage thereof.  Each Revolving Lender shall pay by wire transfer
of immediately available funds to the Administrative Agent not later than
2:00 p.m., New York City time, on such date (or, if such Revolving Lender shall
have received such notice later than 12:00 noon, New York City time, on any day,
not later than 11:00 a.m., New York City time, on the immediately following
Business Day), an amount equal to such Revolving Lender’s Pro Rata Percentage of
the unreimbursed LC Disbursement in the same manner as provided in
Section 2.02(c) with respect to Revolving Loans made by such Revolving Lender,
and the Administrative Agent will promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders.  The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from Borrower
pursuant to the above paragraph prior to the time that any Revolving Lender
makes any payment pursuant to the preceding sentence and any such amounts
received by the Administrative Agent from Borrower thereafter will be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made such payments and to the Issuing Bank, as appropriate.

 

(iii)                     If any Revolving Lender shall not have made its Pro
Rata Percentage of such LC Disbursement available to the Administrative Agent as
provided above, each of such Revolving Lender and Borrower severally agrees to
pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with the foregoing to but excluding
the date such amount is paid, to the Administrative Agent for the account of the
Issuing Bank at (i) in the case of Borrower, the rate per annum set forth in
Section 2.18(h) and (ii) in the case of such Lender, at a rate determined by the
Administrative Agent in accordance with banking industry rules or practices on
interbank compensation.

 

(f)                                   Obligations Absolute.  The Reimbursement
Obligation of Borrower as provided in Section 2.18(e) shall be absolute,
unconditional and irrevocable, and shall be paid and 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 being proved to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iii) payment by the Issuing
Bank under a Letter of Credit against presentation of a draft or other document
that fails to comply with the terms of such Letter of Credit; (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 2.18, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
obligations of Borrower hereunder; (v) the fact that a Default shall have
occurred and be continuing; or (vi) any material adverse change in the business,
property, results of operations, prospects or condition,

 

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financial or otherwise, of Borrower and its Subsidiaries.  None of the Agents,
the Lenders, the Issuing Bank or any of their Affiliates 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 Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by Borrower
to the extent permitted by applicable Requirements of Law) suffered by Borrower
that are caused by the 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.  The parties hereto expressly agree that, in the absence
of gross negligence, bad faith or willful misconduct on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the 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
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.

 

(g)                                  Disbursement Procedures.  The Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit.  The Issuing Bank
shall promptly give written notice to the Administrative Agent and Borrower of
such demand for payment and whether the 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 relieve Borrower of its Reimbursement Obligation to the
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 Section 2.18(e)).

 

(h)                                 Interim Interest.  If the Issuing Bank shall
make any LC Disbursement, then, unless Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest payable on demand, for each day from and including
the date such LC Disbursement is made to but excluding the date that Borrower
reimburses such LC Disbursement, at the rate per annum determined pursuant to
Section 2.06(c).  Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Revolving Lender pursuant to Section 2.18(e) to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.

 

(i)                                     Cash Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that Borrower
receives notice from the Administrative Agent or the Required Lenders (or, if
the maturity of the Loans has been accelerated, Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, Borrower shall deposit on
terms and in interest bearing accounts satisfactory to the Collateral Agent, in
the name of the Collateral Agent and for the benefit of the Revolving Lenders,
an amount in cash equal to 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 Borrower described in
Section 8.01(g) or (h).  Funds so deposited shall be applied by the Collateral
Agent to reimburse the Issuing Bank for LC Disbursements for which it

 

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has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of outstanding Reimbursement Obligations or, if the maturity of the
Loans has been accelerated (but subject to the consent of Revolving Lenders with
LC Exposure representing greater than 50% of the total LC Exposure), be applied
to satisfy other Obligations of Borrower under this Agreement.  If Borrower is
required to provide an amount of cash collateral hereunder as a result of the
existence of an Event of Default, 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 Borrower within three Business Days after all
Events of Default have been cured or waived.

 

(j)                                    Additional Issuing Banks.  Borrower may,
at any time and from time to time, designate one or more additional Revolving
Lenders to act as an issuing bank under the terms of this Agreement, with the
consent of the Administrative Agent (which consent shall not be unreasonably
withheld), the Issuing Bank and such designated Revolving Lender(s).  Any Lender
designated as an issuing bank pursuant to this paragraph (j) shall be deemed (in
addition to being a Revolving Lender) to be the Issuing Bank with respect to
Letters of Credit issued or to be issued by such Revolving Lender, and all
references herein and in the other Loan Documents to the term “Issuing Bank”
shall, with respect to such Letters of Credit, be deemed to refer to such
Revolving Lender in its capacity as Issuing Bank, as the context shall require.

 

(k)                                 Resignation or Removal of the Issuing Bank. 
The Issuing Bank may resign as Issuing Bank hereunder at any time upon at least
30 days’ prior notice to the Lenders, the Administrative Agent and Borrower. 
The Issuing Bank may be replaced at any time by written agreement among
Borrower, each Agent, the replaced Issuing Bank and the successor Issuing Bank. 
The Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank or any such additional Issuing Bank.  At the time any such
resignation or replacement shall become effective, Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.05(c).  From and after the effective date of any such resignation or
replacement or addition, as applicable, (i) the successor or additional Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued by it thereafter and
(ii) references herein to the term “Issuing Bank” shall be deemed to refer to
such successor or such addition or to any previous Issuing Bank, or to such
successor or such addition and all previous Issuing Banks, as the context shall
require.  After the resignation or 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 resignation or replacement, but
shall not be required to issue additional Letters of Credit.  If at any time
there is more than one Issuing Bank hereunder, Borrower may, in its discretion,
select which Issuing Bank is to issue any particular Letter of Credit.

 

(l)                                     Other.  The Issuing Bank shall be under
no obligation to issue any Letter of Credit if

 

(i)                           any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the Issuing
Bank is not otherwise compensated hereunder) not in effect on the Closing Date,
or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank in good
faith deems material to it; or

 

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(ii)                        the issuance of such Letter of Credit would violate
one or more policies of the Issuing Bank.

 

The Issuing Bank shall be under no obligation to amend any Letter of Credit if
(A) the Issuing Bank would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

SECTION 2.19                                Increase in Commitments.

 

(a)                                 Borrower Request.  Borrower may, after the
Restatement Effective Date, by written notice to the Administrative Agent elect
to request (x) prior to the Revolving Maturity Date, an increase to the existing
Revolving Commitments and/or (y) the establishment of one or more new term loan
commitments (each, an “Incremental Term Loan Commitment”) by an amount not in
excess of $50.0 million in the aggregate and not less than $5.0 million
individually.  Each such notice shall specify (i) the date (each, an “Increase
Effective Date”) on which Borrower proposes that the increased or new
Commitments shall be effective, which shall be a date not less than 10 Business
Days after the date on which such notice is delivered to the Administrative
Agent and (ii) the identity of each Eligible Assignee to whom Borrower proposes
any portion of such increased or new Commitments be allocated and the amounts of
such allocations; provided that any existing Lender approached to provide all or
a portion of the increased or new Commitments may elect or decline, in its sole
discretion, to provide such increased or new Commitment.  All persons providing
increases to the existing Revolving Commitments pursuant to this Section 2.19
shall be reasonably approved (such approval not to be unreasonably withheld) by
the Administrative Agent, the Issuing Bank and the Swingline Lender.

 

(b)                                 Conditions.  The increased or new
Commitments shall become effective, as of such Increase Effective Date; provided
that:

 

(i)                           each of the conditions set forth in Section 4.02
(other than clause (a) thereof) shall be satisfied;

 

(ii)                        no Default or Event of Default shall have occurred
and be continuing or would result from the borrowings, if any, to be made on the
Increase Effective Date;

 

(iii)                     after giving pro forma effect to the borrowings to be
made on the Increase Effective Date and to any change in Consolidated EBITDA and
any increase in Indebtedness resulting from the consummation of any Permitted
Acquisition concurrently with such borrowings as of the date of the most recent
financial statements delivered pursuant to Section 5.01(a) or (b), Borrower
shall be in compliance on a Pro Forma Basis with each of the covenants set forth
in Sections 6.10(a) and (b) as of the last measurement date, treating such
borrowings, increase in Indebtedness and consummation as if it occurred on the
first day of the last measurement period;

 

(iv)                    Borrower shall make any payments required pursuant to
Section 2.13 in connection with any adjustment of Revolving Loans pursuant to
Section 2.19(d); and

 

(v)                       Borrower shall deliver or cause to be delivered any
legal opinions or other documents reasonably requested by the Administrative
Agent in connection with any such transaction.

 

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(c)                                  Terms of New Loans and Commitments.  The
terms and provisions of Loans made pursuant to the new Commitments shall be as
follows:

 

(i)                           terms and provisions of Loans made pursuant to
Incremental Term Loan Commitments (“Incremental Term Loans”) shall be, except as
otherwise set forth herein or in the Increase Joinder, identical to the Term B-2
Loans (it being understood that Incremental Term Loans may be part of the
existing Term B-2 Loans);

 

(ii)                        the terms and provisions of Revolving Loans made
pursuant to new Commitments shall be identical to the Revolving Loans;

 

(iii)                     the weighted average life to maturity of all new Term
Loans shall be no shorter than the weighted average life to maturity of the
Revolving Loans and the existing Term B-2 Loans;

 

(iv)                    the maturity date of Incremental Term Loans (the
“Incremental Term Loan Maturity Date”) shall not be earlier than the Final
Maturity Date; and

 

(v)                       the Yield for the Incremental Term Loans shall be
determined by Borrower and the applicable new Lenders; provided, however, that
the Yield for the new Incremental Term Loans shall not be greater than the
highest Yield that may, under any circumstances, be payable with respect to
existing Term B-2 Loans plus 50 basis points (and the Applicable Margins
applicable to the Term B-2 Loans shall be increased to the extent necessary to
achieve the foregoing).

 

The increased or new Commitments shall be effected by a joinder agreement (the
“Increase Joinder”) executed by Borrower, the Administrative Agent and each
Lender making such increased or new Commitment, in form and substance
satisfactory to each of them.  The Increase Joinder may, without the consent of
any other Lenders, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to effect the provisions of this Section 2.19.  In
addition, unless otherwise specifically provided herein, all references in Loan
Documents to Revolving Loans shall be deemed, unless the context otherwise
requires, to include references to Revolving Loans made pursuant to new
Commitments made pursuant to this Agreement.

 

(d)                                 Adjustment of Revolving Loans.  To the
extent the Commitments being increased on the relevant Increase Effective Date
are Revolving Commitments, then each of the Revolving Lenders having a Revolving
Commitment prior to such Increase Effective Date (the “Pre-Increase Revolving
Lenders”) shall assign to any Revolving Lender which is acquiring a new or
additional Revolving Commitment on the Increase Effective Date (the
“Post-Increase Revolving Lenders”), and such Post-Increase Revolving Lenders
shall purchase from each Pre-Increase Revolving Lender, at the principal amount
thereof, such interests in the Revolving Loans and participation interests in LC
Exposure and Swingline Loans outstanding on such Increase Effective Date as
shall be necessary in order that, after giving effect to all such assignments
and purchases, such Revolving Loans and participation interests in LC Exposure
and Swingline Loans will be held by Pre-Increase Revolving Lenders and
Post-Increase Revolving Lenders ratably in accordance with their Revolving
Commitments after giving effect to such increased Revolving Commitments.

 

(e)                                  Making of New Term Loans.  On any Increase
Effective Date on which new Commitments for Incremental Term Loans are
effective, subject to the satisfaction of the foregoing terms and conditions,
each Lender of such new Commitment shall make a term loan to Borrower in an
amount equal to its new Commitment.

 

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(f)                                   Equal and Ratable Benefit.  The Loans and
Commitments established pursuant to this paragraph shall constitute Loans and
Commitments under, and shall be entitled to all the benefits afforded by, this
Agreement and the other Loan Documents, and shall, without limiting the
foregoing, benefit equally and ratably from the Guarantees and security
interests created by the Security Documents.  The Loan Parties shall take any
actions reasonably required by the Administrative Agent to ensure and/or
demonstrate that the Lien and security interests granted by the Security
Documents continue to be perfected under the UCC or otherwise after giving
effect to the establishment of any such Incremental Term Loans or any such new
Commitments.

 

SECTION 2.20                                Defaulting Lenders.

 

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

 

(a)                                 the Commitment Fee shall cease to accrue on
the Commitment of such Revolving Lender so long as it is a Defaulting Lender
(except to the extent it is payable to the Issuing Bank pursuant to clause
(c)(v) below);

 

(b)                                 if any Swingline Exposure or LC Exposure
exists at the time a Revolving Lender becomes a Defaulting Lender then:

 

(i)                           all or any part of such Swingline Exposure and LC
Exposure shall be reallocated among the Non-Defaulting Revolving Lenders in
accordance with their respective Pro Rata Percentages but only to the extent the
sum of all Non-Defaulting Revolving Lenders’ Revolving Exposures plus such
Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total
of all Non-Defaulting Revolving Lenders’ Revolving Commitments;

 

(ii)                        if the reallocation described in clause (i) above
cannot, or can only partially, be effected, Borrower shall within one Business
Day following notice by the Administrative Agent (x) first, prepay such
Defaulting Lender’s Swingline Exposure and (y) second, cash collateralize such
Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation
pursuant to clause (i) above) in accordance with the procedures set forth in
Section 2.18(i) for so long as such LC Exposure is outstanding;

 

(iii)                     if any portion of such Defaulting Lender’s LC Exposure
is cash collateralized pursuant to clause (ii) above, Borrower shall not be
required to pay the LC Participation Fee with respect to such portion of such
Defaulting Lender’s LC Exposure so long as it is cash collateralized;

 

(iv)                    if any portion of such Defaulting Lender’s LC Exposure
is reallocated to the Non-Defaulting Revolving Lenders pursuant to clause
(i) above, then the LC Participation Fee with respect to such portion shall be
allocated among the Non-Defaulting Revolving Lenders in accordance with their
Pro Rata Percentages; or

 

(v)                       if any portion of such Defaulting Lender’s LC Exposure
is neither cash collateralized nor reallocated pursuant to this Section 2.19(b),
then, without prejudice to any rights or remedies of the Issuing Bank or any
Lender hereunder, the LC Participation Fee payable with respect to such
Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such
LC Exposure is cash collateralized and/or reallocated;

 

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(c)                                  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
will be 100% covered by the Revolving Commitments of the Non-Defaulting
Revolving Lenders and/or cash collateralized in accordance with Section 2.19(b),
and participations in any such newly issued or increased Letter of Credit or
newly made Swingline Loan shall be allocated among Non-Defaulting Revolving
Lenders in accordance with their respective Pro Rata Percentages (and Defaulting
Lenders shall not participate therein); and

 

(d)                                 any amount payable to such Defaulting Lender
hereunder (whether on account of principal, interest, fees or otherwise and
including any amount that would otherwise be payable to such Defaulting Lender
pursuant to Section 2.14(d) but excluding Section 2.16(b)) may, in lieu of being
distributed to such Defaulting Lender, be retained by the Administrative Agent
in a segregated non-interest bearing account and, subject to any applicable
Requirements of Law, be applied at such time or times as may be determined by
the Administrative Agent (i) first, to the payment of any amounts owing by such
Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata,
to the payment of any amounts owing by such Defaulting Lender to the Issuing
Bank or Swingline Lender hereunder, (iii) third, to the funding of any Loan or
the funding or cash collateralization of any participation in any Swingline Loan
or Letter of Credit in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (iv) fourth, if so determined by the Administrative Agent
and Borrower, held in such account as cash collateral for future funding
obligations of the Defaulting Lender under this Agreement, (v) fifth, pro rata,
to the payment of any amounts owing to Borrower or the Lenders as a result of
any judgment of a court of competent jurisdiction obtained by Borrower or any
Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement and (vi) sixth, to such
Defaulting Lender or as otherwise directed by a court of competent jurisdiction;
provided that if such payment is (x) a prepayment of the principal amount of any
Loans or Reimbursement Obligations in respect of LC Disbursements which a
Defaulting Lender has funded its participation obligations and (y) made at a
time when the conditions set forth in Section 4.02 are satisfied, such payment
shall be applied solely to prepay the Loans of, and Reimbursement Obligations
owed to, all Non-Defaulting Revolving Lenders pro rata prior to being applied to
the prepayment of any Loans, or Reimbursement Obligations owed to, any
Defaulting Lender.

 

In the event that the Administrative Agent, Borrower, the Issuing Bank or the
Swingline Lender, as the case may be, each agrees that 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 Revolving Lender’s
Commitment and on such date such Revolving Lender shall purchase at par such of
the Loans of the other Revolving Lenders as the Administrative Agent shall
determine may be necessary in order for such Revolving Lender to hold such Loans
in accordance with its Pro Rata Percentage.  The rights and remedies against a
Defaulting Lender under this Section 2.19 are in addition to other rights and
remedies that Borrower, the Administrative Agent, the Issuing Bank, the
Swingline Lender and the Non-Defaulting Revolving Lenders may have against such
Defaulting Lender.  The arrangements permitted or required by this Section 2.19
shall be permitted under this Agreement, notwithstanding any limitation on Liens
or the pro rata sharing provisions or otherwise.

 

SECTION 2.21                                Extension of Term B-1 Loans.  Upon
the mutual agreement of the Borrower and any Term B-1 Loan Lender, such Term B-1
Loan Lender may convert Term B-1 Loans (in a minimum principal amount of
$500,000 (or such lesser principal amount that constitutes all of its Term B-1
Loans)) into Term B-2 Loans at any time prior to February 15, 2013 pursuant to a
Term B-2 Loan

 

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Conversion Document and such Term B-1 Loans so converted shall constitute Term
B-2 Loans for all purposes of the Loan Documents from and after such conversion
(with the effective date of such conversion being the date set forth in the Term
B-2 Loan Conversion Document relating thereto) and the Term B-1 Loan Lender
shall be deemed a Term B-2 Loan Lender in its capacity as holder of such Term
B-2 Loan (and the Register shall reflect such conversion); provided that
(a) such Term B-2 Loan Conversion Document shall be executed by the
Administrative Agent, the Borrower and such Term B-1 Loan Lender, (b) the fee
paid to such Term B-1 Lender for its conversion shall not be greater (measured
as a percentage of the principal amount of Term B-1 Term Loans so converted)
than the fee set forth in Section 5(c) of the Restatement Agreement, (c) the
amounts on Annex I-A shall be reduced and the Annex I-B shall be increased in an
amount proportionate to each such Term B-1 Loan so converted (with each such
reduction and increase to be effective with respect to each such Term Loan
Repayment Date on and following such conversion of such Term B-1 Loan into a
Term B-2 Loan), (d) there shall be no more than 2 (or such greater number as the
Administrative Agent may agree to) dates in the aggregate upon which all such
conversions may occur and (e) the Loan Parties shall enter into such
reaffirmations and amendments to the Collateral Documents as the Administrative
Agent may reasonably request in connection with such each such conversion.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders (with references to
the Companies being references thereto after giving effect to the Transactions
unless otherwise expressly stated) that:

 

SECTION 3.01                                   Organization; Powers.  Each
Company (a) is duly organized and validly existing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
carry on its business as now conducted and to own and lease its property and
(c) is qualified and in good standing (to the extent such concept is applicable
in the applicable jurisdiction) to do business in every jurisdiction where such
qualification is required, except in such jurisdictions where the failure to so
qualify or be in good standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.  Each Company is
in compliance with its Organizational Documents and, with respect to any such
Organizational Documents which are multiparty agreements, there is no existing
default under any Organizational Document of any Company or any event which,
with the giving of notice or passage of time or both, would constitute a default
by any party thereunder.

 

SECTION 3.02                                Authorization; Enforceability.  The
Transactions to be entered into by each Loan Party are within such Loan Party’s
powers and have been duly authorized by all necessary action on the part of such
Loan Party.  This Agreement has been duly executed and delivered by each Loan
Party and constitutes, and each other Loan Document to which any Loan Party is
to be a party, when executed and delivered by such Loan Party, will constitute,
a legal, valid and binding obligation of such Loan Party, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

 

SECTION 3.03                                No Conflicts.  Except as set forth
on Schedule 3.03 to this Agreement, the Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except (i) such as have been obtained or made and are in
full force and effect, (ii) filings necessary to perfect Liens created by the
Loan Documents and (iii) consents, approvals, registrations, filings, permits or
actions the failure to obtain or perform which could not reasonably be expected
to result in a Material Adverse Effect, (b) will not violate the Organiza-

 

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tional Documents of any Company, (c) will not violate in any material respect
any Requirement of Law, (d) will not violate or result in a default or require
any consent or approval under any indenture, agreement or other instrument
binding upon any Company or its property, or give rise to a right thereunder to
require any payment to be made by any Company, except for violations, defaults
or the creation of such rights that could not reasonably be expected to result
in a Material Adverse Effect, and (e) will not result in the creation or
imposition of any Lien on any property of any Company, except Liens created by
the Loan Documents and Permitted Liens.

 

SECTION 3.04                                Financial Statements; Projections.

 

(a)                                 Historical Financial Statements.  Borrower
has heretofore delivered to the Lenders (i) the consolidated balance sheets and
related statements of income, stockholders’ equity and cash flows of Borrower as
of and for the fiscal years ended February 2, 2010, February 1, 2011 and
January 31, 2012, audited by and accompanied by the unqualified opinion of Grant
Thornton LLP, independent public accountants and (ii) unaudited consolidated
balance sheets and related statements of income of Borrower for each fiscal
quarter ending after the last fiscal year covered by the audited financial
statements referenced in clause (i) and more than 45 days prior to the
Restatement Effective Date and for the comparable periods of the preceding
fiscal year.  Such financial statements and all financial statements delivered
pursuant to Sections 5.01(a), (b) and (c) have been prepared in accordance with
GAAP (in the case of financial statements delivered pursuant to Sections
5.01(b) and (c), subject to normal year-end audit adjustments and the absence of
footnotes) and present fairly and in all material respects the financial
condition and results of operations and cash flows of Borrower as of the dates
and for the periods to which they relate.

 

(b)                                 No Liabilities.  Except as set forth in the
financial statements referred to in Section 3.04(a), there are no liabilities of
any Company of any kind, whether accrued, contingent, absolute, determined,
determinable or otherwise, which could reasonably be expected to result in a
Material Adverse Effect, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability,
other than liabilities under the Loan Documents.  Since January 31, 2012, there
has been no event, change, circumstance or occurrence that, individually or in
the aggregate, has had or could reasonably be expected to result in a Material
Adverse Effect.

 

(c)                                  [Reserved].

 

(d)                                 Forecasts.  The forecasts of financial
performance of Holdings and its subsidiaries furnished to the Lenders have been
prepared in good faith by Borrower and based on assumptions believed by Borrower
to reasonable (it being understood that forecasts are subject to uncertainties
and contingencies and that no representation or warranty is given that any
forecast will be realized).

 

SECTION 3.05                                Properties.

 

(a)                                 Generally.  Each Company has good title to,
or valid leasehold interests in, all its property material to its business, free
and clear of all Liens except for, in the case of Collateral, Permitted
Collateral Liens and, in the case of all other material property, Permitted
Liens and minor irregularities or deficiencies in title that, individually or in
the aggregate, do not interfere in any material respect with its ability to
conduct its business as currently conducted or to utilize such property for its
intended purpose.  The property of the Companies, taken as a whole, (i) is in
good operating order, condition and repair (ordinary wear and tear excepted),
except to the extent that the failure to be in such condition could not
reasonably be expected to result in a Material Adverse Effect and
(ii) constitutes all the property which is required for the business and
operations of the Companies as presently conducted.

 

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(b)                                 Real Property.  Schedule 8(a) to the
Perfection Certificate dated the Restatement Effective Date contain a true and
complete list of each interest in Real Property (i) owned by any Company
specifying the address of such Real Property and noting Mortgaged Property as of
the Restatement Effective Date and filing offices for Mortgages as of the
Restatement Effective Date and (ii) leased, subleased, licensed or otherwise
occupied or utilized by any Company, as lessee, sublessee, franchisee or
licensee, as of the Restatement Effective Date.

 

(c)                                  No Casualty Event.  As of the Restatement
Effective Date, no Company has received any notice of, nor has any knowledge of,
the occurrence or pendency or contemplation of any Casualty Event affecting all
or any portion of its property that would reasonably be expected to result in a
Material Adverse Effect.  No Mortgage encumbers improved Real Property that is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards within the meaning of
the National Flood Insurance Act of 1968 unless flood insurance available under
such Act has been obtained in accordance with Section 5.04.

 

(d)                                 Collateral.  Each Company owns or has rights
to use all of the Collateral and all rights with respect to any of the
foregoing, in each case used in, necessary for or material to each Company’s
business as currently conducted.  The use by each Company of such Collateral and
all such rights with respect to the foregoing do not infringe on the rights of
any person other than such infringement which could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.  No
claim has been made and remains outstanding that any Company’s use of any
Collateral does or may violate the rights of any third party that could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 3.06                                Intellectual Property.

 

(a)                                 Ownership/No Claims.  Each Loan Party owns,
or is licensed to use, all patents, patent applications, trademarks, trade
names, service marks, copyrights, technology, trade secrets, proprietary
information, domain names, know-how and processes necessary for the conduct of
its business as currently conducted (the “Intellectual Property”), except for
those the failure to own or license which, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.  No
written claim has been asserted and is pending by any person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Loan Party know of
any valid basis for any such claim.  The use of such Intellectual Property by
each Loan Party does not infringe the rights of any person, except for such
claims and infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

(b)                                 Registrations.  Except pursuant to licenses
and other user agreements entered into by each Loan Party in the ordinary course
of business that are listed in Schedule 12(a) or 12(b) to the Perfection
Certificate, on and as of the Restatement Effective Date (i) each Loan Party
owns and possesses the right to use, and has done nothing to authorize or enable
any other person to use, any copyright, patent or trademark (as such terms are
defined in the Security Agreement) listed in Schedule 12(a) or 12(b) to the
Perfection Certificate and (ii) all registrations listed in Schedule 12(a) or
12(b) to the Perfection Certificate are valid and in full force and effect.

 

(c)                                  No Violations or Proceedings.  To each Loan
Party’s knowledge, on and as of the Restatement Effective Date, there is no
material violation by others of any right of such Loan Party with respect to any
copyright, patent or trademark listed in Schedule 12(a) or 12(b) to the
Perfection Certificate, pledged by it under the name of such Loan Party except
as may be set forth on Schedule 3.06(c).

 

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SECTION 3.07                                Equity Interests and Subsidiaries.

 

(a)                                 Equity Interests.  Schedules 1(a) and
10(a) to the Perfection Certificate dated the Restatement Effective Date set
forth a list of (i) all the Subsidiaries of Holdings and their jurisdictions of
organization as of the Restatement Effective Date and (ii) the number of each
class of its Equity Interests authorized, and the number outstanding, on the
Restatement Effective Date and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights at the
Restatement Effective Date.  All Equity Interests of each Company are duly and
validly issued and are fully paid and non-assessable, and, other than the Equity
Interests of Borrower or joint ventures permitted by this Agreement, are owned
by Borrower, directly or indirectly through Wholly Owned Subsidiaries.  All
Equity Interests of Borrower are owned directly by Holdings.  Each Loan Party is
the record and beneficial owner of, and has good and marketable title to, the
Equity Interests pledged by it under the Security Agreement, free of any and all
Liens, rights or claims of other persons, except the security interest created
by the Security Agreement and other Permitted Collateral Liens, and, with
respect to the Equity Interests of Borrower and its Wholly-Owned Subsidiaries,
there are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of, any
such Equity Interests.

 

(b)                                 No Consent of Third Parties Required.  No
consent of any person including any other general or limited partner, any other
member of a limited liability company, any other shareholder or any other trust
beneficiary is necessary or reasonably desirable (from the perspective of a
secured party) in connection with the creation, perfection or first priority
status of the security interest of the Collateral Agent in any Equity Interests
pledged to the Collateral Agent for the benefit of the Secured Parties under the
Security Agreement or the exercise by the Collateral Agent of the voting or
other rights provided for in the Security Agreement or the exercise of remedies
in respect thereof, except as have been obtained.

 

(c)                                  Organizational Chart.  An accurate
organizational chart, showing the ownership structure of Holdings, Borrower and
each Subsidiary on the Restatement Effective Date, and after giving effect to
the Transactions, is set forth on Schedule 10(a) to the Perfection Certificate
dated the Restatement Effective Date.

 

SECTION 3.08                                Litigation; Compliance with Laws. 
Except as set forth on Schedule 3.08 to this Agreement, there are no actions,
suits or proceedings at law or in equity by or before any Governmental Authority
now pending or, to the knowledge of any Company, threatened against or affecting
any Company or any business, property or rights of any Company (i) that involve
any Loan Document or any of the Transactions or (ii) that could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.  Except for matters covered by Section 3.18, no Company or any of its
property is in violation of, nor will the continued operation of its property as
currently conducted violate, any Requirements of Law (including any zoning or
building ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting any Company’s Real Property or is
in default with respect to any Requirement of Law, where such violation or
default, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.

 

SECTION 3.09                                Agreements.  No Company is a party
to any agreement or instrument or subject to any corporate or other
constitutional restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.  No Company is in default in any manner
under any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other agreement or instrument to which it is a party or by
which it or any of its property is or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect, and no condition
exists which, with the giving of notice or the lapse of time or both, would
constitute such a default.

 

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SECTION 3.10                                Federal Reserve Regulations.  No
Company 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.  No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the regulations of the Board, including Regulation T, U
or X.  The pledge of the Securities Collateral pursuant to the Security
Agreement does not violate such regulations.

 

SECTION 3.11                                Investment Company Act.  No Company
is an “investment company” or a company “controlled” by an “investment company,”
as defined in, or subject to registration under, the Investment Company Act of
1940, as amended.

 

SECTION 3.12                                Use of Proceeds.  On and after the
Restatement Effective Date, the Revolving Loans and Swingline Loans will be used
by Borrower and its subsidiaries to pay Transaction Expenses, and for working
capital and general corporate purposes (including to effect Permitted
Acquisitions).

 

SECTION 3.13                                   Taxes.  Each Company has, except
for any failure that could not reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect, (a) timely filed or caused to be
timely filed all federal Tax Returns and all state, local and foreign Tax
Returns or materials required to have been filed by it and all such Tax Returns
are true and correct in all respects, and (b) duly and timely paid, collected,
withheld or remitted or caused to be duly and timely paid, collected, withheld
or remitted all Taxes (whether or not shown on any Tax Return) due and payable,
collectible, withholdable or remittable by it and all assessments received by
it, except Taxes (i) that are being contested in good faith by appropriate
proceedings and for which such Company has set aside on its books adequate
reserves in accordance with GAAP and (ii) which could not, individually or in
the aggregate, have a Material Adverse Effect.  Each Company is unaware of any
proposed or pending tax assessments, deficiencies or audits that could be
reasonably expected to, individually or in the aggregate, result in a Material
Adverse Effect.

 

SECTION 3.14                                No Material Misstatements.  No
information, report, financial statement, certificate, Borrowing Request, LC
Request, exhibit or schedule furnished by or on behalf of any Company to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto, taken as a
whole contained or contains any material misstatement of fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were or are made, not misleading
in any material respect as of the date such information is dated or certified;
provided that to the extent any such information, report, financial statement,
exhibit or schedule was based upon or constitutes a forecast or projection or
pro forma adjustment, each Company represents only that it acted in good faith
and utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule (it being
understood that forecasts are subject to uncertainties and contingencies and
that no representation or warranty is given that any forecast will be realized).

 

SECTION 3.15                                Labor Matters.  As of the
Restatement Effective Date, there are no strikes, lockouts or slowdowns against
any Company pending or, to the knowledge of any Company, threatened.  The hours
worked by and payments made to employees of any Company have not been in
violation of the Fair Labor Standards Act of 1938, as amended, or any other
applicable federal, state, local or foreign law dealing with such matters in any
manner which could reasonably be expected to result in a Material Adverse
Effect.  All payments due from any Company, or for which any claim may be made
against any Company, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such Company except where the failure to do

 

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so could not reasonably be expected to result in a Material Adverse Effect.  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 any Company is bound.

 

SECTION 3.16                                Solvency.  Immediately after the
consummation of the Transactions to occur on the Restatement Effective Date and
immediately following the making of each Loan and after giving effect to the
application of the proceeds of each Loan, (a) the fair value of the properties
of each Loan Party (individually and on a consolidated basis with its
Subsidiaries) will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of each Loan
Party (individually and on a consolidated basis with its Subsidiaries) will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
(individually and on a consolidated basis with its Subsidiaries) will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each Loan Party
(individually and on a consolidated basis with its Subsidiaries) will not have
unreasonably small capital with which to conduct its business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Restatement Effective Date.

 

SECTION 3.17                                Employee Benefit Plans.  Each
Company and its ERISA Affiliates is in compliance in all material respects with
the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder.  No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events, could reasonably be expected to result in material liability of any
Company or any of its ERISA Affiliates or the imposition of a Lien on any of the
property of any Company.  The present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $1.0 million the fair market value of the property of all such underfunded
Plans.  Using actuarial assumptions and computation methods consistent with
subpart I of subtitle E of Title IV of ERISA, the aggregate liabilities of each
Company or its ERISA Affiliates to all Multiemployer Plans in the event of a
complete withdrawal therefrom, as of the close of the most recent fiscal year of
each such Multiemployer Plan, could not reasonably be expected to result in a
Material Adverse Effect.

 

SECTION 3.18                                Environmental Matters.  Except as
set forth in Schedule 3.18 to this Agreement and except as, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect:

 

(a)                                 The Companies and their businesses,
operations and Real Property are in compliance with, and the Companies have no
liability under, any applicable Environmental Law; and under the currently
effective business plan of the Companies, no expenditures or operational
adjustments will be required in order to comply with applicable Environmental
Laws during the next five years;

 

(b)                                 The Companies have obtained all
Environmental Permits required for the conduct of their businesses and
operations, and the ownership, operation and use of their property, under
Environmental Law, all such Environmental Permits are valid and in good standing
and, under the currently effective business plan of the Companies, no
expenditures or operational adjustments will be required in order to renew or
modify such Environmental Permits during the next five years;

 

(c)                                  There has been no Release or threatened
Release of Hazardous Material on, at, under or from any Real Property or
facility presently or formerly owned, leased or operated by

 

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the Companies or their predecessors in interest that could result in liability
by the Companies under any applicable Environmental Law;

 

(d)                                 There is no Environmental Claim pending or,
to the knowledge of the Companies, threatened against the Companies, or relating
to the Real Property currently or formerly owned, leased or operated by the
Companies or their predecessors in interest or relating to the operations of the
Companies, and there are no actions, activities, circumstances, conditions,
events or incidents that could form the basis of such an Environmental Claim;

 

(e)                                  No person with an indemnity or contribution
obligation to the Companies relating to compliance with or liability under
Environmental Law is in default with respect to such obligation;

 

(f)                                   No Company is obligated to perform any
action or otherwise incur any expense under Environmental Law pursuant to any
order, decree, judgment or agreement by which it is bound or has assumed by
contract, agreement or operation of law, and no Company is conducting or
financing any Response pursuant to any Environmental Law with respect to any
Real Property or any other location;

 

(g)                                  No Real Property or facility owned,
operated or leased by the Companies and, to the knowledge of the Companies, no
Real Property or facility formerly owned, operated or leased by the Companies or
any of their predecessors in interest is (i) listed or proposed for listing on
the National Priorities List promulgated pursuant to CERCLA or (ii) listed on
the Comprehensive Environmental Response, Compensation and Liability Information
System promulgated pursuant to CERCLA or (iii) included on any similar list
maintained by any Governmental Authority including any such list relating to
petroleum;

 

(h)                                 No Lien has been recorded or, to the
knowledge of any Company, threatened under any Environmental Law with respect to
any Real Property or other assets of the Companies;

 

(i)                                     The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not require any notification, registration, filing, reporting, disclosure,
investigation, remediation or cleanup pursuant to any Governmental Real Property
Disclosure Requirements or any other applicable Environmental Law; and

 

(j)                                    The Companies have made available to the
Lenders all material records and files in the possession, custody or control of,
or otherwise reasonably available to, the Companies concerning compliance with
or liability under Environmental Law, including those concerning the actual or
suspected existence of Hazardous Material at Real Property or facilities
currently or formerly owned, operated, leased or used by the Companies.

 

SECTION 3.19                                Insurance.  Schedule 3.19 to this
Agreement sets forth a true, complete and correct description of all insurance
maintained by each Company as of the Restatement Effective Date.  All insurance
maintained by the Companies is in full force and effect, all premiums have been
duly paid, no Company has received notice of violation or cancellation thereof,
except, in such case, where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.  Each Company has insurance in such
amounts and covering such risks and liabilities as are customary for companies
of a similar size engaged in similar businesses in similar locations.

 

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SECTION 3.20                                Security Documents.

 

(a)                                 Security Agreement.  The Security Agreement
is effective to create in favor of the Collateral Agent for the benefit of the
Secured Parties, legal, valid and enforceable Liens on, and security interests
in, the Security Agreement Collateral and, when (i) financing statements and
other filings in appropriate form are filed in the offices specified on
Schedule 7 to the Perfection Certificate and (ii) upon the taking of possession
or control by the Collateral Agent of the Security Agreement Collateral with
respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent possession or control by the Collateral Agent is required by each
Security Agreement), the Liens created by the Security Agreement shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the grantors in the Security Agreement Collateral (other than
such Security Agreement Collateral in which a security interest cannot be
perfected under the UCC as in effect at the relevant time in the relevant
jurisdiction), in each case subject to no Liens other than Permitted Collateral
Liens.

 

(b)                                 PTO Filing; Copyright Office Filing.  When
the Security Agreement or an appropriate short form thereof is filed in the
United States Patent and Trademark Office and the United States Copyright Office
and appropriate UCC financing statements are filed in the proper governmental
offices, the Liens created by such Security Agreement shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in Patents (as defined in the Security Agreement)
registered or applied for with the United States Patent and Trademark Office or
Copyrights (as defined in such Security Agreement) registered or applied for
with the United States Copyright Office, as the case may be, in each case
subject to no Liens other than Permitted Collateral Liens.

 

(c)                                  Mortgages.  Each Mortgage is effective to
create, in favor of the Collateral Agent, for its benefit and the benefit of the
Secured Parties, legal, valid and enforceable first priority Liens on, and
security interests in, all of the Loan Parties’ right, title and interest in and
to the Mortgaged Properties thereunder and the proceeds thereof, subject only to
Permitted Collateral Liens or other Liens acceptable to the Collateral Agent,
and when the Mortgages are filed in the offices specified on Schedule 8(a) to
the Perfection Certificate dated the Restatement Effective Date (or, in the case
of any Mortgage executed and delivered after the date thereof in accordance with
the provisions of Sections 5.11 and 5.12, when such Mortgage is filed in the
offices specified in the local counsel opinion delivered with respect thereto in
accordance with the provisions of Sections 5.11 and 5.12), the Mortgages shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, in each case prior and superior in right to any other person, other
than Permitted Collateral Liens.

 

(d)                                 Valid Liens.  Each Security Document
delivered pursuant to Sections 5.11 and 5.12 will, upon execution and delivery
thereof, be effective to create in favor of the Collateral Agent, for the
benefit of the Secured Parties, legal, valid and enforceable Liens on, and
security interests in, all of the Loan Parties’ right, title and interest in and
to the Collateral thereunder, and (i) when all appropriate filings or recordings
are made in the appropriate offices as may be required under applicable law and
(ii) upon the taking of possession or control by the Collateral Agent of such
Collateral with respect to which a security interest may be perfected only by
possession or control (which possession or control shall be given to the
Collateral Agent to the extent required by any Security Document), such Security
Document will constitute fully perfected Liens on, and security interests in,
all right, title and interest of the Loan Parties in such Collateral, in each
case subject to no Liens other than the applicable Permitted Collateral Liens.

 

SECTION 3.21                                [Intentionally Omitted].

 

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SECTION 3.22                                Anti-Terrorism Law.

 

(a)                                 No Loan Party and, to the knowledge of the
Loan Parties, none of its Affiliates is in violation of any Requirement of Law
relating to terrorism or money laundering (“Anti-Terrorism Laws”), including
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001
(the “Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56.

 

(b)                                 No Loan Party and to the knowledge of the
Loan Parties, no Affiliate or broker or other agent of any Loan Party acting or
benefiting in any capacity in connection with the Loans is any of the following:

 

(i)                           a person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;

 

(ii)                        a person owned or controlled by, or acting for or on
behalf of, any person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order;

 

(iii)                     a person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(iv)                    a person that commits, threatens or conspires to commit
or supports “terrorism” as defined in the Executive Order; or

 

(v)                       a person that is named as a “specially designated
national and blocked person” on the most current list published by the U.S.
Treasury Department Office of Foreign Assets Control (“OFAC”) at its official
website or any replacement website or other replacement official publication of
such list.

 

(c)                                  No Loan Party and, to the knowledge of the
Loan Parties, no broker or other agent of any Loan Party acting in any capacity
in connection with the Loans (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person described in paragraph (b) above, (ii) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order, or (iii) engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

 

SECTION 3.23                                [Intentionally Omitted].

 

ARTICLE IV

 

CONDITIONS TO CREDIT EXTENSIONS

 

SECTION 4.01                                Conditions to Effectiveness and
Initial Credit Extension.  The effectiveness of the Existing Credit Agreement
and the initial extensions of credit thereunder was subject to the satisfaction
(or waiver) of the conditions precedent set forth in Section 4.01 of the
Existing Credit Agreement.

 

SECTION 4.02                                Conditions to All Credit
Extensions.  The obligation of each Lender and each Issuing Bank to make any
Credit Extension (including the initial Credit Extension but excluding

 

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any continuation or conversion of Loans) shall be subject to, and to the
satisfaction of, each of the conditions precedent set forth below.

 

(a)                                 Notice.  The Administrative Agent shall have
received a Borrowing Request as required by Section 2.03 (or such notice shall
have been deemed given in accordance with Section 2.03) if Loans are being
requested or, in the case of the issuance, amendment, extension or renewal of a
Letter of Credit, the Issuing Bank and the Administrative Agent shall have
received an LC Request as required by Section 2.18(b) or, in the case of the
Borrowing of a Swingline Loan, the Swingline Lender and the Administrative Agent
shall have received a Borrowing Request as required by Section 2.17(b).

 

(b)                                 No Default.  Borrower and each other Loan
Party shall be in compliance in all material respects with all the terms and
provisions set forth herein and in each other Loan Document on its part to be
observed or performed, and, at the time of and immediately after giving effect
to such Credit Extension and the application of the proceeds thereof, no Default
shall have occurred and be continuing on such date.

 

(c)                                  Representations and Warranties.  Each of
the representations and warranties made by any Loan Party set forth in
Article III hereof or in any other Loan Document shall be true and correct in
all material respects (except that any representation and warranty that is
qualified by “materiality” or “Material Adverse Effect” shall be true and
correct in all respects) on and as of the date of such Credit Extension;
provided that:

 

(i)                  to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct in all
material respects as of such earlier date;

 

(ii)               any representation and warranty that is qualified as to
“materiality,” “Material Adverse Effect” or similar language shall be true and
correct in all respects on such respective dates; and

 

(d)                                 No Legal Bar.  No order, judgment or decree
of any Governmental Authority shall purport to restrain any Lender from making
any Loans to be made by it.  No injunction or other restraining order shall have
been issued, shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of the
transactions contemplated by this Agreement or the making of Loans hereunder.

 

Each of the delivery of a Borrowing Request (other than in connection with a
continuation or conversion of Loans) or an LC Request and the acceptance by
Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by Borrower and each other Loan Party that on the
date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
conditions contained in Sections 4.02(b)-(d) have been satisfied.  Borrower
shall provide such information (including calculations in reasonable detail of
the covenants in Section 6.10) as the Administrative Agent may reasonably
request to confirm that the conditions in Sections 4.02(b)-(d) have been
satisfied.

 

SECTION 4.03                                Conditions to Effectiveness.  The
effectiveness of the amendment and restatement of the Existing Credit Agreement
in the form of this Agreement is subject to the satisfaction of the conditions
precedent set forth in Section 4 of the Restatement Amendment.

 

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ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Each Loan Party covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full (other
than contingent indemnification obligations not then due and payable) and all
Letters of Credit have been canceled or have expired or have been collateralized
in a matter reasonably acceptable to the Administrative Agent and all amounts
drawn thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, each Loan Party will, and will cause each of its
Subsidiaries to:

 

SECTION 5.01                                Financial Statements, Reports, etc. 
Furnish to the Administrative Agent (for prompt delivery to each Lender), and
upon the request of the Administrative Agent or any Lender, to each such Lender
making the request to Borrower or the Administrative Agent, the following:

 

(a)                                 Annual Reports.  As soon as available and in
any event within 105 days after the end of the fiscal year ending January 29,
2013 and within 105 days after the end of each fiscal year thereafter, (i) the
consolidated balance sheet of Borrower as of the end of such fiscal year and
related consolidated statements of income, cash flows and stockholders’ equity
for such fiscal year, in comparative form with such financial statements as of
the end of, and for, the preceding fiscal year, and notes thereto, all prepared
in accordance with GAAP and accompanied by an opinion of Grant Thornton LLP or
other independent public accountants of recognized national standing reasonably
satisfactory to the Administrative Agent (which opinion shall not be qualified
as to scope or contain any going concern or other qualification, except as may
be required as a result of the impending maturity of any of the Term B-1 Loans
hereunder), stating that such financial statements fairly present, in all
material respects, the consolidated financial condition, results of operations
and cash flows of Borrower as of the dates and for the periods specified in
accordance with GAAP, (ii) a management report in a form reasonably satisfactory
to the Administrative Agent setting forth statement of income items and
Consolidated EBITDA of Borrower for such fiscal year, showing variance, by
dollar amount and percentage, from amounts for the previous fiscal year and
budgeted amounts, and (iii) a narrative report and management’s discussion and
analysis in a form reasonably satisfactory to the Administrative Agent, of the
financial condition and results of operations of Borrower for such fiscal year,
as compared to amounts for the previous fiscal year;

 

(b)                                 Quarterly Reports.  As soon as available and
in any event within 45 days after the end of each of the first three fiscal
quarters of each fiscal year thereafter, (i) the consolidated balance sheet of
Borrower as of the end of such fiscal quarter and related consolidated
statements of income and cash flows for such fiscal quarter and for the then
elapsed portion of the fiscal year, in comparative form with the consolidated
statements of income and cash flows for the comparable periods in the previous
fiscal year, all prepared in accordance with GAAP and accompanied by a
certificate of a Financial Officer stating that such financial statements fairly
present, in all material respects, the consolidated financial condition, results
of operations and cash flows of Borrower as of the date and for the periods
specified in accordance with GAAP consistently applied, and on a basis
consistent with the audited financial statements referred to in clause (a) of
this Section, subject to normal year-end audit adjustments and the absence of
footnotes, (ii) a management report in a form reasonably satisfactory to the
Administrative Agent setting forth statement of income items and Consolidated
EBITDA of Borrower for such fiscal quarter and for the then elapsed portion of
the fiscal year, showing variance, by dollar amount and percentage, from amounts
for the comparable periods in the previous fiscal year and budgeted amounts, and
(iii) a narrative report and management’s discussion and analysis in a form
reasonably satisfactory to the Administrative

 

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Agent, of the financial condition and results of operations for such fiscal
quarter and the then elapsed portion of the fiscal year, as compared to the
comparable periods in the previous fiscal year;

 

(c)                                  Notwithstanding the foregoing, the
obligations in paragraphs (a) and (b) of this Section 5.01 may be satisfied with
respect to financial information of the Borrower by furnishing the Borrower’s
(or any direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as
applicable, filed with the SEC (within the applicable time periods set forth
above in clauses (a) and (b) for such delivery), to the extent such reports
contain the information required in such clause (a) or (b), as applicable;
provided that, (i) to the extent such information relates to a parent of the
Borrower, such information is accompanied by unaudited consolidating information
that explains in reasonable detail the differences between information relating
to the Borrower (or such parent) on the one hand, and the information relating
to the Borrower and its Subsidiaries on a stand alone basis, on the other hand
and (ii) to the extent such information is in lieu of information required to be
provided under Section 5.01(a), such financial statements are accompanied by a
report and opinion of Grant Thornton LLP or other independent public accountants
of recognized national standing reasonably satisfactory to the Administrative
Agent (which opinion shall not be qualified as to scope or contain any going
concern or other qualification, except as may be required as a result of the
impending maturity of any of the Term B-1 Loans hereunder) stating that such
financial statements present fairly, in all material respects, the consolidated
financial condition, results of operations and cash flows as of the dates and
the periods presented in accordance with GAAP, and the management discussion and
analysis in any Form 10-K shall be acceptable in lieu of the narrative report
and management discussion and analysis required in 5.01(a)(iii).

 

It is understood and agreed that a fiscal year of the Borrower or Holdings shall
be referred to by reference to the period of the calendar year that comprises
the majority of the fiscal year period. For the avoidance of doubt, the fiscal
year ended January 29, 2013 is referred to herein as “Fiscal Year 2012”.

 

(d)                                 Financial Officer’s Certificate. 
(i) Concurrently with any delivery of financial statements under
Section 5.01(a) or (b), a Compliance Certificate (A) certifying that no Default
has occurred or, if such a Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto and (B) beginning with the fiscal quarter ending October 30,
2012, setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants contained in
Section 6.10 (including the aggregate amount of the Cumulative Growth Amount for
such period and the uses therefor) and, concurrently with any delivery of
financial statements under Section 5.01(a) above, setting forth Holding’s
calculation of Excess Cash Flow; and (ii) concurrently with any delivery of
financial statements under Section 5.01(a) above, beginning with the fiscal year
ending January 29, 2013, a report of the accounting firm opining on or
certifying such financial statements stating that in the course of its regular
audit of the financial statements of Borrower and its Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge that any Default insofar as it relates to
a financial covenant under Section 6.10 has occurred or, if in the opinion of
such accounting firm such a Default has occurred, specifying the nature and
extent thereof;

 

(e)                                  Financial Officer’s Certificate Regarding
Collateral.  Concurrently with any delivery of financial statements under
Section 5.01(a) above, a certificate of a Financial Officer (A) updating, to the
extent necessary, (i) the list of the Loan Parties owned and leased real
property, (ii) any changes to the names or locations of any Loan Party or
(iii) any other information reasonably requested by the Administrative Agent
with respect to the Collateral including delivering the Administrative Agent and
Collateral Agent a Perfection Certificate Supplement or (B) confirming that
there has been no change in such information since the date of the Perfection
Certificate or latest Perfection Certificate Supplement so delivered;

 

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(f)                                   Public Reports.  Promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by any Company with the SEC, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to holders
of its Material Indebtedness pursuant to the terms of the documentation
governing such Material Indebtedness (or any trustee, agent or other
representative therefor), as the case may be;

 

(g)                                  Management Letters.  Promptly after the
receipt thereof by any Company, a copy of any “management letter” received by
any such person from its certified public accountants and the management’s
responses thereto;

 

(h)                                 Budgets.  Within 60 days after the beginning
of each fiscal year of Borrower, a budget for Borrower in form reasonably
satisfactory to the Administrative Agent, but to include balance sheets,
statements of income and sources and uses of cash, for each month of such fiscal
year prepared in detail, prepared in summary form, in each case, with
appropriate presentation and discussion of the principal assumptions upon which
such budgets are based, accompanied by the statement of a Financial Officer of
Borrower to the effect that the budget of Borrower is a reasonable estimate for
the periods covered thereby;

 

(i)                                     [Intentionally Omitted].

 

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

 

SECTION 5.02                                Litigation and Other Notices. 
Furnish to the Administrative Agent (for prompt delivery to each Lender), and
upon the request of the Administrative Agent or any Lender, to each such Lender
making the request to Borrower or the Administrative Agent, written notice of
the following promptly (and, in any event, within five Business Days of the
occurrence thereof):

 

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

 

(b)                                 the filing or commencement of, or any threat
or notice of intention of any person to file or commence, any action, suit,
litigation or proceeding, whether at law or in equity by or before any
Governmental Authority, (i) against any Company that could reasonably be
expected to result in a Material Adverse Effect or (ii) with respect to any Loan
Document, and promptly (and no more than 15 days after receiving such request)
provide copies to the Administrative Agent and upon written request of the
Administrative Agent of all pleadings and judgments related to such item; and

 

(c)                                  promptly (and, in any event, within five
Business Days of the occurrence thereof) any development that has resulted in,
or could reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.03                                Existence; Businesses and
Properties.

 

(a)                                 Do or cause to be done all things necessary
to preserve, renew and maintain in full force and effect its legal existence,
except as otherwise expressly permitted under Section 6.05 or

 

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Section 6.06 or, in the case of any Subsidiary, where the failure to perform
such obligations, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

(b)                                 Do or cause to be done all things necessary
to (i) obtain, preserve, renew, extend and keep in full force and effect the
rights, licenses, permits, privileges, franchises, authorizations, patents,
copyrights, trademarks and trade names material to the conduct of its business;
(ii) comply with all material agreements except where the failure to comply
could not reasonably be expected to result in a Material Adverse Effect;
(iii) comply with all applicable Requirements of Law (including any and all
zoning, building, Environmental Law, ordinance, code or approval or any building
permits or any restrictions of record or agreements affecting the Real Property)
and decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted, except, where the failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect; and (iv) at all times maintain, preserve and protect all property
material to the conduct of such business and keep such property in good repair,
working order and condition (other than wear and tear occurring in the ordinary
course of business and subject to casualty and condemnation events) and from
time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times, except where failure to do so could not reasonably be expected to
have a Material Adverse Effect; provided that nothing in this
Section 5.03(b) shall prevent (i) sales of property, consolidations or mergers
by or involving any Company in accordance with Section 6.05 or Section 6.06;
(ii) the withdrawal by any Company of its qualification as a foreign corporation
in any jurisdiction where such withdrawal, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect; or
(iii) the abandonment by any Company of any rights, franchises, licenses,
trademarks, trade names, copyrights or patents that such person reasonably
determines are not useful to its business or no longer commercially desirable.

 

SECTION 5.04                                Insurance.

 

(a)                                 Generally.  Keep its insurable property
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks as is
customary with companies in the same or similar businesses operating in the same
or similar locations, including insurance with respect to each Company’s Real
Property and other properties material to the business of the Companies against
such casualties and contingencies and of such types and in such amounts (after
giving effect to any self-insurance reasonable and customary for similarly
situated businesses) with such deductibles as is customary in the case of
similar businesses operating in the same or similar locations.

 

(b)                                 Requirements of Insurance.  All such
insurance shall (i) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30 days
(or 10 days with respect to non-payment of premium) after receipt by the
Collateral Agent of written notice thereof and if an endorsement providing such
notice is commercially impracticable by Borrower’s carrier, Borrower will use
its commercially reasonable efforts to provide 30 days’ notice to the Collateral
Agent prior to the cancellation, material reduction in amount or material change
in coverage, (ii) name the Collateral Agents as mortgagee (in the case of
property insurance) or additional insured on behalf of the Secured Parties (in
the case of liability insurance) or additional loss payee (in the case of
property insurance), as applicable and (iii) be reasonably satisfactory in all
other respects to the Collateral Agent.

 

(c)                                  Notice to Agents.  Notify the
Administrative Agent and the Collateral Agent immediately whenever any separate
insurance concurrent in form or contributing in the event of loss with

 

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that required to be maintained under this Section 5.04 is taken out by any
Company; and promptly deliver to the Administrative Agent and the Collateral
Agent a duplicate original copy of such policy or policies.

 

(d)                                 Flood Insurance.  With respect to each
Mortgaged Property, obtain flood insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time reasonably
require, if at any time the area in which any improvements located on any
Mortgaged Property is designated a “flood hazard area” in any Flood Insurance
Rate Map published by the Federal Emergency Management Agency (or any successor
agency), and otherwise comply with the National Flood Insurance Program as set
forth in the Flood Disaster Protection Act of 1973, as amended from time to
time.

 

(e)                                  Broker’s Report.  Deliver to the
Administrative Agent and the Collateral Agent and the Lenders a report of a
reputable insurance broker with respect to such insurance and such supplemental
reports with respect thereto as the Administrative Agent or the Collateral Agent
may from time to time reasonably request.

 

(f)                                   Mortgaged Properties.  No Loan Party that
is an owner of Mortgaged Property shall take any action that is reasonably
likely to be the basis for termination, revocation or denial of any insurance
coverage required to be maintained under such Loan Party’s respective Mortgage
or that could be the basis for a defense to any claim under any Insurance Policy
maintained in respect of the Premises, and each Loan Party shall otherwise
comply in all material respects with all Insurance Requirements in respect of
the Premises; provided, however, that each Loan Party may, at its own expense
and after written notice to the Administrative Agent, (i) contest the
applicability or enforceability of any such Insurance Requirements by
appropriate legal proceedings, the prosecution of which does not constitute a
basis for cancellation or revocation of any insurance coverage required under
this Section 5.04 or (ii) cause the Insurance Policy containing any such
Insurance Requirement to be replaced by a new policy complying with the
provisions of this Section 5.04.

 

SECTION 5.05                                Taxes.

 

(a)                                 Payment of Taxes.  Pay its Indebtedness and
other obligations promptly and in accordance with their terms, except where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect, and pay and discharge promptly when due all material Taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, services,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
other than a Permitted Lien upon such properties or any part thereof; provided
that such payment and discharge shall not be required with respect to any such
Tax, assessment, charge, levy or claim so long as (x)(i) the validity or amount
thereof shall be contested in good faith by appropriate proceedings timely
instituted and diligently conducted and the applicable Company shall have set
aside on its books adequate reserves or other appropriate provisions with
respect thereto in accordance with GAAP, (ii) such contest operates to suspend
collection of the contested obligation, Tax, assessment or charge and
enforcement of a Lien other than a Permitted Lien or (iii) in the case of
Collateral, the applicable Company shall have otherwise complied with the
Contested Collateral Lien Conditions or (y) the failure to pay could not
reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Effect.

 

(b)                                 Filing of Returns.  Timely file all material
Tax Returns required to be filed by it, and withhold, collect and remit all
material Taxes that it is required to collect, withhold or remit, in each case,
except to the extent a failure to act in compliance with this clause (b) could
not be reasonably expected to, individually or in the aggregate, result in a
Material Adverse Effect.

 

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SECTION 5.06                                Employee Benefits.  (a) Comply with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (x) as soon as possible after, and in any event within
30 days after any Responsible Officer of any Company or any ERISA Affiliates of
any Company knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in liability of the Companies or any of their ERISA Affiliates in an
aggregate amount exceeding $5.0 million or in the imposition of a Lien, a
statement of a Financial Officer of Borrower setting forth details as to such
ERISA Event and the action, if any, that the Companies propose to take with
respect thereto, and (y) upon request by the Administrative Agent, copies of
(i) each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by any Company with the Internal Revenue Service with respect to
each Plan; (ii) the most recent actuarial valuation report for each Plan
maintained by any Company; (iii) all notices received by any Company or any
ERISA Affiliate from a Multiemployer Plan sponsor or any governmental agency
concerning an ERISA Event; and (iv) such other documents or governmental reports
or filings relating to any Plan maintained by any Company (or employee benefit
plan sponsored or contributed to by any Company) as the Administrative Agent
shall reasonably request.

 

SECTION 5.07                                Maintaining Records; Access to
Properties and Inspections; Annual Meetings.  Keep proper books of record and
account (i) in which full, true and correct entries in conformity with all
Requirements of Law, (ii) in form permitting financial statements conforming
with GAAP to be derived therefrom and (iii) in which of all dealings and
transactions in relation to its business and activities are recorded.  Each
Company will permit any representatives designated by the Administrative Agent
or any Lender to visit and inspect the financial records and the property of
such Company upon reasonable prior notice during regular business hours and to
make extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances, accounts and condition of any Company with the officers
and employees thereof and advisors therefor (including independent accountants),
all at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any Lender may request; provided that in the absence of
an Event of Default, no more than one such visit for the Administrative Agent
and the Lenders will be permitted in a year.  So long as no Default or Event of
Default has occurred and is continuing, Borrower shall be permitted to
coordinate the visits and inspections of individual Lenders to minimize
inconvenience.

 

SECTION 5.08                                Use of Proceeds.  Use the proceeds
of the Loans only for the purposes set forth in Section 3.12 and request the
issuance of Letters of Credit only for the purposes set forth in the definition
of Commercial Letter of Credit or Standby Letter of Credit, as the case may be.

 

SECTION 5.09                                Compliance with Environmental Laws;
Environmental Reports.

 

(a)                                 Comply, and cause all lessees and other
persons occupying Real Property owned, operated or leased by any Company to
comply, in all material respects with all Environmental Laws and Environmental
Permits applicable to its operations and Real Property; obtain and renew all
material Environmental Permits applicable to its operations and Real Property;
and conduct all Responses required by, and in accordance with, Environmental
Laws; provided that no Company shall be required to undertake any Response to
the extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances in accordance with GAAP.

 

(b)                                 If a Default caused by reason of a breach of
Section 3.18 or Section 5.09(a) shall have occurred and be continuing for more
than 30 days without the Companies commencing activities reasonably likely to
cure such Default in accordance with Environmental Laws, at the written request
of the Administrative Agent or the Required Lenders through the Administrative
Agent, provide to the

 

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Lenders within 60 days after such request, at the expense of Borrower, an
environmental assessment report regarding the matters which are the subject of
such Default, including, where appropriate, soil and/or groundwater sampling,
prepared by an environmental consulting firm and, in the form and substance,
reasonably acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
Response required by law to address them.

 

SECTION 5.10                                [Intentionally Omitted].

 

SECTION 5.11                                Additional Collateral; Additional
Guarantors.

 

(a)                                 Subject to this Section 5.11, with respect
to any property acquired after the Closing Date by any Loan Party that is
intended to be subject to the Lien created by any of the Security Documents but
is not so subject, promptly (and in any event within 30 days after the
acquisition thereof) (i) execute and deliver to the Administrative Agent and the
Collateral Agent such amendments or supplements to the relevant Security
Documents or such other documents as the Administrative Agent or the Collateral
Agent shall reasonably deem necessary or advisable to grant to the Collateral
Agent, for its benefit and for the benefit of the other Secured Parties, a Lien
on such property subject to no Liens other than Permitted Collateral Liens, and
(ii) take all actions necessary to cause such Lien to be duly perfected to the
extent required by such Security Document 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. 
Borrower shall otherwise take such actions and execute and/or deliver to the
Collateral Agent such documents as the Administrative Agent or the Collateral
Agent shall reasonably require to confirm the validity, perfection and priority
of the Lien of the Security Documents on such after-acquired properties.

 

(b)                                 With respect to any person that is or
becomes a Subsidiary after the Closing Date, promptly (and in any event within
30 days after such person becomes a Subsidiary) (i) deliver to the Collateral
Agent the certificates, if any, representing all of the Equity Interests of such
Subsidiary owned by any Guarantor, together with undated stock powers or other
appropriate instruments of transfer executed and delivered in blank by a duly
authorized officer of the holder(s) of such Equity Interests, and all
intercompany notes owing from such Subsidiary to any Loan Party together with
instruments of transfer executed and delivered in blank by a duly authorized
officer of such Loan Party, (ii) cause such new Subsidiary to execute a Joinder
Agreement or such comparable documentation to become a Subsidiary Guarantor and
a joinder agreement to the applicable Security Agreement, substantially in the
form annexed thereto, and (iii)  take all actions reasonably necessary or
advisable in the opinion of the Administrative Agent or the Collateral Agent to
cause the Lien created by the applicable 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 or the
Collateral Agent and, in the case of a Foreign Subsidiary, execution and
delivery of a security agreement with respect to such Foreign Subsidiary’s
Equity Interests compatible with the laws of such Foreign Subsidiary’s
jurisdiction in form and substance reasonably satisfactory to the Administrative
Agent.  Notwithstanding the foregoing, (1) the Equity Interests required to be
delivered to the Collateral Agent pursuant to clauses (i) and (iii) of this
Section 5.11(b) shall not include any Equity Interests of a Foreign Subsidiary
created or acquired after the Closing Date and (2) no Foreign Subsidiary shall
be required to take the actions specified in clause (ii) of this
Section 5.11(b); provided that this exception shall not apply to (A) Voting
Stock of any Subsidiary which is a first-tier controlled foreign corporation (as
defined in Section 957(a) of the Code) representing 66% of the total voting
power of all outstanding Voting Stock of such Subsidiary and (B) 100% of the
Equity Interests not constituting Voting Stock of any such Subsidiary, except
that any such Equity Interests constituting “stock entitled to vote” within the
meaning of Treasury Regulation Section 1.956-2(c)(2) shall be treated as Voting
Stock for purposes of this Section 5.11(b) Equity Interests of such Subsidiary.

 

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(c)                                  Promptly (and in any event within 60 days
of the acquisition thereof), grant to the Collateral Agent as additional
security for the Secured Obligations, a first priority security interest in and
a Mortgage with respect to each Real Property (i) owned in fee by such Loan
Party, (ii) acquired by such Loan Party after the Closing Date, (iii) that,
together with any improvements thereon, has a fair market value of at least
$5.0 million (except for the property at 100 Vision Park Dr., Shenandoah, TX
77384) and (iv) that is not mortgaged to a third party as permitted by
Section 6.02.  Such Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
the Collateral Agent and shall constitute valid and enforceable perfected Liens
subject only to Permitted Collateral Liens or other Liens acceptable to the
Collateral Agent.  The Mortgages or instruments related thereto shall be duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Mortgages and all taxes, fees and
other charges payable in connection therewith shall be paid in full.  Such Loan
Party shall also take such actions and execute and/or deliver to the Collateral
Agent such documents as the Administrative Agent or the Collateral Agent
reasonably require to confirm the validity, perfection and priority of the Lien
of any Mortgage, which may include obtaining (x) a policy of title insurance (or
marked up title insurance commitment having the effect of a policy of title
insurance) insuring the Lien of such Mortgage as a valid first mortgage Lien
(subject to Permitted Collateral Liens) on the Mortgaged Property and fixtures
described therein in the amount equal to not less than 100% of the fair market
value of such Mortgaged Property and fixtures, (each such policy or such
marked-up commitment, a “Title Policy”), (y) a Survey and (z) a local counsel
opinion (in form and substance reasonably satisfactory to the Administrative
Agent and the Collateral Agent) in respect of such Mortgage.

 

SECTION 5.12                                Security Interests; Further
Assurances.  Promptly, upon the reasonable request of the Administrative Agent,
the Collateral Agent shall, at Borrower’s expense, execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or recorded, in an
appropriate governmental office, any document or instrument supplemental to or
confirmatory of the Security Documents or otherwise deemed by the Administrative
Agent or the Collateral Agent reasonably necessary or desirable for the
continued validity, perfection and priority of the Liens on the Collateral
covered thereby subject to no other Liens except Permitted Collateral Liens, or
use commercially reasonable efforts to obtain any consents or waivers as may be
necessary or appropriate in connection therewith.  Deliver or cause to be
delivered to the Administrative Agent and the Collateral Agent from time to time
such other documentation, consents, authorizations, approvals and orders in form
and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent as the Administrative Agent and the Collateral Agent shall
reasonably deem necessary to perfect or maintain the Liens on the Collateral
pursuant to the Security Documents.  Upon the exercise by the Administrative
Agent or the Collateral Agent of any power, right, privilege or remedy pursuant
to any Loan Document which requires any consent, approval, registration,
qualification or authorization of any Governmental Authority execute and deliver
all applications, certifications, instruments and other documents and papers
that the Administrative Agent or the Collateral Agent may reasonably require. 
If the Administrative Agent, the Collateral Agent or the Required Lenders
determine that they are required by a Requirement of Law to have appraisals
prepared in respect of the Real Property of any Loan Party constituting
Collateral, Borrower shall provide to the Administrative Agent appraisals that
satisfy the applicable requirements of the Real Estate Appraisal Reform
Amendments of FIRREA and are otherwise in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent.

 

SECTION 5.13                                Information Regarding Collateral. 
Not effect any change (i) in any Loan Party’s legal name, (ii) in the location
of any Loan Party’s chief executive office, (iii) in any Loan Party’s identity
or organizational structure, (iv) in any Loan Party’s Federal Taxpayer
Identification Number or organizational identification number, if any, or (v) in
any Loan Party’s jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidat-

 

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ing, reorganizing or organizing in any other jurisdiction), until (A) it shall
have given the Collateral Agent and the Administrative Agent not less than
10 days’ prior written notice (in the form of an Officers’ Certificate), or such
lesser notice period agreed to by the Collateral Agent, of its intention so to
do, clearly describing such change and providing such other information in
connection therewith as the Collateral Agent or the Administrative Agent may
reasonably request and (B) it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the perfection and priority of
the security interest of the Collateral Agent for the benefit of the Secured
Parties in the Collateral, if applicable.  Each Loan Party agrees to promptly
provide the Collateral Agent with certified Organizational Documents reflecting
any of the changes described in the preceding sentence.  Each Loan Party also
agrees to promptly notify the Collateral Agent of any change in the location of
any office in which it maintains books or records relating to Collateral owned
by it or any office or facility at which Collateral with a fair market value in
excess of $2.0 million is located (including the establishment of any such new
office or facility), other than changes in location to a Mortgaged Property.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Each Loan Party covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full (other than
contingent indemnification obligations not then due and payable) and all Letters
of Credit have been canceled or have expired or have been collateralized in a
manner reasonably acceptable to the Administrative Agent and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, no Loan Party will, nor will they cause or permit
any Subsidiaries to:

 

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

 

(a)                                 Indebtedness incurred under this Agreement
and the other Loan Documents;

 

(b)                                 (i) Indebtedness of Borrower and its
Subsidiaries outstanding on the Restatement Effective Date and listed on
Schedule 6.01(b) to this Agreement and (ii) Permitted Refinancings thereof;

 

(c)                                  Indebtedness of Borrower and its
Subsidiaries under Hedging Obligations with respect to interest rates, foreign
currency exchange rates or commodity prices, in each case not entered into for
speculative purposes; provided that if such Hedging Obligations relate to
interest rates, (i) such Hedging Obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by the Loan Documents and
(ii) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which such
Hedging Obligations relate;

 

(d)                                 Indebtedness permitted by Section 6.04(f);

 

(e)                                  Indebtedness of Borrower and its
Subsidiaries in respect of Purchase Money Obligations and Capital Lease
Obligations, in an aggregate amount not to exceed $10.0 million at any time
outstanding;

 

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(f)                                   Indebtedness in respect of bid, workers’
compensation claims, self-insurance obligations, bankers’ acceptances,
performance or surety, appeal or similar bonds issued for the account of and
completion guarantees and other similar obligations provided by any Company in
the ordinary course of business;

 

(g)                                  Contingent Obligations of Borrower and its
Subsidiaries in respect of Indebtedness otherwise permitted under this
Section 6.01;

 

(h)                                 Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however, that
such Indebtedness is extinguished within five Business Days of incurrence;

 

(i)                                     Indebtedness arising in connection with
endorsement of instruments for deposit in the ordinary course of business;

 

(j)                                    Acquired Indebtedness in an aggregate
principal amount not to exceed $25.0 million at any time outstanding;

 

(k)                                 Indebtedness incurred by Borrower or any
Subsidiary to finance the payment of insurance premiums of Borrower or its
Subsidiaries;

 

(l)                                     unsecured intercompany Indebtedness
permitted pursuant to Section 6.04(f) or (m);

 

(m)                             Indebtedness of Borrower and its Subsidiaries in
an aggregate amount not to exceed $50.0 million at any time outstanding, of
which $10.0 million may be secured Indebtedness;  and

 

(n)                                 Indebtedness of Holdings or Borrower
consisting of notes issued as described in Section 6.08(b), provided that
(i) such Indebtedness shall be subordinated to the Obligations in a manner
reasonably satisfactory to the Administrative Agent, (ii) such Indebtedness
shall have no covenants or events of default other than in respect of the
obligation to make scheduled principal and interest payments and (iii) the
interest rate applicable to such Indebtedness shall not exceed the Base Rate
applicable at the time of issuance of such Indebtedness.

 

SECTION 6.02                                Liens.  Create, incur, assume or
permit to exist, directly or indirectly, any Lien on any property now owned or
hereafter acquired by it or on any income or revenues or rights in respect of
any thereof, except the following (collectively, the “Permitted Liens”):

 

(a)                                 Liens for Taxes, not yet due and payable or
delinquent and Liens for Taxes, which (i) are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings (or orders entered in connection with
such proceedings) have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, and (ii) in the case of any such charge or
claim which has or may become a Lien against any of the Collateral, such Lien
and the contest thereof shall satisfy the Contested Collateral Lien Conditions;

 

(b)                                 Liens in respect of property of any Company
imposed by Requirements of Law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as carriers’,
warehousemen’s, materialmen’s, landlords’, workmen’s, suppli-

 

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ers’, repairmen’s and mechanics’ Liens and other similar Liens arising in the
ordinary course of business, and (i) which do not in the aggregate materially
detract from the value of the property of the Companies, taken as a whole, and
do not materially impair the use thereof in the operation of the business of the
Companies, taken as a whole, (ii) which, if they secure obligations that are
then due and unpaid, are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP, which proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property subject to
any such Lien, and (iii) in the case of any such Lien which has or may become a
Lien against any of the Collateral, such Lien and the contest thereof shall
satisfy the Contested Collateral Lien Conditions;

 

(c)                                  any Lien in existence on the Restatement
Effective Date and set forth on Schedule 6.02(c) to this Agreement and any Lien
granted as a replacement or substitute therefor; provided that any such
replacement or substitute Lien (i) except as permitted by
Section 6.01(b)(ii)(A), does not secure an aggregate principal amount of
Indebtedness, if any, greater than that secured on the Restatement Effective
Date and (ii) does not encumber any property other than the property subject
thereto on the Restatement Effective Date (any such Lien, an “Existing Lien”);

 

(d)                                 easements, rights-of-way, restrictions
(including zoning restrictions), covenants, licenses, encroachments, protrusions
and other similar charges or encumbrances, and minor title deficiencies on or
with respect to any Real Property, in each case whether now or hereafter in
existence, not (i) securing Indebtedness or (ii) individually or in the
aggregate materially interfering with the ordinary conduct of the business of
the Companies (taken as a whole);

 

(e)                                  Liens arising out of judgments, attachments
or awards not resulting in an Event of Default;

 

(f)                                   Liens (other than any Lien imposed by
ERISA) (x) imposed by Requirements of Law or deposits made in connection
therewith in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security
legislation, (y) incurred in the ordinary course of business to secure the
performance of tenders, statutory obligations (other than excise taxes), surety,
stay, customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money)
or (z) arising by virtue of deposits made in the ordinary course of business to
secure liability for premiums to insurance carriers;

 

(g)                                  Leases, subleases, licenses and sublicenses
entered into or granted in the ordinary course of business;

 

(h)                                 Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods entered
into by any Company in the ordinary course of business in accordance with the
past practices of such Company;

 

(i)                                     Liens securing Indebtedness incurred
pursuant to Section 6.01(e); provided that any such Liens attach only to the
property being financed pursuant to such Indebtedness and do not encumber any
other property of any Company;

 

(j)                                    bankers’ Liens, rights of setoff and
other similar Liens existing solely with respect to cash and Cash Equivalents on
deposit in one or more accounts maintained by any Com-

 

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pany, in each case granted in the ordinary course of business in favor of the
bank or banks with which such accounts are maintained, securing amounts owing to
such bank with respect to cash management and other account arrangements,
including those involving pooled accounts and netting arrangements; provided
that, unless such Liens are non-consensual and arise by operation of law, in no
case shall any such Liens secure (either directly or indirectly) the repayment
of any Indebtedness;

 

(k)                                 Liens on property of a person existing at
the time such person or the property of such person is acquired or merged with
or into or consolidated with any Company to the extent permitted under
Section 6.07 (and not created in anticipation or contemplation thereof);
provided that such Liens do not extend to property not subject to such Liens at
the time of acquisition (other than improvements thereon) and are no more
favorable to the lienholders than such existing Lien;

 

(l)                                     Liens granted pursuant to the Security
Documents to secure the Secured Obligations;

 

(m)                             licenses of Intellectual Property granted by any
Company in the ordinary course of business and not interfering in any material
respect with the ordinary conduct of business of the Companies;

 

(n)                                 the filing of UCC financing statements
solely as a precautionary measure in connection with operating leases or
consignment of goods and similar arrangements;

 

(o)                                 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;

 

(p)                                 Liens deemed to exist in connection with
Investments in repurchase agreements permitted under Section 6.04;

 

(q)                                 Liens on insurance policies and the proceeds
thereof securing the financing of the premiums with respect thereto to the
extent permitted under Section 6.01(k);

 

(r)                                    the filing of unauthorized financing
statements or other similar notices for which there is no underlying security
interest granted by any Loan Party;

 

(s)                                   Liens in favor of a Loan Party on assets
of a Subsidiary that is not a Subsidiary Guarantor;

 

(t)                                    Liens securing secured Indebtedness
permitted under Section 6.01(m) and other Liens incurred in the ordinary course
of business of any Company with respect to obligations that do not in the
aggregate exceed $14.0 million at any time outstanding, so long as such Liens,
to the extent covering any Collateral, are junior to the Liens granted pursuant
to the Security Documents;

 

(u)                                 any interest or title of a lessor under
leases entered into by Borrower or any of its Subsidiaries in the ordinary
course of business; and

 

(v)                                 Liens on insurance policies and the proceeds
thereof securing the financing of the premiums with respect thereto;

 

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provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral, other than Liens granted
pursuant to the Security Documents.

 

SECTION 6.03                                [Intentionally Omitted].

 

SECTION 6.04                                Investment, Loan and Advances. 
Directly or indirectly, lend money or credit (by way of guarantee or otherwise,
including Contingent Obligations) or make advances to any person, or purchase or
acquire any stock, bonds, notes, debentures or other obligations or securities
of, or any other interest in, or make any capital contribution to, any other
person, or purchase or own a futures contract or otherwise become liable for the
purchase or sale of currency or other commodities at a future date in the nature
of a futures contract (all of the foregoing, collectively, “Investments”),
except that the following shall be permitted:

 

(a)                                 the Companies may consummate the
Transactions in accordance with the provisions of the Transaction Documents (as
defined in the Existing Credit Agreement);

 

(b)                                 Investments outstanding on the Restatement
Effective Date and identified on Schedule 6.04(b) to this Agreement;

 

(c)                                  the Companies may (i) acquire and hold
accounts receivables owing to any of them if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
terms, (ii) invest in, acquire and hold cash and Cash Equivalents, (iii) endorse
negotiable instruments held for collection in the ordinary course of business or
(iv) make lease, utility and other similar deposits in the ordinary course of
business;

 

(d)                                 Hedging Obligations incurred pursuant to
Section 6.01(c);

 

(e)                                  loans and advances to directors, employees
and officers of Holdings or any of its Subsidiaries (i) for bona fide business
purposes not to exceed $5.0 million at any time outstanding and (ii) to purchase
Equity Interests of any Parent Company so long as any proceeds of such purchase
are contemporaneously contributed, directly or indirectly, to Borrower;

 

(f)                                   Investments (i) by any Company in Borrower
or any Subsidiary Guarantor and (ii) by a Subsidiary that is not a Subsidiary
Guarantor in any other Subsidiary; provided that any Investment in the form of a
loan or advance by Borrower or a Subsidiary Guarantor shall be evidenced by an
Intercompany Note and pledged by such Loan Party as Collateral pursuant to the
Security Documents;

 

(g)                                  Investments in securities of trade
creditors or customers in the ordinary course of business and consistent with
such Company’s past practices that are received in settlement of bona fide
disputes or pursuant to any plan of reorganization or liquidation or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers;

 

(h)                                 Investments made by Borrower or any
Subsidiary as a result of consideration received in connection with an Asset
Sale made in compliance with Section 6.06;

 

(i)                                     Permitted Acquisitions;

 

(j)                                    Investments by a Loan Party consisting
solely of Contingent Obligations permitted under Section 6.01(g);

 

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(k)                                 Any portion of an Investment otherwise
accounted for as a Capital Expenditure under Section 6.10(c);

 

(l)                                     Investments solely financed by the
Equity Interests of any Parent Company (other than Holdings);

 

(m)                             Guarantees by Borrower or any Subsidiary of
obligations of franchisees or any of their Affiliates in an aggregate
outstanding amount (including any such guaranteed obligations outstanding on the
Restatement Effective Date) not to exceed $5.0 million;

 

(n)                                 other Investments in an aggregate amount not
to exceed $30.0 million at any time outstanding; provided that with respect to
any Investments made under this clause (l), immediately before and after giving
effect to such Investment, no Default shall have occurred and be continuing or
would result therefrom;

 

(o)                                 Guarantees by Borrower or any Subsidiary of
leases (other than Capitalized Leases) or of other obligations that do not
constitute Indebtedness, in each case entered into in the ordinary course of
business; and

 

(p)                                 other Investments in an amount not to exceed
the Cumulative Growth Amount immediately prior to the making of such Investment.

 

An Investment shall be deemed to be outstanding to the extent not returned in
cash or otherwise in the same form as the original Investment to Borrower or any
Subsidiary Guarantor.

 

SECTION 6.05                                Mergers and Consolidations.  Wind
up, liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, except that the following shall be permitted:

 

(a)                                 [intentionally omitted];

 

(b)                                 Asset Sales in compliance with Section 6.06;

 

(c)                                  acquisitions in compliance with
Section 6.07;

 

(d)                                 (x) any Company may merge or consolidate
with or into Borrower or any Subsidiary Guarantor (as long as Borrower is the
surviving person in the case of any merger or consolidation involving Borrower
and a Subsidiary Guarantor is the surviving person and remains a Wholly Owned
Subsidiary of Holdings in any other case); provided that the Lien on and
security interest in such property granted or to be granted in favor of the
Collateral Agent under the Security Documents shall be maintained or created in
accordance with the provisions of Section 5.11 or Section 5.12, as applicable,
and (y) any Subsidiary that is not a Subsidiary Guarantor may transfer property
or lease to or acquire or lease property from any other Subsidiary that is not a
Subsidiary Guarantor or may be merged into any other Subsidiary that is not a
Subsidiary Guarantor;

 

(e)                                  any Subsidiary may dissolve, liquidate or
wind up its affairs at any time; provided that such dissolution, liquidation or
winding up, as applicable, could not reasonably be expected to have a Material
Adverse Effect; and

 

(f)                                   any Investment expressly permitted under
Section 6.04 may be structured as a merger or consolidation.

 

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SECTION 6.06                                Asset Sales.  Effect any Asset Sale,
except that the following shall be permitted:

 

(a)                                 disposition of used, worn out, obsolete or
surplus property by any Company in the ordinary course of business and the
abandonment or other disposition of Intellectual Property that is, in the
reasonable judgment of Borrower, no longer economically practicable to maintain
or useful in the conduct of the business of the Companies taken as a whole;

 

(b)                                 sales of inventory, cash and Cash
Equivalents and doubtful accounts, in each case, in the ordinary course of
business;

 

(c)                                  other Asset Sales; provided that the
aggregate consideration received in respect of all Asset Sales pursuant to this
clause (b) shall not exceed $20.0 million in the aggregate but, in any event,
shall not exceed $6.0 million with respect to any single Asset Sale;

 

(d)                                 leases of real or personal property in the
ordinary course of business;

 

(e)                                  [intentionally omitted];

 

(f)                                   mergers and consolidations in compliance
with Section 6.05;

 

(g)                                  Investments in compliance with
Section 6.04;

 

(h)                                 without duplication, Investments permitted
as Capital Expenditures pursuant to Section 6.10(c);

 

(i)                                     sales, transfers and other dispositions
of property by any Subsidiary that is not a Subsidiary Guarantor to another
Subsidiary that is not a Subsidiary Guarantor;

 

(j)                                    non-exclusive licenses and sublicenses of
Intellectual Property in the ordinary course of business;

 

(k)                                 any disposition of real property to a
Governmental Authority that results from a Casualty Event;

 

(l)                                     sales or forgiveness of accounts
receivable in the ordinary course of business in connection with the collection
or compromise thereof; and

 

(m)                             Refranchising Sales in the ordinary course of
business.

 

To the extent the Required Lenders or all the Lenders, as applicable, waive the
provisions of this Section 6.06 with respect to the sale of any Collateral, or
any Collateral is sold as permitted by this Section 6.06, such Collateral
(unless sold to a Company) shall be sold free and clear of the Liens created by
the Security Documents, and, so long as Borrower shall have provided the Agents
such certifications or documents as any Agent shall reasonably request in order
to demonstrate compliance with this Section 6.06, the Agents shall take all
actions they deem appropriate in order to effect the foregoing.

 

SECTION 6.07                                Acquisitions.  Purchase or otherwise
acquire (in one or a series of related transactions) any part of the property
(whether tangible or intangible) of any person, except that the following shall
be permitted:

 

(a)                                 Capital Expenditures by Borrower and the
Subsidiaries;

 

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(b)                                 purchases and other acquisitions of
inventory, materials, equipment and intangible property in the ordinary course
of business;

 

(c)                                  Investments in compliance with
Section 6.04;

 

(d)                                 leases of real or personal property in the
ordinary course of business;

 

(e)                                  the Transactions as contemplated by the
Transaction Documents;

 

(f)                                   Permitted Acquisitions; and

 

(g)                                  mergers and consolidations in compliance
with Section 6.05;

 

provided that the Lien on and security interest in such property granted or to
be granted in favor of the Collateral Agent under the Security Documents shall
be maintained or created in accordance with the provisions of Section 5.11 or
Section 5.12, as applicable.

 

SECTION 6.08                                Dividends.  Authorize, declare or
pay, directly or indirectly, any Dividends with respect to any Company, except
that the following shall be permitted:

 

(a)                                 Dividends by any Company to Borrower or any
Guarantor that is a Wholly Owned Subsidiary of Borrower or, in the case of a
Subsidiary that is not a Wholly-Owned Subsidiary, Dividends pro rata to the
holders of such Subsidiary’s Equity Interests, taking into account the relative
preferences, if any, on the various classes of Equity Interests of such
Subsidiary;

 

(b)                                 payments, dividends or distributions,
directly or indirectly, to Holdings to permit Holdings, and the subsequent use
of such payments by Holdings, to repurchase or redeem Qualified Capital Stock of
Holdings or a direct or indirect parent of Holdings (including through the
subsequent dividend or distribution directly or indirectly to such parent) held
by active or former officers, directors, employees or consultants (or their
transferees, estates or beneficiaries under their estates) of any Company or to
make payment on promissory notes issued to pay the purchase price with respect
to such repurchases or redemptions, upon their death, disability, retirement,
severance or termination of employment or service; provided that the aggregate
cash consideration paid for all such redemptions and payments shall not exceed,
in any fiscal year, the sum of (w) $6.0 million (plus any amount not used in any
fiscal year may be carried forward to the next three succeeding fiscal years),
plus (x) the amount of any Net Cash Proceeds received by or contributed to
Borrower from the issuance and sale since the issue date of Qualified Capital
Stock of Holdings to officers, directors or employees of Holdings or any Company
that have not been used to make any repurchases, redemptions or payments under
this clause (b), plus (y) the net cash proceeds of any “key-man” life insurance
policies of any Company that have not been used to make any repurchases,
redemptions or payments under this clause (b) plus (z) amounts that are
contemporaneously repaid to Borrower or a Subsidiary in respect of loans made
pursuant to Section 6.04(e);

 

(c)                                  (A) to the extent actually used by Holdings
or any direct or indirect parent of Holdings to pay such taxes, costs and
expenses, payments, dividends or distributions, directly or indirectly, by
Borrower to or on behalf of Holdings (or its direct or indirect parents) in an
amount sufficient to permit Holdings to pay (or to dividend to its direct or
indirect parents to pay) franchise taxes and other fees required to maintain the
legal existence of Holdings (and its direct and indirect parents) and (B) to the
extent actually used by Holdings (or a direct or indirect parent) to

 

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pay such operating costs and expenses, payments, dividends or distributions,
directly or indirectly, by Borrower to or on behalf of Holdings (or a direct or
indirect parent) in an amount sufficient to pay such operating costs and
expenses incurred in the ordinary course of business of Holdings (or its direct
or indirect parents) and other corporate overhead costs and expenses (including
administrative, legal, accounting and similar expenses provided by third
parties), which are reasonable and customary and incurred in the ordinary course
of business and attributable to the ownership or operations of Borrower and its
Subsidiaries, Transaction Expenses and any reasonable and customary
indemnification claims made by directors or officers of such parent attributable
to the ownership or operations of Borrower and its Subsidiaries;

 

(d)                                 Permitted Tax Distributions by Borrower to
Holdings so long as Holdings (or to its direct or indirect parents) uses such
distributions to pay the applicable taxes;

 

(e)                                  payments resulting from the cashless
exercise of options and warrants on the Equity Interests of any Company
permitted hereunder;

 

(f)                                   the proceeds of which shall be used by
Holdings to pay (or to make Dividends to allow any direct or indirect parent
thereof to pay) fees and expenses (other than to Affiliates) related to any
unsuccessful or secondary equity or debt offering by Holdings (or any direct or
indirect parent thereof) that is directly attributable to the operations of
Borrower and its Subsidiaries;

 

(g)                                  Holdings may make Dividends in an amount
not to exceed the amount of the Cumulative Growth Amount; and

 

(h)                                 Holdings, Borrower and each Subsidiary may
declare and make Dividends payable solely in the Equity Interests (other than
Disqualified Capital Stock not otherwise permitted by Section 7.01) of such
Person.

 

SECTION 6.09                                Transactions with Affiliates.  Enter
into, directly or indirectly, any transaction or series of related transactions,
whether or not in the ordinary course of business, with any Affiliate of any
Company (other than between or among Borrower and one or more Subsidiary
Guarantors or between or among Subsidiaries that are not Loan Parties), other
than on terms and conditions at least as favorable to such Company as would
reasonably be obtained by such Company at that time in a comparable arm’s-length
transaction with a person other than an Affiliate, except that the following
shall be permitted:

 

(a)                                 Dividends permitted by Section 6.08;

 

(b)                                 Investments permitted by Sections 6.04(e),
(f), (j) and (k) and transactions permitted by Section 6.05(d);

 

(c)                                  reasonable and customary director, officer
and employee compensation (including bonuses) and other benefits (including
retirement, health, stock option and other benefit and equity incentive plans)
and indemnification and reimbursement arrangements, in each case, approved by
the Board of Directors of Borrower; and

 

(d)                                 transactions with customers, clients,
suppliers, joint venture partners, franchisees or purchasers or sellers of goods
and services, in each case in the ordinary course of business and otherwise not
prohibited by the Loan Documents.

 

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SECTION 6.10                                Financial Covenants.

 

(a)                                 Maximum Total Leverage Ratio.  Permit the
Total Leverage Ratio, as of the last day of any Test Period to exceed the ratio
set forth below opposite the last fiscal quarter of such Test Period:

 

Test Period

 

Total Leverage Ratio

Third Quarter of Fiscal Year 2012

 

3.50 to 1.0

Fourth Quarter of Fiscal Year 2012

 

3.50 to 1.0

First Quarter of Fiscal Year 2013

 

3.50 to 1.0

Second Quarter of Fiscal Year 2013

 

3.50 to 1.0

Third Quarter of Fiscal Year 2013 and each Fiscal Quarter Thereafter

 

3.50 to 1.0

 

(b)                                 Minimum Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio, as of the last day of any Test Period to
be less than the ratio set forth below opposite the last fiscal quarter of such
Test Period:

 

Test Period

 

Interest Coverage Ratio

Third Quarter of Fiscal Year 2012

 

3.00 to 1.0

Fourth Quarter of Fiscal Year 2012

 

3.00 to 1.0

First Quarter of Fiscal Year 2013

 

3.00 to 1.0

Second Quarter of Fiscal Year 2013

 

3.00 to 1.0

Third Quarter of Fiscal Year 2013 and each Fiscal Quarter Thereafter

 

3.00 to 1.0

 

(c)                                  Limitation on Capital Expenditures.  Permit
the aggregate amount of Capital Expenditures made in any fiscal year set forth
below, to exceed the amount set forth opposite such fiscal year below:

 

Period

 

Amount

Fiscal Year 2012

 

$

80.0 million

Fiscal Year 2013

 

$

80.0 million

Fiscal Year 2014

 

$

80.0 million

Fiscal Year 2015

 

$

80.0 million

 

; provided, however, that (x) if the aggregate amount of Capital Expenditures
made in any fiscal year shall be less than the maximum amount of Capital
Expenditures permitted under this Section 6.10(c) for such fiscal year (before
giving effect to any carryover), then an amount of such shortfall not exceeding
100% of such maximum amount (without giving effect to clause (z) below) may be
added to the amount of Capital Expenditures permitted under this
Section 6.10(c) for the immediately succeeding (but not any other) fiscal year,
(y) in determining whether any amount is available for carryover, the amount
expended in any

 

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fiscal year shall first be deemed to be from the amount allocated to such fiscal
year (before giving effect to any carryover) and (z) the amount set forth in the
table above for any period may be increased in an amount not to exceed the then
Cumulative Growth Amount designated for Capital Expenditures for such period
during such period.

 

Notwithstanding anything to the contrary contained herein, in the event that
Borrower and its Subsidiaries have made Capital Expenditures in any fiscal year
of the Borrower in an amount equal to the maximum aggregate amount permitted to
be made by Borrower its Subsidiaries during such fiscal year, the Borrower and
its Subsidiaries may utilize up to 25% of the applicable permitted scheduled
Capital Expenditures amount as set forth above in this clause (c) for the
immediately succeeding fiscal year of the Borrower (the “Carry-Back Amount”) to
make additional Capital Expenditures in the then current fiscal year of the
Borrower (which shall reduce the base amount of Capital Expenditures permitted
to be made in such succeeding fiscal year by the Carry-Back Amount so utilized).

 

SECTION 6.11                                Prepayments of Other Indebtedness;
Modifications of Organizational Documents and Other Documents, etc.  Directly or
indirectly:

 

(a)                                 make (or give any notice in respect thereof)
any voluntary or optional payment or prepayment on or redemption or acquisition
for value of, or any prepayment or redemption as a result of any asset sale,
change of control or similar event of, any Indebtedness outstanding under any
Subordinated Indebtedness, except (i) the conversion or exchange of any
Subordinated Indebtedness to Equity Interests (other than Disqualified Capital
Stock) of Holdings or any of its direct or indirect parents and (ii) prepayments
or redemptions in respect of Subordinated Indebtedness prior to their scheduled
maturity in an aggregate amount not to exceed the Cumulative Growth Amount;

 

(b)                                 amend or modify, or permit the amendment or
modification of, any provision of any document governing any Subordinated
Indebtedness in any manner that is adverse in any material respect to the
interests of the Lenders;

 

(c)                                  amend or modify, or permit the amendment or
modification of, any provision of any Permitted Refinancing Indebtedness in
respect thereof, or any agreement (including any document relating to any
Permitted Refinancing Indebtedness in respect thereof) relating thereto, other
than amendments or modifications that are not in any manner materially adverse
to Lenders and that do not affect the subordination provisions thereof (if any)
in a manner adverse to the Lenders; or

 

(d)                                 terminate, amend or modify any of its
Organizational Documents (including (x) by the filing or modification of any
certificate of designation and (y) any election to treat any Pledged Securities
(as defined in the Security Agreement) as a “security” under Section 8-103 of
the UCC other than concurrently with the delivery of certificates representing
such Pledged Securities to the Collateral Agent) or any agreement to which it is
a party with respect to Borrower’s Equity Interests (including any stockholders’
agreements), or enter into any new agreement with respect to Borrower’s Equity
Interests, other than any such amendments or modifications or such new
agreements which are not adverse in any material respect to the interests of the
Lenders; provided that Holdings may issue such Equity Interests, so long as such
issuance is not prohibited by Section 6.13 or any other provision of this
Agreement, and may amend or modify its Organizational Documents to authorize any
such Equity Interests.

 

SECTION 6.12                                Limitation on Certain Restrictions
on Subsidiaries.  Directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction

 

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on the ability of any Subsidiary to (a) pay dividends or make any other
distributions on its Equity Interests owned by Borrower or any Subsidiary, or
pay any Indebtedness owed to Borrower or a Subsidiary, (b) make loans or
advances to Borrower or any Subsidiary or (c) transfer any of its properties to
Borrower or any Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) applicable Requirements of Law; (ii) this
Agreement and the other Loan Documents; (iii) [intentionally omitted];
(iv) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of Borrower or a Subsidiary; (v) customary
provisions restricting assignment of any agreement entered into by a Subsidiary
in the ordinary course of business; (vi) any holder of a Lien permitted by
Section 6.02 restricting the transfer of the property subject thereto;
(vii) customary restrictions and conditions contained in any agreement relating
to the sale of any property permitted under Section 6.06 pending the
consummation of such sale; (viii) any agreement in effect at the time such
Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not
entered into in connection with or in contemplation of such person becoming a
Subsidiary of Borrower; (ix) without affecting the Loan Parties’ obligations
under Section 5.11, customary provisions in partnership agreements, limited
liability company organizational governance documents, asset sale and stock sale
agreements and other similar agreements entered into in the ordinary course of
business that restrict the transfer of ownership interests in such partnership,
limited liability company or similar person; (x) restrictions on cash or other
deposits or net worth imposed by suppliers or landlords under contracts entered
into in the ordinary course of business; (xi) any instrument governing
Indebtedness assumed in connection with any Permitted Acquisition, which
encumbrance or restriction is not applicable to any person, or the properties or
assets of any person, other than the person or the properties or assets of the
person so acquired; (xii) in the case of any joint venture which is not a Loan
Party in respect of any matters referred to in clauses (b) and (c) above,
restrictions in such person’s Organizational Documents or pursuant to any joint
venture agreement or stockholders agreements solely to the extent of the Equity
Interests of or property held in the subject joint venture or other entity; or
(xiii) any encumbrances or restrictions imposed by any amendments or
refinancings that are otherwise permitted by the Loan Documents of the
contracts, instruments or obligations referred to in clauses (iii), (iv) or
(viii) above; provided that such amendments or refinancings are no more
materially restrictive with respect to such encumbrances and restrictions than
those prior to such amendment or refinancing.

 

SECTION 6.13                                Limitation on Issuance of Capital
Stock.

 

(a)                                 With respect to Holdings, issue any Equity
Interest that is not Qualified Capital Stock.

 

(b)                                 With respect to Borrower or any Subsidiary,
issue any Equity Interest (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, any Equity
Interest, except (i) for stock splits, stock dividends and additional issuances
of Equity Interests which do not decrease the percentage ownership of Borrower
or any Subsidiaries in any class of the Equity Interest of such Subsidiary;
(ii) Subsidiaries of Borrower formed after the Restatement Effective Date in
accordance with Section 6.14 may issue Equity Interests to Borrower or the
Subsidiary of Borrower which is to own such Equity Interests; and (iii) Borrower
may issue common stock that is Qualified Capital Stock to Holdings.  All Equity
Interests issued in accordance with this Section 6.13(b) shall, to the extent
required by Sections 5.11 and 5.12 or any Security Agreement or if such Equity
Interests are issued by Borrower, be delivered to the Collateral Agent for
pledge pursuant to the applicable Security Agreement.

 

SECTION 6.14                                Limitation on Creation of
Subsidiaries.  Establish, create or acquire any additional Subsidiaries without
the prior written consent of the Required Lenders; provided that, without such
consent, Borrower may (i) establish or create one or more Wholly Owned
Subsidiaries of Borrower, (ii) establish, create or acquire one or more
Subsidiaries in connection with an Investment

 

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permitted under Section 6.04 or (iii) acquire one or more Subsidiaries in
connection with a Permitted Acquisition, so long as, in each case,
Section 5.11(b) shall be complied with.

 

SECTION 6.15                                Business.

 

(a)                                 With respect to Holdings, engage in any
business activities or have any properties or liabilities, other than (i) its
ownership of the Equity Interests of Borrower, (ii) obligations under the Loan
Documents, (iii) guarantees of obligations to the extent such obligations are
permitted hereunder and (iv) activities and properties incidental to the
foregoing clauses (i), (ii) and (iii).

 

(b)                                 With respect to Borrower and the
Subsidiaries, engage (directly or indirectly) in any business other than those
businesses in which Borrower and its Subsidiaries are engaged on the Restatement
Effective Date and businesses that are similar, complementary or reasonably
related to or are reasonable extensions thereof.

 

SECTION 6.16                                Limitation on Accounting Changes. 
Make or permit any change in accounting policies or reporting practices, without
the consent of the Required Lenders, which consent shall not be unreasonably
withheld, except changes that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect or are required by GAAP.

 

SECTION 6.17                                Fiscal Year.  Change its fiscal
year-end to a date other than the Tuesday closest to January 31.

 

SECTION 6.18                                [Intentionally Omitted]. 
SECTION 6.19                                           No Further Negative
Pledge.  Enter into any agreement, instrument, deed or lease which prohibits or
limits the ability of any Loan Party to create, incur, assume or suffer to exist
any Lien upon any of their respective properties or revenues, whether now owned
or hereafter acquired, or which requires the grant of any security for an
obligation if security is granted for another obligation, except the following: 
(1) this Agreement and the other Loan Documents; (2) covenants in documents
creating Liens permitted by Section 6.02 prohibiting further Liens on the
properties encumbered thereby; (3) [intentionally omitted]; (4) any other
agreement that does not restrict in any manner (directly or indirectly) Liens
created pursuant to the Loan Documents on any Collateral securing the Secured
Obligations and does not require the direct or indirect granting of any Lien
securing any Indebtedness or other obligation by virtue of the granting of Liens
on or pledge of property of any Loan Party to secure the Secured Obligations;
and (5) any prohibition or limitation that (a) exists pursuant to applicable
Requirements of Law, (b) consists of customary restrictions and conditions
contained in any agreement relating to the sale of any property permitted under
Section 6.06 pending the consummation of such sale, (c) restricts subletting or
assignment of any lease governing a leasehold interest of Borrower or a
Subsidiary, (d) exists in any agreement in effect at the time such Subsidiary
becomes a Subsidiary of Borrower, so long as such agreement was not entered into
in contemplation of such person becoming a Subsidiary, (e) is imposed by any
amendments or refinancings that are otherwise permitted by the Loan Documents of
the contracts, instruments or obligations referred to in clause (3) or (5)(d) or
(f) exists pursuant to agreements described under Section 6.12(v) (with respect
to any Loan Party) and joint ventures described in Section 6.12(xii); provided
that such amendments and refinancings are no more materially restrictive with
respect to such prohibitions and limitations than those prior to such amendment
or refinancing.

 

SECTION 6.20                                Anti-Terrorism Law; Anti-Money
Laundering.

 

(a)                                 Directly or indirectly, (i) knowingly
conduct any business or engage in making or receiving any contribution of funds,
goods or services to or for the benefit of any person described in Section 3.22,
(ii) knowingly deal in, or otherwise engage in any transaction relating to, any
property or inter-

 

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ests in property blocked pursuant to the Executive Order or any other
Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law
(and the Loan Parties shall deliver to the Lenders any certification or other
evidence requested from time to time by any Lender in its reasonable discretion,
confirming the Loan Parties’ compliance with this Section 6.20).

 

(b)                                 Cause or permit any of the funds of such
Loan Party that are used to repay the Loans to be derived from any unlawful
activity with the result that the making of the Loans would be in violation of
any Requirement of Law.

 

SECTION 6.21                                Embargoed Person.  Cause or permit
(a) any of the funds or properties of the Loan Parties that are used to repay
the Loans to constitute property of, or be beneficially owned directly or
indirectly by, any person subject to sanctions or trade restrictions under
United States law (“Embargoed Person” or “Embargoed Persons”) that is identified
on (1) the “List of Specially Designated Nationals and Blocked Persons”
maintained by OFAC and/or on any other similar list maintained by OFAC pursuant
to any authorizing statute including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Order or Requirement of
Law promulgated thereunder, with the result that the investment in the Loan
Parties (whether directly or indirectly) is prohibited by a Requirement of Law,
or the Loans made by the Lenders would be in violation of a Requirement of Law,
or (2) the Executive Order, any related enabling legislation or any other
similar Executive Orders or (b) any Embargoed Person to have any direct or
indirect interest, of any nature whatsoever in the Loan Parties, with the result
that the investment in the Loan Parties (whether directly or indirectly) is
prohibited by a Requirement of Law or the Loans are in violation of a
Requirement of Law.

 

ARTICLE VII

 

GUARANTEE

 

SECTION 7.01                                The Guarantee.  The Guarantors
hereby jointly and severally guarantee, as a primary obligor and not as a surety
to each Secured Party and their respective successors and assigns, the prompt
payment in full when due (whether at stated maturity, by required prepayment,
declaration, demand, by acceleration or otherwise) of the principal of and
interest (including any interest, fees, costs or charges that would accrue but
for the provisions of the Title 11 of the United States Code after any
bankruptcy or insolvency petition under Title 11 of the United States Code) on
the Loans made by the Lenders to, and the Notes held by each Lender of,
Borrower, and all other Secured Obligations from time to time owing to the
Secured Parties by any Loan Party under any Loan Document or any Hedging
Agreement or Treasury Services Agreement entered into with a counterparty that
is a Secured Party, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the “Guaranteed
Obligations”).  The Guarantors hereby jointly and severally agree that if
Borrower or other Guarantor(s) shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same in cash, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

 

SECTION 7.02                                Obligations Unconditional.  The
obligations of the Guarantors under Section 7.01 shall constitute a guaranty of
payment and to the fullest extent permitted by applicable Requirements of Law,
are absolute, irrevocable and unconditional, joint and several, irrespective of
the value, genuineness, validity, regularity or enforceability of the Guaranteed
Obligations of Borrower under

 

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this Agreement, the Notes, if any, or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or Guarantor
(except for payment in full).  Without limiting the generality of the foregoing,
it is agreed that the occurrence of any one or more of the following shall not
alter or impair the liability of the Guarantors hereunder which shall remain
absolute, irrevocable and unconditional under any and all circumstances as
described above:

 

(i)                  at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;

 

(ii)               any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument referred to
herein or therein shall be done or omitted;

 

(iii)            the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or waived in any
respect or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;

 

(iv)           any Lien or security interest granted to, or in favor of, Issuing
Bank or any Lender or Agent as security for any of the Guaranteed Obligations
shall fail to be perfected; or

 

(v)              the release of any other Guarantor pursuant to Section 7.09.

 

The Guarantors hereby expressly waive to the fullest extent permitted by
applicable law diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that any Secured Party exhaust any
right, power or remedy or proceed against Borrower under this Agreement or the
Notes, if any, or any other agreement or instrument referred to herein or
therein, or against any other person under any other guarantee of, or security
for, any of the Guaranteed Obligations.  The Guarantors waive to the fullest
extent permitted by applicable law any and all notice of the creation, renewal,
extension, waiver, termination or accrual of any of the Guaranteed Obligations
and notice of or proof of reliance by any Secured Party upon this Guarantee or
acceptance of this Guarantee, and the Guaranteed Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guarantee, and all dealings between Borrower and the Secured
Parties shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Guarantee.  This Guarantee shall be construed as a
continuing, absolute, irrevocable and unconditional guarantee of payment without
regard to any right of offset with respect to the Guaranteed Obligations at any
time or from time to time held by Secured Parties, and the obligations and
liabilities of the Guarantors hereunder shall not be conditioned or contingent
upon the pursuit by the Secured Parties or any other person at any time of any
right or remedy against Borrower or against any other person which may be or
become liable in respect of all or any part of the Guaranteed Obligations or
against any collateral security or guarantee therefor or right of offset with
respect thereto.  This Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantors
and the successors and assigns thereof, and shall inure to the benefit of the
Lenders, and their respective successors and assigns, notwithstanding that from
time to time during the term of this Agreement there may be no Guaranteed
Obligations outstanding.

 

SECTION 7.03                                Reinstatement.  The obligations of
the Guarantors under this Article VII shall be automatically reinstated if and
to the extent that for any reason any payment by or on

 

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behalf of Borrower or other Loan Party in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.

 

SECTION 7.04                                Subrogation; Subordination.  Each
Guarantor hereby agrees that until the payment and satisfaction in full in cash
of all Guaranteed Obligations and the expiration and termination of the
Commitments of the Lenders under this Agreement it shall not assert or otherwise
exercise any right or remedy, direct or indirect, arising by reason of any
performance by it of its guarantee in Section 7.01, whether by subrogation or
otherwise, against Borrower or any other Guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.  Any
Indebtedness of any Loan Party permitted pursuant to Section 6.01(d) shall be
subordinated to such Loan Party’s Secured Obligations in the manner set forth in
the Intercompany Note evidencing such Indebtedness.

 

SECTION 7.05                                Remedies.  The Guarantors jointly
and severally agree that, as between the Guarantors and the Lenders, the
obligations of Borrower under this Agreement and the Notes, if any, may be
declared to be forthwith due and payable as provided in Section 8.01 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in Section 8.01) for purposes of Section 7.01, notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against Borrower and
that, in the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due and
payable by Borrower) shall forthwith become due and payable by the Guarantors
for purposes of Section 7.01.

 

SECTION 7.06                                Instrument for the Payment of
Money.  Each Guarantor hereby acknowledges that the guarantee in this
Article VII constitutes an instrument for the payment of money, and consents and
agrees that any Lender or Agent, at its sole option, in the event of a dispute
by such Guarantor in the payment of any moneys due hereunder, shall have the
right to bring a motion-action under New York CPLR Section 3213.

 

SECTION 7.07                                Continuing Guarantee.  The guarantee
in this Article VII is a continuing guarantee of payment, and shall apply to all
Guaranteed Obligations whenever arising.

 

SECTION 7.08                                General Limitation on Guarantee
Obligations.  In any action or proceeding involving any state corporate limited
partnership or limited liability company law, or any applicable state, federal
or foreign bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Guarantor under
Section 7.01 would otherwise be held or determined to be void, voidable, invalid
or unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability under Section 7.01, then, notwithstanding
any other provision to the contrary, the amount of such liability shall, without
any further action by such Guarantor, any Loan Party or any other person, be
automatically limited and reduced to the highest amount (after giving effect to
the right of contribution established in Section 7.10) that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

 

SECTION 7.09                                Release of Guarantors.  If, in
compliance with the terms and provisions of the Loan Documents, all or
substantially all of the Equity Interests or property of any Guarantor are sold
or otherwise transferred (a “Transferred Guarantor”) to a person or persons,
none of which is Borrower or a Subsidiary Guarantor, such Transferred Guarantor
shall, upon the consummation of such sale or transfer, be automatically released
from its obligations under this Agreement (including under Section 10.03 hereof)
and its obligations to pledge and grant any Collateral owned by it pursuant to
any Security Document and, in the case of a sale of all or substantially all of
the Equity Interests of the Transferred Guarantor, the pledge of such Equity
Interests to the Collateral Agent pursuant to the Security Agree-

 

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ments shall be automatically released, and, so long as Borrower shall have
provided the Agents such certifications or documents as any Agent shall
reasonably request, the Collateral Agent shall take such actions as are
necessary to effect each release described in this Section 7.09 in accordance
with the relevant provisions of the Security Documents, so long as Borrower
shall have provided the Agents such certifications or documents as any Agent
shall reasonably request in order to demonstrate compliance with this Agreement.

 

SECTION 7.10                                Right of Contribution.  Each
Subsidiary Guarantor hereby agrees that to the extent that a Subsidiary
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive
contribution from and against any other Subsidiary Guarantor hereunder which has
not paid its proportionate share of such payment.  Each Subsidiary Guarantor’s
right of contribution shall be subject to the terms and conditions of
Section 7.04.  The provisions of this Section 7.10 shall in no respect limit the
obligations and liabilities of any Subsidiary Guarantor to the Administrative
Agent, the Issuing Bank, the Swingline Lender and the Lenders, and each
Subsidiary Guarantor shall remain liable to the Administrative Agent, the
Issuing Bank, the Swingline Lender and the Lenders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.

 

ARTICLE VIII

 

EVENTS OF DEFAULT

 

SECTION 8.01                                Events of Default.  Upon the
occurrence and during the continuance of the following events (“Events of
Default”):

 

(a)                                 default shall be made in the payment of any
principal of any Loan or any Reimbursement Obligation when and as the same shall
become due and payable, whether at the due date thereof (including a Term Loan
Repayment Date) or at a date fixed for prepayment (whether voluntary or
mandatory) thereof or by acceleration thereof or otherwise;

 

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

 

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

 

(d)                                 default shall be made in the due observance
or performance by any Company of any covenant, condition or agreement contained
in Section 5.02 (excluding clauses (a) or (c)), 5.03(a) or 5.08 or in
Article VI;

 

(e)                                  default shall be made in the due observance
or performance by any Company of any covenant, condition or agreement contained
in any Loan Document (other than those specified in paragraphs (a), (b) or
(d) immediately above) and such default shall continue unremedied or shall not
be waived for a period of 30 days after written notice thereof from the
Administrative Agent to Borrower;

 

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(f)                                   any Company shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness
(other than the Obligations), when and as the same shall become due and payable
beyond any applicable grace period, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such Indebtedness or a trustee or other representative on its or their behalf
(with or without the giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity or become subject to a
mandatory offer to purchase by the obligor; provided that it shall not
constitute an Event of Default pursuant to this paragraph (f) unless the
aggregate amount of all such Indebtedness referred to in clauses (i) and
(ii) exceeds $10.0 million at any one time (provided that, in the case of
Hedging Obligations, the amount counted for this purpose shall be the amount
payable by all Companies if such Hedging Obligations were terminated at such
time);

 

(g)                                  an involuntary proceeding shall be
commenced or an involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of any Loan Party or Material
Subsidiary of any Loan Party, or of a substantial part of the property of any
Loan Party or Material Subsidiary of any Loan Party, under Title 11 of the U.S.
Code, as now constituted or hereafter amended, or any other federal, state or
foreign bankruptcy, insolvency, receivership or similar law; (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Loan Party or Material Subsidiary of any Loan Party or
for a substantial part of the property of any such person; or (iii) the
winding-up or liquidation of any Loan Party or Material Subsidiary of any Loan
Party; and such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be entered;

 

(h)                                 any Loan Party or Material Subsidiary of any
Loan Party shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law; (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or the filing
of any petition described in clause (g) above; (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Loan Party or Material Subsidiary of any Loan Party or
for a substantial part of the property of any such person; (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding; (v) make a general assignment for the benefit of creditors;
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due; (vii) take any action for the purpose of effecting any
of the foregoing; or (viii) wind up or liquidate, except as permitted under
Section 6.05;

 

(i)                                     one or more judgments, orders or decrees
for the payment of money in an aggregate amount in excess of $10.0 million
(exclusive of amounts covered by insurance for which coverage is not denied)
shall be rendered against any Loan Party or Material Subsidiary of any Loan
Party or any combination thereof and the same shall remain undischarged,
unvacated or unbonded for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon properties of any Loan Party or Material
Subsidiary of any Loan Party to enforce any such judgment;

 

(j)                                    one or more ERISA Events shall have
occurred that, in the opinion of the Required Lenders, when taken together with
all other such ERISA Events, could reasonably be expected to result in direct or
indirect liability of any Company and its ERISA Affiliates in an aggregate
amount exceeding $10.0 million;

 

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(k)                                 any security interest and Lien purported to
be created by any Security Document shall cease to be in full force and effect,
or shall cease to give the Collateral Agent, for the benefit of the Secured
Parties, the Liens, rights, powers and privileges purported to be created and
granted under such Security Document (including a perfected first priority
security interest in and Lien on all of the Collateral thereunder (except as
otherwise expressly provided in this Agreement or such Security Document)) in
favor of the Collateral Agent, or shall be asserted by Borrower or any other
Loan Party not to be a valid, perfected, first priority (except as otherwise
expressly provided in this Agreement or such Security Document) security
interest in or Lien on the Collateral covered thereby;

 

(l)                                     any Loan Document or any material
provisions thereof shall at any time and for any reason be declared by a court
of competent jurisdiction to be null and void, or a proceeding shall be
commenced by any Loan Party or any of its Affiliates or by any Governmental
Authority seeking to establish the invalidity or unenforceability thereof
(exclusive of questions of interpretation of any provision thereof), or any Loan
Party shall repudiate or deny any portion of its liability or obligation for the
Obligations; or

 

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

 

then, and in every such event (other than an event with respect to Holdings or
Borrower described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to Borrower, take either or
both of the following actions, at the same or different times:  (i) terminate
forthwith the Commitments and (ii) declare the Loans and Reimbursement
Obligations then outstanding to be forthwith due and payable in whole or in
part, whereupon the principal of the Loans and Reimbursement Obligations so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other Obligations of Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by Borrower and the Guarantors, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event, with respect to Holdings or Borrower described in paragraph (g) or
(h) above, the Commitments shall automatically terminate and the principal of
the Loans and Reimbursement Obligations then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other Obligations of
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by
Borrower and the Guarantors, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

 

SECTION 8.02                                Rescission.  If at any time after
termination of the Commitments or acceleration of the maturity of the Loans,
Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations owing by it that shall have
become due otherwise than by acceleration (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified herein)
and all Defaults (other than non-payment of principal of and accrued interest on
the Loans due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 10.02, then upon the written consent of the Required
Lenders and written notice to Borrower, the termination of the Commitments or
the acceleration and their consequences may be rescinded and annulled; but such
action shall not affect any subsequent Default or impair any right or remedy
consequent thereon.  The provisions of the preceding sentence are intended
merely to bind the Lenders and the Issuing Bank to a decision that may be made
at the election of the Required Lenders, and such provisions are not intended to
benefit Borrower and do not give Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.

 

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SECTION 8.03                                Application of Proceeds.  The
proceeds received by the Collateral Agent in respect of any sale of, collection
from or other realization upon all or any part of the Collateral pursuant to the
exercise by the Collateral Agent of its remedies shall be applied, in full or in
part, together with any other sums then held by the Collateral Agent pursuant to
this Agreement, promptly by the Collateral Agent as follows:

 

(a)                                 First, to the payment of all reasonable
costs and expenses, fees, commissions and taxes of such sale, collection or
other realization including compensation to the Collateral Agent and its agents
and counsel, and all expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith and all amounts for which the
Collateral Agent is entitled to indemnification pursuant to the provisions of
any Loan Document, together with interest on each such amount at the highest
rate then in effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;

 

(b)                                 Second, to the payment of all other
reasonable costs and expenses of such sale, collection or other realization
including compensation to the other Secured Parties and their agents and counsel
and all costs, liabilities and advances made or incurred by the other Secured
Parties in connection therewith, together with interest on each such amount at
the highest rate then in effect under this Agreement from and after the date
such amount is due, owing or unpaid until paid in full;

 

(c)                                  Third, without duplication of amounts
applied pursuant to clauses (a) and (b) above, to the payment in full in cash,
pro rata, of interest and other amounts constituting Obligations (other than
principal and Reimbursement Obligations) and any fees, premiums and scheduled
periodic payments due under Hedging Agreements or Treasury Services Agreements
constituting Secured Obligations and any interest accrued thereon, in each case
equally and ratably in accordance with the respective amounts thereof then due
and owing;

 

(d)                                 Fourth, to the payment in full in cash, pro
rata, of principal amount of the Obligations and any premium thereon (including
Reimbursement Obligations) and any breakage, termination or other payments under
Hedging Agreements and Treasury Services Agreements constituting Secured
Obligations and any interest accrued thereon; and

 

(e)                                  Fifth, the balance, if any, to the person
lawfully entitled thereto (including the applicable Loan Party or its successors
or assigns) or as a court of competent jurisdiction may direct.

 

In the event that any such proceeds are insufficient to pay in full the items
described in clauses (a) through (e) of this Section 8.03, the Loan Parties
shall remain liable, jointly and severally, for any deficiency.  Each Loan Party
acknowledges the relative rights, priorities and agreements of the Secured
Parties and as set forth in this Agreement, including as set forth in this
Section 8.03.

 

SECTION 8.04                                Right to Cure.

 

(a)                                 Notwithstanding anything to the contrary
contained in Section 8.01, in the event that Borrower fails to comply with the
requirements of any financial covenants set forth in Section 6.10, until the
expiration of the 15th Business Day subsequent to the date the certificate
calculating compliance with such financial covenant is required to be delivered
pursuant to Section 5.01(d), Holdings shall have the right to issue Permitted
Cure Securities for cash or otherwise receive cash contributions to the capital
of Holdings, and in each case, to contribute any such cash to the capital of
Borrower (collectively, the “Cure Right”), and upon the receipt by Borrower of
such cash (the “Cure Amount”) pursuant to the ex-

 

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ercise by Holdings of such Cure Right and written notice to the Administrative
Agent, all financial covenants shall be recalculated giving effect to the
following pro forma adjustments:

 

(i)                           Consolidated EBITDA shall be increased, solely for
the purpose of measuring the financial covenants and not for any other purpose
under this Agreement, by an amount equal to the Cure Amount; and

 

(ii)                        If, after giving effect to the foregoing
recalculations, Borrower shall be in compliance with the requirements of all
financial covenants set forth in Section 6.10, Borrower shall be deemed to have
satisfied the requirements of Section 6.10 as of the relevant date of
determination with the same effect as though there had been no failure to comply
therewith at such date, and the applicable breach or Default of such financial
covenant that had occurred shall be deemed cured for purposes of this Agreement;
and

 

(iii)                     The Cure Amount shall be included additionally in the
amount of Consolidated EBITDA for the period of four consecutive fiscal quarters
that includes the fiscal quarter for which the Cure Right was exercised for
purposes of calculating the financial covenants and not for any other purpose
under this Agreement.

 

(b)                                 Notwithstanding anything herein to the
contrary, (i) in each four-fiscal quarter period, there shall be at least two
fiscal quarters in which the Cure Right is not exercised, (ii) in each
eight-fiscal quarter period, there shall be a period of at least four
consecutive quarters during which the Cure Right is not exercised and (iii) for
purposes of this Section 8.04, the Cure Amount shall be no greater than the
amount required for purposes of curing the non-compliance with financial
covenants set forth in Section 6.10.

 

ARTICLE IX

 

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

SECTION 9.01                                Appointment and Authority.  Each of
the Lenders and the Issuing Bank hereby irrevocably appoints UBS AG, Stamford
Branch, to act on its behalf as the Administrative Agent and the Collateral
Agent hereunder and under the other Loan Documents and authorizes such Agents to
take such actions on its behalf and to exercise such powers as are delegated to
such Agents by the terms hereof or thereof, together with such actions and
powers as are reasonably incidental thereto.  The provisions of this Article are
solely for the benefit of the Administrative Agent, the Collateral Agent, the
Lenders and the Issuing Bank, and neither Borrower nor any other Loan Party
shall have rights as a third party beneficiary of any of such provisions.

 

SECTION 9.02                                Rights as a Lender.  Each person
serving as an Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not an Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include each
person serving as an Agent hereunder in its individual capacity.  Such person
and its Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with Borrower or any Subsidiary or other Affiliate thereof as if
such person were not an Agent hereunder and without any duty to account therefor
to the Lenders.

 

SECTION 9.03                                Exculpatory Provisions.  No Agent
shall have any duties or obligations except those expressly set forth herein and
in the other Loan Documents.  Without limiting the generality of the foregoing,
no Agent:

 

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(i)                           shall be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing;

 

(ii)                        shall have any duty to take any discretionary action
or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that such Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents); provided that such Agent shall not be
required to take any action that, in its judgment or the judgment of its
counsel, may expose such Agent to liability or that is contrary to any Loan
Document or applicable Requirements of Law; and

 

(iii)                     shall, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
Affiliates that is communicated to or obtained by the person serving as such
Agent or any of its Affiliates in any capacity.

 

No Agent shall be liable for any action taken or not taken by it (x) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Section 10.02) or (y) in the absence of its own gross negligence or willful
misconduct.  No Agent shall be deemed to have knowledge of any Default unless
and until notice describing such Default is given to such Agent by Borrower, a
Lender or the Issuing Bank.

 

No Agent shall be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document 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 such Agent.  Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement with
reference to the Administrative Agent or the Collateral Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law.  Instead, such term us used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.

 

SECTION 9.04                                Reliance by Agent.  Each Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper person.  Each Agent also
may rely upon any statement made to it orally or by telephone and believed by it
to have been made by the proper person, and shall not incur any liability for
relying thereon.  In determining compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit, that by its terms must
be fulfilled to the satisfaction of a Lender or the Issuing Bank, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Bank prior to the making
of such Loan or the issuance of such Letter of Credit.  Each Agent may consult
with legal counsel (who may be counsel for 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.

 

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SECTION 9.05                                Delegation of Duties.  Each Agent
may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through, or delegate any and
all such rights and powers to, any one or more sub-agents appointed by such
Agent. Each Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers by or through their respective Related
Parties.  The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.

 

SECTION 9.06                                Resignation of Agent.  Each Agent
may at any time give notice of its resignation to the Lenders, the Issuing Bank
and Borrower.  Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States.  If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent meeting the qualifications set forth
above provided that if the Agent shall notify Borrower and the Lenders that no
qualifying person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security
held by the Collateral Agent on behalf of the Lenders or the Issuing Bank under
any of the Loan Documents, the retiring Collateral Agent shall continue to hold
such collateral security as nominee until such time as a successor Collateral
Agent is appointed) and (2) all payments, communications and determinations
provided to be made by, to or through an Agent shall instead be made by or to
each Lender and the Issuing Bank directly, until such time as the Required
Lenders appoint a successor Agent as provided for above in this paragraph.  Upon
the acceptance of a successor’s appointment as Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Agent, and the retiring Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
paragraph).  The fees payable by Borrower to a successor Agent shall be the same
as those payable to its predecessor unless otherwise agreed between Borrower and
such successor.  After the retiring Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article IX and Section 10.03 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Agent was acting as Agent.

 

SECTION 9.07                                Non-Reliance on Agent and Other
Lenders.  Each Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon any 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 further
represents and warrants that it has reviewed each document made available to it
on the Platform in connection with this Agreement and has acknowledged and
accepted the terms and conditions applicable to the recipients thereof.  Each
Lender and the Issuing Bank also acknowledges that it will, independently and
without reliance upon any 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 other Loan Document or any related agreement or any document
furnished hereunder or thereunder.

SECTION 9.08                                No Other Duties, etc.  Anything
herein to the contrary notwithstanding, none of the Bookrunner, Arrangers,
Syndication Agent or Documentation Agent listed on the cover page hereof shall
have any powers, duties or responsibilities under this Agreement or any of the
other

 

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Loan Documents, except in its capacity, as applicable, as the Administrative
Agent, the Collateral Agent, a Lender or the Issuing Bank hereunder.

 

SECTION 9.09                                   Withholding Taxes.  To the extent
required by any applicable laws, the Administrative Agent may withhold from any
payment to any Lender or Issuing Bank an amount equivalent to any applicable
withholding Tax.  Without limiting or expanding the provisions of Section 2.15,
each Lender and Issuing Bank shall indemnify and hold harmless the
Administrative Agent against any and all Taxes (including any related interest,
penalties or additions to tax) and any and all related losses, claims,
liabilities and expenses (including fees, charges and disbursements of any
counsel for the Administrative Agent) incurred by or asserted against the
Administrative Agent by the Internal Revenue Service or any other Governmental
Authority as the result of the failure of the Administrative Agent to properly
withhold Tax from amounts paid to or for the account of such Lender or Issuing
Bank for any reason (including, without limitation, because the applicable form
was not delivered or not properly executed, or because such Lender or Issuing
Bank failed to notify the Administrative Agent of a change in circumstance that
rendered the exemption from, or reduction of withholding Tax ineffective). 
Indemnification payments in respect of any of the foregoing shall be made to the
Administrative Agent within 10 days after demand therefor.  A certificate as to
the amount of such payment or liability delivered to any Lender or Issuing Bank
by the Administrative Agent shall be conclusive absent manifest error.  Each
Lender and Issuing Bank hereby authorizes the Administrative Agent to set off
and apply any and all amounts at any time owning to such Lender or Issuing Bank
under this Agreement or any other Loan Document against any amount due the
Administrative Agent under this Section 9.10.  The agreements in this
Section 9.10 shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a
Lender or Issuing Bank, and the repayment, satisfaction or discharge of any
Loans and all other amounts payable hereunder.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01                         Notices.

 

(a)                                 Generally.  Except in the case of notices
and other communications expressly permitted to be given by telephone (and
except as provided in 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
telecopier or electronic mail as follows:

 

(i)                           if to any Loan Party, to Borrower at:

 

Mattress Firm

5815 Gulf Freeway

Houston, TX 77023

Attention: CFO

Telecopier No.: 713-921-4053

 

with copies to:

J.W. Childs Associates, L.P.

111 Huntington Avenue

Suite 2900

Boston, MA  02199-7610

 

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Attention: David Fiorentino

Telecopier No.: 617-753-1101

email: dfiorentino@jwchilds.com

 

(ii)                        if to the Administrative Agent, the Collateral Agent
or Issuing Bank, to it at:

 

UBS AG, Stamford Branch
677 Washington Boulevard
Stamford, Connecticut  06901
Attention:  David Urban
Telecopier No.:  203-719-4176
E-mail:  DL-UBSAgency@ubs.com

 

(iii)                     if to a Lender, to it at its address (or telecopier
number) set forth in its Administrative Questionnaire; and

 

(iv)                    if to the Swingline Lender, to it at:

 

UBS Loan Finance LLC
677 Washington Boulevard
Stamford, Connecticut  06901
Attention:  David Urban
Telecopier No.:  203-719-4176
E-mail:  DL-UBSAgency@ubs.com

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

 

(b)                                 Electronic Communications.  Notices and
other communications to the Lenders and the Issuing Bank hereunder may (subject
to Section 10.01(d)) be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices to any Lender or the Issuing Bank pursuant to Article II if
such Lender or the Issuing Bank, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication.  The Administrative Agent, the Collateral Agent or Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it
(including as set forth in Section 10.01(d)); provided that approval of such
procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by

 

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the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor.

 

(c)                                  Change of Address, etc.  Any party hereto
may change its address or telecopier number for notices and other communications
hereunder by notice to the other parties hereto.

 

(d)                                 Posting.  Each Loan Party hereby agrees that
it will provide to the Administrative Agent all information, documents and other
materials that it is obligated to furnish to the Administrative Agent pursuant
to this Agreement and any other Loan Document, including all notices, requests,
financial statements, financial and other reports, certificates and other
information materials, but excluding any such communication that (i) relates to
a request for a new, or a conversion of an existing, Borrowing or other
extension of credit (including any election of an interest rate or interest
period relating thereto), (ii) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date therefor,
(iii) provides notice of any Default under this Agreement or (iv) is required to
be delivered to satisfy any condition precedent to the effectiveness of this
Agreement and/or any borrowing or other extension of credit hereunder (all such
non-excluded communications, collectively, the “Communications”), by
transmitting the Communications in an electronic/soft medium in a format
reasonably acceptable to the Administrative Agent at DL-UBSAgency@ubs.com or at
such other e-mail address(es) provided to Borrower from time to time or in such
other form, including hard copy delivery thereof, as the Administrative Agent
shall require.  In addition, each Loan Party agrees to continue to provide the
Communications to the Administrative Agent in the manner specified in this
Agreement or any other Loan Document or in such other form, including hard copy
delivery thereof, as the Administrative Agent shall require.  Nothing in this
Section 10.01 shall prejudice the right of the Agents, any Lender or any Loan
Party to give any notice or other communication pursuant to this Agreement or
any other Loan Document in any other manner specified in this Agreement or any
other Loan Document or as any such Agent shall require.

 

To the extent consented to by the Administrative Agent in writing from time to
time, Administrative Agent agrees that receipt of the Communications by the
Administrative Agent at its e-mail address(es) set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Loan Documents; provided that Borrower shall also deliver to the
Administrative Agent an executed original of each Compliance Certificate
required to be delivered hereunder.

 

Each Loan Party further agrees that Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar electronic transmission system (the
“Platform”).  The Platform is provided “as is” and “as available.”  The Agents
do not warrant the accuracy or completeness of the Communications, or the
adequacy of the Platform and expressly disclaim liability for errors or
omissions in the communications.  No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by any Agent in connection
with the Communications or the Platform.  In no event shall the Administrative
Agent or any of its Related Parties have any liability to the Loan Parties, any
Lender or any other person for damages of any kind, including direct or
indirect, special, incidental or consequential damages, losses or expenses
(whether in tort, contract or otherwise) arising out of any Loan Party’s or the
Administrative Agent’s transmission of communications through the Internet,
except to the extent the liability of such person is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such person’s gross negligence or willful misconduct.

 

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SECTION 10.02                         Waivers; Amendment.

 

(a)                                 Generally.  No failure or delay by any
Agent, the 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 each Agent, the Issuing Bank and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted by this
Section 10.02, 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
any Agent, any Lender or the Issuing Bank may have had notice or knowledge of
such Default at the time.  No notice or demand on Borrower in any case shall
entitle Borrower to any other or further notice or demand in similar or other
circumstances.

 

(b)                                 Required Consents.  Subject to
Section 10.02(c), (d) and (e), neither this Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived, amended,
supplemented or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by Borrower and the Required
Lenders or, in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent, the Collateral
Agent (in the case of any Security Document) and the Loan Party or Loan Parties
that are party thereto, in each case with the written consent of the Required
Lenders; provided that no such agreement shall be effective if the effect
thereof would:

 

(i)                           increase the Commitment of any Lender without the
written consent of such Lender (it being understood that no amendment,
modification, termination, waiver or consent with respect to any condition
precedent, covenant or Default shall constitute an increase in the Commitment of
any Lender);

 

(ii)                        reduce or forgive the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon (other than interest
pursuant to Section 2.06(c)), or reduce any Fees payable hereunder, or change
the form or currency of payment of any Obligation, without the written consent
of each Lender directly affected thereby (it being understood that any amendment
or modification to the financial definitions in this Agreement shall not
constitute a reduction in the rate of interest for purposes of this
clause (ii));

 

(iii)                     (A) change the scheduled final maturity of any Loan,
or any scheduled date of payment of or the installment otherwise due on the
principal amount of any Term Loan under Section 2.09, (B) postpone the date for
payment of any Reimbursement Obligation or any interest or fees payable
hereunder (other than waiver of any increases in the interest rate pursuant to
Section 2.06(c)), (C) change the amount of, waive or excuse any such payment
(other than waiver of any increase in the interest rate pursuant to
Section 2.06(c)), or (D) postpone the scheduled date of expiration of any
Commitment or any Letter of Credit beyond the Revolving Maturity Date, in any
case, without the written consent of each Lender directly affected thereby;

 

(iv)                    increase the maximum duration of Interest Periods
hereunder, without the written consent of each Lender directly affected thereby;

 

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(v)                       permit the assignment by Borrower of any of its rights
or obligations under any Loan Document, without the written consent of each
Lender;

 

(vi)                    release Holdings or all or substantially all of the
Subsidiary Guarantors from their Guarantee (except as expressly provided in
Article VII), or limit their liability in respect of such Guarantee, without the
written consent of each Lender;

 

(vii)                 release all or a substantial portion of the Collateral
from the Liens of the Security Documents or alter the relative priorities of the
Secured Obligations entitled to the Liens of the Security Documents, in each
case without the written consent of each Lender (it being understood that
additional Classes of Loans pursuant to Section 2.19 or consented to by the
Required Lenders may be equally and ratably secured by the Collateral with the
then existing Secured Obligations under the Security Documents);

 

(viii)              change Section 2.14(b), (c) or (d) in a manner that would
alter the pro rata sharing of payments or setoffs required thereby or any other
provision in a manner that would alter the pro rata allocation among the Lenders
of Loan disbursements, including the requirements of Sections 2.02(a),
2.17(d) and 2.18(d), without the written consent of each Lender directly
affected thereby;

 

(ix)                    change any provision of this Section 10.02(b) or
Section 10.02(c) or (d), without the written consent of each Lender directly
affected thereby (except for additional restrictions on amendments or waivers
for the benefit of Lenders of additional Classes of Loans pursuant to
Section 2.19 or consented to by the Required Lenders);

 

(x)                       change the percentage set forth in the definition of
“Required Lenders,” “Required Class Lenders,” “Required Revolving Lenders” or
any other provision of any Loan Document (including this Section) specifying the
number or percentage of Lenders (or Lenders of any Class) required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender (or each Lender
of such Class, as the case may be), other than to increase such percentage or
number or to give any additional Lender or group of Lenders such right to waive,
amend or modify or make any such determination or grant any such consent;

 

(xi)                    change the application of prepayments as among or
between Classes under Section 2.10(h), without the written consent of the
Required Class Lenders of each Class that is being allocated a lesser prepayment
as a result thereof (it being understood that the Required Lenders may waive, in
whole or in part, any prepayment so long as the application, as between Classes,
of any portion of such prepayment that is still required to be made is not
changed and, if additional Classes of Term Loans under this Agreement pursuant
to Section 2.19 or consented to by the Required Lenders are made, such new Term
Loans may be included on a pro rata basis in the various prepayments required
pursuant to Section 2.10(h));

 

(xii)                 change or waive any provision of Article X as the same
applies to any Agent, or any other provision hereof as the same applies to the
rights or obligations of any Agent, in each case without the written consent of
such Agent;

 

(xiii)              change or waive any obligation of the Lenders relating to
the issuance of or purchase of participations in Letters of Credit, without the
written consent of the Administrative Agent and the Issuing Bank;

 

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(xiv)             change or waive any provision hereof relating to Swingline
Loans (including the definition of “Swingline Commitment”), without the written
consent of the Swingline Lender; or

 

(xv)                expressly change or waive any condition precedent in
Section 4.02 to any Revolving Borrowing without the written consent of the
Required Revolving Lenders.

 

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except to the extent the consent of such Lender would be required under clause
(i), (ii) or (iii) in the proviso to the first sentence of this
Section 10.02(b).

 

(c)                                  Collateral.  Without the consent of any
other person, the applicable Loan Party or Parties and the Administrative Agent
and/or Collateral Agent may (in its or their respective sole discretion, or
shall, to the extent required by any Loan Document) enter into any amendment 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 the benefit of the Secured
Parties, in any property or so that the security interests therein comply with
applicable Requirements of Law.

 

(d)                                 Dissenting Lenders.  If, in connection with
any proposed change, waiver, discharge or termination of the provisions of this
Agreement as contemplated by Section 10.02(b), the consent of the Required
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then Borrower shall have the right to
replace all, but not less than all, of such non-consenting Lender or Lenders (so
long as all non-consenting Lenders are so replaced) with one or more persons
pursuant to Section 2.16 so long as at the time of such replacement each such
new Lender consents to the proposed change, waiver, discharge or termination. 
Each Lender agrees that, if Borrower elects to replace such Lender in accordance
with this Section, it shall promptly execute and deliver to the Administrative
Agent an Assignment and Assumption to evidence such sale and purchase and shall
deliver to the Administrative Agent any Note (if Notes have been issued in
respect of such Lender’s Loans) subject to such Assignment and Assumption;
provided that the failure of any such non-consenting Lender to execute an
Assignment and Assumption shall not render such sale and purchase (and the
corresponding assignment) invalid and such assignment shall be recorded in the
Register.

 

(e)                                  Refinanced Term Loans.  In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, Holdings, Borrower and the Lenders
providing the relevant Replacement Term Loans (as defined below) to permit the
refinancing of all outstanding Term Loans (“Refinanced Term Loans”) with a
replacement term loans hereunder which shall constitute Term Loans hereunder
(“Replacement Term Loans”); provided that (a) the aggregate principal amount of
Replacement Term Loans shall not exceed the aggregate principal amount of
Refinanced Term Loans, (b) the Applicable Margin for Replacement Term Loans
shall not be higher than the Applicable Margin for Refinanced Term Loans,
(c) the weighted average life to maturity of Replacement Term Loans shall not be
shorter than the weighted average life to maturity of Refinanced Term Loans at
the time of such refinancing (excluding the effect of nominal amortization in
the determination thereof) and (d) all other terms applicable to Replacement
Term Loans shall be substantially identical to, or less favorable to the Lenders
providing Replacement Term Loans than, those applicable to Refinanced Term
Loans, except to the extent necessary to provide for covenants and other terms
applicable to any period after the Final Maturity Date in effect immediately
prior to such refinancing.

 

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SECTION 10.03                         Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.  Borrower shall pay from
time to time upon demand on and after the Restatement Effective Date (i) all
reasonable out-of-pocket expenses incurred by the Agents (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and/or the Collateral Agent) in connection with the syndication of the
credit facilities provided for herein (including the obtaining and maintaining
of CUSIP numbers for the Loans), the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendment, amendment and restatement, modification or waiver of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), including in connection with
post-closing searches to confirm that security filings and recordations have
been properly made, (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, (iii) all
out-of-pocket expenses incurred by any Agent, any Lender or the Issuing Bank
(including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank,
which shall be limited to one primary counsel, any local counsel and any other
counsel deemed necessary by the Administrative Agent in the event of a conflict
of interest under applicable rules of legal ethics), in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section 10.03, or
(B) in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit and
(iv) all documentary and similar taxes and charges in respect of the Loan
Documents.

 

(b)                                 Indemnification by Borrower.  Borrower shall
indemnify each Agent, each Lender and the Issuing Bank, and each Related Party
of any of the foregoing persons (each such person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the reasonable
out-of-pocket fees, charges and disbursements of any counsel for any Indemnitee)
incurred by any Indemnitee or asserted against any Indemnitee by any third party
or by Borrower or any other Loan Party arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement, any other Loan
Document, or any amendment, amendment and restatement, modification or waiver of
the provisions hereof or thereof, or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the 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) any actual or alleged presence or Release or
threatened Release of Hazardous Materials on, at, under or from any property
owned, leased or operated by any Company at any time, or any Environmental Claim
related in any way to any Company, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by Borrower or any other Loan Party against an Indemnitee for breach in
bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if Borrower or such Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction. For the avoidance of doubt, this Section 10.03(b) shall not apply
to Taxes other than Taxes that represent losses, claims, damages, etc. with
respect to a non-Tax claim.

 

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(c)                                  Reimbursement by Lenders.  To the extent
that Borrower for any reason fails to pay any amount required under
paragraph (a) or (b) of this Section 10.03 to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Collateral Agent, the
Issuing Bank, the Swingline Lender or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the Collateral Agent (or any sub-agent thereof), the Issuing Bank,
the Swingline Lender or such Related Party, 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 (or any such sub-agent), the Collateral Agent (or any
sub-agent thereof), the Swingline Lender or the Issuing Bank in its capacity as
such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent), the Collateral Agent (or any
sub-agent thereof), the Swingline Lender or Issuing Bank in connection with such
capacity.  The obligations of the Lenders under this paragraph (c) are subject
to the provisions of Section 2.14.  For purposes hereof, a Lender’s “pro rata
share” shall be determined based upon its share of the sum of the total
Revolving Exposure, outstanding Term Loans and unused Commitments at the time.

 

(d)                                 Waiver of Consequential Damages, etc.  To
the fullest extent permitted by applicable Requirements of Law, no Loan Party
shall assert, and each Loan Party hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof.  No Indemnitee referred to in paragraph (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.

 

(e)                                  Payments.  All amounts due under this
Section shall be payable not later than 5 Business Days after demand therefor.

 

SECTION 10.04                         Successors and Assigns.

 

(a)                                 Successors and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent, the Collateral Agent, the Issuing Lender, the Swingline Lender and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of paragraph (b) of this Section 10.04, (ii) by way of participation
in accordance with the provisions of paragraph (d) of this Section 10.04 or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by Borrower or any Lender shall be null and void). 
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in
paragraph (d) of this Section and, to the extent expressly contemplated hereby,
the other Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at
any time assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that

 

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(i)                  except in the case of any assignment made in connection
with the primary syndication of the Commitment and Loans by the Arrangers or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $5.0 million, in the case of any assignment in
respect of Revolving Loans and/or Revolving Commitments, or $1.0 million, in the
case of any assignment in respect of Term Loans, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, Borrower otherwise consents in writing (each such consent not to be
unreasonably withheld or delayed);

 

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

 

(iii)            each of the Administrative Agent and Borrower consents to such
assignment, which consents shall not be unreasonably withheld or delayed;
provided that (x) no consents shall be required for an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund with respect to a Lender and (y) no
consent of Borrower shall be required during an Event of Default under
Section 8.01(a), (b), (g) or (h).

 

(iv)           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 the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 10.04, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.15 and 10.03 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 paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this
Section 10.04.

 

(c)                                  Register.  The Administrative Agent, acting
solely for this purpose as an agent of Borrower, shall maintain at one of its
offices in Stamford, Connecticut 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 Commitments of, and principal amounts (and related interest
amounts) of the Loans and LC Disbursements owing to, each Lender or Issuing
Bank, as the case may be, pursuant to the terms hereof from time to time (the
“Register”).  The entries in the Register shall be conclusive, and Borrower, the
Admin-

 

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istrative 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 or
Issuing Bank, as the case may be, hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by Borrower, the Issuing Bank, the Collateral Agent, the Swingline
Lender and any Lender (with respect to its own interest only), at any reasonable
time and from time to time upon reasonable prior notice.  Notwithstanding
anything to the contrary contained in this Agreement, the Loans and LC
Disbursements are intended to be treated as registered obligations for U.S.
federal income tax purposes and this Section 10.04 shall be construed so that
the they are at all times maintained in “registered form” within the meaning of
Sections 163(f), 871(h)(2) and 881(c)(2) of the Code, Treasury Regulation
Section 5f.103-1(c) and any other related regulations (or any successor
provisions of the Code or such regulations).

 

(d)                                 Participations.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clause (i), (ii) or (iii) of the first
proviso to Section 10.02(b) that affects such Participant.  Any Lender may at
any time, without the consent of, or notice to, Borrower, the Administrative
Agent or the Issuing Bank sell participations to any person (other than a
natural person or Borrower or any of Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Borrower, the Administrative Agent and the Lenders and Issuing Bank
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.

 

(e)                                  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clause (i), (ii) or (iii) of the first
proviso to Section 10.02(b) that affects such Participant.  Subject to
paragraph (f) of this Section, Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.12, 2.13 and 2.15 (subject to the
limitations and requirements of those Sections applying to each Participant as
if it were a Lender) 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 10.08 as though it were a Lender, provided such Participant agrees to
be subject to Section 2.14 as though it were a Lender.  Each Lender that sells a
Participation shall, acting solely for this purpose as a non-fiduciary agent of
Borrower, maintain a register on which it enters the name and address of each
Participant and the principal amount (and related interest amounts) of each
Participant’s interest in the Loans held by it (the “Participant Register”). 
The entries in the Participant Register shall be conclusive, absent manifest
error, and the parties shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary.  No Lender shall be
required to disclose a Participant Register or any information therein
(including the identity of any Participant or the terms of any participation) to
any Person except (i) that the portion of the Participant Register relating to a
Participant for whom benefits are being claimed under Sections 2.12, 2.13, 2.15
or 10.08 shall be made available to the Borrower and Administrative Agent or
(ii) to the extent such disclosure is required, in connection with a Tax audit
or other proceeding, to establish that any Loans are in registered form for U.S.
federal income tax purposes.  Notwithstanding anything to the contrary contained
in this Agreement, the Loans and LC Disbursements are intended to be

 

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treated as registered obligations for U.S. federal income tax purposes and this
Section 10.04 shall be construed so that the they are at all times maintained in
“registered form” within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Code, Treasury Regulation Section 5f.103-1(c) and any other
related regulations (or any successor provisions of the Code or such
regulations).

 

(f)                                   Limitations on Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Sections
2.12, 2.13 and 2.15 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant except to the
extent that the entitlement to any greater payment results from any change in
Requirements of Law after the participant becomes a Participant, unless the sale
of the participation to such Participant is made with Borrower’s prior written
consent.

 

(g)                                  Certain Pledges.  Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank or other central
bank having jurisdiction over such Lender; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.  In
the case of any Lender that is a fund that invests in bank loans, such Lender
may, without the consent of Borrower or the Administrative Agent, collaterally
assign or pledge all or any portion of its rights under this Agreement,
including the Loans and Notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund, as security for such obligations or securities; provided that, with
respect to Revolving Loans, the documentation governing or evidencing such
collateral assignment or pledge shall provide that any foreclosure or similar
action by such trustee or representative shall be subject to the provisions of
this Section 10.04 concerning assignments and shall not be effective to transfer
any rights under this Agreement or in any Revolving Loan under this Agreement
unless the requirements of this Section 10.04 concerning assignments are fully
satisfied.

 

(h)                                 Electronic Execution of Assignments.  The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable Requirement of Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

 

SECTION 10.05                         Survival of Agreement.  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
Agents, the 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 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 2.12, 2.14, 2.15 and Article X shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the payment of the
Reimbursement Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agree-

 

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ment or any provision hereof; provided that, with respect to Section 10.12, the
survival thereof shall expire upon the one year anniversary of the termination
of this Agreement.

 

SECTION 10.06                         Counterparts; Integration; Effectiveness. 
This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract.  This Agreement
and 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.  Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto. 
Delivery of an executed counterpart of a signature page of this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

SECTION 10.07                         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 10.08                         Right of Setoff.  If an Event of Default
shall have occurred and be continuing, each Lender, the Issuing Bank, and each
of their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable Requirements of Law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the Issuing
Bank or any such Affiliate to or for the credit or the account of Borrower or
any other Loan Party against any and all of the obligations of Borrower or such
Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the Issuing Bank, irrespective of whether or not such
Lender or the Issuing Bank shall have made any demand under this Agreement or
any other Loan Document and although such obligations of Borrower or such Loan
Party may be contingent or unmatured or are owed to a branch or office of such
Lender or the Issuing Bank different from the branch or office holding such
deposit or obligated on such indebtedness.  The rights of each Lender, the
Issuing Bank and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such
Lender, the Issuing Bank or their respective Affiliates may have.  Each Lender
and the Issuing Bank agrees to notify Borrower and the Administrative Agent
promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application.

 

SECTION 10.09                         Governing Law; Jurisdiction; Consent to
Service of Process.

 

(a)                                 Governing Law.  This Agreement shall be
construed in accordance with and governed by the law of the State of New York,
without regard to conflicts of law principles that would require the application
of the laws of another jurisdiction.

 

(b)                                 Submission to Jurisdiction.  Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive 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 any Loan Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any

 

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such action or proceeding may be heard and determined in such New York State
court or, to the fullest extent permitted by applicable law, in such Federal
court.  Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against any Loan Party or its properties in the courts of any
jurisdiction.

 

(c)                                  Waiver of Venue.  Each Loan Party hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Requirements of Law, 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 Section 10.09(b).  Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by applicable Requirements of Law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

(d)                                 Service of Process.  Each party hereto
irrevocably consents to service of process in any action or proceeding arising
out of or relating to any Loan Document, in the manner provided for notices
(other than telecopier or electronic mail) in Section 10.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party hereto
to serve process in any other manner permitted by applicable Requirements of
Law.

 

SECTION 10.10                         Waiver of Jury Trial.  Each party hereto
hereby waives, to the fullest extent permitted by applicable Requirements of
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 (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 10.11                         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 10.12                         Treatment of Certain Information;
Confidentiality.  Each of the Agents, the Lenders and the Issuing Bank 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’ respective partners, directors, officers, employees, agents,
advisors, trustees and other representatives (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any Governmental Authority or
regulatory authority (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by
applicable Requirements of Law or by any subpoena or similar legal process
(provided, unless prohibited by applicable law in the opinion of its counsel or
court order, such Agent, Lender or Issuing Bank, as applicable, shall make
reasonable efforts to notify Borrower of any such requirement or subpoena),
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to this Section 10.12 or a written
agreement containing provisions substantially the same as those of this
Section 10.12 or a written confirmation of the same, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (ii) any actual or prospective
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any swap or derivative transaction relating to Borrower and its obligations or
(iii) any rating agency for the purpose of obtaining a credit rating applicable
to any Lender or (g) with the written consent of Borrower.  For purposes of this
Section, “Information” means all information concerning Holdings or any of its
Subsidiaries or any of its direct or indirect shareholders, or any of their
respective employees, directors or Affiliates (including, without limitation,
the Permitted Holders) received by any Agent, the Issuing Bank or any Lender on
a confidential basis from Borrower or any other person under or pursuant to this
Agreement or any other Loan Document, including, without limitation, financial
terms and financial and organizational information contained in any documents,
statements, certificates, materials or information furnished, or to be
furnished, by or on behalf of Borrower or any other person on a confidential
basis in connection with this Agreement and the Loan Documents, but does not
include any such information that (i) is publicly available at the time of
disclosure or becomes publicly available other than as a result of a breach of
this Section 10.12 or (ii) was acquired or becomes available to any Agent, the
Issuing Bank or any Lender on a nonconfidential basis from a source other than
Borrower or any of its direct or indirect shareholders, or any of their
respective employees, directors, Subsidiaries or Affiliates (including, without
limitation, the Permitted Holders) or any of their respective agents or
representatives.  Any person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such person has exercised the same degree of
care to maintain the confidentiality of such Information as such person would
accord to its own confidential information.

 

SECTION 10.13                         USA PATRIOT Act Notice.  Each Lender that
is subject to the Act (as hereinafter defined) and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Loan Parties that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Patriot Act”), it is required to
obtain, verify and record information that identifies any Loan Party, which
information includes the name, address and tax identification number of such
Loan Party and other information regarding such Loan Party that will allow such
Lender or the Administrative Agent, as applicable, to identify such Loan Party
in accordance with the Patriot Act.  This notice is given in accordance with the
requirements of the Patriot Act and is effective as to the Lenders and the
Administrative Agent.

 

SECTION 10.14                         Interest Rate Limitation.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable Requirements of 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 Requirements of 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 10.15                         [Intentionally Omitted].

 

SECTION 10.16                         Obligations Absolute.  To the fullest
extent permitted by applicable Requirements of Law, all obligations of the Loan
Parties hereunder shall be absolute and unconditional irrespective of:

 

(a)                                 any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any Loan
Party;

 

123

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(b)                                 any lack of validity or enforceability of
any Loan Document or any other agreement or instrument relating thereto against
any Loan Party;

 

(c)                                  any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any Loan Document or
any other agreement or instrument relating thereto;

 

(d)                                 any exchange, release or non-perfection of
any other Collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Obligations;

 

(e)                                  any exercise or non-exercise, or any waiver
of any right, remedy, power or privilege under or in respect hereof or any Loan
Document; or

 

(f)                                   any other circumstances which might
otherwise constitute a defense available to, or a discharge of, the Loan
Parties.

 

124

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Annex I-A

 

Amortization Table for Term B-1 Loans

 

Date

 

Term B-1 Loan
Amount

 

January 31, 2013

 

$

70,146.31

 

April 30, 2013

 

$

70,146.31

 

July 31, 2013

 

$

70,146.31

 

October 31, 2013

 

$

70,146.31

 

Term B-1 Loan Maturity Date

 

$

26,394,339.28

 

 

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

 

Annex I-B

Amortization Table for Term B-2 Loans

 

Date

 

Term B-2 Loan
Amount

 

January 31, 2013

 

$

526,470.82

 

April 30, 2013

 

$

526,470.82

 

July 31, 2013

 

$

526,470.82

 

October 31, 2013

 

$

526,470.82

 

January 31, 2014

 

$

526,470.82

 

April 30, 2014

 

$

526,470.82

 

October 31, 2014

 

$

526,470.82

 

January 31, 2015

 

$

526,470.82

 

April 30, 2015

 

$

526,470.82

 

October 31, 2015

 

$

526,470.82

 

January 31, 2016

 

$

526,470.82

 

April 30, 2016

 

$

526,470.82

 

October 31, 2016

 

$

526,470.82

 

Term B-2 Loan Maturity Date

 

$

193,359,845.79

 

 

2

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SCHEDULE 1

 

REVOLVING COMMITMENTS

 

Lender

 

Revolving
Commitment

 

Amegy Bank, National Association

 

$

20,000,000

 

Bank of America, N.A.

 

$

20,000,000

 

Barclays Bank PLC

 

$

10,000,000

 

Cadence Bank, N.A.

 

$

10,000,000

 

The Huntington National Bank

 

$

10,000,000

 

KeyBank National Association

 

$

10,000,000

 

SunTrust Bank

 

$

10,000,000

 

UBS Loan Finance LLC

 

$

10,000,000

 

 

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

 

ANNEX C

 

ADDITIONAL REVOLVING COMMITMENT LENDER ADDENDUM

 

5

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

 

ADDITIONAL REVOLVING COMMITMENT LENDER ADDENDUM

 

October [  ], 2012

 

Reference is made to that certain Restatement Amendment (the “Amendment”) dated
as of October [      ], 2012, among MATTRESS HOLDING CORP., a Delaware
corporation., as borrower (the “Borrower”), MATTRESS HOLDCO, INC., a Delaware
corporation (“Holdings”), the Subsidiary Guarantors, and UBS AG, Stamford
Branch, as Administrative Agent.  Capitalized terms not otherwise defined in
this Additional Revolving Commitment Lender Addendum have the same meanings as
specified in the Amendment.  This document is an “Additional Revolving
Commitment Lender Addendum” referenced to in the Amendment.

 

Upon execution and delivery of this Additional Revolving Commitment Lender
Addendum by the parties hereto, the undersigned Revolving Lender (i) if an
Existing Revolving Lender, hereby increases its Revolving Commitment under the
Credit Agreement in an amount equal to the amount set forth in Schedule 1 hereto
(the “Increased Revolving Commitment”) and (ii) if an Additional Revolving
Lender, hereby becomes a Revolving Lender under the Credit Agreement having the
Revolving Commitment set forth in Schedule 1 hereto (the “New Revolving
Commitment”), in each case effective as of the Restatement Effective Date.  On
the Restatement Effective Date, the undersigned Revolving Lender will be paid by
the Borrower an upfront fee in cash of 0.50% of the amount of the Increased
Revolving Commitment or the New Revolving Commitment, as applicable, such
payment to be made by the Borrower to the Administrative Agent, on behalf of and
for the benefit of such Revolvng Lender.

 

THIS ADDITIONAL REVOLVING COMMITMENT LENDER ADDENDUM SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

 

This Additional Revolving Commitment Lender Addendum may be executed by one or
more of the parties hereto on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.  Delivery of an executed signature page hereof by facsimile
transmission (or other electronic means) shall be effective as delivery of a
manually executed counterpart hereof.

 

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Additional Revolving
Commitment Lender Addendum to be duly executed and delivered by their proper and
duly authorized officers as of the date first written above.

 

 

 

 

,

 

as a Revolving Lender

 

[Please type legal name of Revolving Lender above]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

[If second signature is necessary:]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

Accepted and agreed:

 

 

 

MATTRESS HOLDING CORP.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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

 

UBS AG, STAMFORD BRANCH, as

 

Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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

 

Schedule 1

 

COMMITMENTS AND NOTICE ADDRESS

 

1.

Name of Lender:

 

 

 

Notice Address:

 

 

 

 

 

 

 

 

 

 

 

Attention:

 

 

 

Telephone:

 

 

 

Facsimile:

 

 

 

 

 

 

2.

Revolving

 

 

 

Commitment:

 

 

 

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