Exhibit 10.3

THIS SUPPORT AGREEMENT IS NOT AN OFFER, OR A SOLICITATION FOR AN OFFER, WITH
RESPECT TO ANY SECURITIES NOR IS IT A SOLICITATION OF ACCEPTANCES OF A CHAPTER
11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH
OFFER OR SOLICITATION WOULD COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR
PROVISIONS OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS SUPPORT AGREEMENT
SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE OCCURRENCE OF THE RSA
EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED BINDING ON THE PARTIES
HERETO.

THIS SUPPORT AGREEMENT DOES NOT PURPORT TO SUMMARIZE ALL OF THE TERMS,
CONDITIONS, REPRESENTATIONS, WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO
THE TRANSACTIONS DESCRIBED HEREIN, WHICH TRANSACTIONS WOULD BE SUBJECT TO THE
COMPLETION OF DEFINITIVE DOCUMENTATION INCORPORATING THE TERMS SET FORTH HEREIN
(OR AS OTHERWISE AGREED BY THE PARTIES). THE CLOSING OF ANY TRANSACTION SHALL BE
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE DOCUMENTATION
AND THE APPROVAL RIGHTS OF THE PARTIES SET FORTH HEREIN AND IN SUCH DEFINITIVE
DOCUMENTATION.

 

 

AFFINION GROUP HOLDINGS, INC., ET AL.

AMENDED AND RESTATED SUPPORT AGREEMENT

March 4, 2019

 

 

This Amended and Restated Support Agreement (together with the exhibits and
schedules attached hereto, which include, without limitation, the Term Sheet (as
defined below), as each may be amended, restated, supplemented, or otherwise
modified from time to time in accordance with the terms hereof, this
“Agreement”), dated as of March 4, 2019, is entered into by and among:
(i) Affinion Group Holdings, Inc. (“Affinion Holdings”) and certain of its
subsidiaries that are signatories hereto (each an “Affinion Party” and
collectively, the “Affinion Parties”); (ii) the lenders (the “Lenders”) under
that certain credit agreement, dated as of May 10, 2017 (as amended, restated,
modified, supplemented or replaced from time to time, the “Credit Agreement”),
by and among Affinion Group, Inc. (“Affinion”), as borrower, Affinion Holdings,
as a guarantor, the lenders party thereto and HPS Investment Partners, LLC, as
administrative agent and collateral agent (the “Administrative Agent”), that are
signatories hereto (collectively, with any Lender that may become a party hereto
in accordance with Sections 13 and 34 of this Agreement, the “Consenting
Lenders”); and (iii) the holders (the “Noteholders”) of Affinion’s Senior Cash
12.5% / PIK Step-Up to 15.5% Notes due 2022 (the “Existing Notes”) issued
pursuant to that certain indenture, dated as of May 10, 2017 (as amended,
restated, modified, supplemented or replaced from time to time, the “Existing
Notes Indenture”), by and among Affinion, as issuer, the guarantors party
thereto and Wilmington Trust, National Association, as trustee (the “Trustee”),

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that are signatories hereto (collectively, with any Noteholder that may become a
party hereto in accordance with Sections 13 and 34 of this Agreement, the
“Consenting Noteholders” and, together with the Consenting Lenders and the
Second Lien Lenders (as defined below), the “Consenting Stakeholders”). This
Agreement collectively refers to the Affinion Parties and the Consenting
Stakeholders as the “Parties” and each individually as a “Party”. Unless
otherwise noted, capitalized terms used but not defined herein have the meanings
ascribed to them at a later point in this Agreement or in the Term Sheet (as
defined herein).

RECITALS

WHEREAS, the Parties entered into that certain Support Agreement, effective as
of March 1, 2019 (the “Original Support Agreement”);

WHEREAS, pursuant to Section 28 of the Original Support Agreement, the Original
Support Agreement may be modified, amended, amended and restated, or
supplemented with the express prior written consent of the Affinion Parties and
the Required Consenting Stakeholders;

WHEREAS, the Affinion Parties and the undersigned Consenting Stakeholders
constituting the Required Consenting Stakeholders desire to amend and restate
the Original Support Agreement as set forth herein;

WHEREAS, as of the date of the Original Support Agreement, the Lenders hold
claims against the Affinion Parties arising on account of the Credit Agreement
(each, a “Lender Claim”) in an aggregate principal amount of approximately
$942 million (together, the “Lender Claims”);

WHEREAS, the Noteholders hold claims against the Affinion Parties arising on
account of the Existing Notes Indenture (each, a “Note Claim”) in an aggregate
principal amount of approximately $682 million (together, the “Note Claims”);

WHEREAS, certain of the Consenting Lenders and the Consenting Noteholders also
hold common stock (“Company Common Stock”), par value $0.001 per share, of
Affinion Holdings or warrants to purchase Company Common Stock (the “Existing
Warrants”) of the type and in the amount set forth on their respective signature
pages hereto;

WHEREAS, the Affinion Parties are seeking to restructure the Lender Claims, the
Note Claims, the Second Lien Claims (as defined below) and certain of their
other obligations and to recapitalize in accordance with the terms provided in
the restructuring term sheet attached hereto as Exhibit A (together with the
exhibits and schedules attached thereto, as each may be amended, restated,
supplemented, or otherwise modified from time to time in accordance with the
terms thereof, the “Term Sheet”) and incorporated herein pursuant to Section 3
of this Agreement pursuant to an out-of-court exchange offer, recapitalization
and private placement offering (the “Recapitalization”);

WHEREAS, if the Affinion Parties do not consummate a Recapitalization, as
described in the Term Sheet and this Agreement or otherwise, then the Affinion
Parties will seek to restructure the Lender Claims, the Note Claims, the Company
Common Stock, the Class C/D Common Stock, the Existing Warrants, the Second Lien
Claims and certain of their other obligations, to cancel the existing equity
interests of Affinion Holdings and to recapitalize in accordance with the Term

 

2

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Sheet through jointly-administered voluntary cases commenced by certain of the
Affinion Parties (the “Chapter 11 Cases”) under chapter 11 of title 11 of the
United States Code, 11 U.S.C. §§ 101–1532 (as amended, the “Bankruptcy Code”),
in the United States Bankruptcy Court for the District of Delaware (together
with any court with jurisdiction over the Chapter 11 Cases, the “Bankruptcy
Court”) pursuant to a pre-packaged plan of reorganization (as may be amended,
restated, supplemented, or otherwise modified from time to time in accordance
with this Agreement, the “Plan”) (the “In-Court Restructuring” and, together
with the Recapitalization, the “Transactions” and each of the Recapitalization
and the In-Court Restructuring, a “Transaction”);

WHEREAS, with respect to any Transaction, certain of the Consenting Stakeholders
(i) have agreed to provide a backstop for a private placement offering, as
described more fully in the Term Sheet, by executing and delivering an investor
purchase agreement (as amended on the date hereof, the “Investor Purchase
Agreement”) in the form attached hereto as Exhibit B simultaneous with their
execution and delivery of this Agreement and (ii) have consented to amend the
existing Warrant Agreement, dated as of May 10, 2017, by and among Affinion
Holdings and American Stock Transfer & Trust Company LLC, as warrant agent (the
“Existing Warrant Agreement”) to force a mandatory exercise of all Existing
Warrants into shares of Company Common Stock immediately prior to the Merger (as
defined below) (the “Warrant Agreement Amendment”) in the form attached hereto
as Exhibit C;

WHEREAS, in connection with a Recapitalization, AGHI Merger Sub, Inc., a
Delaware corporation and newly formed wholly owned subsidiary of Affinion
Holdings, will merge with and into Affinion Holdings, with Affinion Holdings as
the surviving entity (the “Merger”), pursuant to an Agreement and Plan of Merger
in the form attached hereto as Exhibit D (the “Merger Agreement”), and pursuant
to which (i) the Class C/D Common Stock, will be cancelled and the holders
thereof shall receive $0.01 per share of Class C/D Common Stock as merger
consideration, (ii) the Company Common Stock (including the Company Common Stock
issued as a result of the Warrant Agreement Amendment) will be cancelled and the
holders thereof will receive Investor Warrants of the surviving entity and
(iii) the Class M Common Stock, issued in the Exchange Offer, will be cancelled
and the holders thereof will receive shares of New Common Stock of the surviving
entity;

WHEREAS, in connection with a Recapitalization, pursuant to the Second Lien
Commitment Letter (as defined below), the Second Lien Lenders have agreed to
provide second lien financing as further described in Section 2(f) of this
Agreement and, in the event of the Second Lien Credit Facility Funding (as
defined below), the Second Lien Lenders will hold certain claims against the
Affinion Parties arising on account of such financing (the “Second Lien
Claims”);

WHEREAS, with respect to an In-Court Restructuring, certain of the Consenting
Stakeholders have agreed to provide a DIP Facility, by executing and delivering
a commitment (the “DIP Commitment” and the Consenting Stakeholders party to the
DIP Commitment, the “Backstop Parties”), attached hereto as Exhibit E;

WHEREAS, each of the Parties has reviewed, or has had the opportunity to review,
the Term Sheet and this Agreement with the assistance of legal and financial
advisors of its own choosing; and

 

3

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WHEREAS, each Consenting Stakeholder has indicated its consent to the
Transactions, whether implemented pursuant to a Recapitalization or pursuant to
an In-Court Restructuring, and the Affinion Parties desire to obtain the
commitment of the Consenting Stakeholders to support and vote to accept the
Transactions, in each case subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises, mutual covenants, and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the Parties,
intending to be legally bound, hereby agrees as follows:

AGREEMENT

1. RSA Effective Date. The Original Support Agreement became effective on
March 1, 2019 (such date, the “RSA Effective Date”).

2. Form of Transactions.

 

  (a)

If, on or prior to the Launch Date, the Stockholder Necessary Approvals shall
not have been obtained, then the Parties shall effectuate the Transaction
through the In-Court Restructuring on terms and conditions consistent in all
material respects with the Term Sheet.

 

  (b)

If, on or prior to the Launch Date, the Stockholder Necessary Approvals shall
have been obtained, then:

 

  (i)

if each of (1) Consenting Noteholders holding, in the aggregate, at least 94.5%
of the principal amount outstanding of all Note Claims have executed and
delivered this Agreement, and (2) Consenting Lenders holding, in the aggregate,
at least [75]% of the principal amount outstanding of all Lender Claims have
executed and delivered this Agreement, then the Company shall commence an
out-of-court exchange offer and consent solicitation on the terms set forth in
the Term Sheet (the “Exchange Offer”) without simultaneously soliciting votes on
the Plan; provided, however, that if by the tenth (10th) Business Day following
Launch Date the following conditions (together, the “Offering Amendment
Conditions”) have not been met or waived, then the Affinion Parties shall amend
the Offering Memorandum and Disclosure Statement to commence simultaneously
soliciting votes on the Plan to implement the In-Court Restructuring:
(x) Noteholders holding, in the aggregate, at least 98% of the principal amount
outstanding of all Note Claims have validly tendered their Existing Notes
pursuant to the Exchange Offer; and (y) Lenders holding, in the aggregate, at
least 95.5% of the principal amount outstanding of all Lender Claims have agreed
to amend the Credit Agreement; or

 

4

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  (ii)

if either (1) Consenting Noteholders holding, in the aggregate, at least 94.5%
of the principal amount outstanding of all Note Claims have not executed and
delivered this Agreement, or (2) Consenting Lenders holding, in the aggregate,
at least [75]% of the principal amount outstanding of all Lender Claims have not
executed and delivered this Agreement, then the Company shall simultaneously
commence the Exchange Offer and solicit votes on the Plan.

 

  (c)

If, on or before April 6, 2019 (as such date may be extended in writing from
time to time by the Affinion Parties, with the consent of the Required Lenders
(as defined in the Credit Agreement), the “Outer Date”), (i) Noteholders
holding, in the aggregate, at least 98% of the principal amount outstanding of
all Note Claims shall have validly tendered their Existing Notes pursuant to the
Exchange Offer and not withdrawn prior to the expiration date of the Exchange
Offer; (ii) Lenders holding, in the aggregate, at least 95.5% of the principal
amount outstanding of all Lender Claims agree to amend the Credit Agreement as
set forth in the Term Sheet (as so amended, the “Amended Senior Credit
Agreement”); and (iii) (A) holders of Company Common Stock tender votes that
constitute a Stockholder Supermajority Vote (as defined in the Shareholders
Agreement, dated as of November 9, 2015, among Affinion Holdings and the
investors party thereto (as amended from time to time, the “Shareholders
Agreement”)) have granted the necessary approvals required pursuant to
Section 2.2(a)(ii) and (iv) of the Shareholders Agreement for Affinion Holdings
to consummate the Merger and for Affinion Holdings to enter into transactions
with certain holders, or their affiliates, of 5% or more of the issued and
outstanding Company Common Stock (the “Stockholder Necessary Approvals”) and
(B) Affinion Holdings has filed with the Securities and Exchange Commission (the
“SEC”) a definitive Information Statement on Schedule 14C disclosing the receipt
of the required Stockholder Supermajority Vote to approve the Stockholder
Necessary Approvals (the “Schedule 14C”) (the foregoing conditions under clause
(i), (ii) and (iii), the “Consent Requirements”), then the Parties shall,
subject to the satisfaction or waiver of the conditions precedent contained in
the Definitive Documentation (as defined in Section 4 below), effectuate the
Transactions through the Recapitalization on terms and conditions consistent in
all material respects with the Term Sheet and through, among other things, the
execution and delivery of the Definitive Documentation.

 

  (d)

If the Recapitalization is consummated, at the sole discretion of the
Administrative Agent under the Credit Agreement, funds equal to not more than
$20 million otherwise distributable to the Consenting Lenders may be used to
satisfy outstanding Lender Claims held by those Lenders that are not Consenting
Lenders (the “Non-Consenting Lenders”).

 

5

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  (e)

If (A) the Consent Requirements are not satisfied by the Outer Date or (B) the
Consent Requirements are satisfied by the Outer Date but the conditions
precedent contained in the Definitive Documentation to effectuate the
Recapitalization have not been satisfied or waived by five (5) Business Days
after the Outer Date, then the Parties shall, as soon as practicable and no
later than the date set forth in Schedule 1(d), but subject to the satisfaction
or waiver of the conditions precedent contained in the Definitive Documentation,
effectuate the Transaction through the In-Court Restructuring on terms and
conditions consistent in all material respects with the Term Sheet and through,
among other things, the execution and delivery of the Definitive Documentation.

 

  (f)

Until such time as the Chapter 11 Cases have been commenced, but no later than
the Outer Date (as defined in this Agreement) to the extent requested by
Affinion Holdings, ICG, Empyrean Investments, LLC, Jefferies LLC, and Elliott
Associates, L.P. (either directly or through its affiliates) (the “Second Lien
Commitment Parties”) agree to provide the second lien credit facility initially
contemplated by that certain Commitment Letter dated as of November 14, 2018,
delivered to the Company by certain Committed Lenders under and as defined
thereunder (the “Second Lien Commitment Letter”) on the terms and conditions set
forth therein, subject to the amendments, additional terms and conditions,
waivers and other modifications to the terms of the Second Lien Commitment
Letter set forth on Exhibit G hereto.1

3. Exhibits and Schedules Incorporated by Reference. Each of the exhibits and
schedules attached hereto (including, without limitation, the Term Sheet) and
each of the exhibits and schedules to such exhibits (collectively, the “Exhibits
and Schedules”) is expressly incorporated herein and made a part of this
Agreement, and all references to this Agreement shall include the Exhibits and
Schedules. In the event of any inconsistency between this Agreement (without
reference to the Exhibits and Schedules) and the Exhibits and Schedules, the
Exhibits and Schedules (other than the Transferee Joinder) shall govern and
control.

4. Definitive Documentation.

 

  (a)

The definitive documents and agreements governing the Transactions
(collectively, the “Definitive Documentation”) shall include:

 

  (i)

the Investor Purchase Agreement;

 

1 

In the event that the second lien credit facility (the “Second Lien Credit
Facility”) as contemplated by the Second Lien Commitment Letter is funded
(“Second Lien Credit Facility Funding”), each of the investors that have funded
the executed Second Lien Credit Facility (each a “Second Lien Lender” and,
together, the “Second Lien Lenders”) who are Consenting Stakeholders in any
capacity whatsoever shall automatically and without further action of any kind
become party to this Agreement as Consenting Stakeholders in their capacity as
Second Lien Lenders.

 

6

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  (ii)

the Affinion Parties’ Confidential Offering Memorandum, Consent Solicitation,
Private Placement and Disclosure Statement setting forth the terms and
conditions of the Transactions (the “Offering Memorandum and Disclosure
Statement”);

 

  (iii)

the Amended Senior Credit Agreement, any amendments to other Senior Credit
Documents and any related documents;

 

  (iv)

a supplemental indenture to the Existing Notes Indenture, effectuating the
proposed amendments described in the Offering Memorandum and Disclosure
Statement (the “Supplemental Indenture”);

 

  (v)

an indenture (the “New Indenture”) governing the notes described in Annex B to
the Term Sheet (the “New Notes”) and the form of the New Notes;

 

  (vi)

the Merger Agreement;

 

  (vii)

any amendment(s) to governance or organizational documents, including the bylaws
and certificate of incorporation of Affinion Holdings (the “Charter Amendment”);

 

  (viii)

the warrant agreement (the “New Warrant Agreement”) governing the New Penny
Warrants;

 

  (ix)

a new Registration Rights Agreement, described in Annex E to the Term Sheet (the
“Registration Rights Agreement”);

 

  (x)

the new Stockholders Agreement, described in Annex F to the Term Sheet (the
“Stockholders Agreement”);

 

  (xi)

the MIP;

 

  (xii)

the Investor Warrant Agreement;

 

  (xiii)

the Warrant Agreement Amendment;

 

  (xiv)

any amendments to, or new, executive employment agreements;

 

  (xv)

in the event of the Second Lien Credit Facility Funding, a Second Lien Credit
Agreement to be entered into by and among Affinion Group Holdings, Inc.,
Affinion Group, Inc., the lenders party thereto and Cortland Capital Market
Services LLC as Collateral Agent (the “Second Lien Agent” and such agreement,
the “Second Lien Credit Agreement”), the related security agreements, and any
other documents related to the Second Lien Credit Facility (the “Second Lien
Documents”);

 

7

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  (xvi)

in the event the Chapter 11 Cases are commenced:

(1) the Disclosure Statement (which, for the avoidance of doubt, shall be in the
form of the “Offering Memorandum and Disclosure Statement”);

(2) the Plan (including all exhibits, annexes and schedules thereto);

(3) the plan supplement documents (which may include, without limitation, the
following: (i) a schedule of retained causes of action; (ii) new certificates of
incorporation; (iii) new by-laws; and (iv) a list of members of the New Board)
(the “Plan Supplement Documents”);

(4) the solicitation materials (including any ballots and notices, but excluding
the Plan and the Offering Memorandum and Disclosure Statement, and related
exhibits) with respect to the Plan (collectively, the “Solicitation Materials”);

(5) the combined order of the Bankruptcy Court approving the Disclosure
Statement and the Plan (the “Confirmation Order”);

(6) the first day and second day pleadings that the Affinion Parties determine
are necessary or desirable to file with the Bankruptcy Court, the retention
applications, all orders sought pursuant thereto and any other material motions
and orders (the “Chapter 11 Pleadings”); and

(7) the documentation in respect of any DIP facility and authorizing use of cash
collateral, including any motions and orders relating to the use of cash
collateral, debtor-in-possession financing and exit facility (including any
exhibits, schedules, amendments, modifications or supplements thereto) (the
“DIP/Cash Collateral Documents”);

 

  (xvii)

any document or filing identified in the Term Sheet as being subject to approval
or consent rights under Section 4(b) of this Agreement; and

 

  (xviii)

such other documents, pleadings, agreements or supplements, as may be reasonably
necessary or advisable to implement the Transactions.

 

  (b)

The Definitive Documentation identified in Section 4(a) of this Agreement that
remain subject to completion, shall, upon completion, contain terms, conditions,
representations, warranties, and covenants consistent with the terms of this
Agreement (including the Term Sheet), and shall otherwise be in form and
substance satisfactory to the Affinion Parties; provided, however, that:

 

8

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  (i)

(a) the Offering Memorandum and Disclosure Statement (excluding exhibits, unless
specifically enumerated in this Section 4(b)(i)), (b) the Amended Senior Credit
Agreement, (c) the MIP, (d) the Plan (excluding exhibits, unless specifically
enumerated in this Section 4(b)(i)), (e) the Solicitation Materials, (f) the
Confirmation Order, (g) the DIP/Cash Collateral Documents, (h) the Supplemental
Indenture, (i) the New Indenture and form of the New Notes, (j) the Charter
Amendment and (k) any amendments to, or new, executive employment agreements
shall also be in form and substance reasonably satisfactory to those Consenting
Lenders holding, as of the applicable date(s) of determination, in the
aggregate, at least a majority of the principal amount outstanding of all Lender
Claims held by the Consenting Lenders as of such date(s) (the “Required
Consenting Lenders”);

 

  (ii)

(a) the Offering Memorandum and Disclosure Statement (excluding exhibits, unless
specifically enumerated in this Section 4(b)(ii)), (b) the Amended Senior Credit
Agreement, (c) the Supplemental Indenture, (d) the New Indenture and form of the
New Notes, (e) the Charter Amendment, (f) the New Warrant Agreement, (g) the
Registration Rights Agreement, (h) the Stockholders Agreement, (i) the MIP,
(j) the Plan (excluding exhibits, unless specifically enumerated in this
Section 4(b)(ii)), (k) the Solicitation Materials, (l) the Confirmation Order,
(m) the DIP/Cash Collateral Documents and (n) any amendments to, or new,
executive employment agreements shall also be in form and substance reasonably
satisfactory to the Consenting Noteholders holding, as of the applicable date(s)
of determination, at least a majority of the principal amount outstanding of all
Note Claims held by the Consenting Noteholders as of such date(s) (the “Required
Consenting Noteholders” and each of (i) the Required Consenting Lenders and
(ii) the Required Consenting Noteholders, the “Required Consenting
Stakeholders”);

 

  (iii)

The Second Lien Credit Agreement and any other Second Lien Documents (if any)
shall be in form and substance reasonably satisfactory to the Second Lien
Lenders; and

 

  (iv)

(a) the Charter Amendment, (b) the New Warrant Agreement, (c) the Investor
Warrant Agreement; (d) the New Notes and (e) the Stockholders Agreement shall
conform in all material respects to this Agreement and the Term Sheet with
respect to the treatment, claims or rights and benefits granted to, or received
by, ICG or Mudrick, and the Registration Rights Agreement shall (i) conform in
all material respects to this Agreement and the Term Sheet with respect to the
treatment, claims or rights and benefits granted to, or received by, ICG or
Mudrick, and (ii) otherwise be in form and substance reasonably satisfactory to
at least one of ICG or Mudrick;

 

9

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provided further, however, that, unless the Required Consenting Lenders, the
Required Consenting Noteholders, or the Second Lien Lenders, as applicable, have
consent rights over the Definitive Documentation as outlined above, the Affinion
Parties shall consult with the Consenting Stakeholders regarding the form and
substance of the Definitive Documentation specifically enumerated in
Section 4(a) that remains subject to completion or approval by the Bankruptcy
Court (as applicable); provided that, solely to the extent any other Definitive
Documentation listed in Section 4(a) (that remains subject to completion or
approval by the Bankruptcy Court (as applicable)) directly and adversely affects
the treatment, claims of, or rights and benefits granted to, or received by, the
Consenting Lenders, the Consenting Noteholders, or the Second Lien Lenders, as
applicable, under the Term Sheet or Plan, such Definitive Documentation shall be
in form and substance reasonably acceptable to the Required Consenting Lenders,
the Required Consenting Noteholders or the Second Lien Lenders, as applicable.
Without limiting the generality of the foregoing, the Affinion Parties shall use
their reasonable best efforts to provide to HPS’s, Elliott’s, ICG’s and
Mudrick’s (each as defined below) legal counsel drafts of all Definitive
Documentation not less than three (3) days before the date when the Affinion
Parties intend to enter into such Definitive Documentation, or as soon as
reasonably practicable thereafter, and consult in good faith with such counsel
regarding the form and substance of any Definitive Documentation.

 

  (c)

The Affinion Parties shall use their reasonable best efforts to provide to
HPS’s, Elliott’s, ICG’s and Mudrick’s (each as defined below) legal counsel
drafts of all motions or applications, including proposed orders, and other
documents that the Affinion Parties intend to file with the Bankruptcy Court not
less than three (3) days before the date when the Affinion Parties intend to
file any such motion, application or document, including for the avoidance of
doubt, all “first day” and “second day” motions and orders and without limiting
any consent rights set forth in this Agreement, consult in good faith with such
counsel regarding the form and substance of any such proposed filing; provided,
however, that in the event that three (3) days’ notice is impossible or
impracticable under the circumstances, the Affinion Parties shall provide draft
copies of any motions or applications, including proposed orders and any other
documents the Affinion Parties intend to file with the Bankruptcy Court to
HPS’s, Elliott’s, ICG’s and Mudrick’s legal counsel as soon as otherwise
practicable before the date when the Affinion Parties intend to file any such
motion, application or document. The Affinion Parties shall use reasonably best
efforts to notify HPS’s, Elliott’s, ICG’s and Mudrick’s legal counsel
telephonically or by electronic mail to advise them of the documents to be filed
and the facts that make the provision of advance copies not less than three
(3) days before submission impossible or impracticable.

 

10

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  (d)

Notwithstanding anything in this Agreement to the contrary, in no case shall any
of the proposed terms, conditions, representations, warranties or covenants of
any Definitive Documentation have a material, disproportionate and adverse
effect on (i) the Consenting Noteholders that were signatories to the Original
Support Agreement as of the RSA Effective Date relative to other Noteholders or
(ii) the Consenting Lenders that were signatories to the Original Support
Agreement as of the RSA Effective Date relative to other Lenders.

5. Mutual Agreement of the Parties to Support the Transactions. Each of the
Parties to this Agreement agrees (severally and not jointly), from the RSA
Effective Date until the occurrence of a Termination Date (as defined in
Section 12 of this Agreement) applicable to such Party, to:

 

  (a)

support and cooperate with the other Parties to this Agreement to take all
actions commercially reasonably necessary to support and consummate the
Recapitalization;

 

  (b)

if the Consent Requirements are not satisfied by the Outer Date, support and
cooperate with the other Parties to this Agreement to take all actions
commercially reasonably necessary to consummate the In-Court Restructuring;

 

  (c)

take or cause to be taken all actions commercially reasonably necessary to
consummate the Transactions on the terms and subject to the conditions set forth
in the Term Sheet and this Agreement;

 

  (d)

provide reasonably prompt written notice (in accordance with Section 26 of this
Agreement) to Parties between the RSA Effective Date and the Termination Date of
(A) the occurrence, or failure to occur, of any event of which the Party has
actual knowledge which occurrence or failure would be reasonably likely to cause
any covenant contained in this Agreement not to be satisfied in any material
respect, or (B) receipt of any notice from any third party alleging that the
consent of such third party is or may be required in connection with the
Transactions;

 

  (e)

to the extent any legal or structural impediment arises that would be reasonably
likely to prevent, hinder, or delay the consummation of the Transactions,
negotiate with the Parties in good faith appropriate and reasonable additional
or alternative provisions to address any such impediment; provided that the
treatment, claims of, or rights and benefits granted to, or received by, the
Consenting Stakeholders, the proposed timing for consummation of the
Transactions set forth in this Agreement, and other material terms of this
Agreement must be substantially preserved in such alternative or additional
provisions; and

 

11

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  (f)

negotiate in good faith any terms of the Definitive Documentation that are
subject to negotiation as of the RSA Effective Date.

6. Commitment of Consenting Stakeholders. Each Consenting Stakeholder agrees
(severally and not jointly), from the RSA Effective Date until the occurrence of
a Termination Date (as defined in Section 12 of this Agreement) applicable to
such Consenting Stakeholder, to:

 

  (a)

with respect to the Consenting Lenders only, (i) agree to forbear, and to
instruct the Administrative Agent to forbear, from exercising any remedies
against the Affinion Parties and any Guarantors of the Lender Claims, solely in
accordance with the terms of the forbearance agreement, dated as of March 1,
2019, between Affinion, certain Affinion Parties thereto, the Administrative
Agent and the Required Lenders (as defined under the Credit Agreement) (the
“Forbearance Agreement”), and (ii) consent to amend the Credit Agreement to
reflect the terms set forth in the Term Sheet and to permit the consummation of
the Recapitalization, in each case, at or prior to the Outer Date (the “Lender
Consent”);

 

  (b)

with respect to the Consenting Noteholders only, at or prior to the Consent Time
(as defined in the Offering Memorandum and Disclosure Statement) tender for
exchange all Existing Notes beneficially owned by such Consenting Noteholder or
for which it is the nominee, investment manager, or advisor for beneficial
holders thereof pursuant to the Exchange Offer in accordance with the applicable
procedures set forth in the Offering Memorandum and Disclosure Statement, in
each case as specified by such Consenting Noteholder on its respective signature
page hereto or thereafter acquired, and consent to eliminate substantially all
of the restrictive covenants and certain events of default and related
provisions contained in the Existing Notes Indenture in accordance with the Term
Sheet;

 

  (c)

with respect to the Consenting Noteholders only, during any Chapter 11 Cases,
agree to forbear, and to instruct the Trustee to forbear, from taking any action
or exercising any rights or remedies against any guarantors of the Existing
Notes;

 

  (d)

with respect to the Consenting Lenders, the Consenting Noteholders and the
Second Lien Lenders, agree that (i) whether or not required by the Amended
Senior Credit Agreement, the Existing Notes Indenture or the Second Lien Credit
Facility, respectively, upon the RSA Effective Date, such underlying debt shall
not be publicly rated and (ii) upon the consummation of the Transactions, any
new debt issued under the Amended Senior Credit Agreement, the New Indenture, or
such other applicable debt documents, shall not be publicly rated;

 

12

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  (e)

with respect to those Consenting Stakeholders that have entered into a DIP
Commitment, not terminate (nor seek to terminate) such DIP Commitment except as
otherwise provided in such DIP Commitment;

 

  (f)

with respect to those Consenting Stakeholders that have entered into the Second
Lien Commitment Letter, to not terminate such commitment except as otherwise
provided in such Second Lien Commitment Letter, subject to the waivers to the
terms of the Second Lien Commitment Letter set forth on Exhibit G hereto;

 

  (g)

with respect to those Consenting Stakeholders that are or that become Second
Lien Lenders only, during any Chapter 11 Cases agree to forbear, and to instruct
the Second Lien Agent to forbear, from taking any action or exercising any
rights or remedies against any guarantors of the Second Lien Credit Facility;

 

  (h)

with respect to those Consenting Stakeholders that hold Company Common Stock,
simultaneously with the execution and delivery of the Original Support
Agreement, vote all of its Company Common Stock now owned by such Consenting
Stakeholder in favor of the Stockholder Necessary Approvals (including the
ratification of the entry by any such holders or their affiliates into this
Agreement) (the “Stockholder Consent”);

 

  (i)

with respect to the Consenting Stakeholders that are to be a party to the
Investor Purchase Agreement, simultaneously with the execution and delivery of
this Agreement, duly execute and deliver the Investor Purchase Agreement;

 

  (j)

with respect to Elliott, prior to the closing of the Second Lien Credit
Facility, grant its consent to cause, or cause brokers on its behalf to grant
consents to cause, the Trustee to enter into a supplemental indenture (the
“Additional Supplemental Indenture”) with respect to the Existing Notes
Indenture, which will amend the Existing Notes Indenture to permit the
incurrence of the proposed Second Lien Credit Facility and all the transactions
related thereto, including the upsizing of the debt baskets to allow for the
incurrence of the full amount of the Second Lien Credit Facility (including any
incremental amount and interest paid in kind contemplated by the Second Lien
Commitment Letter), modifying the lien covenant to allow the Second Lien Credit
Facility to be secured as contemplated by the Second Lien Commitment Letter, and
permitting Affinion Holdings to guaranty the Second Lien Credit Facility and
pledge its assets to secure such guarantee (provided that, the executed
Supplemental Indenture will not become operative until the closing date for the
Second Lien Credit Facility);

 

13

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  (k)

provide to counsel and investment banker for the Company on a confidential basis
a schedule showing the principal amount of Lender Claims, Second Lien Claims,
Existing Notes, and Company Common Stock held by such Consenting Stakeholder
(the “Confidential Schedule of Holdings”), which shall not be disclosed by such
counsel or investment banker to any third party without such Consenting
Stakeholder’s prior written consent;

 

  (l)

use commercially reasonable efforts to support and take all actions as are
necessary and appropriate to obtain any and all required regulatory and/or
third-party approvals to consummate the Transactions;

 

  (m)

effective solely upon the consummation of a Recapitalization, release and waive,
and covenant not to sue with respect to, any and all claims or causes of action
of any kind whatsoever, arising from or relating to the Transactions, whether
known or unknown, that directly or indirectly arise out of, are based upon or
are in any manner connected with any Consenting Stakeholder’s or its successors’
and assigns’ ownership or acquisition of any equity securities of the Affinion
Parties or any indebtedness under the Existing Notes Indenture or the Credit
Agreement, including any related transaction, event, circumstance, action,
failure to act or occurrence of any sort or type, whether known or unknown,
including without limitation any approval or acceptance given or denied, which
occurred, existed, or was taken, permitted or begun prior to the date of such
release, in each case, that the Consenting Stakeholders or their successors and
assigns have or may have had against (a) the Affinion Parties or their
affiliates and stockholders and (b) the directors, officers, employees,
attorneys, accountants, advisors, agents and representatives, in each case
whether current or former, of the Affinion Parties or affiliates and
stockholders, whether those claims arise under federal or state securities laws
or otherwise (for the avoidance of doubt, the Consenting Stakeholders shall not
be prohibited from asserting claims or causes of action against any Party or
affiliate that has materially breached or terminated this Agreement); provided,
however, that no claims or causes of action arising after the consummation of
the Recapitalization or under any Definitive Documentation shall be released or
waived, and no Consenting Stakeholder hereby covenants not to sue with respect
thereto;

 

  (n)

solely with respect to an In-Court Restructuring, (i) timely vote all of its
Lender Claims, Note Claims, Second Lien Claims (if any), and all other claims
against, or, if and to the extent applicable, interests in (including the
Existing Warrants, the Class C/D Common Stock and the Company Common Stock), as
applicable, the Affinion Parties now or hereafter owned by such Consenting
Stakeholder (or which such Consenting Stakeholder now or hereafter has voting
control over) to accept the Plan in accordance with the applicable procedures
set forth in the Disclosure Statement and the Solicitation Materials;
(ii) timely return a duly-executed ballot in connection therewith; and (iii) not
“opt out” of or object to any releases or exculpation provided under the Plan
(and, to the extent required by such ballot, affirmatively “opt in” to such
releases and exculpation);

 

14

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  (o)

unless this Agreement has been terminated, not withdraw, amend, change, or
revoke (or seek to withdraw, amend, change, or revoke) its participation in the
Exchange Offer, Lender Consent, Stockholder Consent, Investor Purchase
Agreement, tender, consent, or vote with respect to the Plan (if the
Transactions are implemented pursuant to an In-Court Restructuring), as
applicable; provided, however, that upon termination of this Agreement (except
if such Agreement is automatically terminated due to the consummation of the
Transactions), any and all consents and ballots tendered by such Consenting
Stakeholder prior to such termination shall be deemed, for all purposes,
automatically null and void ab initio, shall not be considered or otherwise used
in any manner by the Parties in connection with the Plan, this Agreement or
otherwise, and such consents or ballots may be changed or resubmitted regardless
of whether the applicable voting deadline has passed (without the need to seek a
court order or consent from the Affinion Parties allowing such change or
resubmission), and the Affinion Parties shall not oppose any such change or
resubmission on account of this Agreement;

 

  (p)

not (i) object to, delay, impede, or take any other action (including, as
applicable, to instruct or direct the Trustee or Administrative Agent or any
successor to the Trustee or Administrative Agent) to interfere with the prompt
consummation of the Transactions or the Definitive Documentation (including the
entry by the Bankruptcy Court of an order approving the Disclosure Statement,
orders authorizing the Affinion Parties to retain and employ Akin Gump Strauss
Hauer & Feld, LLP, Guggenheim Securities, LLC, and AlixPartners LLP
(collectively, the “Affinion Advisors”) and the Confirmation Order, if
applicable); (ii) directly or indirectly, propose, file, support, or vote for
any restructuring, workout, reorganization, liquidation, or chapter 11 plan for
any of the Affinion Parties, other than the Transactions and the Plan; or
(iii) encourage or support any other person or entity to do any of the
foregoing; and

 

  (q)

not take any other action, including, without limitation, initiating or joining
in any legal proceeding, that is inconsistent with its obligations under this
Agreement, that could hinder, delay, or prevent the timely consummation of the
Transactions and, if the Transactions are implemented pursuant to an In-Court
Restructuring, the confirmation and consummation of the Plan and entry of the
Confirmation Order.

Notwithstanding the foregoing, nothing in this Agreement, nor a vote to accept
the Plan by any Consenting Stakeholder (if the Transactions are implemented
pursuant to an In-Court Restructuring) shall (w) be construed to limit consent
and approval rights provided in this Agreement and the Definitive Documentation,
(x) be construed to prohibit any Consenting Stakeholder from contesting whether
any matter, fact, or circumstance is a breach of, or is inconsistent with, this
Agreement, or exercising rights or remedies specifically reserved in this
Agreement, (y) be construed to prohibit any Consenting Stakeholder from
appearing as a party-in-interest in any matter to be adjudicated in the Chapter
11 Cases (if the Transactions are

 

15

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implemented pursuant to an In-Court Restructuring), so long as such appearance
and the positions advocated in connection therewith are not inconsistent with
this Agreement and are not for the purpose of hindering, delaying, or preventing
the consummation of the Transactions, or (z) impair or waive the rights of any
Consenting Stakeholder or the Affinion Parties to assert or raise any objection
expressly permitted under this Agreement in connection with any hearing on
confirmation of the Plan or in the Bankruptcy Court.

7. Obligations of the Affinion Parties.

(a) Affirmative Covenants. Subject to the terms and conditions hereof, from the
RSA Effective Date until the occurrence of a Termination Date, each of the
Affinion Parties agrees to:

 

  (i)

use commercially reasonable efforts to implement and consummate the Transactions
in accordance with the applicable milestones set forth in Schedule 1 hereto
(collectively, the “Milestones”), which Milestones may only be extended in
accordance with Section 28 of this Agreement;

 

  (ii)

support and take all actions as are reasonably necessary and appropriate to
obtain any and all required regulatory and/or third-party approvals to
consummate the Transactions;

 

  (iii)

timely pay all fees and expenses as set forth in Section 15 of this Agreement;

 

  (iv)

if the Transactions are implemented pursuant to an In-Court Restructuring,
(a) timely file a formal objection to any motion filed with the Bankruptcy Court
seeking the entry of an order (i) directing the appointment of a trustee or
examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and
(4) of the Bankruptcy Code); (ii) converting the Chapter 11 Cases to cases under
chapter 7 of the Bankruptcy Code; or (iii) dismissing the Chapter 11 Cases and
(b) actively oppose and object to the efforts of any person seeking to directly
or indirectly, object to, delay, impede, or take any other action to interfere
with the acceptance, implementation, or consummation of the Transactions
(including, if applicable, the filing of timely filed objections or written
responses in a Chapter 11 Cases);

 

  (v)

if the Transactions are implemented pursuant to an In-Court Restructuring,
timely file a formal objection to any motion filed with the Bankruptcy Court
seeking the entry of an order modifying or terminating the Affinion Parties’
exclusive right to file and/or solicit acceptances of a plan of reorganization;

 

  (vi)

to operate its business in the ordinary course, taking into account the
commencement of the Chapter 11 Cases, if applicable;

 

16

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  (vii)

to use commercially reasonable efforts to execute and deliver the Definitive
Documentation and any other required agreements to effectuate and consummate the
Transactions as contemplated by this Agreement; and

 

  (viii)

to use commercially reasonable efforts to seek additional support for the
Transactions from the Affinion Parties’ other material stakeholders to the
extent reasonably prudent.

(b) Release. Effective solely upon the consummation of a Transaction, each
Affinion Party agrees to release and waive, and covenants not to sue with
respect to, any and all claims or causes of action of any kind whatsoever,
arising from or related to the Transactions, whether known or unknown, that
directly or indirectly arise out of, are based upon or are in any manner
connected with the Transactions, including any related transaction, event,
circumstance, action, failure to act or occurrence of any sort or type, whether
known or unknown, including without limitation any approval or acceptance given
or denied, which occurred, existed, or was taken, permitted or begun prior to
the date of such release, in each case, that the Affinion Parties or their
successors and assigns have or may have had against (a) each Consenting
Stakeholder, its subsidiaries, affiliates and stockholders and (b) the
directors, officers, employees, attorneys, accountants, advisors, agents and
representatives, in each case whether current or former, of such Consenting
Stakeholder, its subsidiaries, affiliates and stockholders, whether those claims
arise under federal or state securities laws or otherwise; provided, however,
that the foregoing shall not apply to any claims or causes of action relating to
the failure by any Consenting Stakeholder to satisfy its obligations set forth
in Sections (6)(a), (b) or (e) of this Agreement.

(c) Negative Covenants. Subject to the terms and conditions hereof, from the RSA
Effective Date until the occurrence of a Termination Date, the Affinion Parties
agree that they shall not, directly or indirectly, take any of the following
actions, unless such action is consented to in writing by the Required
Consenting Stakeholders or such actions are otherwise consistent with the
Transactions and/or the Term Sheet:

 

  (i)

to undertake any action that is inconsistent with this Agreement, or which would
unreasonably delay consummation of the Transactions and the Definitive
Documentation; and

 

  (ii)

to seek, solicit, or support any dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors, merger, transaction,
consolidation, business combination, joint venture, partnership, sale of assets
(other than sale of inventory in the ordinary course), debt or equity financing
or re-financing, or restructuring of the Affinion Parties (including, for the
avoidance of doubt, a transaction premised on an asset sale under section 363 of
the Bankruptcy Code), other than the Plan and Transactions.

 

17

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(d) Fiduciary Duty. Notwithstanding anything to the contrary herein, (i) if the
Parties seek to implement the Transactions pursuant to a Recapitalization, at
any time prior to the Consent Requirements having been satisfied and (ii) if
Parties seek to implement the Transactions pursuant to an In-Court
Restructuring, then at any time after the Petition Date and prior to the entry
of the Confirmation Order, the Affinion Parties may terminate their obligations
under this Agreement if the board of directors of Affinion reasonably determines
in good faith, based upon the advice of outside counsel, that continued
performance of this Agreement would be inconsistent with the exercise of its
fiduciary duties to all stakeholders under applicable law. Nothing in this
Agreement shall require the Affinion Parties or the officers and employees of
the Affinion Parties in their capacities as such to take or refrain from taking
any action with respect to the Transactions to the extent such person or persons
reasonably determines in good faith, based on the advice of outside counsel,
that taking, or refraining from taking, such action, as applicable, would be
inconsistent with its fiduciary obligations under applicable law. The Affinion
Parties shall give the Consenting Stakeholders not less than two (2) Business
Days prior written notice before the exercise of its rights under this
Section 7(d) or the termination of this Agreement in accordance with
Section 9(d) of this Agreement (it being understood that the specific
performance provisions of Section 21 of this Agreement shall not be applicable
to the parties with respect to the exercise of rights under this Section 7(d) or
termination of this Agreement in accordance with Section 9(d) of this
Agreement). For the avoidance of doubt, the foregoing shall not preclude the
Consenting Stakeholders from challenging the appropriateness of the exercise of
fiduciary duties as the basis for the exercise of rights under this Section 7(d)
or the termination of this Agreement in accordance with Section 9(d) of this
Agreement. Notwithstanding anything to the contrary herein, to the extent the
Affinion Parties engage in any discussions or negotiations with any person or
entity concerning any actual or proposed dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors, merger, transaction,
consolidation, business combination, joint venture, partnership, sale of assets
(other than sale of inventory in the ordinary course), debt or equity financing
or re-financing, or restructuring of the Affinion Parties (including, for the
avoidance of doubt, a transaction premised on an asset sale under section 363 of
the Bankruptcy Code) other than the Plan and the Transactions (each, an
“Alternative Transaction”), the Affinion Parties shall (x) provide a copy of any
written offer or proposal (and notice of any oral offer or proposal) for such
Alternative Transaction within three (3) Business Days of the Affinion Parties’
receipt of such offer or proposal to the legal counsel and the financial
advisors to the Consenting Stakeholders that are subject to an obligation of
confidentiality to Affinion with respect to such information (the “Consenting
Stakeholder Advisors”) and (y) provide such information to the Consenting
Stakeholders regarding such discussions (including copies of any materials
provided to such parties hereunder) as necessary to keep the Consenting
Stakeholder Advisors reasonably informed as to the status and substance of such
discussions.

8. Consenting Stakeholder Termination Events. Each of (i) the Required
Consenting Lenders, (ii) the Required Consenting Noteholders and (iii) acting
together, the Second Lien Lenders (in each case, where applicable) shall have
the right, but not the obligation, upon written notice to the other Parties, to
terminate the obligations of the Consenting Lenders, the Consenting Noteholders
or the Second Lien Lenders, as applicable, under this Agreement upon the
occurrence of any of the following events (each, a “Consenting Stakeholder
Termination Event”), unless waived, in writing, by the Required Consenting
Lenders, the Required Consenting Noteholders or the Second Lien Lenders, as
applicable, on a prospective or retroactive basis:

 

18

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  (a)

the failure to meet any Milestone unless (i) such failure is the result of any
act, omission or delay on the part of any (x) Consenting Lender (solely in its
capacity as a Consenting Lender), in the case of termination by the Required
Consenting Lenders, (y) Consenting Noteholder (solely in its capacity as a
Consenting Noteholder), in the case of termination by the Required Consenting
Noteholders or (z) Second Lien Lender (solely in its capacity as a Second Lien
Lender), in the case of termination by the Second Lien Lenders, in violation of
its obligations under this Agreement or (ii) such Milestone is waived by the
Required Consenting Stakeholders in accordance with Section 28 of this
Agreement;

 

  (b)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court enters an
order converting one or more of the Chapter 11 Cases to a case under chapter 7
of the Bankruptcy Code or an order dismissing one or more of the Chapter 11
Cases;

 

  (c)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court enters an
order appointing a trustee, receiver, or examiner with expanded powers beyond
those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code in one or
more of the Chapter 11 Cases;

 

  (d)

with respect to the Required Consenting Lenders, the Definitive Documentation
does not conform in all material economic respects to this Agreement and the
Term Sheet with respect to the treatment, claims or rights and benefits granted
to, or received by, the Consenting Lenders, or otherwise is not in form and
substance reasonably acceptable to the Required Consenting Lenders (to the
extent such acceptance is required by Section 4(b)) (in each instance, unless
such Definitive Documentation has otherwise been previously agreed to, in
writing, by the Required Consenting Lenders);

 

  (e)

with respect to the Required Consenting Noteholders, the Definitive
Documentation does not conform in all material economic respects to this
Agreement and the Term Sheet with respect to the treatment, claims or rights and
benefits granted to, or received by, the Consenting Noteholders or otherwise is
not in form and substance reasonably acceptable to the Required Consenting
Noteholders (to the extent such acceptance is required by Section 4(b)) (in each
instance, unless such Definitive Documentation has been previously agreed to in
writing by the Required Consenting Noteholders);

 

  (f)

with respect to the Second Lien Lenders, the Definitive Documentation does not
conform in all material economic respects to this Agreement and Term Sheet with
respect to the treatment, claims or rights and benefits granted to, or received
by, the Second Lien Lenders or otherwise is not in form and substance reasonably
acceptable to the Second Lien Lenders (to the extent such acceptance is required
by Section 4(b)) (in each instance, unless such Definitive Documentation has
previously been agreed to in writing by the Second Lien Lenders);

 

19

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  (g)

in the event the Chapter 11 Cases are commenced, any Affinion Party files with
the Bankruptcy Court any motion or application seeking authority to sell any
material assets that is not contemplated in the Term Sheet without the prior
written consent of the Required Consenting Lenders, the Required Consenting
Noteholders and the Second Lien Lenders;

 

  (h)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court grants
relief terminating, annulling, or modifying the automatic stay (as set forth in
section 362 of the Bankruptcy Code) with regard to any material assets of the
Affinion Parties;

 

  (i)

(1) any Affinion Party: (A) materially breaches any representation, warranty, or
covenant under this Agreement, which breach is not cured within five
(5) Business Days after receiving written notice of such breach, (B) withdraws
or revokes the Plan, (C) amends or modifies the Definitive Documentation in a
manner that is inconsistent in any material respect with the terms set forth in
the Term Sheet and this Agreement, the other rights and benefits granted to, or
received by, the Consenting Lenders, the Consenting Noteholders or the Second
Lien Lenders, as applicable, pursuant to the Term Sheet or this Agreement, or
the implementation thereof, unless such amendment or modification is otherwise
consented to in accordance with Section 28 hereof or (D) files, publicly
announces, or informs the Consenting Stakeholders of its intention to file a
chapter 11 plan that contains terms and conditions that (i) do not provide the
Consenting Lenders, the Consenting Noteholders or the Second Lien Lenders, as
applicable, with the economic recovery set forth on, or the other rights and
benefits granted to, or received by, the Consenting Lenders, the Consenting
Noteholders or the Second Lien Lenders, as applicable, pursuant to the Term
Sheet or this Agreement and (ii) are not otherwise consistent with this
Agreement and the Term Sheet; (2) the Required Consenting Lenders (so long as
such terminating Consenting Stakeholder is not a Consenting Lender) materially
breach any representation, warranty or covenant under this Agreement, which
breach or breaches are not cured within five (5) Business Days after receiving
written notice of such breaches; (3) the Required Consenting Noteholders (so
long as such terminating Consenting Stakeholder is not a Consenting Noteholder)
materially breach any representation, warranty or covenant under this Agreement,
which breach or breaches are not cured within five (5) Business Days after
receiving written notice of such breaches; or (4) any Consenting Stakeholder
that has entered into the Second Lien Commitment Letter breaches its obligations
(i) under Section 6(f) of this Agreement not to terminate such commitment or
(ii) under the Second Lien Commitment Letter to fund the Second Lien Credit
Facility, in either case which breach or breaches are not cured within five
(5) Business Days after receiving written notice of such breaches;

 

  (j)

one or more of the DIP Commitments shall have been terminated by an Affinion
Party without the consent of the Backstop Parties;

 

20

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  (k)

the occurrence of the termination of the Forbearance Agreement; provided,
however, that this provision shall not apply if the Chapter 11 Cases are filed;

 

  (l)

in the event the Chapter 11 Cases are commenced, either (i) any Affinion Party
files with the Bankruptcy Court a motion, application, or adversary proceeding
(or any Affinion Party supports any such motion, application, or adversary
proceeding filed or commenced by any third party) (a) challenging the validity,
enforceability, or priority of, or seeking avoidance or subordination of, the
Lender Claims, the Note Claims or the Second Lien Claims, as applicable or
(b) asserting any other cause of action against the Consenting Lenders, the
Administrative Agent, the Consenting Noteholders, the Second Lien Lenders or the
Trustee, as applicable, other than for the enforcement of the obligations of the
Consenting Stakeholders hereunder or (ii) the Bankruptcy Court enters an order
providing relief against any Consenting Lender, the Administrative Agent, any
Consenting Noteholder, any Second Lien Lender or the Trustee, as applicable,
with respect to any of the foregoing causes of action or proceedings filed by
any Affinion Party;

 

  (m)

if the Bankruptcy Court or other governmental authority with jurisdiction shall
have issued any order, injunction, or other decree or taken any other action, in
each case, which has become final and non-appealable and which restrains,
enjoins, or otherwise prohibits the implementation of the Transactions in a way
that cannot be remedied by the Affinion Parties or the effect of which would
render the Plan incapable of consummation on the terms set forth in this
Agreement and the Term Sheet;

 

  (n)

any Affinion Party terminates its obligations under and in accordance with
Section 9(d) of this Agreement;

 

  (o)

the Affinion Parties fail to timely pay the Restructuring Expenses in accordance
with Section 15 hereof;

 

  (p)

in the event the Chapter 11 Cases are commenced, the entry of an order by the
Bankruptcy Court or any other court with appropriate jurisdiction denying
confirmation of the Plan, or if the Confirmation Order is reversed or vacated by
a final order;

 

  (q)

in any instance, the Consenting Stakeholders do not hold, in the aggregate, at
least 66-2/3% of the principal amount outstanding of all of each of the Lender
Claims, the Second Lien Claims and the Note Claims;

 

  (r)

in the event the Chapter 11 Cases are commenced, the Affinion Parties execute or
file with the Bankruptcy Court any Definitive Documentation that is inconsistent
with the requirements set forth in Section 4(b) of this Agreement; or

 

21

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  (s)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court enters an
order in the Chapter 11 Cases terminating any of the Affinion Parties’ exclusive
right to file a plan or plans of reorganization pursuant to section 1121 of the
Bankruptcy Code.

9. The Affinion Parties’ Termination Events. The Affinion Parties shall have the
right, but not the obligation, upon written notice to the Consenting
Stakeholders, to terminate the obligations of the Affinion Parties (jointly)
under this Agreement upon the occurrence of any of the following events (each a
“Company Termination Event,” and together with the Consenting Stakeholder
Termination Events, the “Termination Events”), unless waived, in writing, by the
Affinion Parties on a prospective or retroactive basis:

 

  (a)

the failure to meet the Milestone set forth on Schedule 1(e)(4) unless (i) such
failure is the result of any act, omission, or delay on the part of any Affinion
Party in violation of its obligations under this Agreement or (ii) such
Milestone is waived by the Affinion Parties in accordance with Section 28 of
this Agreement;

 

  (b)

a material breach by any Consenting Stakeholder of any representation, warranty,
or covenant of such Consenting Stakeholders set forth in this Agreement that
could reasonably be expected to have a material adverse impact on the timely
consummation of the Transactions that (to the extent curable) remains uncured
for a period of five (5) days after notice and a description of such breach is
provided to such Consenting Stakeholder; provided that such termination right
shall be ineffective if the Affinion Parties are seeking termination as a result
of a breach by any Consenting Stakeholder and at such time Consenting Lenders
and Consenting Noteholders holding, in the aggregate, at least 66-2/3% of the
principal amount outstanding of all of each of the Lender Claims and Note
Claims, respectively, have not breached this Agreement in any material respect;

 

  (c)

one or more of the DIP Commitments shall have been terminated without the
consent of the Affinion Parties, provided, however, that the termination of one
or more DIP Commitments without the consent of the Affinion Parties shall not
give rise to a Company Termination Event hereunder if within ten (10) Business
Days following receipt by the Affinion Parties and Elliott of an Enforcement
Notice, Elliott or its affiliate has delivered to the Affinion Parties a
commitment to provide replacement junior DIP financing that provides for the
repayment of all amounts outstanding under the DIP Facility and the termination
of all DIP Commitments;

 

  (d)

the Affinion Parties determine to terminate this agreements pursuant to
Section 7(d) of this Agreement;

 

  (e)

in any instance, the Consenting Stakeholders remaining as Parties to this
Agreement do not meet the voting thresholds in Section 1(b) and (c) of the
Original Support Agreement; or

 

22

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  (f)

if the Bankruptcy Court or other governmental authority with jurisdiction shall
have issued any order, injunction, or other decree or taken any other action, in
each case, which has become final and non-appealable and which restrains,
enjoins, or otherwise prohibits the implementation of the Transactions in a way
that cannot be remedied by the Affinion Parties.

10. Individual Termination.

 

  (a)

Any Consenting Stakeholder may terminate this Agreement as to itself only, in
the event that (a) this Agreement is amended, modified or supplemented without
its consent in such a way as to materially, disproportionately and adversely
affect such Consenting Stakeholder relative to similarly situated Consenting
Stakeholders and (b) such amendment, modification or supplement is not undone,
or such consent is not obtained, within five (5) Business Days following the
provision of written notice describing such amendment, modification or
supplement to the Affinion Parties and the other Consenting Stakeholders;
provided, that this Section 10(a) shall not apply to the commitments of the
Consenting Stakeholders under section 6(o).

 

  (b)

Acting together, ICG and Mudrick shall have the right, but not the obligation,
upon written notice to the other Parties, to terminate their obligations under
this Agreement upon the occurrence of the following events, unless waived, in
writing, by ICG and Mudrick on a prospective or retroactive basis:

 

  (i)

the Charter Amendment, the New Warrant Agreement, the Investor Warrant
Agreement, the New Notes or the Stockholders Agreement does not conform in all
material economic respects to this Agreement and the Term Sheet with respect to
the treatment, claims or rights and benefits granted to, or received by, ICG or
Mudrick, or

 

  (ii)

the Registration Rights Agreement (y) does not conform in all material economic
respects to this Agreement and the Term Sheet with respect to the treatment,
claims or rights and benefits granted to, or received by, ICG or Mudrick, or
(z) otherwise is not in form and substance reasonably satisfactory to at least
one of ICG or Mudrick (to the extent such acceptance is required by
Section 4(b)) (in each instance, unless such modification has previously been
agreed to in writing by ICG or Mudrick).

11. Mutual Termination; Automatic Termination. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall terminate automatically and all
of the obligations of the Parties hereunder shall be of no further force or
effect in the event that (i)(a) the Recapitalization is implemented in
accordance with this Agreement and the Term Sheet or (b) the In-Court
Restructuring is implemented in accordance with this Agreement and the Term
Sheet, and the Confirmation Order is final and nonappealable; provided, that no
Termination Event shall

 

23

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be ongoing; (ii) the Transactions are not consummated in accordance with this
Agreement and the Term Sheet by June 3, 2019, as such date may be extended in
writing from time to time by the Affinion Parties and the Required Consenting
Stakeholders; provided, that no Termination Event shall be ongoing; or (iii) the
Affinion Parties and the Required Consenting Stakeholders mutually agree to such
termination in writing.

12. Effect of Termination. The earliest date on which termination of this
Agreement as to a Party is effective in accordance with Sections 8, 9, 10 or 11
of this Agreement shall be referred to, with respect to such Party, as a
“Termination Date”. Upon the occurrence of a Termination Date, (i) all Parties’
(or, in the case of termination pursuant to Section 10, such terminating
Party’s) obligations under this Agreement shall be terminated effective
immediately, and all Parties hereto shall be released from all commitments,
undertakings, agreements, consents, votes and obligations, (ii) any and all
consents or votes tendered by the Parties shall be withdrawn by the respective
holder in connection with this Agreement, the Recapitalization, the Plan or
otherwise (except if a Transaction is consummated), and (iii) if Bankruptcy
Court permission shall be required for a Consenting Stakeholder to change or
withdraw (or cause to be changed or withdrawn) its vote in favor of the Plan, no
Party to this Agreement shall oppose any attempt by such party to change or
withdraw (or cause to be changed or withdrawn) such vote (except if a
Transaction is consummated); provided, however, that each of the following shall
survive any such termination: (a) any claim for breach of this Agreement that
occurs prior to such Termination Date, and all rights and remedies with respect
to such claims shall not be prejudiced in any way; (b) the Affinion Parties’
obligations in Section 15 of this Agreement accrued up to and including such
Termination Date; and (c) Sections 6(d), 6(k), 6(m), 7(b), 12, 16, 18, 19, 20,
21, 22, 23, 25, 26, 27, 29, 31, 32, 36 and 37 of this Agreement. No Party may
terminate this Agreement, and no Consenting Stakeholder may be counted among the
Required Consenting Lenders or the Required Consenting Noteholders, as
applicable, for purposes of terminating this Agreement, if such Party failed to
perform or comply in all material respects with the terms and conditions of this
Agreement, and such failure to perform or comply causes, or resulted in, the
occurrence of one or more termination events specified herein.

13. Transfers of Claims and Interests. No Consenting Stakeholder shall (i) sell,
transfer, assign, pledge, hypothecate, encumber, grant a participation interest
in, or otherwise dispose of, directly or indirectly, any of its right, title, or
interest in respect of any of such Consenting Stakeholder’s claims against, or
interests in, any Affinion Party, as applicable, in whole or in part or
(ii) deposit any of such Consenting Stakeholder’s claims against, or interests
in, any Affinion Party, as applicable, into a voting trust, or grant any
proxies, or enter into a voting agreement with respect to any such claims or
interests (the actions described in clauses (i) and (ii) are collectively
referred to herein as a “Transfer” and the Consenting Stakeholder making such
Transfer is referred to herein as the “Transferor”), unless such Transfer is to
another Consenting Stakeholder or any other entity (a “Transferee”) that first
agrees in writing to be bound by the terms of this Agreement by executing and
delivering to the Affinion Parties a Transferee Joinder substantially in the
form attached hereto as Exhibit F (the “Transferee Joinder”). With respect to
claims against or interests in an Affinion Party held by the relevant Transferee
upon consummation of a Transfer in accordance herewith, such Transferee is
deemed to make all of the representations, warranties, and covenants of a
Consenting Stakeholder, set forth in this Agreement as of the date of such
Transfer. Upon compliance with the foregoing, the Transferor shall be deemed to
relinquish its rights (and be released from its obligations, except for any
liability for

 

24

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breach of this Agreement that occurs prior to such Transfer and any remedies
with respect to such claim) under this Agreement to the extent of such
transferred rights and obligations. Any Transfer made in violation of this
Section 13 shall be deemed null and void ab initio and of no force or effect,
regardless of any prior notice provided to the Affinion Parties and/or any
Consenting Stakeholder, and shall not create any obligation or liability of any
Affinion Party or any other Consenting Stakeholder to the purported transferee.
Notwithstanding the foregoing, a Qualified Marketmaker (as defined below),
acting solely in its capacity as such, that acquires any Lender Claims subject
to this Agreement shall not be required to execute a Transferee Joinder or
otherwise agree to be bound by the terms and conditions set forth in this
Support Agreement if, and only if, such Qualified Marketmaker sells or assigns
such Lender Claims prior to the earlier of (i) the scheduled expiration of the
Exchange Offer or (ii) the end of the tenth (10th) Business Day following its
acquisition of such Claims, and the purchaser of such Claims is a Consenting
Stakeholder (which Consenting Stakeholder shall give notice of such purchase to
the Affinion Parties) or an entity that executes and provides a Transferee
Joinder in accordance with the terms set forth in this Section 13; provided,
however, that any such Qualified Marketmaker that is a Party to this Agreement
shall otherwise be subject to the terms and conditions of this Agreement. In
addition, notwithstanding that a Qualified Marketmaker is a Consenting
Stakeholder, to the extent such Qualfied Marketmaker acquired any Lender Claims
that are not subject to this Agreement with the purpose and intent of acting as
a Qualified Marketmaker for such Lender Claims, such Qualified Marketmaker shall
not be bound by the terms and conditions set forth in this Agreement with
respect to such Lender Claims and may transfer such Lender Claims to a
transferee that is not a Consenting Stakeholder at the time of such Transfer
without the requirement that the transferee be or become a signatory to this
Agreement or execute a Transferee Joinder; provided, however, that any such
Qualified Marketmaker that is a Party to this Agreement shall otherwise be
subject to the terms and conditions of this Agreement. For purposes of this
Section 13, “Qualified Marketmaker” means an entity that holds itself out to the
public or applicable private markets as standing ready in the ordinary course of
business to purchase from customers and sell to customers claims against the
Affinion Parties, in its capacity as a dealer or market maker in claims against
the Affinion Parties. For the avoidance of doubt, to the extent that a
Consenting Stakeholder no longer holds any claims against, or interests in, the
Affinion Parties, it will no longer be deemed a Consenting Stakeholder for
purposes of determining whether a Qualified Marketmaker is required to execute a
Transferee Joinder. For the avoidance of doubt, all obligations and restrictions
imposed, and rights granted, by this Section 13 are subject in their entirety to
Section 39 of this Agreement.

14. Further Acquisition of Claims or Interests.

 

  (a)

Nothing in this Agreement shall be construed as precluding any Consenting
Stakeholder or any of its affiliates from acquiring additional claims against or
interests in any Affinion Parties; provided, however, that any such claims or
interests shall automatically be subject to the terms and conditions of this
Agreement. Upon any such further acquisition by a Consenting Stakeholder or any
of their respective affiliates, such Consenting Stakeholder shall promptly
notify in writing the Affinion Parties, counsel to HPS (as defined below) and
counsel to Elliott (as defined below). Notwithstanding the foregoing, any claims
against or interests in any Affinion Parties purchased by an affiliate of
Goldman Sachs Bank USA shall not automatically be subject to the terms and
conditions of this Agreement.

 

25

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  (b)

Notwithstanding the foregoing, the party who is designated in the Confidential
Schedule of Holdings may settle or deliver any claims or interests pursuant to
an agreement to Transfer such claims or interest entered into by such Party
prior to the date of this Agreement and pending as of the date of such Party’s
entry into this Agreement without the requirement that the transferee be or
become a Party or execute a Transferee Joinder and any such Transfer shall not
be subject to the restrictions of Section 13.

15. Fees and Expenses.

 

  (a)

Subject to Section 12 of this Agreement, the Affinion Parties shall pay or
reimburse, and, if applicable, shall seek under the DIP/Cash Collateral
Documents authority to pay in the event the Chapter 11 Cases are commenced, when
due and payable (and in any event no later than five (5) days following receipt
of an invoice) all reasonable and documented fees and out-of-pocket expenses
(regardless of whether such fees and expenses were incurred before or after the
Petition Date (as defined below), and in each case, in accordance with (and when
due under) any applicable engagement letter or fee reimbursement letter with the
Affinion Parties) of: (a) Paul, Weiss, Rifkind, Wharton & Garrison LLP and one
local Delaware law firm, as counsel to HPS Investment Partners, LLC (“HPS”); (b)
FTI Consulting, Inc., as the financial advisor retained on behalf of HPS;
(c) White & Case LLP, Kleinberg Kaplan Wolff & Cohen, LLP, Debevoise & Plimpton
LLP, Ropes & Gray LLP and one local Delaware law firm, as counsel to Elliott
Associates LP, Elliott International LP, Manchester Securities Corp. and ZEV
Investments Limited (collectively, “Elliott”); (d) one financial advisor to
Elliott, (e) Covington & Burling LLP as counsel to Metro SPV LLC (“ICG”) and
Wachtell, Lipton Rosen & Katz LLP as counsel to Mudrick Capital Management, L.P.
(“Mudrick”), in each case in respect of the Transactions (the “Restructuring
Expenses”); provided, however, that any invoices shall be provided only in
summary form.

 

  (b)

In the event the Chapter 11 Cases are commenced, all such reasonable and
documented Restructuring Expenses incurred and invoiced up to the Petition Date
shall be paid in full prior to the Petition Date (without deducting any
retainers). The Restructuring Expenses shall be paid without the requirement for
the filing of retention applications, fee applications or any other applications
in the Chapter 11 Cases, and without any requirement for further notice of
Bankruptcy Court review or approval, but subject to any procedural requirements
in the DIP/Cash Collateral Documents.

 

26

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16. Consents and Acknowledgments. If the Transactions are to be effectuated
through the In-Court Restructuring, each Party irrevocably acknowledges and
agrees that this Agreement is not and shall not be deemed to be a solicitation
for consents to the Plan. The acceptance of the Plan by each of the Consenting
Stakeholders will not be solicited until such Parties have received the Offering
Memorandum and Disclosure Statement and related ballots in accordance with
applicable law, and will be subject to sections 1125, 1126, and 1127 of the
Bankruptcy Code. This Agreement does not constitute, and shall not be deemed to
constitute, an offer for the purchase, sale, exchange, hypothecation, or other
transfer of securities for purposes of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the “Securities
Act”) and the Securities Exchange Act of 1934, as amended (together with the
rules and regulations promulgated thereunder, the “Exchange Act”) (or any other
federal, state, or provincial law or regulation).

17. Representations and Warranties.

 

  (a)

Each Consenting Stakeholder hereby represents and warrants on a several and not
joint basis, for itself and not any other person or entity, that the following
statements are true, correct, and complete as of the date hereof:

 

  (i)

it has the power and authority to execute and deliver this Agreement and to
perform its obligations hereunder;

 

  (ii)

this Agreement has been duly executed and delivered by such Consenting
Stakeholder, and this Agreement is the legal, valid, and binding obligation of
such Consenting Stakeholder, enforceable against it in accordance with its
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors’ rights generally;

 

  (iii)

it is not a party to any contracts or other agreements that would conflict with,
restrict, or prohibit its ability to fulfill its obligations under this
Agreement;

 

  (iv)

it acknowledges that it has had the opportunity to speak with a representative
of the Affinion Parties and to obtain and review information reasonably
requested by such Consenting Stakeholder from the Affinion Parties, and that it
is not relying upon, and has not relied upon, any statement, representation or
warranty made by any person, including, without limitation, the Affinion
Advisors, other than the representations and warranties of the Affinion Parties
set forth in this Agreement and the Definitive Documentation, and that it has
sufficient knowledge and experience to evaluate properly the terms and
conditions of this Agreement, the Term Sheet and the Transactions, and has been
afforded the opportunity to consult with its legal and financial advisors with
respect to its decision to execute this Agreement and participate in the
Transactions, and it has made its own analysis and decision to enter into this
Agreement and participate in the Transactions and otherwise investigated this
matter to its full satisfaction;

 

27

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  (v)

it beneficially owns, serves as nominee, investment manager, or advisor for
beneficial holders of, or otherwise has the power to control or has investment
authority over the aggregate principal amount of the claims and interests
identified across from its name on the Confidential Schedule of Holdings and in
the amounts set forth therein as of the date of the Original Support Agreement,
in each case, free and clear of any pledge, security interest, claim, lien,
voting agreement, proxy or other encumbrance of any kind;

 

  (vi)

it is (i) a “qualified institutional buyer” (as defined in Rule 144A under the
Securities Act) or (ii) an institutional “accredited investor” (within the
meaning of Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D under the
Securities Act);

 

  (vii)

it is an “institutional account” with the meaning of FINRA Rule 4512(c);

 

  (viii)

it is not subject to a disqualification described in Rule 506(d) of Regulation D
under the Securities Act;

 

  (ix)

it understands that it may be required to bear the economic risk of its
investment in the securities and other consideration it may receive in the
Transactions indefinitely, and is able to bear such risk and the risk of a
complete loss of its investment in the Affinion Parties resulting from its
participation in the Transactions;

 

  (x)

it understands that none of the securities that may be issued in any of the
Transactions will be registered under the Securities Act or any state securities
laws and that any such securities are being offered in reliance on specific
exemptions from the registration requirements of the Securities Act and state
securities law and regulations, and agrees that the Affinion Parties may rely
upon the truth and accuracy of, and such Consenting Stakeholder’s compliance
with, its representations, warranties, agreements, acknowledgments, and
understandings set forth herein in order to determine the availability of such
exemptions and the eligibility of the Consenting Stakeholder to acquire any
securities as part of the Transactions. The Consenting Stakeholder understands
that there is no established market for the securities and that no public market
for the securities may develop. The Consenting Stakeholder understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the securities
or the fairness or suitability of the investment in the securities, nor have
such authorities passed upon or endorsed the merits of the Transactions; and

 

28

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  (xi)

to the extent it acquires any securities in the Transactions, it is acquiring
such securities for investment purposes only for its own account without a view
to distribution thereof within the meaning of the Securities Act.

 

  (b)

Each Affinion Party hereby represents and warrants on a joint and several basis
(and not any other person or entity other than the Affinion Parties) to each of
the other Parties to this Agreement that the following statements are true,
correct, and complete as of the date hereof (provided that it is understood and
agreed that references to “affiliates” below excludes any of the Consenting
Stakeholders and their affiliates (other than the Affinion Parties)):

 

  (i)

it has sufficient knowledge and experience to evaluate properly the terms and
conditions of the this Agreement and the Term Sheet, and has been afforded the
opportunity to consult with its legal and financial advisors with respect to its
decision to execute this Agreement, and it has made its own analysis and
decision to enter into this Agreement and otherwise investigated this matter to
its full satisfaction.

 

  (ii)

it is a corporation, limited liability company or limited company, as
applicable, duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or formation, as applicable; and it is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where failure to be so qualified or
in good standing would not individually or in the aggregate have a Material
Adverse Effect. “Material Adverse Effect” means a change, event, occurrence or
development that, either alone or in combination, has had or would reasonably be
expected to have a materially adverse effect on (a) the business, properties,
operations, condition (financial or otherwise) or results of operations of the
Affinion Parties taken as a whole, or (b) its ability to perform its obligations
under this Agreement; except any change, event, occurrence or development
arising out of, resulting from or attributable to any of the following after the
date hereof: (a) a general change or development in the economy, market
(including the capital, financial, credit or securities markets) or political
environment, (b) a general change or development in any of the industries in
which the Affinion Parties operate, (c) a change or proposed change in law or
the interpretation thereof affecting such industries, (d) a change or proposed
change in GAAP or the interpretation thereof, (e) the

 

29

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  outbreak or escalation of hostilities involving the United States, the
declaration by the United States of a national emergency or war, any other acts
of war (whether declared or undeclared), sabotage, military action or any
escalation or worsening thereof, earthquakes or similar catastrophes, or the
occurrence of any other calamity or crisis, including an act of terrorism,
(f) the announcement, pendency or consummation of this Agreement and/or the
Transactions, or the failure to take actions as a result of any terms or
conditions set forth in this Agreement, (g) any action taken that is required by
this Agreement or at the express request of the Consenting Stakeholders, (h) any
failure to meet internal or published projections, forecasts, performance
measures, operating statistics or revenue or earnings predictions for any period
(it being understood that the underlying cause of any such failure may be taken
into consideration when determining whether a Material Adverse Effect has
occurred unless otherwise excluded pursuant to the terms of this definition;
provided, that, with respect to the matters described in any of the foregoing
clauses (a) through (e), such matter shall only be excluded in determining
whether a Material Adverse Effect has occurred or would reasonably be expected
to occur to the extent that such matter does not have a disproportionate adverse
effect on the Affinion Parties, taken as a whole, relative to other comparable
participants operating in the principal industries in which the Affinion Parties
operate;

 

  (iii)

it has the power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and have taken all necessary corporate,
limited liability company or other action, as applicable, to authorize the
execution, delivery, and performance of this Agreement, including approval of
each of the independent directors or managers, as applicable, of each Affinion
Party;

 

  (iv)

(a) this Agreement has been duly executed and delivered by it; and (b) (1) this
Agreement is the legal, valid, and binding obligation of it, enforceable against
it in accordance with its terms and (2) if the Transactions are implemented
pursuant to an In-Court Restructuring, subject to the provisions of sections
1125 and 1126 of the Bankruptcy Code, this Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its terms,
in each case, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors’ rights generally and is in full force and effect;

 

30

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  (v)

neither the execution and delivery by it of this Agreement, the compliance by it
with the terms and conditions hereof, nor the consummation by it or any of its
affiliates of the Transactions will (a) violate, result in a breach of, or
constitute a default under their respective certificates of incorporation,
bylaws, certificate of formation, articles of association or limited liability
company agreement, as applicable, or the respective organization documents of
any of its affiliates; (b) subject to the effectiveness of the Stockholder
Consent, violate, result in a breach of, or constitute (with or without notice
or lapse of time, or both) a default (other than, for the avoidance of doubt, a
breach or default that would be triggered as a result of the Chapter 11 Cases or
any Affinion Party’s undertaking to implement the Transactions through the
Chapter 11 Cases) under any contract, judgment, order, or decree to which it or
any of its affiliates is a party or is otherwise bound, or give to others any
rights or interests (including rights of purchase, termination, cancellation or
acceleration) under any such agreement or instrument; or (c) conflict with or
violate any applicable laws, statutes, rules, regulations, ordinances judgments
or orders (whether federal, state, local or foreign), except in the case of
clause (ii) as would not reasonably be expected to materially and adversely
affect any or all of the Affinion Parties or their ability to consummate the
Transactions as contemplated herein;

 

  (vi)

Affinion Holdings has filed or furnished, as applicable, all forms, filings,
registrations, submissions, statements, certifications, reports, and documents
required to be filed or furnished by it with the U.S. Securities and Exchange
Commission (the “SEC”) under the Exchange Act and the Securities Act
(collectively, “SEC Filings”), since December 31, 2016 (the SEC Filings since
December 31, 2016 and through the date hereof, including any amendments thereto,
the “Company Reports”). As of their respective dates (or, if amended prior to
the date hereof, as of the date of such amendment), each of the Company Reports,
as amended, complied in all material respects with the applicable requirements
of the Exchange Act and the Securities Act, and any rules and regulations
promulgated thereunder applicable to the Company Reports. As of their respective
dates (or, if amended prior to the date hereof, as of the date of such
amendment), the Company Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading;

 

  (vii)

Affinion Holdings’ consolidated financial statements (including, in each case,
any notes thereto) contained in the Company Reports were prepared (i) in
accordance with generally accepted accounting principles in the United States of
America (“GAAP”) applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto or, in the case of interim
consolidated

 

31

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  financial statements, where information and footnotes contained in such
financial statements are not required under the rules of the SEC to be in
compliance with GAAP) and (ii) in compliance, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, and in each case such consolidated financial statements fairly
presented, in all material respects, the consolidated financial position,
results of operations, changes in stockholder’s equity and cash flows of
Affinion Holdings and its consolidated subsidiaries as of the respective dates
thereof and for the respective periods covered thereby (subject, in the case of
unaudited statements, to normal year-end adjustments);

 

  (viii)

the issuance of the New Notes has been duly authorized by Affinion, and, upon
issuance, the New Notes will be legal, valid and binding obligations of
Affinion, enforceable against Affinion in accordance with their terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally;

 

  (ix)

the issuance of the New Penny Warrants and, subject to the effectiveness of the
Stockholder Consent and the Merger, the Investor Warrants, Class M Common Stock
and the New Common Stock (as defined in the Term Sheet) has been duly authorized
by Affinion Holdings and, upon issuance, the New Penny Warrants will be legal,
valid and binding obligations of Affinion Holdings, enforceable against Affinion
Holdings in accordance with their terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors’ rights generally. Subject to the
effectiveness of the Stockholder Consent and the Merger, the New Common Stock
issuable upon the exercise of the New Penny Warrants will be, prior to issuance,
duly authorized, will be validly issued, fully paid and nonassessable and will
not be issued in violation of the certificate of incorporation, by-laws or other
organizational documents of Affinion Holdings. The authorized, issued and
outstanding share capital of each of Affinion Holdings is as set forth in the
Offering Memorandum and Disclosure Statement (other than for subsequent
issuances, if any, pursuant to employee benefit plans, or upon the exercise of
outstanding options or warrants). None of the outstanding Company Common Stock
or securities convertible into Company Common Stock was issued in violation of
any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of Affinion Holdings. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or

 

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  exercisable for, any share capital of Affinion Holdings other than those
described in the Offering Memorandum and Disclosure Statement or incorporated by
reference therein. The descriptions of Affinion Holdings’ equity compensation
plans or arrangements, and the options or other rights granted thereunder, set
forth in the Offering Memorandum and Disclosure Statement or incorporated by
reference therein accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights;

 

  (x)

on or prior to the consummation of the Exchange Offer, any guarantee made by it
relating to the issuance of the New Notes will be duly authorized by it or such
affiliate and, upon issuance of the New Notes, the guarantee shall be a legal,
valid and binding obligation of it, enforceable against it in accordance with
its terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally and is in full force and effect;

 

  (xi)

assuming the truth and accuracy of the representations of each Consenting
Stakeholder set forth in Section 17(a), it is not necessary, in connection with
the issuance of the New Notes, New Penny Warrants, Investor Warrants or New
Common Stock to the Consenting Stakeholder, to register the New Notes, New Penny
Warrants, Investor Warrants, Class M Common Stock or New Common Stock under the
Securities Act;

 

  (xii)

Affinion has prepared and delivered to each Consenting Stakeholder copies of the
definitive Offering Memorandum and Disclosure Statement related to the Exchange
Offer;

 

  (xiii)

upon the closing of the issuance of the New Notes, the New Indenture governing
the New Notes shall be a legal, valid and binding obligation of each of the
Affinion Parties and any affiliate thereof that acts as a guarantor of the New
Notes, enforceable against such parties in accordance with their terms, except
as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally;

 

  (xiv)

except as would not have, individually or in the aggregate, a Material Adverse
Effect or as disclosed in the Offering Memorandum and Disclosure Statement, it
and its affiliates have good and marketable title to all real properties and
good title to all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would affect the value thereof

 

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  or interfere with the use made or to be made thereof by them; and except as
would not have, individually or in the aggregate, a Material Adverse Effect or
as disclosed in the Offering Memorandum and Disclosure Statement, it and its
affiliates hold any leased real or personal property under valid and (assuming
such leases are binding and enforceable against the other parties thereto)
enforceable leases with no exceptions that would materially interfere with the
use made or to be made thereof by them;

 

  (xv)

it and its affiliates possess all approvals, permits and licenses issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by them except as would not have, individually or in the aggregate,
a Material Adverse Effect and have not received any notice of proceedings
relating to the revocation or modification of any such certificate, authority or
permit that, if determined adversely to it or any of its affiliates, would
individually or in the aggregate have a Material Adverse Effect;

 

  (xvi)

no labor dispute with its or any of its affiliates’ employees exists or, to its
knowledge, is imminent that would reasonably be likely to have a Material
Adverse Effect;

 

  (xvii)

it and its affiliates own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know how, patents,
copyrights, confidential information and other intellectual property
(collectively, “intellectual property rights”) necessary to conduct the business
now operated by them, or presently employed by them except as would not
individually or in the aggregate result in a Material Adverse Effect, and have
not received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to it or its affiliates, would individually or in the aggregate have a
Material Adverse Effect;

 

  (xviii)

except as disclosed in the Offering Memorandum and Disclosure Statement or as
would not reasonably be expected to have a Material Adverse Effect, to its
knowledge, it and its affiliates are in compliance with, and conduct their
business in conformity with, all U.S. federal, state and foreign marketing,
privacy and insurance laws, rules and regulations applicable to them in
connection with conducting their business as described in the Offering
Memorandum and Disclosure Statement;

 

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  (xix)

except as disclosed in the Offering Memorandum and Disclosure Statement, neither
it nor any of its affiliates, to its knowledge, is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or body or
any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “environmental laws”), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any offsite disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and it is not aware of any pending
investigation which would reasonably be likely to lead to such a claim;

 

  (xx)

except as disclosed in the Offering Memorandum and Disclosure Statement, there
are no pending actions, suits or proceedings against or affecting it, its
affiliates or any of their respective properties that, individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect, or
would materially and adversely affect their ability to perform their obligations
hereunder, under the New Notes, New Common Stock, Investor Warrants or the New
Penny Warrants or which are otherwise material in the context of the issued of
the New Notes, New Common Stock, Investor Warrants or the New Penny Warrants;
and, to its knowledge, no such actions, suits or proceedings are threatened;

 

  (xxi)

it maintains a system of accounting controls sufficient to provide reasonable
assurances that: (a) transactions are executed in accordance with management’s
general or specific authorization; (b) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles, as applied in the United States, and to maintain
accountability for assets; (c) access to assets is permitted only in accordance
with management’s general or specific authorization; and (d) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;

 

  (xxii)

except as disclosed in the Offering Memorandum and Disclosure Statement, since
the date of the latest financial statements included in the latest Company
Report: (i) there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of Affinion
and its subsidiaries taken as a whole, and, (ii) except as disclosed in or
contemplated by the Offering Memorandum and Disclosure Statement, since
December 31, 2017 there has been no dividend or distribution of any kind
declared, paid or made by Affinion on any class of its capital stock;

 

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  (xxiii)

except as disclosed in writing in Schedule 2 annexed hereto, it has no knowledge
of any Default or Event of Default (each as defined in the Credit Agreement or
the Existing Notes Indenture, as applicable) under the Credit Agreement or the
Existing Notes Indenture which has occurred and is continuing.

 

  (xxiv)

except as would not have, individually or in the aggregate, a Material Adverse
Effect or as otherwise disclosed in the Offering Memorandum and Disclosure
Statement, it and its affiliates are insured by nationally recognized insurers
with coverage in such amounts and with such deductibles and covering such risks
as are generally deemed prudent and customary for their businesses including,
but not limited to, policies covering real and personal property owned or leased
by it or its affiliates against theft, damage, destruction, acts of vandalism
and earthquakes. It has no reason to believe that it or any of its affiliates
will not be able (a) to renew its existing insurance coverage as and when such
policies expire or (b) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not have a Material Adverse Effect. Neither it nor any of
its affiliates has been denied and not subsequently obtained any insurance
coverage that it has sought or for which it has applied;

 

  (xxv)

neither it nor any of its affiliates nor, to its knowledge, any of its or their
directors, officers, agents or employees or affiliate is aware of or has taken
any action, directly or indirectly, that would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (the “FCPA”), including, without limitation, making
use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA, and it and its affiliates, have conducted their businesses in compliance
with the FCPA and have instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith;

 

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  (xxvi)

its and its affiliates’ operations are and have been conducted at all times in
compliance with all applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations
or guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving it or any of its affiliates with respect to the Money Laundering Laws
is pending or, to its knowledge, threatened; and

 

  (xxvii)

neither it nor any of its affiliates nor, to its knowledge, any of its or their
directors, officers, agents, employees or affiliates is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and it will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds, to any subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently subject to
any U.S. sanctions administered by OFAC.

18. Automatic Stay. Each of the Parties acknowledges and agrees that this
Agreement is being executed in connection with negotiations concerning a
possible financial restructuring of the Affinion Parties and in contemplation of
possible chapter 11 filings by the Affinion Parties, and the rights granted in
this Agreement, including upon a Termination Event, after the commencement of
the Chapter 11 Cases may be exercised by each signatory hereto without approval
of any court, including the Bankruptcy Court, and that no such exercise shall be
a violation of the automatic stay provisions of section 362 of the Bankruptcy
Code.

19. Settlement. This Agreement and the Transactions are part of a proposed
settlement of matters that could otherwise be the subject of litigation among
the Parties. Nothing herein shall be deemed an admission of any kind. This
Agreement and all negotiations related thereto are subject to Federal Rule of
Evidence 408 and any applicable state rules of evidence. This Agreement and all
negotiations relating thereto shall not be admissible into evidence in any
proceeding other than in a proceeding to enforce the terms of this Agreement or
the exhibits attached hereto (as applicable).

20. Relationship Among Parties. Notwithstanding anything herein to the contrary,
the duties and obligations of the Consenting Stakeholders under this Agreement
shall be several, not joint. No Party shall have any responsibility by virtue of
this Agreement for any trading by any other entity, except to the extent that
such other entity trades at such Party’s direction or on such Party’s behalf. No
prior history, pattern, or practice of sharing confidences among or between the
Parties shall in any way affect or negate this Agreement. The Consenting
Noteholders hereby represent and warrant they have no agreement, arrangement, or
understanding with respect to acting together for the purpose of acquiring,
holding, voting, or disposing of any equity securities of the Affinion Parties
and do not constitute a “group” within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934, as amended. No action taken by any Consenting
Lender or Consenting Noteholder pursuant to this Agreement shall be deemed to
constitute or to create a presumption by any of the Parties that the Consenting
Lenders or the Consenting Noteholders, as applicable, are in any way acting in
concert or as such a “group.”

 

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21. Specific Performance. It is understood and agreed by the Parties that money
damages would not be a sufficient remedy for any breach of this Agreement by any
Party and each non-breaching Party shall be entitled to seek specific
performance and injunctive or other equitable relief (including attorneys’ fees
and costs) as the sole and exclusive remedy of any such breach of this Agreement
without the necessity for proving the inadequacy of money damages as a remedy,
including, without limitation, an order of the Bankruptcy Court or other court
of competent jurisdiction requiring any Party to comply promptly with any of its
obligations hereunder, and each Party hereby waives, and agrees not to raise as
a defense against the granting of any such relief, the posting of any bond or
other security by the party seeking specific performance and any obligation of
the party seeking specific performance to demonstrate actual or potential harm.

22. Governing Law and Consent to Jurisdiction and Venue. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to such state’s choice of law provisions which would
require or permit the application of the law of any other jurisdiction. By its
execution and delivery of this Agreement, each Party irrevocably and
unconditionally agrees for itself that any legal action, suit, or proceeding
against it with respect to any matter arising under or arising out of or in
connection with this Agreement or for recognition or enforcement of any judgment
rendered in any such action, suit, or proceeding shall be brought in the federal
or state courts located in the Borough of Manhattan, City of New York, and by
executing and delivering this Agreement, each of the Parties irrevocably accepts
and submits itself to the jurisdiction of such courts, exclusive of any other
forum, generally and unconditionally, with respect to any such action, suit, or
proceeding. Notwithstanding the foregoing consent to New York jurisdiction, upon
the commencement of any Chapter 11 Cases and until the effective date of the
Plan, each Party agrees that the Bankruptcy Court shall have exclusive
jurisdiction of all matters arising out of or in connection with this Agreement.
By executing and delivering this Agreement, and upon commencement of the
Chapter 11 Cases, each of the Parties irrevocably and unconditionally submits to
the personal jurisdiction of the Bankruptcy Court solely for purposes of any
action, suit, proceeding, or other contested matter arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment rendered or
order entered in any such action, suit, proceeding, or other contested matter.

23. WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE PARTIES WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY ACTION, PROCEEDING, COUNTERCLAIM, OR
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN ANY OF THE
PARTIES ARISING OUT OF, CONNECTED WITH, RELATING TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTES RESOLVED IN COURT SHALL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

24. Successors and Assigns. Except as otherwise provided in this Agreement and
subject to Sections 13 and 14 of this Agreement, neither this Agreement nor any
of the rights or obligations hereunder may be assigned by any Party hereto,
without the prior written consent of the other Parties hereto, and then only to
a person or entity that has agreed to be bound by the provisions of this
Agreement. This Agreement is intended to and shall bind and inure to the benefit
of each of the Parties and each of their respective permitted successors,
assigns, heirs, executors, administrators, and representatives.

 

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25. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement
shall be solely for the benefit of the Parties and no other person or entity
shall be a third-party beneficiary of this Agreement.

26. Notices. All notices (including, without limitation, any notice of
termination or breach) and other communications from any Party hereunder shall
be in writing and shall be deemed to have been duly given if personally
delivered by courier service, messenger, email, or facsimile to the other
Parties at the applicable addresses below, or such other addresses as may be
furnished hereafter by notice in writing. Any notice of termination or breach
shall be delivered to all other Parties.

 

  (a)

If to any Affinion Party:

c/o Affinion Group Holdings, Inc.

6 High Ridge Park

Stamford, CT 06905

Attn: Brian J. Fisher, General Counsel

Phone: (203) 956-1000

Fax: (203) 956-1206

Email: bfisher@affiniongroup.com

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld, LLP

One Bryant Park

New York, NY 10036

Attn: David H. Botter, Sarah Link Schultz & Rosa A. Testani

Phone: (212) 872-1000

Fax: (212) 872-1002

Email: dbotter@akingump.com, sschultz@akingump.com, &

rtestani@akingump.com

 

  (b)

If to HPS:

HPS Investment Partners, LLC

40 West 57th Street

New York, NY 10019

Attention: Colbert Cannon

Email: colbert.cannon@hpspartners.com

 

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with a copy (which shall not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019

Attn: Paul M. Basta and Sarah Harnett

Phone: (212) 373-3000

Fax: (212) 492-0023 and (212) 492-0029

Email: pbasta@paulweiss.com, sharnett@paulweiss.com

 

  (c)

If to Elliott:

Elliott Management Corporation

40 West 57th Street, 30th Floor

New York, NY 10019

Attn: Austin Camporin and Sam Dostart

Email: acamporin@elliottmgmt.com; sdostart@elliottmgmt.com

with a copy (which shall not constitute notice) to:

White & Case LLP

1221 Avenue of the Americas

New York, NY 10020

Attn: Philip Abelson and Jonathan Michels

Phone: (212) 819-8200

Fax: (212) 354-8113

Email: philip.abelson@whitecase.com; jmichels@whitecase.com

27. Entire Agreement. This Agreement (and the exhibits and schedules attached
hereto) constitutes the entire agreement of the Parties with respect to the
transactions contemplated herein, and supersedes all prior negotiations,
discussions, promises, representations, warranties, agreements, and
understandings, whether written or oral, between or among the Parties with
respect thereto; provided, however, that, for the avoidance of doubt, any
confidentiality agreement executed by any Consenting Stakeholder shall survive
this Agreement and shall continue to be in full force and effect in accordance
with its terms; provided, further, that the Parties intend to enter into the
Definitive Documentation after the date hereof to consummate the Transactions.

28. Amendments. Except as otherwise provided herein, this Agreement may not be
modified, amended, amended and restated, or supplemented, and no term or
provision hereof or thereof waived, without the express prior written consent of
the Affinion Parties and the Required Consenting Stakeholders; provided that,
(A) any amendments to the defined term “Required Consenting Lenders” shall
require the written consent of the Required Consenting Lenders, (B) any
amendments to the defined term “Required Consenting Noteholders” shall require
the written consent of the Required Consenting Noteholders, (C) any amendments
to the defined term “Second Lien Lenders” shall require the written consent of
each of the Second Lien Lenders and (D) any amendment that would materially and
adversely, directly or indirectly, affect a Consenting Stakeholder shall require
the prior written consent of such Consenting Stakeholder.

 

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29. Reservation of Rights.

 

  (a)

Except as expressly provided in this Agreement, nothing herein is intended to,
or does, in any manner waive, limit, impair, or restrict the ability of any
Party to protect and preserve its rights, remedies, and interests, including
without limitation, its claims against any of the other Parties.

 

  (b)

Without limiting sub-clause (a) of this Section 29 in any way, if the
Transactions are not consummated in the manner and on the timeline set forth in
this Agreement, or if this Agreement is terminated for any reason, nothing shall
be construed herein as a waiver by any Party of any or all of such Party’s
rights, remedies, claims, and defenses and the Parties expressly reserve any and
all of their respective rights, remedies, claims, and defenses, subject to
Section 19 of this Agreement. This Agreement, the Plan (in the event the Chapter
11 Cases are commenced), and any related document shall in no event be construed
as or be deemed to be evidence of an admission or concession on the part of any
Party of any claim or fault or liability or damages whatsoever. Each of the
Parties denies any and all wrongdoing or liability of any kind and does not
concede any infirmity in the claims or defenses which it has asserted or could
assert.

30. Counterparts. This Agreement may be executed in one or more counterparts,
each of which, when so executed, shall constitute the same instrument, and the
counterparts may be delivered by facsimile transmission or by electronic mail in
portable document format (.pdf).

31. Public Disclosure; Confidentiality.

 

  (a)

This Agreement, as well as its terms, its existence, and the existence of the
negotiation of its terms are expressly subject to any existing confidentiality
agreements executed by and among any of the Parties as of the date hereof;
provided, however, that after the public announcement by any of the Affinion
Parties of the entry into this Agreement, the Parties may disclose the existence
of, or the terms of, this Agreement or any other material term of the
Transactions contemplated herein without the express written consent of the
other Parties to such existing confidentiality agreements. The Affinion Parties
shall submit drafts to legal counsel for HPS, Elliott, ICG and Mudrick of any
press release and public documents that constitute disclosure of the existence
or terms of this Agreement or any amendment to the terms of this Agreement at
least one (1) day before making any such disclosure. The Affinion Parties, HPS,
Elliott, ICG and Mudrick shall (a) consult with each other before issuing any
press release or otherwise making any public statement or filing with respect to
the transactions contemplated by this Agreement and (b) not issue any such press
release or make any such public statement or filing prior to such consultation
and review and the receipt of the prior consent of the other, unless required by
applicable law or regulations of any applicable stock exchange or governmental
authority, in which case, the Party required to issue the press release or make
the public statement or filing shall, prior to issuing such press release or
making such public statement or filing, use its commercially reasonable efforts
to

 

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  allow the other reasonable time to comment on such press release or public
statement or filing to the extent practicable. Except as required by applicable
law or otherwise permitted under the terms of any other agreement between the
Affinion Parties and any Consenting Stakeholder, no Party or its advisors shall
disclose to any person or entity (including, for the avoidance of doubt, any
other Consenting Stakeholder), other than advisors to the Affinion Parties, the
principal amount or percentage of (i) Lender Claims held by any Consenting
Lender or (ii) Note Claims held by any Consenting Noteholder, or use the name of
any Consenting Stakeholder or its controlled affiliates, officers, directors,
managers, stockholders, members, employees, partners, representatives and agents
in any press release, in each case, without the prior written consent of such
Consenting Stakeholder; provided that (i) if such disclosure is required by law,
subpoena, or other legal process or regulation, the disclosing Party shall
afford the relevant Consenting Noteholder a reasonable opportunity to review and
comment in advance of such disclosure and shall take all reasonable measures to
limit such disclosure, (ii) the foregoing shall not prohibit the disclosure of
the aggregate percentage or aggregate principal amount of Lender Claims or Note
Claims held by all Consenting Lenders and Consenting Noteholders, respectively,
and (iii) any Party may disclose information requested by a regulatory authority
with jurisdiction over its operations to such authority without limitation or
notice to any Party or other person or entity. Notwithstanding the provisions in
this Section 31, any Party may disclose to the extent consented to in writing by
a Consenting Stakeholder such Consenting Stakeholder’s individual holdings. Any
public filing of this Agreement, with the Bankruptcy Court or otherwise, which
includes executed signature pages to this Agreement shall include such signature
pages only in redacted form with respect to the holdings of each Consenting
Stakeholder (provided that the holdings disclosed in such signature pages may be
filed in unredacted form with the Bankruptcy Court under seal).

 

  (b)

Notwithstanding anything herein to the contrary, the Affinion Parties shall be
permitted to make such public disclosures with the SEC as the Affinion Parties,
based on the advice of outside counsel, deem necessary or appropriate to satisfy
their obligations to make public disclosures pursuant to the Exchange Act.

 

  (c)

Notwithstanding anything herein to the contrary, the Parties may enter into
discussions with principals, employees, agents or professionals of the Lenders
and the Administrative Agent, the Second Lien Lenders, the Noteholders and the
Trustee, and holders of Company Common Stock (including of Class C/D Common
Stock) or Existing Warrants in furtherance and support of this Agreement and the
Transactions contemplated herein; provided, however, that prior to any
Consenting Stakeholder engaging in such discussions, Affinion Holdings has
confirmed to such Consenting Stakeholder that the foregoing persons have entered
into confidentiality agreements with, or otherwise owe a duty of trust or
confidence to, Affinion Holdings.

 

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32. Creditors’ Committee. Notwithstanding anything herein to the contrary, if
any Consenting Stakeholder is appointed to, and serves on an official committee
of creditors in the Chapter 11 Cases, the terms of this Agreement shall not be
construed so as to limit such Consenting Stakeholder’s exercise of its fiduciary
duties arising from its service on such committee; provided, however, that
service as a member of a committee shall not relieve such Consenting Stakeholder
of its obligations to affirmatively support the Transactions on the terms and
conditions set forth in this Agreement and the Term Sheet.

33. Severability. If any portion of this Agreement, or the application of any
such provision or part thereof to any person or entity or circumstance, shall be
held to be invalid, unenforceable, void or voidable, or violative of applicable
law, the remaining portions of this Agreement insofar as they may practicably be
performed shall remain in full force and effect and binding on the Parties so
long as the economic or legal substance of the Transactions contemplated by this
Agreement is not affected in any manner materially adverse to any Party. Upon
any such determination of invalidity, the Parties shall negotiate in good faith
to modify this Agreement to effect the original intent of the Parties as closely
as possible in a reasonably acceptable manner in order that the Transactions
contemplated by this Agreement are consummated as originally contemplated to the
greatest extent possible.

34. Additional Parties. Without in any way limiting the provisions hereof,
additional Lenders, Second Lien Lenders or Noteholders may elect to become
Parties by executing and delivering to the other Parties a counterpart hereof.
Such additional Parties shall become Consenting Stakeholders under this
Agreement in accordance with the terms of this Agreement.

35. Time Periods. If any time period or other deadline provided in this
Agreement expires on a day that is not a Business Day, then such time period or
other deadline, as applicable, shall be deemed extended to the next succeeding
Business Day.

36. Headings. The section headings of this Agreement are for convenience of
reference only and shall not, for any purpose, be deemed a part of this
Agreement.

37. Interpretation. This Agreement is the product of negotiations among the
Parties, and the enforcement or interpretation hereof, is to be interpreted in a
neutral manner, and any presumption with regard to interpretation for or against
any Party by reason of that Party having drafted or caused to be drafted this
Agreement or any portion hereof, shall not be effective in regard to the
interpretation hereof. For purposes of this Agreement, unless otherwise
specified: (a) each term, whether stated in the singular or the plural, shall
include both the singular and the plural, and pronouns stated in the masculine,
feminine, or neuter gender shall include the masculine, feminine, and the neuter
gender; (b) all references herein to “Articles”, “Sections”, and “Exhibits” are
references to Articles, Sections, and Exhibits of this Agreement; (c) the words
“herein,” “hereof,” “hereunder,” and “hereto” refer to this Agreement in its
entirety rather than to a particular portion of this Agreement; (d) the word
“shall” will be read as an imperative; (e) the word “or” shall be read
inclusively to mean “and/or,” except as context requires otherwise and (f) the
word “including” shall be read inclusively to mean “including with limitation.”

 

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38. Remedies Cumulative; No Waiver. All rights, powers, and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power, or remedy thereof by any Party shall not preclude the simultaneous or
later exercise of any other such right, power, or remedy by such Party. The
failure of any Party hereto to exercise any right, power, or remedy provided
under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon strict compliance by any other Party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such Party of its right
to exercise any such or other right, power, or remedy or to demand such strict
compliance. No waiver of any Party shall be enforceable against such Party
without the signed waiver of the Party against whom enforcement is being sought.

39. Right of First Offer in Respect of Existing Notes.

 

  (a)

Subject to the terms and conditions of this Section 39, for so long as Elliott,
ICG or Mudrick remains a Consenting Noteholder (each, a “ROFO Owner”), such
Consenting Noteholder shall have a right of first offer to purchase any Existing
Notes that any other Consenting Noteholder (a “ROFO Initiator”) proposes to
Transfer. No Consenting Noteholder may Transfer any Existing Notes without first
complying with the terms and conditions of this Section 39; provided that this
Section 39 shall not apply to a transfer by a Consenting Noteholder to one or
more of its Affiliates.

 

  (b)

Each time a ROFO Initiator proposes to Transfer any Existing Notes owned by it
(the “Transfer Notes”), the ROFO Initiator shall give a written notice (the
“ROFO Initiator Notice”) to each of the ROFO Owners who is not an Affiliate of
the ROFO Initiator, specifying the aggregate principal amount of the Existing
Notes proposed to be sold by such ROFO Initiator and the price at which such
ROFO Initiator desires to sell such Existing Notes (the “Transfer Price”).

 

  (c)

Within three (3) Business Days after the receipt of a ROFO Initiator Notice (the
“ROFO Exercise Period”), each ROFO Owner wishing to exercise its right of first
offer under this Section 39 shall submit a written notice to the ROFO Initiator
accepting the Transfer Price and indicating any other material terms and
conditions on which, such ROFO Owners are willing to purchase all (but not less
than all) of the Transfer Notes (a “ROFO Exercise Notice”). A ROFO Owner’s
failure to deliver a valid ROFO Exercise Notice prior to the expiration of the
ROFO Exercise Period shall be deemed an election by such ROFO Owner not to
exercise its rights pursuant to this Section 39. If any ROFO Owner provides a
ROFO Exercise Notice within the ROFO Exercise Period, the ROFO Initiator shall
Transfer of all of the Transfer Notes on commercially reasonable terms to such
ROFO Owners (in proportion to the ownership percentage of each ROFO Owner).

 

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  (d)

If no ROFO Owner delivers a ROFO Exercise Notice prior to the end of the ROFO
Exercise Period, then the ROFO Initiator shall have three (3) Business Days
after the expiration of the ROFO Exercise Period during which to Transfer,
subject to compliance with Section 13, all of the Transfer Notes to a third
party purchaser (“Third Party Purchaser”) at a price greater than the Transfer
Price and on terms no more favorable to such Third Party Purchaser in all
material respects than those contained in the ROFO Offer. If, at the end of such
three-Business-Day period, the ROFO Initiator has not completed a Transfer of
the Transfer Notes to a third party purchaser, the ROFO Initiator shall no
longer be permitted to Transfer the Transfer Notes to any Person without again
complying with the requirements of this Section 39.

 

  (e)

For purposes of this Section 39: (i) the term “Affiliate” means any individual,
partnership, corporation, trust or other entity or association, directly or
indirectly, through one (1) or more intermediaries, controlling, controlled by,
or under common control with a Person; (ii) the term “control,” as used in the
immediately preceding clause (i), means, with respect to a corporation or
limited liability company the right to exercise, directly or indirectly, twenty
percent (20%) or more of the voting rights attributable to the controlled
corporation or limited liability company, and, with respect to any individual,
partnership, trust, other entity or association, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled entity; and (iii) the term “Person” means an
individual, partnership, limited liability company, corporation, joint venture,
trust, business trust, association, or similar entity, whether domestic or
foreign, and the heirs, executors, legal representatives, successors and assigns
of such entity where the context requires. With respect to any Person who is a
general partner of a Person, such general partner is an Affiliate of such
Person. With respect to a trust, any Affiliate shall include any Person which is
a trustee or lifetime beneficiary of such trust.

40. Provision related to Goldman Sachs Bank USA. The Parties acknowledge and
agree that, with respect to Goldman Sachs Bank USA, this Agreement shall only
bind the Credit – US Bank Loan Trading Business. For the avoidance of doubt,
this Agreement shall not bind any affiliates of Goldman Sachs Bank USA, and
shall not bind the activities of any other business unit, desk or division
conducted in Goldman Sachs Bank USA or in any affiliate of Goldman Sachs Bank
USA

[Signatures and exhibits follow.]

 

45

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AFFINION GROUP HOLDINGS, INC.,

a Delaware corporation

By:  

 

  [NAME], [TITLE]

[SIGNATURE PAGES FOR GUARANTOR

ENTITIES TO BE INSERTED]

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

[CONSENTING STAKEHOLDER] By:  

                                          

Name:  

 

Title:  

 

Address for Notices:

 

47

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Schedule 1

Milestones

 

  (a)

no later than the later of (x) four (4) Business Days after the RSA Effective
Date and (y) three (3) Business Days after the receipt of the Stockholder
Supermajority Vote (such later date, the “Launch Date”), the Affinion Parties
shall have caused the Information Agent to mail the Offering Memorandum and
Disclosure Statement to Eligible Holders; provided, however, that the Launch
Date shall not be later than March 8, 2019;

 

  (b)

no later than one (1) Business Day after the Launch Date, Affinion Holdings
filed with the SEC a preliminary Information Statement on Schedule 14C;

 

  (c)

no later than twelve (12) calendar days from the filing of the preliminary
Information Statement on Schedule 14C (or the next Business Day thereafter if
such 12th calendar day is not a Business Day), Affinion Holdings shall have
filed with the SEC a definitive Information Statement on Schedule 14C; provided
that the foregoing milestone shall not be required to be met if the SEC has
notified Affinion Holdings that it will review the preliminary Information
Statement on Schedule 14C;

 

  (d)

unless (x) the Consent Requirements or the Offering Amendment Conditions of the
Agreement have been satisfied on or before the Outer Date, then no later than
11:59 p.m. prevailing Eastern Time on April 7, 2019, or (y) if the Consent
Requirements have been satisfied on or before the Outer Date, but the conditions
precedent contained in the Definitive Documents to the effectuate the
Recapitalization have not been satisfied or waived by five (5) Business Days
after the Outer Date, then no later than 11:59 p.m. prevailing Eastern Time on
April 14, 2019, the Affinion Parties shall commence the Chapter 11 Cases by
filing bankruptcy petitions with the Bankruptcy Court (such applicable filing
date, the “Petition Date”);

 

  (e)

if in an In-Court Restructuring:

(1) on the Petition Date, the Affinion Parties shall have filed following:
(a) the Plan, (b) the disclosure statement (which shall be in the form of the
Offering Memorandum and Disclosure Statement, as used herein, the “Disclosure
Statement”), (c) a motion for entry of interim and final orders approving any
DIP facility and authorizing the use of cash collateral (the “DIP Motion”), and
(d) a motion (the “DS/Plan Scheduling Motion”) seeking, among other things,
entry of an order (i) scheduling an objection deadline and combined hearing on
the Disclosure Statement and Plan confirmation, (ii) approving the form and
manner of notice of combined hearing and commencement, (iii) establishing
procedures for objecting to the Disclosure Statement and the Plan,
(iv) approving solicitation procedures and form of ballot, and (v) granting
related relief (the “DS/Confirmation Hearing”);

(2) within three (3) calendar days after the Petition Date, the Bankruptcy Court
shall have entered (a) an order approving the DIP Motion on an interim basis,
(b) orders approving the all “first day motions” (on an interim basis to the
extent necessary) and (c) an order approving the DS/Plan Scheduling Motion;

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

(3) within thirty (30) calendar days after the Petition Date, the Bankruptcy
Court shall have (a) entered an order approving the DIP Motion on a final basis
in form and substance acceptable to the Debtors and the Required Consenting
Stakeholders and (b) held the DS/Confirmation Hearing and entered an order
approving the Disclosure Statement and the Confirmation Order;

(4) within forty-five (45) calendar days after the Petition Date, the Affinion
Parties shall consummate the transactions contemplated by the Plan.

 

49

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Schedule 2

Known Defaults and Events of Default

 

  a.

Event of Default under Section 7.01(c) of the Credit Agreement with respect to
not making the payment of interest due on February 19, 2019, for which the
applicable grace period expired on February 26, 2019.

 

50

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Exhibit A to the Support Agreement

Term Sheet

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THIS TERM SHEET IS NOT (NOR SHALL IT BE CONSTRUED AS) AN OFFER OR A SOLICITATION
OF AN OFFER WITH RESPECT TO ANY SECURITIES, NOR IS IT A SOLICITATION OF
ACCEPTANCE OR REJECTION OF A CHAPTER 11 PLAN OF REORGANIZATION PURSUANT TO THE
BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY IN COMPLIANCE
WITH ALL APPLICABLE SECURITIES LAWS AND, IF APPLICABLE, PROVISIONS OF THE
BANKRUPTCY CODE. THIS TERM SHEET IS BEING PROVIDED IN FURTHERANCE OF SETTLEMENT
DISCUSSIONS AND IS ENTITLED TO PROTECTION PURSUANT TO RULE 408 OF THE FEDERAL
RULES OF EVIDENCE AND ANY SIMILAR FEDERAL OR STATE RULE OF EVIDENCE. THE
TRANSACTIONS DESCRIBED IN THIS TERM SHEET ARE SUBJECT IN ALL RESPECTS TO, AMONG
OTHER THINGS, EXECUTION AND DELIVERY OF DEFINITIVE DOCUMENTATION AND
SATISFACTION OR WAIVER OF THE CONDITIONS PRECEDENT SET FORTH THEREIN. UNTIL
PUBLICLY DISCLOSED, THIS TERM SHEET SHALL REMAIN STRICTLY CONFIDENTIAL AND MAY
NOT BE SHARED WITH ANY OTHER PARTY OR PERSON WITHOUT THE CONSENT OF THE COMPANY
AND THE REQUIRED CONSENTING STAKEHOLDERS.

 

  AFFINION GROUP HOLDINGS, INC.

AMENDED AND RESTATED TERM SHEET

 

March 4, 2019

This amended and restated term sheet (as amended and restated, the “Term Sheet”)
sets forth the principal terms of a restructuring transaction (the
“Transaction”) with respect to the existing debt and equity of Affinion Group
Holdings, Inc. (“Affinion Holdings”) and Affinion Group, Inc. (“Affinion”) and
certain of their respective subsidiaries (collectively, the “Affinion Parties”
or the “Company”). This Term Sheet is the “Term Sheet” referenced as Exhibit A
in that certain Support Agreement, dated as of March 4, 2019 (as the same may be
amended, modified or supplemented, the “Support Agreement”), by and among the
Company and the Consenting Stakeholders party thereto. Capitalized terms used
and not defined in this Term Sheet shall have the meaning ascribed thereto in
the Support Agreement. This Term Sheet supersedes any proposed summary of the
terms or conditions regarding the subject matter hereof and dated prior to the
date hereof. This Term Sheet is being provided as part of a comprehensive
transaction, each element of which is a consideration for the other elements and
an integral aspect of the proposed Transaction.

Subject in all respects to the terms of the Support Agreement to which this Term
Sheet will be attached, except that in the case of an inconsistency between this
Term Sheet and the Support Agreement, the application of Section 3 of the
Support Agreement shall govern, the Transaction will, if the Consent
Requirements are met by the Outer Date, be consummated through a
Recapitalization, or otherwise through an In-Court Restructuring pursuant to the
Chapter 11 Cases filed under chapter 11 of title 11 of the United States (the
“Bankruptcy Code”) in the Bankruptcy Court for the District of Delaware (the
“Bankruptcy Court”) by the Company and certain of its subsidiaries (each, a
“Debtor” and, collectively, the “Debtors”). A Transaction consummated through a
Recapitalization will include an offer to Eligible Holders (as defined below) to
exchange the Existing Notes held by Eligible Holders for Class M Common Stock,
par value $0.01 per share (the “Class M Common Stock”) as consideration
therefor, and to solicit each tendering Noteholder’s consent to the Proposed
Amendments (as defined below) with subscriptions rights to the Rights Offering
(as defined below) being given as consideration therefor (collectively, the
“Exchange

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

Offer”), in each case pursuant to the terms of the Support Agreement, and as set
forth on Annex A to this Term Sheet. A Recapitalization also will include a
merger pursuant to which AGHI Merger Sub, Inc., a Delaware corporation and newly
formed wholly owned subsidiary of Affinion Holdings (“Merger Sub”), will merge
with and into Affinion Holdings, with Affinion Holdings as the surviving entity
(the “Merger”). As a result of the Merger, the existing Common Stock, par value
$0.01 per share, of Affinion Holdings (the “Company Common Stock”) will be
cancelled and Investor Warrants (the “Investor Warrants”) having the terms set
forth in the Investor Warrant Agreement, the form of which is set forth on Annex
D-1, will be issued as consideration therefor, and the Class M Common Stock
issued to the participating holders of Existing Notes in the Exchange Offer will
be cancelled and shares of common stock, par value $0.000001 per share, of the
surviving entity (the “New Common Stock”) will be issued as consideration
therefor; provided that, as further described below, to the extent necessary,
penny warrants to purchase New Common Stock (the “New Penny Warrants”) having
the terms set forth in the New Penny Warrant Agreement, the form of which is set
forth on Annex D-2, may be issued to Eligible Holders that participate in the
Exchange Offer in lieu of New Common Stock. Irrespective of whether consummated
through a Recapitalization or an In-Court Restructuring, the Transaction will
include a private placement offering (the “Rights Offering”) to certain
subscribing holders of Existing Notes and, in the case of the Recapitalization
only, to certain holders of Company Common Stock and Existing Warrants, to
purchase new notes issued by Affinion (the “New Notes”), in each case pursuant
to the terms of the Support Agreement and as set forth on Annex B-1 and B-2 to
this Term Sheet. Additionally, the Transaction will include (a) an amendment to
the Credit Agreement (as defined in the Support Agreement) to, among other
things, (i) decrease the aggregate Revolving Facility Commitments and allow for
the prepayment of Term Loans (each, as defined in the Credit Agreement) at par
plus accrued interest, (ii) extend each of the Revolving Facility Maturity Date
and the Term Loan Maturity Date (each, as defined in the Credit Agreement),
(iii) modify the interest payable thereunder and (iv) incorporate certain other
modifications to reflect the Transaction and the status of Affinion after giving
effect to the Transaction (the “Credit Agreement Amendment”), the form of which
is as set forth on Annex C to this Term Sheet; (b) amendments to, amendments and
restatements of, or the rejection and replacement of (i) the Shareholders
Agreement, (ii) the Registration Rights Agreement, and (iii) the certificate of
incorporation and by-laws of Affinion Holdings (the “Corporate Governance
Document Amendments”), as set forth on Annex E to this Term Sheet; and (c) in
the event that a Second Lien Credit Facility Funding (as defined below) has
occurred, the satisfaction and discharge of the indebtedness outstanding under
the Second Lien Credit Facility (as defined below) as set forth below on Annex F
in this Term Sheet (the “Satisfaction and Discharge”).

NOTHING IN THIS TERM SHEET SHALL CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF
ANY FACT OR LIABILITY, A STIPULATION OR A WAIVER, AND EACH STATEMENT CONTAINED
HEREIN IS MADE WITHOUT PREJUDICE, WITH A FULL RESERVATION OF ALL RIGHTS,
REMEDIES, CLAIMS AND DEFENSES OF THE LENDERS, THE COMPANY, AND ANY CREDITOR
PARTY. THIS TERM SHEET DOES NOT INCLUDE A DESCRIPTION OF ALL OF THE TERMS,
CONDITIONS, AND OTHER PROVISIONS THAT ARE TO BE CONTAINED IN THE DEFINITIVE
DOCUMENTATION, WHICH REMAIN SUBJECT TO DISCUSSION, NEGOTIATION AND EXECUTION.

 

2

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TREATMENT OF CLAIMS AND INTERESTS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Administrative Expenses, Tax Claims, and Other Priority Claims    All such
underlying claims shall be paid in the ordinary course of business as and when
they come due.    On or as soon as practicable after the later to occur of
(i) the effective date of the Plan (the “Effective Date”) or (ii) in the
ordinary course of business as and when due, each holder of an allowed
administrative, priority tax or other priority claim shall be paid in full in
cash, receive treatment consistent with the provisions of section 1129(a)(9) of
the Bankruptcy Code, or such other less favorable treatment as may be agreed by
the holder of such allowed claim and the Debtors or the reorganized Debtors, as
applicable. Revolving Facility    The revolving commitments under the Credit
Agreement (the “Revolver”) shall be repaid in full at par using proceeds from
the Rights Offering and available cash on hand (for the avoidance of doubt,
interest, to the extent not otherwise paid, shall continue to accrue until
repayment in full at the contract, non-default rate), following which
availability under the Revolver shall be permanently reduced to $85.0 million.
The Revolver will be provided on a super-senior basis relative to term loans
held by Consenting Lenders pursuant to the payment waterfall providing that
payment after an event of default will be applied first to the Revolver and, to
the extent remaining outstanding, term loans held by Non-Consenting Lenders
prior to being applied to term loans held by Consenting Lenders.   

Holders of claims under the Revolver (the “Revolver Claims”) shall be repaid in
full at par using proceeds from the Rights Offering and available cash on hand
(for the avoidance of doubt, to the extent not otherwise paid, interest shall
continue to accrue until repayment in full at the contract, non-default rate),
following which availability under the Revolver shall be permanently reduced to
$85.0 million. The Revolver will be provided on a super-senior basis pursuant to
the payment waterfall providing that payment after an event of default will be
applied first to the Revolver.

 

Holders of Revolver Claims will be impaired and entitled to vote to accept or
reject the Plan.

 

3

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TREATMENT OF CLAIMS AND INTERESTS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Term Loan Facility    Using proceeds from the Rights Offering and available cash
on hand in an aggregate amount of $148.0 million plus (y) the $5.0 million of
net proceeds from the “Bridges Sale” to be released from escrow on the Effective
Date, (i) the accrued and unpaid interest on the existing term loans under the
Credit Agreement (the “Existing Term Loans”) shall be paid in full (for the
avoidance of doubt, interest, to the extent not otherwise paid, shall continue
to accrue until repayment in full at the contract, non-default rate), and
(ii) with any remaining amounts after such payment, the Existing Term Loans will
be paid down on a pro rata basis (at a price equal to the principal amount being
repaid in the case of Existing Term Loans held by Consenting Lenders and at a
price equal to the principal amount being repaid plus the applicable premium due
under the existing Credit Agreement in the case of Existing Term Loans held by
Non-Consenting Lenders; provided that, at the sole discretion of the
Administrative Agent, funds equal to not more than $20.0 million otherwise
distributable as set forth in clause (ii) of this sentence may be used first to
satisfy outstanding Existing Term Loans held by Non-Consenting Lenders (the
“Non-Consenting Lender Option”); provided further, that the Consenting Lenders
agree that the Non-Consenting Lender Option may (but shall not be required to)
be effectuated pursuant to an Auction (as defined in the Existing Credit
Agreement), which, notwithstanding anything to the contrary in the Existing
Credit Agreement (i) may be open only to Non-Consenting Lenders, (ii) may be
subject to procedures to be agreed by the Administrative Agent and Affinion
(including allowing for multiple prices at which Existing Term Loans are
repurchased), and (iii) shall be conditioned solely upon closing of the
Recapitalization). Any Existing Term Loans not repaid will remain outstanding
under the Amended Senior Credit Agreement (as defined below).   

Each holder of claims under the Existing Term Loans (the “Term Loan Claims”)
shall receive (x) (i) payment in full of the accrued and unpaid interest on the
Existing Term Loans (for the avoidance of doubt, interest, to the extent not
otherwise paid, shall continue to accrue until repayment in full at the
contract, non-default rate), and (ii) on a pro rata basis, a pay down (at a
price equal to the principal amount thereof) using proceeds from the Rights
Offering and available cash on hand in an aggregate amount of (A) $148.0 million
plus (B) the $5.0 million of net proceeds from the “Bridges Sale” to be released
from escrow on the Effective Date minus (C) the amount of any adequate
protection interest payments made with respect to the Existing Term Loans during
the Chapter 11 Cases, minus (D) the amount used to pay accrued and unpaid
interest pursuant to clause (i) above on the Effective Date, and (y) term loans
under the Amended Senior Credit Agreement in an amount equal to the Term Loan
Claims remaining after the consummation of the par pay down.

 

Holders of Term Loan Claims will be impaired and entitled to vote to accept or
reject the Plan.

 

4

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TREATMENT OF CLAIMS AND INTERESTS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Second Lien Facility    In the event that the second lien credit facility (the
“Second Lien Credit Facility”) as contemplated by that certain Commitment
Letter, delivered to the Company by certain investors on November 14, 2018, is
funded (“Second Lien Credit Facility Funding”), any amounts actually funded in
cash under the Second Lien Credit Facility and all interest actually paid in
kind and accrued and unpaid interest shall be required to be repaid in full in
cash, which shall be funded using proceeds from the Rights Offering and
available cash on hand, and the investors that have funded loans under the
executed Second Lien Credit Facility (each a “Second Lien Lender” and, together,
the “Second Lien Lenders”) shall receive, on a pro rata basis the Second Lien
Closing Fee (as defined below) and the Second Lien Funding Premium (as defined
below), each as set forth on Annex F hereto, with the payment being in the form
of New Notes.   

In the event the Second Lien Credit Facility Funding has occurred (any claims
under the Second Lien Credit Facility, the “Second Lien Claims”), any amounts
actually funded in cash under the Second Lien Credit Facility and all interest
actually paid in kind and accrued and unpaid interest shall be repaid in full in
cash, which shall be funded using proceeds from the Rights Offering and
available cash on hand and the Second Lien Lenders shall receive the Second Lien
Closing Fee and the Second Lien Funding Premium, each as set forth on Annex F
hereto, with such payment being in the form of New Notes.

 

Holders of Second Lien Claims will be impaired and entitled to vote to accept or
reject the Plan.

Other Secured Claims    All such underlying claims, if any, shall be paid in the
ordinary course of business as and when they come due.   

On the Effective Date, except to the extent that a holder of an allowed other
secured claim agrees to less favorable treatment, each allowed other secured
claim shall be (i) cured and reinstated pursuant to section 1124(2) of the
Bankruptcy Code or (ii) receive such other treatment to render such secured
claim unimpaired pursuant to section 1124(1) of the Bankruptcy Code.

Holders of Other Secured Claims will be unimpaired and deemed to accept the Plan
and thus not entitled to vote.

 

5

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TREATMENT OF CLAIMS AND INTERESTS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Notes   

Each Eligible Holder of Existing Notes that participates in the Exchange Offer
shall receive its pro rata portion of Class M Common Stock. The Class M Common
Stock will then be cancelled in the Merger and the holders of Class M Common
Stock will receive as merger consideration, in the aggregate, 100.0% of the New
Common Stock (subject to dilution from (i) the issuance of New Common Stock
pursuant to the MIP (as defined below), (ii) the issuance of New Common Stock
(or the New Penny Warrants, as the case may be) pursuant to the Investor
Purchase Agreement, (iii) the issuance of the New Penny Warrants and the
Investor Warrants, (iv) the conversion of the New Notes, if applicable, and
(v) the concurrent preemptive rights offering to certain holders of the Company
Common Stock as required by the Company’s existing Shareholders Agreement as a
result of the Exchange Offer (the “Preemptive Offer”)), as set forth in further
detail on Annex A, hereto.

 

Each Eligible Holder of Existing Notes that participates in the Exchange Offer
shall also be permitted to subscribe to purchase New Notes in an amount up to
its pro rata portion of 96% of the principal amount of New Notes offered in the
Rights Offering, as set forth in further detail on Annex B-2, hereto.

  

In full and final satisfaction of the Notes Claims, each holder of Note Claims
shall receive its pro rata portion of 100.0% of the common stock of reorganized
Affinion Holdings (subject to dilution from (i) the issuance of New Common Stock
pursuant to the MIP, (ii) the issuance of New Common Stock (or the New Penny
Warrants, as the case may be) pursuant to the Investor Purchase Agreement,
(iii) the issuance of the New Penny Warrants, and (iv) the conversion of the New
Notes, if applicable).

 

Holders of Note Claims will be impaired and entitled to vote to accept or reject
the Plan.

 

Each eligible holder of Note Claims will also be permitted to subscribe to
purchase New Notes in an amount up to its pro rata portion of 100.0% of the
Rights Offering, as set forth in further detail on Annex B-2, hereto.

   To the extent the acquisition of Class M Common Stock or New Common Stock
would result in an investor beneficially owning 19.9% or more of the outstanding
amount of New Common Stock, and which investor’s acquisition of New Common Stock
would require the consent of, or notice to, a governmental authority (including
without limitation the U.K. Financial Conduct Authority), and such consent has
not been obtained, or notice has not been given, a holder of Existing Notes will
receive, as necessary, New Penny Warrants, as set forth on Annex D-2, in lieu of
shares of Class M Common Stock or New Common Stock (together with the New Common
Stock, the “New Equity Interests”).    To the extent the acquisition of common
stock of the reorganized Affinion Holdings would result in an investor
beneficially owning 19.9% or more of the outstanding amount of common stock of
reorganized Affinion Holdings, and which investor’s acquisition of the common
stock of reorganized Affinion Holdings would require the consent of, or notice
to, a governmental authority (including without limitation the U.K. Financial
Conduct Authority), and such consent has not been obtained, or notice has not
been given, a holder of Existing Notes will receive, as necessary, New Penny
Warrants, as set forth on Annex D-2, in lieu of shares of common stock of
reorganized Affinion Holdings.

 

6

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TREATMENT OF CLAIMS AND INTERESTS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

General Unsecured Claims    Holders of allowed general unsecured claims shall be
paid in the ordinary course of business.   

Except to the extent that a holder of an allowed general unsecured claim agrees
to a less favorable treatment of its allowed claim, in exchange for full and
final satisfaction, settlement, release, and discharge of each allowed general
unsecured claim, each holder of an allowed general unsecured claim shall have
its claim reinstated as of the Effective Date as an obligation of the applicable
reorganized Debtor and shall be satisfied in full in the ordinary course of
business in accordance with the terms and conditions of the particular
transaction giving rise to such allowed general unsecured claim; provided that,
with respect to trade creditors, the current terms of the agreements and/or
arrangements between the Debtors and such parties remain unaltered.

 

Holders of General Unsecured Claims will be unimpaired and deemed to accept the
Plan and thus not entitled to vote.

Section 510(b) Claims    Not applicable.   

On the Effective Date, all claims arising under section 510(b) of the Bankruptcy
Code shall be extinguished, cancelled and discharged and the holders of any
section 510(b) claims shall not be entitled to, and shall not receive or retain,
any property or distribution on account of such claims under the Plan.

 

Holders of Section 510(b) Claims will be impaired and deemed to reject the Plan
and thus not entitled to vote.

Company Common Stock and Existing Warrants   

Certain Consenting Stakeholders have informed the Company that they desire to
exercise their Existing Warrants using full physical settlement.

 

All other Existing Warrants will be amended to be mandatorily exercised, on a
cashless basis into shares of Company Common Stock immediately prior to the
Merger. In accordance with the Merger, such newly issued Company Common Stock,
together with the

   All existing Company Common Stock, Existing Warrants, Class C/D Common Stock
(as defined below) and any other equity interests of Affinion Holdings
(collectively, the “Affinion Holdings Equity Interests”) shall be cancelled and
shall not receive any distribution.

 

7

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TREATMENT OF CLAIMS AND INTERESTS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

  

prior existing Company Common Stock, will be cancelled in the Merger and the
holders of Company Common Stock will receive Investor Warrants as merger
consideration. The form of the Investor Warrants are set forth on Annex D-1,
hereto. Any investor that properly submits an exercise notice prior to the
mandatory exercise will be able to exercise their Existing Warrants for cash in
accordance with the terms of the Existing Warrant Agreement.

 

In addition, each holder of Existing Equity Interests will have the right to
subscribe to purchase New Notes in an amount up to its pro rata portion of 4% of
the principal amount of New Notes offered in the Rights Offering as set forth in
further detail on Annex B-2, hereto.

   Holders of Affinion Holdings Equity Interests will be impaired and deemed to
reject the Plan and thus not entitled to vote. Class C/D Common Stock    Holders
of Class C Common Stock (the “Class C Common Stock”), par value $0.01 per share,
of Affinion Holdings, or of Class D Common Stock (the “Class D Common Stock” and
together with the Class C Common Stock, the “Class C/D Common Stock”), par value
$0.01 per share, of Affinion Holdings will be cashed out as a result of the
Merger, and will receive $0.01 per share as merger consideration.    See
“Company Common Stock and Existing Warrants” above. Intercompany Interests   
Unchanged.   

On the Effective Date, the equity interests in any Debtor (other than Affinion
Holdings) shall receive no distribution in respect of their equity interests and
shall be reinstated, for administrative purposes only, at the election of the
Debtors.

 

Holders of Intercompany Interests will be impaired and deemed to reject the Plan
and thus not entitled to vote.

 

8

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Financing Commitment    Certain parties to the Support Agreement have entered
into the Investor Purchase Agreement to backstop 100% of the Rights Offering on
the terms and conditions set forth therein. DIP Facility    Not Applicable.   

Certain first lien lenders will provide the Debtors with post-petition financing
on the terms, and subject to the conditions, set forth in the DIP commitment
letter attached to the Support Agreement as Exhibit E (the “DIP Facility”). The
DIP Facility shall be used to fund operations and the payment of administrative
expenses in the Chapter 11 Cases.

 

On the Effective Date, and except to the extent that the reorganized Debtors and
a holder of an allowed DIP Facility claim agree to a less favorable treatment
(in which event such other agreement will govern, but solely as between such
holder of an allowed DIP Facility claim and the reorganized Debtors) or has been
paid prior to the Effective Date, each holder of an allowed DIP Facility claim
shall receive, on account of and in full and final satisfaction, settlement,
release, and discharge of such claim against each of the Debtors that are
obligors under the DIP Facility, its pro rata share of cash in the amount of
such allowed DIP Facility claim.

Tax Related Issues (Structuring & Otherwise)    The parties will work together
in good faith and will use reasonable best efforts to structure and implement
the Transaction and the transactions related thereto in a tax efficient and cost
efficient manner for the reorganized Company and the Required Consenting
Stakeholders. The parties intend to structure the Transaction and the
transactions related thereto to avoid material cash taxes and preserve favorable
tax attributes to the extent practicable and not adverse to the Lenders or the
Noteholders. Intercompany Claims    Unchanged.    On the Effective Date,
intercompany claims shall be reinstated, compromised, or cancelled at the
election of the Debtors or the reorganized Debtors, as applicable, with the
consent of the Required Consenting Stakeholders.

 

9

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Corporate Governance/New Board    The existing organizational documents of the
Company will be amended or amended and restated pursuant to the terms set forth
on Annex E-1 and E-2.   

On the Effective Date, the existing corporate governance documents will be
amended and restated or terminated, as necessary, to, among other things, set
forth the rights and obligations of the parties (collectively, the “Corporate
Governance Documents”). The Corporate Governance Documents shall be consistent
with this Term Sheet and the Support Agreement.

 

The existing directors of each of the Debtors shall remain in their current
capacities as directors of the applicable reorganized Debtor, until replaced or
removed in accordance with the organizational documents of the applicable
reorganized Debtors.

Registration Rights    The Company’s Registration Rights Agreement shall
terminate as a result of there being no “Registrable Securities” outstanding
following consummation of the Merger. Immediately following the Merger, Affinion
Holdings and certain investors will enter into a new Registration Rights
Agreement, having the terms set forth on Annex E-4.    The reorganized Company
shall enter into a new registration rights agreement with any party that on or
after the Effective Date holds 7% or more of the New Common Stock. The
registration rights agreement shall include those terms described on Annex E-4
hereto. Shareholders Agreement    The existing Shareholders Agreement shall
terminate as a result of there being no “Stockholders” following the
consummation of the Merger. Immediately following the Merger, Affinion Holdings
and each of the investors participating in the Exchange Offer, the Preemptive
Offer and/or the Investor Purchase Agreement shall enter into a new Stockholders
Agreement, the form of which is set forth on Annex E-3, hereto.    Immediately
following the Effective Date, the shareholders will enter into a new
Stockholders Agreement, the form of which is set forth on Annex E-3, hereto.
Executory Contracts and Unexpired Leases    Unchanged.    In the event the
Chapter 11 Cases are commenced, the Debtors intend to assume all executory
contracts and unexpired leases; provided, however, that the Debtors are
continuing to evaluate certain real property leases and will designate such
leases for assumption or rejection at or prior to confirmation, with the consent
of the Required Consenting Stakeholders.

 

10

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Employment Agreements / Other Compensation Programs    Unchanged other than the
adoption of the MIP (as defined below).    On the Effective Date, the Debtors
will assume all existing employment agreements, retention agreements, incentive
plans, and compensation and severance plans. Management Incentive Plan    The
Company shall establish and adopt a new Board/management incentive plan (the
“MIP”) with equity and non-equity awards and terms determined as set forth on
Annex E-5, hereto. Retained Causes of Action    Not applicable.   

The In-Court Restructuring shall contain customary provisions regarding
retention of causes of action which shall revest in the Company.

 

The reorganized Debtors shall determine whether to pursue any and all Debtor
claims. All proceeds from any recovery derived from such Debtor claims, if any,
shall vest in the reorganized Debtors.

Releases, Exculpation, Injunction    The Recapitalization shall provide for
customary mutual releases and other exculpatory provisions, in each case, to the
fullest extent permitted by law, in favor of the Company, the Consenting
Stakeholders, and the Company’s current and former direct and indirect
affiliates, subsidiaries, equityholders, members, partners, professionals,
principals, attorneys, accountants, investment bankers, consultants, agents,
advisors, other representatives, employees, directors, and officers (including
their respective equityholders, members, partners, subsidiaries, affiliates,
funds, managers, managing members, officers, directors, employees, advisors,
principals, attorneys, professionals, accountants, investment bankers,
consultants, agents, and other representatives), in their respective capacities
as such.    The Plan shall contain customary mutual releases and other
exculpatory provisions, in each case, to the fullest extent permitted by law, in
favor of the Debtors, the Consenting Stakeholders, and the holders of
claims/interests that vote to accept the Plan and in the case of each of the
foregoing, each such party’s current and former direct and indirect affiliates,
subsidiaries, equityholders, members, partners, professionals, principals,
attorneys, accountants, investment bankers, consultants, agents, advisors, other
representatives, employees, directors, and officers (including their respective
equityholders, members, partners, subsidiaries, affiliates, funds, managers,
managing members, officers, directors, employees, advisors, principals,
attorneys, professionals, accountants, investment bankers, consultants, agents,
and other representatives), in their respective capacities as such
(collectively, the “Released Parties”), as well as standard and customary,
exculpation, discharge, and injunction provisions.

 

11

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

     

The Plan shall further provide that, to the extent permitted by applicable law,
all voting creditors and all creditors in classes deemed to accept or reject the
Plan shall be deemed to release all Released Parties unless they elect to opt
out of granting such releases.

 

The Plan shall further provide that any Consenting Stakeholder that terminates
or materially breaches the Support Agreement will not be a Released or
Exculpated Party.

Consent and Consultation Rights    The Consenting Stakeholders’ consent and
consultation rights over the Definitive Documents are as set forth in the
Support Agreement. Conditions to Closing   

In addition to the conditions set forth in the Support Agreement and the
Definitive Documentation, the effectiveness of the Recapitalization shall be
subject to the satisfaction or waiver of the following customary closing
conditions (except with respect to those conditions that, by their nature, are
intended to be satisfied at the closing of the Recapitalization or a later date,
which in each case shall be capable of being satisfied at the closing of the
Recapitalization or such later date):

 

(i) The obtaining of all necessary approvals, the tolling of all applicable
waiting periods, or the filing of all applicable notices under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
competition laws of any applicable foreign jurisdictions, except to the extent
the failure to obtain such approvals, give such notices or toll such waiting
periods would not reasonably be expected to have a material adverse effect on
the Affinion Parties;

  

In addition to the conditions set forth in the Support Agreement and the
Definitive Documentation, the effectiveness of the In-Court Restructuring shall
be subject to the satisfaction or waiver of the following customary closing
conditions:

 

(i) The obtaining of all necessary approvals, the tolling of all applicable
waiting periods, or the filing of all applicable notices under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
competition laws of any applicable foreign jurisdictions, except to the extent
the failure to obtain such approvals, give such notices or toll such waiting
periods would not reasonably be expected to have a material adverse effect on
the Affinion Parties;

 

12

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

  

(ii)  unless waived by the Affinion Parties, the Required Consenting
Noteholders, the Second Lien Lenders, ICG, Mudrick and/or the Required
Consenting Lenders, as applicable, each document or agreement constituting
Definitive Documentation shall be in form and substance consistent in all
material respects with this Term Sheet and the Support Agreement and be
otherwise approved consistent in all material respects with the terms of section
4(b) of the Support Agreement and the Plan;

 

(iii)  unless waived by the Affinion Parties, the Required Consenting
Noteholders and/or the Required Consenting Lenders, as applicable, each of the
schedules, documents, supplements, and exhibits to the Plan and the Offering
Memorandum and Disclosure Statement (except to the extent expressly excluded
pursuant to the terms of Section 4(b)(i) or 4(b)(ii) of the Support Agreement)
shall be in form and substance consistent in all material respects with this
Term Sheet and the Support Agreement and such documents shall otherwise be
approved consistent in all material respects with terms of section 4(b) of the
Support Agreement;

 

(iv) none of the Investor Purchase Agreement, the Support Agreement, the
Forbearance or the Merger Agreement shall have been terminated or, without the
consent of the Affinion Parties, Required Consenting Noteholders and/or Required
Consenting Lenders, as applicable, altered, amended, supplemented or modified in
any way (except as expressly permitted by the Support Agreement), and each shall
remain in full force and effect as a binding obligation of the parties thereto;

  

(ii)  unless waived by Affinion Parties, the Required Consenting Noteholders,
the Second Lien Lenders, ICG, Mudrick and/or the Required Consenting Lenders, as
applicable, each document or agreement constituting Definitive Documentation
shall be in form and substance consistent in all material respects with this
Term Sheet and the Support Agreement and be otherwise approved consistent in all
material respects with the terms of section 4(b) of the Support Agreement and
the Plan;

 

(iii)  the Bankruptcy Court shall have entered an order confirming the Plan in
form and substance consistent in all material respects with this Term Sheet and
the Support Agreement and such order shall otherwise be approved consistent in
all material respects with the terms of section 4(b) of the Support Agreement,
and such order shall not have been stayed, modified or vacated; and

 

(iv) unless waived by the Affinion Parties, the Required Consenting Noteholders
and/or the Required Consenting Lenders, as applicable, each of the schedules,
documents, supplements, and exhibits to the Plan and the Offering Memorandum and
Disclosure Statement (except to the extent expressly excluded pursuant to the
terms of Section 4(b)(i) or 4(b)(ii) of the Support Agreement) shall be in form
and substance consistent in all material respects with this Term Sheet and the
Support Agreement and such documents shall otherwise be approved consistent in
all material respects with terms of section 4(b) of the Support Agreement.

 

13

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

  

(v)   unless waived by the Affinion Parties and the Required Consenting
Stakeholders, the Consent Requirements shall have been satisfied on or prior to
the Outer Date;

 

(vi) each of the Definitive Documents shall have been, to the extent applicable,
executed and delivered by each of the parties thereto, and shall be in full
force and effect as a binding obligation of the parties thereto;

 

(vii)  the Rights Offering shall have been consummated;

 

(viii)  the Merger shall have been consummated in accordance with the terms of
the Merger Agreement;

 

(ix) the preemptive offer resulting from the proposed issuance of equity
securities of Affinion Holdings as contemplated by the Recapitalization shall
have been consummated or, with the consent of the Required Consenting
Noteholders, Affinion Holdings shall have elected to utilize the “accelerated
issuances” provision of the Shareholders Agreement to perform the preemptive
offer promptly following the closing;

  

 

14

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OTHER TERMS     

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

  

(x)   unless waived by the Affinion Parties and the Required Consenting Lenders,
each of the investors party to the Investor Purchase Agreement stand ready,
willing and able to subscribe for, collectively, the full amount of the
unsubscribed for New Notes from the Rights Offering;

   Business Day    “Business Day” means any day other than (i) any Saturday or
Sunday or (ii) any other day on which banks located in New York, New York or
Stamford, Connecticut are required or authorized by law to be closed for
business.

 

15

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Annex A

Summary Description of Exchange Offer

 

Exchange Offer   

Affinion Group Holdings, Inc. (“Affinion Holdings” or the “Offeror”) intends to
conduct the Exchange Offer, pursuant to which Affinion Holdings will offer, in
reliance on the exemption from the registration requirements of the Securities
Act of 1933, as amended (together with the rules and regulations promulgated
thereunder, the “Securities Act”), provided by Section 4(a)(2) thereof, to all
eligible holders of the Existing Notes (as defined below) (the “Noteholders”),
to exchange Affinion Holdings’ Senior Cash 12.5%/PIK Step-Up to 15.5% Notes due
2022 (the “Existing Notes”) and consent to the Proposed Amendments (as defined
below) for the consideration described below.

 

The Exchange Offer is being made, and the Exchange Consideration (as defined
below) is being offered, and issued only (a) in the United States, to holders of
Existing Notes who are (i)(x) “qualified institutional buyers” (as defined in
Rule 144A under the Securities Act) or (y) institutional “accredited investors”
within the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the
Securities Act and (ii) “institutional accounts” within the meaning of Rule 4512
of the Financial Industry Regulatory Authority and (b) outside the United
States, to holders of Existing Notes who are not “U.S. persons” (as defined in
Rule 902 under the Securities Act) in reliance on Regulation S of the Securities
Act. The holders of Existing Notes who are eligible to participate in the
Exchange Offer pursuant to at least one of the foregoing conditions are referred
to herein as “Eligible Holders.”

The Consent Solicitation    Affinion Holdings is soliciting consents from the
Noteholders for proposed amendments to the Existing Notes Indenture governing
the Existing Notes to eliminate substantially all of the restrictive covenants
and certain events of default and related provisions contained in the Existing
Notes Indenture (the “Proposed Amendments”). If the requisite consents are
obtained and the Consent Solicitation is consummated, the Proposed Amendments
will be effected through the execution of a supplemental indenture to the
Existing Notes Indenture (the “Supplemental Indenture”). By tendering its
Existing Notes, an Eligible Holder will be deemed to have delivered consents to
the Proposed Amendments with respect to its Existing Notes being tendered.
Eligible Holders may not deliver consents without tendering the related Existing
Notes and Eligible Holders may not tender Existing Notes without delivering the
related consents.

 

A-1

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

Exchange Consideration   

For each $1,000 principal amount of the Existing Notes tendered in the Exchange
Offer on or prior to the Expiration Time, Eligible Holders will receive
[14.672467] shares of Class M Common Stock, which will, by operation of the
Merger, be cancelled and the holders thereof shall receive, as consideration
therefor, [1] shares of New Common Stock, which shall constitute 100% of the
issued and outstanding New Common Stock, subject to dilution from (i) the
issuance of New Common Stock pursuant to the MIP, (ii) the issuance of New
Common Stock (or the New Penny Warrants, as the case may be) pursuant to the
Investor Purchase Agreement, (iii) the issuance of the New Penny Warrants and
the Investor Warrants, (iv) the conversion of the New Notes, if applicable, and
(v) the Preemptive Offer (the “Exchange Consideration”).

 

For each $1,000 principal amount of the Existing Notes tendered in the Exchange
Offer on or prior to the Consent Time, each Eligible Holder will receive rights
to subscribe to purchase its pro rata portion of 96% of the principal amount of
the New Notes being offered pursuant to the terms of the Rights Offering (the
“Consent Consideration”, and together with the Exchange Consideration, the
“Total Consideration”).

 

The terms of the New Notes are set forth on Annex B-1.

 

The New Notes will not be registered under the Securities Act and holders of the
New Notes will not be able to offer or sell such New Notes except pursuant to an
exemption from or in a transaction not subject to the registration requirements
of the Securities Act and subject to the additional transfer restrictions set
forth on Annex B-1.

Waiver of Preemptive Rights    By participating in the Exchange Offer, any
Eligible Holder shall be deemed to have acknowledged and agreed that such
Eligible Holder waives its preemptive rights, to the extent such Eligible Holder
has preemptive rights, as set forth in the Shareholders Agreement with respect
to all Company Common Stock and New Penny Warrants to be issued (i) in the
Exchange Offer, (ii) pursuant to the Investor Purchase Agreement, and (iii) upon
the conversion of the New Notes, if applicable. Withdrawal Rights    Validly
tendered Existing Notes may be withdrawn (and the related consents pursuant to
the Consent Solicitation therefore revoked) at any time at or prior to the tenth
Business Day following the commencement of the Exchange Offer (the “Consent
Time”), subject to applicable law.

 

A-2

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Annex B-1

Description of New Notes

[See attached]

 

Annex B-1

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

Final Form

DESCRIPTION OF THE NEW NOTES

General

Capitalized terms used in this “Description of the New Notes” section and not
otherwise defined have the meanings set forth in the section “—Certain
Definitions.” As used in this “Description of the New Notes” section, the
“Company” means Affinion Group, Inc. and not any of its Subsidiaries.

Pursuant to the terms of the Rights Offering, the Investor Purchase Agreement
and the Equity Rights Offering (solely if the Recapitalization is consummated),
the Company will initially issue $345,000,000 in aggregate principal amount of
18% Senior PIK New Notes due 2024 (the “New Notes”) under an indenture (the
“Indenture”), to be dated as of the Issue Date, among the Company, the
Guarantors and Wilmington Trust, National Association, as trustee (the
“Trustee”). Copies of the Indenture may be obtained from the Company upon
request. See “Where You Can Find More Information.”

The following summary of certain provisions of the Indenture and the New Notes
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Indenture, including the
definitions of certain terms therein and those terms of the Trust Indenture Act
of 1939, as amended (the “TIA”) that are expressly incorporated by reference
therein. The Indenture will not be qualified under the TIA.

We may issue additional New Notes (the “Additional New Notes”) from time to time
after this offering without notice or the consent of holders of New Notes. Any
issuance of Additional New Notes is subject to the covenant described below
under the caption “—Certain Covenants—Limitation on Incurrence of Indebtedness
and Issuance of Disqualified Stock and Preferred Stock.” The New Notes and any
Additional New Notes subsequently issued under the Indenture will be treated as
a single class for all purposes under the Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase. Unless the
context otherwise requires, for all purposes of the Indenture and this
“Description of the New Notes,” references to the New Notes include any
Additional New Notes actually issued.

Principal of, premium, if any, and interest on the New Notes will be payable,
and the New Notes may be exchanged or transferred, at the office or agency of
the Company as specified in the Indenture (which initially shall be the
principal corporate trust office of the Trustee). On each interest payment date,
the Company shall pay scheduled payments of interest on the New Notes entirely
by increasing the principal amount of the outstanding New Notes in the amount of
interest paid (a “PIK Payment”). Upon such PIK Payment, the registrar will
increase the outstanding principal amount of the New Notes as shown in the
registrar’s definitive register of holders of New Notes (the “Register”) in the
amount of such PIK Payment. Unless the context otherwise requires, for all
purposes of the Indenture and this “Description of the New Notes,” references to
the “principal amount” of the New Notes includes any increase in the principal
amount of the outstanding New Notes as a result of a PIK Payment. On the Closing
Date, the Trustee shall act as the registrar.

The New Notes will be issued only in fully registered uncertificated form,
without coupons, in minimum denominations of $1.00 and any integral multiple of
$1.00. No service charge will be made for any registration of transfer or
exchange of New Notes, but the Company may require payment of a sum sufficient
to cover any transfer tax or other similar governmental charge payable in
connection therewith. The New Notes will not be made eligible for trading
through the facilities of The Depository Trust Company. At the Company’s option
and in its sole discretion, the Company may notify the Trustee that it elects to
cause the issuance of certificated notes.

Terms of the New Notes

The New Notes will be:

 

  •  

general unsecured obligations of the Company and will not be entitled to the
benefit of any mandatory sinking fund;

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

  •

effectively subordinated in right of payment to all existing and future secured
Indebtedness of the Company, including the Indebtedness of the Company under the
Credit Agreement to the extent of the assets securing such Indebtedness;

 

  •

pari passu in right of payment with all existing and future senior Indebtedness
of the Company, including Indebtedness of the Company under the Credit
Agreement;

 

  •

senior in right of payment to all existing and future subordinated Indebtedness
of the Company; and

 

  •

subject to the Payment Subordination Provisions (as defined below), guaranteed
on a senior unsecured basis by the Guarantors as described under “—Guarantees.”

After giving pro forma effect to the Transactions (assuming all Existing Notes
and are validly tendered for exchange at or prior to the Consent Time, and
further assuming the Pre-Emptive Rights Offer is 0% subscribed), as of
December 31, 2018, the Company and the Initial Guarantors (as defined under
“—Guarantees”) would have had $[•] million of Indebtedness (including the New
Notes), $[•] million of which would have been secured Indebtedness, and the
Company’s Subsidiaries that are not guaranteeing the New Notes would have had
$[•] million of indebtedness and other liabilities (including trade payables but
excluding unsecured intercompany borrowings).

As of the date of the Indenture, all of the Company’s subsidiaries will be
“Restricted Subsidiaries.” Under certain circumstances, the Company will be
permitted to designate certain of its other subsidiaries as “Unrestricted
Subsidiaries.” Any Unrestricted Subsidiaries will not be subject to any of the
restrictive covenants in the Indenture and will not guarantee the New Notes.

The New Notes will mature on the date that is five years and six months from the
Issue Date, at their principal amount, plus accrued and unpaid interest to, but
not including, the maturity date. If the Consolidated Net Leverage Ratio of
Affinion Holdings on the maturity date of the New Notes is greater than or equal
to 8.50 to 1.00, then, in lieu of the Company making any required principal
payment on the New Notes on such maturity date, the holders of a majority in
aggregate principal amount of the New Notes outstanding may, with the consent of
the Company, elect to convert (the “Maturity Date Conversion”) the aggregate
outstanding principal amount of New Notes into new common stock, par value
$0.000001, of Affinion Holdings (the “New Common Stock”) equal to a percentage
of the fully diluted equity of Affinion Holdings (calculated prior to dilution
from the issuance of any New Common Stock, or securities convertible into New
Common Stock, in each case issued under the Management Incentive Plan),
calculated by multiplying (A) 99.9999 by (B) (1) the aggregate outstanding
principal amount of New Notes (calculated after giving effect to any PIK
Payments) as of such date divided by (2) the aggregate principal amount of New
Notes and Additional New Notes issued under the indenture (including 18% PIK
interest paid semi-annually on such New Notes and Additional New Notes from the
date of issuance thereof to the maturity date). Upon a Maturity Date Conversion,
the indenture will be discharged and the registrar will deregister the New
Notes.

Interest on the New Notes will accrue at a rate per annum of 18.00%. Interest on
the New Notes will be payable semi-annually in arrears on the six- and
twelve-month anniversaries of the Issue Date, commencing on the six-month
anniversary of the Issue Date. The Company will make each interest payment to
the holders of record of the New Notes on the fifteenth calendar day immediately
preceding the related interest payment date. The New Notes will accrue interest
from the most recent date to which interest has been paid or, if no interest has
been paid, from and including the Issue Date and will be computed on the basis
of a 360-day year comprised of twelve 30-day months. Interest will be payable on
the New Notes by increasing the principal amount of each holder’s New Notes in
the Register by an amount equal to the amount of interest for the applicable
interest period (rounded up to the nearest whole dollar) for such holder’s New
Notes. Following an increase in the principal amount of New Notes as a result of
a PIK Payment, such New Notes will bear interest on such increased principal
amount from and after the interest payment date in respect of which such PIK
Payment was made.

Optional Redemption

The Company may redeem the New Notes, at its option, in whole at any time or in
part from time to time, upon not less than 10 nor more than 60 days’ prior
notice sent electronically or mailed by first-class mail to each holder’s
registered address, at a redemption price equal to 100% of the principal amount
of the New Notes, plus accrued and unpaid interest, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).

 

2

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In the case of any partial redemptions described above, selection of the New
Notes for redemption will be made by the Company; provided, that no New Notes of
$1.00 or less shall be redeemed in part. If any Note is to be redeemed as
described above in part only, the notice of redemption relating to such Note
shall state the portion of the principal amount thereof to be redeemed. Upon
such redemption, the registrar will decrease the principal amount of each
applicable holder’s Note in the Register to correspond with such cancellation.
On and after the redemption date, interest will cease to accrue on New Notes or
portions thereof called for redemption so long as the Company has deposited with
the paying agent funds sufficient to pay the principal of, plus accrued and
unpaid interest on, the New Notes to be redeemed.

The Company, its Subsidiaries or any Affiliates of the Company may at any time
and from time to time purchase any of our Indebtedness, including the New Notes,
or Indebtedness of our Subsidiaries. Any such future purchases may be made
through open market or privately negotiated transactions with third parties or
our Affiliates, or pursuant to one or more tender or exchange offers or
otherwise, upon such terms and at such prices as we, our Subsidiaries or our
Affiliates may determine.

Guarantees

The New Notes will be guaranteed, jointly and severally, by Affinion Holdings
and the Subsidiary Guarantors, which are each of the Company’s direct and
indirect Restricted Subsidiaries (other than any Excluded Subsidiaries). On the
Issue Date, each of the Company’s Restricted Subsidiaries listed on Schedule I
hereto (including but not limited to the Foreign Subsidiaries listed on Schedule
I hereto) will be a Subsidiary Guarantor (together with Affinion Holdings, the
“Initial Guarantors”). In the twelve month period ended December 31, 2018,
Subsidiaries that are not guaranteeing the New Notes (“Non-Guarantor
Subsidiaries”) contributed $[•] million and $[•] million to our net revenues and
EBITDA, respectively. As of December 31, 2018, the Non-Guarantor Subsidiaries
would have held approximately $[•] million, or [•]%, of our total assets.

Each Guarantee:

 

  •

will be senior in right of payment to all existing and future subordinated
Indebtedness of each Guarantor;

 

  •

will be a general unsecured obligation of each Guarantor;

 

  •

will be effectively subordinated in right of payment to all existing and future
secured Indebtedness of each Guarantor, including the guarantee of such
Guarantor under the Credit Agreement to the extent of the collateral secured
thereby; and

 

  •

will be, subject to the Payment Subordination Provisions, pari passu in right of
payment with all existing and future senior Indebtedness of each Guarantor,
including the guarantee of such Guarantor under the Credit Agreement.

The obligations of any Foreign Subsidiary that is a Subsidiary Guarantor
organized in any jurisdiction other than the United Kingdom with respect to its
Guarantee will be subordinated in right of payment (as described in this
paragraph, the “Payment Subordination Provisions”) to the prior payment in full
in cash of all obligations under the Credit Agreement, dated as of May 10, 2017,
by and among Affinion Holdings, the Company, the lenders party thereto, HPS
Investment Partners, LLC, as administrative agent and collateral agent, as in
effect on the Issue Date (as amended, restated, amended and restated,
supplemented, refinanced, replaced or otherwise modified, the “HPS Credit
Agreement”); provided that the Guarantees of such Subsidiary Guarantors shall in
all respects rank (i) pari passu in right of payment with any Indebtedness of
the Company or such Subsidiary Guarantor that ranks pari passu in right of
payment with the HPS Credit Agreement and (ii) senior in right of payment with
any Indebtedness of the Company or such Subsidiary Guarantor that ranks
subordinated in right of payment with the HPS Credit Agreement.

 

3

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The obligations of each Subsidiary Guarantor under its Guarantee will be limited
as necessary to prevent that Guarantee from constituting a fraudulent conveyance
under applicable law. In addition, the guarantees by certain foreign
subsidiaries may also be limited by financial assistance, corporate purpose,
capital maintenance or similar laws, regulations or defenses affecting creditor
rights generally. See “Risk Factors—Risk Factors Related to Our Indebtedness
Following the Transactions—Federal and state statutes allow courts, under
specific circumstances, to avoid notes and any future guarantees and require
holders of New Notes to return payments received, and foreign laws may contain
similar provisions.” As of December 31, 2018, after giving pro forma effect to
the Transactions, the Initial Guarantors would have had $[•] million of Secured
Indebtedness, of which $[•] million would have been guarantees of Indebtedness
under the Credit Agreement.

Each Guarantee will be a continuing guarantee and, subject to the next
succeeding paragraph, shall:

 

  (1)

remain in full force and effect until payment in full of all obligations of the
Company under the Indenture and the New Notes;

 

  (2)

be binding upon each such Guarantor and its successors; and

 

  (3)

inure to the benefit of and be enforceable by the Trustee, the holders and their
successors, transferees and assigns.

Notwithstanding anything to the contrary in “Amendments and Waivers,” a
Guarantee of a Guarantor will be automatically released and discharged upon:

 

  (1)

in the case of a Subsidiary Guarantor, the sale, disposition or other transfer
(including through merger, amalgamation or consolidation) of the Capital Stock
of such Subsidiary Guarantor, following which such Subsidiary Guarantor is no
longer a Restricted Subsidiary, if such sale, disposition or other transfer is
made in compliance with the Indenture, or

 

  (2)

in the case of a Subsidiary Guarantor, the Company designating such Subsidiary
Guarantor to be (x) an Unrestricted Subsidiary in accordance with the provisions
set forth under “—Certain Covenants—Limitation on Restricted Payments” and the
definition of “Unrestricted Subsidiary” or (y) an Identified Guarantor, or

 

  (3)

the Company’s exercise of the legal defeasance option as described under
“—Defeasance,” or if the Company’s obligations under the Indenture are
discharged in accordance with the terms of the Indenture.

Certain Covenants

The Indenture will contain provisions in respect of certain covenants including,
among others, those summarized below:

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock. The Indenture will provide that:

 

  (1)

the Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness)
or issue any shares of Disqualified Stock; and

 

  (2)

the Company will not permit any of its Restricted Subsidiaries to issue any
shares of Preferred Stock;

provided, however, that the Company and any Subsidiary Guarantor may Incur
Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified
Stock and any Subsidiary Guarantor of the Company may issue shares of Preferred
Stock, in each case, based on the Company’s most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is Incurred or such
Disqualified Stock or Preferred Stock is issued (determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been Incurred, or the Disqualified Stock or
Preferred Stock had been issued, as the case may be, and the application of
proceeds therefrom had occurred at the beginning of such four-quarter period),
if (i) the Company’s Fixed Charge Coverage Ratio would have been at least 1.65
to 1.00 and (ii) the Company’s Consolidated Net Leverage Ratio would not exceed
6.00 to 1.00.

 

4

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The foregoing limitations will not apply to (collectively, “Permitted Debt”):

 

  (a)

the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness
under any Credit Agreement and the issuance and creation of letters of credit
and bankers’ acceptances thereunder (with letters of credit and bankers’
acceptances being deemed to have a principal amount equal to the face amount
thereof) up to the sum of (i) $50.0 million and (ii) an aggregate principal
amount of the term loan and revolving loan commitments under the HPS Credit
Agreement as in effect on the Issue Date (which is estimated on the date of this
Offering Memorandum to be approximately $800 million); provided that such amount
shall be reduced by the aggregate amount of all repayments, optional or
mandatory, of the principal of any term Indebtedness and all commitment
reductions with respect to any revolving credit commitments, in each case, under
any such Credit Agreement that have been made since the Issue Date;

 

  (b)

the Incurrence by the Company and the Guarantors of Indebtedness represented by
(i) the New Notes to be issued on the Issue Date, (ii) the New Notes to be
issued after the Issue Date pursuant to the terms of the Management Incentive
Plan and (iii) any increase in the principal amount of New Notes as a result of
a PIK Payment and, in each case, the Guarantees in respect thereof;

 

  (c)

Indebtedness of the Company and its Restricted Subsidiaries existing on the
Issue Date (other than Indebtedness described in clauses (a) and (b)) after
giving effect to the use of proceeds of the offering of the New Notes;

 

  (d)

(1) Indebtedness (including Capital Lease Obligations) Incurred by the Company
or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company
or any of its Restricted Subsidiaries and Preferred Stock issued by any
Restricted Subsidiaries of the Company to finance (whether prior to or within
270 days after) the purchase, lease, construction or improvement of property
(real or personal) or equipment (whether through the direct purchase of assets
or the Capital Stock of any Person owning such assets (but no other material
assets)) and (2) Acquired Indebtedness; provided, however, that the aggregate
principal amount of Indebtedness, Disqualified Stock and Preferred Stock
incurred pursuant to this clause (d), when aggregated with the principal amount
of all other Indebtedness, Disqualified Stock and Preferred Stock then
outstanding that was Incurred (or deemed Incurred as provided under clause
(n) below) pursuant to this clause (d), does not exceed $40 million in the
aggregate;

 

  (e)

Indebtedness Incurred by the Company or any of its Restricted Subsidiaries
constituting reimbursement obligations with respect to letters of credit and
bank guarantees issued in the ordinary course of business, including without
limitation letters of credit in respect of workers’ compensation claims, health,
disability or other benefits to employees or former employees or their families
or property, casualty or liability insurance or self-insurance, or other
Indebtedness with respect to reimbursement type obligations regarding workers’
compensation claims;

 

  (f)

Indebtedness arising from agreements of the Company or any Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, Incurred or assumed in connection with the
Transactions or the disposition of any business, assets or a Subsidiary of the
Company, other than guarantees of Indebtedness Incurred by any Person acquiring
all or any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition;

 

  (g)

Indebtedness of the Company to a Restricted Subsidiary; provided, that any such
Indebtedness is subordinated in right of payment to the obligations of the
Company under the New Notes; provided, further, that any subsequent issuance or
transfer of any Capital Stock or any other event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of
such Indebtedness;

 

5

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  (h)

shares of Preferred Stock of a Restricted Subsidiary issued to the Company or
another Restricted Subsidiary; provided, that any subsequent issuance or
transfer of any Capital Stock or any other event that results in any Restricted
Subsidiary that holds such shares of Preferred Stock of another Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent
transfer of any such shares of Preferred Stock (except to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to be an issuance of
shares of Preferred Stock;

 

  (i)

Indebtedness of a Restricted Subsidiary to the Company or another Restricted
Subsidiary; provided, that if a Guarantor incurs such Indebtedness, and such
Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such
Indebtedness is subordinated in right of payment to the Guarantee of such
Guarantor; provided, further, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any Restricted Subsidiary
holding such Indebtedness ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except (x) to the Company or
another Restricted Subsidiary or (y) a pledge of Indebtedness referred to in
this clause (i) shall be deemed to be held by the pledgor and shall not be
deemed a transfer until the pledgee commences actions to foreclose on such
Indebtedness) shall be deemed, in each case, to be an Incurrence of such
Indebtedness;

 

  (j)

Hedging Obligations that are Incurred not for speculative purposes and either
(1) for the purpose of fixing or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of the Indenture to be outstanding
or (2) for the purpose of fixing or hedging currency exchange rate risk with
respect to any currency exchanges;

 

  (k)

obligations (including reimbursement obligations with respect to letters of
credit and bank guarantees) in respect of performance, bid, appeal and surety
bonds and completion guarantees provided by the Company or any Restricted
Subsidiary, in each case, reasonably required in the conduct of the business
(giving effect to any growth or expansion of such business), including those to
secure health, safety, insurance and environmental obligations of the Company
and its Restricted Subsidiaries as conducted in accordance with good and prudent
business industry practice;

 

  (l)

Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary
of the Company and Preferred Stock of any Restricted Subsidiary of the Company
not otherwise permitted hereunder in an aggregate principal amount which, when
aggregated with the principal amount or liquidation preference of all other
Indebtedness, Disqualified Stock and Preferred Stock then outstanding and
Incurred pursuant to this clause (l), does not exceed $65.0 million at any one
time outstanding;

 

  (m)

any guarantee by the Company or any of its Restricted Subsidiaries of
Indebtedness or other obligations of the Company or any of its Restricted
Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations
by the Company or such Restricted Subsidiary is permitted under the terms of the
Indenture; provided, that if such Indebtedness is by its express terms
subordinated in right of payment to the New Notes or the Guarantee of such
Restricted Subsidiary, as applicable, any such guarantee of such guarantor with
respect to such Indebtedness shall be subordinated in right of payment to the
New Notes or such Guarantor’s Guarantee, as applicable, substantially to the
same extent as such Indebtedness is subordinated to the New Notes or the
Guarantee of such Restricted Subsidiary, as applicable;

 

  (n)

the Incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary
of the Company which serves to refund, refinance or defease any Indebtedness,
Disqualified Stock or Preferred Stock Incurred as permitted under the first
paragraph of this covenant and clauses (b), (c), (d) and (n) of this paragraph,
including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to
pay premiums and fees in connection therewith (subject to the following proviso,
“Refinancing Indebtedness”) prior to its respective maturity; provided, however,
that such Refinancing Indebtedness:

 

  (1)

has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is Incurred which is not less than the remaining Weighted Average
Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock
being refunded or refinanced;

 

  (2)

has a Stated Maturity which is no earlier than the earlier of (x) the Stated
Maturity of the Indebtedness being refunded or refinanced or (y) at least 91
days later than the maturity date of the New Notes;

 

6

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  (3)

to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior
to the New Notes, or the Guarantee of such Restricted Subsidiary, as applicable,
such Refinancing Indebtedness is junior to the New Notes or the Guarantee of
such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or
Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or
Preferred Stock;

 

  (4)

is Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced plus
premium and fees Incurred in connection with such refinancing;

 

  (5)

shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a
Restricted Subsidiary of the Company that is not a Subsidiary Guarantor that
refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or
a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of
the Company or a Restricted Subsidiary that refinances Indebtedness,
Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

 

  (6)

in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness
outstanding under clause (d), shall be deemed to have been Incurred and to be
outstanding under such clause (d), as applicable, and not this clause (n) for
purposes of determining amounts outstanding under such clauses (d),

and provided, further, that subclauses (1) and (2) of this clause (n) will not
apply to any refunding, refinancing or defeasance of (A) the New Notes or
(B) any Secured Indebtedness;

 

  (o)

Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business or other cash management services in the ordinary
course of business and in good faith; provided, that (i) such Indebtedness
(other than credit or purchase cards) is extinguished within 10 Business Days of
notification to the Company of its Incurrence; and (ii) such Indebtedness in
respect of credit or purchase cards is extinguished within 60 days from its
Incurrence;

 

  (p)

Indebtedness of the Company or any Restricted Subsidiary supported by a letter
of credit or bank guarantee issued under the Credit Agreement pursuant to clause
(a) above, in a principal amount not in excess of the stated amount of such
letter of credit or bank guarantee, provided, that if the Indebtedness incurred
under this clause (p) is at any time no longer supported by such letter of
credit or bank guarantee, then the Indebtedness previously incurred under this
clause (p) shall be classified under the preceding paragraph or under another
available clause in this paragraph and if such Indebtedness may not be so
reclassified, then an Event of Default under the Indenture shall be deemed to
have occurred;

 

  (q)

the Incurrence by the Company of up to $25.0 million in aggregate principal
amount of Indebtedness in respect of letters of credit; provided that the
Incurrence of any such Indebtedness under this clause (q) shall reduce
dollar-for-dollar the amount available to be Incurred under any Credit Agreement
under clause (a) of this paragraph by an amount equal to the face amount of such
letters of credit (provided that for the avoidance of doubt, if any such
Indebtedness under this clause (q) is repaid, cancelled or otherwise
extinguished, the amount available to be Incurred under any Credit Agreement
under clause (a) of this paragraph shall be increased by an amount equal to the
face amount of letters of credit that are so repaid, cancelled or otherwise
extinguished, and such increased amount shall be available only for revolving
credit borrowings under the revolving credit facility provided under the Credit
Agreement or any replacement revolving facility thereof by the Company and the
Guarantors);

 

  (r)

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

 

  (s)

up to $10.0 million in aggregate principal amount of Indebtedness of Foreign
Subsidiaries that are not Subsidiary Guarantors at any time outstanding;

 

7

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  (t)

Indebtedness consisting of earn-outs and obligations of the Company or any
Restricted Subsidiary under deferred compensation or other similar arrangements
Incurred by such person in connection with Permitted Business Acquisitions or
any other Investment permitted under the Indenture;

 

  (u)

Indebtedness consisting of an unsecured corporate purchase card program in the
ordinary course of business in an aggregate amount at any time outstanding
pursuant to this clause (u) not in excess of $60.0 million; and

 

  (v)

Indebtedness by the Company or any of its Restricted Subsidiaries incurred under
lines of credit or overdraft facilities extended by one or more financial
institutions, in each case, established for the Company’s or such Restricted
Subsidiaries’ ordinary course of operations (such Indebtedness, the “Overdraft
Line”), (it being understood, however, that for a period of 90 consecutive days
during each fiscal year of the Company the outstanding principal amount of
Indebtedness under the Overdraft Line shall not exceed $20.0 million).

For purposes of determining compliance with this covenant, in the event that an
item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of one or more of the categories of permitted Indebtedness, Disqualified Stock
or Preferred Stock described in clauses (a) through (v) above or is entitled to
be Incurred pursuant to the first paragraph of this covenant, the Company shall,
in its sole discretion, divide, classify or reclassify, or later divide,
classify or reclassify, such item of Indebtedness, Disqualified Stock or
Preferred Stock in any manner that complies with this covenant and such item of
Indebtedness, Disqualified Stock or Preferred Stock will be treated as having
been Incurred pursuant to one or more of such clauses or pursuant to the first
paragraph hereof. Notwithstanding the foregoing, Indebtedness under the Credit
Agreement outstanding on the Issue Date will be deemed to have been incurred on
such date in reliance on the exception provided by clause (a) above and the
Company shall not be permitted to reclassify all or any portion of such
Indebtedness outstanding on the Issue Date. Accrual of interest, the accretion
of accreted value, amortization or original issue discount, the payment of
interest in the form of additional Indebtedness with the same terms (including
any PIK Payment), the payment of dividends on Preferred Stock in the form of
additional shares of Preferred Stock of the same class, the accretion of
liquidation preference and increases in the amount of Indebtedness outstanding
solely as a result of fluctuations in the exchange rate of currencies will not
be deemed to be an Incurrence of Indebtedness for purposes of this covenant.
Guarantees of, or obligations in respect of letters of credit relating to,
Indebtedness which is otherwise included in the determination of a particular
amount of Indebtedness shall not be included in the determination of such amount
of Indebtedness; provided, that the Incurrence of the Indebtedness represented
by such guarantee or letter of credit, as the case may be, was in compliance
with this covenant.

For purposes of determining compliance with any U.S. dollar-denominated
restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was Incurred, in the case of term debt, or first committed or
first Incurred (whichever yields the lower U.S. dollar equivalent), in the case
of revolving credit debt; provided, that if such Indebtedness is Incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-denominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced.

Limitation on Restricted Payments. The Indenture will provide that the Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:

 

  (1)

declare or pay any dividend or make any distribution on account of the Company’s
or any of its Restricted Subsidiaries’ Equity Interests, including any payment
with respect to such Equity Interests made in connection with any merger,
amalgamation or consolidation involving the Company (other than (A) dividends or
distributions by the Company payable solely in Equity Interests (other than
Disqualified Stock) of the Company; or (B) dividends or distributions by a
Restricted Subsidiary on its common Equity Interests so long as, in the case of
any dividend or distribution payable on or in respect of any class or series of
securities issued by a Restricted Subsidiary other than a Wholly Owned
Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least
its pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities);

 

8

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  (2)

purchase or otherwise acquire or retire for value any Equity Interests of the
Company or any Parent of the Company, including in connection with any merger,
amalgamation or consolidation;

 

  (3)

make any principal payment on, or redeem, repurchase, defease or otherwise
acquire or retire for value, in each case prior to any scheduled repayment or
scheduled maturity, any Subordinated Indebtedness of the Company or any
Restricted Subsidiary (other than the payment, redemption, repurchase,
defeasance, acquisition or retirement of (A) Subordinated Indebtedness in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of such payment,
redemption, repurchase, defeasance, acquisition or retirement and
(B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of
the covenant described under “—Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock”); or

 

  (4)

make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above
being collectively referred to as “Restricted Payments”), unless, at the time of
such Restricted Payment:

 

  (a)

no Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof;

 

  (b)

immediately after giving effect to such transaction on a pro forma basis as if
the Restricted Payment had been made (and including any other Restricted
Payments made during the interest period in which such Restricted Payment is
anticipated to be made) and any Indebtedness Incurred on such date had been
Incurred, the Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first
paragraph of the covenant described under “—Limitation on Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

 

  (c)

such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the Issue Date (including Restricted Payments permitted by clauses (1),
(4), (6), (7) and (14) of the next succeeding paragraph, but excluding all other
Restricted Payments permitted by the next succeeding paragraph), is less than
the sum, without duplication, of:

 

  (A)

50% of the Consolidated Net Income of the Company for the period (taken as one
accounting period) from the Issue Date to the end of the Company’s most recently
ended fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus

 

  (B)

100% of the aggregate net proceeds, including cash and the Fair Market Value (as
determined in accordance with the next succeeding sentence) of property other
than cash, received by the Company after the Issue Date from the issue or sale
of Equity Interests of the Company or any Parent of the Company (excluding
(without duplication) Refunding Capital Stock and Disqualified Stock) including
Equity Interests (other than Refunding Capital Stock or Disqualified Stock)
issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of
warrants or options (other than an issuance or sale to a Restricted Subsidiary
of the Company or an employee stock ownership plan or trust established by the
Company or any of its Subsidiaries), plus

 

  (C)

100% of the aggregate amount of contributions to the capital of the Company
received in cash and the Fair Market Value (as determined in accordance with the
next succeeding sentence) of property other than cash after the Issue Date
(other than Refunding Capital Stock, Disqualified Stock and contributions by a
Restricted Subsidiary), plus

 

  (D)

100% of the aggregate amount received by the Company or any Restricted
Subsidiary after the Issue Date in cash and the Fair Market Value (as determined
in accordance with the next succeeding sentence) of property other than cash
received by the Company or any Restricted Subsidiary after the Issue Date from:

 

9

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  (i)

the sale or other disposition (other than to the Company or a Restricted
Subsidiary of the Company) of Restricted Investments made by the Company and its
Restricted Subsidiaries and from repurchases and redemptions of such Restricted
Investments from the Company and its Restricted Subsidiaries by any Person
(other than the Company or any of its Restricted Subsidiaries) and from
repayments of loans or advances which constituted Restricted Investments (other
than in each case to the extent that the Restricted Investment was made pursuant
to clause (7) of the second paragraph of the covenant described under
“—Limitation on Restricted Payments”),

 

  (ii)

the sale (other than to the Company or a Restricted Subsidiary of the Company)
of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted
Subsidiary to the extent the investments in such Unrestricted Subsidiary was
made by the Company or a Restricted Subsidiary pursuant to clause (7) of the
second paragraph of “—Limitation on Restricted Payments” or to the extent such
Investment constituted a Permitted Investment), or

 

  (iii)

a distribution, dividend or other payment from an Unrestricted Subsidiary, plus

 

  (E)

in the event any Unrestricted Subsidiary of the Company has been redesignated as
a Restricted Subsidiary or has been merged, consolidated or amalgamated with or
into, or transfers or conveys its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company after the Issue Date, the Fair Market
Value (as determined in accordance with the next succeeding sentence) of the
Investments of the Company in such Unrestricted Subsidiary at the time of such
redesignation, combination or transfer (or of the assets transferred or
conveyed, as applicable) (other than in each case to the extent that the
designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant
to clause (7) of the second paragraph of the covenant described under
“—Limitation on Restricted Payments” or constituted a Permitted Investment).

The Fair Market Value of property other than cash covered by clauses (B), (C),
(D) and (E) above shall be determined in good faith by the Board of Directors of
the Company and

 

  (1)

in the event of property with a Fair Market Value in excess of $10.0 million,
shall be set forth in an Officers’ Certificate or

 

  (2)

in the event of property with a Fair Market Value in excess of $25.0 million,
shall be set forth in a resolution approved by at least a majority of the Board
of Directors of the Company.

The foregoing provisions will not prohibit:

 

  (1)

the payment of any dividend or distribution within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of the Indenture;

 

(2)

  

 (a)

   the repurchase, retirement or other acquisition of any Equity Interests
(“Retired Capital Stock”) of the Company, any Parent of the Company or
Subordinated Indebtedness of the Company, any Parent of the Company or any
Subsidiary Guarantor, in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than the sale of any Disqualified Stock or
any Equity Interests sold to a Subsidiary of the Company or to an employee stock
ownership plan or any trust established by the Company or any of its
Subsidiaries) of Equity Interests of the Company or any Parent of the Company or
contributions to the equity capital of the Company (collectively, including any
such contributions, “Refunding Capital Stock”), and   

 (b)  

   the declaration and payment of accrued dividends on the Retired Capital Stock
out of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company or to an employee stock ownership plan or any trust
established by the Company or any of its Subsidiaries) of Refunding Capital
Stock;

 

 

10

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  (3)

the redemption, repayment, repurchase or other acquisition or retirement of
Subordinated Indebtedness of the Company or any Subsidiary Guarantor made by
exchange for, or out of the proceeds of the substantially concurrent sale (or as
promptly as practicable after giving any requisite notice to the holders of such
Subordinated Indebtedness) of, new Indebtedness of the Company or any Subsidiary
Guarantor which is Incurred in accordance with the covenant described under
“—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock
and Preferred Stock” so long as

 

  (a)

the principal amount of such new Indebtedness does not exceed the principal
amount of the Subordinated Indebtedness being so redeemed, repurchased, acquired
or retired for value (plus the amount of any premium required to be paid under
the terms of the instrument governing the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired plus any fees incurred in connection
therewith),

 

  (b)

such Indebtedness is Incurred by the Company or by a Subsidiary Guarantor in
respect of refinanced Indebtedness of a Subsidiary Guarantor and, in each case,
is subordinated to the New Notes, or the related Guarantee, as the case may be,
at least to the same extent as such Subordinated Indebtedness so purchased,
exchanged, redeemed, repurchased, acquired or retired for value,

 

  (c)

such Indebtedness has a final scheduled maturity date equal to or later than the
earlier of (x) the final scheduled maturity date of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired and (y) at
least 91 days later than the maturity date of the New Notes, and

 

  (d)

such Indebtedness has a Weighted Average Life to Maturity at the time Incurred
which is not less than the remaining Weighted Average Life to Maturity of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or retired;

 

  (4)

the repurchase, retirement or other acquisition for value (or dividends to any
Parent of the Company to finance any such repurchase, retirement or other
acquisition for value) of Equity Interests of the Company or any Parent of the
Company held by any future, present or former employee, director or consultant
of the Company, any Parent of the Company or any Subsidiary of the Company
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or other agreement or arrangement; provided,
however, that the aggregate amounts paid under this clause (4) do not exceed
$1.25 million in any calendar year commencing with 2019; provided, further,
however, that such amount in any calendar year may be increased by an amount not
to exceed:

 

  (a)

the cash proceeds received by the Company or any of its Restricted Subsidiaries
from the sale of Equity Interests (other than Disqualified Stock) of the Company
after the Issue Date to members of management, directors or consultants of the
Company, any Parent of the Company and Restricted Subsidiaries of the Company
(provided, that the amount of such cash proceeds utilized for any such
repurchase, retirement, other acquisition or dividend will not increase the
amount available for Restricted Payments under clause (c) of the immediately
preceding paragraph); plus

 

  (b)

the cash proceeds of key man life insurance policies received by the Company,
any Parent of the Company (to the extent contributed to the Company) or the
Restricted Subsidiaries of the Company after the Issue Date; less

 

  (c)

the amount of any Restricted Payments previously made pursuant to subclauses
(a) and (b) of this second proviso of clause (4);

 

  (5)

the declaration and payment of dividends or distributions to holders of any
class or series of Disqualified Stock of the Company or any of its Restricted
Subsidiaries issued or incurred after the Issue Date in accordance with the
covenant described under “—Limitation on Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock;”

 

  (6)

the payment of dividends on the Company’s common Capital Stock (or the payment
of dividends to any Parent of the Company to fund the payment by such Parent of
the Company of dividends on such entity’s common Capital Stock) of up to
6.0% per annum of the net cash proceeds received by or contributed to the
Company from any public offering of common Capital Stock consummated after the
Issue Date, other than public offerings with respect to common Capital Stock of
the Company or any Parent of the Company registered on Form S-4 or Form S-8;

 

11

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  (7)

other Restricted Payments since the Issue Date in an aggregate amount not to
exceed $2.5 million;

 

  (8)

the distribution, as a dividend or otherwise, of shares of Capital Stock of, or
Indebtedness owed to the Company or a Restricted Subsidiary of the Company by,
Unrestricted Subsidiaries (other than to the extent such Investments were made
pursuant to clause (9) of the definition of Permitted Investments);

 

  (9)

(a) with respect to each tax year or portion thereof that any direct or indirect
parent of the Company qualifies as a Flow Through Entity, the distribution by
the Company to the holders of Capital Stock of such direct or indirect parent of
the Company of an amount equal to the product of the amount of aggregate net
taxable income of the Company allocated by the Company to the holders of Capital
Stock of the Company for such period and the Presumed Tax Rate for such period;
and (b) with respect to any tax year or portion thereof that any direct or
indirect parent of the Company does not qualify as a Flow Through Entity,
payment of dividends or other distributions to any direct or indirect parent of
the Company that files a consolidated U.S. federal tax return that includes the
Company and its subsidiaries in an amount not to exceed the amount that the
Company and its Restricted Subsidiaries would have been required to pay in
respect of federal, state or local taxes, as the case may be, in respect of such
year if the Company and its Restricted Subsidiaries had paid such taxes directly
as a stand-alone taxpayer or stand-alone group;

 

  (10)

the declaration and payment of dividends to, or the making of loans to, any
Parent of the Company in amounts required for such entity to pay general
corporate overhead expenses (including salaries, bonuses, benefits paid to
management and employees of any Parent, expenses related to any equity or debt
offering, including pre-emptive rights offerings, of such Parent (whether or not
successful), if applicable, expenses incurred in connection with such Parent’s
obligations as a public company, including SEC expenses and stock exchange or
OTC listing expenses and legal, accounting and other professional and
administrative expenses) for any direct or indirect parent entity of the Company
to the extent such expenses are (a) attributable to the ownership or operation
of the Company and its Restricted Subsidiaries or (b) expenses required to be
incurred by any Parent of the Company in connection with the performance of its
obligations under any debt agreement, shareholders’ agreement, registration
rights agreement, investor rights agreement, warrant agreement or similar
agreements, whether in existence on or after the Issue Date, to the extent such
obligations arise from the issuance of debt of the Company that is guaranteed by
any such Parent or from the issuance of Equity Interests of any such Parent, in
each case, determined in good faith by the Board of Directors;

 

  (11)

any Restricted Payment used to fund the Transactions and the fees and expenses
related thereto or made in connection with the consummation of the Transactions
(including payments made pursuant to or as contemplated by the Transaction
Documents, whether payable on the Issue Date or thereafter);

 

  (12)

repurchases of Equity Interests deemed to occur upon exercise of stock options
or warrants if such Equity Interests represent a portion of the exercise price
of such options or warrants; and

 

  (13)

payments of cash, or dividends, distributions or advances by the Company or any
Restricted Subsidiary to allow any such entity to make payments of cash, in lieu
of the issuance of fractional shares upon the exercise of warrants or upon the
conversion or exchange of Capital Stock of any such Person; provided, however,
that the aggregate amount of such payments, dividends, distributions or advances
does not exceed $1.25 million.

provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (4), (5), (6), (7) and (8), no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof.

The amount of all Restricted Payments (other than cash) will be the Fair Market
Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. Except as otherwise provided
herein, the Fair Market Value of any assets or securities that are required to
be valued by this covenant will be determined in good faith by senior management
or the Board of Directors of the Company.

 

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As of the Issue Date, all of the Company’s Subsidiaries will be Restricted
Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become
a Restricted Subsidiary except pursuant to the definition of “Unrestricted
Subsidiary.” For purposes of designating any Restricted Subsidiary as an
Unrestricted Subsidiary, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so
designated will be deemed to be Restricted Payments or Permitted Investments in
an amount determined as set forth in the last sentence of the definition of
“Investments.” Such designation will only be permitted if Restricted Payments or
Permitted Investments in such amount would be permitted at such time and if such
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

Dividend and Other Payment Restrictions Affecting Subsidiaries. The Indenture
will provide that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or consensual
restriction on the ability of any Restricted Subsidiary to:

 

  (a) (i)

pay dividends or make any other distributions to the Company or any of its
Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any
other interest or participation in, or measured by, its profits; or (ii) pay any
Indebtedness owed to the Company or any of its Restricted Subsidiaries;

 

  (b)

make loans or advances to the Company or any of its Restricted Subsidiaries; or

 

  (c)

sell, lease or transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries;

except in each case for such encumbrances or restrictions existing under or by
reason of:

 

  (1)

contractual encumbrances or restrictions in effect on the Issue Date, including
pursuant to the Credit Agreement and other Senior Credit Documents;

 

  (2)

the Indenture and the New Notes;

 

  (3)

applicable law or any applicable rule, regulation or order;

 

  (4)

any agreement or other instrument of a Person acquired by the Company or any
Restricted Subsidiary which was in existence at the time of such acquisition
(but not created in contemplation thereof), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired;

 

  (5)

contracts or agreements for the sale of assets, including customary restrictions
with respect to a Subsidiary pursuant to an agreement that has been entered into
for the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary;

 

  (6)

Secured Indebtedness otherwise permitted to be Incurred pursuant to the
covenants described under “—Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock” and “—Liens” that limit the
right of the debtor to dispose of the assets securing such Indebtedness;

 

  (7)

restrictions on cash or other deposits or net worth imposed by customers,
suppliers or other vendors under contracts entered into in the ordinary course
of business;

 

  (8)

customary provisions in joint venture agreements and other similar agreements
(including customary provisions in agreements relating to any Joint Venture);

 

  (9)

purchase money obligations for property acquired and Capital Lease Obligations
in the ordinary course of business that impose restrictions of the nature
discussed in clause (c) above on the property so acquired;

 

  (10)

customary provisions contained in leases, licenses, contracts and other similar
agreements entered into in the ordinary course of business that impose
restrictions of the type described in clause (c) above on the property subject
to such lease;

 

13

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  (11)

other Indebtedness, Disqualified Stock or Preferred Stock of any Restricted
Subsidiary of the Company that is Incurred subsequent to the Issue Date and
permitted pursuant to the covenant described under “—Limitation on Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” provided,
that such encumbrances and restrictions contained in any agreement or instrument
will not materially affect the Company’s ability to make anticipated principal
or interest payments on the New Notes (as determined in good faith by senior
management or the Board of Directors of the Company); and

 

  (12)

any encumbrances or restrictions of the type referred to in clauses (a), (b) and
(c) above imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1) through
(11) above; provided, that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are,
in the good faith judgment of senior management or the Board of Directors of the
Company, no more restrictive as a whole with respect to such encumbrances and
restrictions than those prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.

For purposes of determining compliance with this covenant, (i) the priority of
any Preferred Stock in receiving dividends or liquidating distributions prior to
dividends or liquidating distributions being paid on common Capital Stock shall
not be deemed a restriction on the ability to make distributions on Capital
Stock and (ii) the subordination of loans or advances made to the Company or a
Restricted Subsidiary of the Company to other Indebtedness Incurred by the
Company or any such Restricted Subsidiary shall not be deemed a restriction on
the ability to make loans or advances.

Transactions with Affiliates. The Indenture will provide that the Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any payment to, or sell, lease, transfer or otherwise dispose
of any of its properties or assets to, or purchase any property or assets from,
or enter into or make or amend any transaction or series of transactions,
contract, agreement, understanding, loan, advance or guarantee with or for the
benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate
Transaction”) involving aggregate consideration in excess of $5 million, unless:

 

  (a)

such Affiliate Transaction is on terms that are not less favorable to the
Company or the relevant Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and

 

  (b)

with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $20 million, the
Company delivers to the Trustee a resolution adopted in good faith by the
majority of the Board of Directors of the Company approving such Affiliate
Transaction and set forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with clause (a) above.

The foregoing provisions will not apply to the following:

 

  (1)

transactions between or among the Company and/or any of its Restricted
Subsidiaries;

 

  (2)

Restricted Payments permitted by the provisions of the Indenture described above
under the covenant “—Limitation on Restricted Payments” and Investments under
the definition of “Permitted Investments;”

 

  (3)

the payment of reasonable and customary fees to, and indemnity provided on
behalf of officers, directors, employees or consultants of the Company, any
Parent of the Company or any Restricted Subsidiary of the Company;

 

  (4)

payments by the Company or any of its Restricted Subsidiaries made for any
financial advisory, financing, underwriting or placement services or in respect
of other investment banking activities, including, without limitation, in
connection with acquisitions or divestitures, which payments are (x) approved by
a majority of the Board of Directors of the Company in good faith or (y) made
pursuant to any agreement, or any agreement contemplated by such agreement, each
as described or incorporated by reference in this Offering Memorandum;

 

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  (5)

transactions in which the Company or any of its Restricted Subsidiaries, as the
case may be, delivers to the Trustee a letter from an Independent Financial
Advisor stating that such transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view or meets the requirements of clause
(a) of the preceding paragraph;

 

  (6)

payments or loans (or cancellation of loans) to employees or consultants that
are (x) approved by a majority of the Board of Directors of the Company in good
faith, (y) made in compliance with applicable law and (z) otherwise permitted
under the Indenture;

 

  (7)

any agreement as in effect as of the Issue Date as described in this Offering
Memorandum;

 

  (8)

the existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of, the Transaction Documents
and any amendment thereto or similar agreements which it may enter into
thereafter; provided, however, that the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of its obligations under, any
future amendment to any such existing agreement or under any similar agreement
entered into after the Issue Date shall only be permitted by this clause (8) to
the extent that the terms of any such existing agreement together with all
amendments thereto, taken as a whole, or new agreement are not otherwise more
disadvantageous to the holders of the New Notes in any material respect than the
original agreement as in effect on the Issue Date;

 

  (9)

transactions to effect the Transactions and the payment of all fees and expenses
related to the Transactions, as described or incorporated by reference in this
Offering Memorandum;

 

  (10)

transactions with customers, clients, suppliers, or purchasers or sellers of
goods or services, in each case in the ordinary course of business and otherwise
in compliance with the terms of the Indenture that are fair to the Company or
the Restricted Subsidiaries, in the reasonable determination of the members of
the Board of Directors or the senior management of the Company, or are on terms
at least as favorable as would reasonably have been entered into at such time
with an unaffiliated party;

 

  (11)

if otherwise permitted under the Indenture, the issuance of Equity Interests
(other than Disqualified Stock) of the Company to any Specified Holder, the
Management Group or to any director, officer, employee or consultant of the
Company or any Parent of the Company;

 

  (12)

the issuances of securities or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock option and stock ownership plans or similar employee benefit plans
approved by the Board of Directors of the Company or of a Restricted Subsidiary
of the Company, as appropriate, in good faith;

 

  (13)

the entering into of any tax sharing agreement or arrangement and any payment
permitted by clause (8) of the second paragraph of the covenant described under
“—Limitation on Restricted Payments;”

 

  (14)

any contribution to the capital of the Company;

 

  (15)

transactions between the Company or any of its Restricted Subsidiaries and any
Person, a director of which is also a director of the Company or any direct or
indirect parent company of the Company; provided, however, that such director
abstains from voting as a director of the Company or such direct or indirect
parent company, as the case may be, on any matter involving such other Person;

 

  (16)

pledges of Equity Interests of Unrestricted Subsidiaries; and

 

  (17)

any employment agreements entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business.

Liens. The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause
or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) upon any of their property or assets, now owned or hereafter
acquired, unless all payments due under the Indenture and the New Notes are
secured on an equal and ratable basis with the obligations so secured (or, in
the case of Indebtedness subordinated to the New Notes or the related
Guarantees, prior or senior thereto, with the same relative priority as the New
Notes will have with respect to such subordinated Indebtedness) until such time
as such obligations are no longer secured by a Lien.

 

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Reports and Other Information. The Indenture will provide that notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act or otherwise report on an annual and quarterly
basis on forms provided for such annual and quarterly reporting pursuant to
rules and regulations promulgated by the SEC, from and after the Issue Date, the
Company will furnish to the Trustee,

 

  (1)

within 120 days after the end of each fiscal year, audited year-end consolidated
financial statements and a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and a report on the annual financial
statements by the Company’s independent registered public accounting firm
(which, for the avoidance of doubt, will be a report solely on the annual
financial statements and no assessment by management on the Company’s internal
controls and procedures or any report by the Company’s independent registered
public accounting firm thereon will be required to be included pursuant to this
covenant); and

 

  (2)

within 45 days after the end of each of the first three fiscal quarters of each
fiscal year, unaudited quarterly financial statements and a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”.

The Company may satisfy such reporting requirements by posting copies of such
information required by the preceding paragraphs on a website (which may be
nonpublic and may be maintained by the Company or a third party) to which access
will be given to the Trustee, the holders, prospective investors in the New
Notes (which prospective investors shall be limited to “qualified institutional
buyers” within the meaning of Rule 144A of the U.S. Securities Act or non-U.S.
persons (as defined in Regulation S under the U.S. Securities Act) that certify
their status as such to the reasonable satisfaction of the Company).

The Indenture permits the Company to satisfy its obligations in this covenant
with respect to financial information relating to the Company by furnishing
financial information relating to a Parent; provided that, the same is
accompanied by consolidating information that explains in reasonable detail the
differences between the information relating to such Parent, on the one hand,
and the information relating to the Company and its Restricted Subsidiaries on a
standalone basis, on the other hand. For the avoidance of doubt, the
consolidating information referred to in the proviso in the preceding sentence
need not be audited. Notwithstanding the foregoing, the Company will be deemed
to have furnished such reports and other information referred to above to the
Trustee and the holders if it or such Parent has filed such reports, information
or other documents with the SEC via the EDGAR filing system and such reports are
publicly available (it being understood that the Company and Parent will not
have any obligation to file reports with the SEC from and after the Issue Date).

Delivery of reports and other information is for informational purposes only and
their respective receipt of such reports shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Company’s or any other Person’s compliance with
any of its covenants under the Indenture, the Guarantees or the New Notes (as to
which the Trustee is entitled to rely exclusively on Officer’s Certificates).
The Trustee shall not be obligated to monitor or confirm, on a continuing basis
or otherwise, the Company’s or any other Person’s compliance with the covenants
described herein or with respect to any reports or other documents filed under
the Indenture.

Future Guarantors. The Indenture will provide that if (x) the Company acquires
or creates any direct or indirect Restricted Subsidiary that is not an Excluded
Subsidiary after the Issue Date (unless such Subsidiary is already a Guarantor),
(y) any Excluded Subsidiary acquired or created after the Issue Date ceases to
constitute an Excluded Subsidiary or (z) any existing Unrestricted Subsidiary is
designated as a Restricted Subsidiary in accordance with the provisions set
forth under “—Certain Covenants—Limitation on Restricted Payments” and the
definition of “Unrestricted Subsidiary”, the Company shall cause such Restricted
Subsidiary, at the earlier of (a) 20 Business Days after the date of such
acquisition, formation, cessation or designation (provided if the administrative
agent under the Credit Agreement grants an extension of time to comply with the
obligation to make such Restricted Subsidiary a guarantor thereunder to a date
later than 20 Business Days after the date of such acquisition, formation,
cessation or designation, then such extension of time shall also be deemed
granted hereunder and/or, in the case of any such Restricted Subsidiary that is
a Foreign Subsidiary, such later date as may be the first practicable date
because of delays caused by foreign legal requirements despite diligent efforts
on the part of the Company), or (b) concurrently (to the extent reasonably
practicable) with the guarantee under the Credit Agreement by such

 

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Subsidiary, to execute and deliver to the Trustee a supplemental indenture in
substantially the form attached as an exhibit to the Indenture pursuant to which
such Restricted Subsidiary will unconditionally Guarantee, on a joint and
several basis, the full and prompt payment of the principal of, premium, if any
and interest on the New Notes on a senior unsecured basis (subject to the
Payment Subordination Provisions) and all other obligations under the Indenture.
Each Guarantee of a Subsidiary Guarantor will be limited to an amount not to
exceed the maximum amount that can be guaranteed by that Subsidiary Guarantor
without rendering the Guarantee, as it relates to such Subsidiary Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.

Each Guarantee shall be released in accordance with the provisions of the
Indenture described under “—Guarantees.”

Change of Control

Upon the occurrence of a Change of Control, each holder will have the right to
require the Company to repurchase all or any part of such holder’s Notes at a
purchase price in cash equal to 100% of the principal amount of the Notes
thereof, in each case, plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date).

Within 60 days following any Change of Control, the Company shall send (or cause
to be sent) a notice (a “Change of Control Offer”) to each holder with a copy to
the Trustee stating (in addition to any information that is required by the
Indenture):

 

  (1)

that a Change of Control has occurred and that such holder has the right to
require the Company to purchase such holder’s Notes at a purchase price in cash
equal to 100% of the principal amount of the Notes thereof, plus accrued and
unpaid interest, if any, to the date of purchase (subject to the right of
holders of record on a record date to receive interest on the relevant interest
payment date);

 

  (2)

the circumstances and relevant facts and financial information regarding such
Change of Control;

 

  (3)

the repurchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is sent); and

 

  (4)

the instructions determined by the Company, consistent with this covenant, that
a holder must follow in order to have its Notes purchased.

In addition, the Company will not be required to make a Change of Control Offer
upon a Change of Control if (i) a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer or (ii) at the time of such Change of Control, any
Credit Agreement in effect at such time prohibits the Company from making such
Change of Control Offer or otherwise prohibits the Company from repurchasing all
Notes subject to such Change of Control Offer.

The Credit Agreement provides that certain change of control events with respect
to the Company constitute an event of default under the Credit Agreement and, as
of the Issue Date, prohibits the Company from repurchasing the Notes in a Change
of Control Offer. Any future credit agreements or other similar agreements to
which the Company becomes a party may contain similar provisions and may
prohibit the Company from purchasing any Notes. In the event a Change of Control
occurs at a time when the Company is prohibited by any Credit Agreement from
purchasing Notes, the Company could seek the consent of its lenders, including
lenders under the Credit Agreement to the purchase of Notes, or could attempt to
refinance the borrowings that contain such prohibition; however, the Company is
under no obligation to seek such consent or attempt to so refinance. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing Notes under such Credit Agreement and, in
such case, the Company will not be required to make a Change of Control Offer in
respect of such Change of Control, and the Company’s failure to make such Change
of Control Offer would not constitute an Event of Default under the Indenture.

 

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Notice of any Change of Control Offer may be given prior to the completion
thereof, and any such Change of Control Offer notice may, at the Company’s
discretion, be subject to one or more conditions precedent, including, but not
limited to, completion of the related Change of Control Offer.

The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Notes pursuant to this covenant. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this covenant, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this paragraph by virtue thereof.

The Company has no present intention to engage in a transaction involving a
Change of Control, although it is possible that the Company could decide to do
so in the future. Subject to the limitations discussed below, the Company could,
in the future, enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not constitute a Change of
Control under the Indenture, but that could increase the amount of indebtedness
outstanding at such time or otherwise affect the capital structure or credit
ratings of the Company or any of its Affiliates. In addition, holders of Notes
may not be entitled to require us to purchase their Notes in certain
circumstances involving a significant change in the composition of our Board of
Directors.

The definition of “Change of Control” includes a phrase relating to the sale,
lease or transfer of “all or substantially all” the assets of the Company and
its Subsidiaries taken as a whole. Although there is a developing body of case
law interpreting the phrase “substantially all,” under New York law, which
governs the Indenture, there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a holder of Notes to require
the Company to repurchase such Notes as a result of a sale, lease or transfer of
less than all of the assets of the Company and its Subsidiaries taken as a whole
to another Person or group may be uncertain.

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

The Indenture will provide that the Company may not consolidate, amalgamate or
merge with or into or wind up into (whether or not the Company is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one or more related
transactions to, any Person unless:

 

  (1)

the Company is a surviving Person or the Person formed by or surviving any such
consolidation, amalgamation or merger (if other than the Company) or to which
such sale, assignment, transfer, lease, conveyance or other disposition has been
made is a corporation, partnership or limited liability company organized or
existing under the laws of the United States, any state thereof or the District
of Columbia (the Company or such Person, as the case may be, being herein called
the “Successor Company”);

 

  (2)

the Successor Company (if other than the Company) expressly assumes all the
obligations of the Company under the Indenture and the New Notes pursuant to
supplemental indentures or other documents or instruments in form reasonably
satisfactory to the Trustee;

 

  (3)

immediately after giving effect to such transaction no Default or Event of
Default shall have occurred and be continuing;

 

  (4)

immediately after giving pro forma effect to such transaction, as if such
transaction had occurred at the beginning of the applicable four-quarter period
(and treating any Indebtedness which becomes an obligation of the Successor
Company or any of its Restricted Subsidiaries as a result of such transaction as
having been Incurred by the Successor Company or such Restricted Subsidiary at
the time of such transaction), either

 

  (a)

the Successor Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of the covenant described under “—Certain Covenants—Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock;” or

 

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  (b)

the Fixed Charge Coverage Ratio for the Successor Company and its Restricted
Subsidiaries would be greater than or equal to such ratio for the Company and
its Restricted Subsidiaries immediately prior to such transaction;

 

  (5)

each Guarantor, unless it is the other party to the transactions described
above, shall have by supplemental indenture confirmed that its Guarantee shall
apply to such Person’s obligations under the Indenture and the New Notes.

 

  (6)

if the Successor Company is not organized as a corporation after such
transaction, a successor corporation which is a Subsidiary of the Successor
Company and is organized or existing under the laws of the United States, any
state thereof or the District of Columbia shall be co-obligor of the New Notes
and shall have by supplemental indenture confirmed its obligations under the
Indenture and the New Notes; and

 

  (7)

the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, amalgamation, merger
or transfer and such supplemental indenture (if any) comply with the Indenture.

The Successor Company (if other than the Company) will succeed to, and be
substituted for, the Company under the Indenture and the New Notes, and the
Company will automatically be released and discharged from its obligations under
the Indenture and the New Notes, but in the case of a lease of all or
substantially all of its assets, the Company will not be released from the
obligations to pay the principal of and interest on the New Notes.
Notwithstanding the foregoing clauses (3) and (4), (a) any Restricted Subsidiary
may consolidate or amalgamate with, merge into, sell, assign or transfer, lease,
convey or otherwise dispose of all or part of its properties and assets to the
Company or to another Restricted Subsidiary and (b) the Company may merge,
amalgamate or consolidate with an Affiliate incorporated or organized solely for
the purpose of incorporating or organizing the Company in another state of the
United States or the District of Columbia so long as the amount of Indebtedness
of the Company and its Restricted Subsidiaries is not increased thereby (any
transaction described in this sentence a “Specified Merger/Transfer
Transaction”). This “—Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets” will not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Company and its
Restricted Subsidiaries.

For purposes of this covenant, the sale, lease, conveyance, assignment, transfer
or other disposition of all or substantially all of the properties and assets of
one or more Subsidiaries of the Company, which properties and assets, if held by
the Company instead of such Subsidiaries, would constitute all or substantially
all of the properties and assets of the Company on a consolidated basis, shall
be deemed to be the transfer of all or substantially all of the properties and
assets of the Company.

Although there is a limited body of case law interpreting the phrase
“substantially all,” under New York law, which governs the Indenture, there is
no precise established definition of the phrase under applicable law.
Accordingly, in certain circumstances there may be a degree of uncertainty as to
whether a particular transaction would involve “all or substantially all” of the
property or assets of a Person.

The Indenture will further provide that subject to certain limitations in the
Indenture governing release of a Guarantee upon the sale or disposition of a
Restricted Subsidiary of the Company that is a Subsidiary Guarantor, each
Subsidiary Guarantor will not, and the Company will not permit any Subsidiary
Guarantor to, consolidate, amalgamate or merge with or into or wind up into
(whether or not such Subsidiary Guarantor is the surviving Person), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions to, any Person
unless:

 

  (1)

such Subsidiary Guarantor is a surviving Person or the Person formed by or
surviving any such consolidation, amalgamation or merger (if other than such
Subsidiary Guarantor) or to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made is a corporation, partnership or
limited liability company organized or existing under the laws of the United
States, any state thereof or the District of Columbia (such Subsidiary Guarantor
or such Person, as the case may be, being herein called the “Successor
Guarantor”) and the Successor Guarantor (if other than such Subsidiary
Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor
under the Indenture and such Subsidiary Guarantor’s Guarantee pursuant to a
supplemental indenture;

 

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  (2)

immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Guarantor or any of
its Subsidiaries as a result of such transaction as having been Incurred by the
Successor Guarantor or such Subsidiary at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing; and

 

  (3)

any Successor Guarantor (if other than such Subsidiary Guarantor) shall have
delivered or caused to be delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such consolidation, amalgamation,
merger or transfer and such supplemental indenture (if any) comply with the
Indenture.

Subject to certain limitations described in the Indenture, the Successor
Guarantor will succeed to, and be substituted for, such Subsidiary Guarantor
under the Indenture and such Subsidiary Guarantor’s Guarantee, and such
Subsidiary Guarantor will automatically be released and discharged from its
obligations under the Indenture and such Subsidiary Guarantor’s guarantee.
Notwithstanding clause (2) of the foregoing paragraph, (i) a Subsidiary
Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated or
organized solely for the purpose of incorporating or organizing such Subsidiary
Guarantor in another state of the United States, the District of Columbia or any
territory of the United States, so long as the amount of Indebtedness of the
Subsidiary Guarantor is not increased thereby and (ii) a Subsidiary Guarantor
may merge, amalgamate or consolidate with another Subsidiary Guarantor or the
Company.

Defaults

An “Event of Default” will be defined in the Indenture as:

 

  (1)

a default in any payment of interest on any Note when due that continues for 30
days,

 

  (2)

a default in the payment of principal or premium, if any, of any Note when due
at its Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise,

 

  (3)

the failure by the Company or any of its Restricted Subsidiaries to comply with
the provisions described under the captions “—Merger, Amalgamation,
Consolidation or Sale of All or Substantially All Assets,” and “—Optional
Redemption,”

 

  (4)

the failure by the Company, Affinion Holdings or any of its Restricted
Subsidiaries to comply for 30 days after notice with any of its obligations
under the covenants described under “—Certain Covenants,”

 

  (5)

the failure by the Company or any of its Restricted Subsidiaries to comply for
60 days after notice with its other agreements contained in the New Notes or the
Indenture,

 

  (6)

the failure by the Company, Affinion Holdings, any Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that would constitute a
Significant Subsidiary to pay any Indebtedness (other than Indebtedness owing to
a Restricted Subsidiary of the Company) within any applicable grace period after
final maturity or the acceleration of any such Indebtedness by the holders
thereof because of a default, in each case, if the total amount of such
Indebtedness unpaid or accelerated exceeds $16.5 million or its foreign currency
equivalent (the “cross-acceleration provision”),

 

  (7)

certain events of bankruptcy, insolvency or reorganization of the Company,
Affinion Holdings, any Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that would constitute a Significant Subsidiary (the
“bankruptcy provisions”),

 

  (8)

failure by the Company, Affinion Holdings, any Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that would constitute a
Significant Subsidiary to pay final judgments aggregating in excess of
$16.5 million or its foreign currency equivalent (net of any amounts which are
covered by enforceable insurance policies issued by solvent carriers), which
judgments are not discharged, waived or stayed for a period of 60 days (the
“judgment default provision”), or

 

20

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  (9)

any Guarantee of Affinion Holdings, a Significant Subsidiary or a group of
Restricted Subsidiaries of the Company that would constitute a Significant
Subsidiary ceases to be in full force and effect (except as contemplated by the
terms thereof) or any such Guarantor that qualifies or a group of such
Guarantors that would qualify as a Significant Subsidiary denies or disaffirms
its obligations under the Indenture or any Guarantee and such Default continues
for ten days.

The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

However, a default under clauses (4) and (5) will not constitute an Event of
Default until the Trustee or the holders of 25% in principal amount of the New
Notes outstanding notify the Company of the default and the Company does not
cure such default within the time specified in clauses (4) and (5) hereof after
receipt of such notice.

If an Event of Default (other than a Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company) occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the New Notes outstanding by notice to the Company (and to the Trustee if given
by holders) may declare the principal of, premium, if any, and accrued but
unpaid interest on all the New Notes to be due and payable. Upon such a
declaration, such principal and interest will be due and payable immediately. If
an Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal of, premium, if any, and
interest on all the New Notes will become immediately due and payable without
any declaration or other act on the part of the Trustee or any holders. Under
certain circumstances, the holders of a majority in principal amount of the New
Notes outstanding may rescind any such acceleration with respect to the New
Notes and its consequences.

In the event of any Event of Default specified in clause (6) of the first
paragraph above, such Event of Default and all consequences thereof (excluding,
however, any resulting payment default) will be annulled, waived and rescinded,
automatically and without any action by the Trustee or the holders of the New
Notes, if within 20 days after such Event of Default arose the Company delivers
an Officers’ Certificate to the Trustee stating that (x) the Indebtedness or
guarantee that is the basis for such Event of Default has been discharged or
(y) the holders thereof have rescinded or waived the acceleration, notice or
action (as the case may be) giving rise to such Event of Default (and such
Officers’ Certificate would attach information provided by such holders or
otherwise relied upon by the Company to support the statement in the Officers’
Certificate relating to such rescission or waiver by such holders) or (z) the
default that is the basis for such Event of Default has been cured, it being
understood that in no event shall an acceleration of the principal amount of the
New Notes as described above be annulled, waived or rescinded upon the happening
of any such events.

Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the holders unless such holders
have offered to the Trustee indemnity or security against any loss, liability or
expense satisfactory to the Trustee. Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no holder may
pursue any remedy with respect to the Indenture or the New Notes unless:

 

  (1)

such holder has previously given the Trustee notice that an Event of Default is
continuing,

 

  (2)

holders of at least 25% in principal amount of the New Notes outstanding have
requested the Trustee to pursue the remedy,

 

  (3)

such holders have offered the Trustee security or indemnity (satisfactory to the
Trustee) against any loss, liability or expense,

 

  (4)

the Trustee has not complied with such request within 60 days after the receipt
of the request and the offer of security or indemnity, and

 

  (5)

the holders of a majority in principal amount of the outstanding New Notes have
not given the Trustee a direction inconsistent with such request within such
60-day period.

 

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Subject to certain restrictions, the holders of a majority in principal amount
of the New Notes outstanding are given the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
holder or that would involve the Trustee in personal liability. Prior to taking
any action under the Indenture, the Trustee will be entitled to indemnification
satisfactory to it in its sole discretion against all losses, liabilities and
expenses caused by taking or not taking such action.

The Indenture provides that if a Default occurs and is continuing and is
actually known to the Trustee, the Trustee must send electronically or mail to
each holder of the New Notes notice of the Default within the earlier of 90 days
after it occurs or 30 days after it is actually known to a Trust Officer or
written notice of it is received by the Trustee. Except in the case of a Default
in the payment of principal of, premium (if any) or interest on any applicable
Note, the Trustee may withhold notice if and so long as the Trustee in good
faith determines that withholding notice is in the interests of the noteholders.
In addition, the Company is required to deliver to the Trustee, within 120 days
after the end of each fiscal year, a certificate indicating whether the signers
thereof know of any Default that occurred during the previous year. The Company
also is required to deliver to the Trustee, within 30 days after the occurrence
thereof, written notice of any events which would constitute certain Defaults,
their status and what action the Company is taking or proposes to take in
respect thereof.

Amendments and Waivers

Subject to certain exceptions, the Indenture may be amended with the consent of
the holders of a majority in principal amount of the New Notes then outstanding
and any past default or compliance with any provision may be waived with the
consent of the holders of a majority in principal amount of the New Notes then
outstanding. However, without the consent of each holder of an outstanding Note
affected, no amendment may, among other things:

 

  (1)

reduce the amount of New Notes whose holders must consent to an amendment,

 

  (2)

reduce the rate of or extend the time for payment of interest on any Note,

 

  (3)

reduce the principal of or change the Stated Maturity of any Note,

 

  (4)

make any Note payable in money other than that stated in such Note,

 

  (5)

impair the right of any holder to receive payment of principal of, premium, if
any, and interest on such holder’s New Notes on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect to
such holder’s New Notes,

 

  (6)

make any change in the amendment provisions which require each holder’s consent
or in the waiver provisions,

 

  (7)

expressly subordinate the New Notes or any Guarantee thereof to any other
Indebtedness of the Company or any Guarantor,

 

  (8)

modify the Guarantees in any manner adverse to the holders, or

 

  (9)

modify the provisions set forth under “—Transfer and Exchange” below (including
the definition of Permitted Transfer).

Notwithstanding the preceding, without the consent of any holder, the Company
and Trustee may amend the Indenture to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a Successor Company of the
obligations of the Company under the Indenture and the New Notes, to provide for
the assumption by a Successor Guarantor of the obligations of a Subsidiary
Guarantor under the Indenture and its Guarantee, to provide for New Notes to be
represented in uncertificated, certificated or global form (including making any

 

22

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changes to the Indenture necessary to reflect such form of notes and/or the
requirements of any clearing agency, such as The Depository Trust Company), to
add Guarantees with respect to the New Notes, to secure the New Notes, to add to
the covenants of the Company for the benefit of the holders or to surrender any
right or power conferred upon the Company, to make any change that does not
adversely affect the rights of any holder, to comply with any requirement of the
SEC in connection with the qualification of the Indenture under the TIA, to give
effect to any transaction that is expressly permitted by another provision of
the Indenture, to effect any provision of the Indenture or to make certain
changes to the Indenture to provide for the issuance of Additional New Notes.

The consent of the noteholders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.

After an amendment under the Indenture becomes effective, the Company is
required to send or cause to be sent to the noteholders a notice briefly
describing such amendment. However, the failure to give such notice to all
noteholders entitled to receive such notice, or any defect therein, will not
impair or affect the validity of the amendment.

The Indenture will provide that: (i) in determining whether the holders of the
required principal amount of New Notes have concurred in any request, demand,
authorization, notice, direction, amendment, supplement, waiver or consent, New
Notes owned of record or beneficially by the Company, Affinion Holdings or any
Affiliate of the Company or any other obligor of the New Notes shall be
considered as though they are not outstanding (but the New Notes owned of record
of beneficially owned by any Specified Holder shall be deemed outstanding for
all purposes under the Indenture) and (ii) in determining whether the Trustee
shall be protected in relying on any such request, demand, authorization,
notice, direction, amendment, supplement, waiver or consent, only New Notes
owned by the Company, Affinion Holdings, Affiliates of the Company (other than
by any Specified Holder) or any other obligor on the New Notes which a Trust
Officer of the Trustee knows are so owned shall be considered as though they are
not outstanding.

No Personal Liability of Directors, Officers, Employees and Stockholders

The Indenture will provide that no director, officer, employee, incorporator or
holder of any Equity Interests in the Company, as such, will have any liability
for any obligations of the Company under the New Notes or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of New Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the New Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.

Transfer and Exchange

A noteholder may transfer or exchange New Notes in accordance with the
Indenture. Subject to the immediately succeeding paragraph, prior to an IPO, no
holder shall be permitted to sell or otherwise transfer any of its New Notes
except pursuant to a Permitted Transfer. Upon any transfer or exchange, the
registrar and the Trustee may require a noteholder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a noteholder to pay any taxes required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption or to transfer or exchange any Note for a period of 15 days prior
to a selection of New Notes to be redeemed. The New Notes will be issued in
registered uncertificated form and the registered holder of a Note as shown in
the Register will be treated as the owner of such Note for all purposes.

As used herein,

“IPO” means the first public underwritten offering of the equity securities of
Affinion Holdings (or a direct or indirect parent holding company or Subsidiary)
pursuant to an effective registration statement under the Securities Act (other
than on Forms S-4, S-8 or successors to such forms) marketed by a nationally
recognized investment bank after the closing of which such equity securities are
listed on the New York Stock Exchange or NASDAQ;

 

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“Permitted Transfer” means (A) transfers (x) with respect to a holder that is
not a natural person, a transfer from a holder to its members (if such holder is
a limited liability company), to its partners (if such holder is a general or
limited partnership), to its shareholders (if such holder is a corporation) or
by way of a distribution or to its beneficiaries (if such holder is a trust) or
a transfer to an Affiliate of the transferring holder or (y) with respect to a
holder that is a natural person, transfers to such holder’s legatees or heirs,
following the death of such holder, and transfers to a family member or to a
trust primarily for such holder’s benefit or the benefit of its family members;
(B) transfers to or among Specified Holders; or (C) transfers to a third party
purchaser, provided for purposes of this clause (C) that (x) unless approved by
the Board of Directors of Affinion Holdings, no New Notes may be transferred to,
whether directly or indirectly, a Prohibited Person, (y) no New Notes may be
transferred to a third party if, as a result of such transfer, Affinion Holdings
or any of its Affiliates would be required to register as a reporting company
under the Exchange Act, and (z) prior to such transfer, (1) any prospective
selling holder must provide notice to the Specified Holders holding at least
7.0% of the aggregate outstanding principal amount of the New Notes as of such
date who is not an affiliate of such prospective selling holder (each such
Specified Holder, a “ROFO Holder”) setting forth the aggregate principal amount
of New Notes proposed to be sold (the “Transfer Interests”), and concurrently
with such notice, such selling holder will submit to the chief legal officer of
Affinion Holdings, on a confidential basis, the price at which such selling
holder desires to sell such Transfer Interests (the “Offer Price”), (2) within
five Business Days after such notice (the “ROFO Exercise Period”), each ROFO
Holder wishing to exercise its right of first offer to purchase such New Notes
will notify the chief legal officer of Affinion Holders with the price at which
such ROFO Holder desires to purchase the Transfer Interest (each, a “Bid
Price”), and indicating any other material terms and conditions on which, such
ROFO Holder is willing to purchase all (but not less than all) of the Transfer
Interests (each, a “ROFO Exercise Notice”), (3) if any ROFO Holder provides a
ROFO Exercise Notice within the ROFO Exercise Period, on the Business Day
immediately following the expiration of the ROFO Exercise Period, Affinion
Holdings will notify the selling holder and the ROFO Holders who submitted a
ROFO Exercise Notice of the Transfer Price (as defined below), and (4) if (I)
there is an Accepted Offer Event (as defined below), the selling holder will
transfer all of the Transfer Interests at the Transfer Price on commercially
reasonable terms negotiated in good faith to the ROFO Holders who submitted the
Transfer Price (and any ROFO Holder who submitted an Offer Price will have the
right, but not the obligation, to participate in such transfer in connection
with an Accepted Offer Event at the Transfer Price in proportion to their and
their Affiliates ownership percentage of the aggregate principal amount of the
Notes), (II) there is a Rejected Offer Event (as defined below), then the
selling holder will have 90 days after the ROFO Exercise Period during which to
transfer, subject to clauses (A) and (B) above, all of the Transfer Interest to
a third party purchaser (which may include any other holder of New Notes or any
stockholder of Affinion Holdings) at a price equal to or greater than the
Transfer Price and on terms no more favorable to such third party purchaser in
all material respects than those contained in the ROFO Exercise Notice, (III) no
ROFO Holder delivers a ROFO Exercise Notice prior to the end of the ROFO
Election Period, then the selling holder will have 90 days after the ROFO
Exercise Period during which to transfer, subject to clauses (A) and (B) above,
all of the Transfer Interest to a third party purchaser (which transfer, for the
avoidance of doubt, may be for price greater than, equal to or less than the
Offer Price), provided further that if after 90 days following the ROFO Election
Period, such selling holder has not completed a transfer of the Transfer
Interests to a third party purchaser, such selling holder will no longer be
permitted to transfer the Transfer Interests to any Person without again
complying with the requirements of this clause (z);

“Prohibited Person” means (A) any Person appearing on the Specially Designated
Nationals and Blocked Persons List of the Office of Foreign Assets Control in
the United States Department of the Treasury; (B) any other Person with whom a
transaction is prohibited by Executive Order 13224, the USA PATRIOT Act, the
Trading with the Enemy Act or the foreign asset control regulations of the
United States Treasury Department, in each case as amended from time to time;
(C) any other Person whom the Board of Directors of Affinion Holdings (acting
reasonably and in good faith and the determination of which includes the
independent director thereof) considers would create a material reputational
risk for Affinion Holdings or the Company; (D) any other Person (x) who competes
with Affinion Holdings or any of its Subsidiaries as determined by the Board of
Directors of Affinion Holdings (which shall include the approval of the
independent director thereof) or (y) who is known by the Board of Directors of
Affinion Holdings to directly or indirectly own (other than as a passive
investor) more than 10.0% of the equity securities of a Person described in the
foregoing clause (x) or (E) any Person (or an Affiliate thereof) who holds
Existing Notes after the consummation of the Exchange Offer and Rights Offering;
and

 

24

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“Transfer Price” means an amount determined as follows: (i) in the event only
one Bid Price was submitted by one or more ROFO Holders and it exceeds the Offer
Price, then the Transfer Price shall be an amount equal to the average of the
Bid Price and the Offer Price; (ii) in the event multiple Bid Prices were
submitted and at least one exceeds the Offer Price, then the Transfer Price
shall be an amount equal to the average of the highest Bid Price and the Offer
Price; (iii) if only one Bid Price is submitted by one or more ROFO Holders and
such Bid Price equals the Offer Price, then the Transfer Price shall be an
amount equal to the Offer Price (this or the foregoing circumstances described
in clauses (i) and (ii), an “Accepted Offer Event”); (iv) in the event only one
Bid Price was submitted and the Offer Price exceeds it, then the Transfer Price
shall be an amount equal to the average of the Bid Price and the Offer Price;
and (v) in the event multiple Bid Prices were submitted and the Offer Price
exceeds the highest Bid Price submitted, then the Transfer Price shall be an
amount equal to the average of the lowest Bid Price and the Offer Price (this or
the foregoing circumstances described in clause (iv), a “Rejected Offer Event”).

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect (except
as to surviving rights of registration or transfer or exchange of the New Notes,
as expressly provided for in the Indenture) as to all outstanding New Notes
when:

 

  (1)

either (a) all the New Notes registered on the Register have been deregistered
or (b) all of the New Notes under the Indenture (i) have become due and payable,
(ii) will become due and payable at their Stated Maturity within one year or
(iii) if redeemable at the option of the Company, have been called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, and the Company has irrevocably deposited or caused to
be deposited with the Trustee funds in an amount sufficient to pay and discharge
the entire Indebtedness on the New Notes not theretofore deregistered, for
principal of, premium, if any, and interest on the New Notes to the date of
deposit together with irrevocable instructions from the Company directing the
Trustee to apply such funds to the payment thereof at maturity or redemption, as
the case may be;

 

  (2)

the Company has and/or the Guarantors have paid all other sums payable under the
Indenture; and

 

  (3)

the Company has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel stating that all conditions precedent under the Indenture relating to
the satisfaction and discharge of the Indenture have been complied with.

Defeasance

The Indenture will provide that the Company at any time may terminate all its
obligations under the New Notes and the Indenture (“legal defeasance”), except
for certain obligations, including those respecting the defeasance trust and
obligations to register the transfer or exchange of the New Notes, to replace
mutilated, destroyed, lost or stolen New Notes and to maintain a registrar and
paying agent in respect of the New Notes. The Company at any time may terminate
its obligations under certain covenants that are described in the Indenture,
including the covenants described under “—Certain Covenants,” the operation of
the cross-acceleration provision, the bankruptcy provisions with respect to
Significant Subsidiaries and the judgment default provision described under
“—Defaults” and the undertakings and covenants contained under “—Merger,
Amalgamation, Consolidation or Sale of All or Substantially All Assets”
(“covenant defeasance”). If the Company exercises its legal or covenant
defeasance option each Guarantor will be released from all of its obligations
with respect to its Guarantee.

The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its legal
defeasance option, payment of the New Notes may not be accelerated because of an
Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the New Notes may not be accelerated because of an
Event of Default specified in clause (3), (4), (5), (6), (7) (with respect only
to Significant Subsidiaries), (8) or (9) under “—Defaults.”

In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the “defeasance trust”) with the Trustee money or U.S.
Government Obligations for the payment of principal, premium (if any) and
interest on the New Notes to redemption or maturity, as the case may be, and
must comply with certain other conditions, including delivery to the Trustee of
an Opinion of Counsel to the effect that holders of the New Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and

 

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defeasance and will be subject to federal income tax on the same amount and in
the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred (and, in the case of legal defeasance
only, such Opinion of Counsel must be based on a ruling of the Internal Revenue
Service or change in applicable federal income tax law). Notwithstanding the
foregoing, the Opinion of Counsel required by the immediately preceding sentence
with respect to a legal defeasance need not be delivered if all of the New Notes
not theretofore deregistered (x) have become due and payable or (y) will become
due and payable at their Stated Maturity within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.

Concerning the Trustee

GLAS Trust Company LLC will be the Trustee under the Indenture and will be
appointed by the Company as registrar and a paying agent with regard to the New
Notes.

If the Trustee becomes a creditor of the Company or any Guarantor, the Indenture
and the Trust Indenture Act limit its right to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue or
resign.

The Indenture will provide that in case an Event of Default will occur and be
continuing, the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of New
Notes, unless such Holder will have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.

Tax Treatment

The Company and its Affiliates, and the holders of the New Notes, shall treat
the New Notes as indebtedness for U.S. federal income tax purposes, except that
they shall treat the New Notes as equity if (i) there has been a “determination”
within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as
amended (the “Code”) that the New Notes are equity for U.S. federal income tax
purposes, or (ii) there has been a change in the Code, the Treasury Regulations
thereunder, or IRS published rulings or procedures, occurring after the Closing
Date, and the Company or the holders of the New Notes shall have received advice
of counsel that, as a result of such change, it is more likely than not that the
New Notes are equity for U.S. federal income tax purposes.

Governing Law

The Indenture will provide that it and the New Notes will be governed by, and
construed in accordance with, the laws of the State of New York.

Certain Definitions

“Acquired Indebtedness” means, with respect to any specified Person:

 

  (1)

Indebtedness of any other Person existing at the time such other Person is
merged or consolidated with or into or becomes a Restricted Subsidiary of such
specified Person, and

 

  (2)

Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person,

in each case, other than Indebtedness Incurred as consideration in, in
contemplation of, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was otherwise acquired by such Person, or such asset was acquired
by such Person, as applicable.

 

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“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

“Affinion Holdings” means Affinion Group Holdings, Inc., a Delaware corporation,
and its successors.

“Agreed Guarantee Principles” means the principles set forth as an exhibit to
the Indenture, in substantially the form attached as Exhibit A hereto.

“Applicable Insurance Laws and Regulations” means any laws, rules and
regulations of any government or governmental authority or agency, including of
any Applicable Insurance Regulatory Authority, applicable to the Insurance
Business or the Insurance Subsidiaries.

“Applicable Insurance Regulatory Authority” means, when used with respect to any
Insurance Subsidiary, the insurance department or similar administrative
authority or agency located in (x) the state or other jurisdiction in which such
Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory
jurisdiction over such Insurance Subsidiary, the insurance department, authority
or agency in each state or other jurisdiction in which such Insurance Subsidiary
is licensed, and shall include any Federal insurance regulatory department,
authority or agency that may be created in the future and that asserts
regulatory jurisdiction over such Insurance Subsidiary.

“Board of Directors” means as to any Person, the board of directors or managers,
as applicable, of such Person (or, if such Person is a partnership, the board of
directors or other governing body of the general partner of such Person) or any
duly authorized committee thereof.

“Business Day” means a day other than a Saturday, Sunday or other day on which
banking institutions are authorized or required by law to close in New York City
or place of payment.

“Capital Lease” means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, any property by such Person as lessee
that are required to be accounted for as a capital lease on a balance sheet of
such person prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any Capital Lease, and, for purposes hereof,
the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.

“Capital Stock” means:

 

  (1)

in the case of a corporation or a company, corporate stock or shares;

 

  (2)

in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;

 

  (3)

in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

 

  (4)

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 assets of, the
issuing Person.

“Cash Equivalents” means:

 

  (1)

U.S. dollars, pounds sterling, euros or, in the case of any Foreign Subsidiary
that is a Restricted Subsidiary, such local currencies held by it from time to
time in the ordinary course of business;

 

27

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  (2)

securities issued or directly and fully guaranteed or insured by the government
of the United States or any country that is a member of the European Union or
any agency or instrumentality thereof, in each case with maturities not
exceeding two years from the date of acquisition;

 

  (3)

certificates of deposit, time deposits and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers’
acceptances, in each case with maturities not exceeding one year, and overnight
bank deposits, in each case with any commercial bank having capital and surplus
in excess of $250 million, or the foreign currency equivalent thereof, and whose
long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or
reasonably equivalent ratings of another internationally recognized ratings
agency);

 

  (4)

repurchase obligations for underlying securities of the types described in
clauses (2) and (3) above entered into with any financial institution meeting
the qualifications specified in clause (3) above;

 

  (5)

commercial paper issued by a corporation (other than an Affiliate of the
Company) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or
reasonably equivalent ratings of another internationally recognized ratings
agency) and in each case maturing within one year after the date of acquisition;

 

  (6)

readily marketable direct obligations issued by any state of the United States
of America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody’s or S&P (or reasonably
equivalent ratings of another internationally recognized ratings agency) in each
case with maturities not exceeding two years from the date of acquisition;

 

  (7)

Indebtedness issued by Persons with a rating of “A” or higher from S&P or “A-2”
or higher from Moody’s (or reasonably equivalent ratings of another
internationally recognized ratings agency) in each case with maturities not
exceeding two years from the date of acquisition; and

 

  (8)

investment funds investing at least 95% of their assets in securities of the
types described in clauses (1) through (7) above.

“CFC” means a “controlled foreign corporation” pursuant to Section 957 of the
Code.

“Change of Control” means the occurrence of one or more of the following events:

 

  (1)

upon the sale or disposition of all or substantially of the property and assets
or business of the Company and its Restricted Subsidiaries, taken as a whole (in
one transaction or a series of related transactions) to any Person, other than
to a Subsidiary Guarantor pursuant to a transaction expressly permitted by the
Indenture; or

 

  (2)

the acquisition by any Person or group (within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act, or any successor provision, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), including any group acting for the purpose of
acquiring, holding or disposing of securities (within the meaning of Rule
13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act,
or any successor provision), of more than 50% of the total voting power of the
Voting Stock of Affinion Holdings (for purposes of calculating the total voting
power of the Voting Stock held by a group, the voting power beneficially owned
by a Permitted Holder shall be excluded to the extent such Permitted Holder
retains the sole economic rights with respect to the subject Voting Stock); or

 

  (3)

a majority of the seats (other than vacant seats) on the Board of Directors of
Affinion Holdings shall at any time be occupied by persons who were neither
(a) nominated by the Board of Directors of Affinion Holdings or a Permitted
Holder, nor (b) appointed by directors so nominated.

Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not
constitute a Change of Control.

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

 

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“Consolidated Net Leverage Ratio” means, with respect to any Person at any date,
the ratio of (a) the aggregate amount of all Indebtedness of such Person and its
Restricted Subsidiaries less cash and cash equivalents (excluding restricted
cash), in each case, determined on a consolidated basis in accordance with GAAP
as of such date to (b) the EBITDA of such Person for the four full fiscal
quarters for which internal financial statements are available immediately
preceding such date. In the event that the Company or any of its Restricted
Subsidiaries Incurs or redeems any Indebtedness subsequent to the commencement
of the period for which the Consolidated Net Leverage Ratio is being calculated
and on or prior to the date on which the event for which the calculation of the
Consolidated Net Leverage Ratio is made, then the Consolidated Net Leverage
Ratio shall be calculated giving pro forma effect to such Incurrence or
redemption of Indebtedness as if the same had occurred at the beginning of the
applicable four-quarter period. The provisions applicable to pro forma
transactions and Indebtedness set forth in the second paragraph of the
definition of “Fixed Charge Coverage Ratio” will apply for purposes of making
the computation referred to in this paragraph.

“Consolidated Net Income” means, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its subsidiaries for such period,
on a consolidated basis, plus the amount that the provision for taxes exceeds
cash taxes paid by such Person and its subsidiaries in such period; provided,
however, that:

 

  (a)

[reserved];

 

  (b)

any increase in amortization or depreciation or any one-time non-cash charges
resulting from purchase accounting in connection with any acquisition that is
consummated on or after the Issue Date shall be excluded;

 

  (c)

the cumulative effect of a change in accounting principles during such period
shall be excluded;

 

  (d)

any net after-tax gains or losses on disposal of discontinued operations shall
be excluded;

 

  (e)

any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset dispositions
other than in the ordinary course of business (as determined in good faith by
senior management or the Board of Directors of the Company) shall be excluded;

 

  (f)

any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of (i) indebtedness,
and (ii) Swap Agreements and other derivative instruments to the extent that
such gains or losses have been realized by the Company, in each case, shall be
excluded;

 

  (g)

the Net Income for such period of any person that is not a subsidiary of such
person, or is an Unrestricted Subsidiary, or that is accounted for by the equity
method of accounting, shall be included only to the extent of the amount of
dividends or distributions or other payments actually paid in cash (or to the
extent converted into cash) to the referent person or a subsidiary thereof in
respect of such period;

 

  (h)

the Net Income for such period of any subsidiary of such person shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by such subsidiary of its Net Income is not at the date of
determination permitted without any prior governmental approval (which has not
been obtained) or, directly or indirectly, by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such subsidiary or its equity holders,
unless such restrictions with respect to the payment of dividends or similar
distributions have been legally waived; provided that the Consolidated Net
Income of such person shall be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or converted into cash)
by any such subsidiary to such person or a subsidiary of such person (subject to
the provisions of this clause (h)), to the extent not already included therein;

 

  (i)

any non-cash impairment charge or asset write-off resulting from the application
of Statement of Financial Accounting Standards No. 142 and 144, and the
amortization of intangibles arising pursuant to No. 141, shall be excluded;

 

  (j)

any non-cash expenses realized or resulting from employee benefit plans or
post-employment benefit plans, long-term incentive plans or grants of stock
appreciation or similar rights, stock options, restricted stock or other rights
to officers, directors and employees of such person or any of its Subsidiaries
shall be excluded;

 

29

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  (k)

any one-time non-cash compensation charges shall be excluded;

 

  (l)

non-cash gains, losses, income and expenses resulting from fair value accounting
required by Statement of Financial Accounting Standards No. 133 and related
interpretations shall be excluded;

 

  (m)

[reserved];

 

  (n)

[reserved];

 

  (o)

any currency translation gains and losses realized from currency remeasurements
of Indebtedness, and any net loss or gain realized from any Swap Agreements for
currency exchange risk, in each case, that are actually paid in cash, shall be
excluded; and

 

  (p) (i)

the non-cash portion of “straight-line” rent expense shall be excluded and
(ii) the cash portion of “straight-line” rent expense which exceeds the amount
expensed in respect of such rent expense shall be included.

Notwithstanding the foregoing, for the purpose of the covenant described under
“—Certain Covenants—Limitation on Restricted Payments” only, there shall be
excluded from the calculation of Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary of the Company in respect
of or that originally constituted Restricted Investments.

“Contingent Obligations” means, with respect to any Person, any obligation of
such Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent:

 

  (1)

to purchase any such primary obligation or any property constituting direct or
indirect security therefor;

 

  (2)

to advance or supply funds:

 

  (a)

for the purchase or payment of any such primary obligation; or

 

  (b)

to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor; or

 

  (3)

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 against loss in respect
thereof.

“Credit Agreement” means (i) the Credit Agreement, dated as of May 10, 2017,
among the Company, Affinion Holdings, the lenders from time to time party
thereto, HPS Investment Partners, LLC, as Administrative Agent and Collateral
Agent, and the other agents party thereto, as amended, restated, supplemented,
waived, replaced (whether or not upon termination, and whether with the original
lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise
modified from time to time, including any one or more agreements or indentures
extending the maturity thereof, refinancing, replacing or otherwise
restructuring all or any portion of the Indebtedness under such agreement or
agreements or indenture or indentures or any successor or replacement agreement
or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or altering the maturity thereof and (ii) whether or not the
credit agreement referred to in clause (i) remains outstanding, if designated by
the Company to be included in the definition of “Credit Agreement,” one or more
(A) debt facilities or commercial paper facilities, providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to lenders or to special purpose entities formed to borrow from
lenders against such receivables) or letters of credit, (B) debt securities,
indentures or other forms of debt financing (including convertible or
exchangeable debt instruments or bank guarantees or bankers’ acceptances), or
(C) instruments or agreements evidencing any other Indebtedness, in each case,
with the same or different borrowers or issuers and, in each case, as amended,
supplemented, modified, extended, restructured, renewed, refinanced, restated,
replaced or refunded in whole or in part from time to time.

 

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“Default” means any event that is, or after notice or passage of time or both
would be, an Event of Default.

“Disqualified Stock” means, with respect to any Person, any Capital Stock of
such Person which, by its terms (or by the terms of any security into which it
is convertible or for which it is redeemable, putable or exchangeable), or upon
the happening of any event:

 

  (1)

matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise,

 

  (2)

is convertible or exchangeable for Indebtedness or Disqualified Stock of such
Person, or

 

  (3)

is redeemable at the option of the holder thereof, in whole or in part,

 

  in

each case prior to 91 days after the maturity date of the New Notes;

provided, however, that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable at
the option of the holder thereof prior to such date shall be deemed to be
Disqualified Stock; provided, further, however, that (x) if such Capital Stock
is issued to any employee or to any plan for the benefit of employees of the
Company or its Subsidiaries or by any such plan to such employees, such Capital
Stock shall not constitute Disqualified Stock solely because it may be required
to be repurchased by the Company in order to satisfy applicable statutory or
regulatory obligations or as a result of such employee’s termination, death or
disability and (y) such Capital Stock shall not constitute Disqualified Stock if
such Capital Stock matures or is mandatorily redeemable or is redeemable at the
option of the holders thereof as a result of a change of control or asset sale
so long as the relevant asset sale or change of control provisions, taken as a
whole, are no more favorable in any material respect to holders of such Capital
Stock than the asset sale and change of control provisions applicable to the New
Notes and any purchase requirement triggered thereby may not become operative
until compliance with the asset sale and change of control provisions applicable
to the New Notes (including the purchase of any New Notes tendered pursuant
thereto); provided, further, that any class of Capital Stock of such Person that
by its terms authorizes such Person to satisfy its obligations thereunder by
delivery of Capital Stock that is not Disqualified Stock shall not be deemed to
be Disqualified Stock.

“EBITDA” means, with respect to the Company and its Restricted Subsidiaries on a
consolidated basis for any period, the Consolidated Net Income of the Company
and its Restricted Subsidiaries for such period (without giving effect to the
amount added to Net Income in calculating Consolidated Net Income for the excess
of the provision for taxes over cash taxes), plus

 

  (a)

the sum of, without duplication:

 

  (i)

to the extent deducted or otherwise excluded in calculating Consolidated Net
Income for such period, provision for taxes based on income, profits or capital
of the Company and its Restricted Subsidiaries for such period, without
duplication, including, without limitation, state franchise and similar taxes,
and including an amount equal to the amount of tax distributions actually made
to the holders of Equity Interests of the Company and the Restricted
Subsidiaries in respect of such period, which shall be included as though such
amounts had been paid as income taxes directly by the Company or any Restricted
Subsidiary; plus

 

  (ii)

to the extent deducted or otherwise excluded in calculating Consolidated Net
Income for such period, Fixed Charges of the Company and its Restricted
Subsidiaries for such period; plus

 

  (iii)

to the extent deducted or otherwise excluded in calculating Consolidated Net
Income for such period, depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
charges or expenses to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of the Company and its Restricted Subsidiaries
for such period; plus

 

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  (iv)

to the extent deducted or otherwise excluded in calculating Consolidated Net
Income for such period, the amount of any business optimization expenses and
restructuring charges or expenses (which, for the avoidance of doubt, shall
include office and plant closures, facility consolidations, retention payments
and special supplemental bonuses payable, exit costs, severance payments,
systems establishment costs or excess pension charges); provided that the
aggregate total amount of all such restructuring charges and expenses that are
actually paid in cash that may be added back, under this clause (iv) shall not
exceed the greater of $15,000,000 and 7.5% of EBITDA for the relevant Test
Period prior to giving effect to such addback; plus

 

  (v)

any net after-tax extraordinary or nonrecurring or unusual losses, expenses or
charges, provided that the aggregate total amount of all such losses, expenses,
charges and fees consisting of legal fees, fines and legal settlements that may
be added back pursuant to this clause (v) shall not exceed (x) $16,500,000 for
the relevant Test Period or (y) $33,000,000 in the aggregate during the term of
the Indenture; plus

 

  (vi)

[reserved]; plus

 

  (vii)

any expenses or charges (other than depreciation or amortization expense as
described in the preceding clause (iii)) related to any issuance of Equity
Interests, Investment, acquisition, disposition, recapitalization or the
incurrence, modification or repayment of Indebtedness permitted to be incurred
by the Indenture (including a refinancing thereof) (whether or not successful),
including such fees, expenses or charges related to (x) the offering of the
Existing Notes, (y) the Restructuring Transactions (to the extent such fees,
expenses or charges are paid within 180 days of the Issue Date), and (z) any
amendment or other modification of the New Notes or other Indebtedness; plus

 

  (viii)

non-cash gains and losses with respect to Swap Agreements and other derivative
instruments; plus

 

  (ix)

non-cash currency translation gains and losses related to currency
remeasurements of Indebtedness, and any net non-cash loss or gain resulting from
any Swap Agreement for currency exchange risk; minus

 

  (b)

the sum of (i) non-cash items increasing such Consolidated Net Income for such
period (excluding the recognition of deferred revenue or any non-cash items
which represent the reversal of any accrual of, or reserve for, anticipated cash
charges in any prior period and any items for which cash was received in any
prior period and excluding amounts increasing Consolidated Net Income pursuant
to clause (q) of the definition of Consolidated Net Income); and (ii) any net
after-tax extraordinary or nonrecurring or unusual gains or income (including,
for the avoidance of doubt, cancellation of debt income in connection with the
Transactions or otherwise);

in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the preceding, the provision for taxes based on the income or
profits of, the Fixed Charges of, the depreciation and amortization and other
non-cash expenses or non-cash items of and the restructuring charges or expenses
of, a Restricted Subsidiary of the Company will be added to (or subtracted from,
in the case of non-cash items described in clause (b) above) Consolidated Net
Income to compute EBITDA, (A) in the same proportion that the Net Income of such
Restricted Subsidiary was added to compute such Consolidated Net Income of the
Company, and (B) only to the extent that a corresponding amount of the Net
Income of such Restricted Subsidiary would be permitted at the date of
determination to be dividended or distributed to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained), and
without direct or indirect restriction pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

 

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“Excluded Foreign Subsidiary” means (i) any Foreign Subsidiary that is a CFC and
(ii) any Restricted Subsidiary that has no material assets other than Equity
Interests of, or Equity Interests and indebtedness of, one or more CFCs.

“Excluded Subsidiaries” means (i) each Unrestricted Subsidiary, (ii) to the
extent prohibited by Applicable Insurance Laws and Regulations, any Insurance
Subsidiary, (iii) [reserved]; (iv) any Foreign Subsidiary not required to be
Guarantors pursuant to the Agreed Guarantee Principles, (v) any Immaterial
Subsidiary (as defined in the Credit Agreement as in effect on the Issue Date),
(vi) any Restricted Subsidiary solely to the extent that, and only for so long
as, guaranteeing the Obligations would violate or require consent (that could
not be readily obtained without undue burden to the Company and the Guarantors)
under applicable law or regulations or a contractual obligation on such
Restricted Subsidiary and such law or obligation existed at the time of the
acquisition of such Restricted Subsidiary and was not created or made binding on
such Restricted Subsidiary in contemplation of or in connection with the
acquisition of such Restricted Subsidiary and (vii) any Excluded Foreign
Subsidiaries; provided, that any such Restricted Subsidiary that is a guarantor
under or in respect of the Credit Agreement shall be deemed not to be an
Excluded Subsidiary.

“Existing Notes” means the Senior Cash 12.5% / PIK Step-Up to 15.5% New Notes
due 2022 that were issued by the Company May 10, 2017.

“Fair Market Value” means, with respect to any asset or property, the price that
could be negotiated in an arm’s-length transaction between a willing seller and
a willing and able buyer, neither of whom is under undue pressure or compulsion
to complete the transaction.

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any
period, the ratio of the EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. In the event that the specified Person
or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any
Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred
Stock subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated and on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
“Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such Incurrence, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of Disqualified
Stock or Preferred Stock, and the use of the proceeds therefrom as if the same
had occurred at the beginning of such period.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio
referred to above, Investments, acquisitions, dispositions, mergers,
consolidations or discontinued operations (as determined in accordance with
GAAP) that have been made by the Company or any Restricted Subsidiary during the
four-quarter reference period or subsequent to such reference period and on or
prior to or simultaneously with the Calculation Date shall be calculated on a
pro forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, consolidations or discontinued operations (including the Transactions)
had occurred on the first day of the four-quarter reference period. If since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Investment, acquisition,
disposition, merger or consolidation or discontinued any operation that would
have required adjustment pursuant to this definition, then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect thereto for such
period as if such Investment, acquisition, disposition, merger, consolidation or
discontinued operation had occurred at the beginning of the applicable
four-quarter period. For purposes of this definition, whenever pro forma effect
is to be given to an Investment, acquisition, disposition, merger, consolidation
or discontinued operation (including the Transactions) and the amount of income
or earnings relating thereto, the pro forma calculations shall be determined in
good faith by a responsible financial or accounting Officer of the Company and
shall comply with the requirements of Rule 11-02 of Regulation S-X promulgated
by the SEC. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness shall be calculated as
if the rate in effect on the Calculation Date had been the applicable rate for
the entire period (taking into account any Hedging Obligations applicable to
such Indebtedness if the related hedge has a remaining term in excess of twelve
months).

 

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Interest on a Capital Lease Obligation shall be deemed to accrue at an interest
rate reasonably determined by a responsible financial or accounting officer of
the Company to be the rate of interest implicit in such Capital Lease Obligation
in accordance with GAAP. For purposes of making the computation referred to
above, interest on any Indebtedness under a revolving credit facility computed
on a pro forma basis shall be computed based upon the average daily balance of
such Indebtedness during the applicable period. Interest on Indebtedness that
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Company may designate.

“Fixed Charges” means, with respect to any specified Person for any period, the
sum, without duplication, of:

 

  (1)

the consolidated interest expense (net of interest income) to the extent it
relates to Indebtedness of such Person and its Restricted Subsidiaries for such
period and to the extent such expense was deducted in computing Consolidated Net
Income, whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments
(including any interest on the New Notes), the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers’ acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations (but excluding the amortization or writeoff of deferred
financing fees or expenses of any bridge or other financing fee in connection
with the Transactions , the refinancing of the Credit Agreement and the offering
of the New Notes); plus

 

  (2)

the consolidated interest of such Person and its Restricted Subsidiaries that
was capitalized during such period; plus

 

  (3)

any interest expense on Indebtedness of another Person that is guaranteed by
such Person or one of its Restricted Subsidiaries or secured by a Lien on assets
of such Person or one of its Restricted Subsidiaries, whether or not such
guarantee or Lien is called upon; plus

 

  (4)

to the extent not included in clause (1) above, the product of (a) all
dividends, whether paid or accrued and whether or not in cash, on any series of
Disqualified Stock or Preferred Stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests (other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal,

in each case, on a consolidated basis and in accordance with GAAP.

“Flow Through Entity” means an entity that is treated as a partnership not
taxable as a corporation, a grantor trust or a disregarded entity for U.S.
federal income tax purposes or subject to treatment on a comparable basis for
purposes of state, local or foreign tax law.

“Foreign Subsidiary” means a Restricted Subsidiary not organized or existing
under the laws of the United States of America or any state or territory thereof
or the District of Columbia and any direct or indirect subsidiary of such
Restricted Subsidiary.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date. For the
purposes of the Indenture, the term “consolidated” with respect to any Person
shall mean such Person consolidated with its Restricted Subsidiaries, and shall
not include any Unrestricted Subsidiary, but the interest of such Person in an
Unrestricted Subsidiary will be accounted for as an Investment. Notwithstanding
any changes in GAAP after the Issue Date, any lease of Affinion Holdings, the
Company or their respective Subsidiaries that would be characterized as an
operating lease under GAAP in effect on the Issue Date (whether such lease is
entered into before or after the Issue Date) will not constitute Indebtedness, a
Capital Lease or a Capital Lease Obligation of Affinion Holdings, the Company or
their respective Subsidiaries under the Indenture as a result of such changes in
GAAP.

 

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“guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.

“Guarantee” means any guarantee of the obligations of the Company under the
Indenture and the New Notes by any Person in accordance with the provisions of
the Indenture.

“Guarantor” means any Person that Incurs a Guarantee; provided, that upon the
release or discharge of such Person from its Guarantee in accordance with the
Indenture, such Person ceases to be a Guarantor.

“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under:

 

  (1)

currency exchange or interest rate swap agreements, cap agreements and collar
agreements; and

 

  (2)

other agreements or arrangements designed to manage exposure or protect such
Person against fluctuations in currency exchange or interest rates.

“holder” or “noteholder” means the Person in whose name a Note is registered on
the registrar’s books.

“Incur” means issue, assume, guarantee, incur or otherwise become liable for;
provided, however, that any Indebtedness or Capital Stock of a Person existing
at the time such Person becomes a Subsidiary (whether by merger, amalgamation,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Subsidiary.

“Indebtedness” means, with respect to any Person:

 

  (1)

the principal and premium (if any) of any indebtedness of such Person, whether
or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds,
notes, debentures or similar instruments or letters of credit or bankers’
acceptances (or, without duplication, reimbursement agreements in respect
thereof), (c) representing the deferred and unpaid purchase price of any
property, except any such balance that constitutes a current account payable,
trade payable or similar obligation Incurred, (d) in respect of Capital Lease
Obligations, or (e) representing any Hedging Obligations, if and to the extent
that any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability on a balance sheet (excluding the
footnotes thereto) of such Person prepared in accordance with GAAP;

 

  (2)

to the extent not otherwise included, any obligation of such Person to be liable
for, or to pay, as obligor, guarantor or otherwise, the Indebtedness of another
Person (other than by endorsement of negotiable instruments for collection in
the ordinary course of business); and

 

  (3)

to the extent not otherwise included, Indebtedness of another Person secured by
a Lien on any asset owned by such Person (whether or not such Indebtedness is
assumed by such Person); provided, however, that the amount of such Indebtedness
will be the lesser of: (a) the Fair Market Value of such asset at such date of
determination and (b) the amount of such Indebtedness of such other Person;

provided, however, that notwithstanding the foregoing, Indebtedness shall be
deemed not to include (i) Contingent Obligations incurred in the ordinary course
of business and not in respect of borrowed money, (ii) deferred or prepaid
revenues, (iii) purchase price holdbacks in respect of a portion of the purchase
price of an asset to satisfy warranty or other unperformed obligations of the
respective seller, (iv) obligations to make payments in respect of money back
guarantees offered to customers in the ordinary course of business,
(v) obligations to make payments to one or more insurers in respect of premiums
collected by the Company on behalf of such insurers or in respect profit-sharing
arrangements entered into with such insurers, in each case in the ordinary
course of business, or (vi) the financing of insurance premiums with the carrier
of such insurance or take or pay obligations contained in supply agreements, in
each case entered into in the ordinary course of business.

 

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Notwithstanding anything in the Indenture, Indebtedness shall not include, and
shall be calculated without giving effect to, the effects of Statement of
Financial Accounting Standards No. 133 and related interpretations to the extent
such effects would otherwise increase or decrease an amount of Indebtedness for
any purpose under the Indenture as a result of accounting for any embedded
derivatives created by the terms of such Indebtedness; and any such amounts that
would have constituted Indebtedness under the Indenture but for the application
of this sentence shall not be deemed an Incurrence of Indebtedness under the
Indenture.

“Identified Guarantor” means a Guarantor identified in writing for release by
the Company and agreed to by holders of a majority in principal amount of the
New Notes outstanding.

“Independent Financial Advisor” means an accounting, appraisal or investment
banking firm or consultant to Persons engaged in a Similar Business, in each
case of nationally recognized standing that is, in the good faith determination
of the Board of Directors of the Company, qualified to perform the task for
which it has been engaged.

“Insurance Business” means one or more aspects of the business of soliciting,
administering, selling, issuing or underwriting insurance or reinsurance.

“Insurance Subsidiary” means any Restricted Subsidiary that is licensed by any
Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance
Business.

“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
trade credit and advances to customers and marketing partners and commission,
travel and similar advances to officers, employees and consultants, in each case
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities issued by
any other Person and investments that are required by GAAP to be classified on
the balance sheet of the Company in the same manner as the other investments
included in this definition to the extent such transactions involve the transfer
of cash or other property. For purposes of the definition of “Unrestricted
Subsidiary” and the covenant described under “—Certain Covenants—Limitation on
Restricted Payments”:

 

  (1)

“Investments” shall include the portion (proportionate to the Company’s equity
interest in such Subsidiary) of the Fair Market Value of the net assets of a
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent “Investment” in an Unrestricted Subsidiary equal to an
amount (if positive) equal to:

 

  (a)

the Company’s “Investment” in such Subsidiary at the time of such redesignation,
less

 

  (b)

the portion (proportionate to the Company’s equity interest in such Subsidiary)
of the Fair Market Value of the net assets of such Subsidiary at the time of
such redesignation; and

 

  (2)

any property transferred to or from an Unrestricted Subsidiary shall be valued
at its Fair Market Value at the time of such transfer, in each case as
determined in good faith by senior management or the Board of Directors of the
Company.

“Investor Purchase Agreement” means that certain Investor Purchase Agreement,
dated as of February [•], 2019, by and among Affinion Holdings, the Company and
the investors from time to time party thereto.

“Issue Date” means the date on which the New Notes are originally issued.

“Joint Venture” means any Person, other than an individual or a Subsidiary of
the Company, (i) in which the Company or a Restricted Subsidiary of the Company
holds or acquires an ownership interest (whether by way of Capital Stock or
otherwise) and (ii) which is engaged in a Similar Business.

 

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“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any other agreement to give a security interest and, any filing of or
agreement to give any financing statement under the Uniform Commercial Code or
equivalent statutes of any jurisdiction (other than a filing for informational
purposes)); provided, that in no event shall an operating lease be deemed to
constitute a Lien.

“Management Group” means all of the individuals consisting of the directors,
executive officers and other management personnel of the Company or any direct
or indirect parent company of the Company, as the case may be, on the Issue Date
together with (1) any new directors whose election by such boards of directors
or whose nomination for election by the shareholders of the Company or any
direct or indirect parent company of the Company, as the case may be, as
applicable, was approved by (x) a vote of a majority of the directors of the
Company or any direct or indirect parent of the Company as applicable, then
still in office who were either directors on the Issue Date or whose election or
nomination was previously so approved or (y) the Specified Holders and
(2) executive officers and other management personnel of the Company or any
direct or indirect parent company of the Company, as the case may be, as
applicable, hired at a time when the directors on the Issue Date together with
the directors so approved constituted a majority of the directors of the Company
or any direct or indirect parent company of the Company, as the case may be, as
applicable.

“Management Incentive Plan” means Affinion Holding’s new incentive plan (as
amended from time to time) for its directors and management with equity and
non-equity awards, as described in the Offering Memorandum.

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating
agency business thereof.

“Net Income” means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of Preferred Stock dividends, less an amount equal to the amount of tax
distributions actually made to the holders of Capital Stock of such Person or
any Parent of such Person in respect of a period in accordance with clause
(8) of the second paragraph under “—Certain Covenants—Limitation on Restricted
Payments,” as if such amounts had been paid as income taxes directly by such
Person but only to the extent such amounts have not already been accounted for
as taxes reducing the net income (loss) of such Person.

“Non-Guarantor Restricted Subsidiary” means any Restricted Subsidiary of the
Company that is not a Subsidiary Guarantor.

“Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements (including, without limitation, reimbursement obligations with
respect to letters of credit and bankers’ acceptances), damages and other
liabilities payable under the documentation governing any Indebtedness;
provided, that Obligations with respect to the New Notes shall not include fees
or indemnifications in favor of the Trustee and other third parties other than
the holders of the New Notes.

“Offering Memorandum” means the Confidential Offering Memorandum, Consent
Solicitation, Rights Offering and Disclosure Statement, dated March [4], 2019
(including the information incorporated by reference therein), as amended or
supplemented on the Issue Date.

“Officer” means the Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, President, any Executive Vice President, Senior Vice
President or Vice President, the Treasurer or the Secretary of the Company or
any of the Company’s Restricted Subsidiaries.

“Officers’ Certificate” means a certificate signed on behalf of the Company by
two Officers of the Company or any of the Company’s Restricted Subsidiaries, one
of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company or any
of the Company’s Restricted Subsidiaries, that meets the requirements set forth
in the Indenture.

“Opinion of Counsel” means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.

 

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“Parent” means, with respect to any Person, any direct or indirect parent
company of such Person whose only material assets consist of the common Capital
Stock of such Person. For the avoidance of doubt, Affinion Holdings shall be a
Parent of the Company on the Issue Date.

“Permitted Holders” mean (i) any owner of Equity Interests of Affinion Holdings
as of the Issue Date that, together with its Affiliates, owns at least 10% of
the Equity Interests of Affinion Holdings on a fully diluted basis as of the
Issue Date and (ii) any Affiliates of the foregoing. Any Person or group whose
acquisition of beneficial ownership constitutes a Change of Control in respect
of which a Change of Control Offer is made in accordance with the requirements
of the Indenture will thereafter, together with its Affiliates, constitute an
additional Permitted Holder.

“Permitted Investments” means:

 

  (1)

any Investment in the Company or any Restricted Subsidiary;

 

  (2)

any Investment in Cash Equivalents;

 

  (3)

any Investment by the Company or any Subsidiary Guarantor of the Company in a
Person if as a result of such Investment (a) such Person becomes a Subsidiary
Guarantor of the Company, or (b) such Person, in one transaction or a series of
related transactions, is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all of its assets to, or is liquidated
into, the Company or a Subsidiary Guarantor of the Company;

 

  (4)

[reserved];

 

  (5)

any Investment existing on the Issue Date and any Investments made pursuant to
binding commitments in effect on the Issue Date;

 

  (6)

advances in the ordinary course of business to employees not in excess of
$6.25 million and outstanding at any one time in the aggregate; provided that
advances that are forgiven shall continue to be deemed outstanding;

 

  (7)

any Investment acquired by the Company or any of its Restricted Subsidiaries
(a) in exchange for any other Investment or accounts receivable held by the
Company or any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable or (b) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in
default;

 

  (8)

Hedging Obligations permitted under clause (j) of the second paragraph of
“—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock;”

 

  (9)

additional Investments by the Company or any of its Restricted Subsidiaries
having an aggregate Fair Market Value, taken together with all other Investments
made pursuant to this clause (9) since the Issue Date that are at that time
outstanding (without giving effect to the sale of Investments made pursuant to
this clause (9) to the extent the proceeds of such sale received by the Company
and its Restricted Subsidiaries do not consist of Cash Equivalents), not to
exceed $20 million (with the Fair Market Value of each Investment being measured
at the time made and without giving effect to subsequent changes in value);

 

  (10)

loans and advances to officers, directors and employees for business-related
travel expenses, moving and relocation expenses and other similar expenses, in
each case Incurred in the ordinary course of business;

 

  (11)

Investments the payment for which consists of Equity Interests of the Company or
any Parent of the Company (other than Disqualified Stock); provided, however,
that such Equity Interests will not increase the amount available for Restricted
Payments under the calculation set forth in clause (c) of the first paragraph of
the covenant described under “—Certain Covenants—Limitation on Restricted
Payments” until such time as the Investment in such Equity Interests is no
longer outstanding;

 

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  (12)

Investments consisting of the licensing or contribution of intellectual property
pursuant to joint marketing arrangements with other Persons;

 

  (13)

Investments consisting of purchases and acquisitions of inventory, supplies,
materials and equipment or purchases of contract rights or licenses or leases of
intellectual property in each case in the ordinary course of business;

 

  (14)

Investments of a Restricted Subsidiary of the Company acquired after the Issue
Date or of an entity merged into, amalgamated with, or consolidated with a
Restricted Subsidiary of the Company in a transaction that is not prohibited by
the covenant described under “—Merger, Amalgamation, Consolidation or Sale of
All or Substantially All Assets” after the Issue Date to the extent that such
Investments were not made in contemplation of such acquisition, merger,
amalgamation or consolidation and were in existence on the date of such
acquisition, merger, amalgamation or consolidation;

 

  (15)

any Investment in the New Notes;

 

  (16)

any transaction to the extent it constitutes an Investment that is permitted by
and made in accordance with the provisions of the second paragraph of the
covenant described under “—Certain Covenants—Transactions with Affiliates”
(except transactions described in clauses (2), (5), (6), (7), (8), (10) and
(15) of such paragraph); and

 

  (17)

any Investment in the Company or any Restricted Subsidiary of the Company
consisting of intercompany current liabilities incurred in the ordinary course
of business, consistent with past practice and in good faith in connection with
reasonable and customary cash management operations of the Company and/or its
Restricted Subsidiaries to provide working capital to Restricted Subsidiaries
for ongoing operations.

“Permitted Liens” means, with respect to any Person:

 

  (1)

pledges or deposits by such Person under workmen’s compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
public or statutory obligations, including those to secure health, safety,
insurance and environmental obligations, of such Person or deposits of cash or
U.S. government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;

 

  (2)

landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
construction or other like Liens arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or that are being
contested in good faith by appropriate proceedings and in respect of which, if
applicable, the Company or any Restricted Subsidiary shall have set aside on its
books reserves in accordance with GAAP;

 

  (3)

Liens for taxes, assessments or other governmental charges not yet due or
payable or subject to penalties for nonpayment or which are being contested in
good faith by appropriate proceedings;

 

  (4)

Liens to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance and return of money bonds,
bids, leases, government contracts, trade contracts, agreements with public
utilities, and other obligations of a like nature (including letters of credit
in lieu of any such bonds or to support the issuance thereof) in the ordinary
course of business, including those Incurred to secure health, safety, insurance
and environmental obligations in the ordinary course of business;

 

  (5)

zoning restrictions, survey exceptions, easements, trackage rights, leases
(other than Capital Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on or agreements dealing with the use of real
property, servicing agreements, development agreements, site plan agreements and
other similar encumbrances Incurred in the ordinary course of business and title
defects or irregularities that are of a minor nature and that, in the aggregate,
do not interfere in any material respect with the ordinary conduct of the
business of such Person;

 

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  (6)

Liens securing Indebtedness permitted to be Incurred pursuant to clause (a), (d)
or (v) of the second paragraph of the covenant described under “—Certain
Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock;” provided, that in the case of clause (d), such Liens
do not extend to any property or assets that are not property being purchased,
leased, constructed or improved with the proceeds of such Indebtedness being
Incurred;

 

  (7)

Liens existing on the Issue Date;

 

  (8)

Liens on assets, property or shares of stock of a Person at the time such Person
becomes a Subsidiary; provided, however, that such Liens are not created or
Incurred in connection with, or in contemplation of, such other Person becoming
such a Subsidiary; provided, further, however, that such Liens may not extend to
any other property owned by the Company or any Restricted Subsidiary of the
Company;

 

  (9)

Liens on assets or property at the time the Company or a Restricted Subsidiary
of the Company acquired the assets or property, including any acquisition by
means of a merger, amalgamation or consolidation with or into the Company or any
Restricted Subsidiary of the Company; provided, however, that such Liens are not
created or Incurred in connection with, or in contemplation of, such
acquisition; provided, further, however, that the Liens may not extend to any
other assets or property owned by the Company or any Restricted Subsidiary of
the Company;

 

  (10)

Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Company or another Restricted Subsidiary of the Company permitted
to be Incurred in accordance with the covenant described under “—Certain
Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock;”

 

  (11)

Liens securing Hedging Obligations permitted to be Incurred under clause (j) of
the second paragraph of the covenant described under “—Certain
Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock;”

 

  (12)

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

 

  (13)

leases and subleases of real property granted to others in the ordinary course
of business that do not (i) materially interfere with the ordinary conduct of
the business of the Company or any of its Restricted Subsidiaries or (ii) secure
any Indebtedness;

 

  (14)

Liens arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Company and its Restricted Subsidiaries in
the ordinary course of business;

 

  (15)

Liens in favor of the Company or any Guarantor;

 

  (16)

Liens on equipment of the Company or any Restricted Subsidiary granted in the
ordinary course of business to the Company’s customer at the site at which such
equipment is located;

 

  (17)

Liens securing insurance premiums financing arrangements; provided, that such
Liens are limited to the applicable unearned insurance premiums;

 

  (18)

Liens on the Equity Interests of Unrestricted Subsidiaries;

 

  (19)

licenses of intellectual property and software that are not material to the
conduct of any of the business lines of the Company and the Restricted
Subsidiaries and the value of which does not constitute a material portion of
the assets of the Company and its Restricted Subsidiaries, taken as a whole, and
such license does not materially interfere with the ordinary course of conduct
of the business of the Company or any of its Restricted Subsidiaries;

 

  (20)

Liens to secure any refinancing, refunding, extension, renewal or replacement
(or successive refinancings, refundings, extensions, renewals or replacements)
as a whole, or in part, of any Indebtedness secured by any Lien referred to in
the foregoing clauses (7), (8) and (9); provided, however, that (x) such new
Lien shall be limited to all or part of the same property that secured the
original Lien (plus improvements on such property), and (y) the Indebtedness
secured by such Lien at such time is not increased to any amount greater than
the sum of (A) the outstanding principal amount or, if greater, committed amount
of the Indebtedness described under clauses (7), (8) and (9) at the time the
original Lien became a Permitted Lien under the Indenture, and (B) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement;

 

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  (21)

judgment and attachment Liens not giving rise to an Event of Default and notices
of lis pendens and associated rights related to litigation being contested in
good faith by appropriate proceedings and for which adequate reserves have been
made;

 

  (22)

Liens securing obligations permitted to be Incurred under clause (l) of the
second paragraph of the covenant described under “—Certain Covenants—Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock;

 

  (23)

Liens arising out of consignment or similar arrangements for the sale of goods
entered into in the ordinary course of business;

 

  (24)

Liens incurred to secure cash management services in the ordinary course of
business and in good faith;

 

  (25)

Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with importation of goods;

 

  (26)

deposits and other Liens made in the ordinary course of business in compliance
with the Federal Employers Liability Act or any other workers’ compensation,
unemployment insurance and other social security laws or regulations and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements in respect of such obligations and (ii) deposits and
other Liens securing liability for reimbursement or indemnification obligations
of (including obligations in respect of letters of credit or bank guarantees for
the benefit of) insurance carriers providing property, casualty or liability
insurance to the Company or any Restricted Subsidiary;

 

  (27)

Liens on cash collateral securing Indebtedness permitted to be Incurred under
clause (q) of the second paragraph of the covenant described under “—Certain
Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified
Stock and Preferred Stock;” so long as such cash collateral does not exceed 105%
of the Indebtedness permitted to be Incurred under such clause (q);

 

  (28)

deposits or other Liens with respect to property or assets of the Company or any
Restricted Subsidiary; provided, that the obligations secured by such Liens
shall not exceed $1.25 million at any time; and

 

  (29)

Liens solely on any cash earnest money deposits made by the Company or any of
the Restricted Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder with respect to any acquisition that would
constitute an Investment pursuant to this Indenture;

 

  (30)

Liens arising solely by virtue of any statutory or common law provision relating
to banker’s liens, rights of set-off or similar rights (including Liens arising
or created pursuant to the applicable general banking terms and conditions
(algemene bankvoorwaarden) of any member of the Dutch Banking Association;

 

  (31)

Liens of franchisors in the ordinary course of business not securing
Indebtedness; and

 

  (32)

Liens securing judgments that do not constitute an Event of Default under clause
(8) of the definition thereof.

“Person” means any individual, corporation, partnership, limited liability
company, Joint Venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

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

 

41

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“Presumed Tax Rate” means the highest effective marginal statutory combined U.S.
federal, state and local income tax rate prescribed for an individual residing
in New York City (taking into account (i) the deductibility of state and local
income taxes for U.S. federal income tax purposes, assuming the limitation of
Section 68(a)(2) of the Code applies and taking into account any impact of
Section 68(f) of the Code, and (ii) the character (long-term or short-term
capital gain, dividend income or other ordinary income) of the applicable
income).

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of
such Person other than an Unrestricted Subsidiary of such Person. Unless
otherwise indicated in this “Description of the New Notes,” all references to
Restricted Subsidiaries shall mean Restricted Subsidiaries of the Company.

“Restructuring Transactions” shall mean the transactions contemplated by the
Support Agreement, including the transactions contemplated by the Fifth
Amendment to the Credit Agreement, dated as of the Issue Date, and the issuance
of the New Notes.

“S&P” means Standard & Poor’s Ratings Group or any successor to the rating
agency business thereof.

“Sale/Leaseback Transaction” means an arrangement relating to property now owned
or hereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or such Restricted Subsidiary leases it from such Person, other than
leases between the Company and a Restricted Subsidiary of the Company or between
Restricted Subsidiaries of the Company.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Senior Credit Documents” means the collective reference to any Credit
Agreement, any notes issued pursuant thereto and the guarantees thereof, and the
collateral documents relating thereto, as amended, supplemented or otherwise
modified from time to time.

“Significant Subsidiary” means any Restricted Subsidiary that would be a
“significant subsidiary” of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC or any successor provision.

“Similar Business” means any business or activity of the Company or any of its
Subsidiaries currently conducted or proposed as of the Issue Date, or any
business or activity that is reasonably similar thereto or a reasonable
extension, development or expansion thereof, or is complementary, incidental,
ancillary or related thereto.

“Specified Holders” means Elliott Management Corporation, Metro SPV LLC, Mudrick
Capital Management, LP and Empyrean Capital Partners, L.P. and any of their
respective Affiliates.

“Stated Maturity” means, with respect to any security, the date specified in
such security as the fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).

“Subordinated Indebtedness” means (a) with respect to the Company, any
Indebtedness of the Company which is by its terms subordinated in right of
payment to the New Notes and (b) with respect to any Guarantor, any Indebtedness
of such Guarantor which is by its terms subordinated in right of payment to its
Guarantee.

 

42

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“Subsidiary” means, with respect to any Person, (1) any corporation, association
or other business entity (other than a partnership, joint venture or limited
liability company) of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
of determination owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a combination thereof,
(2) any partnership, joint venture or limited liability company of which
(x) more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general and limited partnership interests, as applicable,
are owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person or a combination thereof, whether in
the form of membership, general, special or limited partnership interests or
otherwise, and (y) such Person or any Wholly Owned Restricted Subsidiary of such
Person is a controlling general partner or otherwise controls such entity and
(3) any Person that is consolidated in the consolidated financial statements of
the specified Person in accordance with GAAP.

“Subsidiary Guarantor” means each Subsidiary of the Company that is a Guarantor.

“Support Agreement” means that certain Support Agreement, dated as of February
[•], 2019, by and among Affinion Holdings, the Company and the consenting
stakeholders party thereto, as may be amended, modified or supplemented prior to
the Issue Date.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided, that no phantom stock or
similar plan providing for payments only on account of services provided by
current or former directors, officers, employees or consultants of Affinion
Holdings, the Company or any of its Restricted Subsidiaries shall be a Swap
Agreement.

“Test Period” means, on any date of determination, the period of four
consecutive fiscal quarters of the Company then most recently ended for which
financial statements have been filed with the SEC or furnished to Trustee
pursuant to the covenant under “Certain Covenants—Reports and Other Information”
(taken as one accounting period).

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as
in effect on the date of the Indenture.

“Total Assets” means, with respect to any Person, the total consolidated assets
of such Person and its Restricted Subsidiaries, as shown on the most recent
balance sheet.

“Transactions” means collectively, the Exchange Offer, the Restructuring
Transactions, and the other related transactions that are described in, or
contemplated by, the Support Agreement, the Investor Purchase Agreement and the
Offering Memorandum.

“Transaction Documents” means the Indenture, the Support Agreement, the Investor
Purchase Agreement, the Credit Agreement and, in each case, any other document
entered into in connection with the Transactions, in each case as amended,
supplemented or modified from time to time.

“Trust Officer” means any officer within the corporate trust department of the
Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person’s knowledge of and
familiarity with the particular subject, and who shall have direct
responsibility for the administration of the Indenture.

“Trustee” means the respective party named as such in the Indenture until a
successor replaces it and, thereafter, means the successor.

 

43

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“Unrestricted Subsidiary” means:

 

  (1)

any Subsidiary of the Company that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below; and

 

  (2)

any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the
Company (including any newly acquired or newly formed Subsidiary of the Company)
to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company
(other than any Subsidiary of the Subsidiary to be so designated); provided,
however, that (i) the Subsidiary to be so designated and its Subsidiaries do not
at the time of designation have and do not thereafter Incur any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Company or
any of its Restricted Subsidiaries (other than Equity Interests of Unrestricted
Subsidiaries) and (ii) such designation would be permitted under the covenant
described under “—Certain Covenants—Limitation on Restricted Payments.”
Notwithstanding the foregoing, the aggregate amount of Total Assets of all
Unrestricted Subsidiaries as of the last day of the most recent fiscal quarter
for which internal consolidated financial statements of the Company are
available shall not exceed either (x) 2.00% of the Total Assets of the Company
or (y) 1.00% of EBITDA, in each case, as of such date.

The Board of Directors of the Company may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation:

 

  (x)

(1) the Company could Incur $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test described in the first paragraph under
“—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock,” or (2) the Fixed Charge Coverage Ratio
for the Company and its Restricted Subsidiaries would be greater than such ratio
for the Company and its Restricted Subsidiaries immediately prior to such
designation, in each case on a pro forma basis taking into account such
designation, and

 

  (y)

no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by promptly filing with the Trustee a copy of the resolution of
the Board of Directors of the Company giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.

“U.S. Government Obligations” means securities that are:

 

  (1)

direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or

 

  (2)

obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in each case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian
with respect to any such U.S. Government Obligations or a specific payment of
principal of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depository receipt; provided,
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depository receipt.

“Voting Stock” of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

 

44

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“Weighted Average Life to Maturity” means, when applied to any Indebtedness,
Disqualified Stock or Preferred Stock, as the case may be, at any date, the
quotient obtained by dividing (1) the sum of the products of the number of years
from the date of determination to the date of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Disqualified Stock or Preferred Stock multiplied by the amount
of such payment, by (2) the sum of all such payments.

“Wholly Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a
Restricted Subsidiary.

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100%
of the outstanding Capital Stock or other ownership interests of which (other
than directors’ qualifying shares or shares or interests required to be held by
foreign nationals) shall at the time be owned by such Person or by one or more
Wholly Owned Subsidiaries of such Person and one or more Wholly Owned
Subsidiaries of such Person.

 

45

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Exhibit A to the Description of the New Notes

AGREED GUARANTEE PRINCIPLES

 

  a.

The guarantees to be provided by Foreign Subsidiaries of Affinion Holdings (the
“Group”) will be given in accordance with certain agreed guarantee principles
set forth below (the “Agreed Guarantee Principles”). This schedule addresses the
manner in which the Agreed Guarantee Principles will impact the guarantees
proposed to be taken in relation to this transaction.

 

  b.

The Agreed Guarantee Principles embody a recognition by all parties that there
may be certain legal and practical impediments in obtaining effective guarantees
from members of the Group in jurisdictions in which it has been agreed that
guarantees will be granted. In particular:

 

  i.

general statutory limitations, regulatory requirements or restrictions,
financial assistance, corporate benefit, fraudulent preference, “earnings
stripping”, “controlled foreign corporation” rules, “thin capitalization” rules
(or analogous restrictions), tax restrictions, retention of title claims,
employee consultation or approval requirements, capital maintenance rules and
similar principles may prevent or limit a member of the Group from providing a
guarantee or may require that the guarantee or be limited in amount or
otherwise;

 

  ii.

a key factor in determining whether or not a guarantee shall be taken is the
applicable cost (including adverse effects on interest deductibility and stamp
duty, notarization and registration fees and the burden and/or cost of complying
with any applicable financial assistance, corporate benefit or thin
capitalization rules) which shall not be materially and disproportionately
greater than the benefit to the holders of the New Notes of obtaining such
guarantee;

 

  iii.

the maximum guaranteed amount may be limited to minimize stamp duty,
notarization, registration or other applicable fees, taxes and duties where the
incremental cost of such fees, taxes and duties is materially and
disproportionately greater than the benefit to the holders of the New Notes of
increasing the guaranteed amount;

 

  iv.

members of the Group will not be required to give guarantees if it is not within
the legal capacity of the relevant members of the Group or if the same would
conflict with the fiduciary duties of the directors of the relevant members of
the Group or contravene any legal or regulatory prohibition or would result in
(or in a material risk of) personal or criminal liability on the part of any
officer or director;

 

  v.

members of the Group will not be required to give guarantees if doing so would
be prohibited by (1) any law or regulation or (2) any contractual obligation in
effect on the Issue Date (or, with respect to any subsidiary that is acquired
after the Issue Date, any contractual obligation in effect on the date of such
acquisition that is not entered into in contemplation thereof), but only for so
long as such prohibition exists, and provided that the relevant member of the
Group shall use reasonable endeavors to overcome any such obstacles or
restrictions; and

 

  vi.

the giving of a guarantee, will not be required if it would be reasonably likely
to have a material adverse effect on the ability of the Company or the relevant
Guarantor to conduct its operations and business in the ordinary course as
otherwise permitted by the Indenture.

 

46

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Schedule I to the Description of the New Notes

Initial Guarantors

The Initial Guarantors shall be the following:

US Subsidiary Guarantors:

 

  1.

Affinion Brazil Holdings I, LLC

 

  2.

Affinion Brazil Holdings II, LLC

 

  3.

Affinion Data Services, Inc.

 

  4.

Affinion Developments, LLC

 

  5.

Affinion Group, Inc.

 

  6.

Affinion Group, LLC

 

  7.

Affinion Investments II, LLC

 

  8.

Affinion Investments, LLC

 

  9.

Affinion Net Patents, Inc.

 

  10.

Affinion PD Holdings, Inc.

 

  11.

Affinion Publishing, LLC

 

  12.

BreakFive, LLC

 

  13.

Cardwell Agency, Inc.

 

  14.

CCAA, Corporation

 

  15.

Connexions Loyalty Acquisition, LLC

 

  16.

Connexions Loyalty Global Travel Fulfillment LLC

 

  17.

Connexions Loyalty Travel Solutions LLC

 

  18.

Connexions Loyalty, Inc.

 

  19.

Connexions SM Ventures, LLC

 

  20.

Connexions SMV, LLC

 

  21.

CUC Asia Holdings

 

  22.

Global Protection Solutions, LLC

 

  23.

Incentive Networks LLC

 

  24.

Lift Media, LLC

 

  25.

Long Term Preferred Care, Inc.

 

  26.

Loyalty Travel Agency LLC

 

  27.

Propp Corp.

 

  28.

Travelers Advantage Services, LLC

 

  29.

Trilegiant Auto Services, Inc.

 

  30.

Trilegiant Corporation

 

  31.

Trilegiant Insurance Services, Inc.

 

  32.

Trilegiant Retail Services, Inc.

 

  33.

Watchguard Registration Services, Inc.

 

  34.

Webloyalty Holdings Inc.

 

  35.

Webloyalty.com, Inc.

Foreign Subsidiary Guarantors:

 

  1.

Affinion International Holdings Limited (UK)

 

  2.

Affinion International Limited UK (UK)

 

  3.

Affinion International Travel Holdco Limited (UK)

 

  4.

Loyalty Ventures Limited (UK)

 

  5.

Webloyalty International Limited (UK)

 

  6.

Affinion International B.V. (The Netherlands)

 

  7.

Bassae Holding B.V. (The Netherlands)

 

  8.

Webloyalty Holdings Cooperatief U.A. (The Netherlands)

 

  9.

Webloyalty International Sarl (Switzerland)

 

47

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Annex B-2

Summary Description of the Rights Offering

 

    

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Security Offered    Rights to subscribe for $300.0 million aggregate principal
amount of New Notes, having the terms set forth on Annex B-1. Participants   
(i) Eligible Holders of Existing Notes that participate in the Exchange Offer on
or prior to the Consent Time and (ii) existing holders of Company Common Stock
and Existing Warrants, provided that each such participating holder holds at
least 1% of Company Common Stock on an as converted basis.    Holders of Note
Claims. Allocation   

96% to Eligible Holders of Existing Notes that participate in the Exchange Offer
on or prior to the Consent Time.

 

4% to existing holders of Company Common Stock and Existing Warrants that hold,
together with their affiliates, at least 1% of Company Common Stock on an as
converted basis.

  

100% to eligible holders of Note Claims.

 

Existing holders of Company Common Stock and Existing Warrants will have no
right to participate in the Rights Offering.

Price    Each $1,000 principal amount of New Notes will be offered at a price
equal to $1,000, with no OID. Expiration of the Offer; Closing    The Rights
Offering will expire at the Consent Time, with subscription offer acceptance
notices due on the fifth Business Day following the Consent Time (the
“Subscription Deadline”). Participants (other than the Financing Parties) must
fund into escrow within three Business Days after the Subscription Deadline. The
issuance of the New Notes pursuant to the Rights Offering will occur concurrent
with the settlement of the Exchange Offer (and the Financing Parties will fund
on such date) (the “Settlement Date”. For the avoidance of doubt, interest on
the New Notes shall start accruing only at the Settlement Date.    The Rights
Offering will expire at the Consent Time, with subscription offer acceptance
notices due on Subscription Deadline. Participants (other than the Financing
Parties) must fund into escrow within three Business Days after the Subscription
Deadline. The issuance of the New Notes pursuant to the Rights Offering will
occur concurrent on the Effective Date (and the Financing Parties will fund on
such date). For the avoidance of doubt, interest on the New Notes shall start
accruing only at the Effective Date.

 

B-2

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

    

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

No Revocation of Exercise    All subscriptions to purchase New Notes will be
irrevocable (except as required by law) and may not be withdrawn. Financing
Parties    Certain parties to the Support Agreement have entered into the
Investor Purchase Agreement on the terms and conditions set forth therein (the
“Financing Parties”). Financing Commitment Premium   

Financing commitment premium will consist of (i) $45 million aggregate principal
amount of New Notes and (ii) New Common Stock (or common stock of reorganized
Affinion Holdings with respect to an In-Court Restructuring) equal to 12.5% of
the issued and outstanding New Common Stock (or common stock of reorganized
Affinion Holdings), as calculated prior to dilution on account of New Common
Stock issued pursuant to the MIP and, in the case of a Recapitalization, the
issuance of Investor Warrants, as applicable (the “Financing Premium”).

 

To the extent the acquisition of New Common Stock (or common stock of
reorganized Affinion Holdings with respect to an In-Court Restructuring) would
result in a Financing Party beneficially owning 19.9% or more of the outstanding
amount of New Common Stock or common stock of reorganized Affinion Holdings, as
applicable, and which a Financing Party’s acquisition of the New Common Stock,
or notice to, a governmental authority (including without limitation the U.K.
Financial Conduct Authority), and such consent has not been obtained, or notice
has not been given, such Financing Party will receive, as necessary, New Penny
Warrants in lieu of shares of New Common Stock or common stock of reorganized
Affinion Holdings, as applicable, for such Financing Party’s applicable its
Financing Premium.

   Exercise Documents    Participants will execute and deliver a customary
subscription offer acceptance notice.

 

B-3

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

Annex C

Form of Credit Agreement Amendment

[See Attached]

 

C-1

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

Execution Version

FIFTH AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO COLLATERAL AGREEMENT1

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO COLLATERAL
AGREEMENT, dated as of         , 2019 (this “Fifth Amendment”), is made by and
among AFFINION GROUP, INC., a Delaware corporation (the “Borrower”), HPS
INVESTMENT PARTNERS, LLC, as administrative agent (in such capacity, together
with its successors in such capacity, the “Administrative Agent”), the Lenders
party hereto and, for purposes of Section 5 hereof, each other Loan Party party
hereto. Each capitalized term used herein but not otherwise defined herein has
the meaning given such term in the Amended Credit Agreement or in the Amended
Collateral Agreement, as applicable.

RECITALS

A. (i) AFFINION GROUP HOLDINGS, INC., a Delaware corporation (“Holdings”), the
Borrower, the Lenders from time to time party thereto and the Administrative
Agent are parties to that certain Credit Agreement, dated as of May 10, 2017,
(as amended by that First Amendment to Credit Agreement, dated November 30,
2017, that Second Amendment to Credit Agreement, dated as of May 4, 2018, that
Third Amendment to Credit Agreement, dated as of July 16, 2018, that Fourth
Amendment to Credit Agreement, dated as of November 14, 2018, the “Existing
Credit Agreement”; and as amended hereby, the “Amended Credit Agreement”),
pursuant to which the Lenders have made certain Loans and provided certain
Commitments (subject to the terms and conditions thereof) to the Borrower and
(ii) Holdings, the Borrower, certain other Loan Parties from time to time party
thereto and the Administrative Agent are parties to that certain Collateral
Agreement, dated as of May 10, 2017 (the “Existing Collateral Agreement”; and as
amended hereby, the “Amended Collateral Agreement”);

B. The Borrower wishes, and the Lenders signatory hereto and the Administrative
Agent are willing to permit the Borrower, to modify the application of proceeds
provisions in Section 5.4(a) of the Existing Collateral Agreement;

C. The Borrower, Holdings and certain other Loan Parties are party to that
certain Restructuring Support Agreement (as defined in Exhibit A hereto) and the
Borrower wishes to achieve, and the Lenders signatory hereto and the
Administrative Agent are willing to permit, the consummation of the
Restructuring Transactions (as defined in Exhibit A hereto) described in the
Restructuring Support Agreement;

 

1 

In the event that the Restructuring Transactions are consummated pursuant to a
chapter 11 proceeding, the Fifth Amendment and Amended Credit Agreement shall be
modified as necessary to reflect, among other things, that there will only be a
single class of Term Loans. Additionally, as further set forth in the
Restructuring Support Agreement, the Administrative Agent (in its sole
discretion) may inform the Borrower that the Fifth Amendment and Amended Credit
Agreement shall be modified to (1) provide for the exercise of the
Non-Consenting Lender Option (as defined in the Restructuring Support
Agreement), if applicable, and (2) if, applicable, to reflect that there will
only be a single class of Term Loans.

 

1

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

D. The Borrower desires to (i) obtain an extension of the maturity of the
Revolving Facility Commitments and Term Loans existing immediately prior to the
Fifth Amendment Effective Date (as hereinafter defined) and (ii) to modify
certain other provisions in the Existing Credit Agreement;

E. The Revolving Facility Lenders and each Term Lender signatory hereto (any
such Term Lender, a “2019 Term Lender”) have agreed to extend the maturity of
all Revolving Facility Loans and such 2019 Term Lender’s outstanding Term Loans
(so extended, the “2019 Term Loans”), as applicable, and consents to the
proposed modifications with respect thereto in accordance with the terms and
subject to the conditions set forth herein; as of the Fifth Amendment Effective
Date, Term Loans held by Term Lenders that are not party hereto shall be deemed
a separate tranche from the 2019 Term Loans (such Term Loans to be referred to
as the “Non-Extended Term Loans”); and

F. The Borrower wishes, and the Lenders signatory hereto and the Administrative
Agent are willing, to amend the Existing Credit Agreement pursuant to
Section 9.09(b) of the Existing Credit Agreement as more fully described herein.

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

SECTION 1. Amendments to Existing Credit Agreement. As of the Fifth Amendment
Effective Date (as defined below), the Existing Credit Agreement is hereby
amended, to delete the stricken text (indicated textually in the same manner as
the following example: stricken text ) and to add the underlined text (indicated
textually in the same manner as the following example: underlined text) as set
forth on Exhibit A hereto.

SECTION 2. Amendments to Existing Collateral Agreement. As of the Fifth
Amendment Effective Date, the Existing Collateral Agreement is hereby amended as
follows:

(a) Section 5.4(a) is hereby replaced in its entirety with the following text in
lieu thereof:

“5.4 Application of Proceeds. (a) Subject to Section 5.4(b) below, if an Event
of Default shall have occurred and be continuing, the Agent shall,
notwithstanding the provisions of Section 2.08 and Section 2.11 of the Credit
Agreement, apply all or any part of the Collateral and/or net Proceeds thereof
realized through the exercise by the Agent of its remedies hereunder or as the
result of any distributions or other recoveries in any bankruptcy or other
insolvency proceeding (after deducting fees and expenses as provided in
Section 5.5), whether or not held in any Collateral Account, in payment of the
Secured Obligations. The Agent shall apply any such Collateral or Proceeds to be
applied as set forth in Section 3(a) of the Fifth Amendment.

 

2

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In addition, with respect to any proceeds of Insurance received by the Agent,
(x) if no Event of Default shall have occurred and be continuing, (i) such
Insurance Proceeds shall be returned to the Grantors if permitted or required by
the Credit Agreement or (ii) if not so permitted or required by the Credit
Agreement, then such Insurance Proceeds shall be applied in accordance with this
Section 5.4(a) and (y) if an Event of Default shall have occurred and be
continuing, then such Insurance Proceeds shall be applied in accordance with
this Section 5.4(a).

SECTION 3. Consents and Other Agreements.

(a) Notwithstanding anything to the contrary in any Loan Document, if an Event
of Default shall have occurred and be continuing, the Collateral Agent shall,
notwithstanding the provisions of Section 2.08 and Section 2.11 of the Credit
Agreement, apply all or any part of the Collateral and/or net Proceeds (as
defined in the Collateral Agreement) thereof and/or any other proceeds realized
through the exercise by the Collateral Agent of its remedies under the Loan
Documents or as the result of any distributions or other recoveries in any
bankruptcy or other insolvency proceeding (after deducting fees and expenses as
applicable), whether or not held in any Collateral Account, in payment of the
Secured Obligations. The Collateral Agent shall apply any such amounts in the
following order:

First, to the Collateral Agent and the Administrative Agent to pay incurred and
unpaid fees and expenses under the Loan Documents;

Second, to the Administrative Agent in respect of Secured Obligations then due
and owing to any Revolving Facility Lender and Non-Extending Term Lender and
remaining unpaid for application by the Administrative Agent in accordance with
the terms of the Credit Agreement;

Third, to the Administrative Agent in respect of all Secured Obligations to the
Revolving Facility Lenders and Non-Extending Term Lenders (other than those
under clause second above) for prepayment of such Secured Obligations in
accordance with the terms of the Credit Agreement; and

Fourth, to the Administrative Agent in respect of Secured Obligations then due
and owing (other than those under clauses second and third above) and remaining
unpaid for application by the Administrative Agent in accordance with the terms
of the Credit Agreement;

Fifth, to the Administrative Agent in respect of all Secured Obligations (other
than those under clauses second, third and fourth above) for prepayment of such
Secured Obligations in accordance with the terms of the Credit Agreement; and

Sixth, any balance of such Proceeds or other amounts remaining after a Discharge
of the Secured Obligations shall be paid over to the Borrower or to whomsoever
may be lawfully entitled to receive the same and any Collateral remaining after
a Discharge of Secured Obligations shall be returned to the applicable Grantor
or to whomsoever may be lawfully entitled to receive the same.

 

3

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In addition, with respect to any proceeds of Insurance (as defined in the
Collateral Agreement) received by the Collateral Agent, (x) if no Event of
Default shall have occurred and be continuing, (i) such Insurance Proceeds shall
be returned to the Grantors if permitted or required by the Credit Agreement or
(ii) if not so permitted or required by the Credit Agreement, then such
Insurance Proceeds shall be applied in accordance with this Section 3(a) and
(y) if an Event of Default shall have occurred and be continuing, then such
Insurance Proceeds shall be applied in accordance with this Section 3(a).

(b) On the Fifth Amendment Effective Date, certain outstanding Term Loans shall
be prepaid in accordance with the Restructuring Support Agreement; the 2019 Term
Lenders party hereto hereby consent to the prepayment on the Fifth Amendment
Effective Date of any 2019 Term Loans on a less than pro rata basis with any
prepayment of Non-Extended Term Loans on the Fifth Amendment Effective Date and
agree that such prepayment of 2019 Term Loans shall be made at par plus accrued
and unpaid interest, without any further premium or penalty.

(c) The Lenders party hereto hereby consent to the Restructuring Transactions
and agree that the consummation thereof does not result in a Default or Event of
Default under the Loan Documents, such transactions to include, for the
avoidance of doubt, (i) (x) the prepayment in full at par plus accrued and
unpaid interest of the Revolving Facility Loans using proceeds from the Offering
and cash on hand and (y) subject to the exercise of the Non-Consenting Lender
Option (as defined in the Restructuring Support Agreement), the prepayment
(A) at par plus accrued and unpaid interest of the 2019 Term Loans and (B) of
the Non-Extended Term Loans pursuant to the terms of the Existing Credit
Agreement, in the case of clause (y), using the $5,000,000 of Net Proceeds from
the Bridges Sale released from escrow on the Fifth Amendment Effective Date and
$148,000,000 of proceeds from the Offering and cash on hand2, (ii) the exercise
and consummation of the Non-Consenting Lender Option and (iii) (w) the repayment
of any outstanding Indebtedness committed pursuant to the Second Lien Commitment
Letter with cash from the proceeds of the Offering and cash on hand in an amount
equal to the actual cash proceeds of such Indebtedness received by the Borrower,
the amount of all interest actually paid in kind, accrued and unpaid interest,
and the amount of all customary indemnity and expense reimbursement obligations
due under the definitive documentation for such Indebtedness, (x) the repayment
of amounts equal to the Closing Fee (as defined in the Second Lien Commitment
Letter) in the form of New Notes, (y) the repayment of amounts equal to the
Early Termination Fee (as defined in the Second Lien Commitment Letter) in the
form of New Notes and (z) the payment of any other fees, premiums or amounts (if
any) owing to the lenders under such Indebtedness in the form of New Notes (as
defined in Exhibit A hereto) (the prepayments contemplated pursuant to this
clause (c), collectively, the “Fifth Amendment Effective Date Payments”).

 

 

2 

To the extent the Restructuring Transactions are consummated through the Chapter
11 Cases as defined in the Restructuring Support Agreement, the amount of cash
available for repayment of Term Loans on the Fifth Amendment Effective Date will
be reduced by the amount of cash interest paid with respect to the Term Loans
during the Chapter 11 Cases.

 

4

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(d) On the Fifth Amendment Effective Date, the outstanding Revolving Facility
Loans shall be prepaid in full and the Revolving Facility Commitments shall be
permanently reduced to $85,000,000 on a pro rata basis among the Revolving
Facility Lenders.

SECTION 4. Conditions to Effectiveness. This Fifth Amendment shall not become
effective until the date (the “Fifth Amendment Effective Date”) on which each of
the following conditions is satisfied (or waived in accordance with Section 9.09
of the Existing Credit Agreement):

 

  (a)

The Administrative Agent shall have received from the Lenders required to
execute this Fifth Amendment pursuant to the Restructuring Support Agreement,
the Borrower and the other parties hereto, executed counterparts of this Fifth
Amendment.

 

  (b)

The Administrative Agent shall have received, on behalf of itself, the Lenders,
each Issuing Bank and each Swingline Lender on the Fifth Amendment Effective
Date, the favorable written opinion of (a) Akin Gump Strauss Hauer & Feld LLP
and (b) local counsel for material Loan Parties organized under the laws of
England and Wales, Switzerland and the Netherlands, (i) in form and substance
reasonably satisfactory to the Administrative Agent, (ii) dated as of the Fifth
Amendment Effective Date and (iii) addressed to the Lenders, each Issuing Bank,
each Swingline Lender and the Administrative Agent, covering such matters
relating to this Fifth Amendment and the Loan Documents as the Administrative
Agent shall reasonably request.

 

  (c)

The Administrative Agent shall have received a certificate from a Responsible
Officer of Holdings, dated the Fifth Amendment Effective Date, confirming:
(i) the representations and warranties set forth in the Loan Documents that are
qualified by materiality shall be true and correct, and the representations and
warranties that are not so qualified shall be true and correct in all material
respects, in each case on and as of the date of the Fifth Amendment Effective
Date, or if specifically specified in the Loan Documents as of the applicable
earlier date, (ii) no Event of Default or Default has occurred and is continuing
or would result herefrom, and (iii) that the condition set forth in Section 2(j)
below has been satisfied.

 

  (d)

The Administrative Agent shall have received in the case of each Loan Party each
of the items referred to below, as applicable and subject to the proviso at the
end of this clause (d):

(i) a copy of the certificate or articles of incorporation or formation, limited
liability agreement, partnership agreement or other constituent or governing
documents, including all amendments thereto, of each Loan Party, (a) if
applicable in such jurisdiction, certified as of a recent date by the Secretary
of State (or other similar official) of the jurisdiction of its organization,
and a certificate as to the good standing (to the extent such concept or a
similar concept exists under the laws of such jurisdiction) of each such Loan
Party

 

5

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as of a recent date from such Secretary of State (or other similar official),
and (b) otherwise, (i) certified by the Secretary or Assistant Secretary or
similar officer of each such Loan Party or other person duly authorized by the
constituent documents of such Loan Party or (ii) otherwise in form and substance
reasonably satisfactory to the Administrative Agent and each of the Lenders;

(ii) a certificate of the Secretary or Assistant Secretary or similar officer of
each Loan Party or other person duly authorized by the constituent documents of
such Loan Party dated the Fifth Amendment Effective Date and certifying:

(A) that attached thereto is a true and complete copy of the by-laws (or limited
liability company agreement, articles of association, partnership agreement or
other equivalent constituent and governing documents) of such Loan Party as in
effect on the Fifth Amendment Effective Date and at all times since a date prior
to the date of the resolutions described in clause (B) below;

(B) that attached thereto is a true and complete copy of resolutions (or
equivalent authorizing actions) duly adopted by the Board of Directors (or
equivalent governing body) of such Loan Party (or its managing general partner
or managing member), and, with respect to each Loan Party incorporated in the
Netherlands, if required by law or its constituent documents, the general
meeting (algemene vergadering), (algemene ledenvergadering) and/or supervisory
board (raad van commissarissen) of such Loan Party, authorizing the execution,
delivery and performance of the Loan Documents to which such person is a party
and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect on the Fifth Amendment Effective Date;

(C) that attached thereto, in relation to a Loan Party incorporated in
Switzerland, is a true and complete copy of the minutes of a
shareholder/quotaholder resolutions duly adopted by the shareholder/quotaholder
of such Loan Party authorizing the execution, delivery and performance of the
Loan Documents to which such person is a party and that such resolutions have
not been modified, rescinded or amended and are in full force and effect on the
Fifth Amendment Effective Date;

(D) that the certificate or articles of incorporation, by-laws, limited
liability company agreement, articles of association, partnership agreement or
other equivalent constituent and governing documents of such Loan Party have not
been amended since the date of the last amendment thereto disclosed pursuant to
clause (i) above;

 

6

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(E) as to the incumbency and specimen signature of each officer or other duly
authorized person executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party;

(F) as to the absence of any pending proceeding for the dissolution or
liquidation of such Loan Party or, to the knowledge of such person, threatening
the existence of such Loan Party;

(G) in the case of a Loan Party formed, incorporated or organized under the laws
of England and Wales, confirming that borrowing or guaranteeing or securing, as
appropriate, the total commitments would not cause any borrowing, guarantee,
security or similar limit binding on it to be exceeded;

(iii) a certification of another officer or other duly authorized person as to
the incumbency and specimen signature of the Secretary or Assistant Secretary or
similar officer or other person duly authorized by such Loan Party executing the
certificate pursuant to clause (ii) above; and

(iv) in the case of a Loan Party formed, incorporated or organized under the
laws of England and Wales), a copy of a resolution of the board of directors (or
applicable equivalent) and/or the shareholders of that Loan Party (in each case
to the extent required by law): (i) approving the terms of, and the transactions
contemplated by, the Loan Documents to which it is a party and resolving that it
execute the Loan Documents to which it is a party; (ii) authorizing a specified
person or persons to execute the Loan Documents to which it is a party on its
behalf; and (iii) authorizing a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with the Loan Documents to which it is a
party;

provided, however, that to the extent the applicable constituent and governing
documents and incumbencies required above have not changed since the last time
delivered, the certifying Secretary or Assistant Secretary or similar officer or
person may certify to that effect rather than re-attaching such documents and
incumbencies.

 

  (e)

The Administrative Agent shall have received in the case of each Loan Party
incorporated in the Netherlands, if applicable, an unconditional positive advice
(advies) of each works council having jurisdiction over that Loan Party and the
related request for advice (adviesaanvraag) or confirmation of such works
council that it irrevocably and unconditionally waives its right to render
advice, or, if not applicable, a confirmation by the Board of Directors of that
Loan Party in the resolutions referred to in paragraph (ii)(B) above that such
Loan Party does not have a works council.

 

7

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

  (f)

All actions reasonably requested by the Administrative Agent to ensure the
continuing enforceability of the guarantees of the Loan Parties and the
continuing grant and perfection of all security interests previously granted by
the Loan Parties shall have been undertaken in a manner reasonably acceptable to
the Administrative Agent.

 

  (g)

At least five Business Days prior to the Fifth Amendment Effective Date, the
Administrative Agent and the Lenders shall have received all documentation and
other information required by bank regulatory authorities or reasonably
requested by the Administrative Agent or any Lender under or in respect of
applicable “know-your-customer” and anti-money laundering rules and regulations,
including the PATRIOT Act, and including a duly executed W-9 tax form (or such
other applicable IRS tax form) of the Borrower that was requested at least 10
Business Days prior to the Fifth Amendment Effective Date.

 

  (h)

The Administrative Agent shall have received all amounts due and payable
pursuant to the Restructuring Support Agreement on or prior to the Fifth
Amendment Effective Date. Additionally, the Administrative Agent shall have
received reimbursement or payment of all reasonable out-of-pocket expenses
(including reasonable fees, charges and disbursements of Paul, Weiss, Rifkind,
Wharton & Garrison LLP and reasonably necessary U.S. local and foreign counsel)
invoiced on or prior to the Fifth Amendment Effective Date.

 

  (i)

The Restructuring Transactions shall have been consummated substantially
concurrently with the Fifth Amendment Effective Date, on the terms set forth in
the Restructuring Support Agreement.

 

  (j)

Prior to or substantially concurrently with the Fifth Amendment Effective Date,
the Borrower shall make the Fifth Amendment Effective Date Payments.

SECTION 5. Ratification and Affirmation. The Borrower and each other Loan Party
does hereby adopt, ratify, and confirm the Existing Credit Agreement, the
Existing Collateral Agreement and the other Loan Documents, as amended hereby,
and its obligations thereunder. The Borrower and each other Loan Party hereby
(a) acknowledges, renews and extends its continued liability under each Loan
Document and agrees that each Loan Document remains in full force and effect,
except as expressly amended hereby, notwithstanding the amendments contained
herein and shall not be impaired or limited by the execution or effectiveness of
this Fifth Amendment, (b) confirms and ratifies all of its obligations under the
Loan Documents, including its obligations and the Liens and security interests
granted by it under the Security Documents and (c) confirms that all references
in such Security Documents to the “Credit Agreement” (or words of similar
import) refer to the Existing Credit Agreement as amended and supplemented
hereby without impairing any such obligations or Liens in any respect.
Notwithstanding the conditions to effectiveness set forth in this Amendment, no
consent by any Loan Party (other than the Borrower) is required by the terms of
the Existing Credit Agreement or any other Loan Document to the amendments to
the Existing Credit Agreement effected pursuant to this Amendment and nothing in
the Amended Credit Agreement, this Amendment or any other Loan Document shall be
deemed to require its consent to any future amendments to the Amended Credit
Agreement, except to the extent expressly set forth in Section 9.09 of the
Amended Credit Agreement.

 

8

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SECTION 6. Miscellaneous.

 

  (a)

Confirmation. The provisions of the Loan Documents, as amended by this Fifth
Amendment, shall remain in full force and effect in accordance with their terms
following the effectiveness of this Fifth Amendment.

 

  (b)

Loan Document. This Fifth Amendment and each agreement, instrument, certificate
or document executed by the Borrower or any other Loan Party or any of its or
their respective officers in connection therewith are “Loan Documents” as
defined and described in the Amended Credit Agreement and all of the terms and
provisions of the Loan Documents relating to other Loan Documents shall apply
hereto and thereto.

 

  (c)

Counterparts. This Fifth Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of this Fifth Amendment by facsimile or other electronic transmission
shall be effective as delivery of a manually executed counterpart hereof.

 

  (d)

ENTIRE AGREEMENT. THIS FIFTH AMENDMENT, THE AMENDED CREDIT AGREEMENT, THE
AMENDED COLLATERAL AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION
HEREWITH AND THEREWITH REPRESENT THE FINAL AND ENTIRE AGREEMENT RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AMONG THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE
NO PROMISES, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE ADMINISTRATIVE
AGENT OR ANY LENDER, ISSUING BANK OR SWINGLINE LENDER RELATIVE TO THE SUBJECT
MATTER HEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN OR IN THE OTHER LOAN
DOCUMENTS.

 

  (e)

GOVERNING LAW. THIS FIFTH AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

9

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(f) THE PROVISIONS OF SECTIONS 9.13 AND 9.17 OF THE AMENDED CREDIT AGREEMENT
SHALL APPLY, MUTATIS MUTANDIS, TO THIS FIFTH AMENDMENT. THE PROVISIONS OF
SECTION 8.07 (FIRST SENTENCE) AND SECTION 8.08 OF THE AMENDED CREDIT AGREEMENT
SHALL APPLY, MUTATIS MUTANDIS, TO THIS FIFTH AMENDMENT, IT BEING UNDERSTOOD THAT
THE PARTIES’ RESPECTIVE FINANCIAL ADVISORS INVOLVED IN THE ARRANGEMENT OF THIS
FIFTH AMENDMENT SHALL ALSO BE ENTITLED TO RELY ON THE BENEFITS THEREOF.

[Remainder of page intentionally left blank]

 

 

10

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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be
duly executed and delivered as of the date first written above.

 

AFFINION GROUP, INC., as Borrower By:  

                              

Name:   Title:  

[Signature Page—Fifth Amendment to Credit Agreement]

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

 

AFFINION GROUP HOLDINGS, INC.

 

AFFINION BRAZIL HOLDINGS I, LLC

 

AFFINION BRAZIL HOLDINGS II, LLC

 

AFFINION DATA SERVICES, INC.

 

AFFINION DEVELOPMENTS, LLC

 

AFFINION GROUP, LLC

 

AFFINION INVESTMENTS II, LLC

 

AFFINION PD HOLDINGS, INC.

 

AFFINION PUBLISHING, LLC

 

BREAKFIVE, LLC

 

CARDWELL AGENCY, INC.

 

CCAA, CORPORATION

 

CONNEXIONS LOYALTY GLOBAL TRAVEL
FULFILLMENT LLC

 

CONNEXIONS LOYALTY TRAVEL SOLUTIONS LLC

 

CONNEXIONS LOYALTY, INC.

 

CONNEXIONS SM VENTURES, LLC

 

CONNEXIONS SMV, LLC

 

GLOBAL PROTECTION SOLUTIONS, LLC

 

LIFT MEDIA, LLC

 

LONG TERM PREFERRED CARE, INC.

 

LOYALTY TRAVEL AGENCY LLC

 

PROPP CORP.

 

TRAVELERS ADVANTAGE SERVICES, LLC

 

TRILEGIANT AUTO SERVICES, INC.

 

TRILEGIANT CORPORATION

 

TRILEGIANT INSURANCE SERVICES, INC.

    

 

TRILEGIANT RETAIL SERVICES, INC.

 

WATCHGUARD REGISTRATION SERVICES, INC.

 

WEBLOYALTY HOLDINGS, INC.

 

WEBLOYALTY.COM, INC.

 

By:                                                            
                                                      

 

      Name:

 

      Title:

[Signature Page—Fifth Amendment to Credit Agreement]

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

AFFINION INVESTMENTS, LLC By:   Affinion Group, Inc., its non-economic managing
member By:  

 

  Name:   Title: AFFINION NET PATENTS, INC. By:  

 

  Name:   Title: CONNEXIONS LOYALTY ACQUISITION, LLC By:  

 

  Name:   Title:

[Signature Page—Fifth Amendment to Credit Agreement]

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

CUC ASIA HOLDINGS, by its partners   TRILEGIANT CORPORATION   By:  

                                      

    Name:     Title: and     TRILEGIANT RETAIL SERVICES, INC.   By:  

                                          

    Name:     Title: INCENTIVE NETWORKS LLC By:  

 

  Name:   Title: AFFINION INTERNATIONAL HOLDINGS LIMITED By:  

 

  Name:   Title:

[Signature Page—Fifth Amendment to Credit Agreement]

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

AFFINION INTERNATIONAL LIMITED By:  

 

  Name:   Title: AFFINION INTERNATIONAL TRAVEL HOLDCO LIMITED By:  

 

  Name:   Title: LOYALTY VENTURES LIMITED By:  

 

  Name:   Title: WEBLOYALTY INTERNATIONAL LIMITED By:  

 

  Name:   Title: AFFINION INTERNATIONAL B.V. By:  

 

  Name:   Title:

[Signature Page — Fifth Amendment to Credit Agreement]

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

BASSAE HOLDING B.V. By:  

 

  Name:   Title: WEBLOYALTY HOLDINGS COÖPERATIEF U.A. By:  

 

  Name:   Title: WEBLOYALTY INTERNATIONAL SÀRL By:  

 

  Name:   Title:

[Signature Page—Fifth Amendment to Credit Agreement]

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

HPS INVESTMENT PARTNERS, LLC,

as Administrative Agent

By:  

                              

Name:   Title:  

[Signature Page—Fifth Amendment to Credit Agreement]

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

[•], as a Lender By:  

 

 

Name: Title:

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

(Exhibit A)

CREDIT AGREEMENT

Dated as of May 10, 2017,

As Amended by the First Amendment to Credit Agreement dated as of November 30,
2017,

the Second Amendment to Credit Agreement dated as of May 4, 2018,

the Third Amendment to Credit Agreement dated as of July 16, 2018 and,

the Fourth Amendment to Credit Agreement dated as of November 14, 2018, and

the Fifth Amendment to Credit Agreement dated as of [●], 2019,

Among

AFFINION GROUP HOLDINGS, INC.,

AFFINION GROUP, INC.,

as Borrower,

THE LENDERS PARTY HERETO,

and

HPS INVESTMENT PARTNERS, LLC

as Administrative Agent and Collateral Agent

 

 

HPS INVESTMENT PARTNERS, LLC

as Lead Arranger, Syndication Agent, Documentation Agent and Bookrunner

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

Table of Contents

 

     Page   ARTICLE I

 

DEFINITIONS

 

SECTION 1.01 Defined Terms

     1  

SECTION 1.02 Terms Generally

     53  

SECTION 1.03 Divisions

     5453  

SECTION 1.04 Currency Translation

     54  

SECTION 1.05 Letter of Credit Amounts

     54  

SECTION 1.06 Dutch Terms.

     5554   ARTICLE II

 

THE CREDITS

 

SECTION 2.01 Commitments

     55  

SECTION 2.02 Loans and Borrowings

     55  

SECTION 2.03 Requests for Borrowings

     56  

SECTION 2.04 Swingline Loans

     57  

SECTION 2.05 Letters of Credit

     60  

SECTION 2.06 Funding of Borrowings

     6968  

SECTION 2.07 Interest Elections

     7069  

SECTION 2.08 Termination and Reduction of Commitments

     7170  

SECTION 2.09 Repayment of Loans; Evidence of Debt

     7271  

SECTION 2.10 Repayment of Term Loans and Revolving Facility Loans

     7271  

SECTION 2.11 Prepayment of Loans

     7473  

SECTION 2.12 Fees

     7675  

SECTION 2.13 Interest

     7877  

SECTION 2.14 Alternate Rate of Interest

     8078  

SECTION 2.15 Increased Costs

     8179  

SECTION 2.16 Break Funding Payments

     8280  

SECTION 2.17 Taxes

     8281  

SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     8684  

SECTION 2.19 Mitigation Obligations; Replacement of Lenders

     8886  

SECTION 2.20 [Reserved]

     9088  

SECTION 2.21 Illegality

     9088  

SECTION 2.22 Cash Collateral

     9088  

SECTION 2.23 Defaulting Lenders

     9189  

 

ii

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

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.01 Organization; Powers

     9391  

SECTION 3.02 Authorization

     9391  

SECTION 3.03 Enforceability

     9492  

SECTION 3.04 Governmental Approvals

     9492  

SECTION 3.05 Financial Statements

     9492  

SECTION 3.06 No Material Adverse Change or Material Adverse Effect

     9593  

SECTION 3.07 Title to Properties; Possession Under Leases

     9594  

SECTION 3.08 Subsidiaries

     9694  

SECTION 3.09 Litigation; Compliance with Laws

     9795  

SECTION 3.10 Federal Reserve Regulations

     9896  

SECTION 3.11 Investment Company Act; Public Utility Holding Company Act

     9896  

SECTION 3.12 Use of Proceeds

     9896  

SECTION 3.13 Tax Returns

     9896  

SECTION 3.14 No Material Misstatements

     9997  

SECTION 3.15 Employee Benefit Plans

     9997  

SECTION 3.16 Environmental Matters

     10098  

SECTION 3.17 Security Documents

     10199  

SECTION 3.18 Location of Real Property

     102100  

SECTION 3.19 Solvency

     102100  

SECTION 3.20 Labor Matters

     103101  

SECTION 3.21 Insurance

     103101  

SECTION 3.22 Senior Debt

     104101  

SECTION 3.23 No Violation

     104102  

SECTION 3.24 Holdings Indebtedness

     104102  

SECTION 3.25 PATRIOT Act, etc.

     104102  

SECTION 3.26 Sanctions Laws

     104102  

SECTION 3.27 Anti-Corruption Laws and Sanctions

     105103   ARTICLE IV

 

CONDITIONS OF LENDING

 

SECTION 4.01 All Credit Events

     105103  

SECTION 4.02 Closing Date

     106104   ARTICLE V

 

AFFIRMATIVE COVENANTS   

SECTION 5.01 Existence; Businesses and Properties

     110108  

 

iii

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SECTION 5.02 Insurance

     111109  

SECTION 5.03 Taxes

     112110  

SECTION 5.04 Financial Statements, Reports, etc.

     112110  

SECTION 5.05 Litigation and Other Notices

     115113  

SECTION 5.06 Compliance with Laws

     115113  

SECTION 5.07 Maintaining Records; Access to Properties and Inspections

     116113  

SECTION 5.08 Payment of Obligations

     116114  

SECTION 5.09 Use of Proceeds

     116114  

SECTION 5.10 Compliance with Environmental Laws

     117114  

SECTION 5.11 Further Assurances; Additional Security

     117114  

SECTION 5.12 Fiscal Year; Accounting

     119117  

SECTION 5.13 Rating

     119117  

SECTION 5.14 Lender Meetings

     120118  

SECTION 5.15 Compliance with Material Contracts

     120118  

SECTION 5.16 Compliance with Anti-Corruption Laws

     120118  

SECTION 5.17 Post-Closing Matters

     120118   ARTICLE VI

 

NEGATIVE COVENANTS

 

SECTION 6.01 Indebtedness

     120119  

SECTION 6.02 Liens

     124122  

SECTION 6.03 Sale and Lease-Back Transactions

     128127  

SECTION 6.04 Investments, Loans and Advances

     129127  

SECTION 6.05 Mergers, Consolidations, Sales of Assets and Acquisitions

     131130  

SECTION 6.06 Dividends and Distributions

     134133  

SECTION 6.07 Transactions with Affiliates

     136134  

SECTION 6.08 Business of Holdings, the Borrower and the Subsidiaries

     139137  

SECTION 6.09 Limitation on Modifications and Payments of lndebtedness;

  

                           Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc.

     139137  

SECTION 6.10 Financial Maintenance Covenants

     142140  

SECTION 6.11 Limitations on Change in Fiscal Periods

     143141  

SECTION 6.12 Swap Agreements

     143141   ARTICLE VII

 

EVENTS OF DEFAULT

 

SECTION 7.01 Events of Default

     144141  

SECTION 7.02 Exclusion of Certain Subsidiaries

     147144  

 

iv

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ARTICLE VIII

 

THE AGENTS

 

SECTION 8.01 Appointment and Authority

     147144  

SECTION 8.02 Rights as a Lender

     148145  

SECTION 8.03 Exculpatory Provisions

     148445  

SECTION 8.04 Reliance by Administrative Agent

     149146  

SECTION 8.05 Delegation of Duties

     150147  

SECTION 8.06 Resignation of the Administrative Agent

     150147  

SECTION 8.07 Non-Reliance on Administrative Agent and Other Lenders

     151148  

SECTION 8.08 No Other Duties, Etc

     151148  

SECTION 8.09 Administrative Agent May File Proofs of Claim

     151148  

SECTION 8.10 Collateral Matters

     152149  

SECTION 8.11 Withholding Tax

     153150   ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01 Notices

     153150  

SECTION 9.02 Survival of Agreement

     155152  

SECTION 9.03 Binding Effect

     155152  

SECTION 9.04 Successors and Assigns

     155153  

SECTION 9.05 Expenses; Indemnity

     162159  

SECTION 9.06 Right of Set-off

     164161  

SECTION 9.07 Payments Set Aside

     165162  

SECTION 9.08 Applicable Law

     165162  

SECTION 9.09 Waivers; Amendment

     165162  

SECTION 9.10 Interest Rate Limitation

     169166  

SECTION 9.11 [Reserved]

     169166  

SECTION 9.12 Entire Agreement

     169166  

SECTION 9.13 WAIVER OF JURY TRIAL

     170166  

SECTION 9.14 Severability

     170167  

SECTION 9.15 Counterparts

     170167  

SECTION 9.16 Headings

     170167  

SECTION 9.17 Jurisdiction; Consent to Service of Process

     170167  

SECTION 9.18 Confidentiality

     171168  

SECTION 9.19 Direct Website Communications

     172168  

SECTION 9.20 Release of Liens and Guarantees

     173170  

SECTION 9.21 Power of Attorney

     174171  

SECTION 9.22 PATRIOT Act Notice

     174171  

SECTION 9.23 No Advisory or Fiduciary Relationship

     174171  

SECTION 9.24 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions

     175172  

 

v

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Exhibits and Schedules

 

 

Exhibit A

   Form of Assignment and Acceptance  

Exhibit B

   [Reserved]  

Exhibit C-l

   Form of Borrowing Request  

Exhibit C-2

   Form of Swingline Borrowing Request  

Exhibit D

   Form of Collateral Agreement  

Exhibit E

   Form of Guaranty Agreement  

Exhibit F

   Auction Procedures  

Exhibit G

   Tax Compliance Certificates

 

 

Schedule 1.01(b)

   Immaterial Subsidiaries  

Schedule 1.01(e)

   Agreed Security Principles  

Schedule 1.01(f)

   Foreign Security Documents and Foreign Pledge Agreements  

Schedule 1.01(g)

   Loan Parties  

Schedule 2.01

   Commitments and Lenders  

Schedule 3.01

   Organization and Good Standing  

Schedule 3.04

   Governmental Approvals  

Schedule 3.05(b)

   Liabilities/Long-Term Obligations  

Schedule 3.07(b)

   Possession under Leases  

Schedule 3.08(a)

   Subsidiaries  

Schedule 3.08(c)

   Subscriptions  

Schedule 3.12

   Notes  

Schedule 3.13

   Taxes  

Schedule 3.15

   Employee Benefit Plans  

Schedule 3.16

   Environmental Matters  

Schedule 3.18

   Real Property  

Schedule 3.20

   Labor Matters  

Schedule 3.21

   Insurance  

Schedule 3.24

   Holdings Indebtedness  

Schedule 5.17

   Post-Closing Matters  

Schedule 6.01

   Indebtedness  

Schedule 6.02(a)

   Liens  

Schedule 6.04

   Investments; Intercompany Loans  

Schedule 6.07

   Transactions with Affiliates  

Schedule 6.09(c)

   Contractual Encumbrances and Restrictions  

Schedule 9.01(a)(i)

   Loan Party Notice Information  

Schedule 9.01(a)(ii)

   Administrative Agent Notice Information

 

vi

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This CREDIT AGREEMENT (this “Agreement”), dated as of May 10, 2017, is made by
among AFFINION GROUP HOLDINGS, INC., a Delaware corporation (“Holdings”),
AFFINION GROUP, INC., a Delaware corporation (the “Borrower”), the Lenders (as
hereinafter defined) from time to time party hereto, HPS INVESTMENT PARTNERS,
LLC, as administrative agent (together with any successor administrative agent
appointed pursuant hereto, in such capacity, the “Administrative Agent”) and as
collateral agent (together with any successor collateral agent appointed
pursuant hereto, in such capacity, the “Collateral Agent”) for the Lenders.

WHEREAS, the Borrower has requested that the Lenders extend credit in the form
of (a) Term Loans on the Closing Date in an aggregate principal amount equal to
$1,340,000,000 and (b) Revolving Loans at any time and from time to time after
the Closing Date and prior to the Maturity Date in an aggregate principal amount
at any one time outstanding (when taken together with the face amount of Letters
of Credit and Swingline Loans then outstanding) not to exceed $110,000,000. The
proceeds of the Term Loans may be used on the Closing Date solely to fund the
Transactions. The proceeds of the Revolving Loans and Letters of Credit may be
used on or after the Closing Date to provide for ongoing working capital
requirements of the Borrower;

WHEREAS, on the Fifth Amendment Effective Date (a) Term Loans shall be prepaid
as contemplated in the Restructuring Support Agreement and (b) Revolving Loans
shall be prepaid and the Revolving Facility Commitments shall be reduced to
$85,000,000 as contemplated by the Restructuring Support Agreement;

WHEREAS, the Borrower and each other Loan Party desire to secure all of the
Obligations by granting to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in and Lien upon substantially all of the property
and assets of the Borrower and the other Loan Parties, subject to the
limitations described herein and in the Security Documents; and

WHEREAS, the Lenders are willing to extend such credit to the Borrower, and the
Issuing Banks are willing to issue, or cause Third Party LC Issuers to issue,
Letters of Credit for the account of the Borrower, in each case on the terms and
subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the above premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

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

“2017 Exchange” shall mean (x) the exchange of Senior Notes for 2017 Exchange
Notes and warrants to acquire common stock, par value $0.01 per share, of
Holdings or cash, (y) the exchange of Existing Holdings Notes for 2017 Exchange
Notes and warrants to

 

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acquire common stock, par value $0.01 per share, of Holdings or cash and (z) the
exchange of Affinion Investments Notes for 2017 Exchange Notes and warrants to
acquire common stock, par value $0.01 per share, of Holdings or cash, in each
case, pursuant to the terms of the 2017 Exchange Documents.

“2017 Exchange Documents’’ shall mean (i) the Support Agreement, dated March 31,
2017, among Holdings, the Borrower, Affinion International, Affinion Investments
and each significant holder party thereto from time to time (including the
exhibits and annexes thereto, the “Support Agreement”), (ii) the Investor
Purchase Agreement, (iii) the Offering Memorandum and Consent Solicitation
Statement, substantially in the form attached as Exhibit A to the Support
Agreement, relating to the 2017 Exchange (the “2017 Exchange OM”) and (iv) the
2017 Exchange Notes Documents.

“2017 Exchange Notes” shall mean the 12.50%/14.00% Senior PIK/Toggle Notes due
2022 to be issued by the Borrower pursuant to the 2017 Exchange.

“2017 Exchange Notes Documents” shall mean, collectively, the 2017 Exchange
Notes, the 2017 Exchange Notes Indenture and any documents, supplements,
instruments and agreements delivered in connection therewith.

“2017 Exchange Notes Indenture” shall mean the Indenture, dated as of May 10,
2017, among the Borrower, as issuer, the guarantors party thereto, and
Wilmington Trust, National Association, as trustee.

“2019 Term Lender” shall have the meaning set forth in the Fifth Amendment.

“2019 Term Loans” shall have the meaning set forth in the Fifth Amendment. The
aggregate principal amount of 2019 Term Loans outstanding as of Fifth Amendment
Effective Date is $[    ].1

“ABR” shall mean, for any day, a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Prime Rate in
effect on such date and (c) 2.00%.

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

“ABR Loan” shall mean any ABR Term Loan, any ABR Revolving Loan or any Swingline
Loan to the Borrower.

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

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

 

 

 

1

NTD: to be filled in on the Fifth Amendment Effective Date.

 

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

ABR Term Loan Borrowing” shall mean a Borrowing comprised of ABR Term Loans.

“Account Control Agreement” shall mean a tri-party deposit account, securities
account or commodities account control agreement by and among the applicable
Loan Party, the Collateral Agent and the depository, securities intermediary or
commodities intermediary, and each in form and substance reasonably satisfactory
to the Administrative Agent and in any event providing to the Collateral Agent
“control” of such deposit account, securities or commodities account within the
meaning of Articles 8 and 9 of the Uniform Commercial Code.

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

“Adjusted Eurocurrency Rate” shall mean for any Interest Period with respect to
a Eurocurrency Loan, a rate per annum equal to the higher of (a) 1.00 % and
(b) a rate per annum determined by the Administrative Agent pursuant to the
following formula:

 

Adjusted                      

Eurocurrency Base Rate

  

Eurocurrency Rate =

   1.00 - Eurocurrency Reserve Percentage   

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

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.12(c).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in a
form supplied by the Administrative Agent and any sub-agents.

“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 6.05, 6.07 and 9.04 the term
“Affiliate” shall also include any person that directly or indirectly owns 10%
or more of any class of Equity Interests of the person specified or that is an
officer or director of the Person.

“Affiliated Lender” shall mean any Affiliate of Holdings, the Borrower, their
respective Subsidiaries or the Permitted Holders (other than a natural Person,
or a holding company, investment vehicle or trust for or owned and operated for
the primary benefit of a natural Person, or Holdings, the Borrower and their
respective Subsidiaries).

“Affinion International” shall mean Affinion International Holdings Limited
(UK), a limited liability company incorporated in England and Wales and a
Subsidiary of the Borrower with registered number 03458969.

 

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“Affinion International Notes” shall mean the 7.5% Senior Notes due in 2018
issued by Affinion International pursuant to the Affinion International
Indenture.

“Affinion International Notes Documents” shall mean, collectively, the Affinion
International Notes, the Affinion International Notes Indenture and any
documents, supplements, instruments and agreements delivered in connection
therewith.

“Affinion International Notes Indenture” shall mean the Indenture, dated as of
the November 9, 2015, among, among others, Affinion International as issuer and
Wilmington Trust, National Association, as trustee.

“Affinion Investments” shall mean Affinion Investments LLC, a Delaware limited
liability company and a Wholly Owned Subsidiary of the Borrower.

“Affinion Investments IT” shall mean Affinion Investments II LLC (f/k/a
Connexions Loyalty LLC and prior to that, Affinion Loyalty LLC), a Delaware
limited liability company and a Wholly Owned Subsidiary of the Borrower.

“Affinion Investments Notes” shall mean the 13.50% Senior Subordinated Notes due
2018 issued by Affinion Investments pursuant to the Affinion Investments Notes
Indenture.

“Affinion Investments Notes Documents” shall mean, collectively, the Affinion
Investments Notes, the Affinion Investments Notes Indenture and any documents,
supplements, instruments and agreements delivered in connection therewith.

“Affinion Investments Notes Indenture” shall mean the Indenture, dated as of the
December 12, 2013, among Affinion Investments as issuer, Affinion Investments II
as guarantor and Wells Fargo Bank, National Association, as trustee.

“Agent Fee Letter” shall have the meaning assigned to such term in the
definition of “Fee Letters.”

“Agent Parties” shall have the meaning assigned to such term in Section 9.19(c).

“Agents” shall mean the collective reference to the lead arrangers, syndication
agents, documentation agents or bookrunners identified in the cover page hereto.

“Agreed Security Principles” shall mean the principles set forth on Schedule
1.01(e) attached hereto.

“Agreement” shall have the meaning assigned to such term in the preamble hereto,
as amended from time to time in accordance with the terms hereof.

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Affiliates concerning or
relating to bribery or corruption, including, without limitation: (a) the FCPA;
(b) the UK Bribery Act 2010; (c) any activity prohibited by any resolution of
the U.N. Security Council under Chapter VII of the U.N. Charter or the
Organization for Economic Cooperation and Development’s Good Practice

 

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Guidance on Internal Controls, Ethics, and Compliance; (d) any laws implementing
the principles described in the Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, signed in Paris on
17 December 1997, which entered into force on 15 February 1999, and the
Convention’s Commentaries; and (e) any other applicable anti-corruption or
anti-bribery laws.

“Applicable Insurance Laws and Regulations” shall mean any laws, rules and
regulations of any government or governmental authority or agency, including of
any Applicable Insurance Regulatory Authority, applicable to the Insurance
Business or the Insurance Subsidiaries.

“Applicable Insurance Regulatory Authority” shall mean, when used with respect
to any Insurance Subsidiary, the insurance department or similar administrative
authority or agency located in (x) the state or other jurisdiction in which such
Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory
jurisdiction over such Insurance Subsidiary, the insurance department, authority
or agency in each state or other jurisdiction in which such Insurance Subsidiary
is licensed, and shall include any Federal insurance regulatory department,
authority or agency that may be created in the future and that asserts
regulatory jurisdiction over such Insurance Subsidiary.

“Applicable Margin” shall mean for any day (a) (i) with respect to any Term Loan
and Non-Extended Term Loan, (x) 7.75% per annum in the case of Eurocurrency
Loans and (y) 6.75% per annum in the case of ABR Loans, (ii) with respect to any
Revolving Facility Loan (including each Swingline Loan), 7.75(x) 4.00% per annum
in the case of any Eurocurrency Loan,Loans and 6.75(y) 3.00% per annum in the
case of any ABR Loan, Loans, and (iii) with respect to any 2019 Term Loan, (x)
5.75% per annum in the case of Eurocurrency Loans, provided, that, with respect
to the 2019 Term Loans that are Eurocurrency Loans (A) from the Fifth Amendment
Effective Date through the third anniversary thereof, the Margin Cash Component
shall be 4.00% per annum and the Margin PIK Component shall be 1.75% per annum,
(B) thereafter through the fourth anniversary of the Fifth Amendment Effective
Date, the Margin Cash Component shall be 4.50% per annum and the Margin PIK
Component shall be 1.25% per annum and (C) thereafter, the Margin Cash Component
shall be 5.00% per annum and the Margin PIK Component shall be 0.75% per annum,
and (y) 4.75% per annum in the case of ABR Loans, provided, that, with respect
to the 2019 Term Loans that are ABR Loans (A) from the Fifth Amendment Effective
Date through the third anniversary thereof, the Margin Cash Component shall be
3.00% per annum and the Margin PIK Component shall be 1.75% per annum,
(B) thereafter through the fourth anniversary of the Fifth Amendment Effective
Date, the Margin Cash Component shall be 3.50% per annum and the Margin PIK
Component shall be 1.25% per annum and (C) thereafter, the Margin Cash Component
shall be 4.00% per annum and the Margin PIK Component shall be 0.75% per annum,
and (b) with respect to the Commitment Fee, 0.75% per annum.

“Applicable Percentage” shall mean, in respect of the Term Loans, with respect
to any Term Lender at any time, the percentage (carried out to the ninth decimal
place) of the Term Loans represented by (i) such Term Lender’s Term Loan
Commitment at such time and (ii) after the termination of such Term Lender’s
Term Loan Commitment, the principal amount of such Term Lender’s Term Loans at
such time, and in respect of the Revolving Facility Loans,

 

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with respect to any Revolving Facility Lender at any time, the percentage
(carried out to the ninth decimal place) of the Revolving Facility Loans
represented by such Revolving Facility Lender’s Revolving Facility Commitment at
such time. If the commitment of each Revolving Facility Lender to make Revolving
Facility Loans and the obligation of the Issuing Bank to make L/C Advances have
been terminated pursuant to Section 7.01, or if the Revolving Facility
Commitments have expired, then the Applicable Percentage of each Revolving
Facility Lender in respect of the Revolving Facility Loans shall be determined
based on the relative amounts of the Revolving Facility Exposures of such
Revolving Facility Lender in respect of the total Revolving Facility Exposure
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender in respect of each Tranche is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender becomes a party hereto, as applicable.

“Approved Fund’’ shall have the meaning assigned to such term in
Section 9.04(b).

“Asset Sale” shall mean any loss, damage, destruction or condemnation of, or any
sale, assignment, conveyance, exclusive license, transfer or other disposition
(including any sale and leaseback of assets and any mortgage, lease or sublease
of Real Property, or by merger, allocation of assets, division, consolidation or
amalgamation) to any person of any asset or assets of any of the Holdings, the
Borrower or any Subsidiary.

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

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent and the
Borrower (if required by Section 9.04), in the form of Exhibit A or such other
form as shall be approved by the Administrative Agent.

“Auction” shall have the meaning assigned to such term in Section 2.11(e).

“Auction Prepayment” shall have the meaning assigned to such term in
Section 2.11(e).

“Auction Procedures” shall mean the procedures set forth in Exhibit F hereto.

“Available Unused Commitment” shall mean, with respect to a Revolving Facility
Lender at any time, an amount equal to the amount by which (a) the aggregate
amount of the Revolving Facility Commitment of such Revolving Facility Lender at
such time exceeds (b) the Revolving Facility Exposure of such Revolving Facility
Lender at such time.

“Average Liquidity” shall mean, as of any date, the average, for the 20 calendar
day period ending on the day immediately prior to the applicable calculation
date, of the sum of (i) the aggregate Available Unused Commitment minus the face
amount of letters of credit issued pursuant to Section 6.01(s), plus
(ii) unrestricted cash (as determined in accordance with GAAP) of Holdings, the
Borrower and its Subsidiaries.

 

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

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

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States of America, or any successor thereto.

“Board of Directors” shall mean, as to any person, the board of directors or
managers, as applicable, of such person (or, if such person is a partnership,
the board of directors or other governing body of the general partner of such
person) or any duly authorized committee thereof.

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

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

“Borrowing” shall mean a group of Loans of a single Type, Class and currency and
made on a single date to a single Borrower and, in the case of Eurocurrency
Loans, as to which a single Interest Period is in effect

“Borrowing Minimum” shall mean $5,000,000; provided that with respect to
Swingline Loans only, shall mean $2,000,000.

“Borrowing Multiple” shall mean $1,000,000; provided that with respect to
Swingline Loans only, shall mean $100,000.

“Borrowing Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C-1.

“Bridges Purchase Agreement” shall mean that certain Membership Interest
Purchase Agreement, dated as of July 3, 2018, by and among AIS Holdco, LLC, as
purchaser and Affinion Group, LLC, as seller, Affinion Group, Inc. as seller
parent and Affinion Benefits Group, LLC as the company, as amended, supplemented
or otherwise modified in a manner that is not materially adverse to the Lenders.

“Bridges Sale” shall mean the disposition consummated pursuant to the Bridges
Purchase Agreement.

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

 

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“Capital Expenditures” shall mean, for any person in respect of any period,
without duplication, the aggregate of all expenditures incurred for any purchase
or other acquisition of any asset, including capitalized leasehold improvements,
which would be classified as a fixed or capital asset on a consolidated balance
sheet of such Person prepared in accordance with GAAP or are or should be
included in “additions to property, plant or equipment” or similar items
reflected in the statement of cash flows of such person; provided, however, that
Capital Expenditures shall not include:

(a)    expenditures with funds that would have constituted Net Proceeds under
clause (a) of the definition of the term “Net Proceeds’’ but for the application
of the first proviso to such clause (a);

(b)    expenditures with proceeds of insurance settlements, condemnation awards
and other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or other property to the extent such expenditures are made to
replace or repair such lost, destroyed, damaged or condemned assets, equipment
or other property or otherwise to acquire, maintain, develop, construct,
improve, upgrade or repair assets or properties useful in the business of the
Borrower and the Subsidiaries within 12 months of receipt of such proceeds;

(c)    interest capitalized during such period;

(d)    expenditures that are accounted for as capital expenditures of such
person and that actually are paid for by a third party (excluding Holdings, the
Borrower or any Subsidiary) and for which none of Holdings, the Borrower or any
Subsidiary has provided or is required to provide or incur or is otherwise
liable for, directly or indirectly, any consideration or obligation to such
third party or any other person (whether before, during or after such period);

(e)    the book value of any asset owned by such person prior to or during such
period to the extent that such book value is included as a capital expenditure
during such period as a result of such person reusing or beginning to reuse such
asset during such period without a corresponding expenditure actually having
been made in such period; provided, that (i) any expenditure necessary in order
to permit such asset to be reused shall be included as a Capital Expenditure
during the period that such expenditure actually is made and (ii) such book
value shall have been included in Capital Expenditures when such asset was
originally acquired;

(f)    the purchase price of equipment purchased during such period to the
extent that the consideration therefor consists of any combination of (i) used
or surplus equipment traded in at the time of such purchase and (ii) the
proceeds of a concurrent sale of used or surplus equipment, in each case, in the
ordinary course of business; or

(g)    Investments in respect of a Permitted Business Acquisition.

 

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“Capital Lease” shall mean, with respect to any person, any lease of, or other
arrangement conveying the right to use, any property by such Person as lessee
that are required to be accounted for as a capital lease on a balance sheet of
such person prepared in accordance with GAAP.

“Capital Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any Capital Lease, and, for purposes
hereof, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.

“Cash Collateralize” shall mean to pledge and deposit with or deliver to the
Collateral Agent, for the benefit of the Administrative Agent, any applicable
Issuing Bank or any applicable Swingline Lender (as applicable) and the Lenders,
as collateral for unreimbursed L/C Disbursements, Obligations in respect of
Swingline Loans, or obligations of Lenders to fund participations in respect of
either thereof (as the context may require), cash or deposit account balances
or, if the applicable Issuing Bank or applicable Swingline Lender benefitting
from such collateral shall agree in its sole discretion, other credit support,
in each case pursuant to documentation in form and substance satisfactory to
(a) the Administrative Agent and (b) the applicable Issuing Bank or the
applicable Swingline Lender (as applicable). “Cash Collateral” shall have a
meaning correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.

“Cash Interest Expense” shall mean, with respect to any person on a consolidated
basis for any period, Interest Expense for such period, less, without
duplication, the sum of (a) pay-in-kind Interest Expense or other noncash
Interest Expense (including as a result of the effects of purchase accounting),
(b) to the extent included in Interest Expense, the amortization of any
financing fees paid by, or on behalf of, Holdings, the Borrower or any
Subsidiary, including such fees paid in connection with the Transactions,
(c) the amortization of debt discounts, if any, or fees in respect of Swap
Agreements and (d) cash interest income of Holdings, the Borrower and the
Subsidiaries for such period; provided, that Cash Interest Expense shall exclude
any one-time financing fees paid in connection with the Transactions or one-time
amendment fees paid in connection with any amendment of this Agreement.

“CFC” shall mean a “controlled foreign corporation” pursuant to Section 957 of
the Code.

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

(a)    a majority of the seats (other than vacant seats) on the Board of
Directors of Holdings shall at any time be occupied by persons who were neither
(a) nominated by the Board of Directors of Holdings or a Permitted Holder, nor
(b) appointed by directors so nominated; or

(b)    a “change of control” shall occur under or with respect to any Junior
Indebtedness constituting Material Indebtedness or any Permitted Refinancing
Indebtedness in respect of any of the foregoing; or

 

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(c)    Holdings shall fail to own, directly or indirectly, beneficially and of
record, 100% of all issued and outstanding Equity Interests of the Borrower;

(d)    any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) other than
the Permitted Holders becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the Equity Interests of Holdings entitled to
vote for members of the board of directors or equivalent governing body of such
person on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right); or

(e)    upon the sale or disposition of all or substantially of the property and
assets or business of the Borrower and its Subsidiaries, taken as a whole (in
one transaction or a series of transactions) to any Person, other than to a
Subsidiary Loan Party pursuant to a transaction expressly permitted by this
Agreement.

“Change in Law” shall mean the occurrence, after the date of this Agreement or,
if later, the date on which the applicable Lender becomes a Lender hereunder, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation, implementation or application thereof by
any Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) 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 requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or 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.

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

“Closing Date” shall mean May 10, 2017.

“COC Make Whole Premium Amount” shall mean, with respect to any Non-Extended
Term Loan subject to a COC Payment Event, on any date of calculation, the excess
of (i) (x) the prepayment price to prepay in full the principal amount of such
Non-Extended Term Loan (including any prepayment premium payable pursuant to
Section 2.12(e)) on the day immediately following the first anniversary of the
Closing Date plus (y) the present value on such date of all interest that would
have accrued on such Non-Extended Term Loan from the

 

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date of calculation through the date immediately following the first anniversary
of the Closing Date (excluding accrued but unpaid interest to the date of such
calculation) computed using a discount rate equal to the Treasury Rate as of
such calculation date plus 50 basis points over (ii) the then outstanding
principal amount of such Non-Extended Term Loans.

“COC Payment Event” shall have the meaning specified in Section 2.12(e).

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

“Collateral’’ shall mean all “Collateral’’ and “Mortgaged Property” referred to
in the Security Documents (including the Mortgaged Properties) and all other
property that is or is intended to be subject to any Lien in favor of the
Administrative Agent for the benefit of the Lenders.

“Collateral Access Agreement” shall mean a landlord waiver or other agreement,
in a form as shall be reasonably satisfactory to the Collateral Agent, between
the Collateral Agent and any third party (including any bailee, consignee,
customs broker, or other similar Person) in possession of any Collateral or any
landlord of any premises where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, or otherwise modified from
time to time.

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

“Collateral Agreement” shall mean the Collateral Agreement, in the form of
Exhibit D, as amended, supplemented or otherwise modified from time to time,
among Holdings, the Borrower, each Subsidiary Loan Party and the Collateral
Agent.

“Collateral and Guarantee Requirement” shall mean, at any time, subject to the
Agreed Security Principles, the requirement that:

(a)    the Administrative Agent shall have received (i) from Holdings, the
Borrower and each other Subsidiary Loan Party a counterpart of the Collateral
Agreement, duly executed and delivered on behalf of each such person party
thereto, (ii) from Holdings, the Borrower and each Loan Party a counterpart of
the Guaranty Agreement, duly executed and delivered on behalf of each such
person party thereto, and (iii) on the Closing Date, the Foreign Security
Documents listed on Schedule 1.01(f);

(b)    all outstanding Equity Interests of the Borrower, all other outstanding
Equity Interests directly owned by any Loan Party (other than the Equity
Interests of an Insurance Subsidiary to the extent that a pledge of such Equity
Interests violates applicable law), and all Indebtedness owing to any Loan Party
(other than intercompany indebtedness, which is governed by clause (c) below)
shall have been pledged pursuant to the Collateral Agreement (or other
applicable Security Document) and the Administrative Agent shall have received
certificates or other instruments representing or evidencing all such Equity
Interests (other than (i) uncertificated Equity Interests, (ii) Equity Interests
issued by Foreign Subsidiaries organized under the laws of a

 

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jurisdiction where receipt of such certificates or other instruments is not
effective to perfect security interests in such Equity Interests and
(iii) Equity Interests issued by a Foreign Subsidiary organized under the laws
of an Excluded Jurisdiction) and any notes or other instruments representing
such Indebtedness in excess of $5,000,000, together with stock powers, note
powers or other instruments of transfer with respect thereto endorsed in blank,
provided, that, (x) unless otherwise agreed by the Borrower and the
Administrative Agent in any given case, in no event shall more than 65% of the
issued and outstanding voting Equity Interests of any Excluded Foreign
Subsidiary be pledged to secure Obligations of the Loan Parties and (y) the only
Foreign Pledge Agreements required to be executed on the Closing Date shall be
those set forth on Schedule 1.01(f);

(c)    (i) all Indebtedness of Holdings, the Borrower and each Subsidiary (other
than (x) intercompany Indebtedness incurred in the ordinary course of business
in connection with the cash management operations and intercompany sales of the
Borrower and each Subsidiary, (y) any Indebtedness not exceeding $1,000,000 and
(z) to the extent that a pledge of such promissory note or instrument would
violate applicable law) that is owing to any Loan Party shall be evidenced by a
promissory note or an instrument in form satisfactory to the Administrative
Agent and shall have been pledged pursuant to the Collateral Agreement (or other
applicable Security Document), and (ii) the Administrative Agent shall have
received all such promissory notes or instruments, together with note powers or
other instruments of transfer with respect thereto endorsed in blank (other than
with respect to any such intercompany debt the perfection of the pledge of which
is not achieved by delivery to the Administrative Agent);

(d)    except as otherwise contemplated by any Security Document or elsewhere in
this definition of Collateral and Guarantee Requirement (including with regard
to deposit accounts), all documents and instruments, (including, in the United
States of America, filings of Uniform Commercial Code financing statements and
filings with the United States Copyright Office and the United States Patent and
Trademark Office) and all other actions required by law or reasonably requested
by the Administrative Agent to be filed, registered or recorded to create the
Liens intended to be created by the Security Documents (in each case, including
any supplements thereto) and perfect such Liens to the extent required by, and
with the priority required by, the Security Documents shall have been filed,
registered or recorded or delivered to the Administrative Agent for filing,
registration or the recording or taken concurrently with, or promptly following,
the execution and delivery of each such Security Document;

(e)    except as set forth pursuant to any Security Document, each Loan Party
shall have obtained all consents and approvals required to be obtained by it in
connection with (i) the execution and delivery of all Security Documents (or
supplements thereto) to which it is a party and the granting by it of the Liens
thereunder and (ii) the performance of its obligations thereunder;

(f)    subject to Section 5.11(g), in the case of any person that (i) becomes a
Loan Party after the Closing Date, the Administrative Agent shall have received
from such Loan Party, (A) a supplement or joinder to each of the Guaranty
Agreement and the Collateral Agreement (other with respect to Foreign Subsidiary
Loan Parties), in the form

 

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specified therein, duly executed and delivered on behalf of such person,
(B) with respect to any Foreign Pledge Agreement that the Administrative Agent
determines, based on the advice of counsel, to be necessary or advisable in
connection with the pledge of Equity Interests or Indebtedness of a Foreign
Subsidiary (other than a pledge of Equity Interests of any Foreign Subsidiary
that is not directly owned by it, that is an Immaterial Subsidiary or that is
organized under the laws of an Excluded Jurisdiction) owned by such Loan Party,
a counterpart thereof, duly executed and delivered on behalf of such person,
(C) with respect to any Foreign Security Document that the Administrative Agent
determines, based on the advice of counsel, to be necessary or advisable in
connection with the pledge of assets owned by such Foreign Subsidiary Loan
Party, a counterpart thereof, duly executed and delivered on behalf of such
person, (D) such other Security Documents as may be required to be delivered
pursuant to Section 5.11, and (E) evidence that any other requirements of
Section 5.11 shall have been complied with and (ii) becomes such a Subsidiary
Loan Party, the Administrative Agent shall have received from the parent of such
Subsidiary Loan Party, (A) supplements to the applicable Security Documents
pursuant to which it shall have pledged the Equity Interests in the other
Subsidiaries owned by it, or other Security Documents, effecting the pledge of
such Equity Interests in favor of the Administrative Agent, subject to the same
exceptions and limitations as set forth in paragraph (c) above and clause (i)(B)
above and (B) certificates and instruments representing or evidencing such
Equity Interests, subject to the same exceptions and limitations as set forth in
paragraph (c) above; and

(g)    other than (i) an aggregate amount of not more than $2,000,000 at any one
time, in the case of any Loan Party, (ii) zero balance accounts, (iii) accounts
used exclusively to hold funds that are earmarked for the payment of taxes,
(iv) amounts deposited into deposit accounts exclusively used for payroll,
payroll Taxes and other employee wage and benefit payments to or for the
Borrower or Borrower’s Subsidiaries’ employees, (v) any deposit account or
securities account for the sole purpose of holding cash that serves as
collateral or security under a letter of credit or other obligation not
prohibited by any Loan Document, (vi) fiduciary accounts required to be
maintained by any regulatory or quasi-regulatory body and (vii) deposit accounts
and securities account outside of the United States or owned by a Foreign
Subsidiary; make, acquire, or permit to exist Permitted Investments consisting
of cash, cash equivalents, or amounts credited to deposit accounts or securities
accounts unless such Person and the applicable bank or securities intermediary
have entered into Account Control Agreements with the Collateral Agent governing
such Permitted Investments in order to perfect (and further establish)
Collateral Agent’s Liens in such Permitted Investments. Except as provided
herein, no Loan Party shall maintain any deposit account or securities account
unless the Collateral Agent shall have received an Account Control Agreement in
respect of such deposit account or securities account.

Notwithstanding the foregoing, the Guaranty Agreement and the Security Documents
shall provide that the obligations of any Foreign Subsidiary Loan Party under
such agreements shall be subject to the limitations set forth in the Agreed
Security Principles.

 

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“Commitment Fee” shall have the meaning assigned to such term in
Section 2.12(a).

“Commitments” shall mean (a) with respect to any Lender, such Lender’s Revolving
Facility Commitment and/or Term Loan Commitment, (b) with respect to any
Swingline Lender, such Swingline Lender’s Swingline Commitment and (c) with
respect to any Issuing Bank, such Issuing Bank’s L/C Commitment.

“Communications” shall have the meaning assigned to such term in
Section 9.19(a).

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

“Consolidated Debt” at any date shall mean the sum of (without duplication) all
Indebtedness (other than letters of credit, to the extent undrawn) consisting of
Capital Lease Obligations, bankers’ acceptances, Indebtedness for borrowed
money, Disqualified Stock and Indebtedness in respect of the deferred purchase
price of property or services of the Borrower and the Subsidiaries determined on
a consolidated basis on such date; provided that, the amount of Consolidated
Debt shall be reduced by the face amount of letters of credit issued and
outstanding pursuant to Section 6.01(s).

“Consolidated Fixed Charge Coverage Ratio” shall mean, on any date, the ratio of
(a) EBITDA for such Test Period calculated on a Pro Forma Basis minus Capital
Expenditures for such Test Period to (b) Consolidated Fixed Charges paid in cash
for such Test Period (solely with respect to the Bridges Sale, giving pro forma
effect thereto with respect to reduced cash interest expenses).

“Consolidated Fixed Charges” shall mean, with respect to the Borrower and the
Subsidiaries on a consolidated basis for any period, the sum, without
duplication, of:

(a)    the consolidated interest expense (net of interest income) to the extent
it relates to Indebtedness of the Borrower and the Subsidiaries for such period,
and to the extent such expense was deducted in computing Consolidated Net
Income, whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers’ acceptance financings, and net of the effect of all payments made or
received pursuant to obligations under any Swap Agreement, but excluding the
amortization or write-off of deferred financing fees or expenses of any bridge
or other financing fee in connection with the Transactions; plus

(b)    provision for cash income taxes made by Borrower and its Subsidiaries on
a consolidated basis in respect of such Test Period; plus

 

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(c)    to the extent payable in cash, any interest expense on Indebtedness of
another person that is Guaranteed by the Borrower and the Subsidiaries or
secured by a Lien on assets of the Borrower and the Subsidiaries, whether or not
such Guarantee or Lien is called upon; plus

(d)    scheduled payments made or payable during such period on account of
principal of Indebtedness of the Borrower and its Subsidiaries (including
scheduled principal payments in respect of the Term Loans),

in each case, on a consolidated basis and in accordance with GAAP.

For purposes of determining Consolidated Fixed Charges for any period that
includes the quarterly periods ending September 30, 2016, December 31, 2016,
March 31, 2017 and June 30, 2017, the Consolidated Fixed Charges for such
quarterly periods shall be $34,630,672, $34,491,747, $34,089,750 and
$37,066,032, respectively.

“Consolidated Leverage Ratio” shall mean, on any date, the ratio of
(a) Consolidated Debt as of such date to (b) EBITDA for the period of four
consecutive fiscal quarters of the Borrower most recently ended and Reported as
of such date, all determined on a consolidated basis in accordance with GAAP;
provided, that EBITDA shall be determined for the applicable Test Period on a
Pro Forma Basis.

“Consolidated Net Income” shall mean, with respect to any person for any period,
the aggregate of the Net Income of such person and its subsidiaries for such
period, on a consolidated basis, plus the amount that the provision for taxes
exceeds cash taxes paid by such person and its Subsidiaries in such period;
provided, however, that, without duplication,

(a)    [reserved];

(b)    any increase in amortization or depreciation or any one-time non-cash
charges resulting from purchase accounting in connection with any acquisition
that is consummated on or after the Closing Date shall be excluded;

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

(d)    any net after-tax gains or losses on disposal of discontinued operations
shall be excluded;

(e)    any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset dispositions
other than in the ordinary course of business (as determined in good faith by
senior management or the Board of Directors of the Borrower) shall be excluded;

(f)    any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of (i) indebtedness,
and (ii) Swap Agreements and other derivative instruments to the extent that
such gains or losses have been realized by the Borrower, in each case, shall be
excluded;

 

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(g)    the Net Income for such period of any person that is not a subsidiary of
such person, or that is accounted for by the equity method of accounting, shall
be included only to the extent of the amount of dividends or distributions or
other payments actually paid in cash (or to the extent converted into cash) to
the referent person or a subsidiary thereof in respect of such period;

(h)    the Net Income for such period of any subsidiary of such person shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by such subsidiary of its Net Income is not at the date of
determination permitted without any prior governmental approval (which has not
been obtained) or, directly or indirectly, by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such subsidiary or its equity holders,
unless such restrictions with respect to the payment of dividends or similar
distributions have been legally waived; provided that the Consolidated Net
Income of such person shall be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or converted into cash)
by any such subsidiary to such person or a subsidiary of such person (subject to
the provisions of this clause (h), to the extent not already included therein;

(i)    any non-cash impairment charge or asset write-off resulting from the
application of Statement of Financial Accounting Standards No. 142 and 144, and
the amortization of intangibles arising pursuant to No. 141, shall be excluded;

(j)    any non-cash expenses realized or resulting from employee benefit plans
or post employment benefit plans, long-term incentive plans or grants of stock
appreciation or similar rights, stock options, restricted stock or other rights
to officers, directors and employees of such person or any of its Subsidiaries
shall be excluded;

(k)    any one-time non-cash compensation charges shall be excluded;

(l)    non-cash gains, losses, income and expenses resulting from fair value
accounting required by Statement of Financial Accounting Standards No. 133 and
related interpretations shall be excluded;

(m)    [reserved];

(n)    [reserved];

(o)    any currency translation gains and losses realized from currency
remeasurements of Indebtedness, and any net loss or gain realized from any Swap
Agreements for currency exchange risk, in each case, that are actually paid in
cash, shall be excluded; and

 

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(p) (i) the non-cash portion of “straight-line” rent expense shall be excluded
and (ii) the cash portion of “straight-line” rent expense which exceeds the
amount expensed in respect of such rent expense shall be included.

“Consolidated Total Assets” shall mean, as of any date, the total assets of the
Borrower and the Subsidiaries, determined on a consolidated basis in accordance
with GAAP, as set forth on the consolidated balance sheet of the Borrower as of
the last day of the fiscal quarter most recently ended and Reported.

“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
“Controlling" and “Controlled” shall have meanings correlative thereto.

“Credit Event” shall have the meaning assigned to such term in Article IV.

“Credit Facilities” shall mean, collectively, (i) the revolving credit
facilities represented by the Revolving Facility Commitments, (ii) the swingline
facility provided pursuant to Section 2.04 evidenced by the Swingline
Commitments (and the related Swingline Loans and other Swingline Exposure),
(iii) the letter of credit facility provided pursuant to Section 2.05 (and the
related Letters of Credit and other L/C Exposure), and (iv) the term facility
represented by the Term Loans.

“Current Assets” shall mean, with respect to the Borrower and the Subsidiaries
on a consolidated basis at any date of determination, all assets (other than
cash and Permitted Investments or other cash equivalents) that would, in
accordance with GAAP, be classified on a consolidated balance sheet of the
Borrower and the Subsidiaries as current assets at such date of determination,
other than amounts related to current or deferred Taxes based on income or
profits.

“Current Liabilities” shall mean, with respect to the Borrower and the
Subsidiaries on a consolidated basis at any date of determination, all
liabilities that would, in accordance with GAAP, be classified on a consolidated
balance sheet of the Borrower and the Subsidiaries as current liabilities at
such date of determination, other than (a) the current portion of any
Indebtedness, (b) accruals of Interest Expense (excluding Interest Expense that
is due and unpaid), (c) accruals for current or deferred Taxes based on income
or profits, (d) accruals, if any, of transaction costs resulting from the
Transactions, (e) accruals of any costs or expenses related to (i) severance or
termination of employees prior to the Closing Date or (ii) bonuses, pension and
other post-retirement benefit obligations, and (f) accruals for add-backs to
EBITDA included in clause (a)(iv) of the definition of such term.

“Debt Service” shall mean, with respect to Holdings, the Borrower and the
Subsidiaries on a consolidated basis for any period, Cash Interest Expense for
such period plus scheduled principal amortization of Consolidated Debt for such
period.

“Debtor Relief Laws” shall mean Title 11 of the United States Code entitled
“Bankruptcy” as now and hereafter in effect, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States of America or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

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

“Defaulting Lender” shall mean, subject to Section 2.23(b), any Lender that, as
determined by the Administrative Agent, (a) has failed to perform any of its
funding obligations hereunder, including in respect of its Loans or
participations in respect of Letters of Credit or Swingline Loans, within three
Business Days of the date required to be funded by it hereunder, (b) has
notified the Borrower or the Administrative Agent that it does not intend to
comply with its funding obligations or has made a public statement to that
effect with respect to its funding obligations hereunder or under other
agreements in which it commits to extend credit, (c) has failed, within three
Business Days after request by the Administrative Agent, to confirm in a manner
satisfactory to the Administrative Agent that it will comply with its funding
obligations, 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, (ii) had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar person charged with reorganization or liquidation of its
business or a custodian appointed for it, or (iii) taken any action in
furtherance of, or indicated its consent to, approval of or acquiescence in any
such proceeding or appointment; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority.

“Disqualified Stock” shall mean, with respect to any person, any Equity
Interests of such person that, by their terms (or by the terms of any security
into which such Equity Interests are convertible or for which such Equity
Interests are redeemable or exchangeable), or upon the happening of any event,
(i) mature or are mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (other than as a result of a change of control or asset sale),
(ii) are convertible or exchangeable other than at the option of the issuer
thereof for Indebtedness or Disqualified Stock or (iii) are redeemable at the
option of the holder thereof (other than upon the occurrence of a Change in
Control (or similar event), sale or disposition of all or substantially all of
the assets of the Borrower and its Subsidiaries, or the acceleration of the
Loans, subject, in each case, to the prior payment in full in cash of all
Obligations), in whole or in part, in each case prior to 91 days after the
Latest Maturity Date; provided, however, that only the portion of the Equity
Interests that so mature or are mandatorily redeemable, are so convertible or
exchangeable or are so redeemable at the option of the holder thereof prior to
such date shall be deemed to be Disqualified Stock; provided, further, that if
such Equity Interests are issued to any employee or to any plan for the benefit
of employees of the Borrower or the Subsidiaries or by any such plan to such
employees, such Equity Interests shall not constitute Disqualified Stock solely
because they may be required to be repurchased by the Borrower in order to
satisfy applicable statutory or regulatory obligations or as a result of such
employee’s termination, death or disability; provided, still further, that any
class of Equity Interests of such person that by its terms authorizes such
person to satisfy its obligations thereunder by delivery of Equity Interests
that are not Disqualified Stock shall not be deemed to be Disqualified Stock.

 

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“Dividends” shall have the meaning assigned to such term in Section 6.06.

“Dollar” and “$” shall mean lawful money of the United States.

“Domestic Subsidiary” shall mean any Subsidiary that is not a Foreign
Subsidiary.

“EBITDA” shall mean, with respect to the Borrower and the Subsidiaries on a
consolidated basis for any period, the Consolidated Net Income of the Borrower
and the Subsidiaries for such period (without giving effect to the amount added
to Net Income in calculating Consolidated Net Income for the excess of the
provision for taxes over cash taxes) plus (a) the sum of without duplication:

(i) to the extent deducted or otherwise excluded in calculating Consolidated Net
Income for such period, provision for taxes based on income, profits or capital
of the Borrower and the Subsidiaries for such period, without duplication,
including, without limitation, state franchise and similar taxes, and including
an amount equal to the amount of tax distributions actually made to the holders
of Equity Interests of the Borrower and the Subsidiaries in respect of such
period in accordance with Section 6.06(b), which shall be included as though
such amounts had been paid as income taxes directly by the Borrower or any
Subsidiary; plus

(ii) to the extent deducted or otherwise excluded in calculating Consolidated
Net Income for such period, Consolidated Fixed Charges of the Borrower and the
Subsidiaries for such period; plus

(iii) to the extent deducted or otherwise excluded in calculating Consolidated
Net Income for such period, depreciation, amortization (including amortization
of intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such non-cash
charges or expenses to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of the Borrower and the Subsidiaries for such
period; plus

(iv) to the extent deducted or otherwise excluded in calculating Consolidated
Net Income for such period, the amount of any business optimization expenses and
restructuring charges or expenses (which, for the avoidance of doubt, shall
include office and plant closures, facility consolidations, retention payments
and special supplemental bonuses payable, exit costs, severance payments,
systems establishment costs or excess pension charges); provided, that the
aggregate total amount of all such restructuring charges and expenses that are
actually paid in cash that may be added back, under this clause (iv) shall not
exceed (A) for any Test Period ending on or prior to December 31, 2018, the
greater of $12,375,000 and 7.5% of EBITDA for the relevant Test Period prior to
giving effect to such addback and (B) with respect to any Test Period ending
thereafter,15,000,000 and 7.5% of EBITDA for the relevant Test Period prior to
giving effect to such addback; plus

 

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(v) any net after-tax extraordinary or nonrecurring or unusual losses, expenses
or charges; provided that (A) for any Test Period ending on or prior to December
31, 2018, the aggregate total amount of all such losses, expenses, charges and
fees consisting of legal fees, fines and legal settlements that may be added
back pursuant to this clause (v) shall not exceed (x) $16,500,000 for the
relevant Test Period or (y) $33,000,000 in the aggregate during the term of this
Agreement and (B) with respect to any Test Period ending thereafter, the
aggregate total amount of any net after tax extraordinary or nonrecurring or
unusual losses, expenses or charges added back pursuant to this clause (v) shall
not exceed 10.0% of EBITDA for the relevant Test Period prior to giving effect
to such addback; plus

(vi) [reserved]; plus

(vii) any expenses or charges (other than depreciation or amortization expense
as described in the preceding clause (iii)) related to any issuance of Equity
Interests, Investment, acquisition, disposition, recapitalization or the
incurrence, modification or repayment of Indebtedness permitted to be incurred
by this Agreement (including a refinancing thereof) (whether or not successful),
including (x) such fees, expenses or charges related to (x) the offering of the
2017 Exchange Notes and the Obligations, and (y) the Restructuring Transactions
(to the extent such fees, expenses or charges are paid within 180 days after the
Fifth Amendment Effective Date), and (z) any amendment or other modification of
the Obligations or other Indebtedness; plus

(viii) non-cash gains and losses with respect to Swap Agreements and other
derivative instruments; plus

(ix) non-cash currency translation gains and losses related to currency
remeasurements of Indebtedness, and any net non-cash loss or gain resulting from
any Swap Agreement for currency exchange risk; minus

(b) the sum of (i) non-cash items increasing such Consolidated Net Income for
such period (excluding the recognition of deferred revenue or any non-cash items
which represent the reversal of any accrual of, or reserve for, anticipated cash
charges in any prior period and any items for which cash was received in any
prior period); and (ii) any net after-tax extraordinary or nonrecurring or
unusual gains or income (including for the avoidance of doubt, cancellation of
debt income in connection with the Transactions or otherwise);

in each case, on a consolidated basis and determined in accordance with GAAP.

 

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Notwithstanding the preceding, the provision for taxes based on the income or
profits of, the Consolidated Fixed Charges of, the depreciation and amortization
and other non-cash expenses or non-cash items of and the restructuring charges
or expenses of, a Subsidiary of the Borrower will be added to (or subtracted
from, in the case of non-cash items described in clause (b) above) Consolidated
Net Income to compute EBITDA, (A) in the same proportion that the Net Income of
such Subsidiary was added to compute such Consolidated Net Income of the
Borrower, and (B) only to the extent that a corresponding amount of the Net
Income of such Subsidiary would be permitted at the date of determination to be
dividended or distributed to the Borrower by such Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.

Notwithstanding the foregoing, contract termination fees shall be disregarded
for purposes of calculating EBITDA.

For purposes of determining EBITDA for any period that includes the quarterly
periods ending September 30, 2016 and December 31, 2016, EBITDA for such
quarterly periods shall be $62,775,879 and $55,832,903, respectively.

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

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

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

“Effective Yield” shall mean, as to any Loans of any Class or other
Indebtedness, the effective yield on such Loans or other Indebtedness as
determined by the Administrative Agent, taking into account the applicable
interest rate margins, any interest rate floors or similar devices and all fees,
including upfront or similar fees or original issue discount (amortized over the
shorter of (x) the life of such Loans or other Indebtedness and (y) four years
following the date of incurrence thereof) payable generally to Lenders making
such Loans or lenders providing such other Indebtedness, but excluding any
arrangement, structuring or other fees payable in connection therewith that are
not generally shared with the relevant Lenders or other applicable other lenders
and customary consent fees paid generally to consenting Lenders or applicable
other lenders. All such determinations made by the Administrative Agent shall,
absent manifest error, be final, conclusive and binding on the Borrowers and the
Lenders and the Administrative Agent shall have no liability to any person with
respect to such determination absent gross negligence or willful misconduct.

“EMU Legislation” shall mean the legislative measures of the European Union for
the introduction of, changeover to or operation of the euro in one or more
member states.

 

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

“Environmental Laws” shall mean all applicable laws (including common law),
rules, regulations, codes, ordinances, orders, decrees, directives, judgments,
injunctions, notices or binding agreements issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the generation, management,
Release or threatened Release of, or exposure to, any Hazardous Material or to
health and safety matters (to the extent relating to the environment or
Hazardous Materials).

“Equity Interests" of any person shall mean any and all shares, interests,
membership interests, rights to purchase or otherwise acquire, warrants,
options, participations or other equivalents of or interests in (however
designated) equity or ownership of such person, including any preferred stock,
any limited or general partnership interest and any limited liability company
membership interest, and any securities or other rights or interests convertible
into or exchangeable for any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and any
successor thereto.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with Holdings, the Borrower or a Subsidiary, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely for purposes
of Section 302 or 303 of ERISA or Section 412 or 430 of the Code, is treated as
a single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any Reportable Event; (b) the failure to meet the
minimum funding standard of Sections 412 or 430 of the Code or Sections 302 or
303 of ERISA with respect to any Plan, whether or not waived; (c) the filing
pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the failure to make by its due date a required contribution under
Section 412(m) of the Code with respect to any Plan; (e) the failure to make any
required contribution to a Multiemployer Plan; (f) the incurrence by Holdings,
the Borrower, a Subsidiary or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Plan; (e) the receipt by
Holdings, the Borrower, a Subsidiary or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention, or the institution by
the PBGC of proceedings, to terminate any Plan or to appoint a trustee to
administer any Plan; (g) the incurrence by Holdings, the Borrower, a Subsidiary
or any ERISA Affiliate of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by
Holdings, the Borrower, a Subsidiary or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from Holdings, the Borrower, a Subsidiary
or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
(I) in “critical” or “endangered” status under Section 432 of the Code or
Section 305 of ERISA, (II) in “at risk” status (as defined in Section 430 of the
Code or Section 303 of ERISA) or (III) insolvent within the meaning of Title IV
of ERISA.

 

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

“euro” or “€” shall mean the currency constituted by the Treaty on the European
Union and as referred to in the EMU Legislation.

“Eurocurrency Base Rate” shall mean, for such Interest Period, the rate per
annum equal to the ICE Benchmark Administration LIBOR Rate (“LIBOR” ), as
published by Reuters (or other commercially available source providing
quotations of LIBOR as designated by the Administrative Agent from time to time)
at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period (such rate the, “LIBO Screen Rate”). If the LIBO Screen Rate is not
available at such time for any reason for such Interest Period (an “Impacted
Interest Period”), then the “Eurocurrency Base Rate” for such Interest Period
shall be the Interpolated Rate. If such Interpolated Rate is unavailable at such
time for any reason, then LIBOR for such Interest Period shall be the rate per
annum determined by Administrative Agent to be the rate per annum equal to the
offered quotation rate for first class banks in the London interbank market for
deposits (for delivery on the first day of the relevant period) in Dollars of
amounts in same day funds comparable to the principal amount of the applicable
Eurocurrency Loan of 3 major London banks for which LIBOR is then being
determined with maturities comparable to such Interest Period as of
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of such Interest Period, which determination shall be conclusive
absent manifest error.

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

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

“Eurocurrency Reserve Percentage” shall mean, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as “Eurocurrency Liabilities”). The Adjusted Eurocurrency Rate for
each outstanding Eurocurrency Loan shall be adjusted automatically as of the
effective date of any change in the Eurocurrency Reserve Percentage.

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

 

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

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

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

“Excess Cash Flow” shall mean, with respect to the Borrower and the Subsidiaries
on a consolidated basis for any Excess Cash Flow Period, EBITDA of the Borrower
and the Subsidiaries on a consolidated basis for such Excess Cash Flow Period,
minus, without duplication,

(a) Debt Service for such Excess Cash Flow Period, reduced by the aggregate
principal amount of voluntary prepayments of Consolidated Debt (other than
prepayments of the Loans) that would otherwise constitute scheduled principal
amortization during such Excess Cash Flow Period;

(b) the amount of any voluntary prepayment permitted hereunder of term
Indebtedness (other than any Term Loans) during such Excess Cash Flow Period, in
each case to the extent not financed, or intended to be financed, using the
proceeds of, without duplication, the incurrence of Indebtedness, the sale or
issuance of any Equity Interests or any Net Proceeds not otherwise required to
prepay the Loans pursuant to Section 2.11 or the definition of the term “Net
Proceeds”, in each case, to the extent that the amount of such prepayment is not
already reflected in Debt Service;

(c) (i) Capital Expenditures by the Borrower and the Subsidiaries on a
consolidated basis during such Excess Cash Flow Period that are paid in cash and
(ii) the aggregate consideration paid in cash during such Excess Cash Flow
Period in respect of Permitted Business Acquisitions and other Investments
permitted hereunder, in each case, to the extent not financed with the proceeds
of, without duplication, the incurrence of Indebtedness (other than Revolving
Facility Loans), the sale or issuance of any Equity Interests or any Net
Proceeds not otherwise required to prepay the Loans pursuant to Section 2.11 or
the definition of the term “Net Proceeds” (less any amounts received in respect
thereof as a return of capital);

(d) [reserved];

(e) Taxes paid in cash by Holdings, the Borrower and the Subsidiaries on a
consolidated basis during such Excess Cash Flow Period or that will be paid
within six months after the close of such Excess Cash Flow Period and for which
reserves have been established, including income tax expense and withholding tax
expense incurred in connection with cross-border transactions involving the
Foreign Subsidiaries; provided, that any amount so deducted 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;

 

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(f) an amount equal to any increase in Working Capital of the Borrower and the
Subsidiaries for such Excess Cash Flow Period;

(g) cash expenditures made in respect of Swap Agreements during such Excess Cash
Flow Period, to the extent not reflected in the computation of EBITDA or Cash
Interest Expense;

(h) [reserved];

(i) without duplication of any exclusions to the calculation of Consolidated Net
Income or EBITDA, amounts paid in cash during such Excess Cash Flow Period on
account of (A) items that were accounted for as noncash reductions of Net Income
in determining Consolidated Net Income or as noncash reductions of Consolidated
Net Income in determining EBITDA of the Borrower and the Subsidiaries in a prior
Excess Cash Flow Period and (B) reserves or accruals established in purchase
accounting;

(j) to the extent not deducted in the computation of Net Proceeds in respect of
any asset disposition or condemnation giving rise thereto, the amount of any
mandatory prepayment of Indebtedness (other than Indebtedness created hereunder
or under any other Loan Document), together with any interest, premium or
penalties required to be paid (and actually paid) in connection therewith to the
extent that the income or gain realized from the transaction giving rise to such
Net Proceeds exceeds the aggregate amount of all such mandatory prepayments and
Capital Expenditures made with such Net Proceeds, and

(k) the amount related to items that were added to or not deducted from Net
Income in calculating Consolidated Net Income or were added to or not deducted
from Consolidated Net Income in calculating EBITDA to the extent such items
represented a cash payment (which had not reduced Excess Cash Flow upon the
accrual thereof in a prior Excess Cash Flow Period), or an accrual for a cash
payment, by the Borrower and the Subsidiaries or did not represent cash received
by the Borrower and the Subsidiaries, in each case on a consolidated basis
during such Excess Cash Flow Period,

plus, without duplication,

(a) an amount equal to any decrease in Working Capital of the Borrower and the
Subsidiaries for such Excess Cash Flow Period;

(b) [reserved];

(c) all amounts referred to in clause (c) above to the extent funded with,
without duplication, (i) the proceeds of the sale or issuance of Equity
Interests of, or capital contributions to, the Borrower after the Closing Date,
(ii) the proceeds of Indebtedness (other than Revolving Facility Loans) or
(iii) any Net Proceeds not otherwise required to prepay the Loans pursuant to
Section 2.11 or the definition of the term “Net Proceeds”, in each case, to the
extent there is a corresponding deduction from Excess Cash Flow above;

 

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(d) [Reserved];

(e) cash payments received in respect of Swap Agreements during such Excess Cash
Flow Period to the extent (i) not included in the computation of EBITDA or

(ii) such payments do not reduce Cash Interest Expense;

(f) any extraordinary or nonrecurring gain realized in cash during such Excess
Cash Flow Period, except to the extent such gain consists of Net Proceeds
subject to Section 2.11(b) or not otherwise required to prepay the Loans
pursuant to Section 2.11 or the definition of the term “Net Proceeds”.

(g) to the extent deducted in the computation of EBITDA, cash interest income;
and

(h) the amount related to items that were deducted from or not added to Net
Income in connection with calculating Consolidated Net Income or were deducted
from or not added to Consolidated Net Income in calculating EBITDA to the extent
either (x) such items represented cash received by the Borrower or any
Subsidiary or (y) such items do not represent cash paid by the Borrower or any
Subsidiary, in each case on a consolidated basis during such Excess Cash Flow
Period, in each case, except to the extent such amount consists of Net Proceeds
subject to Section 2.11(b) or not otherwise required to prepay the Loans
pursuant to Section 2.11 or the definition of the term “Net Proceeds”.

“Excess Cash Flow Period” shall mean (a) the period beginning on the first day
of the first fiscal quarter beginning after the Closing Date through the fiscal
year of the Borrower ending on December 31, 20172019, and (b) each fiscal year
of the Borrower endedending thereafter.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

“Excluded Contributions” shall mean the Permitted Investments received by the
Borrower from:

(a) contributions in respect of its common stock, and

(b) the sale (other than to a Subsidiary of the Borrower or pursuant to any
management equity plan or stock option plan or any other management or employee
benefit plan or agreement of the Borrower or any of its Subsidiaries) of Equity
Interests (other than Disqualified Stock) of the Borrower or Holdings,

in each case, as designated as Excluded Contributions pursuant to an Officer’s
Certificate executed by a Responsible Officer of the Borrower.

 

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“Excluded Foreign Subsidiary” shall mean (i) any Foreign Subsidiary that is a
CFC and (ii) any Subsidiary that has no material assets other than Equity
Interests of, or Equity Interests and indebtedness of, one or more CFCs.

“Excluded Indebtedness” shall mean all Indebtedness permitted to be incurred
under Section 6.01 (as amended or waived from time to time).

“Excluded Jurisdictions” shall mean any jurisdiction in which a Foreign
Subsidiary is formed or organized to the extent that the perfection of the
pledge of Equity Interests in such Foreign Subsidiary pursuant to a Foreign
Pledge Agreement requires the consent or approval of any Governmental Authority
in such jurisdiction and such consent or approval is not readily obtainable in
the ordinary course, or violates applicable law.

“Excluded Taxes” shall mean, with respect to any Recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, the following
Taxes:

(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes,

(b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts
payable to or for the account of such Lender with respect to an applicable
interest in a Loan or Commitment pursuant to a law in effect on the date on
which (i) such Lender acquires such interest in the Loan or Commitment (other
than pursuant to an assignment request by the Borrower under Section 2.19) or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.17, amounts with respect to such Taxes were payable
either to such Lender's assignor immediately before such Lender became a party
hereto or to such Lender immediately before it changed its lending office or
(ii) such withholding tax shall have resulted from the making of any payment to
a location other than the office designated by the Administrative Agent or such
Lender for the receipt of payments of the applicable type,

(c) Taxes attributable to such Recipient’s failure to comply with
Section 2.17(g) (other than as a result of a Change in Law) and

(d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Credit Agreement” shall mean, that certain Amended and Restated Credit
Agreement, dated as of April 9, 2010, by and among, among others, Holdings,
Borrower, the lenders from time to time party thereto, Deutsche Bank Trust
Company Americas as Administrative Agent (as amended, restated, amended and
restated or otherwise modified from time to time).

“Existing Holdings Notes” shall mean the 13.75%/14.50% Senior Secured PIK/Toggle
Notes due 2018 issued by Holdings.

 

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“Existing Lenders” shall have the meaning assigned to such term in the recitals
hereto.

“Extended Senior Subordinated Notes” shall mean the Senior Subordinated Notes
due 2018 issued by the Borrower to Affinion Investments on December 12, 2013
pursuant to the Extended Senior Subordinated Notes Indenture in connection with
the Permitted Exchange Transactions.

“Extended Senior Subordinated Notes Indenture” shall mean the Indenture, dated
as of December 12, 2013, among the Borrower, the Subsidiary Loan Parties, Wells
Fargo Bank, National Association, as trustee and Wilmington Trust, National
Association, as holder agent.

“Fair Market Value” shall mean, with respect to any asset or property, the price
that could be negotiated in an arms’-length transaction between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction.

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

“FCPA” shall mean the Foreign Corrupt Practices Act of 1977, as amended.

“Federal Funds Rate” shall mean, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (charged on such day on such transactions as
determined by the Administrative Agent).

“Fee Letters” shall mean (i) that certain Closing Payment Letter dated as of
March 31, 2017, by and among HPS Investment Partners, LLC and Affinion Group,
Inc. and (ii) that certain Amended and Restated Agent Fee Letter (the “Agent Fee
Letter”) dated as of May 10, 2017, by and among HPS Investment Partners, LLC and
Affinion Group, Inc.

“Fees” shall mean the Commitment Fees, the L/C Participation Fees, the Issuing
Bank Fees and the Administrative Agent Fees.

“Fifth Amendment” shall mean that certain Fifth Amendment to Credit Agreement,
dated as of [•], 2019, by and among the Borrower, the Administrative Agent and
the Lenders party thereto.

 

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“Fifth Amendment Effective Date” shall have the meaning set forth in the Fifth
Amendment.

“Fifth Amendment Effective Date Payments” shall have the meaning set forth in
the Fifth Amendment.

“Financial Officer” of any person shall mean the Chief Financial Officer,
principal accounting officer, Treasurer, Assistant Treasurer or Controller of
such person.

“First Amendment” shall mean that certain First Amendment to Credit Agreement,
dated as of November 30, 2017, by and among the Borrower, the Administrative
Agent and the Revolving Facility Lenders.

“First Amendment Effective Date” shall mean November 30, 2017.

“Foreign Lender” shall mean any Lender which for U.S. federal income tax
purposes (i) is regarded as a separate entity and is not a U.S. Person or
(ii) is disregarded as a separate entity and has a regarded owner that is not a
U.S. Person.

“Foreign Pledge Agreement” shall mean a pledge or charge agreement with respect
to the Pledged Collateral that constitutes Equity Interests of a Foreign
Subsidiary, in form and substance reasonably satisfactory to the Administrative
Agent; provided, that, unless the Borrower and the Administrative Agent
otherwise agree in any given case, in no event shall more than 65% of the issued
and outstanding voting Equity Interests of any Excluded Foreign Subsidiary be
pledged to secure Obligations of the Loan Parties.

“Foreign Security Documents” shall mean each of the security agreements,
mortgages and other instruments and documents executed and delivered pursuant to
any of the foregoing or pursuant to Section 5.11, in each case, granting Liens
on Collateral of a Foreign Subsidiary Loan Party, and as amended from time to
time in accordance with the terms hereof and thereof.

“Foreign Subsidiary” shall mean any Subsidiary (together with its successors)
that is incorporated or organized under the laws of any jurisdiction other than
the United States of America, any State thereof or the District of Columbia.

“Foreign Subsidiary Loan Party” shall mean each (i) Foreign Subsidiary of the
Borrower on the Closing Date set forth on Schedule 1.01(g) hereto and (ii) each
Wholly Owned Subsidiary of the Borrower that is a Foreign Subsidiary formed or
acquired after the Closing Date other than (A) Excluded Foreign Subsidiaries,
(B) Foreign Subsidiaries not required to be Foreign Subsidiary Loan Parties
pursuant to the Agreed Security Principles, (C) [reserved], (D) Immaterial
Subsidiaries and (E) any Foreign Subsidiary solely to the extent that, and only
for so long as, guaranteeing the Obligations would violate or require consent
(that could not be readily obtained without undue burden to the Loan Parties)
under applicable law or regulations or a contractual obligation on such Foreign
Subsidiary and such law or obligation existed at the time of the acquisition of
such Foreign Subsidiary and was not created or made binding on such Foreign
Subsidiary in contemplation of or in connection with the acquisition of such
Foreign Subsidiary.

 

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“Fourth Amendment” shall mean that certain Fourth Amendment to Credit Agreement,
dated as of November 14, 2018, by and among the Borrower, the Administrative
Agent and the Required Lenders party thereto.

“Fourth Amendment Effective Date” shall mean November 14, 2018.

“Fourth Amendment Prepayment Released Escrow Funds” shall mean the $13,000,000
of Net Proceeds from the Bridges Sale in that certain escrow account established
pursuant to Section 6.05(h) and released pursuant to the Fourth Amendment on the
Fourth Amendment Effective Date and immediately used to prepay outstanding Term
Loans together with the premium required under Section 6.05(h) in an amount
equal to 3.00% of the aggregate principal amount being so prepaid.

“Fourth Amendment Released Escrow Funds” shall mean the $32,000,000 of Net
Proceeds from the Bridges Sale in that certain escrow account established
pursuant to Section 6.05(h) and released to the Borrower pursuant to the Fourth
Amendment on the Fourth Amendment Effective Date.

“Fronting Exposure” shall mean, at any time there is a Defaulting Lender,
(a) with respect to each Issuing Bank, such Defaulting Lender’s Applicable
Percentage of the outstanding Letter of Credit obligations other than Letter of
Credit obligations as to which such Defaulting Lender’s participation obligation
has been reallocated to other Lenders or Cash Collateralized in accordance with
the terms hereof, and (b) with respect to each Swingline Lender, such Defaulting
Lender’s Applicable Percentage of Swingline Loans other than Swingline Loans as
to which such Defaulting Lender’s participation obligation has been reallocated
to other Lenders or Cash Collateralized in accordance with the terms hereof.

“GAAP” shall mean generally accepted accounting principles in effect from time
to time in the United States, applied on a consistent basis, subject to the
provisions of Section 1.02; provided, that any reference to the application of
GAAP in Sections 3.13(a), 3.13(b), 3.20, 5.03, 5.07 and
6.02(e), to a Foreign Subsidiary (and not as a consolidated Subsidiary of the
Borrower) shall mean generally accepted accounting principles in effect from
time to time in the jurisdiction of organization of such Foreign Subsidiary.

“Governing Body” shall have the meaning assigned to such term in Section
5.13(a).

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

 

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“Guarantee” of or by any person (the “guarantor”) shall mean (a) any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay or otherwise) or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
Indebtedness or other obligation, (ii) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, (iv) entered into for the purpose of assuring in any other manner
the holders of such Indebtedness or other obligation of the payment thereof or
to protect such holders against loss in respect thereof (in whole or in part) or
(v) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or other obligation, or (b) any Lien on any
assets of the guarantor securing any Indebtedness or other obligation (or any
existing right, contingent or otherwise, of the holder of Indebtedness or other
obligation to be secured by such a Lien) of any other person, whether or not
such Indebtedness or other obligation is assumed by the guarantor; provided,
however, that the term “Guarantee” shall not include endorsements for collection
or deposit, in either case in the ordinary course of business, or customary and
reasonable indemnity obligations in effect on the Closing Date or entered into
in connection with any acquisition or disposition of assets permitted under this
Agreement.

“Guaranty Agreement” shall mean the Guaranty Agreement, in the form of Exhibit
E, as amended, supplemented or otherwise modified from time to time, among
Holdings, the Borrower, each Loan Party and the Collateral Agent.

“Hazardous Materials” shall mean all pollutants, contaminants, wastes,
chemicals, materials, substances and constituents, including explosive or
radioactive substances or petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls or radon gas, of any
nature subject to regulation or which can give rise to liability under any
Environmental Law.

“Highest Lawful Rate” shall mean the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum non-usurious interest rate than
applicable laws now allow.

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

“Honor Date” shall have the meaning assigned to such term in Section 2.05.

“HPS” shall mean HPS Investment Partners, LLC.

 

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“HPS Lenders” shall mean any Lender that is from time to time a party hereto
that is an Affiliate of HPS.

“Immaterial Subsidiary” shall mean any Subsidiary that (a) did not, as of the
last day of the fiscal quarter of the Borrower most recently ended and Reported,
have assets with a value in excess of 1.0% of the Consolidated Total Assets and
revenues representing in excess of 1.0% of total revenues of the Borrower and
the Subsidiaries on a consolidated basis as of such date and (b) taken together
with all other Immaterial Subsidiaries as of the last day of the fiscal quarter
of the Borrower most recently ended and Reported, did not have assets with a
value in excess of 2.0% of the Consolidated Total Assets and revenues
representing in excess of 2.0% of total revenues of the Borrower and the
Subsidiaries on a consolidated basis as of such date; provided, that any
Subsidiary that is a “Significant Subsidiary” as such term (or any similar term)
is used in any Junior Indebtedness document (or any definitive agreement
governing Permitted Refinancing Indebtedness in respect of any of the
foregoing). Each Immaterial Subsidiary shall be set forth in Schedule 1.01(b),
and the Borrower shall update such Schedule from time to time after the Closing
Date as necessary to reflect all Immaterial Subsidiaries at such time (the
selection of Subsidiaries to be added to or removed from such Schedule to be
made as the Borrower may determine).

“Impacted Interest Period” shall have the meaning set forth in the definition of
“Eurocurrency Base Rate”.

“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 under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (d) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (other than current trade liabilities and current
intercompany liabilities (but not any refinancings, extensions, renewals or
replacements thereof) incurred in the ordinary course of business and maturing
within 365 days after the incurrence thereof), (e) all Guarantees by such person
of Indebtedness of others, (f) all Capital Lease Obligations of such person,
(g) all payments that such person would have to make in the event of an early
termination, on the date Indebtedness of such person is being determined, in
respect of outstanding Swap Agreements, (h) the principal component of all
obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit, (i) the principal component of all obligations of
such person in respect of bankers’ acceptances, (j) the amount of all
obligations of such person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock (excluding accrued dividends that have not
increased the liquidation preference of such Disqualified Stock) and (k) to the
extent constituting a liability under GAAP, earn-outs and obligations of the
Borrower or any Subsidiary under deferred compensation or other similar
arrangements incurred by such person in connection with Permitted Business
Acquisitions or any other Investment permitted hereunder. The Indebtedness of
any person shall include the Indebtedness of any partnership in which such
person is a general partner, other than to the extent that the instrument or
agreement evidencing such Indebtedness expressly limits the liability of such
person in respect thereof; provided, however, that, notwithstanding the
foregoing, solely for purposes of calculating the financial covenant in
Section 6.10 (including Pro Forma Compliance) or calculating any financial
ratio, Indebtedness shall be deemed not to include (i) contingent

 

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obligations incurred in the ordinary course of business, (ii) deferred or
prepaid revenues, (iii) purchase price holdbacks in respect of a portion of the
purchase price of an asset to satisfy warranty or other unperformed obligations
of the respective seller, (iv) [reserved], (v) obligations to make payments in
respect of money backed guarantees offered to customers in the ordinary course
of business, (vi) obligations to make payments to one or more insurers in
respect of profit sharing arrangements entered into in the ordinary course of
business, or (vii) any Indebtedness of Holdings deemed to be Indebtedness of the
Borrower on its balance sheet under GAAP but for which the Borrower and its
Subsidiaries do not have any obligations or liabilities, contingent or
otherwise.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of any
Loan Party under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

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

“Ineligible Institution” shall mean the persons identified in writing to the
Administrative Agent by the Borrower on the Closing Dateprior to the execution
of the Restructuring Support Agreement, and as may be identified in writing to
the Administrative Agent by the Borrower from time to time thereafter, with the
written consent of the Administrative Agent, by delivery of a notice thereof to
the Administrative Agent setting forth such person or persons (or the person or
persons previously identified to Agent that are to be no longer considered
“Ineligible Institutions”).

“Information” shall have the meaning assigned to such term in Section 3.14(a).

“Information Memorandum” shall mean the “HPS Meeting” presentation, dated
January 2017, as modified or supplemented prior to the Closing Date.

“Insurance Business” shall mean one or more aspects of the business of
soliciting, administering, selling, issuing or underwriting insurance or
reinsurance.

“Insurance Subsidiary” shall mean any Subsidiary that is licensed by any
Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance
Business.

“Intellectual Property Security Agreements” shall mean the Form of Copyright
Security Agreement, Form of Patent Security Agreement, and Form of Trademark
Security Agreement, attached as exhibits to the Collateral Agreement.

“Interest Coverage Ratio” shall mean, on any date, the ratio of (a) EBITDA for
such Test Period calculated on a Pro Forma Basis to (b) Cash Interest Expense of
the Borrower and the Subsidiaries, in each case, for the applicable period of
four consecutive fiscal quarters of the Borrower, all determined on a
consolidated basis in accordance with GAAP.

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

 

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“Interest Expense” shall mean, with respect to any person for any period, the
sum of, without duplication, (a) gross interest expense of such person for such
period on a consolidated basis, including (i) the amortization of debt
discounts, (ii) the amortization of all fees (including fees with respect to
Swap Agreements) payable in connection with the incurrence of Indebtedness to
the extent included in interest expense, (iii) the portion of any payments or
accruals with respect to Capital Lease Obligations allocable to interest expense
and (iv) net payments and receipts (if any) pursuant to interest rate hedging
obligations, and excluding amortization of deferred financing fees and expensing
of any bridge or other financing fees, (b) capitalized interest of such person,
whether paid or accrued, and (c) commissions, discounts, yield and other fees
and charges incurred for such period in connection with any receivables
financing of such person or any of its subsidiaries that are payable to persons
other than Holdings, the Borrower and the Subsidiaries.

“Interest Payment Date” shall mean, (a) with respect to any Eurocurrency Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest
Period of more than three months’ duration each day that would have been an
Interest Payment Date had successive Interest Periods of three months’ duration
been applicable to such Borrowing and, in addition, the date of any refinancing
or conversion of such Borrowing with or to a Borrowing of a different Type and
(b) with respect to any ABR Loan, the last Business Day of each calendar quarter
(being the last day of March, June, September and December of each year).

“Interest Period” shall mean, as to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as applicable, and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter (or 12 months thereafter, if at the time of the relevant
Borrowing, all Lenders agree to make interest periods of such length available),
as the Borrower may elect, or the date any Eurocurrency Borrowing is converted
to an ABR Borrowing in accordance with Section 2.07 or repaid or prepaid in
accordance with Section 2.09, 2.10 or 2.11; provided, however, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) the
Borrower may, with the consent of the Administrative Agent, elect to have an
interest period of less than a month with respect to any Eurocurrency Borrowing.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.

“Interpolated Rate” shall mean, at any time, for any Interest Period, the rate
per annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period (for which the LIBO Screen Rate is available) that is shorter
than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest
period (for which the LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time.

 

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“Investment” shall have the meaning set forth in Section 6.04.

“Investor Purchase Agreement” shall mean that certain Investor Purchase
Agreement, dated as of March 31, 2017, by and among Holdings, the Borrower,
Affinion Investments, Elliott Management Corporation, Franklin Mutual Advisers,
LLC, and any additional investors party thereto.

“ISP” shall mean, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking
Law & Practice, Inc. (or such later version thereof as may be in effect at the
time of issuance).

“Issuer Documents” shall have the meaning set forth in Section 2.05(a).

“Issuing Bank” shall mean a Lender to be reasonably agreed between HPS and
Borrower and each other Issuing Bank designated pursuant to Section 2.05(j) or
(k), in each case in its capacity as an issuer of Letters of Credit hereunder,
and its successors in such capacity as provided in Section 2.05(i) or (k). An
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of such Issuing Bank or through agreements with third
party letter of credit issuers issuing letters of credit (and such issuer, a
“Third Party LC Issuer”) on behalf of the Borrower as a co-applicant and
designated as a Letter of Credit hereunder by the Borrower or Administrative
Agent, in which case the term “Issuing Bank” shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate. Where the context so
requires, references herein to Issuing Bank shall include any Third Party LC
Issuer; provided, however that no such Third Party Issuer shall have any
obligations under this Agreement. For the avoidance of doubt, neither HPS nor
HPS Lenders shall act as Issuing Banks unless agreed to in writing in their sole
discretion; it being understood that, as of the First Amendment Effective Date,
the Issuing Banks shall mean the Issuing Banks identified on Schedule 1 to the
First Amendment.

“Issuing Bank Fees” shall have the meaning assigned to such term in Section
2.12(b).

“Junior Indebtedness” shall mean, collectively, (1) any Material Indebtedness of
the Borrower or any of its Subsidiaries that are Loan Parties that is
(x) secured by a Lien that is junior in priority to the Lien securing the
Obligations, (y) by its terms subordinated in right of payment to all or any
portion of the Obligations or (z) unsecured, in each case, other than
intercompany Indebtedness among the Borrower and its Subsidiaries and
Indebtedness incurred under Section 6.01(w); which for the avoidance of doubt,
as of the Closing Date includes, (i) the 2017 Exchange Notes and (ii) any Senior
Notes, Extended Senior Subordinated Notes and Affinion Investments Notes
remaining outstanding after the 2017 Exchange and (2) the Second Lien Facility
and any other Indebtedness incurred after the FourthFifth Amendment Effective
Date pursuant to Section 6.01(k)includes, the New Notes.

“Junior Lien Intercreditor and Subordination Agreement” shall mean an
intercreditor and subordination agreement in the form approved by the
Administrative Agent in connection with the Second Lien Commitment Letter or
otherwise in a form reasonably acceptable to the Administrative Agent, to be
entered into by and among Holdings, the

 

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Borrower, the other Loan Parties from time to time party thereto, the
Administrative Agent, the Collateral Agent and one or more other debt
representatives, which shall (i) provide that the Liens on the Collateral
securing the Second Lien Facility (and/or otherany Indebtedness incurred
pursuant to Section 6.01(k)) shall be junior to the Liens on the Collateral
securing the Obligations and (ii) contain payment subordination provisions.

“Latest Maturity Date” shall mean, at any date of determination, the latest
final stated maturity date applicable to any Class of Loans or Commitments
hereunder at such time, in each case as extended in accordance with this
Agreement from time to time.

“Laws” shall mean, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“L/C Advance” shall mean, with respect to each Lender, such Lender’s funding of
its participation in any L/C Borrowing in accordance with its Applicable
Percentage.

“L/C Borrowing” shall mean an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing.

“L/C Commitment” shall mean, with respect to each Issuing Bank, the commitment
of such Issuing Bank to issue Letters of Credit pursuant to Section 2.05. The
initial aggregate amount of the L/C Commitments of all Issuing Banks is $0. For
the avoidance of doubt, neither HPS nor HPS Lenders shall have L/C Commitments
unless agreed to in writing in their sole discretion; it being understood that,
as of the First Amendment Effective Date, the aggregate amount of the L/C
Commitments of all Issuing Banks is $20,000,000 and the aggregate L/C Commitment
of each Issuing Banks is as set forth on Schedule 1 of the First Amendment.

“L/C Disbursement” shall mean a payment or disbursement made by an Issuing Bank
pursuant to a Letter of Credit (including any payment or disbursement made by an
Issuing Bank to any Third Party LC Issuer).

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

“L/C Participation Fee” shall have the meaning assigned such term in Section
2.12(b).

 

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“Lead Arranger” shall mean HPS Investments Partners, LLC.

“Leased Material Real Property” shall mean the leased real property set forth on
Schedule 3.18.

“Lender” shall mean each Revolving Facility Lender, each Swingline Lender, each
Term Lender and each Issuing Bank.

“Letter of Credit” shall mean any letter of credit issued pursuant to Section
2.05.

“Letter of Credit Application” shall mean an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by any applicable Issuing Bank or any Third Party LC Issuer.

“LIBO Screen Rate” shall have the meaning set forth in the definition of
“Eurodollar Base Rate”.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, hypothecation, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities (other than securities
representing an interest in a joint venture that is not a Subsidiary), any
purchase option, call or similar right of a third party with respect to such
securities; provided, that in no event shall an operating lease or an agreement
to sell be deemed to constitute a Lien.

“Loan Documents” shall mean this Agreement, the Letters of Credit, the Security
Documents, any promissory note issued under Section 2.09(e), solely for the
purposes of 7.01(c) hereof, the Fee Letters and all other documents,
certificates, instruments or agreements executed and delivered by or on behalf
of a Loan Party for the benefit of any Agent, Issuing Bank or Lender in
connection herewith on or after the date hereof.

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

“Loans” shall mean the Term Loans, the Revolving Facility Loans and the
Swingline Loans.

“Local Time” shall mean New York City time.

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

“Make Whole Premium Amount” shall mean, with respect to any Term Loan subject to
a Payment Event, on any date of calculation, the excess of (i) (x) the
prepayment price to prepay in full the principal amount of such Term Loan
(including any prepayment premium

 

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payable pursuant to Section 2.12(e)) on the day immediately following the second
anniversary of (A) with respect to the Non-Extended Term Loans, the Closing Date
and (B) with respect to the 2019 Term Loans, the Fifth Amendment Effective Date
plus (y) the present value on such date of all interest (using the interest rate
applicable to the Term Loan being prepaid as of the date of the prepayment) that
would have accrued on such Term Loan from the date of calculation through the
date immediately following the second anniversary of (A) with respect to the
Non-Extended Term Loans, the Closing Date and (B) with respect to the 2019 Term
Loans, the Fifth Amendment Effective Date (excluding accrued but unpaid interest
to the date of such calculation) computed using a discount rate equal to the
Treasury Rate as of such calculation date plus 50 basis points over (ii) the
then outstanding principal amount of such Term Loans.

“Margin Cash Component” shall mean the portion of the Applicable Margin with
respect to the 2019 Term Loans which may only be paid in cash.

“Margin PIK Component” shall mean the portion of the Applicable Margin with
respect to the 2019 Term Loans which shall be paid in kind.

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

“Material Adverse Effect” shall mean the existence of any event, development or
circumstance that, subsequent to December 31, 2016February 28, 2019, has had or
could reasonably be expected to have a material adverse effect on (a) the
business, property, operations or condition of the Borrower and the
Subsidiaries, taken as a whole, or (b) the validity or enforceability of any
material Loan Document or the rights and remedies of the Administrative Agent
and the Lenders thereunder.2

“Material Agreement” shall mean any agreement, contract or instrument to which
any Loan Party is a party or by which any Loan Party or any of its properties is
bound (i) pursuant to which any Loan Party receives or will receive revenue (as
determined in accordance with GAAP on the financial statements of the Borrower),
in excess of $50,000,000 in any 12 month period, (ii) governing, creating,
evidencing or relating to Material Indebtedness of any Loan Party or (iii) the
termination or suspension of which, or the failure of any party thereto to
perform its obligations thereunder, could reasonably be expected to have a
Material Adverse Effect.

“Material Indebtedness” shall mean Indebtedness (other than Loans and Letters of
Credit) of any one or more of Holdings, the Borrower or any Subsidiary in an
aggregate principal amount exceeding $16,500,000.

“Material Insurance Subsidiary” shall mean one or more Subsidiaries that
constitute all or substantially all or a material portion of the Insurance
Business of the Borrower and its Subsidiaries.

 

2 

To the extent that the Restructuring Transactions are effectuated through
chapter 11 proceedings, definition to be modified to provide that the events
leading up to commencement of the proceedings and any events or conditions
arising as a result of the commencement of the proceedings shall be deemed not
to be a Material Adverse Effect.

 

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“Material Subsidiary” shall mean any Subsidiary other than Immaterial
Subsidiaries.

“Meetings” shall have the meaning assigned to such term in Section 5.13(a).

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgaged Properties” shall mean each real property encumbered by a Mortgage
pursuant to Section 5.11.

“Mortgages” shall mean the mortgages, debentures, hypothecs, deeds of trust,
deeds to secure debt, assignments of leases and rents, and other security
documents delivered pursuant to Section 5.11, as amended, supplemented or
otherwise modified from time to time, with respect to Mortgaged Properties, each
in form and substance reasonably satisfactory to the Administrative Agent.

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 3(37)
or 4001(a)(3) of ERISA to which Holdings, the Borrower or any Subsidiary or any
ERISA Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding six plan years made or accrued an obligation to
make contributions.

“Natixis” shall have the meaning assigned to such term in Section 2.05(m).

“Natixis L/C Agreement” shall have the meaning assigned to such term in Section
2.05(m).

“Natixis L/C Documents” shall have the meaning assigned to such term in Section
2.05(m).

“Natixis Swingline Agreement” shall have the meaning assigned to such term in
Section 2.04(f).

“Natixis Swingline Documents” shall have the meaning assigned to such term in
Section 2.04(f).

“Net Income” shall mean, with respect to any person, the net income (loss) of
such person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends minus an amount equal to the amount of tax
distributions actually made to the holders of Equity Interests of such person or
any parent of such person in respect of a period in accordance with
Section 6.06(b)(i) as if such amounts had been paid as income taxes directly by
such person but only to the extent such amounts have not already been accounted
for as taxes reducing the net income (loss) of such person.

“Net Proceeds” shall mean:

(a) 100% of the proceeds in the form of cash, cash equivalents and Permitted
Investments actually received by any Loan Party (including any such proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or

 

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purchase price adjustment receivable or otherwise and including casualty
insurance settlements and condemnation awards, but only as and when received)
from any loss, damage, loss due to eminent domain or pursuant to a sale of any
such assets to a purchaser with such power under threat of such a taking,
destruction or condemnation of, or any sale, transfer or other disposition
(including any sale and leaseback of assets and any mortgage or lease of real
property) to any person of any asset or assets of the Borrower or any Loan Party
(other than those pursuant to Section 6.05(a), (b), (c), (e), (g), (i), (j), or
(m)) net of (i) attorneys’ fees, accountants’ fees, investment banking fees,
survey costs, title insurance premiums, and related search and recording
charges, transfer taxes, deed or mortgage recording taxes, required debt
payments and required payments of other obligations relating to the applicable
asset (other than pursuant hereto), other customary expenses and brokerage,
consultant and other customary fees actually incurred in connection therewith
and (ii) Taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements);
provided, that if no Event of Default exists, the Borrower or any Subsidiary may
deliver a certificate of a Responsible Officer of the Borrower to the
Administrative Agent promptly after receipt of any such proceeds, but in no
event to exceed 5 Business Days after receipt of any such proceeds, setting
forth the Borrower’s or such Subsidiary’s intention to use, or to commit to use,
any portion of such proceeds in an amount not to exceed 25% thereof, to acquire,
maintain, develop, construct, improve, upgrade or repair assets useful in the
business of the Borrower and the Loan Parties or to make investments in
Permitted Business Acquisitions or Investments permitted by Section 6.04, in
each case, if such certificate shall have been delivered, within twelve months
of such receipt, such portion of such proceeds shall not constitute Net Proceeds
except to the extent not so used (or committed to be used) within such twelve
month period, provided, however that the foregoing reinvestment right shall not
apply to any net proceeds received (A) in excess of $5,000,000 in the aggregate
from the Fourth Amendment Effective Date or (B) the net proceeds received from
any sale or disposition of the assets or Equity Interests of any Material
Insurance Subsidiary, in each case to the extent that such assets or Equity
Interests do not represent a de minimis, immaterial or dormant portion of the
Insurance Business of the Borrower and its Subsidiaries, other than, with
respect to this clause (B), as set forth in Section 6.05(h); provided, further,
that (x) no proceeds realized in a single transaction or series of related
transactions shall constitute Net Proceeds unless such proceeds shall exceed
$1,000,000 and (y) no proceeds shall constitute Net Proceeds in any fiscal year
until the aggregate amount of all such proceeds in such fiscal year shall exceed
$2,000,000; provided, still further, that pending such reinvestment, such
proceeds may be applied to temporarily reduce outstanding Revolving Facility
Loans;

(b) 100% of the proceeds in the form of cash, cash equivalents and Permitted
Investments from the incurrence, issuance or sale by any Loan Party of any
Indebtedness and debt like securities, in each case, (other than Excluded
Indebtedness), net of all taxes and fees (including investment banking fees),
commissions, costs and other expenses, in each case incurred in connection with
such issuance or sale; and

 

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(c) 100% of the proceeds in form of cash, cash equivalents and Permitted
Investments from the receipt of extraordinary and nonrecurring receipts,
including without limitation, corporate tax refunds, net of all taxes and fees,
commissions, costs and other expenses, in each case incurred in connection with
such extraordinary and nonrecurring receipt, provided that for the avoidance of
doubt, the receipt of cash proceeds from Excluded Indebtedness or the issuance
of Equity Interests of, or capital contributions to, Holdings shall not be
deemed a receipt of Net Proceeds pursuant to this clause (c); provided, further,
that no proceeds realized in a transaction or receipt shall constitute Net
Proceeds unless such proceeds exceed $5,000,000.

For purposes of calculating the amount of Net Proceeds, fees, commissions and
other costs and expenses payable to Holdings or the Borrower or any Affiliate of
either of them shall be disregarded.

“New Notes” shall mean the Borrower’s 18% PIK Notes due 2024 issued as part of
the Restructuring Transactions on the Fifth Amendment Effective Date.

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

“Non-Consenting Lender” shall have the meaning assigned to such term in Section
2.19(c).

“Non-Extended Term Loans” shall have the meaning set forth in the Fifth
Amendment. The aggregate principal amount of Non-Extended Term Loans outstanding
as of Fifth Amendment Effective Date is $[    ].3

“Non-Extending Term Lender” shall mean any Lender that holds Non-Extended Term
Loans.

“Note” shall have the meaning assigned to such term in Section 2.09(e).

“Obligations” shall mean (i) all principal of and interest (including, without
limitation, interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower or any other Loan Party, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) and premium (if any) on
all Loans made pursuant to the Credit Agreement, (ii) all reimbursement
obligations (if any) and interest thereon (including, without limitation,
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower or any other Loan Party, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) with respect to any Letter
of Credit issued pursuant to the Credit Agreement and (iii) all guarantee
obligations, fees, expenses and all other obligations, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document or the Letters of Credit, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Arranger, the Agents or any Lender that are required to be paid
by the Borrower pursuant hereto) or otherwise. Notwithstanding the foregoing,
Obligations of any Guarantor shall in no event include any Excluded Swap
Obligations of such Guarantor.

 

3 

NTD: to be filled in on the Fifth Amendment Effective Date.

 

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“Obligors” shall have the meaning assigned to such term in Section 2.05(n).

“Observer ” shall have the meaning assigned to such term in Section 5.13(a).

“OFAC” shall mean the Office of Foreign Asset Control of the Department of the
Treasury of the United States of America.

“Offering” shall have the meaning assigned to such term in the Restructuring
Support Agreement.

“Organizational Documents” shall mean, collectively, with respect to any Person,
(i) in the case of any corporation, the certificate of incorporation or articles
of incorporation and by-laws (or similar constitutive documents) of such Person,
(ii) in the case of any limited liability company, the certificate or articles
of formation or organization and operating agreement or memorandum and articles
of association (or similar constitutive documents) of such Person, (iii) in the
case of any limited partnership, the certificate of formation and limited
partnership agreement (or similar constitutive documents) of such Person (and,
where applicable, the equity holders or shareholders registry of such Person),
(iv) in the case of any general partnership, the partnership agreement (or
similar constitutive document) of such Person, (v) in any other case, the
functional equivalent of the foregoing, and (vi) any shareholder, voting trust
or similar agreement between or among any holders of Equity Interests of such
Person.

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

“Other Taxes” shall mean all present or future stamp, court or documentary,
excise, property, intangible, recording, filing or similar Taxes that arise from
any payment made under, from the execution, delivery, performance, enforcement
or registration of, from the receipt or perfection of a security interest under,
or otherwise with respect to, any Loan Document.

“Overdraft Line” shall have the meaning assigned to such term in Section
6.01(r).

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

“Participant Register” shall have the meaning specified in Section 9.04(c).

“PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.

 

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“Payment Event” shall have the meaning specified in Section 2.12(e).

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

“Perfection Certificate” shall mean the Perfection Certificate with respect to
Borrower, in a form reasonably satisfactory to the Administrative Agent.

“Permitted Business Acquisition” shall mean any acquisition of all or
substantially all the assets of, or all or substantially all the Equity
Interests (other than directors’ qualifying shares) in, a person or division or
line of business of a person (or any subsequent investment made in a person,
division or line of business previously acquired in a Permitted Business
Acquisition) if (a) such acquisition was not preceded by, or effected pursuant
to, an unsolicited or hostile offer by the acquirer or an Affiliate of the
acquirer; (b) such acquisition is of a Similar Business, (c) such acquisition
results in a net positive change to EBITDA on a Pro Forma Basis, (d) immediately
after giving effect thereto: (i) no Event of Default shall have occurred and be
continuing or would result therefrom; (ii) all transactions related thereto
shall be consummated in accordance with applicable laws; (iii) (A) after giving
effect to such acquisition, calculated as of the last day of the most recently
ended and Reported fiscal quarter (1) the Total Secured Leverage Ratio shall not
exceed the lesser of (x) the Total Secured Leverage Ratio as of the ClosingFifth
Amendment Effective Date and (y) the Total Secured Leverage Ratio immediately
prior to giving effect to such “Permitted Business Acquisition” and (2) the
Consolidated Fixed Charge Coverage Ratio shall not be less than the greater of
(x) the Consolidated Fixed Charge Coverage Ratio as of the ClosingFifth
Amendment Effective Date and (y) the Consolidated Fixed Charge Coverage Ratio
immediately prior to giving effect to such “Permitted Business Acquisition” and
the Borrower shall have delivered to the Administrative Agent a certificate of a
Responsible Officer of the Borrower to such effect, together with all relevant
financial information for such Subsidiary or assets and (B) any acquired or
newly formed Subsidiary shall not be liable for any Indebtedness (except for
Indebtedness permitted by Section 6.01); (iv) to the extent required by
Section 5.11, the Collateral and Guarantee Requirement will be satisfied with
respect to such acquired person and the equity interests of such acquired
person; (v) no Investments made in “Permitted Business Acquisitions” shall be
made in persons that do not become Loan Parties (other than the Specified
Acquisition); and (vi) in the event of a single or series of related “Permitted
Business Acquisitions” in excess of an aggregate principal sum of $75,000,000,
the Borrower shall provide the Administrative Agent with (X) a quality of
earnings report (prepared by a “Big Four” accounting firm or other national
accounting firm reasonably acceptable to the Administrative Agent),
(Y) projections and financials and (Z) such other documents and information as
the Administrative Agent may reasonably request; provided that, notwithstanding
the foregoing, the Specified Acquisition shall be permitted if (A) the Borrower
complies with clauses (i), (ii) and (iv) above and provides the materials and
information described in clause (vi) above, and the Investments made in
connection with the Specified Acquisition shall not reduce the amount of, and
availability under, the Non-Loan Party Cap, (B) such Specified Acquisition is
consummated within 9 months from the Closing Date and (C) the aggregate purchase
price of such Specified Acquisition shall not exceed $25,000,000, of which only
up to $12,500,000 shall be paid at the closing of the Specified Acquisition.

 

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“Permitted Holder” shall mean Third Avenue Management, Allianz Global Investors,
Empyrean Capital, Pennant Park and Ares Management.(i) any owner of Equity
Interests of Holdings as of the Fifth Amendment Effective Date that, together
with its Affiliates, owns at least 10% of the Equity Interests of Holdings on a
fully diluted basis as of the Fifth Amendment Effective Date and (ii) any
Affiliates of the foregoing.

“Permitted Investments” shall mean:

(a) U.S. Dollars, Sterling, euros, or, in the case of any Foreign Subsidiary,
such local currencies held by it from time to time in the ordinary course of
business;

(b) securities issued or directly and fully guaranteed or insured by the
government of, or any agency or instrumentality thereof, the United States of
America, Mexico or any member state of the European Union, in each case, with
maturities not exceeding two years after the date of acquisition;

(c) in the case of any Foreign Subsidiary, securities issued or directly and
fully guaranteed or insured by the government of, or any agency or
instrumentality thereof, in each case with maturities not exceeding 270 days
after the date of acquisition and held by it from time to time in the ordinary
course of business;

(d) certificates of deposit, time deposits and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers’
acceptances, in each case with maturities not exceeding one year and overnight
bank deposits and demand deposits (in their respective local currencies), in
each case with any commercial bank having capital and surplus in excess of
$500,000,000 or the foreign currency equivalent thereof and whose long-term debt
is rated “A” or the equivalent thereof by Moody’s or S&P (or, in the case of an
obligor domiciled outside of the United States, reasonably equivalent ratings of
another internationally recognized credit rating agency);

(e) repurchase obligations for underlying securities of the types described in
clauses (b) and (d) above entered into with any financial institution meeting
the qualifications specified in clause (d) above;

(f) commercial paper issued by a corporation (other than an Affiliated Lender)
rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or, in the
case of an obligor domiciled outside of the United States, reasonably equivalent
ratings of another internationally recognized credit rating agency) and in each
case maturing within one year after the date of acquisition;

(g) readily marketable direct obligations issued by any state of the United
States of America or any political subdivision thereof having one of the two
highest rating categories obtainable from either Moody’s or S&P in each case
with maturities not exceeding two years from the date of acquisition;

 

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(h) Indebtedness issued by persons with a rating of “A” or higher from S&P or
“A-2” or higher from Moody’s (or, in the case of an obligor domiciled outside of
the United States, reasonably equivalent ratings of another internationally
recognized credit rating agency) in each case with maturities not exceeding two
years from the date of acquisition; and

(i) investment funds investing at least 95% of their assets in securities of the
types described in clauses (a) through (h) above.

“Permitted Refinancing Indebtedness” shall mean any Indebtedness issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund (collectively, to “Refinance” ), the Indebtedness
being Refinanced (or previous refinancings thereof constituting Permitted
Refinancing Indebtedness); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premium thereon and original issue
discounts, underwriting discounts, fees, commissions and expenses), (b) the
average life to maturity of such Permitted Refinancing Indebtedness is greater
than or equal to that of the Indebtedness being Refinanced, (c) if the
Indebtedness being Refinanced is subordinated in right of payment to the
Obligations under this Agreement, such Permitted Refinancing Indebtedness shall
be subordinated in right of payment to such Obligations on terms at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being Refinanced, (d) no Permitted Refinancing Indebtedness shall
have greater guarantees or security, than the Indebtedness being Refinanced,
(e) if the Indebtedness being Refinanced is secured by any collateral (whether
equally and ratably with, or junior to, the Secured Parties or otherwise), such
Permitted Refinancing Indebtedness may be secured by such collateral (including
in respect of Indebtedness of Foreign Subsidiaries that are not Loan Parties
otherwise permitted under this Agreement and any collateral pursuant to
after-acquired property clauses, in each case, to the extent any such collateral
secured the Indebtedness being Refinanced) on terms no less favorable to the
Secured Parties than those contained in the documentation (including any
intercreditor agreement or Junior Lien Intercreditor and Subordination
Agreement) governing the Indebtedness being Refinanced, (f) in the case of the
2017 Exchange Notes and any Permitted Refinancing Indebtedness in respect
thereto, has no scheduled amortization, payments of principal, sinking fund
payments or similar scheduled payments, other than regularly scheduled payments
of interest, (g) in the case of the Second Lien FacilityNew Notes or any other
Indebtedness incurred pursuant to Section 6.01(k) and any Permitted Refinancing
Indebtedness in respect thereto respectively, has no scheduled amortization,
scheduled payments of principal or interest, sinking fund payments or similar
scheduled payments, in each case, prior to the final maturity thereof, other
than regularly scheduled payments of interest that are payable in kind, and
(h) no Default or Event of Default shall have occurred and be continuing or
would result therefrom.

“person” shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company (or series
thereof) or government, individual or family trusts, or any agency or political
subdivision thereof.

 

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“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
and in respect of which Holdings, the Borrower, any Subsidiary or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Platform” shall have the meaning assigned to such term in Section 9.19(b).

“Pledged Collateral” shall mean Pledged Securities (as defined in the Collateral
Agreement) or a similar term (e.g. pledge assets, assigned claims, assigned
receivables) in the Collateral Agreement or a Foreign Pledge Agreement, as
applicable.

“Prepayment Fee” shall have the meaning specified in Section 2.12(e).

“Prepayment Transaction” shall mean any repayment, refinancing, substitution or
replacement, in whole or in part, of principal of outstanding Term Loans,
directly or indirectly, from the net proceeds of any Indebtedness of Holdings,
the Borrower or any of their Subsidiaries, including, without limitation, as may
be effected through any other new or additional loans under this Agreement or by
an amendment of any provisions of this Agreement (including pursuant to
Section 9.09(f)), including any replacement of a Non-Consenting Lender in
connection with a required assignment pursuant to Section 2.19.

“Prime Rate” shall mean the rate of interest quoted in the print edition of The
Wall Street Journal, Money Rates Section as the Prime Rate (currently defined as
the base rate on corporate loans posted by at least 75% of the nation’s 30
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. The Administrative Agent or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.

“primary obligor” shall have the meaning assigned to such term in the definition
of the term “Guarantee.”

“Pro Forma Basis” shall mean, as to any person, for any events as described
below that occur subsequent to the commencement of a period for which the
financial effect of such events is being calculated, and giving effect to the
events for which such calculation is being made, such calculation as will give
pro forma effect to such events as if such events occurred on the first day of
the four consecutive fiscal quarter period ended on or before the occurrence of
such event (the “Reference Period”): in making any determination of EBITDA,
effect shall be given to any Asset Sale, any acquisition, Investment,
disposition, merger, amalgamation or consolidation (including the Transactions)
(or any similar transaction or transactions not otherwise permitted under
Section 6.04 or 6.05 that require a waiver or consent of the Required Lenders
and such waiver or consent has been obtained), any dividend, distribution or
other similar payment, and any restructurings of the business of Holdings, the
Borrower or any of the Subsidiaries that Holdings, the Borrower or any of its
Subsidiaries has determined to make and/or made and are expected to have a
continuing impact and are factually supportable, which would include cost
savings resulting from head count reduction, closure of facilities and similar
operational and other cost savings, which adjustments the Borrower

 

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determines are reasonable as set forth in a certificate of a Financial Officer
of the Borrower (the foregoing, together with any transactions related thereto
or in connection therewith, the “relevant transactions”), in each case that
occurred during the Reference Period (or, in the case of determinations made
pursuant to the definition of the term “Permitted Business Acquisition” or
pursuant to Sections 2.11(b), 6.01, 6.02, 6.05, 6.06 or 6.09, occurring during
the Reference Period or thereafter and through and including the date upon which
the respective Permitted Business Acquisition or incurrence of Indebtedness or
Liens or dividend or other applicable transaction is consummated).

Pro forma calculations made pursuant to the definition of this term “Pro Forma
Basis” shall be determined in good faith by a Responsible Officer of the
Borrower. Any such pro forma calculation may include adjustments appropriate, in
the reasonable good faith determination of the Borrower, to reflect operating
expense reductions, other operating improvements or synergies reasonably
expected to result and be realizable from the applicable pro forma event within
the 12 month period following the consummation of the pro forma event, provided
that the adjustments made pursuant to this paragraph, shall not exceed (A) for
any Test Period ending on or prior to December 31, 2018, the greater of
$8,250,000 and 5% of EBITDA for the relevant Test Period prior to giving effect
to such adjustment and (B) with respect to any Test Period ending
thereafter,10,000,000 and 5% of EBITDA for the relevant Test Period prior to
giving effect to such adjustment. The Borrower shall deliver to the
Administrative Agent a certificate of a Responsible Officer of the Borrower
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 Forma Closing Balance Sheet” shall have the meaning assigned to such term
in Section 3.05(a)(i).

“Pro Forma Compliance” shall mean, at any date of determination, that the
Borrower shall be in pro forma compliance with the covenants set forth in
Section 6.10 as of the date of such determination (calculated on a Pro Forma
Basis and giving pro forma effect to the event giving rise to such
determination).

“Projections” shall mean the projections of the Borrower and the Subsidiaries
included in the Information Memorandum and any other projections and any
forward-looking statements (including statements with respect to booked
business) of such entities furnished to the Lenders or the Administrative Agent
by or on behalf of Holdings, the Borrower or any of the Subsidiaries prior to
the Closing Date.

“Public Lender” shall have the meaning assigned to such term in Section 9.19(b).

“Rate” shall have the meaning assigned to such term in the definition of the
term “Type.”

“Recipient” shall mean (a) the Administrative Agent, (b) any Lender or (c) any
Issuing Bank, as applicable.

 

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“Reference Period” shall have the meaning assigned to such term in the
definition of the term “Pro Forma Basis.”

“Refinance” shall have the meaning assigned to such term in the definition of
the term “Permitted Refinancing Indebtedness,” and “Refinanced” shall have a
meaning correlative thereto.

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

“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.

“Regulatory Agreement” shall have the meaning assigned to such term in Section
3.09(c).

“Related Fund” shall mean, with respect to any Lender that is a fund that
invests in bank or commercial loans and similar extensions of credit, any other
fund that invests in bank or commercial loans and similar extensions of credit
and is advised or managed by (a) such Lender, (b) an Affiliate of such Lender or
(c) an entity (or an Affiliate of such entity) that administers, advises or
manages such Lender.

“Related Parties” shall mean, with respect to any specified 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, emanating or migrating in, into, onto or through the environment.

“Remaining Present Value” shall mean, as of any date with respect to any lease,
the present value as of such date of the scheduled future lease payments with
respect to such lease, determined with a discount rate equal to a market rate of
interest for such lease reasonably determined at the time such lease was entered
into.

“Reportable Event” shall mean any reportable event as defined in Section 4043(c)
of ERISA or the regulations issued thereunder, other than those events as to
which the 30-day notice period referred to in Section 4043(c) of ERISA has been
waived, with respect to a Plan (other than a Plan maintained by an ERISA
Affiliate that is considered an ERISA Affiliate only pursuant to subsection
(m) or (o) of Section 414 of the Code).

“Reported” shall mean, with respect to any fiscal quarter or Excess Cash Flow
Period of the Borrower, the delivery to the Administrative Agent of the
financial statements required to be delivered with respect to the end of such
fiscal quarter or such Excess Cash Flow Period under Section 5.04(a) or (b), as
applicable.

 

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“Required Lenders” shall mean, at any time, Lenders having (a) Loans (other than
Swingline Loans) outstanding, (b) L/C Exposure, (c) Swingline Exposure and
(d) Available Unused Commitments that, taken together, represent more than 50%
of the sum of (w) all Loans (other than Swingline Loans) outstanding, (x) L/C
Exposure, (y) Swingline Exposure and (z) the total Available Unused Commitments
at such time. The Loans, L/C Exposure, Swingline Exposure and Available Unused
Commitment of any Defaulting Lender shall be disregarded in determining Required
Lenders at any time.

“Required Percentage” shall mean, with respect to an Excess Cash Flow Period,
50%; provided, that if the Senior Secured Leverage Ratio calculated as of the
end of any Excess Cash Flow Period is (i) less than or equal to 3.50 to 1.00,
the Required Percentage shall be 25% and (ii) less than or equal to 2.50 to
1.00, the Required Percentage shall be 0%..

“Requirements of Law” shall mean, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

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

“Restructuring Support Agreement” shall mean that certain Support Agreement,
dated as of March 1, 2019, by and among the Borrower and the Consenting
Stakeholders (as defined therein) party thereto, as may be amended, modified or
supplemented prior to the date hereof.

“Restructuring Transactions” shall mean the transactions contemplated by the
Restructuring Support Agreement, including the transactions contemplated by the
Fifth Amendment and the issuance of the New Notes.

“Revolving Availability Period” shall mean, with respect to the Revolving
Facility Commitments, the period from and including Closing Date to but
excluding the earlier of the Revolving Facility Maturity Date and the date of
termination of the Revolving Facility Commitments.

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

“Revolving Facility Commitment” shall mean, with respect to any Revolving
Facility Lender, such Lender’s commitment to make Revolving Facility Loans
pursuant to Section 2.01, expressed as an amount representing the maximum
aggregate permitted amount of such Lender’s Revolving Facility Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s Revolving Facility Commitment is set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Revolving Facility Commitment, as applicable. The aggregate amount of the
Lenders’ Revolving Facility Commitments as of the ClosingFifth Amendment
Effective Date is $110,000,00085,000,000.

 

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“Revolving Facility Exposure” shall mean, at any time, the sum of (i) the
aggregate principal amount of the Revolving Facility Loans outstanding at such
time and (ii) the aggregate L/C Exposure at such time; provided, that for
purposes of Sections 2.01(b), 2.04(a)(ii) and (iii), 2.05(b)(ii), 2.08(b)(ii)
and 2.11(d), “Revolving Facility Exposure” shall also include the aggregate
Swingline Exposure at such time. The Revolving Facility Exposure of any Lender
at any time shall be such Lender’s Applicable Percentage of the total Revolving
Facility Exposure at such time.

“Revolving Facility Lender” shall mean a Lender with a Revolving Facility
Commitment or with outstanding Revolving Facility Exposure.

“Revolving Facility Loans” shall mean a loan made by a Revolving Facility Lender
pursuant to Section 2.01(b). Each Revolving Facility Loan shall be a
Eurocurrency Loan or an ABR Loan.

“Revolving Facility Maturity Date” shall mean the date that is the fivefour year
anniversary of the ClosingFifth Amendment Effective Date.

“S&P” shall mean S&P Global Ratings, a business unit of Standard & Poor’s
Financial Services LLC, a subsidiary of S&P Global Inc.

“Sale and Lease-Back Transaction” shall have the meaning assigned to such term
in Section 6.03.

“Sanctioned Country” shall mean, at any time, a country or territory which is
itself the subject or target of any Sanctions (as of the Date of this Agreement,
Cuba, Iran, North Korea, Sudan, Syria, and the Crimea region of Ukraine)

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC or the U.S.
Department of State, the United Nations Security Council, the European Union,
any Member State of the European Union, or the United Kingdom (irrespective of
its status vis-a-vis the European Union), (b) any Person operating, organized or
resident in a Sanctioned Country or (c) any Person owned or controlled by any
such Person.

“Sanctions Laws” shall mean economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by OFAC or the U.S. Department of State, or (b) the
United Nations Security Council, the European Union, any European Union member
state or Her Majesty’s Treasury of the United Kingdom.

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

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“Second Lien Commitment Letter” shall have the meaning assigned to such term in
the Fourth Amendment.

“Second Lien Facility” shall mean Indebtedness incurred by the Borrower pursuant
to, and having the terms set forth in, the Second Lien Commitment Letter as in
effect on the Fourth Amendment Effective Date, with amendments, supplements and
other modifications that are not adverse to the Lenders, including any
Incremental Amount (as defined in the Second Lien Commitment Letter)
contemplated thereby, which, for the avoidance of doubt, shall be subject to the
terms of Sections 6.01(h) and 6.02(cc).

“Secured Parties” shall mean the “Secured Parties” as defined in the Collateral
Agreement.

“Security Documents” shall mean the Mortgages, the Guaranty Agreement, the
Collateral Agreement, the Foreign Pledge Agreements, the Foreign Security
Document, the Intellectual Property Security Agreements and each of the security
agreements, mortgages and other instruments and documents executed and delivered
pursuant to any of the foregoing or pursuant to Section 5.11, in each case, as
amended from time to time in accordance with the terms hereof and thereof.

“Senior Notes” shall mean the 7.875% Senior Notes due 2018 issued by the
Borrower.

“Senior Secured Debt” at any date shall mean the aggregate principal amount of
Consolidated Debt of the Borrower and its Subsidiaries outstanding at such date
that consists of, without duplication, Indebtedness that in each case is then
secured by Liens on property or assets of the Borrower and its Subsidiaries
(other than property or assets held in a defeasance or similar trust or
arrangement for the benefit of the Indebtedness secured thereby) and both such
Consolidated Debt and the Liens securing the same are not subordinated to the
Obligations, or the Liens securing the same, respectively.

“Senior Secured Leverage Ratio” shall mean, on any date, the ratio of (a) (i)
Senior Secured Debt as of such date, determined on a consolidated basis in
accordance with GAAP minus (ii) Unrestricted Cash of the Borrower and its
Subsidiaries in an amount not to exceed $30,000,000 in the aggregate, to (b)
EBITDA for such Test Period; provided, that EBITDA shall be determined for the
relevant Test Period on a Pro Forma Basis.

“Similar Business” shall mean any business or activity of the Borrower or any of
its Subsidiaries currently conducted or proposed as of the Closing Date, or any
business or activity that is reasonably similar thereto or a reasonable
extension, development or expansion thereof, or is complementary, incidental,
ancillary or related thereto.

“Specified Acquisition” shall mean the single acquisition of equity interests or
assets of a technology services provider that has previously provided services
to the Borrower and/or its Subsidiaries, that was specifically identified to and
approved by the Administrative Agent prior to the Closing Date.

 

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“Statutory Reserves” shall mean, with respect to any currency, the aggregate of
the maximum reserve, liquid asset, fees or similar requirements (including any
marginal, special, emergency or supplemental reserves or other requirements)
established by any central bank, monetary authority, the Board, the Financial
Services Authority, the European Central Bank or other Governmental Authority
for any category of deposits or liabilities customarily used to fund loans in
such currency, expressed in the case of each such requirement as a decimal. Such
reserve percentages shall, in the case of U.S. Dollar-denominated Loans, include
those imposed pursuant to Regulation D of the Board. Eurocurrency Loans shall be
deemed to be subject to such reserve, liquid asset or similar requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under any applicable law, rule or
regulation, including Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve,
liquid asset or similar requirement.

“Sterling” shall mean the lawful money of the United Kingdom.

“subsidiary” shall mean, with respect to any person (herein referred to as the
“parent”), any corporation, partnership, association or other business entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or more than 50% of
the general partnership interests are, at the time any determination is being
made, directly or indirectly, owned, Controlled or held, or (b) that is, at the
time any determination is made, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.

“Subsidiary” shall mean a subsidiary of the Borrower.

“Subsidiary Loan Party” shall mean (i) each Domestic Subsidiary of the Borrower
on the Closing Date set forth on Schedule 1.01(g) hereto and (ii) each Wholly
Owned Subsidiary of the Borrower that is a Domestic Subsidiary formed or
acquired after the Closing Date other than (A) [reserved], (B) to the extent
prohibited by Applicable Insurance Laws and Regulations, any Insurance
Subsidiary and (C) any Domestic Subsidiary solely to the extent that, and only
for so long as, guaranteeing the Obligations would violate or require consent
(that could not be readily obtained without undue burden to the Loan Parties)
under applicable law or regulations or a contractual obligation on such Domestic
Subsidiary and such law or obligation existed at the time of the acquisition of
such Domestic Subsidiary and was not created or made binding on such Domestic
Subsidiary in contemplation of or in connection with the acquisition of such
Domestic Subsidiary.

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

 

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

“Swingline Borrowing Request” shall mean a request by the Borrower substantially
in the form of Exhibit C-2.

“Swingline Commitment” shall mean, with respect to each Swingline Lender, the
commitment of such Swingline Lender to make Swingline Loans pursuant to
Section 2.04. The initial aggregate amount of the Swingline Commitments is $0.
For the avoidance of doubt, neither HPS nor HPS Lenders shall have Swingline
Commitments unless agreed to in writing in their sole discretion; it being
understood that, as of the First Amendment Effective Date, the aggregate amount
of the Swingline Commitment of all Swingline Lenders is $20,000,000 and the
aggregate Swingline Commitment of each Swingline Lender is as set forth on
Schedule 1 of the First Amendment.

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

“Swingline Lender” shall mean each Lender to be reasonably agreed between HPS
and Borrower, in its capacity as a lender of Swingline Loans. A Swingline Lender
may, in its discretion, arrange for Swingline Loans to be made by Affiliates of
such Swingline Lender or through agreements with third party swingline lenders
making swingline loans (and such swingline lender, a “Third Party Swingline
Lender”) to the Borrower and designated as a Swingline Loan hereunder by the
Borrower or Administrative Agent, in which case the term “Swingline Lender”
shall include any such Affiliate with respect to Swingline Loans made by such
Affiliate. Where the context so requires, references herein to Swingline Lender
shall include any Third Party Swingline Lender; provided, however that no such
Third Party Swingline Lender shall have any obligations under this Agreement.
For the avoidance of doubt, neither HPS nor HPS Lenders shall act as a Swingline
Lender unless agreed to in writing in their sole discretion; it being understood
that, as of the First Amendment Effective Date, the Swingline Lenders shall mean
the Swingline Lenders identified on Schedule 1 to the First Amendment.

“Swingline Loans” shall mean the swingline loans made to the Borrower pursuant
to Section 2.04.

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

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

“Term Lender” shall mean a Lender with aany Non-Extending Term Loan
CommitmentLender or 2019 Term Lender.

 

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“Term Loan Commitment” shall mean, with respect to each Term Lender, the
commitment, if any, of such Term Lender to make Term Loans hereunder on the
Closing Date, expressed as an amount representing the maximum aggregate
permitted principal amount of the Term Loans to be made by such Lender. The
initial amount of each Lender’s Term Loan Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Term Loan Commitment, as applicable.—The aggregate amount of
the Lenders’ Term Loan Commitments as of the Closing Date (immediately prior to
termination on such date pursuant to Section 2.08(a)) is $1,340,000,000.

“Term Loan Maturity Date” shall mean (A) with respect to the Non-Extended Term
Loans, the date that is the five year anniversary of the Closing Date and
(B) with respect to the 2019 Term Loans, the date that is the five year
anniversary of the Fifth Amendment Effective Date.

“Term Loans” shall mean the Non-Extended Term Loans made by the Lenders pursuant
to Section 2.01(a). The aggregate principal amount of Term Loans outstanding as
of Closing Date is $l,340,000,000.or the 2019 Term Loans, or both the
Non-Extended Term Loans and the 2019 Term Loans, as applicable.

“Test Period” shall mean, on any date of determination, the period of four
consecutive fiscal quarters of the Borrower then most recently ended and
Reported (taken as one accounting period).

“Third Party LC Issuer” shall have the meaning specified in the definition of
Issuing Bank.

“Third Party Swingline Lender” shall have the meaning specified in the
definition of Swingline Lender.

“Total Secured Debt” at any date shall mean the aggregate principal amount of
Consolidated Debt of the Borrower and its Subsidiaries outstanding at such date
that consists of, without duplication, Indebtedness that in each case is then
secured by Liens on property or assets of the Borrower and its Subsidiaries
(other than property or assets held in a defeasance or similar trust or
arrangement for the benefit of the Indebtedness secured thereby).

“Total Secured Leverage Ratio” shall mean, on any date, the ratio of (a) Total
Secured Debt as of such date to (b) EBITDA for such Test Period, all determined
on a consolidated basis in accordance with GAAP; provided, that EBITDA shall be
determined for the relevant Test Period on a Pro Forma Basis.

“Tranche” shall mean a category ofeach of (i) the Non-Extended Term Loans,
(ii) the 2019 Term Loans and (iii) the Revolving Facility Commitments and
extensions of creditsthe Revolving Facility Loans thereunder.

“Transaction Documents” shall mean the Loan Documents and the 2017
ExchangeRestructuring Support Agreement, the transaction documents contemplated
by the Restructuring Support Agreement and the Loan Documents, in each case as
amended from time to time in accordance with the terms hereof and thereof.

 

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“Transactions” shall mean, collectively, the transactions to occur pursuant to
the Transaction Documents, including (a) the execution and delivery of the Loan
Documents and the initial borrowings hereunder; (b) the execution and delivery
of the 2017 Exchange Transaction Documents and the consummation of the 2017
Exchange thereunder; (c) the repayment, redemption or discharge of, and
termination of all obligations under, the Existing Credit Agreement and Existing
Credit Agreement Loan Documents and the Affinion International Notes and the
Affinion International Notes Documents, (d) the issuance of additional 2017
Exchange Notes to redeem, repay or otherwise discharge any Senior Notes,
Affinion Investments Notes and Existing Holdings Notes remaining outstanding
after giving effect to the 2017 Exchange and (eOffering; (c) Restructuring
Transactions, and (d) the payment of all fees and expenses in connection
therewith to be paid on, prior to or subsequent to the Closing Date and owing in
connection with the foregoing.

“Treasury Rate” shall mean, as of the applicable payment date, the yield to
maturity as of such payment date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H. 15 (519) that has become publicly available at least two
Business Days prior to such redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market date)) most
nearly equal to the(A) with respect to the Non-Extended Term Loans, the period
from such payment date to the date immediately following the first anniversary
of the Closing Date, in the case of the COC Make Whole Premium Amount, and the
date immediately following the second anniversary of the Closing Date, in the
case of the Make Whole Premium Amounts; and (B) with respect to the 2019 Term
Loans, the period from such payment date to the date immediately following the
second anniversary of the Fifth Amendment Effective Date, provided; however,
that if the period from such prepayment date to the date immediately following
the first anniversary or-of the Closing Date, the second anniversary of the
Closing Date or the second anniversary of the Fifth Amendment Effective Date, as
applicable, is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.

“Type,” when used in respect of any Loan or Borrowing, shall refer to the Rate
by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term '“Rate" shall include the
Adjusted Eurocurrency Rate and ABR.

“Unreimbursed Amount” shall have the meaning assigned to such term in
Section 2.05.

“Unrestricted Cash” shall mean cash or cash equivalents of the Borrower or any
of its Subsidiaries that would not appear as “restricted” on a consolidated
balance sheet of the Borrower or any of its Subsidiaries for purposes of GAAP.

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

 

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“U.S. Lending Office” shall mean, as to any Lender, the applicable branch,
office or Affiliate of such Lender designated by such Lender to make Loans to
the Borrower.

“U.S. Person” shall mean any Person that is a “United States Person” as defined
in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning specified in Section
2.17(g).

“Wholly Owned Subsidiary” of any person shall mean a subsidiary of such person,
all of the Equity Interests of which (other than directors’ qualifying shares or
nominee or other similar shares required pursuant to applicable law) are owned
by such person or another Wholly Owned Subsidiary of such person.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a “complete withdrawal” or “partial withdrawal” from such Multiemployer Plan,
as such terms are defined in Section 4201(b) of ERISA.

“Withholding Agent” shall mean any Loan Party and the Administrative Agent.

“Working Capital” shall mean, with respect to the Borrower and the Subsidiaries
on a consolidated basis at any date of determination, Current Assets at such
date of determination minus Current Liabilities at such date of determination;
provided, that, for purposes of calculating Excess Cash Flow, increases or
decreases in Working Capital shall be calculated without regard to any changes
in Current Assets or Current Liabilities as a result of (a) any reclassification
in accordance with GAAP of assets or liabilities, as applicable, between current
and noncurrent or (b) the effects of purchase accounting.

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

SECTION 1.02 Terms Generally. The definitions set forth or referred to in
Section 1.01 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words '“include,”
“includes” and “including” shall be deemed to be followed by the phrase
'“without limitation” All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, any reference in this Agreement
to any Loan Document or other document or agreement shall mean such document as
amended, restated, supplemented or otherwise modified from time to time. Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the Closing Date in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders

 

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request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith. Notwithstanding the foregoing and notwithstanding any
changes in GAAP after the Closing Date, any lease of Holdings, the Borrower or
the Subsidiaries that would be characterized as an operating lease under GAAP in
effect on the Closing Date (whether such lease is entered into before or after
the Closing Date) shall not constitute Indebtedness, a Capital Lease or a
Capital Lease Obligation of Holdings, the Borrower or any Subsidiary under this
Agreement or any other Loan Document as a result of such changes in GAAP.

SECTION 1.03 Divisions. For all purposes under the Loan Documents, in connection
with any division or plan of division under Delaware law (or any comparable
event under a different jurisdiction’s laws): (a) if any asset, right,
obligation or liability of any Person becomes the asset, right, obligation or
liability of a different Person, then it shall be deemed to have been
transferred from the original Person to the subsequent Person, and (b) if any
new Person comes into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its Equity
Interests at such time.

SECTION 1.04 Currency Translation. For purposes of determining compliance as of
any date with Section 6.01, 6.02, 6.03, 6.04, 6.05, 6.06 or 6.07, amounts
incurred or outstanding in currencies other than U.S. Dollars shall be
translated into U.S. Dollars at the exchange rates in effect on the first
Business Day of the fiscal quarter in which such determination occurs or in
respect of which such determination is being made, as such exchange rates shall
be determined in good faith by the Borrower. No Default or Event of Default
shall arise as a result of any limitation or threshold set forth in U.S. Dollars
in Section 6.01, 6.02, 6.03, 6.04, 6.05, 6.06 or 6.07 or paragraph (f) or (j) of
Section 7.01 being exceeded solely as a result of changes in currency exchange
rates from those applicable on the first day of the fiscal quarter in which such
determination occurs or in respect of which such determination is being made.

SECTION 1.05 Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall at all times be deemed
to be the maximum stated amount of such Letter of Credit after giving effect to
all such increases, whether or not such maximum stated amount is in effect at
such times.

SECTION 1.06 Dutch Terms. In this Agreement, where it relates to a Dutch person
or the context so requires, a reference to (i) “works council” means each works
council (ondernemingsraad) or central or group works council (cenlrale of groeps
ondernemingsraad) within the meaning of the Works Councils Act of the
Netherlands (Wet op de ondernemingsraden) having jurisdiction over that person,
(ii) the execution, delivery and performance of any document or action having
been duly authorized includes any action required to comply with the Works
Councils Act of the Netherlands (Wet op de ondernemingsraden) and obtaining an
unconditional positive advice (advies) from the competent

 

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works council(s), (iii) “constituent documents” means the deed of incorporation
(akte van oprichting), articles of association (statuten), and an up-to-date
extract of the Trade Register of the Dutch Chamber of Commerce relating to that
person, (iv) a “bankruptcy”, “winding-up”, “liquidation” or “dissolution”
includes that person being declared bankrupt (failliet verklaard) or dissolved
(ontbonden), (v) a “moratorium” includes (voorlopige) surseance van betaling.
(vi) “admit in writing its inability or fail generally to pay its debts”
includes that person having filed a notice under Section 36 of the Tax
Collection Act of the Netherlands (Invorderingswet 1990) or Section 60 of the
Social Insurance Financing Act of the Netherlands (Wet Financiering Sociale
Verzekeringen) in conjunction with Section 36 of the Tax Collection Act of the
Netherlands (Invorderingswet 1990), (vii) a “liquidator” or “trustee in
bankruptcy” includes a curator or a beoogd curator, (viii) an “administrator”
includes a bewindvoerder, or a beoogd bewindvoerder, and (ix) a “lien” includes
any mortgage (hypotheek), pledge (pandrecht), retention of title arrangement
(eigendomsvoorbehoud), privilege (voorrecht), right of retention (recht van
retentie), right to reclaim goods (recht van reclame), and any right in rem
(beperkt recht), created for the purpose of granting security
(goederenrechtelijk zekerheidsrecht).

ARTICLE II

The Credits

SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein:

(a) each Term Lender agrees to make Term Loans to the Borrower in U.S. Dollars
on the Closing Date from its U.S. Lending Office in a principal amount equal to
its Term Loan Commitment;

(b) each Revolving Facility Lender agrees from time to time during the Revolving
Availability Period to make Revolving Facility Loans in U.S. Dollars to the
Borrower from its U.S. Lending Office in an aggregate principal amount that will
not result in such Lender’s Revolving Facility Exposure exceeding such Lender’s
Revolving Facility Commitment; provided that, no Revolving Facility Loans will
be required to be made to the extent that the aggregate amount of Revolving
Facility Exposure plus the face amount of letters of credit issued under
Section 6.01(s) exceeds the total Revolving Facility Commitments.

(c) within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Revolving Facility
Loans. Amounts repaid in respect of Term Loans may not be reborrowed.

SECTION 2.02 Loans and Borrowings.

(a) Each Loan shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class (or, in the case of Swingline
Loans, in accordance with their respective Swingline Commitments).

 

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(b) Subject to Section 2.14, each Borrowing (other than a Swingline Borrowing)
shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower
may request in accordance herewith. Each Swingline Borrowing shall be an ABR
Borrowing. Each Lender at its option may make any ABR Loan or Eurocurrency Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided, that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement and such Lender shall not be entitled to any amounts payable
under Section 2.15 or 2.17 solely in respect of increased costs or taxes
resulting from such exercise and existing at the time of such exercise.

(c) At the commencement of each Interest Period for any Eurocurrency Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of the Borrowing Multiple and not less than the Borrowing Minimum. At
the time that (i) each ABR Revolving Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of the Borrowing Multiple
and not less than the Borrowing Minimum; provided, that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Revolving Commitments or that is required to finance the
reimbursement of an L/C Disbursement as contemplated by Section 2.05(e).
Borrowings of more than one Type and Class may be outstanding at the same time;
provided, that there shall not at any time be more than a total of (i) ten
Eurocurrency Borrowings outstanding under each Class of Term Loans and (ii) ten
Eurocurrency Borrowings outstanding under each Class of Revolving Facility
Loans.

(d) 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
Facility Maturity Date or Term Loan Maturity Date or other final stated maturity
date of any other Class of Loans, as applicable.

SECTION 2.03 Requests for Borrowings. To request a Revolving Facility Borrowing
and/or a Term Borrowing, the Borrower shall notify the Administrative Agent of
such request (as provided in Section 9.01) in writing by providing a Borrowing
Request in the form of Exhibit C-l hereto (a) in the case of a Eurocurrency
Borrowing, not later than 12:00 p.m., Local Time, four Business Days before the
date of the proposed Borrowing, (b) in the case of an ABR Term Loan Borrowing,
not later than 12:00 p.m., Local Time, four Business Day before the date of the
proposed Borrowing, and (c) in the case of an ABR Revolving Borrowing, not later
than 12:00 p.m., Local Time, four Business Days before the date of the proposed
Borrowing; provided, that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an L/C Disbursement as contemplated by
Section 2.05(e) may be given not later than 11:00 a.m., Local Time, on the date
of the proposed Borrowing. Each such written Borrowing Request shall be
irrevocable and shall be provided by electronic mail or telecopy to the
Administrative Agent. Each such written Borrowing Request shall specify the
following information in compliance with Section 2.02:

(i) the Class of such Borrowing;

(ii) the aggregate amount of the requested Borrowing;

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

 

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(iv) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing;

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

(vi) the location and number of the Borrower’s account to which funds are to be
disbursed.

If no election as to the Type of Term Borrowing or Revolving Facility Borrowing
is specified (as applicable), then the requested Revolving Facility Borrowing
shall be an ABR Borrowing. If no Interest Period is specified with respect to
any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each 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 Swingline Loans.

(a) Subject to the terms and conditions set forth herein, each Swingline Lender
agrees, severally, to make Swingline Loans in U.S. Dollars to the 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 Swingline
Exposure exceeding the Swingline Commitment, (ii) the Revolving Facility
Exposure of any Swingline Lender exceeding such Swingline Lender’s respective
Revolving Facility Commitment or (iii) the Revolving Facility Exposure plus the
face amount of letters of credit issued under Section 6.01(s) exceeding the
total Revolving Facility Commitments; provided, that the Swingline Lenders shall
not be required to make a Swingline Loan to refinance an outstanding Swingline
Borrowing and, to the extent that any HPS Lender is a Swingline Lender, such
Swingline Lender shall not be required to fund any Swingline Loans until receipt
of corresponding loans under the Natixis Swingline Agreement. Each Swingline
Borrowing shall be in an amount that is an integral multiple of the Borrowing
Multiple, and not less than the Borrowing Minimum. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Swingline Loans. To the extent that HPS and the HPS
Lenders agree to act as Swingline Lenders, it is understood and agreed they may
satisfy their obligations hereunder with respect to the making of Swingline
Loans by causing a Third Party Swingline Lender to make such Swingline Loan.

(b) To request a Swingline Borrowing, the Borrower shall notify the
Administrative Agent and the Swingline Lenders of such request in writing (which
may be by electronic mail) in the form of a Swingline Borrowing Request, not
later than 10:00 a.m., Local Time, on the day of a proposed Swingline Borrowing.
Each such notice and Swingline Borrowing Request shall be irrevocable and shall
specify (i) the requested date (which shall be a Business Day) and (ii) the
amount of the requested Swingline Borrowing. The Swingline Lenders shall consult
with the Administrative Agent as to whether the making of the Swingline Loan is
in accordance with the terms of this Agreement prior to the Swingline Lenders
funding such Swingline Loan. Upon receipt of notice a proposed Swingline
Borrowing from Borrower,

 

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the Swingline Lenders shall promptly deliver notice of a proposed borrowing to
Natixis no later than the deadline set forth in the Natixis Swingline Agreement
for requesting a corresponding loan. The Swingline Lenders shall make each
Swingline Loan to be made by them hereunder in accordance with Section 2.02(a)
on the proposed date thereof by wire transfer of immediately available funds by
4:00 p.m., Local Time, to the account of the Borrower (or, in the case of a
Swingline Borrowing made to finance the reimbursement of an L/C Disbursement as
provided in Section 2.05(e), by remittance to the applicable Issuing Bank).

(c) The Swingline Lenders shall have the right to demand repayment by the
Borrower of any Swingline Loan, in whole or in part, on the 15th day after
borrowing of any Swingline Loan upon giving written notice to the Borrower and
the Administrative Agent before 12:00 p.m. (New York City time) no later than
the 5th day after borrowing of any Swingline Loan. With respect to any Swingline
Loans which have not been repaid by the Borrower upon demand pursuant to the
foregoing sentence or voluntarily prepaid by the Borrower pursuant to
Section 2.11(a), the Swingline Lenders may by written notice given to the
Administrative Agent not later than 12:00 p.m., Local Time, in their sole
discretion, four Business Days before the date of the proposed participations,
require the Revolving Facility Lenders to acquire participations in all or a
portion of the outstanding Swingline Loans made by it. Such notice shall specify
the aggregate amount of such Swingline Loans in which the Revolving Facility
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each such Revolving Facility
Lender, specifying in such notice such Revolving Facility Lender’s Applicable
Percentage of such Swingline Loan or Loans. Each Revolving Facility 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
Lenders, such Revolving Facility Lender’s Applicable Percentage of such
Swingline Loan or Loans (and the Administrative Agent may apply Cash Collateral
available with respect to the applicable Swingline Loan). Each Revolving
Facility Lender acknowledges and agrees that its respective obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Facility Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Loans made by such Revolving Facility Lender (and
Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the
Revolving Facility Lenders), and the Administrative Agent shall promptly pay to
the Swingline Lenders the amounts so received by it from the Revolving Facility
Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph (c),
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lenders. Any amounts received by
the Swingline Lenders from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lenders
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
Facility Lenders that shall have made their payments pursuant to this paragraph
and to the Swingline Lenders, as their interests may appear; provided, that any
such payment so remitted shall be repaid to the Swingline Lenders or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

 

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(d) The Swingline Lenders may be replaced at any time by written agreement among
the Borrower, the Administrative Agent, the replaced Swingline Lender(s) and the
successor Swingline Lender(s). The Administrative Agent shall notify the Lenders
of any such replacement of a Swingline Lender. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Swingline Lender(s). From and after the effective date
of any such replacement, (i) the successor Swingline Lender(s) shall have all
the rights and obligations of the replaced Swingline Lender(s) under this
Agreement with respect to Swingline Loans to be extended thereafter and
(ii) references herein to the term “Swingline Lender” or “Swingline Lenders”
shall be deemed to refer to such successor or to any previous Swingline Lender,
or to such successor and all previous Swingline Lenders, as the context shall
require. After the replacement of a Swingline Lender hereunder, the replaced
Swingline Lender shall remain a party hereto and shall continue to have all the
rights and obligations of such Swingline Loans under this Agreement with respect
to Swingline Loans extended by it prior to such replacement but shall not be
required to extend any additional Swingline Loans.

(e) Pursuant to the First Amendment, certain HPS Lenders have agreed to act as
Swingline Lenders. HPS and the HPS Lenders agree to use commercially reasonable
efforts to keep in effect the Natixis Swingline Agreement (it being agreed that
in no event shall HPS or the HPS Lenders be required to pay any incremental
fees, costs or expenses greater than those of a de minimis nature, unless the
Borrower shall agree to and promptly reimburse such fees, costs and expenses in
full) and agree to act as Swingline Lenders if the Natixis Swingline Agreement
remains in effect, provided that notwithstanding anything herein to contrary, if
at any time HPS or the HPS Lenders are unable act as Swingline Lenders or cannot
act as a Swingline Lender without undue burden or without incurring incremental
fees, costs or expenses of a non-de minimis nature then HPS and the HPS Lenders,
may, upon written notice (“Swingline Resignation Notice”) to the Borrower and
Administrative Agent, immediately resign from their role(s) as Swingline
Lenders. After any potential resignation of HPS and the HPS Lenders hereunder,
HPS and the HPS Lenders shall remain a party hereto and shall continue to have
all the rights and obligations of such Swingline Loans under this Agreement with
respect to Swingline Loans extended by them prior to such resignation but shall
not be required to extend any additional Swingline Loans. Such Swingline
Resignation Notice shall also serve as a notice to the Revolving Facility
Lenders pursuant to Section 2.04(c) and the Revolving Facility Lenders hereby
agree to acquire participations in such Swingline Loans in accordance with the
provisions of Section 2.04(c).

(f) Reference is made to (i) that certain Swing Line Loan Reimbursement
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the “Natixis Swingline Agreement”) dated as of the First Amendment
Effective Date among the Obligors, HPS and Natixis and (ii) the Natixis Fee
Letter (together with the Natixis Swingline Agreement, the “Natixis Swingline
Documents”). The Borrower acknowledges that it has read the Natixis Swingline
Documents and approves of HPS and the Obligors entering into the same.
Notwithstanding any other provision of this Agreement, the Obligors as Swingline
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hereunder shall have no obligation to lend, or cause Natixis to lend, swingline
loans other than in accordance with the terms of, and subject to the terms and
conditions of, the Natixis Swingline Documents and the Borrower shall have no
right to request that HPS or the Obligors lend or cause the lending of swingline
loans other than in accordance with, and subject to all terms and conditions of,
the Natixis Swingline Documents. Borrower will supply HPS with such documents as
HPS may reasonably request in order to comply with or keep in effect the Natixis
Swingline Documents. Borrower shall promptly reimburse HPS for any and all fees,
expenses and other amounts payable by HPS or any Obligor under the Natixis
Swingline Documents including, without limitation, the Swing Line Loan Upfront
Fees (as defined therein), any increased costs as provided in Section 5 of the
Natixis Swingline Agreement, any Taxes as provided in the Section 6 of the
Natixis Swingline Agreement and any indemnification and breakage obligations as
provided in Section 8 of the Natixis Swingline Agreement (but excluding
Swingline Loan Unused Commitment Fees (as defined therein), and the interest
rate payable pursuant to Section 2(b) of the Natixis Swingline Agreement, solely
to the extent such fees and amounts are duplicative of, and in each case not in
excess of, the corresponding fees and amounts the Borrower would otherwise be
required to pay hereunder in connection with the Commitment Fee pursuant to
Section 2.12(a) and interest payable pursuant to Section 2.13(a) in respect of
Swingline Loans respectively). In the event of any conflict between this
Section 2.04(f) of this Agreement and any other provision of this Agreement,
this Section 2.04(f) shall govern and control.

SECTION 2.05 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, (i) each
Issuing Bank severally agrees, in reliance upon the agreements of the Revolving
Facility Lenders set forth in this Section 2.05, from time to time on any
Business day during the Revolving Availability Period and prior to the date that
is thirty days prior to the Revolving Facility Maturity Date, to issue Letters
of Credit for the account of the Borrower or its Subsidiaries, and to amend
Letters of Credit previously issued by it, in accordance with subsection
(b) below, and to honor drawings of Letters of Credit; and (ii) the Revolving
Facility Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower or its Subsidiaries and any drawings thereunder;
provided that after giving effect to any issuance of any Letter of Credit,
(x) the total Revolving Facility Exposure plus the face amount of letters of
credit issued under Section 6.01(s) shall not exceed the total Revolving
Facility Commitments, (y) the Revolving Facility Exposure of any Revolving
Facility Lender shall not exceed such Revolving Facility Lender’s respective
Revolving Facility Commitment, and (z) the L/C Exposure shall not exceed the
aggregate L/C Commitments; provided further that, to the extent that any HPS
Lender is an Issuing Bank, such Issuing Bank shall not be required to issue,
amend or otherwise provide Letters of Credit unless the corresponding letters of
credit are issued, amended or otherwise provided under the Natixis L/C
Agreement. Each request by the Borrower for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by the Borrower that the
issuance or amendment of such Letter of Credit so requested complies with the
conditions set forth in the proviso to the preceding sentence. Within the
foregoing limits, and subject to the terms and conditions hereof, the Borrower’s
ability to obtain Letters of Credit shall be fully revolving, and accordingly
the Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon and
reimbursed. In the event of any inconsistency between the terms and conditions
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Agreement and the terms and conditions of any form of Letter of Credit
Application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, an Issuing Bank relating to any Letter of Credit
(collectively, the “Issuer Documents”), the terms and conditions of this
Agreement shall control. To the extent that HPS and the HPS Lenders agree to act
as Issuing Banks, it is understood and agreed they may satisfy their obligations
hereunder with respect to the issuance of Letters of Credit by causing a Third
Party LC Issuer to issue such Letters of Credit.

(b) Notice of Issuance, Amendment, Renewal, Extension, (i) Each Letter of Credit
shall be issued or amended, as the case may be, upon the request of the Borrower
delivered to the applicable Issuing Bank (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed
and signed by a Responsible Officer of the Borrower. Such Letter of Credit
Application must be received by the applicable Issuing Bank and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Administrative Agent and the applicable Issuing
Bank may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the applicable
Issuing Bank: (A) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the stated amount thereof; (C) the expiry
date thereof (and any “evergreen” renewals, if any, including the terms
thereof); (D) the name and address of the beneficiary thereof; (E) the documents
to be presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; (G) the purpose and nature of the requested Letter of
Credit; and (H) such other matters as such Issuing Bank may require. In the case
of a request for an amendment of any outstanding Letter of Credit, such Letter
of Credit Application shall specify in form and detail satisfactory to the
applicable Issuing Bank (w) the Letter of Credit to be amended; (x) the proposed
date of amendment thereof (which shall be a Business Day); (y) the nature of the
proposed amendment; and (z) such other matters as such Issuing Bank may require.
Additionally, the Borrower shall furnish to the applicable Issuing Bank and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as such Issuing Bank or the Administrative Agent may require.

(ii) Promptly after receipt of any Letter of Credit Application, the applicable
Issuing Bank will confirm with the Administrative Agent in writing (which may be
by electronic mail or telecopy) that the Administrative Agent has received a
copy of such Letter of Credit Application from the Borrower and, if not, such
Issuing Bank will provide the Administrative Agent with a copy thereof. Promptly
thereafter, the Issuing Bank shall request a letter of credit from Natixis no
later than the deadline set forth in the Natixis L/C Agreement for requesting a
letter of credit issuance. Unless the applicable Issuing Bank has received
written notice from any Revolving Facility Lender, the Administrative Agent or
any Loan Party, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article 4.01 shall not then be satisfied,
then, subject to the terms and conditions hereof, such applicable Issuing Bank
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower or the applicable Subsidiary

 

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or enter into the applicable amendment, as the case may be, in each case in
accordance with such Issuing Bank’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Revolving Facility
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the applicable Issuing Bank a risk participation in such Letter of
Credit in an amount equal to the product of such Revolving Facility Lender’s
Applicable Percentage times the amount of such Letter of Credit.

(iii) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the applicable Issuing Bank will also deliver to the Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

(c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt
from the beneficiary of any Letter of Credit of any notice of a drawing under
such Letter of Credit, the applicable Issuing Bank shall notify the Borrower and
the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any
payment by the applicable Issuing Bank under a Letter of Credit (each such date,
an “Honor Date”), the Borrower shall reimburse the applicable Issuing Bank
through the Administrative Agent in an amount equal to the amount of such
drawing. If the Borrower fails to so reimburse the applicable Issuing Bank by
such time, the Administrative Agent shall promptly notify each Revolving
Facility Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Revolving Facility Lender’s
Applicable Percentage thereof. In such event, the Borrower shall be deemed to
have requested a Borrowing of ABR Loans to be disbursed four Business Days after
the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.02 for the principal amount of
ABR Loans, but subject to the amount of the unutilized portion of the
Commitments and the conditions set forth in Section 4.01 (other than the
delivery of a Borrowing Request) (provided, however, that for the avoidance of
doubt, no Revolving Facility lender shall be required to disburse their portion
of the Unreimbursed Amount sooner than the time periods specified in
Section 2.03).

(ii) Each Revolving Facility Lender shall upon any notice pursuant to
Section 2.05(c)(i) make funds available (and the Administrative Agent may apply
Cash Collateral provided for this purpose) for the account of the applicable
Issuing Bank at the Administrative Agent’s Office in an amount equal to its
Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the
Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.05(c)(iii), each Revolving Facility
Lender that so makes funds available shall be deemed to have made an ABR Loan to
the Borrower in such amount (provided, however, that for the avoidance of doubt,
no Revolving Facility lender shall be required to disburse their portion of the
Unreimbursed Amount sooner than the time periods specified in Section 2.03). The
Administrative Agent shall remit the funds so received to the applicable Issuing
Bank.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of ABR Loans because the conditions set forth in Section 4.01 cannot
be satisfied or for any other reason, the Borrower shall be deemed to have
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applicable Issuing Bank an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the rate specified
in Section 2.13. In such event, each Revolving Facility Lender’s payment to the
Administrative Agent for the account of the applicable Issuing Bank pursuant to
Section 2.05(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Revolving
Facility Lender in satisfaction of its participation obligation under this
Section 2.05.

(iv) Until each Revolving Facility Lender funds its Loan or L/C Advance pursuant
to this Section 2.05(c) to reimburse applicable Issuing Bank for any amount
drawn under any Letter of Credit, interest in respect of such Revolving Facility
Lender’s Applicable Percentage of such amount shall be solely for the account of
the applicable Issuing Bank.

(v) Each Revolving Facility Lender’s obligation to make Loans or L/C Advances to
reimburse the applicable Issuing Bank for amounts drawn under Letters of Credit,
as contemplated by this Section 2.05(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Facility
Lender may have against the applicable Issuing Bank, the Borrower or any other
person for any reason whatsoever; (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each Revolving Facility
Lender’s obligation to make Loans pursuant to this Section 2.05(c) is subject to
the conditions set forth in Section 4.01 (other than delivery by the Borrower of
a Borrowing Request). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the applicable
Issuing Bank for the amount of any payment made by the Issuing Bank under any
Letter of Credit, together with interest as provided herein.

(vi) If any Revolving Facility Lender fails to make available to the
Administrative Agent for the account of the applicable Issuing Bank any amount
required to be paid by such Revolving Facility Lender pursuant to the foregoing
provisions of this Section 2.05(c) by the time specified in Section 2.05(c)(ii),
then, without limiting the other provisions of this Agreement, the applicable
Issuing Bank shall be entitled to recover from such Revolving Facility Lender
(acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the applicable Issuing Bank at a
rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the applicable Issuing Bank in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the applicable Issuing Bank in connection with the
foregoing. If such Revolving Facility Lender pays such amount (with interest and
fees as aforesaid), the amount so paid shall constitute such Revolving Facility
Lender’s Loan included in the relevant Borrowing or L/C Advance in respect of
the relevant L/C Borrowing, as the case may be. A certificate of the applicable
Issuing Bank submitted to any Revolving Facility Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(vi) shall be conclusive absent manifest error.

 

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(d) Repayment of Participations.

(i) At any time after the applicable Issuing Bank has made a payment under any
Letter of Credit and has received from any Revolving Facility Lender such
Revolving Facility Lender’s L/C Advance in respect of such payment in accordance
with Section 2.05(c), if the Administrative Agent receives for the account of
the applicable Issuing Bank any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Revolving Facility
Lender its Applicable Percentage thereof in the same funds as those received by
the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of any
Issuing Bank pursuant to Section 2.05(c)(i) is required to be returned under any
of the circumstances described in Section 9.07 (including pursuant to any
settlement entered into by the applicable Issuing Bank in its discretion), each
Revolving Facility Lender shall pay to the Administrative Agent for the account
of the applicable Issuing Bank its Applicable Percentage thereof on demand of
the Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Revolving Facility Lender, at a rate
per annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Revolving Facility Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the
Issuing Banks for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any person for whom any such
beneficiary or any such transferee may be acting), the applicable Issuing Bank
or any other person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

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(iv) any payment by the applicable Issuing Bank under such Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by the applicable
Issuing Bank under such Letter of Credit to any person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
Subsidiary.

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the applicable Issuing Bank. The Borrower shall
be conclusively deemed to have waived any such claim against the applicable
Issuing Bank and its correspondents unless such notice is given as aforesaid.

(f) Role of the Issuing Banks. Each Revolving Facility Lender and the Borrower
agree that, in paying any drawing under a Letter of Credit, no Issuing Bank
shall have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the person executing or delivering any such document. Neither
any Issuing Bank, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of any Issuing Bank shall
be liable to any Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. Neither any Issuing Bank, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of any
Issuing Bank shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.05(e); provided, however, that anything in
such clauses to the contrary notwithstanding, the Borrower may have a claim
against an Issuing Bank, and such Issuing Bank may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by such Issuing Bank’s willful misconduct or gross negligence or such
Issuing Bank’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the

 

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terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, any Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, no Issuing Bank shall
be responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

(g) Unless otherwise expressly agreed by the applicable Issuing Bank and the
Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to
each standby Letter of Credit.

(h) Certain Conditions. No Issuing Bank shall be under any 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 applicable Issuing Bank
from issuing the Letter of Credit, or any Law applicable to the applicable
Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the applicable
Issuing Bank shall prohibit, or request that the applicable Issuing Bank refrain
from, the issuance of letters of credit generally or the Letter of Credit in
particular or shall impose upon the applicable Issuing Bank with respect to the
Letter of Credit any restriction, reserve or capital requirement (for which the
applicable Issuing Bank is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the applicable Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the applicable Issuing Bank in good faith deems material to it;

(ii) the issuance of the Letter of Credit would violate one or more policies of
the applicable Issuing Bank applicable to letters of credit generally;

(iii) the Letter of Credit is to be denominated in a currency other than
Dollars; or

(iv) any Lender is at that time a Defaulting Lender, unless the applicable
Issuing Bank has entered into arrangements, including the delivery of Cash
Collateral, satisfactory to the applicable Issuing Bank (in its sole discretion)
with the Borrower or such Lender to eliminate the Issuing Bank’s actual or
potential Fronting Exposure (after giving effect to Section 2.23(a)(iv)) with
respect to the Defaulting Lender arising from either the Letter of Credit then
proposed to be issued or that Letter of Credit and all other Letter of Credit
obligations as to which the applicable Issuing Bank has actual or potential
Fronting Exposure, as it may elect in its sole discretion.

(i) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Revolving Facility Maturity Date; provided, that
any Letter of Credit with a one-year tenor may provide for the automatic renewal
thereof for additional one-year periods (which, in no event, shall extend beyond
the applicable date referred to in clause (a) of this Section 2.05).

 

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(j) Replacement of an Issuing Bank. An Issuing Bank may be replaced at any time
by written agreement among the Borrower, the Administrative Agent, the replaced
Issuing Bank and the successor Issuing Bank. The Administrative Agent shall
notify the Lenders of any such replacement of an Issuing Bank. At the time any
such replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
replaced Issuing Bank under this Agreement with respect to Letters of Credit to
be issued thereafter and (ii) references herein to the term “Issuing Bank” or
“Issuing Banks” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of such Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement but shall
not be required to issue additional Letters of Credit.

(k) Appointment of an Issuing Bank and Additional Issuing Banks. Pursuant to the
First Amendment, certain HPS Lenders have agreed to act as Issuing Banks. HPS
and the HPS Lenders agree to use commercially reasonable efforts to keep in
effect the Natixis L/C Agreement (it being agreed that in no event shall HPS or
the HPS Lenders be required to pay any incremental fees, costs or expenses
greater than those of a de minimis nature, unless the Borrower shall agree to
and promptly reimburse such fees, costs and expenses in full) and agree to act
as Issuing Banks if the Natixis L/C Agreement remains in effect, provided that
notwithstanding anything herein to contrary, if at any time HPS and the HPS
Lenders are unable or cannot act as Issuing Banks without undue burden or
without incurring incremental fees, costs or expenses of a non-de minimis nature
then HPS and the HPS Lender may, upon written notice to the Borrower and
Administrative Agent, immediately resign from their roles as Issuing Banks. If
at any time, and from time to time, HPS or the HPS Lenders is required to cash
collaterize any Letter of Credit issued by a Third Party LC Issuer, the Borrower
agrees to immediately (with either cash on hand or via a request for a Revolving
Facility Borrowing (with such requirement being satisfied if the Borrower
immediately requests a Revolving Facility Borrowing and promptly applies the
proceeds of such Revolving Facility Borrowing as set forth in this sentence))
cash collateralize such Letter of Credit (or reimburse HPS and the HPS Lenders
for such cash collateralization). From time to time, the Borrower may by written
notice to the Administrative Agent designate up to four Lenders, each of which
agrees (in its sole discretion) to act in such capacity and each of which is
reasonably satisfactory to the Administrative Agent as an Issuing Bank. Each
such additional Issuing Bank shall execute a counterpart of this Agreement upon
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) and shall thereafter be an Issuing Bank hereunder for all
purposes. For avoidance of doubt, no Third Party LC Issuer shall be required to
become a party to this Agreement.

 

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(l) Issuing Bank Agreements. Unless otherwise requested by the Administrative
Agent, each Issuing Bank shall report in writing to the Administrative Agent
(i) on the first Business Day of each month, the daily activity (set forth by
day) in respect of Letters of Credit during the immediately preceding month,
including all issuances, extensions, amendments and renewals, all expirations
and cancellations and all disbursements and reimbursements, (ii) on or prior to
each Business Day on which such Issuing Bank expects to issue, amend, renew or
extend any Letter of Credit, the date of such issuance, amendment, renewal or
extension, and the aggregate face amount of the Letters of Credit to be issued,
amended, renewed or extended by it and outstanding after giving effect to such
issuance, amendment, renewal or extension occurred (and whether the amount
thereof changed), it being understood that such Issuing Bank shall not permit
any issuance, renewal, extension or amendment resulting in an increase in the
amount of any Letter of Credit to occur without first obtaining written (or,
with respect to any Issuing Bank, if the Administrative Agent so agrees with
respect to such Issuing Bank, telephonic) confirmation from the Administrative
Agent that it is then permitted under this Agreement, (iii) on each Business Day
on which such Issuing Bank makes any L/C Disbursement in respect of any Letter
of Credit issued, the date of such L/C Disbursement and the amount of such L/C
Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse
an L/C Disbursement required to be reimbursed to such Issuing Bank on such day,
the date of such failure and the amount of such L/C Disbursement and (v) on any
other Business Day, such other information as the Administrative Agent shall
reasonably request.

(m) Reference is made to (i) that certain Continuing Agreement for Letters of
Credit (as amended, restated, supplemented or otherwise modified from time to
time, the “Natixis L/C Agreement”) dated as of the First Amendment Effective
Date among SLF 2016 Institutional Holdings lux S.A R.L, Specialty Loan Fund
2016-1, L.P., , Cactus Direct lending Fund, L.P. and Red Cedar Fund, L.P. (each
an “Obligor” and collectively the “Obligors”), HPS and Natixis, New York Branch
(Natixis) and (ii) that certain Natixis Fee Letter (as amended, restated,
supplemented or otherwise modified from time to time, the “Natixis Fee Letter”
and together with the Natixis L/C Agreement, the “Natixis L/C Documents”) dated
as of the First Amendment Effective Date among the Obligors, HPS and Natixis.
The Borrower acknowledges that it has read the Natixis L/C Documents and
approves of HPS and the Obligors entering into the same. Notwithstanding any
other provision of this Agreement, the Obligors as Issuing Banks hereunder shall
have no obligation to issue, or cause Natixis to issue, letters of credit other
than in accordance with the terms of, and subject to the terms and conditions
of, the Natixis L/C Documents and the Borrower shall have no right to request
that HPS or the Obligors issue or cause the issuance of any letters of credit
other than in accordance with, and subject to all terms and conditions of, the
Natixis L/C Documents. Borrower will supply HPS with such documents as HPS may
reasonably request in order to comply with or keep in effect the Natixis L/C
Documents. HPS will furnish to the Borrower a copy of each Credit and each
amendment thereto that is delivered to it by Natixis and will promptly notify
HPS in writing of any claim of noncompliance and shall be conclusively deemed to
have waived any claim against HPS, Natixis or its correspondents unless notice
is given as aforesaid. Borrower shall promptly reimburse HPS for any and all
fees, expenses and other amounts payable by HPS or any Obligor under the Natixis
L/C Documents including, without limitation the LoC Facility Upfront Fees, any
increased costs as provided in Section 5 of the Natixis L/C Agreement, any Taxes
as provided in the Section 6 of the Natixis L/C Agreement and any
indemnification obligations as provided in Section 8 of the Natixis L/C
Agreement (but excluding the LoC Participation Fees, the LoC Facility Unused
Commitment Fee, the LoC Issuance Fees (each as defined therein) and the interest
rate payable pursuant to Section 2(b) of the Natixis L/C Agreement, solely to
the extent

 

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such fees and amounts are duplicative of, and in each case not in excess of, the
corresponding fees and amounts the Borrower would otherwise be required to pay
hereunder in connection with the L/C Participation Fee, fronting fees and
Issuing Bank Fees pursuant to Section 2.12(b), the Commitment Fee pursuant to
Section 2.12(a) and interest payable pursuant to Section 2.05(c) in respect of
Unreimbursed Amounts respectively). In the event of any conflict between this
Section 2.05(m) of this Agreement and any other provision of this Agreement,
this Section 2.05(m) shall govern and control.

SECTION 2.06 Funding of Borrowings.

(a) Each Lender shall make each Loan to be made by it on the proposed date
thereof by wire transfer of immediately available funds by 12:00 noon, Local
Time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders; provided, that Swingline Loans shall
be made as provided in Section 2.04. Upon receipt of all funds requested in the
Borrowing Request, the Administrative Agent will make such Loans available to
the Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower designated by the Borrower in the applicable Borrowing
Request; provided, that L/C Advances made to finance a L/C Borrowing pursuant to
Section 2.05(b)(ii) shall be remitted by the Administrative Agent to the
applicable Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurocurrency Loans (or, in the
case of any Borrowing of ABR Loans, prior to 12:00 noon on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date and at the time required
by Section 2.06(a) and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower each severally agree to pay
to the Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to ABR Loans. If the Borrower and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping period,
the Administrative Agent shall promptly remit to the Borrower the amount of such
interest paid by the Borrower for such period. If such Lender pays its share of
the applicable Borrowing to the Administrative Agent, then the amount so paid
shall constitute such Lender’s Loan included in such Borrowing. Any payment by
the Borrower shall be without prejudice to any claim the Borrower may have
against a Lender that shall have failed to make such payment to the
Administrative Agent.

SECTION 2.07 Interest Elections, (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurocurrency Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request.

 

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Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans resulting
from an election made with respect to any such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.

(b) To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election (as provided in Section 9.01) in writing
(in a form as the Administrative Agent may reasonably request) (which may be by
electronic mail or telecopy), in the case of an election that would result in a
Borrowing, by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting
from such election to be made on the effective date of such election.
Notwithstanding any other provision of this Section, the Borrower shall not be
permitted to (i) change the currency of any Borrowing, (ii) elect an Interest
Period for Eurocurrency Loans that does not comply with Section 2.02(d) or
(iii) convert any Borrowing to a Borrowing not available under the Class of
Commitments pursuant to which such Borrowing was made.

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

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

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

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

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

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

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

 

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

SECTION 2.08 Termination and Reduction of Commitments. (a) Unless previously
terminated, the Revolving Facility Commitment (x) on May 10, 2021, shall be
reduced to $80,000,000, ratably among the Revolving Facility Lenders in
accordance with their respective Revolving Facility Commitments and (y) shall
terminate on the Revolving Facility Maturity Date.

(ii) The Term Loan Commitments shall terminate on the Closing Date (immediately
after the incurrence of Term Loans on such date).

(b) The Borrower may at any time terminate, or from time to time reduce, the
Revolving Facility Commitments; provided, that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 (or, if less, the remaining amount of
the Revolving Facility Commitments) and (ii) the Borrower shall not terminate or
reduce the Revolving Facility Commitments if, after giving effect to any
concurrent prepayment of the Revolving Facility Loans in accordance with
Section 2.11, the total Revolving Facility Exposure plus the face amount of
letters of credit issued under Section 6.01(s) would exceed the total Revolving
Facility Commitments; provided further that, the Borrower may terminate the
unused Revolving Facility Commitments of any Defaulting Lender at any time, or
from time to time, in any amounts and without a pro rata reduction of the
Revolving Facility Commitments of the other Lenders.

(c) The Borrower shall notify the Administrative Agent in writing (which may be
by electronic mail or telecopy) of any election to terminate or reduce the
Revolving Facility Commitments under paragraph (b) of this Section 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
applicable Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided, that a notice
of termination of the Revolving Facility Commitments delivered by the Borrower
may state that such notice is conditioned upon the effectiveness of other
financing, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class pursuant to this Section 2.08 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 2.09 Repayment of Loans; Evidence of Debt, (a) The Borrower

 

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hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Revolving Facility Lender the then unpaid principal amount of
each Revolving Facility Loan of such Lender to the Borrower on the Revolving
Facility Maturity Date, (ii) to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each Term Loan of such Lender to the
Borrower as provided in Section 2.10 and (iii) to the Swingline Lenders the then
unpaid principal amount of each Swingline Loan to the Borrower on the Revolving
Facility Maturity Date.

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

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

(d)    The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall be prima facie evidence of the existence, currencies
and amounts of the obligations recorded therein; provided, that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement and in the event of any
conflict between the entries made in the accounts maintained pursuant to
Section 2.09(b) and the accounts maintained pursuant to Section 2.09(c), the
accounts maintained pursuant to Section 2.09(c) shall govern and control absent
manifest error.

(e)    Any Lender may request that Loans of any Class made by it be evidenced by
a promissory note (a “Note”). In such event, the Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to such Lender and its
registered assigns and in a form approved by the Administrative Agent and
reasonably acceptable to the Borrower.

SECTION 2.10    Repayment of Term Loans and Revolving Facility Loans.

(a) Subject to the other paragraphs of this Section, the Borrower shall repay
Non-Extended Term Loans prior to 2:00 p.m., Local Time, on each date set forth
below in the aggregate principal amount set forth for such Borrowings opposite
such date; provided that if such date does not fall on a Business Day, then such
amounts shall be paid on the preceding Business Day:

 

Date

   Non-Extended Term Loans
to Be Repaid  

[June 30, 20172019

   $ 3,350,000  

September 30, 20172019

   $ 3,350,000  

December 31, 20172019

   $ 3,350,000  

March 31, 20182020

   $ 3,350,000  

 

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Date

   Non-Extended Term Loans
to Be Repaid  

June 30, 20182020

   $ 3,350,000  

September 30, 20182020

   $ 3,350,000  

December 31, 20182020

   $ 3,350,000  

March 31, 20192021

   $ 3,350,000  

June 30, 20192021

   $ 8,375,000  

September 30, 20192021

   $ 8,375,000  

December 31, 20192021

   $ 8,375,000  

March 31, 20202022

   $ 8,375,000        ]4  

Term Loan Maturity Date

    

the remaining

principal amount

 

 

To the extent not previously paid, outstanding Non-Extended Term Loans shall be
due and payable on the Term Loan Maturity Date. If any payment under this clause
(a) shall be due on a day that is not a Business Day, the date for payment shall
be the next preceding Business Day.

(b) Subject to the other paragraphs of this Section, the Borrower shall repay
2019 Term Loans prior to 2:00 p.m., Local Time, on each date set forth below in
the aggregate principal amount set forth for such Borrowings opposite such date;
provided that if such date does not fall on a Business Day, then such amounts
shall be paid on the preceding Business Day:

 

Date

   2019 Term Loans to Be
Repaid  

[June 30, 2019

   $ 0  

September 30, 2019

   $ 0  

December 31, 2019

   $ 0  

March 31, 2020

   $ 0  

June 30, 2020

   $ 16,750,0000  

September 30, 2020

   $ 16,750,0000  

December 31, 2020

   $ 16,750,0000  

March 31, 2021

   $ 16,750,0000  

June 30, 2021

   $ 16,750,0000  

September 30, 2021

   $ 16,750,0000  

December 31, 2021

   $ 16,750,0000  

March 31, 2022

   $ 16,750,0001,762,500  

June 30, 2022

   $ 1,762,500  

September 30, 2022

   $ 1,762,500  

December 31, 2022

   $ 1,762,500  

March 31, 2023

   $ 4,406,250  

June 30, 2023

   $ 4,406,250  

 

4 

To be updated to reflect the proper amortization schedule for any Non-Extended
Term Loans outstanding after the Fifth Amendment Effective Date.

 

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Date

   2019 Term Loans to Be
Repaid  

September 30, 2023

   $ 4,406,250  

December 31, 2023

   $ 4,406,250 ]5 

Term Loan Maturity Date

    
the remaining principal
amount  
 

To the extent not previously paid, outstanding 2019 Term Loans shall be due and
payable on the Term Loan Maturity Date. If any payment under this clause (ib)
shall be due on a day that is not a Business Day, the date for payment shall be
the next preceding Business Day.

(bc) To the extent not previously paid, outstanding Revolving Facility Loans
shall be due and payable on the Revolving Facility Maturity Date.

(ed) Subject to Section 2.23, prepayment of the Loans from:

(i)    (x) all Net Proceeds pursuant to Section 2.11(b) and Excess Cash Flow
pursuant to Section 2.11(c) other than the Net Proceeds of the Bridges Sale, to
be applied to prepay Term Loans shall be applied to reduce, in the inverse order
of maturity, the unpaid scheduled amortization payments under
paragraphparagraphs (a) and (ib) above, in respect of Term Loans on a ratable
basis (which shall include, for the avoidance of doubt, the Term Loan Maturity
Date payment) and (y) all Net Proceeds of the Bridges Sale pursuant to
Section 2.11(b) to be applied to prepay Term Loans shall be applied to reduce,
first, in the direct order of maturity, the unpaid scheduled amortization
payments under paragraph (a)(i) above in respect of Term Loans that are due on
June 30, 2019, September 30, 2019, December 31, 2019 and March 31, 2020 so that
each such amortization payment is reduced to $3,350,000, second, in the direct
order of maturity, the unpaid scheduled amortization payments under paragraph
(a)(i) above in respect of Term Loans that are due on June 30, 2020, September
30, 2020, December 31, 2020 and March 31, 2021 so that each such amortization
payment is reduced to $8,375,000, and third, to the Term Loan Maturity Date
payment; and; and

(ii)    any optional prepayments of the Term Loans pursuant to Section 2.11(a)
shall be applied to reduce in the inverse order of maturity, the unpaid
scheduled amortization payment under paragraphparagraphs (a) and (ib) above in
respect of the Term Loans on a ratable basis (which shall include, for the
avoidance of doubt, the Term Loan Maturity Date payment); provided that, with
the consent of the Required Lenders, the Borrower shall be entitled to prepay
Non-Extended Term Loans pursuant to Section 2.11(a) prior to prepaying any 2019
Term Loans pursuant to Section 2.11(a).

(de) Prior to any repayment of any Loan or Loans hereunder, the Borrower shall
select the Borrowing or Borrowings constituting such Loan or Loans to be repaid
or reduced and shall notify the Administrative Agent in writing by electronic
mail or telecopy) of

 

 

5 

To be updated based on closing date to reflect amortization of 0.25% per quarter
after the third anniversary of the Fifth Amendment Effective Date through the
fourth anniversary, and after the fourth anniversary, 0.625% per quarter.

 

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such selection (i) in the case of an ABR Term Loan Borrowing, not later than
12:00 p.m., Local Time, one Business Day before the scheduled date of such
repayment, (ii) in the case of a Eurocurrency Borrowing, not later than 12:00
p.m., Local Time, three Business Days before the scheduled date of such
repayment or reduction and (iii) in the case of an ABR Revolving Borrowing, not
later than 10:00 a.m. Local Time, one Business Day prior to the day of such
repayment. Except as otherwise provided in Section 2.11(e), each repayment of a
Borrowing within any Class shall be applied ratably to the Loans in such
Class included in the repaid Borrowing. Notwithstanding anything to the contrary
in the immediately preceding sentence, the Borrower shall select the Borrowing
or Borrowings to be repaid and shall notify the Administrative Agent in writing
(by electronic mail or telecopy) of such selection not later than 12:00 p.m.,
Local Time, on the scheduled date of such repayment. Repayments of Borrowings
shall be accompanied by accrued interest on the amount repaid and any fees
required pursuant to Section 2.12(e) and reasonably documented out-of-pocket
expenses with respect to such repayments to the extent required to be reimbursed
pursuant to the terms of this Agreement. Notwithstanding anything herein to the
contrary (but in any event subject to Section 2.16), the Borrower may rescind
any notice of prepayment pursuant to Section 2.11(a), if such prepayment would
have resulted from a refinancing or repayment of the facilities under this
Agreement (whether through the incurrence of other Indebtedness, issuance of
Equity Interests or otherwise), which refinancing or repayment shall not be
consummated or shall otherwise be delayed, or condition such prepayment pursuant
to Section 2.11(a) on the consummation of such refinancing or repayment. Any
prepayments required to be made under Sections 2.11(b), (c) or (d) shall be
accompanied by a written notice of such prepayment in accordance with the timing
in this Section 2.10(d), and shall include the sub-section of Section 2.11 that
such payment is being made pursuant to.

SECTION 2.11 Prepayment of Loans. (a) The Borrower shall have the right, in its
sole discretion at any time and from time to time to prepay any Borrowing in
whole or in part, in accordance with paragraphs (c) and (d) of Section 2.10,
without premium or penalty (but subject to Section 2.16 and except for the
Prepayment Fee payable pursuant to Sections 2.12 (e)), in an aggregate principal
amount that is an integral multiple of the Borrowing Multiple and not less than
the Borrowing Minimum or, if less, the amount outstanding, subject to prior
written notice in accordance with Section 2.10(d); provided that,
notwithstanding the foregoing, prepayments of Swingline Loans shall require
notice to Swingline Lenders and such notice must be received by not later than
10:00 a.m. one (1) Business Day prior to the date of prepayment.

(b) All Net Proceeds shall be applied promptly after receipt thereof to prepay
Term Loans in accordance with paragraphs (c) and (d) of Section 2.10. For the
avoidance of doubt, in the event that any Net Proceeds are not reinvested by the
Borrower within the 12 month period referred to in “Net Proceeds”, or, upon
request by the Administrative Agent if an Event of Default shall have occurred
and be continuing, the Borrower shall immediately apply the Net Proceeds as set
forth in paragraphs (c) and (d) of Section 2.10.

(c) Not later than 90 days after the end of each Excess Cash Flow Period (or
such later date, if any, on which the Borrower is permitted or required to
deliver annual audited statements under Section 5.04(a)), commencing with the
Excess Cash Flow Period ending on December 31, 20172019, the Borrower shall
prepay the Term Loans as set forth in

 

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paragraphs (c) and (d) of Section 2.10 in an aggregate amount equal to the
(A) the Required Percentage of such Excess Cash Flow, if any, for such Excess
Cash Flow Period, minus (B) the sum of (1) the aggregate principal amount of
voluntary prepayments of Term Loans pursuant to
Section 2.11(a), (2) permanent voluntary reductions of Revolving Facility
Commitments pursuant to Section 2.08(b) solely to the extent that an equal
amount of Revolving Facility Loans was simultaneously repaid pursuant to
Section 2.11(a) (and solely to the extent any such voluntary prepayments of Term
Loans and permanent reductions of Revolving Facility Commitments shall not have
already been deducted when calculating Excess Cash Flow) and (3) the aggregate
amount of Net Proceeds applied to repay the Term Loans pursuant to
Section 2.11(b) in respect of clause (c) of the definition of “Net Proceeds” in
such Excess Cash Flow Period; provided, that if the amount in clause (B) exceeds
the amount in clause (A), no such prepayment of Term Loans shall be required.
Not later than the date on which the Borrower is required to deliver financial
statements with respect to the end of each Excess Cash Flow Period under
Section 5.04(a), the Borrower will deliver to the Administrative Agent a
certificate signed by a Responsible Officer of the Borrower setting forth the
amount, if any, of Excess Cash Flow for such fiscal year, the amount of any
required prepayment and the calculation thereof in reasonable detail.

(d) In the event and on such occasion that the total Revolving Facility Exposure
plus the face amount of letters of credit issued under Section 6.01(s) exceeds
the total Revolving Facility Commitments, the Borrower shall prepay Revolving
Facility Borrowings or Swingline Borrowings (or, if no such Borrowings are
outstanding, deposit Cash Collateral in an account with the Collateral Agent
pursuant to Section 2.22) in an aggregate amount equal to such excess.

(e) Notwithstanding anything to the contrary contained in this Section 2.11 or
any other provision of this Agreement, the Borrower may prepay any Class or
Classes of outstanding Term Loans, at a discount to par pursuant to one or more
auctions (each, an “Auction”) on the following basis (any such prepayment, an
“Auction Prepayment”):

(i) [Reserved].

(ii) All Term Lenders (other than Defaulting Lenders) of the applicable Class or
Classes shall be permitted (but not required) to participate in each Auction.
Any such Lender who elects to participate in an Auction may choose to offer all
or part of such Lender’s Term Loans of the applicable Class for prepayment.

(iii) Each Auction Prepayment shall be subject to the conditions that (A) the
Administrative Agent shall have received a certificate to the effect that
(I) immediately prior to and after giving effect to the Auction Prepayment, no
Default shall have occurred and be continuing, (II) as of the date of the
Auction Notice (as defined in Exhibit F), the Borrower is not in possession of
any material non-public information with respect to Holdings or any of its
Subsidiaries that has not been disclosed to the Lenders (other than Lenders that
do not wish to receive material non-public information with respect to Holdings
or any of its Subsidiaries) prior to such date, and, if not disclosed to the
Lenders, could reasonably be expected to have a material effect upon, or
otherwise be material to, (1) a Lender’s decision to participate in any Auction
or (2) the market price

 

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of the Term Loans subject to such Auction, and (III) each of the conditions to
such Auction Prepayment has been satisfied, (B) immediately prior to and after
giving effect to the Auction Prepayment, the sum of the unused Revolving
Facility Commitments plus Unrestricted Cash and cash equivalents held by Loan
Parties shall not be less than $75,000,000, (C) each offer of prepayment made
pursuant to this Section 2.11(e) must be in an amount not less than $5,000,000,
(D) no Auction Prepayment shall be made from the proceeds of any Revolving
Facility Loan or Swingline Loan, and (E) any Auction Prepayment shall be offered
to all Lenders with Term Loans on a pro rata basis.

(iv) All Term Loans prepaid by the Borrower pursuant to this Section 2.11(e)
shall be accompanied by all accrued interest on the par principal amount so
prepaid to, but not including, the date of the Auction Prepayment. Auction
Prepayments shall not be subject to Section 2.16. The par principal amount of
Term Loans prepaid pursuant to this Section 2.11(e) shall be applied pro rata to
reduce the remaining scheduled installments of principal thereof pursuant to
Section 2.10(c)(i).

(v) Each Auction shall comply with the Auction Procedures and any such other
procedures established by the Administrative Agent in its reasonable discretion
and agreed to by the Borrower.

(vi) This Section 2.11(e) shall neither (A) require the Borrower to undertake
any Auction nor (B) limit or restrict the Borrower from making voluntary
prepayments of Term Loans in accordance with Section 2.11(a).

SECTION 2.12 Fees. (a) The Borrower agrees to pay to each Revolving Facility
Lender (other than any Defaulting Lender), through the Administrative Agent,
three Business Days after the last day of March, June, September and December in
each year, and three Business Days after the date on which the Revolving
Facility Commitments of all the Revolving Facility Lenders shall be terminated
as provided herein (which, if said day is not a Business Day, then the next
Business Day thereafter), a commitment fee (a “Commitment Fee”) on the daily
amount of the Available Unused Commitment of such Revolving Facility Lender
during the preceding quarter (or shorter period commencing with the Closing Date
or ending with the date on which the last of the Revolving Facility Commitments
of such Lender shall be terminated), which shall accrue at a rate equal to the
Applicable Margin. All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. For the purpose of
calculating any Lender’s Commitment Fee, the outstanding Swingline Loans during
the period for which such Lender’s Commitment Fee is calculated shall be deemed
to be zero. The Commitment Fee due to each Revolving Facility Lender shall
commence to accrue on the Closing Date and shall cease to accrue on the date on
which the last of the Revolving Facility Commitments of such Lender shall be
terminated as provided herein.

(b) The Borrower from time to time agrees to pay (i) to each Revolving Facility
Lender, through the Administrative Agent, three Business Days after the last day
of March, June, September and December of each year and three Business Days
after the date on which the Revolving Facility Commitments of all the Lenders
shall be terminated as provided herein, a fee (an “L/C Participation Fee”) on
such Lender’s Applicable Percentage of the daily aggregate L/C Exposure
(excluding the portion thereof attributable to unreimbursed L/C

 

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Disbursements), during the preceding quarter (or shorter period commencing with
the Closing Date or ending with the Revolving Facility Maturity Date or the date
on which the Revolving Facility Commitments shall be terminated) at the rate per
annum equal to the Applicable Margin for Eurocurrency Revolving Borrowings
effective for each day in such period; provided that in no event shall the L/C
Participation Fee for any Letter of Credit be less than $500 for any annual
period; provided, however, that any L/C Participation Fee otherwise payable for
the account of a Defaulting Lender with respect to any Letter of Credit as to
which such Defaulting Lender has not provided Cash Collateral satisfactory to
the Issuing Bank pursuant to Section 2.22 shall be payable, to the maximum
extent permitted by applicable Law, to the other Lenders in accordance with the
upward adjustments in their respective Applicable Percentages allocable to such
Letter of Credit pursuant to Section 2.23(a)(iv), with the balance of such fee,
if any, payable to the Issuing Bank for its own account, and (ii) to each
Issuing Bank, for its own account, (x) three Business Days after the last day of
March, June, September and December of each year and three Business Days after
the date on which the Revolving Facility Commitments of all the Lenders shall be
terminated as provided herein, a fronting fee in respect of each Letter of
Credit issued by such Issuing Bank for the period from and including the date of
issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate to be agreed between the Issuing Bank and
the Borrower per annum of the daily average stated amount of such Letter of
Credit (or as otherwise agreed with such Issuing Bank), plus (y) in connection
with the issuance, amendment or transfer of any such Letter of Credit or any L/C
Disbursement thereunder, such Issuing Bank’s customary documentary and
processing charges (collectively, “Issuing Bank Fees”). All L/C Participation
Fees and Issuing Bank Fees that are payable on a per annum basis shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.

(c)    The Borrower agrees to pay to the Administrative Agent, for the account
of the Administrative Agent, the fees set forth in the Agent Fee Letter (the
“Administrative Agent Fees”).

(d)    [reserved].

(e)    If (x) the Borrower makes a voluntary prepayment of all or any portion of
Term Loans pursuant to Section 2.11(a) or a mandatory prepayment of all or any
portion of Term Loans pursuant to Section 2.11(b) from the receipt of Net
Proceeds pursuant to clause (b) of the definition thereof, (y) any Prepayment
Transaction is consummated in respect of all or any portion of the Term Loans
(including an assignment of all or any portion of a Term Loan held by a
Non-Consenting Lender pursuant to Section 2.19(c)) or (z) the Term Loans become
due as a result of an acceleration of the Term Loans pursuant to Section 7.01
(collectively, the “Payment Events” and each , a “Payment Event”), the Borrower
shall pay each Lender whose Term Loans are subject to such Payment Event, on the
date of such Payment Event, a fee (the “Prepayment Fee”), equal to: (A) with
respect to the Non-Extended Term Loans, (i) if such Payment Event occurs on or
prior to the second anniversary of the Closing Date, the Make Whole Premium
Amount applicable to the aggregate principal amount of Term Loans subject to
such Payment Event, (ii) if such Payment Event occurs after the second
anniversary of the Closing Date but on or prior to the third anniversary of the
Closing Date, 3.00% on the aggregate principal amount of Term Loans subject to
such Payment Event and (iii) if such Payment Event occurs after the third
anniversary of the Closing Date but on or prior to the fourth anniversary of the
Closing Date,

 

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2.00% on the aggregate principal amount of Term Loans subject to such Payment
Event; provided that with respect to any Payment Event in respect of an
acceleration in regard to Section 7.01(g) or prepayment in connection with a
Change in Control (a “COC Payment Event”), the Prepayment Fee that the Borrower
shall pay each Lender whose Term Loans are subject to such COC Payment Event,
payable on the date of such COC Payment Event, shall be equal to: (i) if such
COC Payment Event occurs on or prior to the first anniversary of the Closing
Date, the COC Make Whole Premium Amount applicable to the aggregate principal
amount of Term Loans subject to such COC Payment Event, (ii) if such COC Payment
Event occurs after the first anniversary of the Closing Date but on or prior to
the second anniversary of the Closing Date, 3.00% on the aggregate principal
amount of Term Loans subject to such COC Payment Event and (iii) if such COC
Payment Event occurs after the second anniversary of the Closing Date but on or
prior to the third anniversary of the Closing Date, 1.00% on the aggregate
principal amount of Term Loans subject to such COC Payment Event and (B) with
respect to the 2019 Term Loans, (i) if such Payment Event occurs on or prior to
the second anniversary of the Fifth Amendment Effective Date, the Make Whole
Premium Amount applicable to the aggregate principal amount of Term Loans
subject to such Payment Event and (ii) if such Payment Event occurs after the
second anniversary of the Fifth Amendment Effective Date but on or prior to the
third anniversary of the Fifth Amendment Effective Date, 3.00% on the aggregate
principal amount of Term Loans subject to such Payment Event; provided, however
that for the avoidance of doubt, no Prepayment Fee shall be due with respect to
any prepayments made pursuant to Section 2.11(b) from the receipt of Net
Proceeds pursuant to clauses (a) and (c) of the definition thereof and
Section 2.11(c). Notwithstanding anything to the contrary herein, with respect
to the first $31,070,000 of Term Loan principal voluntary or mandatory
prepayments or repayments pursuant to any provision of this Agreement following
the Fourththe Borrower may make the Fifth Amendment Effective Date (and
excluding, for the avoidance of doubt, the Fourth Amendment Prepayment Released
Escrow Funds which shall not reduce the foregoing amount), includingPayment with
respect to any Payment Event, COC Payment Event or payment at maturity or due
because of acceleration and solely excluding the regularly scheduled
amortization payments made pursuant to Section 2.10 (but not excluding the Term
Loan Maturity Date payment) the Borrower shall pay each Lender whose Term Loans
are subject to such payment, on the date of such payment, a fee equal to the
greater of (x) the fee that would otherwise be payable with respect to Payment
Events or COC Payments Events if such payment occurs in connection with a
Payment Event or COC Payment Event, as applicable, and (y) 3.00% on the
aggregate principal amount of Term Loans subject to such payment.Term Loans held
by 2019 Term Lenders without paying any Prepayment Fee.

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

SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the ABR plus the Applicable Margin.

 

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

(c)    Notwithstanding the foregoing, if any principal of or interest on any
Loan or any Fees or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, then
(i) such overdue amount shall bear interest, after as well as before judgment,
at a rate per annum equal to (A) in the case of overdue principal of any Loan,
2.00% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (B) in the case of any other amount,
2.00% plus the interest rate that would have applied had such amount, during the
period of non-payment, constituted an ABR Loan, and (ii) all other principal of
any Loan then outstanding hereunder shall bear interest at a rate of 2.00% plus
the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section 2.13; provided, that this paragraph (c) shall not
apply to any Event of Default that has been waived by the Lenders pursuant to
Section 9.09.

(d)    Accrued interest on each Loan shall be payable in arrears (i) on each
Interest Payment Date for such Loan, with any portion of interest on the 2019
Term Loans accruing pursuant to the Margin PIK Component being paid in kind by
increasing the principal balance of the 2019 Term Loan by the amount of such
interest rather than being paid in cash, (ii) in the case of Revolving Facility
Loans, upon the earlier of the termination of the Revolving Facility Commitments
and the Revolving Facility Maturity Date and (iii) in the case of the Term
Loans, on the applicable Term Loan Maturity Date; provided, that (A) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(B) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment, and (C) in the
event of any conversion of any Eurocurrency Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

(e)    All computations of interest for ABR Loans determined by reference to the
“Prime Rate” shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.18(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

(f)    When entering into this Agreement, the parties have assumed that the
interest payable at the rates set out in this Section 2.13 (Interest) or in
other Sections of this Agreement is not and will not become subject to Swiss
withholding tax (Verrechnungssteuer). Notwithstanding that the parties do not
anticipate (acting in good faith) that any payment of interest will be subject
to Swiss withholding tax (Verrechnungssteuer), they agree that, if a tax
deduction for Swiss withholding tax (Verrechnungssteuer) is required by law to
be made by a

 

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Loan Party in respect of any interest payable by it under this Agreement and
should, in respect of such Loan Party, paragraph (b) of Section 2.17 (Payments
free of Taxes) or paragraph (d) of Section 2.17 (Indemnification by Borrower) be
unenforceable for any reason, the applicable interest rate in relation to that
interest payment shall be

(i)    the interest rate which would have applied to that interest payment (as
provided for in this Section 2.13 (Interest) or otherwise in this Agreement in
the absence of this paragraph (g))

divided by

(ii)    1 minus the rate at which the relevant Tax Deduction is required to be
made (where the rate at which the relevant deduction or withholding of Tax is
required to be made is for this purpose expressed as a fraction of 1 rather than
as a percentage) and

(1) the relevant Loan Party shall be obliged to pay the relevant interest at the
adjusted rate in accordance with this paragraph, (2) the relevant Loan Party
shall make the tax deduction for Swiss withholding tax (Verrechnungssteuer) on
the so recalculated interest and (3) all references to a rate of interest in
this Agreement shall be construed accordingly..

(g)    To the extent that interest payable by a Loan Party under this Agreement
becomes subject to Swiss withholding tax (Verrechnungssteuer), each relevant
Lender and the Loan Parties shall promptly co-operate in completing any
procedural formalities (including submitting forms and documents required by the
appropriate Tax authority) to the extent possible and necessary for the relevant
Loan Party to obtain authorization to make interest payments without them being
subject to Swiss withholding tax (Verrechnungssteuer) or to allow the Lenders to
prepare claims for the refund of any Swiss withholding tax (Verrechnungssteuer)
so deducted.

SECTION 2.14 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing denominated in any currency, on any
day:

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

(b)    the Administrative Agent is advised by the Required Lenders that any
applicable Adjusted Eurocurrency Rate for such currency for such Interest Period
for such day 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 or such day;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by electronic mail or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no

 

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longer exist, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing
denominated in such currency shall be ineffective and such Borrowing shall be
converted to or continued as on the last day of the Interest Period applicable
thereto, an ABR Borrowing and (ii) if any Borrowing Request requests a
Eurocurrency Borrowing in such currency, such Borrowing shall be made as an ABR
Borrowing.

SECTION 2.15 Increased Costs. (a) If any Change in Law shall:

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

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

(iii)    impose on any Lender or Issuing Bank or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurocurrency 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 Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender or Issuing Bank, as applicable, such additional amount
or amounts as will compensate such Lender or Issuing Bank, as applicable, for
such additional costs incurred or reduction suffered.

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

 

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

(d)    Promptly after any Lender or any Issuing Bank has determined that it will
make a request for increased compensation pursuant to this Section 2.15, such
Lender or Issuing Bank shall notify the Borrower thereof. Failure or delay on
the part of any Lender or Issuing Bank to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right
to demand such compensation; provided, that the Borrower shall not be required
to compensate a Lender or an Issuing Bank pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that
such Lender or Issuing Bank, as applicable, notifies the Borrower of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s or
Issuing Bank’s intention to claim compensation therefor; provided, further, that
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

SECTION 2.16 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Eurocurrency Loan on the date specified in any notice delivered
pursuant hereto or (d) the assignment of any Eurocurrency Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Borrower pursuant to Section 2.19, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurocurrency Loan, such loss, cost or expense to any
Lender shall be deemed to be the amount determined by such Lender to be the
excess, if any, of (i) the amount of interest that would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted
Eurocurrency 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 a
Eurocurrency Loan, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest that would accrue on such principal
amount for such period at the interest rate that such Lender would bid were it
to bid, at the commencement of such period, for deposits in the applicable
currency of a comparable amount and period from other banks in the Eurocurrency
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

 

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SECTION 2.17 Taxes.

(a)    Defined Terms. For purposes of this Section 2.17, the term “Lender”
includes any Issuing Bank and the term “applicable law” includes FATCA.

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

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

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

(e)    Evidence of Payments. As soon as practicable after any payment of Taxes
by any Loan Party to a Governmental Authority pursuant to this Section 2.17,
such Loan Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

(f)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower or any Loan Party has not already indemnified the Administrative Agent
for such Indemnified Taxes and without limiting the obligation of the Loan
Parties to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 9.04(c) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender,
in each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the

 

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amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under any Loan Document or otherwise
payable by the Administrative Agent to the Lender from any other source against
any amount due to the Administrative Agent under this paragraph (e).

(g)    Status of Lenders.

(i)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(g) (ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

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

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

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

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest”

 

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article of such tax treaty and (y) with respect to any other applicable payments
under any Loan Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;

(2)    executed copies of IRS Form W-8ECI;

(3)    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
substantially in the form of Exhibit G-l to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or

(4)    to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or
W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit
G-2 or Exhibit G-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on
behalf of each such direct and indirect partner;

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

(D)    if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation

 

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prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

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

(h)    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including by
the payment of additional amounts pursuant to this Section 2.17), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(i)    Survival. Each party’s obligations under this Section 2.17 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document

SECTION 2.18    Payments Generally; Pro Rata Treatment; Sharing of Set offs.
(a) Unless otherwise specified, the Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees or reimbursement
of L/C Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 2:00 p.m., Local Time, on the date when due, in immediately
available funds, without condition or deduction for any defense, recoupment,
set-off 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.

 

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All such payments shall be made to the Administrative Agent to the applicable
account designated to the Borrower by the Administrative Agent, except payments
to be made directly to the applicable Issuing Bank or the applicable Swingline
Lender as expressly provided herein and except that payments pursuant to
Sections 2.15, 2.16, 2.17 and 9.05 shall be made directly to the persons
entitled thereto. 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. Unless otherwise specified, if any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments under each Loan Document of principal or interest
in respect of any Loan (or of any breakage indemnity in respect of any Loan)
shall be made in the currency of such Loan; all other payments hereunder and
under each other Loan Document shall be made in U.S. Dollars, except as
otherwise expressly provided herein. Any payment required to be made by the
Administrative Agent hereunder shall be deemed to have been made by the time
required if the Administrative Agent shall, at or before such time, have taken
the necessary steps to make such payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by the
Administrative Agent to make such payment.

(b)    If at any time insufficient funds are received by and available to the
Administrative Agent from the Borrower to pay fully all amounts of principal,
unreimbursed L/C Disbursements, interest and fees then due from the Borrower
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due from the Borrower hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to
such parties, (ii) second, towards payment of principal of Swingline Loans and
unreimbursed L/C Disbursements then due from the Borrower hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal,
and unreimbursed L/C Disbursements then due to such parties, and (iii) third,
towards payment of principal then due from the Borrower hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.

(c)    If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Term Loans of a given Tranche, Revolving Facility Loans or participations
in L/C Disbursements or Swingline Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Term Loans,
Revolving Facility Loans and participations in L/C Disbursements and Swingline
Loans and accrued interest thereon under any Tranche than the proportion
received by any other Lender under such Tranche, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Term Loans, Revolving Facility Loans and participations in L/C Disbursements and
Swingline Loans of other Lenders under such Tranche to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders under such
Tranche ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Term Loans, Revolving Facility Loans and
participations in L/C Disbursements and Swingline Loans under such Tranche;
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 (c) shall
not be construed to apply to (x) any payment made pursuant to and in accordance
with the express

 

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terms of this Agreement (including, without limitation, Section 2.11(e) or the
application of funds arising from the existence of a Defaulting Lender), (y) the
application of Cash Collateral provided for in Section 2.22, or (z) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or subparticipations in L/C Disbursements or
Swingline Loans to any assignee or participant. The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

(d)    Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the applicable Issuing Bank hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the applicable Issuing Bank, as applicable, the amount due. In such event, if
the Borrower has not in fact made such payment, then each of the Lenders or the
applicable Issuing Bank, as applicable, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of (A) (1) in the case of Loans, the
Federal Funds Effective Rate, (2) in the case of any other amounts denominated
in U.S. Dollars, the Federal Funds Effective Rate, and (3) in the case of any
other amount denominated in a currency other than U.S. Dollars, the rate
reasonably determined by the Administrative Agent to be the cost to it of
funding such amount, and (B) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

(e)    If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the applicable conditions set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

(f)    The obligations of the Lenders hereunder to make Loans, to fund
participations in Letters of Credit and Swingline Loans and to make payments
pursuant to Section 9.05(d) are several and not joint. The failure of any Lender
to make any Loan, to fund any such participation or to make any payment under
Section 9.05(d) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan, to
purchase its participation or to make its payment under Section 9.05(d).

SECTION 2.19 Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.15, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
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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 2.15 or 2.17, as
applicable, in the future and (ii) would not subject such Lender to any material
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender in any material respect. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b)    If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or is a Defaulting Lender, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require any
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided, that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if in respect of any Revolving
Facility Commitment or Revolving Facility Loan, the Swingline Lenders and the
Issuing Banks), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in L/C Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other
amounts) (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments, (iv) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 9.05, and (v) such assignment does not
conflict with any applicable Laws. A Lender shall not be required to make any
such assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment cease to apply. Nothing in this Section 2.19 shall be deemed to
prejudice any rights that the Borrower may have against any Lender that is a
Defaulting Lender.

(c)    If any Lender has failed to consent to a proposed amendment, waiver,
discharge or termination that pursuant to the terms of Section 9.09 requires the
consent of all the Lenders affected or each Lender and with respect to which the
Required Lenders (as may be required by Section 9.09 in any given case) shall
have granted their consent (any such Lender referred to above, a “Non-Consenting
Lender”), then so long as no Event of Default then exists, the Borrower shall
have the right (unless such Non-Consenting Lender grants such consent) to
(i) replace any such Non-Consenting Lender by requiring such Non-Consenting
Lender to assign its Loans and Commitments hereunder to one or more assignees
reasonably acceptable to the Administrative Agent (and, if in respect of any
Revolving Facility Commitment or Revolving Facility Loan, the Swingline Lenders
and the Issuing Banks) or (ii) require such Non-Consenting Lender to assign all
of its Term Loans hereunder or all of its Revolving Facility Commitments or
Revolving Facility Loans hereunder to one or more assignees reasonably
acceptable to the Administrative Agent (and, if in respect of any Revolving
Facility Commitment or Revolving Facility Loan, the Swingline Lenders and the
Issuing Banks); provided, that (i) all Obligations of the Borrower owing to such
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arising under Section 2.16 as a result of such replacement, and/or all
Obligations of the Borrower owing to such Non-Consenting Lender in respect of
any Loans required to be assigned shall be paid in full to such Non-Consenting
Lender concurrently with such assignment (including all fees payable to such
Non-Consenting Lender in accordance with Sections 2.12(d) and (e)), and (ii) the
replacement Lender shall purchase the foregoing by paying to such Non-Consenting
Lender a price equal to the principal amount thereof plus accrued and unpaid
interest thereon. In connection with any such assignment the Borrower, the
Administrative Agent, such Non-Consenting Lender and the replacement Lender
shall otherwise comply with Section 9.05.

SECTION 2.20 [Reserved].

SECTION 2.21 Illegality. If any Lender reasonably determines that any change in
law has made it unlawful, or that any Governmental Authority has asserted after
the Closing Date that it is unlawful, for any Lender or its applicable lending
office to make or maintain any Eurocurrency Loans, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligations of
such Lender to make or continue Eurocurrency Loans or to convert ABR Borrowings
to Eurocurrency Borrowings shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall
upon demand from such Lender (with a copy to the Administrative Agent), either
convert all Eurocurrency Borrowings of such Lender to ABR Borrowings, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurocurrency Borrowings to such day, or immediately,
if such Lender may not lawfully continue to maintain such Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted.

SECTION 2.22 Cash Collateral.

(a)    Certain Credit Support Events. Upon the request of the Administrative
Agent or any Issuing Bank if, as of the expiration date for all Letters of
Credit set forth in Section 2.05(c), any L/C Exposure for any reason remains
outstanding, the Borrower shall, in each case, immediately Cash Collateralize
the then outstanding amount of all L/C Exposure.

(b)    Grant of Security Interest. All Cash Collateral (other than credit
support not constituting funds subject to deposit) shall be maintained in
blocked, non-interest bearing deposit accounts at a bank to be reasonably agreed
between the Administrative Agent and the Borrower. The Borrower, and to the
extent provided by any Lender, such Lender, hereby grants to (and subjects to
the control of) the Collateral Agent, for the benefit of the Administrative
Agent, the applicable Issuing Bank and the Lenders (including the applicable
Swingline Lenders), and agrees to maintain, a first priority security interest
in all such cash, deposit accounts and all balances therein, and all other
property so provided as collateral pursuant hereto, and in all proceeds of the
foregoing, all as security for the obligations to which such Cash Collateral may
be applied pursuant to Section 2.22(c). If at any time the Administrative Agent
or the Collateral Agent determines that Cash Collateral is subject to any right
or claim of any person other than the Collateral Agent as herein provided, or
that the total amount of such Cash Collateral is less than the applicable
Fronting Exposure and other obligations secured thereby, then (i) the Borrower
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the Borrower), or (ii) the relevant Defaulting Lender (solely to the extent that
the applicable Cash Collateral was provided by such Defaulting Lender) will,
promptly upon demand by the Administrative Agent, pay or provide to the
Collateral Agent additional Cash Collateral in an amount sufficient to eliminate
such deficiency.

(c)    Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of this Section 2.22 or Sections
2.04, 2.05, 2.11, 2.23 or 7.01 in respect of Letters of Credit or Swingline
Loans shall be held and applied to the satisfaction of the specific Letter of
Credit obligations, Swingline Loans, obligations to fund participations therein
(including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) and other obligations for which the Cash Collateral
was so provided, prior to any other application of such property as may be
provided for herein.

(d)    Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or other obligations shall be released promptly
following (i) the elimination of the applicable Fronting Exposure or other
obligations giving rise thereto (including by the termination of Defaulting
Lender status of the applicable Lender (or, as appropriate, its assignee
following compliance with Section 9.04(b)(ii))) or (ii) the Administrative
Agent’s good faith determination that there exists excess Cash Collateral;
provided, however, (x) that Cash Collateral furnished by or on behalf of a Loan
Party shall not be released during the continuance of a Default or Event of
Default (and following application as provided in this Section 2.22 may be
otherwise applied in accordance with Section 7.01), and (y) the person providing
Cash Collateral and the Issuing Banks or Swingline Lenders, as applicable, may
agree that Cash Collateral shall not be released but instead held to support
future anticipated Fronting Exposure or other obligations.

SECTION 2.23 Defaulting Lenders.

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

(i)    Waivers and Amendments. That Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 9.09.

(ii)    Reallocation of Payments. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of that
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VII or otherwise, and including any amounts made available to the
Administrative Agent by that Defaulting Lender pursuant to Section 9.06), shall
be applied at such time or times as may be determined by the Administrative
Agent as follows: first, to the payment of any amounts owing by that Defaulting
Lender to the Administrative Agent hereunder; second, to the payment on a pro
rata basis of any amounts owing by that Defaulting Lender to the Issuing Banks
or Swingline Lenders hereunder; third, if so determined by the Administrative
Agent or requested by the Issuing Banks or Swingline Lenders, to be held as Cash
Collateral for future funding obligations of that Defaulting Lender of any
participation in any Swingline Loan or Letter of Credit; fourth, as the Borrower
may

 

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request (so long as no Default or Event of Default exists), to the funding of
any Loan in respect of which that Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a non-interest bearing deposit account and released
in order to satisfy obligations of that Defaulting Lender to fund Loans under
this Agreement; sixth, to the payment of any amounts owing to the Lenders, the
Issuing Banks or Swingline Lenders as a result of any judgment of a court of
competent jurisdiction obtained by any Lender, Issuing Banks or Swingline
Lenders against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; seventh, so long as no Default
or Event of Default exists, to the payment of any amounts owing to the Borrower
as a result of any judgment of a court of competent jurisdiction obtained by the
Borrower against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; and eighth, to that Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of any Loans or
L/C Borrowings in respect of which that Defaulting Lender has not fully funded
its appropriate share and (y) such Loans or L/C Borrowings were made at a time
when the conditions set forth in Section 4.01 were satisfied or waived, such
payment shall be applied solely to pay the Loans of, and L/C Borrowings owed to,
all non-Defaulting Lenders on a pro rata basis prior to being applied to the
payment of any Loans of, or L/C Borrowings to, that Defaulting Lender. Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.22(a)(ii) shall be deemed paid to and
redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto.

(iii) Certain Fees. The Defaulting Lender (x) shall not be entitled to receive
any Commitment Fee pursuant to Section 2.12(a) for any period during which that
Lender is a Defaulting Lender (and the Borrower shall not be required to pay any
such fee that otherwise would have been required to have been paid to that
Defaulting Lender), and (y) shall be limited in its right to receive L/C
Participation Fees as provided in Section 2.12(b).

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. During
any period in which there is a Defaulting Lender, for purposes of computing the
amount of the obligation of each non-Defaulting Lender to acquire, refinance or
fund participations in Letters of Credit or Swingline Loans pursuant to Sections
2.04 and 2.05, the “Applicable Percentage” of each non-Defaulting Lender shall
be computed without giving effect to the Commitment of that Defaulting Lender;
provided, that, (i) each such reallocation shall be given effect only if, at the
date the applicable Lender becomes a Defaulting Lender, no Default or Event of
Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender
to acquire, refinance or fund participations in Letters of Credit and Swingline
Loans shall not exceed the positive difference, if any, of (1) the Commitment of
that non-Defaulting Lender minus (2) the aggregate outstanding amount of the
Loans of that Lender.

 

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(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, Swingline
Lenders and the Issuing Banks agree in writing in their sole discretion that a
Defaulting Lender should no longer be deemed to be a Defaulting Lender, the
Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any Cash Collateral),
that Lender will, to the extent applicable, purchase that portion of outstanding
Loans of the other Lenders or take such other actions as the Administrative
Agent may determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit and Swingline Loans to be held on a pro rata
basis by the Lenders in accordance with their Applicable Percentages (without
giving effect to Section 2.23(a)(iv)), whereupon that Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants that:

SECTION 3.01 Organization; Powers. Except as set forth on Schedule 3.01, each of
Holdings, the Borrower and each of the Subsidiaries (a) is a limited liability
company, unlimited liability company, corporation or partnership duly organized,
validly existing and in good standing (or, if applicable in a foreign
jurisdiction, enjoys the equivalent status under the laws of any jurisdiction of
organization outside the United States) under the laws of the jurisdiction of
its organization, (b) has all requisite corporate or other organizational power
and authority to own its property and assets and to carry on its business as now
conducted, (c) is qualified to do business in each jurisdiction and licensed
and, as applicable, in good standing under the laws of each jurisdiction where
such qualification or license or, if applicable, good standing is required,
except where the failure so to qualify could not reasonably be expected to have
a Material Adverse Effect, (d) has the corporate or other organizational power
and authority to execute, deliver and perform its obligations under each of the
Loan Documents and each other agreement or instrument contemplated thereby to
which it is or will be a party and, in the case of the Borrower, to borrow and
otherwise obtain credit hereunder and (e) has all requisite governmental
licenses, authorizations, consents and approvals to own its property and assets
and to carry on its business as now conducted, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.02 Authorization. The execution, delivery and performance by Holdings,
the Borrower and each of the Loan Parties of each of the Loan Documents to which
it is a party, and the borrowings hereunder and the transactions forming a part
of the Transactions, (a) have been duly authorized by all corporate, stockholder
or limited liability company or partnership action required to be obtained by
Holdings, the Borrower and such Loan Parties and (b) will not (i) violate (A)
any provision of law, statute, rule or regulation, or of the

 

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certificate or articles of incorporation or other constitutive documents
(including any limited liability company or operating agreements) or by-laws of
Holdings, the Borrower or any such Loan Parties, (B) any applicable order of any
court or any rule, regulation or order of any Governmental Authority or (C) any
provision of any indenture, certificate of designation for preferred stock,
agreement or other instrument to which Holdings, the Borrower or any such Loan
Parties is a party or by which any of them or any of their property is or may be
bound, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under, give rise to a right of
or result in any cancellation or acceleration of any right or obligation
(including any payment) or to a loss of a material benefit under any such
indenture, certificate of designation for preferred stock, agreement or other
instrument, where any such conflict, violation, breach or default referred to in
clause (i) or (ii) of this Section 3.02, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, or (iii) result in
the creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Holdings, the Borrower or any such
Loan Parties, other than the Liens created by the Loan Documents and Liens
permitted by Section 6.02.

SECTION 3.03 Enforceability. This Agreement has been duly executed and delivered
by Holdings and the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party that is party thereto will constitute,
a legal, valid and binding obligation of such Loan Party enforceable against
each such Loan Party in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or
other similar laws affecting creditors’ rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), (iii) implied covenants of good faith and
fair dealing and (iv) except to the extent set forth in the applicable Foreign
Pledge Agreements or Foreign Security Documents, any foreign laws, rules and
regulations as they relate to pledges of Equity Interests or granting of Liens
pursuant to such agreements.

SECTION 3.04 Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (a) filings
necessary to perfect or maintain the perfection or priority of the Liens created
by the Security Documents (including, for the avoidance of doubt, the filing of
Uniform Commercial Code financing statements and equivalent filings in foreign
jurisdictions), (b) filings with the United States Patent and Trademark Office
and the United States Copyright Office and comparable offices in foreign
jurisdictions and equivalent filings in foreign jurisdictions, (c) recordation
of the Mortgages, (d) such as have been made or obtained and are in full force
and effect, (e) such other actions, consents, approvals, registrations or
filings with respect to which the failure to be obtained or made could not
reasonably be expected to have a Material Adverse Effect and (f) filings or
other actions listed on Schedule 3.04.

SECTION 3.05 Financial Statements. (a) The Borrower has heretofore furnished to
the Lenders:

(i) The unaudited pro forma condensed combined balance sheet as of December 31,
2016 (the “Pro Forma Closing Balance Sheet”) of the Borrower, together

 

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with its combined subsidiaries (in each case including the notes thereto),
copies of which have heretofore been furnished to each Lender, which have been
prepared giving effect to the Transactions (as if such events had occurred on
such date). The Pro Forma Closing Balance Sheet has been prepared in good faith
based on assumptions believed by Holdings and the Borrower to have been
reasonable as of the date of delivery thereof (it being understood that such
assumptions are based on good faith estimates of certain items and that the
actual amount of such items is subject to change). The Pro Forma Closing Balance
Sheet presents fairly in all material respects on a pro forma basis the
estimated financial position of the Borrower and its consolidated subsidiaries
as at December 31, 2016, assuming that the events specified in the second
preceding sentence had actually occurred at such date.

(ii) The audited consolidated balance sheets of the Borrower and its
subsidiaries as at December 31, 2015 and December 31, 2016 and the related
statements of operations, changes in combined equity and cash flows of the
Borrower and its subsidiaries for the fiscal years ended December 31, 2015 and
December 31, 2016, in each such case, copies of which have heretofore been
furnished to each Lender, which have been prepared in accordance with GAAP
applied consistently throughout the periods involved, and present fairly, in all
material respects, the financial position and results of operations of the
Borrower and its subsidiaries, as of and on such dates set forth on such
financial statements.

(iii) The unaudited quarterly consolidated balance sheets of the Borrower and
its combined Subsidiaries and the related statements of operations and cash
flows showing the financial position of the Borrower and its combined
Subsidiaries, in each such case, copies of which have heretofore been furnished
to each Lender, which have been prepared in accordance with GAAP applied
consistently throughout the periods involved, and present fairly, in all
material respects, the financial position and results of operations of the
Borrower and its Subsidiaries, for the most recent fiscal quarter(s) ended after
December 31, 2016 and at least 45 days prior to the Closing Date.

(iv) The unaudited monthly summary income statement information in a form
consistent with what is delivered to the Board of Directors and summary balance
sheet information in the form agreed to between the Administrative Agent and the
Borrower prior to the Closing Date, for the most recent month(s) ended after
December 31, 2016 and at least 30 days prior to the Closing Date.

(b) Except as set forth in Schedule 3.05(b), as of the Closing Date, none of the
Borrower or the Subsidiaries has any material Guarantees, contingent liabilities
and liabilities for taxes, or any long-term leases or unusual forward or
long-term commitments, including any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the financial statements referred to in the preceding clauses
(a)(i) and (ii). During the period from December 31, 2016, to and including the
Closing Date there has been no disposition by Holdings, the Borrower or any of
its subsidiaries of any material part of its business or property that has not
been disclosed to the Administrative Agent.

SECTION 3.06 No Material Adverse Change or Material Adverse Effect. Since
February 28, 2019, there has been no event, development or circumstance that has
had or could reasonably be expected to have a Material Adverse Effect.

 

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SECTION 3.07 Title to Properties; Possession Under Leases. (a) Each of the
Borrower and the Subsidiaries has good and valid record fee simple title to, or
valid leasehold interests in, or easements or other limited property interests
in, all its properties and assets (including all Mortgaged Properties), except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes and except where the failure to have such title,
interests or easements could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. All such properties and assets held
in fee simple are free and clear of Liens, other than Liens expressly permitted
by Section 6.02.

(b) Each of the Borrower and the Subsidiaries has complied with all obligations
under all leases to which it is a party, except where the failure to comply
would not reasonably be considered to have Material Adverse Effect, and all such
leases are in full force and effect, except leases in respect of which the
failure to be in full force and effect could not reasonably be expected to have
a Material Adverse Effect. Except as set forth on Schedule 3.07(b), the Borrower
and each of the Subsidiaries enjoys peaceful and undisturbed possession under
all such leases, other than leases in respect of which the failure to enjoy
peaceful and undisturbed possession could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

(c) Each of the Borrower and the Subsidiaries owns or possesses or has valid
licenses to all patents, trademarks, service marks, trade names, copyrights and
rights with respect thereto necessary for the present conduct of its business,
without any conflict (of which the Borrower has been notified in writing) with
the rights of others, and free from any burdensome restrictions on the present
conduct of the their businesses, except where such conflicts and restrictions
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

(d) As of the Closing Date, none of the Borrower or the Subsidiaries has
received any notice of any pending or contemplated condemnation proceeding
affecting any of the Mortgaged Properties or any sale or disposition thereof in
lieu of condemnation that remains unresolved as of the Closing Date.

(e) None of the Borrower or the Subsidiaries is obligated on the Closing Date
under any right of first refusal, option or other contractual right to sell,
assign or otherwise dispose of any Mortgaged Property or any interest therein,
except as permitted under Section 6.02 or 6.05.

SECTION 3.08 Subsidiaries. (a) Schedule 3.08(a) sets forth as of the Closing
Date the name and jurisdiction of incorporation, formation or organization of
each direct and indirect subsidiary of Holdings. Except as set forth on Schedule
3.08(a), as of the Closing Date, all of the issued and outstanding Equity
Interests of each subsidiary of Holdings is owned directly by Holdings or by
another subsidiary.

 

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(b) Each Loan Party is the record and beneficial owner of, and has good and
marketable title to, the Equity Interests pledged by (or purported to be pledged
by) it under the Security Documents, free of any and all Liens other than Liens
permitted by Section 6.02.

(c) As of the Closing Date, there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors’ qualifying shares) of
any nature relating to any Equity Interests of Holdings, the Borrower or any of
the Subsidiaries, and there are no 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 Equity
Interests pledged by (or purported to be pledged) under the Security Documents,
except rights of employees to purchase Equity Interests of Holdings or as set
forth on Schedule 3.08(c).

SECTION 3.09 Litigation; Compliance with Laws. (a) As of the Closing Date, there
are no actions, suits or proceedings at law or in equity or, to the knowledge of
the Borrower, investigations by or on behalf of any Governmental Authority or in
arbitration now pending, or, to the knowledge of the Borrower, threatened in
writing against or affecting Holdings or the Borrower or any of its subsidiaries
or any business, property or rights of any such person (i) that involve any Loan
Document or the Transactions or (ii) could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or materially
adversely affect the Transactions. As of the date of any Borrowing after the
Closing Date, there are no actions, suits or proceedings at law or in equity or,
to the knowledge of the Borrower, investigations by or on behalf of any
Governmental Authority or in arbitration now pending, or, to the knowledge of
the Borrower, threatened in writing against or affecting Holdings or the
Borrower or any of its subsidiaries or any business, property or rights of any
such person which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

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

(c) Agreements with Regulatory Agencies. Neither Holdings, the Borrower nor any
of its Subsidiaries is subject to any cease-and-desist or other similar order or
enforcement action issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, any Governmental Authority that currently
restricts the conduct of its business (each item in this sentence, a “Regulatory
Agreement”) in a manner that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Nor has Holdings, the Borrower
or any of its Subsidiaries been advised since December 31, 2015 by any
Governmental Authority that it is considering issuing, initiating, ordering, or
requesting any such Regulatory Agreement that could reasonably be expected to
have a Material Adverse Effect.

 

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Holdings, the Borrower and each of its Subsidiaries is in compliance with each
Regulatory Agreement to which it is party or subject, other than to the extent
such noncompliance could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and neither Holdings, the Borrower nor
any of its Subsidiaries has received any notice from any Governmental Authority
indicating that either Holdings, the Borrower or any of its Subsidiaries is not
in compliance with any such Regulatory Agreement, other than to the extent such
noncompliance could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

SECTION 3.10 Federal Reserve Regulations. (a) None of Holdings, the Borrower or
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.

(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose that entails a violation of,
or that is inconsistent with, the provisions of the Regulations of the Board,
including Regulation U or Regulation X.

SECTION 3.11 Investment Company Act; Public Utility Holding Company Act. None of
Holdings, the Borrower or the Subsidiaries is (a) an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended, or (b) a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended.

SECTION 3.12 Use of Proceeds. The Borrower will use the proceeds of the Term
Loans borrowed on the Closing Date, to refinance the indebtedness under the
Existing Credit Agreement and the Affinion International Notes and for the
payment of fees and expenses payable in connection with the Transactions. The
Borrower will use the proceeds of the Revolving Facility Loans and the Swingline
Loans for working capital needs and other general corporate purposes (including,
without limitation, for Permitted Business Acquisitions and to make Permitted
Investments). The Borrower will use the proceeds of the Letters of Credit solely
to support payment obligations incurred by the Borrower and its Subsidiaries.
Other than as set forth on Schedule 3.12, all Senior Notes, Affinion Investments
Notes and Existing Holdings Notes shall have been exchanged pursuant to the 2017
Exchange.

Holdings and the Borrower confirm and shall ensure that no proceeds borrowed or
Letter of Credit requested under the Credit Facilities have been or will be used
in a manner which would constitute a “use of proceeds in Switzerland” as
interpreted by Swiss tax authorities for purposes of Swiss withholding tax
(Verrechnungssteuer), except and to the extent that a written confirmation or
tax ruling countersigned by the Swiss Federal Tax Administration (Eidgenössische
Steuerverwaltung) has been obtained (in a form satisfactory to the
Administrative Agent) confirming that the intended “use of proceeds in
Switzerland” does not result therein that interest payments in respect of a
Credit Facility become subject to a withholding or deduction for Swiss
withholding tax (Verrechnungssteuer).

 

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SECTION 3.13 Tax Returns. Except as set forth on Schedule 3.13:

(a) Each of Holdings, the Borrower and the Subsidiaries (i) has timely filed or
caused to be timely filed all federal, state, local and non-U.S. Tax returns
required to have been filed by it that are material to such companies taken as a
whole and each such Tax return is true and correct in all material respects,
including, without limitation, relating to all periods or portions thereof
ending on or prior to the Closing Date and (ii) has timely paid or caused to be
timely paid all Taxes shown thereon to be due and payable by it and all other
material Taxes or assessments, except Taxes or assessments, including, without
limitation, relating to all periods or portions thereof ending on or prior to
the Closing Date that are being contested in good faith by appropriate
proceedings in accordance with Section 5.03 and for which Holdings, the Borrower
or any of the Subsidiaries (as the case may be) has set aside on its books
adequate reserves in accordance with GAAP; and

(b) Other than as could not be, individually or in the aggregate, reasonably
expected to have a Material Adverse Effect: as of the Closing Date, with respect
to each of Holdings, the Borrower and the Subsidiaries, (i) there are no claims
being asserted in writing with respect to any Taxes, (ii) no presently effective
waivers or extensions of statutes of limitation with respect to Taxes have been
given or requested and (iii) no Tax returns are being examined by, and no
written notification of intention to examine has been received from, the
Internal Revenue Service or any other Taxing authority.

SECTION 3.14 No Material Misstatements. (a) All written information (other than
the Projections, estimates and information of a general economic nature) (the
“Information”) concerning Holdings, the Borrower, the Subsidiaries, the
Transactions and any other transactions contemplated hereby included in the
Information Memorandum or otherwise prepared by or on behalf of the foregoing or
their representatives and made available to any Lenders or the Administrative
Agent in connection with the Transactions or the other transactions contemplated
hereby, when taken as a whole, were true and correct in all material respects,
as of the date such Information was furnished to the Lenders and as of the
Closing Date and did not contain any untrue statement of a material fact as of
any such date or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements were made.

(b) Any Projections and estimates and information of a general economic nature
prepared by or on behalf of the Borrower or any of its representatives and that
have been made available to any Lenders or the Administrative Agent in
connection with the Transactions or the other transactions contemplated hereby
(i) have been prepared in good faith based upon assumptions believed by the
Borrower to be reasonable as of the date thereof, as of the date such
Projections and estimates were furnished to the Lenders and as of the Closing
Date, and (ii) as of the Closing Date, have not been modified in any material
respect by the Borrower (it being understood that forecasts and projections by
their nature are inherently uncertain, that actual results may differ
significantly from the forecasted or projected results and that such differences
may be material and no assurances are being given that the results reflected in
the forecasts and projections will be achieved).

SECTION 3.15 Employee Benefit Plans. (a) Except as could not

 

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reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect or as set forth on Schedule 3.15: (i) each of Holdings and the
Borrower, the Subsidiaries is in compliance with the applicable provisions of
ERISA and the provisions of the Code relating to Plans and the regulations and
published interpretations thereunder and any similar applicable law; (ii) no
Reportable Event has occurred during the past five years as to which Holdings,
the Borrower, a Subsidiary or any ERISA Affiliate was required to file a report
with the PBGC, other than reports that have been filed; (iii) the present value
of all benefit liabilities under each Plan of Holdings, the Borrower, the
Subsidiaries and the ERISA Affiliates (based on those assumptions used to fund
such Plan), as of the last annual valuation date applicable thereto for which a
valuation is available, does not exceed the value of the assets of such Plan;
(iv) no ERISA Event has occurred or is reasonably expected to occur; and
(v) none of Holdings, the Borrower, the Subsidiaries or the ERISA Affiliates has
received any written notification that any Multiemployer Plan is in
reorganization or has been terminated within the meaning of Title IV of ERISA,
or has knowledge that any Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated.

(b) Each of Holdings, the Borrower and the Subsidiaries is in compliance (i)
with all applicable provisions of law and all applicable regulations and
published interpretations thereunder with respect to any employee pension
benefit plan or other employee benefit plan governed by the laws of a
jurisdiction other than the United States and (ii) with the terms of any such
plan, except, in each case, for such noncompliance that could not reasonably be
expected to have a Material Adverse Effect.

(c) None of Holdings, the Borrower or any of the Subsidiaries is or has at any
time been an employer (for the purposes of sections 38 to 51 of the Pensions Act
2004) of an occupational pension scheme that is not a money purchase scheme
(both terms as defined in the Pension Schemes Act 1993), and none of Holdings,
the Borrower or any of the Subsidiaries is or has at any time been “connected”
with or an “associate” of (as those terms are used in sections 39 and 43 of the
Pensions Act 2004) such an employer, other than any such scheme, connection or
association that could not reasonably be expected to have a Material Adverse
Effect.

SECTION 3.16 Environmental Matters. Except as disclosed on Schedule 3.16 and
except as to matters that could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect (i) no written notice, request
for information, order, complaint or penalty has been received by the Borrower
or any of the Subsidiaries, and there are no judicial, administrative or other
actions, suits or proceedings pending or threatened, that allege a violation of
or liability under any applicable Environmental Laws, in each case relating to
the Borrower or any of the Subsidiaries, (ii) each of the Borrower and the
Subsidiaries has obtained and maintained all permits, licenses and other
approvals necessary for its operations to comply with all applicable
Environmental Laws and is, and during the term of all applicable statutes of
limitation, has been, in compliance with the terms of such permits, licenses and
other approvals and with all other applicable Environmental Laws, (iii) there
has been no material written environmental assessment or audit conducted since
January 1, 2005, by the Borrower or any of the Subsidiaries of any property
currently owned or leased by the Borrower or any of the Subsidiaries that has
not been made available to the Administrative Agent prior to the date hereof,
(iv) no Hazardous Material is located at, on or under any property

 

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currently or, to the knowledge of the Borrower, formerly owned, operated or
leased by the Borrower or any of its Subsidiaries that would reasonably be
expected to give rise to any cost, liability or obligation of the Borrower or
any of the Subsidiaries under any applicable Environmental Laws, and no
Hazardous Material has been generated, owned, treated, stored, handled or
controlled by the Borrower or any of its Subsidiaries and transported to or
Released at any location in a manner that would reasonably be expected to give
rise to any cost, liability or obligation of the Borrower or any of the
Subsidiaries under any Environmental Laws, and (v) there are no written
agreements in which the Borrower or any of the Subsidiaries has expressly
assumed or undertaken responsibility, and such assumption or undertaking of
responsibility has not expired or otherwise terminated, for any liability or
obligation of any other person arising under or relating to applicable
Environmental Laws, which in any such case has not been made available to the
Administrative Agent prior to the date hereof.

SECTION 3.17 Security Documents. (a) The Collateral Agreement is effective to
create in favor of the Collateral Agent (for the benefit of the Secured Parties)
a legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof to the extent intended to be created thereby. In
the case of the Pledged Collateral described in the Collateral Agreement, when
certificates or promissory notes, as applicable, representing such Pledged
Collateral are delivered to the Collateral Agent, and in the case of the other
Collateral described in the Collateral Agreement (other than the Intellectual
Property (as defined in the Collateral Agreement)), when financing statements in
appropriate form are filed in the offices specified on Schedule 3 of the
Collateral Agreement, the Collateral Agent (for the benefit of the Secured
Parties) shall have a fully perfected Lien on, and security interest in (to the
extent required thereby), all right, title and interest of the Loan Parties in
such Collateral and, subject to Section 9-315 of the New York Uniform Commercial
Code, the proceeds thereof, as security for the Obligations to the extent
perfection can be obtained by filing Uniform Commercial Code financing
statements, in each case prior and superior in right to any other person
(except, in the case of Collateral other than Pledged Collateral, Liens
expressly permitted by Section 6.02).

(b) When the Intellectual Property Security Agreements are properly filed in the
United States Patent and Trademark Office and the United States Copyright
Office, and, with respect to Collateral comprised of Intellectual Property in
which a security interest cannot be perfected by such filings, upon the proper
filing of the financing statements referred to in paragraph (a) above, the
Collateral Agent (for the benefit of the Secured Parties) shall have a fully
perfected Lien on, and security interest in (to the extent intended to be
created thereby), all right, title and interest of the Loan Parties thereunder
in the domestic Intellectual Property included in the Collateral, in each case
prior and superior in right to any other person (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the
United States Copyright Office may be necessary to perfect a lien on registered
trademarks and patents, trademark and patent applications and registered
copyrights acquired by the grantors thereunder after the Closing Date) except
Liens expressly permitted by Section 6.02.

(c) Each Foreign Pledge Agreement is effective to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral described therein and the
proceeds thereof to the fullest extent permissible under applicable law. In the
case of the Pledged Collateral described in a Foreign Pledge Agreement, when
certificates representing such Pledged Collateral (if any) are delivered

 

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to the Collateral Agent, the Collateral Agent (for the benefit of the Secured
Parties) shall have a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations, prior and superior in right
to any other person except Liens expressly permitted by Section 6.02.

(d) Each Foreign Security Document is effective to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral described therein and the
proceeds thereof to the fullest extent permissible under applicable law. In the
case of the Collateral described in a Foreign Security Document, the Collateral
Agent (for the benefit of the Secured Parties) shall have a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Collateral and the proceeds thereof, as security for the Obligations,
prior and superior in right to any other person except Liens expressly permitted
by Section 6.02.

(e) The Mortgages executed and delivered after the Closing Date pursuant to
Section 5.11 shall be effective to create in favor of the Collateral Agent (for
the benefit of the Secured Parties) a legal, valid and enforceable Lien on all
of the Loan Parties’ right, title and interest in and to the Mortgaged Property
thereunder and the proceeds thereof, and when such Mortgages are filed or
recorded in the proper real estate filing or recording offices, the Collateral
Agent (for the benefit of the Secured Parties) shall have a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Mortgaged Property and, to the extent applicable, subject to
Section 9-315 of the Uniform Commercial Code, the proceeds thereof, in each case
prior and superior in right to any other person, other than with respect to the
rights of a person pursuant to Liens expressly permitted by Section 6.02.

(f) After taking the actions specified for perfection therein, each Security
Document (excluding the Foreign Pledge Agreements, the Foreign Security
Documents, the Collateral Agreement and the Mortgages, each of which is covered
by another paragraph of this Section 3.17), when executed and delivered, will be
effective under applicable law to create in favor of the Collateral Agent (for
the benefit of the Secured Parties) a legal, valid and enforceable security
interest in the Collateral subject thereto (to the extent intended to be created
thereby), and will constitute a fully perfected Lien on and security interest in
all right, title and interest of the Loan Parties in the Collateral subject
thereto (to extent required thereby), prior and superior to the rights of any
other person, except for rights secured by Liens expressly provided by
Section 6.02.

(g) Notwithstanding anything herein (including this Section 3.17) or in any
other Loan Document to the contrary, other than to the extent set forth in the
applicable Foreign Pledge Agreements or Foreign Security Documents, none of the
Borrower or any other Loan Party makes any representation or warranty as to the
effects of perfection or non-perfection, the priority or the enforceability of
any pledge of or security interest in any Equity Interests of any Foreign
Subsidiary, Collateral owned by any Foreign Subsidiary Loan Party, or as to the
rights and remedies of the Agents or any Lender with respect thereto, under
foreign law.

SECTION 3.18 Location of Real Property. Schedule 3.18 lists completely and
correctly as of the Closing Date all material real property owned or leased by
Holdings, the Borrower and the Loan Parties and the addresses thereof. As of the
Closing Date, Holdings, the

 

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Borrower and the Loan Parties own in fee all the real property set forth as
being owned by them on such Schedule 3.18. As of the Closing Date, Holdings, the
Borrower and the Loan Parties have in all material respects, valid leases in a
material real property set forth as being leased by them on Schedule 3.18.

SECTION 3.19 Solvency. (a) Immediately after giving effect to the Transactions
on the Closing Date, (i) the sum of the assets of the Borrower (individually)
and Holdings, the Borrower and the Subsidiaries on a consolidated basis, both at
a fair valuation and at present fair salable value, exceeds the liabilities,
including contingent, subordinated, unmatured, unliquidated, and disputed
liabilities of the Borrower (individually) and Holdings, the Borrower and the
Subsidiaries on a consolidated basis, respectively; (ii) the Borrower
(individually) and Holdings, the Borrower and the Subsidiaries on a consolidated
basis, respectively, have sufficient capital with which to conduct their
business; and (iii) the Borrower (individually) and Holdings, the Borrower and
the Subsidiaries on a consolidated basis have not incurred debts beyond their
ability to pay such debts as they mature. For purposes of this definition,
“debt” means any liability on a claim, and “claim” means (i) a right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (ii) a right to an equitable remedy for breach of
performance to the extent such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured. With respect to
any such contingent liabilities, such liabilities shall be computed at the
amount which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.

(b) Neither of Holdings or the Borrower intends to, or believes that it or any
Loan Party will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing and amounts of cash to be received by it
or any such Loan Party and the timing and amounts of cash to be payable on or in
respect of its Indebtedness or the Indebtedness of any such Loan Party.

SECTION 3.20 Labor Matters. Except as, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes, lockouts, stoppages, slowdowns or other labor disputes pending or
threatened against Holdings, the Borrower or any of the Subsidiaries; (b) the
hours worked and payments made to employees of Holdings, the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable law dealing with such matters; (c) all payments due from
Holdings, the Borrower or any of the Subsidiaries or for which any claim may be
made against Holdings, the Borrower or any of the Subsidiaries, 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 Holdings, the Borrower or such
Subsidiary to the extent required by GAAP; and (d) Holdings, the Borrower and
the Subsidiaries are in compliance with all applicable laws, agreements,
policies, plans and programs relating to employment and employment practices.
Except as set forth on Schedule 3.20, consummation of the Transactions will not
give rise to a right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which Holdings, the Borrower
or any of the Subsidiaries (or any predecessor) is a party or by which Holdings,
the Borrower or any of the Subsidiaries (or any predecessor) is bound.

 

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SECTION 3.21 Insurance. Schedule 3.21 sets forth a true, complete and correct
description of all material insurance maintained by or on behalf of Holdings,
the Borrower or the Subsidiaries as of the Closing Date. As of such date, such
insurance is in full force and effect. Such insurance complies with the
requirements of this Agreement and the other Loan Documents and the Borrower
believes (in the good faith judgment of the management of Borrower) that the
insurance maintained by or on behalf of Holdings, the Borrower and the
Subsidiaries is in at least such amounts as is adequate, reasonable and prudent
in light of the size and nature of its business.

SECTION 3.22 Senior Debt. The Obligations constitute “Senior Debt” (or the
equivalent thereof) and “Designated Senior Debt” (or the equivalent thereof)
under the Affinion Investments Notes Indenture.

SECTION 3.23 No Violation. (a) None of Holdings, the Borrower or any Subsidiary
is (a) a party to any agreement or instrument, or subject to any corporate
restriction, that, individually or in the aggregate, has resulted, or could
reasonably be expected to result, in a Material Adverse Effect or (b) is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which any of
Holdings, the Borrower or any Subsidiary is a party that, individually or in the
aggregate, has resulted, or could reasonably be expected to result, in a
Material Adverse Effect.

SECTION 3.24 Holdings Indebtedness. As of the Closing Date, and after giving
effect to the Transactions, Holdings’ only Indebtedness is the Indebtedness set
forth on Schedule 3.24.

SECTION 3.25 PATRIOT Act, etc. To the extent applicable, each Loan Party is in
compliance, in all material respects, with (i) the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (ii) the
PATRIOT Act.

SECTION 3.26 Sanctions Laws (a) None of the Loan Parties or Subsidiaries is in
violation of any applicable Sanctions Laws, 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
applicable Sanctions Laws.

(b) None of the Loan Parties or Subsidiaries is any of the following (each a
“Blocked Person”):

(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;

(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,
Executive Order No. 13224;

 

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(iii) a Person with which any Agent or Lender is prohibited from dealing or
otherwise engaging in any transaction by any Sanctions Laws;

(iv) a Person that commits, threatens or conspires to commit or supports
“terrorism” (as defined in Executive Order No. 13224); or

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

(c) No Loan Party or, to the knowledge of any Loan Party, any of its agents
acting in any capacity in connection with the Loans, Letters of Credit, the
Transactions or the other transactions hereunder (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Blocked Person or (ii) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to Executive Order No. 13224.

SECTION 3.27 Anti-Corruption Laws and Sanctions Laws. The Borrower, its
Subsidiaries and, to the knowledge of the Borrower, their respective officers,
employees, directors and agents that act in any capacity in connection with the
credit facility established hereby, are in compliance with Anti-Corruption Laws
and applicable Sanctions Laws in all material respects. None of (a) the
Borrower, any Subsidiary or, to the knowledge of Borrower, any of their
respective directors, officers or employees, or (b) to the knowledge of the
Borrower, any agent of the Borrower or any Subsidiary that act in any capacity
in connection with the credit facility established hereby, is a Sanctioned
Person. No Borrowing, use of proceeds or other transaction contemplated by this
Agreement will violate any Anti-Corruption Law or applicable Sanctions Laws.

ARTICLE IV

Conditions of Lending

The obligations of (a) the Lenders (including the Swingline Lenders) to make
Loans and (b) any Issuing Bank to issue, amend, extend or renew Letters of
Credit or increase the stated amounts of Letters of Credit hereunder (each, a
“Credit Event”) are subject to the satisfaction of the following conditions:

SECTION 4.01 All Credit Events. On the date of each Borrowing and on the date of
each issuance, amendment, extension or renewal of a Letter of Credit:

(a) The Administrative Agent shall have received, in the case of a Borrowing, a
Borrowing Request as required by Section 2.03 or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the applicable Issuing
Bank and the Administrative Agent shall have received a notice requesting the
issuance, amendment, extension or renewal of such Letter of Credit as required
by Section 2.05(b).

 

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(b) The representations and warranties set forth in the Loan Documents that are
qualified by materiality shall be true and correct, and the representations and
warranties that are not so qualified shall be true and correct in all material
respects, in each case on and as of the date of such Borrowing or issuance,
amendment, extension or renewal of a Letter of Credit (other than an amendment,
extension or renewal of a Letter of Credit without any (i) increase in the
stated amount of such Letter of Credit or (ii) extension of the expiration of
such Letter of Credit), as applicable, with the same effect as though made on
and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties that are qualified by materiality shall be true and correct, and the
representations and warranties that are not so qualified shall be true and
correct in all material respects, as of such earlier date).

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

Each Borrowing and each issuance, amendment, extension or renewal of a Letter of
Credit (other than an amendment, extension or renewal of a Letter of Credit
without any (i) increase in the stated amount of such Letter of Credit or
(ii) extension of the expiration of such Letter of Credit) shall be deemed to
constitute a representation and warranty by the Borrower on the date of such
Borrowing, issuance, amendment, extension or renewal as applicable, as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.

SECTION 4.02 Closing Date. On the Closing Date:

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

(b) The Administrative Agent shall have received, on behalf of itself, the
Lenders and each Issuing Bank on the Closing Date the following favorable and
customary executed legal opinions:

(i) the legal opinion of Akin Gump Strauss Hauer and Feld, LLP, special counsel
for Holdings, the Borrower and the other Loan Parties; and

(ii) the legal opinion of local counsel in each jurisdiction in which a material
Loan Party is organized (and such other opinions as reasonably requested by the
Administrative Agent in its sole discretion), to the extent such Loan Party is
not covered by the opinion referenced in the preceding clause (i).

Each legal opinion shall be (i) in form and substance reasonably satisfactory to
the Administrative Agent, (ii) dated the Closing Date, and (iii) addressed to
each Issuing Bank, the Administrative Agent and the Lenders, covering such other
matters relating to the Loan Documents as the Administrative Agent shall
reasonably request. Each of Holdings, the Borrower and the other Loan Parties
hereby instructs its counsel to deliver such opinions.

 

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(c) [Reserved].

(d) The Administrative Agent shall have received in the case of each Loan Party
each of the items referred to in clauses (i), (ii) and (iii) below:

(i) a copy of the certificate or articles of incorporation or formation, limited
liability agreement, partnership agreement or other constituent or governing
documents, including all amendments thereto, of each Loan Party, (a) if
applicable in such jurisdiction, certified as of a recent date by the Secretary
of State (or other similar official) of the jurisdiction of its organization,
and a certificate as to the good standing (to the extent such concept or a
similar concept exists under the laws of such jurisdiction) of each such Loan
Party as of a recent date from such Secretary of State (or other similar
official), and (b) otherwise, (i) certified by the Secretary or Assistant
Secretary of each such Loan Party or other person duly authorized by the
constituent documents of such Loan Party or (ii) otherwise in form and substance
reasonably satisfactory to the Administrative Agent and each of the Lenders;

(ii) a certificate of the Secretary or Assistant Secretary or similar officer of
each Loan Party or other person duly authorized by the constituent documents of
such Loan Party dated the Closing Date and certifying:

(A) that attached thereto is a true and complete copy of the by-laws (or limited
liability company agreement, articles of association, partnership agreement or
other equivalent constituent and governing documents) of such Loan Party as in
effect on the Closing Date and at all times since a date prior to the date of
the resolutions described in clause (B) below;

(B) that attached thereto is a true and complete copy of resolutions (or
equivalent authorizing actions) duly adopted by the Board of Directors (or
equivalent governing body) of such Loan Party (or its managing general partner
or managing member), and, with respect to each Loan Party incorporated in the
Netherlands, if required by law or its constituent documents, the general
meeting (algemene vergadering), (algemene ledenvergadering) and/or supervisory
board (raad van commissarissen) of such Loan Party, authorizing the execution,
delivery and performance of the Loan Documents to which such person is a party
and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect on the Closing Date;

(C) that attached thereto, in relation to a Loan Party incorporated in
Switzerland, is a true and complete copy of the minutes of a
shareholder/quotaholder resolutions duly adopted by the shareholder/quotaholder
of such Loan Party authorizing the execution, delivery and performance of the
Loan Documents to which such person is a party and that such resolutions have
not been modified, rescinded or amended and are in full force and effect on the
Closing Date;

 

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(D) that the certificate or articles of incorporation, by-laws, limited
liability company agreement, articles of association, partnership agreement or
other equivalent constituent and governing documents of such Loan Party have not
been amended since the date of the last amendment thereto disclosed pursuant to
clause (i) above;

(E) as to the incumbency and specimen signature of each officer or other duly
authorized person executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party;

(F) as to the absence of any pending proceeding for the dissolution or
liquidation of such Loan Party or, to the knowledge of such person, threatening
the existence of such Loan Party;

(G) In the case of a Loan Party formed, incorporated or organized under the laws
of England and Wales), confirming that borrowing or guaranteeing or securing, as
appropriate, the total commitments would not cause any borrowing, guarantee,
security or similar limit binding on it to be exceeded; and

(iii) a certification of another officer or other duly authorized person as to
the incumbency and specimen signature of the Secretary or Assistant Secretary or
similar officer or other person duly authorized by such Loan Party executing the
certificate pursuant to clause (ii) above.

(iv) In the case of a Loan Party formed, incorporated or organized under the
laws of England and Wales), a copy of a resolution of the board of directors (or
applicable equivalent) and/or the shareholders of that Loan Party (in each case
to the extent required by law): (i) approving the terms of, and the transactions
contemplated by, the Loan Documents to which it is a party and resolving that it
execute the Loan Documents to which it is a party; (ii) authorizing a specified
person or persons to execute the Loan Documents to which it is a party on its
behalf; and (iii) authorizing a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be signed and/or
despatched by it under or in connection with the Loan Documents to which it is a
party;

(v) The Administrative Agent shall have received in the case of each Loan Party
incorporated in the Netherlands, if applicable, an unconditional positive advice
(advies) of each works council having jurisdiction over that Loan Party and the
related request for advice (adviesaanvraag) or confirmation of such works
council that it irrevocably and unconditionally waives its right to render
advice, or, if not applicable, a confirmation by the Board of Directors of that
Loan Party in the resolutions referred to in paragraph (ii) (B) above that such
Loan Party does not have a works council.

(e) The elements of the Collateral and Guarantee Requirement referred to in
clauses (a), (b), (c), (d) and (e) of that definition shall have been satisfied
and the Administrative

 

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Agent shall have received a completed Perfection Certificate dated the Closing
Date and signed by a Responsible Officer of the Borrower, together with all
attachments contemplated thereby, and the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to the Loan Parties
and evidence reasonably satisfactory to the Administrative Agent that the Liens
indicated by such filings (or similar documents) are permitted by Section 6.02
or have been released.

(f) On the Closing Date, the Transactions shall be consummated substantially
concurrently with the funding of the Term Loans on the Closing Date, and after
giving effect to the Transactions and the other transactions contemplated
hereby, Holdings, the Borrower and the Subsidiaries shall have outstanding no
Indebtedness or preferred Equity Interests other than Indebtedness permitted
pursuant to Section 6.01.

(g) The Administrative Agent shall have received a customary certificate in from
a Responsible Officer of the Borrower, in form and substance satisfactory to the
Administrative Agent and addressed to the Administrative Agent and the Lenders,
certifying that Holdings and its subsidiaries, on a consolidated basis after
giving effect to the Transactions and the other transactions contemplated
hereby, are solvent.

(h) The Agents shall have received all fees payable thereto or to any Lender on
or prior to the Closing Date (including, for the avoidance of doubt, pursuant to
the Fee Letters) and, to the extent invoiced at least 3 Business Days prior to
the Closing Date, all other amounts due and payable pursuant to the Loan
Documents on or prior to the Closing Date, including reimbursement or payment of
all reasonable out-of-pocket expenses (including reasonable fees, charges and
disbursements of Latham & Watkins LLP and reasonably necessary U.S. local and
foreign counsel) required to be reimbursed or paid by the Loan Parties hereunder
or under any Loan Document and the Borrower shall have otherwise complied in all
material respects with the terms of the Fee Letters.

(i) The Administrative Agent shall have received insurance certificates
satisfying the requirements of Section 5.02 of this Agreement (provided that to
the extent unavailable by the Closing Date, the Borrower shall comply with such
requirements as set forth in Schedule 5.17).

(j) Since December 31, 2016, no Material Adverse Effect has occurred.

(k) The Lenders shall have received the Pro Forma Closing Balance Sheet and the
financial statements described in Section 3.05(a).

(l) The Administrative Agent shall have received a certificate of Holdings,
Dated the Closing Date, confirming satisfaction with Sections 4.01(b), 4.01(c)
and 4.02(n).

(m) At least five Business Days prior to the Closing Date, the Agents and the
Lenders shall have received all documentation and other information required by
bank regulatory authorities or reasonably requested by any Agent or any Lender
under or in respect of applicable “know-your-customer” and anti-money laundering
rules and regulations, including the PATRIOT Act, and including a duly executed
W-9 tax form (or such other applicable IRS tax form) of the Borrower that was
requested at least 10 Business Days prior to the Closing Date.

 

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(n) The Total Secured Leverage Ratio as of the Closing Date, calculated based on
EBITDA for the four consecutive fiscal quarter period ended on December 31,
2016, shall not exceed 5.90:1.00.

(o) The 2017 Exchange shall have been consummated, in all material respects, in
accordance with the terms and conditions set forth in the 2017 Exchange
Documents; provided that any modifications, amendments or waivers thereto shall
not be adverse to the interests of the Administrative Agent, the Lenders or the
Arrangers unless consented to in writing by the Administrative Agent, the
Lenders and the Arrangers; provided, for the avoidance of doubt, (i) any change
to cash consideration being offered to note holders pursuant to the 2017
Exchange Documents shall not be adverse to the interests of the Administrative
Agent, the Lenders or the Arrangers if any increase in such amount would be
funded by proceeds from the issuance of 2017 Exchange Notes pursuant to the
Investor Purchase Agreement and (ii) any waiver of the minimum condition with
respect to the exchange of the Senior Notes pursuant to the 2017 Exchange
Documents shall not be adverse to the interests of the Administrative Agent, the
Lenders or the Arrangers if any unexchanged Senior Notes are redeemed, purchased
or otherwise discharged concurrently with the closing of the 2017 Exchange.

Without limiting the generality of the provisions of the last paragraph of
Section 8.03, for purposes of determining compliance with the conditions
specified in this Section 4.02, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

ARTICLE V

Affirmative Covenants

Each of Holdings (solely with respect to Section 5.01(a), Section 5.03,
Section 5.06 and Section 5.13) and the Borrower covenants and agrees with each
Lender that so long as this Agreement shall remain in effect (other than in
respect of contingent indemnification obligations) 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 and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, each of Holdings
(solely with respect to Section 5.01(a), Section 5.03 and Section 5.06) and the
Borrower will, and will cause each of the Subsidiaries to:

SECTION 5.01 Existence; Businesses and Properties. (a) Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence and good standing under the laws of the jurisdiction of its
organization, (i) except as otherwise expressly permitted under Section 6.05,
and (ii) except for the liquidation or dissolution of Subsidiaries if the assets
of such Subsidiaries to the extent they exceed estimated

 

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liabilities are acquired by the Borrower or a Wholly Owned Subsidiary of the
Borrower in such liquidation or dissolution; provided, that (i) Subsidiaries
that are Subsidiary Loan Parties may not be liquidated into Subsidiaries that
are not Subsidiary Loan Parties and (ii) Subsidiaries that are Foreign
Subsidiary Loan Parties may not be liquidated into Subsidiaries that are not
Loan Parties unless, in each case, such liquidation is otherwise permitted by
Section 6.05(b).

(b) Do or cause to be done all things necessary to (i) obtain, preserve, renew,
extend and keep in full force and effect the permits, franchises,
authorizations, patents, trademarks, service marks, trade names, copyrights,
licenses, rights and privileges with respect thereto necessary to the normal
conduct of its business, unless the failure to do so would not result, in each
case, in a Material Adverse Effect, (ii) comply in all material respects with
all material applicable laws, rules, regulations (including any zoning,
building, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Mortgaged Properties) and
judgments, writs, injunctions, decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted, and (iii) at all times maintain and
preserve all material property necessary to the normal conduct of its business
and keep such property in good repair, working order and condition 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, if any, may be properly conducted
at all times (in each case except as expressly permitted by this Agreement).

SECTION 5.02 Insurance. (a) Keep its insurable properties insured at all times
by financially sound and reputable insurers in such amounts as shall be
customary for similar businesses and maintain such other reasonable insurance
(including, to the extent consistent with past practices, self-insurance), of
such types, to such extent and against such risks, as is customary with
companies in the same or similar businesses, taking into account the general
degree to which such companies are leveraged, and maintain such other insurance
as may be required by law or any other Loan Document.

(b) Cause all such property and property casualty insurance policies to be
endorsed or otherwise amended to include appropriate loss payable endorsements,
including, with respect to Mortgaged Properties, a “standard” or “New York”
lender’s loss payable endorsement, in each case, in form and substance
reasonably satisfactory to the Administrative Agent, which endorsement shall
provide that, from and after the Closing Date, if the insurance carrier shall
have received written notice from the Administrative Agent of the occurrence of
an Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Borrower or the other Loan Parties under such policies directly
to the Administrative Agent; cause all such policies to provide that none of the
Borrower, the Administrative Agent or any other party shall be a coinsurer
thereunder and to contain a “Replacement Cost Endorsement,” without any
deduction for depreciation, and such other provisions as the Administrative
Agent may reasonably (in light of a Default or a material development in respect
of the insured property) require from time to time to protect their interests;
deliver original or certified copies of all such policies or a certificate of an
insurance broker to the Administrative Agent; cause each such policy to provide
that it shall not be canceled, lapsed (including for nonrenewal) or terminated
upon less than 30 days’ prior written notice (or 10 days’ prior written notice
in the case of any failure to pay any premium due thereunder) thereof by the
insurer to the Administrative Agent;

 

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deliver to the Administrative Agent, prior to the cancellation, lapse (including
for nonrenewal) or termination of any such policy of insurance, a copy of a
renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent), or insurance certificate with
respect thereto, together with evidence satisfactory to the Administrative Agent
of payment of the premium therefor.

(c) Notify the Administrative Agent promptly whenever any separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained under this Section 5.02 is taken out by Holdings, the Borrower or any
of the Subsidiaries; and promptly deliver to the Administrative Agent a
duplicate original copy of such policy or policies, or an insurance certificate
with respect thereto.

(d) In connection with the covenants set forth in this Section 5.02, it is
understood and agreed that:

(i) none of the Administrative Agent, the Lenders, the Issuing Bank and their
respective agents or employees shall be liable for any loss or damage insured by
the insurance policies required to be maintained under this Section 5.02, it
being understood that (A) the Loan Parties shall look solely to their insurance
companies or any other parties other than the aforesaid parties for the recovery
of such loss or damage and (B) such insurance companies shall have no rights of
subrogation against the Administrative Agent, the Lenders, any Issuing Bank or
their agents or employees. If, however, the insurance policies, as a matter of
the internal policy of such insurer, do not provide waiver of subrogation rights
against such parties, as required above, then each of Holdings and the Borrower,
on behalf of itself and behalf of each of its subsidiaries, hereby agrees, to
the extent permitted by law, to waive, and further agrees to cause each of their
Subsidiaries to waive, its right of recovery, if any, against the Administrative
Agent, the Lenders, any Issuing Bank and their agents and employees; and

(ii) the designation of any form, type or amount of insurance coverage by the
Administrative Agent under this Section 5.02 shall in no event be deemed a
representation, warranty or advice by the Administrative Agent or the Lenders
that such insurance is adequate for the purposes of the business of Holdings,
the Borrower and the Subsidiaries or the protection of their properties.

SECTION 5.03 Taxes. 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, materials and
supplies or otherwise that, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
discharge shall not be required with respect to any such Tax, assessment,
charge, levy or claim so long as (a) the validity or amount thereof shall be
contested in good faith by appropriate proceedings, (b) Holdings, the Borrower
or the affected Subsidiary, as applicable, shall have set aside on its books
adequate reserves in accordance with GAAP with respect thereto, and (c) the
failure to make such payment and discharge could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 5.04 Financial Statements, Reports, etc. Furnish to the Administrative
Agent (which will promptly furnish such information to the Lenders):

 

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(a) as soon as available, but in any event within 90 days (or, if applicable,
such shorter period as the SEC shall specify for the filing of Annual Reports on
Form 10-K or, if applicable, such longer period permitted under Rule 12b-25
under the Exchange Act) after the end of each fiscal year, (i) a consolidated
balance sheet and related statements of operations, cash flows and owners’
equity showing the financial position of the Borrower and its subsidiaries as of
the close of such fiscal year and the consolidated results of its operations
during such year and, commencing with the fiscal year ending December 31, 2017,
setting forth in comparative form the corresponding figures for the prior fiscal
year, and (ii) management’s discussion and analysis of significant operational
and financial developments during such fiscal year and a “key performance
indicator” report with such content as may be mutually agreed by the
Administrative Agent and the Borrower, which consolidated balance sheet and
related statements of operations, cash flows and owners’ equity shall be audited
by an independent certified public accounting firm of recognized national
standing reasonably acceptable to the Administrative Agent (it being understood
that any of the “big four” accounting firms shall be acceptable to the
Administrative Agent) and accompanied by an opinion of such accountants (which,
other than for the fiscal year ended December 31, 2018, shall not be qualified
in any material respect, other than solely with respect to, or resulting solely
from, an upcoming maturity of any Tranche under this Agreement) to the effect
that such consolidated financial statements fairly present, in all material
respects, the financial position and results of operations of the Borrower and
its subsidiaries on a consolidated basis in accordance with GAAP (it being
understood that the delivery by the Borrower of Annual Reports on Form 10-K of
the Borrower and its consolidated subsidiaries shall satisfy the requirements of
this Section 5.04(a) to the extent such Annual Reports include the information
specified herein);

(b) as soon as available, but in any event within 45 days after the first three
fiscal quarters of each fiscal year (or, if applicable, such shorter period as
the SEC shall specify for the filing of Quarterly Reports on Form 10-Q or, if
applicable, such longer period permitted under Rule 12b-25 under the Exchange
Act) and within 75 days for the fourth fiscal quarter of any fiscal year,
commencing with the fiscal quarter ending March 31, 2017, (i) a consolidated
balance sheet and related statements of operations and cash flows showing the
financial position of the Borrower and its subsidiaries as of the close of such
fiscal quarter and the consolidated results of its operations during such fiscal
quarter and the then-elapsed portion of the fiscal year and setting forth in
comparative form the corresponding figures for the corresponding periods of the
prior fiscal year, and (ii) management’s discussion and analysis of significant
operational and financial developments during such quarterly period and a “key
performance indicator” report with such content as may be mutually agreed by the
Administrative Agent and the Borrower, all of which shall be in reasonable
detail and which consolidated balance sheet and related statements of operations
and cash flows shall be certified by a Responsible Officer of the Borrower on
behalf of the Borrower as fairly presenting, in all material respects, the
financial position and results of operations of the Borrower and its
subsidiaries on a consolidated basis in accordance with GAAP (subject to normal
year-end audit adjustments and the absence of footnotes (it being understood
that the delivery by the Borrower of Quarterly Reports on Form 10-Q of the
Borrower and its consolidated subsidiaries shall satisfy the requirements of
this Section 5.04(b) to the extent such Quarterly Reports include the
information specified herein));

 

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(c) as soon as available, but in any event within 30 days after the end of each
of the first two months of each fiscal quarter, summary income statement
information in a form consistent with what is delivered to the Board of
Directors and summary balance sheet information in the form agreed to between
the Administrative Agent and the Borrower prior to the Closing Date.

(d) Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of
this Section 5.04 may be satisfied with respect to financial information of
Borrower and its subsidiaries by furnishing (A) the applicable financial
statements of Holdings (or any direct or indirect parent of Holdings) or
(B) Holdings’ (or any direct or indirect parent thereof) as applicable, Form
10-K or 10-Q, as applicable; provided that, with respect to clauses (A) and (B),
to the extent such information relates to Holdings (or any direct or indirect
parent of Holdings), such information is accompanied by consolidating
information that explains in reasonable detail the differences between the
information relating to Holdings (or such direct or indirect parent), on the one
hand, and the information relating to the Borrower and its subsidiaries on a
standalone basis, on the other hand.

(e) (i) concurrently with any delivery of financial statements under paragraph
(a) or (b) above, a certificate of a Responsible Officer of the Borrower
(A) certifying that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (B) setting forth computations in reasonable detail demonstrating
compliance with the covenant contained in Section 6.10, or that compliance is
not then required in accordance with the terms of Section 6.10, and
(ii) concurrently with any delivery of financial statements under paragraph
(a) above, but only if available after use of commercially reasonable efforts, a
certificate of the accounting firm opining on or certifying such statements
stating whether they obtained knowledge during the course of their examination
of such statements of any Default or Event of Default (which certificate may be
limited to accounting matters and disclaims responsibility for legal
interpretations);

(f) promptly after the same become publicly available, copies of all periodic
and other publicly available reports, proxy statements and, to the extent
requested by the Administrative Agent, other reports and statements filed by
Holdings, the Borrower or any of its subsidiaries with the SEC, or after an
initial public offering, distributed to its stockholders generally, as
applicable; provided, however, that such reports, proxy statements, filings and
other materials required to be delivered pursuant to this clause (f) shall be
deemed delivered for purposes of this Agreement when posted to the website of
the Borrower or any website operated by the SEC containing “EDGAR” database
information;

(g) if, as a result of any change in accounting principles and policies from
those applied in the preparation of the financial statements referred to in
Section 3.05(a)(ii) for the fiscal year ended December 31, 2016, the
consolidated financial statements of the Borrower and its subsidiaries delivered
pursuant to paragraph (a) above will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant to
such

 

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clauses had no such change in accounting principles and policies been made,
then, together with the first delivery of financial statements pursuant to
paragraph (a) above following such change, a schedule prepared by a Responsible
Officer on behalf of the Borrower reconciling such changes to what the financial
statements would have been without such changes;

(h) within 75 days after the beginning of each fiscal year, detailed
consolidated quarterly budgets for such fiscal year and, as soon as available,
significant revisions, if any, of such budget and quarterly projections with
respect to such fiscal year, including a description of underlying assumptions
with respect thereto;

(i) upon the reasonable request of the Administrative Agent, an updated
Perfection Certificate (or, to the extent such request relates to specified
information contained in the Perfection Certificate, such information)
reflecting all changes since the date of the information most recently received
pursuant to this paragraph (i) or Section 5.11(f);

(j) promptly, a copy of all reports submitted to the Board of Directors (or any
committee thereof) of any of Holdings, the Borrower or any Subsidiary in
connection with any material interim or special audit made by independent
accountants of the books of Holdings, the Borrower or any Subsidiary;

(k) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Holdings, the Borrower
or any of its subsidiaries, or compliance with the terms of any Loan Document,
or such consolidating financial statements, as in each case the Administrative
Agent may reasonably request (for itself or on behalf of any Lender); and

(l) promptly upon request by the Administrative Agent, copies of: (i) each
Schedule B (Actuarial Information) to the most recent annual report (Form 5500
Series) filed with the Internal Revenue Service with respect to a Plan; (ii) the
most recent actuarial valuation report for any Plan; (iii) all notices received
from a Multiemployer Plan sponsor, a plan administrator or any governmental
agency, or provided to any Multiemployer Plan by Holdings, the Borrower, a
Subsidiary or any ERISA Affiliate, concerning an ERISA Event; and (iv) such
other documents or governmental reports or filings relating to any Plan or
Multiemployer Plan as the Administrative Agent shall reasonably request.

SECTION 5.05 Litigation and Other Notices. Furnish to the Administrative Agent
written notice of the following promptly after any Responsible Officer of
Holdings or the Borrower obtains actual knowledge thereof:

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

(b) the filing or commencement of, or any written threat or notice of intention
of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority or in arbitration,
against Holdings, the Borrower or any of its subsidiaries as to which an adverse
determination is reasonably probable and that, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;

 

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(c)    any other development specific to Holdings, the Borrower or any of its
subsidiaries that is not a matter of general public knowledge and that has had,
or could reasonably be expected to have, a Material Adverse Effect;

(d)    the occurrence of any ERISA Event that, together with all other ERISA
Events that have occurred, could reasonably be expected to have a Material
Adverse Effect; and

(e)    any material change in accounting policies or financial reporting
practices by any Loan Party or any Subsidiaries thereof.

SECTION 5.06 Compliance with Laws. Comply with all laws, rules, regulations and
orders of any Governmental Authority as applicable to it or its property, except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect; provided, that this Section 5.06 shall not apply to
Environmental Laws, which are the subject of Section 5.10, or to laws related to
Taxes, which are the subject of Section 5.03.

SECTION 5.07 Maintaining Records; Access to Properties and Inspections. Maintain
all financial records in accordance with GAAP and permit any persons designated
by the Administrative Agent or, upon the occurrence and during the continuance
of an Event of Default, any Lender to visit and inspect the financial records
and the properties of Holdings, the Borrower or any of the Subsidiaries at
reasonable times, upon reasonable prior notice to Holdings or the Borrower, and
as often as reasonably requested and to make extracts from and copies of such
financial records, and permit any persons designated by the Administrative Agent
or, upon the occurrence and during the continuance of an Event of Default, any
Lender upon reasonable prior notice to Holdings or the Borrower to discuss the
affairs, finances and condition of Holdings, the Borrower or any of the
Subsidiaries with the officers thereof and independent accountants therefor
(subject to reasonable requirements of confidentiality, including requirements
imposed by law or by contract); provided that, notwithstanding anything in this
Section 5.07 to the contrary, Holdings, the Borrower and its Subsidiaries will
not be required to disclose, permit the inspection, examination or making copies
or abstracts of, or discussion of, any document, information or other matter
that (i) constitutes trade secrets or proprietary information, (ii) in respect
of which disclosure is prohibited by applicable law or binding contractual
arrangement and such contractual arrangement was not created or made binding in
contemplation of this provision or (iii) is subject to attorney-client or
similar privilege or constitutes attorney work product.

SECTION 5.08 Payment of Obligations. Pay its material Indebtedness and other
material obligations, including material Tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, and (c) the failure to make such payment could
not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.09 Use of Proceeds. Use the proceeds of the Loans and the Letters of
Credit only as contemplated in Section 3.12. The Borrower will not request any
Borrowing, and the Borrower shall not use, and shall procure that its
Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Borrowing

 

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(a) in furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws in any material respect, (b) for the
purpose of funding, financing or facilitating any unauthorized activities,
business or transaction of or with any Sanctioned Person, or in any Sanctioned
Country, or (c) knowingly in any manner that would result in the violation of
any Sanctions Laws applicable to any party hereto. The Fourth Amendment
Prepayment Released Escrow Funds shall on the Fourth Amendment Effective Date be
used to prepay outstanding Term Loans together with the premium required under
Section 6.05(h) in an amount equal to 3.00% of the aggregate principal amount
being so prepaid. The Fourth Amendment Released Escrow Funds shall on the Fourth
Amendment Effective Date be deposited into a deposit account subject to an
Account Control Agreement in favour of the Collateral Agent, and such Fourth
Amendment Working Capital Released Escrow Funds shall remain in such deposit
account until used by the Borrower or its Subsidiaries solely for working
capital and/or to make an investment in one or more businesses, or capital
expenditures or assets, in each case used or useful in a Similar Business. The
proceeds of the Second Lien Facility shall be deposited into a deposit account
subject to an Account Control Agreement in favour of the Collateral Agent, and
such proceeds shall remain in such deposit account until used by the Borrower or
its Subsidiaries solely for working capital and/or to make an investment in one
or more businesses, or capital expenditures or assets, in each case used or
useful in a Similar Business.

SECTION 5.10 Compliance with Environmental Laws. Comply with all Environmental
Laws applicable to its operations and properties; and comply with and obtain and
renew all material permits, licenses and other approvals required pursuant to
Environmental Law for its operations and properties, except, in each case with
respect to this Section 5.10, to the extent the failure to do so could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

SECTION 5.11 Further Assurances; Additional Security, (a) Execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, Mortgages and other documents and recordings of
Liens in stock registries), that may be required under any applicable law, or
that the Administrative Agent may reasonably request, to cause the Collateral
and Guarantee Requirement to be and remain satisfied, all at the expense of the
Loan Parties, and provide to the Administrative Agent, from time to time upon
reasonable request, evidence reasonably satisfactory to the Administrative Agent
as to the perfection and priority of the Liens created or intended to be created
by the Security Documents.

(b)    If any asset (other than real property) that has an individual Fair
Market Value in an amount, or if purchase price therefor is, greater than
$2,500,000 is acquired by Holdings, the Borrower or any other Loan Party after
the Closing Date or owned by an entity at the time it becomes a Loan Party (in
each case other than assets constituting Collateral under a Security Document
that become subject to the Lien of such Security Document upon acquisition
thereof and other than assets that (i) are subject to secured financing
arrangements containing restrictions permitted by Section 6.09(c) pursuant to
which a Lien on such assets securing the Obligations is not permitted or
(ii) are not required to become subject to the Liens of the Administrative Agent
pursuant to Section 5.11(g) or the Security Documents), cause such asset to be
subjected to a Lien securing the Obligations pursuant to appropriate Security
Documents

 

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and take, and cause the Loan Parties to take, such actions as shall be necessary
or reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section 5.11, all at
the expense of the Loan Parties, subject to paragraph (g) below.

(c)    Promptly notify the Administrative Agent of the acquisition of, and, upon
the written request of the Administrative Agent, grant and cause each of the
Loan Parties to grant to the Administrative Agent security interests and
mortgages in, such real property of the Borrower or any such Loan Parties as are
not covered by the original Mortgages (other than assets that (i) are subject to
permitted secured financing arrangements containing restrictions permitted by
Section 6.09(c), pursuant to which a Lien on such assets securing the
Obligations is not permitted or (ii) are not required to become subject to the
Liens of the Administrative Agent pursuant to Section 5.11(g) or the Security
Documents), to the extent acquired after the Closing Date and having a value or
purchase price at the time of acquisition in excess of $2,500,000 pursuant to
documentation in such form as is reasonably satisfactory to the Administrative
Agent (each, an “Additional Mortgage”) and constituting valid and enforceable
perfected Liens superior to and prior to the rights of all third persons subject
to no other Liens except as are permitted by Section 6.02, at the time of
perfection thereof, record or file, and cause each such Subsidiary to record or
file, the Additional Mortgage or instruments related thereto in such manner and
in such places as is required by law to establish, perfect, preserve and protect
the Liens in favor of the Administrative Agent required to be granted pursuant
to the Additional Mortgages and pay, and cause each such Subsidiary to pay, in
full, all Taxes, fees and other charges payable in connection therewith, in each
case subject to paragraph (g) below. With respect to each such Additional
Mortgage, the Borrower shall deliver, or cause the applicable Loan Party to
deliver, to the Administrative Agent contemporaneously therewith a title
insurance policy or policies or marked up unconditional binder of title
insurance in an amount equal to the Fair Market Value of the Mortgaged Property,
paid for by the Borrower or the applicable Loan Party, issued by a nationally
recognized title insurance company insuring the Lien of each such Mortgage as a
valid first Lien on the Mortgaged Property described therein, free of any other
Liens except as expressly permitted by Section 6.02 and Liens arising by
operation of law, together with such endorsements, coinsurance and reinsurance
as the Administrative Agent may reasonably request and a survey if reasonably
available with respect to property outside the United States. Additionally, if
applicable, Borrower shall deliver to the Administrative Agent a completed
standard “life of loan” flood hazard determination form for each property
encumbered by a Mortgage, and if the property is located in an area designated
by the U.S. Federal Emergency Management Agency (or any successor agency) as
having special flood or mud slide hazards, (i) a notification to the Borrower
(“Borrower Notice”) and (if applicable) notification to the Borrower that flood
insurance coverage under the National Flood Insurance Program (“NFIP”) created
by the U.S. Congress pursuant to the National Flood Insurance Act of 1968, the
Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act
of 1994 and the Flood Insurance Reform Act of 2004 is not available because the
applicable community does not participate in the NFIP, (ii) documentation
evidencing the Borrower’s receipt of the Borrower Notice (e.g., countersigned
Borrower Notice, return receipt of certified U.S. Mail, or overnight delivery),
and (iii) if Borrower Notice is required to be given and flood insurance is
available in the community in which the property is located, a copy of one of
the following: the flood insurance policy, the Borrower’s application for a
flood insurance policy plus proof of premium payment, a declaration page
confirming that flood insurance has been issued, or such other evidence of flood
insurance reasonably satisfactory to the Administrative Agent.

 

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(d)    In connection with (i) the formation or acquisition of any direct or
indirect Subsidiary Loan Party or Foreign Subsidiary Loan Party or (ii) any
existing direct or indirect subsidiary of Holdings or the Borrower becoming a
Subsidiary Loan Party or Foreign Subsidiary Loan Party, within ten Business Days
after the date of such formation, acquisition or Subsidiary becoming a
Subsidiary Loan Party or Foreign Subsidiary Loan Party, notify the
Administrative Agent and the Lenders thereof and, within 20 Business Days after
such date or such longer period as the Administrative Agent shall agree (or, in
the case of a Foreign Subsidiary Loan Party or a Foreign Pledge Agreement, such
later date as may be the first practicable date because of delays caused by
foreign legal requirements, despite diligent efforts on the part of the Loan
Parties), cause the Collateral and Guarantee Requirement to be satisfied with
respect to such subsidiary and with respect to any Equity Interest in or
Indebtedness of such subsidiary owned by or on behalf of any Loan Party, subject
to Section 5.11(g).

(e)    [Reserved].

(f)    (i) Furnish to the Administrative Agent prompt written notice of any
change (A) in any Loan Party’s corporate or organization name, (B) in any Loan
Party’s identity or organizational structure or (C) in any Loan Party’s
organizational identification number, provided, that the Borrower shall not
effect or permit any such change unless all filings have been made, or will have
been made within 30 days of such change, under the Uniform Commercial Code or
otherwise that are required in order for the Administrative Agent to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral for the benefit of the applicable Secured Parties
(to the extent intended to be created by the Security Documents) and
(ii) promptly notify the Administrative Agent if any material portion of the
Collateral is damaged or destroyed.

(g)    The Collateral and Guarantee Requirement and the other provisions of this
Section 5.11 need not be satisfied with respect to (i) any real property held by
the Borrower or any of the Subsidiaries as a lessee under a lease, (ii) any
Equity Interests acquired after the Closing Date in accordance with this
Agreement if, and to the extent that, and for so long as (A) such Equity
Interests constitute less than 100% of all applicable Equity Interests of such
person and the persons holding the remainder of such Equity Interests are not
Affiliates, (B) doing so would violate or require a consent (that could not be
readily obtained without undue burden on the Loan Parties) under applicable law
or regulations or a contractual obligation binding on such Equity Interests,
including with regard to any Insurance Subsidiary, after giving effect to
anti-assignment provisions of the Uniform Commercial Code and (C) such law or
obligation existed at the time of the acquisition thereof and was not created or
made binding on such Equity Interests in contemplation of or in connection with
the acquisition of such Equity Interests, (iii) any assets acquired after the
Closing Date, to the extent that, and for so long as, taking such actions would
violate a contractual obligation binding on such assets that existed at the time
of the acquisition thereof and was not created or made binding on such assets in
contemplation or in connection with the acquisition of such assets, after giving
effect to anti-assignment provisions of the Uniform Commercial Code (except in
the case of assets acquired with Indebtedness permitted pursuant to
Section 6.01(i) that is secured by a Lien permitted pursuant to

 

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Section 6.02(i) or (j)), (iv) [restrictedreserved] and (v) any Subsidiary or
asset with respect to which the Administrative Agent determines that the cost of
the satisfaction of the Collateral and Guarantee Requirement or the provisions
of this Section 5.11 with respect thereto exceeds the value of the security
afforded thereby; provided, that, (i) upon the reasonable request of the
Administrative Agent, Holdings and the Borrower shall, and shall cause any
applicable Subsidiary to, use commercially reasonable efforts to have waived or
eliminated any contractual obligation of the types described in clauses (ii) and
(iii) above and (ii) the Administrative Agent may, in its sole discretion, allow
for extensions of time for satisfaction of, and waivers with respect to the
satisfaction of, the Collateral and Guarantee Requirement or provisions of this
Section 5.11.

SECTION 5.12 Fiscal Year; Accounting. In the case of the Borrower, cause its
fiscal year to end on December 31.

SECTION 5.13    Rating. In the case of the Borrower, use commercially reasonable
efforts to maintain (i) public ratings (but not any specific rating) from each
of Moody’s and S&P for the Term Loans, (ii) a public corporate credit rating of
the Borrower (but not any specific rating) from S&P and (iii) a public corporate
family rating of the Borrower (but not any specific rating) from Moody’s.

SECTION 5.13 Board Observer.

(a)     The Required Lenders shall have the right to select a single non-voting
observer (each person so selected to serve as an observer from time to time, an
“Observer”) to attend all meetings (including regular and special meetings,
“Meetings”) of the Board of Directors of Holdings and the Borrower
(collectively, the “Governing Bodies” and each, a “Governing Body”). The
Observer shall have the right to attend such Meetings in person or
telephonically or through other means of communication, in each case, to the
extent not prohibited under the applicable laws or regulations of the state of
organization of the Borrower or Holdings, as applicable.

(b)     The Observer shall be provided with notice of, and agendas for, all
Meetings in the same manner and at the same time as notice is sent to the
members of the applicable Governing Body. If any Governing Body proposes to take
any action by written consent in lieu of a meeting, the Observer shall receive
(A) a draft of such written consent at the same time and in the same manner as
if the Observer were a member of such Governing Body and (B) a copy of such
written consent when sent to members of such Governing Body for execution.

(c)     Concurrently with his or her designation, the Observer shall enter into
a reasonable and customary confidentiality agreement.

(d)     Anything to the contrary herein notwithstanding, the Observer may be
excluded from any portions of Meetings or from receiving any portions of
information to the extent (x) necessary to retain legal privilege or (y) the
subject matter involves a matter reasonably determined by the members of the
Board of Directors to present a conflict of interest between the Holdings, the
Borrower or their respective subsidiaries and stockholders, on the one hand, and
any Lender or an affiliate of either, on the other hand; provided, that, in the
event that

 

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the Observer is so excluded, Holdings and/or the Borrower, as applicable, shall
provide to the Observer a summary of the materials or meeting which the Observer
was not provided access in a manner in Holdings and the Borrower’s legal
counsel’s reasonable and good faith determination does not waive any applicable
privilege as soon as reasonably practicable following such meeting.

SECTION 5.14 Lender Meetings. In the case of the Borrower, upon the request of
the Administrative Agent, (a) participate in a meeting of the Administrative
Agent and the Lenders once during each fiscal year to be held at such time and
location as may be agreed upon by the Borrower and the Administrative Agent
(which may be telephonically), and (b) to the extent that the Borrower has not
already participated in or scheduled a similar conference call for such quarter
in connection with the delivery of its financial statements under the 2017
ExchangeNew Notes (which the Administrative Agent and the Lenders can
participate in), participate in a telephonic conference call with the
Administrative Agent and the Lenders quarterly at such time as may be agreed
upon by the Borrower and the Administrative Agent.

SECTION 5.15 Compliance with Material Contracts. Perform and observe all of the
material terms and conditions of each Material Agreement to be performed or
observed by it; provided that, no breach of this Section 5.15 shall be deemed to
have occurred if any alleged breach or failure to observe the material terms and
conditions of a Material Agreement is being contested in good faith by
appropriate proceedings by the Borrower or applicable Subsidiary, and the
Borrower or such Subsidiary shall have set aside on its books reserves in
accordance with GAAP.

SECTION 5.16 Compliance with Anti-Corruption Laws. Maintain policies and
procedures reasonably designed to ensure compliance by the Borrower, the
Subsidiaries, and their respective directors, officers, employees, and agents
with the Anti-Corruption Laws.

SECTION 5.17 Post-Closing Matters. Deliver to Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent, the items
described on Schedule 5.17 hereof or take such actions described on Schedule
5.17, in each case, on or before the dates specified with respect to such items
on Schedule 5.17 (or, in each case, such later date as may be agreed to by
Administrative Agent in its sole discretion). All conditions, covenants,
representations and warranties contained in this Agreement and the other Loan
Documents will be deemed modified to the extent necessary to effect the
foregoing (and to permit the taking of the actions described on Schedule 5.17
within the time periods specified thereon, rather than as elsewhere provided in
the Loan Documents).

ARTICLE VI

Negative Covenants

Each of Holdings (solely with respect to Sections 6.08(b) and 6.09) and the
Borrower covenants and agrees with each Lender that, so long as this Agreement
shall remain in effect (other than in respect of contingent indemnification
obligations) 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 and all Letters of Credit have
been canceled or have expired and all amounts drawn thereunder have

 

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been reimbursed in full, Holdings will not (solely with respect to Sections
6.08(b) and 6.09) and the Borrower will not, and will not cause or permit any of
the Subsidiaries to:

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

(a)    Indebtedness (other than intercompany Indebtedness) of the Subsidiaries
existing, or incurred pursuant to facilities existing, on the Closing Date and
set forth on Schedule 6.01 and any Permitted Refinancing Indebtedness incurred
to Refinance such Indebtedness or, without duplication, replacements of such
facilities that would constitute Permitted Refinancing Indebtedness with respect
to such facilities if all Indebtedness available to be incurred thereunder were
outstanding on the date of such replacement;

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

(c)    Indebtedness of the Borrower and the Subsidiaries pursuant to Swap
Agreements permitted by Section 6.12;

(d)    Indebtedness of the Borrower and the Subsidiaries owed to (including
obligations in respect of letters of credit or bank guarantees or similar
instruments for the benefit of) any person providing workers’ compensation,
health, disability or other employee benefits or property, casualty or liability
insurance to the Borrower or any Subsidiary, pursuant to reimbursement or
indemnification obligations to such person, in each case, provided in the
ordinary course of business; provided, that upon the incurrence of Indebtedness
with respect to reimbursement obligations regarding workers’ compensation
claims, such obligations are reimbursed not later than 30 days following such
incurrence;

(e)    Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to
the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any
Subsidiary that is not a Subsidiary Loan Party owing to the Borrower or any
Subsidiary Loan Party shall be subject to Section 6.04, and (ii) Indebtedness of
the Borrower owing to any Subsidiary and Indebtedness of any other Loan Party
owing to any Subsidiary that is not a Subsidiary Loan Party shall be
subordinated in right of payment to the Obligations on terms reasonably
satisfactory to the Administrative Agent;

(f)    Indebtedness of the Borrower and the Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and completion
guarantees and similar obligations, in each case, reasonably required in the
conduct of the business (giving effect to any growth or expansion of such
business permitted hereunder), including those incurred to secure health,
safety, insurance and environmental obligations of the Borrower and its
Subsidiaries as conducted in accordance with good and prudent business industry
practice and otherwise as permitted by the Loan Documents;

(g)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business or other cash management services in
the ordinary course of business and in good faith; provided, that (i) such
Indebtedness (other than credit or purchase cards) is extinguished within 10
Business Days of notification to the Borrower of its incurrence; and (ii) such
Indebtedness in respect of credit or purchase cards is extinguished within 60
days from its incurrence;

 

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(h)    [reserved];

(h)    (i) Indebtedness of a Subsidiary acquired after the Closing Date or a
person merged into or consolidated with the Borrower or any Subsidiary after the
Closing Date and Indebtedness assumed in connection with the acquisition of
assets, which Indebtedness, in each case, exists at the time of such
acquisition, merger or consolidation and is not created in contemplation of such
event and where such acquisition, merger or consolidation is permitted by this
Agreement, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance
such Indebtedness; provided, that the aggregate principal amount of such
Indebtedness at the time of, and after giving effect to, such acquisition,
merger or consolidation, such assumption or such incurrence, as applicable
(together with Indebtedness outstanding pursuant to this paragraph (h) or
paragraph (i) of this Section 6.01 and the Remaining Present Value of
outstanding leases permitted under Section 6.03), would not exceed $30,000,000
in the aggregate;

(i)    (i) Capital Lease Obligations, mortgage financings and purchase money
Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270
days after the acquisition, lease or improvement of the respective asset
permitted under this Agreement in order to finance such acquisition or
improvement, in each case, in the ordinary course of business, and (ii)(ii) any
Permitted Refinancing Indebtedness incurred to Refinance such Indebtednessin
respect thereof, and (iii) Capital Lease Obligations incurred by the Borrower or
any Subsidiary in respect of any Sale and Lease-Back Transaction that is
permitted under Section 6.03, collectively, in an aggregate principal amount
that at the time of, and after giving effect to, the incurrence thereof
(together with Indebtedness outstanding pursuant to paragraph (h) of this
Section 6.01 or this paragraph (i) and the Remaining Present Value of leases
permitted under Section 6.03) would not exceed $15,000,00030,000,000 in the
aggregate;

(j)    Indebtedness in respect of the New Notes, the 2017 Exchange Notes and
Permitted Refinancing Indebtedness with respect thereto; provided that, in the
case of any Guarantees of the New Notes or any Permitted Refinancing
Indebtedness with respect thereto by Foreign Subsidiaries of the Borrower
organized in any jurisdiction other than the United Kingdom, such Guarantees
shall be subordinated in right of payment to the Guarantees provided by such
Subsidiaries with respect to the Obligations;

(k)    other Indebtedness of the Borrower or any Subsidiary, in an aggregate
principal amount at any time outstanding pursuant to this paragraph (k) not in
excess of $40,000,00050,000,000 (provided that such amount may increase solely
with respect to any “payment in kind” interest that accrues thereto) (provided
that, for the avoidance of doubt, the incurrence of the Second Lien Facility
shall reduce the amounts available pursuant to this paragraph (k)}; provided
that such Indebtedness (i) shall be unsecured or if secured, shall be secured
solely if permitted under Section 6.02(cc), and shall be secured on a junior
priority basis to the Liens securing the Obligations, shall be subject to a
Junior Lien Intercreditor and Subordination Agreement and shall not have any
Liens other than with respect to the Collateral, (ii) if guaranteed will not be
guaranteed by any Subsidiary other than a Loan Party, (iii) shall not mature
prior to the date that is 91 days after the Latest Maturity Date, (iv) shall
have no

 

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scheduled amortization, scheduled payments of principal, sinking fund payments
or similar scheduled payments, in each case, prior to the final maturity date
thereof, other than regularly scheduled payments of interest that are payable in
kind; (v) shall not have terms or provisions which are more restrictive on the
Borrower and its Subsidiaries than the terms and provisions under the Loan
Documents, other than such terms and provisions as the Administrative Agent may
agree in its reasonable discretion and such terms and provisions applicable only
to the periods after the Latest Maturity Date and (vi) other than for the Second
Lien Facility which shall have the terms set forth in the Second Lien Commitment
Letter, as in effect on the Fourth Amendment Effective Date, shall not have an
effective yieldEffective Yield that is 10.00% per annum higher than the
effective yieldEffective Yield of the Term Loans;

(l)    Guarantees by the Borrower or any Subsidiary of any Indebtedness of the
Borrower or any Subsidiary expressly permitted to be incurred under this
Agreement; provided, that, notwithstanding anything to the contrary in this
Section 6.01, (i) the Borrower and the Loan Parties shall not Guarantee the
Indebtedness of any Subsidiary that is not a Loan Party unless such Guarantee is
expressly permitted under Section 6.04, (ii) any Guarantees by the Borrower or
any Loan Party under this Section 6.01(1) of any other Indebtedness of a person
that is subordinated in right of payment to other Indebtedness of such person
shall be expressly subordinated in right of payment to the Obligations on terms
not less favorable to the Lenders than the subordination terms of such other
Indebtedness, (iii) no Subsidiary shall Guarantee any Junior Indebtedness (or
Permitted Refinancing Indebtedness in respect of any of the foregoing), unless
such Subsidiary is also a Loan Party in compliance with the Collateral and
Guarantee Requirement and (iv) no Subsidiary (other than Affinion Investments
II) shall Guarantee the Affinion Investment Notes Documents;

(m)    Indebtedness arising from agreements of the Borrower or any Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary, other than Guarantees of
Indebtedness incurred by any person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition,
in each case, to the extent such obligation or transaction is permitted by this
Agreement;

(n)    reimbursement and similar obligations of Subsidiaries in respect of
letters of credit or bank guarantees (other than Letters of Credit issued
pursuant to Section 2.05) having an aggregate face amount not in excess of
$12,000,000; provided that from the Fourth Amendment Effective Date, this
Section 6.01(n) shall be limited to such reimbursement and similar obligations
existing as of the Fourth Amendment Effective Date and any Permitted Refinancing
Indebtedness with respect thereto;

(o)    Indebtedness of the Borrower and the Subsidiaries supported by a Letter
of Credit, in a principal amount not in excess of the stated amount of such
Letter of Credit;

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

(q)    to the extent constituting Indebtedness, all premium (if any), interest
(including interest paid in kind and post-petition interest), fees, expenses,
charges and additional or contingent interest on Indebtedness otherwise
permitted to be incurred pursuant to this Section 6.01;

 

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(r)    Indebtedness of the Borrower and the Subsidiaries incurred under lines of
credit or overdraft facilities extended by one or more financial institutions
reasonably acceptable to the Administrative Agent or by Lenders and, in each
case, established for the Borrower’s and such Subsidiaries’ ordinary course of
operations (such Indebtedness, the “Overdraft Line”), which Indebtedness may be
secured as, but only to the extent, provided in Section 6.02(b) and in the
Security Documents (it being understood, however, that for a period of 90
consecutive days during each fiscal year of the Borrower the outstanding
principal amount of Indebtedness under the Overdraft Line shall not exceed
$15,000,000); provided that from the Fourth Amendment Effective Date, this
Section 6.01(r) shall be limited to such Indebtedness existing as of the Fourth
Amendment Effective Date and any Permitted Refinancing Indebtedness with respect
thereto;

(s)    Upup to $20,000,000 in aggregate principal amount of Indebtedness of the
Borrower in respect of letters of credit, provided that if the aggregate
Available Unused Commitment under the Revolving Facility Commitments is
$20,000,000 or less, the availability under this Section 6.01(s) shall be
reduced by an amount equal to which the Available Unused Commitment under the
Revolving Facility Commitment decreases below $20,000,000;

(t)    [reserved]; up to $7,500,000 in aggregate principal amount of
Indebtedness of Foreign Subsidiaries that are not Loan Parties at any time
outstanding; provided, that to the extent that the terms of such Indebtedness
are permitted hereunder, any increase in the amount of such Indebtedness as a
result of capitalized or paid-in-kind interest or accreted principal on such
Indebtedness pursuant to such terms shall not constitute a further issuance or
incurrence of Indebtedness for purposes of this Section 6.01(t);

(u)    Indebtedness consisting of earn-outs and obligations of the Borrower or
any Subsidiary under deferred compensation or other similar arrangements
incurred by such person in connection with Permitted Business Acquisitions or
any other Investment permitted hereunder;

(v)    [reserved];

(w)    Indebtedness consisting of an unsecured corporate purchase card program
in the ordinary course of business in an aggregate amount at any time
outstanding pursuant to this paragraph (w) not in excess of $45,000,000; and

(x)    (i) other Indebtedness incurred by the Borrower or any Subsidiary Loan
Party, so long as (A) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (B) such Indebtedness is unsecured,
(C) the Borrower and the Subsidiaries shall be in Pro Forma Compliance and
(D) immediately after giving effect to the issuance, incurrence or assumption of
such Indebtedness, on a Pro Forma Basis, (x) the Consolidated Leverage Ratio,
calculated as of the last day of the most recently completed and Reported fiscal
quarter, shall not exceed 4.005.50 to 1.00, and (y) the Interest Coverage Ratio,
calculated as of the last day of the most recently completed and Reported fiscal
quarter, shall not be less than 2.00l.75 to 1.00, and (ii) Permitted Refinancing
Indebtedness in respect thereof;

 

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provided, that such Indebtedness incurred hereunder shall not mature or require
any amortization prior to the date that is 91 days after the Latest Maturity
Date.

SECTION 6.02 Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including stock or other securities of any person, including
the Borrower or any Subsidiary of the Borrower) at the time owned by it or on
any income or revenues or rights in respect of any thereof, except:

(a)    Liens on property or assets of the Subsidiaries existing on the Closing
Date and set forth on Schedule 6.02(a); provided, that (i) such Liens shall
secure only those obligations that they secure on the Closing Date (and
Permitted Refinancing Indebtedness in respect thereof permitted by
Section 6.01(a)) and shall not subsequently apply to any other property or
assets of the Borrower or any Subsidiary and (ii) in the case of a Lien securing
Permitted Refinancing Indebtedness, any such Lien is permitted, subject to
compliance with clause (e) of the definition of the term “Permitted Refinancing
Indebtedness”;

(b)    any Lien created under the Loan Documents, the Overdraft Line or
permitted in respect of any Mortgaged Property by the terms of the applicable
Mortgage; provided, however, in no event shall the holders of the Indebtedness
under the Overdraft Line have the right to receive proceeds in respect of a
claim in excess of $15,000,000 in the aggregate, together with (i) any accrued
and unpaid interest in respect of Indebtedness under the Overdraft Line and
(ii) any accrued and unpaid fees and expenses owing by the Subsidiaries under
the Overdraft Line, from the enforcement of any remedies available to the
Secured Parties under all of the Loan Documents;

(c)    any Lien on any property or asset of the Borrower or any Subsidiary
acquired after the Closing Date in a transaction permitted by this Agreement;
provided, that such Lien (i) does not apply to any other property or assets of
Holdings, the Borrower or any of the Subsidiaries not securing such Indebtedness
or other obligations owing to the same financier as the financier of such
Indebtedness or other obligations or to any person to which such financier has
assigned such Indebtedness or other obligations, at the date of the acquisition
of such property or asset (other than after acquired property subjected to a
Lien securing Indebtedness incurred prior to such date and which Indebtedness is
permitted hereunder, such Indebtedness owing to the same financier as the
financier of such Indebtedness at the date of the acquisition, that require a
pledge of after acquired property, it being understood that such requirement
shall not be permitted to apply to any property to which such requirement would
not have applied but for such acquisition), (ii) such Lien is not created in
contemplation of or in connection with such acquisition, (iii) after giving
effect to any such Lien and the incurrence of Indebtedness, if any, secured by
such Lien is created, incurred, acquired or assumed (or any prior Indebtedness
becomes so secured) on a Pro Forma Basis, the Senior Secured Leverage Ratio,
calculated as of the last day of the most recently ended and Reported fiscal
quarter, shall be less than or equal to 2.75 to 1.00, (iv) at the time of the
incurrence of such Lien and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing or would result therefrom and
(v) the Indebtedness or other obligations secured by such Lien are otherwise
permitted by this Agreement;

 

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(d)    Liens for Taxes, assessments or other governmental charges or levies not
yet delinquent or that are being contested in compliance with Section 5.03;

(e)    landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, construction or other like Liens arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days or
that are being contested in good faith by appropriate proceedings and in respect
of which, if applicable, Holdings, the Borrower or any Subsidiary shall have set
aside on its books reserves in accordance with GAAP;

(f)    (i) deposits and other Liens made in the ordinary course of business in
compliance with the Federal Employers Liability Act or any other workers’
compensation, unemployment insurance and other social security laws or
regulations and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in respect of such obligations and
(ii) deposits and other Liens securing liability for reimbursement or
indemnification obligations of (including obligations in respect of letters of
credit or bank guarantees for the benefit of) insurance carriers providing
property, casualty or liability insurance to Holdings, the Borrower or any
Subsidiary;

(g)    deposits and other Liens to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance and
return of money bonds, bids, leases, government contracts, trade contracts,
agreements with public utilities, and other obligations of a like nature
(including letters of credit in lieu of any such bonds or to support the
issuance thereof) incurred by Holdings, the Borrower or any Subsidiary in the
ordinary course of business, including those incurred to secure health, safety,
insurance and environmental obligations in the ordinary course of business;

(h)    zoning restrictions, survey exceptions, easements, trackage rights,
leases (other than Capital Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on or agreements dealing with the use of real
property, servicing agreements, development agreements, site plan agreements and
other similar encumbrances incurred in the ordinary course of business and title
defects or irregularities that are of a minor nature and that, in the aggregate,
do not interfere in any material respect with the ordinary conduct of the
business of the Borrower or any Subsidiary;

(i)    purchase money security interests in equipment or other property or
improvements thereto hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or any Subsidiary (including the interests of
vendors and lessors under conditional sale and title retention agreements);
provided, that (i) such security interests secure Indebtedness permitted by
Section 6.01(i) (including any Permitted Refinancing Indebtedness in respect
thereof), (ii) such security interests are incurred, and the Indebtedness
secured thereby is created, within 270 days after such acquisition, (iii) the
Indebtedness secured thereby is created, within 270 days after such acquisition,
(iv) the Indebtedness secured thereby does not exceed 100% of the cost of such
equipment or other property or improvements at the time of such acquisition or
construction, including transaction costs incurred by the Borrower or any
Subsidiary in connection with such acquisition, and (v) such security interests
do not apply to any other property or assets of Holdings, the Borrower or any
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equipment or other property or improvements but not to other parts of the
property to which any such improvements are made); provided, further, that
individual financings of equipment provided by a single lender may be
cross-collateralized to other financings of equipment provided solely by such
lender;

(j)    Liens arising out of capitalized lease transactions permitted under
Section 6.03, so long as such Liens attach only to the property sold and being
leased in such transaction and any accessions thereto or proceeds thereof and
related property;

(k)    Liens securing judgments that do not constitute an Event of Default under
Section 7.01(j);

(l)    other Liens with respect to property or assets of the Borrower or any
Subsidiary not constituting, or required to constitute, Collateral for the
Obligations; provided that (i) after giving effect to any such Lien and the
incurrence of Indebtedness, if any, secured by such Lien is created, incurred,
acquired or assumed (or any prior Indebtedness becomes so secured) on a Pro
Forma Basis, the Senior Secured Leverage Ratio, calculated as of the last day of
the most recently completed and Reported fiscal quarter, shall be less than or
equal to 3.00 to 1.00 (ii) at the time of the incurrence of such Lien and after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing or would result therefrom, and (iii) the Indebtedness or other
obligations secured by such Lien are otherwise permitted by this Agreement;

(m)    Liens disclosed by the title insurance policies delivered on or
subsequent to the Closing Date and pursuant to Section 5.11 and any replacement,
extension or renewal of any such Lien; provided, that such replacement,
extension or renewal Lien shall not cover any property other than the property
that was subject to such Lien prior to such replacement, extension or renewal;
provided, further, that the Indebtedness and other obligations secured by such
replacement, extension or renewal Lien are permitted by this Agreement;

(n)    any interest or title of a lessor under any leases or subleases entered
into by the Borrower or any Subsidiary in the ordinary course of business;

(o)    Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts
of the Borrower or any Subsidiary to permit satisfaction of overdraft or similar
obligations incurred in the ordinary course of business of the Borrower and the
Subsidiaries or (iii) relating to purchase orders and other agreements entered
into with customers of the Borrower or any Subsidiary in the ordinary course of
business;

(p)    Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights (including Liens
arising or created pursuant to the applicable general banking terms and
conditions (algemene bankvoorwaarden) of any member of the Dutch Banking
Association);

 

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(q)    Liens securing obligations in respect of trade-related letters of credit
permitted under Section 6.01(f) or (n) and covering the goods (or the documents
of title in respect of such goods) financed by such letters of credit and the
proceeds and products thereof;

(r)    licenses of intellectual property and software that are not material to
the conduct of any of the business lines of the Borrower and the Subsidiaries
and the value of which does not constitute a material portion of the assets of
the Borrower and its Subsidiaries, taken as a whole, and such license does not
materially interfere with the ordinary course of conduct of the business of the
Borrower or any of its Subsidiaries;

(s)    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;

(t)    deposits or other Liens with respect to property or assets of the
Borrower or any Subsidiary; provided, that the obligations secured by such Liens
shall not exceed $1,000,000 at any time;

(u)    Liens solely on any cash earnest money deposits made by the Borrower or
any of the Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder with respect to any acquisition that would
constitute an Investment permitted by this Agreement;

(v)    Liens arising out of consignment or similar arrangements for the sale of
goods entered into in the ordinary course of business;

(w)    Liens in favor of the Borrower or any Loan Party;

(x)    Liens arising from precautionary Uniform Commercial Code financing
statements or consignments entered into in connection with any transaction
otherwise permitted under this Agreement;

(y)    Liens of franchisors in the ordinary course of business not securing
Indebtedness;

(z)    Liens on not more than $12,000,000 of deposits securing Swap Agreements
permitted to be incurred under Section 6.12;

(aa)    Liens securing insurance premium financing arrangements; provided, that
such Liens are limited to the applicable unearned insurance premiums;

(bb)    Liens incurred to secure cash management services in the ordinary course
of business and in good faith; provided, that such Liens are not incurred in
connection with, and do not secure, any borrowings or Indebtedness;

(cc)    Liens securing Indebtedness incurred under Section 6.01(k); provided,
that such Liens shall be on a junior priority basis to the Liens securing the
Obligations, shall be subject to a Junior Lien Intercreditor and Subordination
Agreement and shall not be secured by any assets other than the Collateral;

 

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(dd)    leases and subleases not constituting Capital Lease Obligations of real
property not material to the conduct of any business line of the Borrower and
its Subsidiaries granted to others in the ordinary course of business that do
not materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries; and

(ee)    Liens on cash collateral securing Indebtedness incurred under
Section 6.01(s) so long as such cash collateral does not exceed 105% of the
Indebtedness permitted under Section 6.01(s).

Notwithstanding the foregoing, (i) no Liens shall be permitted to exist,
directly or indirectly, on (a) Pledged Collateral and (b) any Indebtedness of
the Borrower or any Subsidiary to the Borrower or a Domestic Subsidiary (unless
such Indebtedness shall have become subject to a first priority Lien securing
the Obligations), other than Liens in favor of the Administrative Agent for the
benefit of the Secured Parties and Liens permitted by Section 6.02(d), (p) or
(cc) and (ii) no Liens over any deposit account of the Borrower or any
Subsidiary Loan Party not in favor of the Administrative Agent for the benefit
of the Secured Parties other than Liens permitted by Sections 6.02(b), (d), (f),
(g), (k), (o)(i), (o)(ii), (p), (bb), (cc) or (ee) shall be perfected.

Notwithstanding the foregoing, (i) no Liens will be permitted to exist, directly
or indirectly, on any assets or Equity Interests of the Borrower or any
Subsidiaries, except to the extent specifically permitted herein and (ii) no
Liens will be permitted to exist, directly or indirectly, to the extent such
Liens are in regard to Indebtedness for borrowed money, on any assets or Equity
Interests of a Subsidiary that is not a Loan Party pursuant to Sections 6.02(l)
and (cc) (other than Liens on Equity Interests of a Subsidiary that is not a
Loan Party pursuant to Section (cc) if such Equity Interests are Collateral)
unless such Subsidiary becomes a Loan Party and complies with the Collateral and
Guarantee Requirements.

SECTION 6.03 Sale and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property being sold or transferred (a “Sale and Lease-Back Transaction”);
provided, that (a) a Sale and Lease-Back Transaction shall be permitted with
respect to property (i) owned by the Borrower or any Subsidiary that is acquired
after the ClosingFifth Amendment Effective Date so long as such Sale and
Lease-Back Transaction is consummated within 270 days of the acquisition of such
property, or (ii) owned by any Foreign Subsidiary that is not a Loan Party
regardless of when such property was acquired, and (b) at the time the lease in
connection therewith is entered into, and after giving effect to the entering
into of such lease, the Remaining Present Value of such lease (together with
Indebtedness outstanding pursuant to Sections 6.01(h) and (i) and the Remaining
Present Value of outstanding leases previously entered into under this
Section 6.03) would not exceed $45,000,00030,000,000 in the aggregate.

SECTION 6.04 Investments, Loans and Advances. Purchase, hold or acquire
(including pursuant to any merger with a person that is not a Wholly Owned
Subsidiary immediately prior to such merger; and including in one transaction or
a series of transactions)

 

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any Equity Interests, Indebtedness, other securities of or of all or
substantially all of the property and assets or business of another person or
assets constituting a business unit, line of business or division of such
person, make or permit to exist any loans, advances or capital contributions to
or Guarantees of the obligations of, or make or permit to exist any investment
or any other interest in (each, an “Investment”), in any other person, except:

(a)    Investments by Holdings in the Equity Interests of the Borrower at any
time, which Equity Interests will constitute Pledged Collateral;

(b)    (i) Investments by (x) the Borrower or the Subsidiaries in other
Subsidiaries effective as of the Closing Date as set forth on Schedule 6.04 and
(y) [reserved]; (ii) Investments by the Borrower or any Subsidiary Loan Party in
the Borrower or any Subsidiary Loan Party; (iii) Investments by any Foreign
Subsidiary Loan Party in the Borrower or any Loan Party; (iv) Investments by any
Subsidiary that is not a Loan Party in any other Subsidiary that is not a Loan
Party and (v) Investments by the Borrower or any Subsidiary in the Borrower or
any Subsidiary not otherwise permitted in clauses (ii), (iii) or (iv) above or
in any Similar Business in an aggregate amount for all such Investments made or
deemed made pursuant to this Section 6.04(b)(v) that are at that time
outstanding (in the case of Guarantees, after deducting any reduction in the
amount thereof without having made payment thereunder, and after giving effect
to any returns with respect to such Investments or the sale of Investments made
pursuant to this Section 6.04(b)(v) (i) to the extent such returns or the
proceeds of such sale received by the Borrower and its Subsidiaries consists of
cash and Permitted Investments and (ii) in an amount not to exceed the amount of
the Investments made after the Closing Date) not to exceed the $30,000,000 (with
the Fair Market Value of each Investment being measured at the time made and
without giving effect to subsequent changes in value); provided, that
(A) intercompany current liabilities incurred in the ordinary course of business
and in good faith in connection with cash management operations shall not be
included in calculating the limitation in this Section 6.04(b) at any time and
(B) the aggregate amount of Investments made in persons that are not Loan
Parties or do not in connection with such Investment becomes a Loan Party may
only be made in connection with an ordinary course recapitalization of
intercompany loans into Equity Interests of the applicable Subsidiary, and the
aggregate amount of such Investments (other than the Specified Acquisition), in
each case, pursuant to Section 6.04(b)(v), shall not, collectively, exceed at
any one time outstanding, $20,000,000 (the “Non-Loan Party Cap”);

(c)    Permitted Investments and Investments that were Permitted Investments
when made;

(d)    Investments arising out of the receipt by the Borrower or any Subsidiary
of noncash consideration for the sale of assets permitted under Section 6.05;

(e)    (i) loans and advances to employees of Holdings, the Borrower or any
Subsidiary in the ordinary course of business not to exceed $5,000,000 in the
aggregate at any time outstanding (calculated without regard to write-downs or
write-offs thereof) and (ii) advances of payroll payments and expenses to
employees in the ordinary course of business;

(f)    (i) accounts receivable arising, and trade credit granted, in the
ordinary course of business, (ii) any securities received in satisfaction or
partial satisfaction of defaulted accounts receivable from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit
loss and (iii) any prepayments and other credits to suppliers made in the
ordinary course of business;

 

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(g)    Swap Agreements permitted pursuant to Section 6.12;

(h)    Investments existing on the Closing Date and set forth on Schedule 6.04;

(i)    Investments resulting from pledges and deposits referred to in Sections
6.02(f), (g), (k), (s) and (u);

(j)    [reserved]; additional Investments by the Borrower or any of its
Subsidiaries having an aggregate Fair Market Value, taken together with all
other Investments made pursuant to this Section 6.04(j) that are at that time
outstanding, in an amount not to exceed $17,500,000 (with the Fair Market Value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value);

(k)    Investments constituting Permitted Business Acquisitions;

(l)    Investments consisting of the licensing or contribution of intellectual
property pursuant to joint marketing arrangements with other persons;

(m)    intercompany loans and other Investments between Foreign Subsidiaries
that are not Loan Parties;

(n)    Investments consisting of purchases and acquisitions of inventory,
supplies, materials and equipment or purchases of contract rights or licenses or
leases of intellectual property in each case in the ordinary course of business;

(o)    [reserved];

(p)    Investments received in connection with the bankruptcy or reorganization
of, or settlement of delinquent accounts and disputes with or judgments against,
customers and suppliers, in each case in the ordinary course of business or
Investments acquired by the Borrower as a result of a foreclosure by the
Borrower or any of the Subsidiaries with respect to any secured Investments or
other transfer of title with respect to any secured Investment in default;

(q)    Investments of a Subsidiary acquired after the Closing Date or of a
person merged into or consolidated with a Subsidiary in accordance with
Section 6.05 after the Closing Date to the extent that (i) such acquisition,
merger or consolidation is permitted under this Section 6.04, (ii) such
Investments were not made in contemplation of or in connection with such
acquisition, merger or consolidation, and (iii) such Investments were in
existence on the date of such acquisition, merger or consolidation; and

(r)    Investments received substantially contemporaneously in exchange for
Equity Interests of Holdings; provided, that (i) no Change in Control would
result therefrom, and (ii) such Equity Interests do not constitute Disqualified
Stock;

 

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(s)    [reserved]lnvestments in joint ventures not in excess of $5,000,000 in
the aggregate;

(t)    Guarantees by (i) the Borrower or any Subsidiary of operating leases
(other than Capital Lease Obligations) or of other obligations that do not
constitute Indebtedness, in each case, entered into by the Borrower or any
Subsidiary in the ordinary course of business and (ii) any Foreign Subsidiary of
operating leases (other than Capital Lease Obligations) or of obligations that
do not constitute Indebtedness, in each case, entered into by any Foreign
Subsidiary in the ordinary course of business;

(u)    Investments made with Excluded Contributions provided that (i) at the
time of such Investment and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing or would result therefrom and
(ii) such Excluded Contributions shall not have been otherwise applied for any
other purpose;

(v)    Investments made by Subsidiaries that are not Subsidiary Loan Parties
solely to the extent such Investments are made with the proceeds received by
such Subsidiary from an Investment in such Subsidiary made pursuant to Sections
6.04(b)(v), (j) or (x);

(w)    Guarantees permitted under Section 6.01 (except to the extent such
Guarantee is expressly subject to Section 6.04); and

(x)    Investments in Foreign Subsidiaries in the form of intercompany loans
made by the Borrower or any of its Domestic Subsidiaries with the proceeds of
royalty payments received by the Borrower or its Domestic Subsidiaries from
Foreign Subsidiaries in an aggregate amount not to exceed $25,000,000 in any
fiscal year of the Borrower.

Notwithstanding anything to the contrary contained in Section 6.04 above, no
Investment shall be permitted by this Section 6.04 with respect to the assets or
Equity Interests of any Material Insurance Subsidiary, except for (if otherwise
permitted hereunder) (i) when such assets or Equity Interests represents a de
minimis, immaterial or dormant portion of the Insurance Business of the Borrower
and its Subsidiaries, (ii) Investments by the Borrower or any Subsidiary Loan
Party in the Borrower or any Subsidiary Loan Party and (iii) Investments by any
Foreign Subsidiary Loan Party in the Borrower or any Loan Party.

Notwithstanding anything to the contrary contained in Section 6.04 above, the
Borrower and its Subsidiaries shall not, directly (and shall cause their
Subsidiaries not to, directly or indirectly) make any Investments pursuant to
clauses (j) and (s) above in order to make Dividends not otherwise permitted
under Section 6.06 or Junior Indebtedness Payments not otherwise permitted under
Section 6.09(b).

SECTION 6.05 Mergers, Consolidations, Sales of Assets and Acquisitions. Merge
into, divide or consolidate with any other person, or permit any other person to
merge into or consolidate with it, or sell, transfer, allocate, divide lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any part of its assets (whether now owned or hereafter acquired), or issue,
sell, transfer or otherwise dispose of any Equity Interests of any Subsidiary or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all of any division, unit or business of any other person, except
that this Section shall not prohibit:

 

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(a)    (i) the lease, purchase and sale of inventory in the ordinary course of
business by the Borrower or any Subsidiary, (ii) the acquisition of any other
asset in the ordinary course of business by the Borrower or any Subsidiary,
(iii) the sale of obsolete or worn out equipment or other property in the
ordinary course of business by the Borrower or any Subsidiary or (iv) the sale
of Permitted Investments in the ordinary course of business;

(b)    if at the time thereof and immediately thereafter no Event of Default
shall have occurred and be continuing or would result therefrom, (i) the merger
of any Subsidiary into the Borrower in a transaction in which the Borrower is
the survivor, (ii) the merger or consolidation of (x) any Domestic Subsidiary
into or with any Subsidiary Loan Party in a transaction in which the surviving
or resulting entity is a Subsidiary Loan Party or (y) any Foreign Subsidiary
into or with any Foreign Subsidiary Loan Party in a transaction in which the
surviving or resulting entity is a Foreign Subsidiary Loan Party, and, in the
case of each of clauses (i) and (ii), no person other than the Borrower,
Subsidiary Loan Party or Foreign Subsidiary Loan Party receives any
consideration, (iii) the merger or consolidation of any Subsidiary that is not a
Loan Party into or with any other Subsidiary that is not a Loan Party or
(iv)    the liquidation or dissolution or change in form of entity of any
Subsidiary (other than the Borrower) in accordance with Section 5.01(a)(ii) if
the Borrower determines in good faith that such liquidation, change in form or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders;

(c)    sales, transfers, leases or other dispositions to the Borrower or a
Subsidiary (upon voluntary liquidation or otherwise); provided, that any sales,
transfers, leases or other dispositions by a Loan Party to a Subsidiary that is
not a Loan Party shall be made in compliance with Section 6.07 and the aggregate
gross proceeds of any such sales, transfers, leases or other dispositions plus
the aggregate gross proceeds of any or all assets sold, transferred or leased in
reliance upon paragraph (h) below shall not exceed $20,000,00035,000,000;

(d)    Sale and Lease-Back Transactions permitted by Section 6.03;

(e)    Investments permitted by Section 6.04, Liens permitted by Section 6.02
and Dividends permitted by Section 6.06;

(f)    any swap of assets with a Fair Market Value not to exceed $10,000,000 in
the aggregate during the term of this Agreement in exchange for other assets of
comparable or greater value or usefulness to the business of the Borrower and
the Subsidiaries taken as a whole, as determined in good faith by the management
of the Borrower, provided that (i) no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (ii) for the avoidance
of doubt, such swap of assets shall not, directly or indirectly, be made for the
purposes of making a Dividend not otherwise permitted under Section 6.06 or
Junior Indebtedness Payment not otherwise permitted under Section 6.09(b);

(g)    the sale of defaulted receivables in the ordinary course of business and
not as part of an accounts receivables financing transaction;

 

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(h)    (i) sales, transfers, leases or other dispositions of assets not
otherwise permitted by this Section 6.05; provided, that the aggregate gross
proceeds (including noncash proceeds) of any or all assets sold, transferred,
leased or otherwise disposed of in reliance upon this paragraph (h)(i) plus the
aggregate gross amount of such proceeds in reliance upon Section 6.05(c) above
shall not exceed $20,000,00050,000,000; provided, further, that the Net Proceeds
thereof are applied in accordance with Section 2.11(b); and (ii) dispositions of
the assets or Equity Interests of any Material Insurance Subsidiary; provided,
that (i) such sales and dispositions are for Fair Market Value, (ii) such
disposition is for 85% cash consideration, to a third party that is not an
Affiliate upon terms no less favorable to the Borrower or such Subsidiary, as
applicable, than would otherwise be obtained in a comparable arm’s-length
transaction, (iii) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (iv) the Total Secured Leverage Ratio
shall not exceed the lesser of (x) 5.275 to 1.00 and (y) the Total Secured
Leverage Ratio immediately prior to giving effect to such disposition and the
Borrower shall have delivered to the Administrative Agent a certificate of a
Responsible Officer of the Borrower to such effect, together with all relevant
financial information for such Subsidiary or assets; provided that solely for
purposespurpose of the Bridges Sale, the Total Secured Leverage Ratio shall be
calculated net of the Unrestricted Cash proceeds received thereof (it being
agreed that any cash proceeds received and deposited into the escrow account (or
other account) described in the proviso below shall be deemed Unrestricted Cash
for purposes of calculating the Total Secured Leverage Ratio in connection with
the Bridges Sale), and (v) the Net Proceeds thereof (which shall not be subject
to a reinvestment right other than as set forth below in this clause (h)) are
applied in accordance with Section 2.11(b) and subject to the Prepayment Fees in
respect of COC Payment Events pursuant to Section 2.12(e); provided that
notwithstanding the foregoing, the Borrower and its Subsidiaries can retain up
to $50,000,000 of Net Proceeds from the Bridges Sale as long as such amount is
held in an escrow account (or such other account satisfactory to the
Administrative Agent) subject to the sole control of the Administrative Agent
which account shall be established promptly upon the receipt of the Net
Proceeds, but in no event to exceed 30 days following receipt unless the
Administrative Agent consents in its sole discretion), with such proceeds only
being released to the Borrower and its Subsidiaries (i) with the consent of the
Administrative Agent, if used to acquire, maintain, develop, construct, improve,
upgrade or repair assets useful in the business of the Borrower and the Loan
Parties or to make investments in Permitted Business Acquisitions or Investments
permitted by Section 6.04, (ii) with the consent of the Administrative Agent or
(iii) if used to prepay Term Loans together with a premium equal to 3.00% of the
aggregate principal amount being prepaid; provided further, if there are any
amounts remaining in such escrow account on the date that is nine months after
receipt of such Net Proceeds, thenFifth Amendment Effective Date, then the
Borrower will use such amounts will be usedon the Fifth Amendment Effective Date
to prepay Term Loans together with awithout paying any Prepayment Fee or other
premium equal to 3.00% of the aggregate principal amount being prepaidor
penalty.

(i)    any Permitted Business Acquisition or merger or consolidation in order to
effect a Permitted Business Acquisition; provided, that following any such
merger or consolidation (i) involving the Borrower, the Borrower is the
surviving corporation, (ii)    involving a Domestic Subsidiary, the surviving or
resulting entity shall be a Subsidiary Loan Party that is a Wholly Owned
Subsidiary and (iii) involving a Foreign Subsidiary, the surviving or resulting
entity shall be a Wholly Owned Subsidiary;

 

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(j)    non-exclusive licensing and cross-licensing arrangements involving any
technology or other intellectual property of the Borrower or any Subsidiary in
the ordinary course of business and other licensing and cross-licensing
arrangements involving any technology or other intellectual property of the
Borrower or any Subsidiary that are not material to the conduct of any of the
business lines of the Borrower and the Subsidiaries, that do not materially
interfere with the ordinary course of the business of the Borrower or any of its
Subsidiaries and the value of which does not constitute a material portion of
the assets of the Borrower and its Subsidiaries, taken as a whole, and that are
not material to the ordinary course of conduct of the business of the Borrower
or any of its Subsidiaries;

(k)    the lease, assignment or sublease of any real or personal property in the
ordinary course of business; and

(l)    sales, leases or other dispositions of inventory, equipment or other
assets (excluding Equity Interests, assets constituting a business division,
unit, line of business, all or substantially all of the assets of any Material
Subsidiary, Sale and Lease-Back Transactions and receivables) of the Borrower
and the Subsidiaries determined by the management of the Borrower to be no
longer useful or necessary in the operation of the business of the Borrower or
any of the Subsidiaries; provided, that the Net Proceeds thereof are applied in
accordance with Section 2.11(b).

Notwithstanding anything to the contrary contained in Section 6.05 above, (i) no
sale, transfer or other disposition of assets shall be permitted by this
Section 6.05 (except as permitted to Loan Parties pursuant to Section 6.05(c))
unless such disposition is for Fair Market Value, and (ii) no sale, transfer or
other disposition of assets with a Fair Market Value of more than $2,000,000
shall be permitted by paragraph (a), (d), (h),or (I) of this Section 6.05 unless
such disposition is for at least 75% cash consideration; provided, that for
purposes of clause (ii), the amount of any secured Indebtedness of the Borrower
or any Subsidiary or other Indebtedness of a Subsidiary that is not a Loan Party
(as shown on the Borrower’s or such Subsidiary’s most recent balance sheet or in
the notes thereto) that is assumed by the transferee of any such assets shall be
deemed to be cash.

SECTION 6.06 Dividends and Distributions. Declare or pay, directly or
indirectly, any dividend or make, directly or indirectly, any other distribution
(by reduction of capital or otherwise), whether in cash, property, securities or
a combination thereof, with respect to any of its Equity Interests (other than
dividends and distributions on Equity Interests payable solely by the issuance
of additional Equity Interests (other than Disqualified Stock) of the person
paying such dividends or distributions) or directly or indirectly redeem,
purchase, retire or otherwise acquire for value (or permit any subsidiary of the
Borrower to purchase or acquire) any of its Equity Interests or set aside any
amount for any such purpose (other than through the issuance of additional
Equity Interests of the person redeeming, purchasing, retiring or acquiring such
shares) (any of the foregoing dividends, distributions, redemptions,
repurchases, retirements, other acquisitions or setting aside of amounts, “
Dividends”); provided, however, that:

 

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(a)    (i) any Subsidiary may declare and pay dividends to, or make other
distributions to, the Borrower or any Subsidiary that is a direct parent of such
Subsidiary and, if not a Wholly Owned Subsidiary, to each other direct owner of
Equity Interests of such Subsidiary on a pro rata basis (or more favorable basis
from the perspective of the Borrower or such Subsidiary) based on their relative
ownership interests; and (ii) to the extent permitted by Section 6.04, any
Subsidiary that is not a Wholly Owned Subsidiary may repurchase its Equity
Interests from any owner of the Equity Interests of such Subsidiary that is not
the Borrower or a Subsidiary;

(b)    the Borrower may declare and pay dividends or make other distributions to
Holdings in respect of (i) overhead, legal, accounting and other professional
fees and expenses of Holdings, including, in an aggregate amount not to exceed
$2,500,000, for director fees and for costs and expenses associated with
registration and listing of Holdings’ Equity Interests, and (ii) actual U.S.
federal, state and local income Tax liabilities of Holdings for the consolidated
group of which Holdings is parent to the extent that Holdings, and not the
Borrower, (A) files a consolidated U.S. federal income tax return that includes
the Borrower and its Subsidiaries in an amount not to exceed the amount that the
Borrower and its Subsidiaries would have been required to pay in respect of
federal, state or local income taxes, as the case may be, in respect of such
year if the Borrower and its Subsidiaries had paid such taxes directly as a
stand-alone taxpayer or stand-alone group and (B) actually pays, or will pay, as
the consolidated tax payor, such taxes for the Borrower and its Subsidiaries, it
being agreed that if such dividends and distributions are paid to Holdings and
Holdings does not make such consolidated tax payments on the date when the
Borrower and its subsidiaries are required to pay such taxes, such failure shall
be an Event of Default that shall continue until all such taxes are paid,
(iii) fees and expenses related to any public offering or private placement of
equity securities of Holdings that is not consummated, and (iv) other fees and
expenses in connection with the maintenance of its existence and its ownership
of the Borrower;

(c)    the Borrower may declare and pay dividends or make other distributions to
Holdings to purchase or redeem Equity Interests of Holdings (including related
stock appreciation rights or similar securities) held by then present or former
directors, consultants, officers or employees of Holdings, the Borrower or any
of the Subsidiaries or by any Plan upon such person’s death, disability,
retirement or termination of employment or under the terms of any such Plan or
any other agreement under which such shares of stock or related rights were
issued; provided, that the aggregate amount of dividends for such purchases or
redemptions under this Section 6.06(c) shall not exceed (i) in any fiscal year
$1,000,000, plus (ii) cash proceeds received from directors, consultants,
officers or employees of Holdings, the Borrower or any Subsidiary from the
issuance of Equity Interests of Holdings (other than Disqualified Stock) in
connection with permitted employee compensation and incentive arrangements as
set forth in a certificate of a Responsible Officer of the Borrower, which if
not used in any fiscal year, may be carried forward to any fiscal calendar year,
plus (iii) amounts received in respect of key man life insurance policy
proceeds;

(d)    any person may make noncash repurchases of Equity Interests deemed to
occur upon exercise of stock options if such Equity Interests represent a
portion of the exercise price of such options;

 

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(e)    any person may make distributions to minority shareholders of any
subsidiary that is acquired pursuant to a Permitted Business Acquisition
pursuant to appraisal or dissenters’ rights with respect to shares of such
subsidiary held by such shareholders;

(f)    the Borrower or any Subsidiary may make payments of cash, or dividends,
distributions or advances to allow such person to make payments of cash, in lieu
of the issuance of fractional shares upon exercise of warrants or upon the
conversion or exchange of Equity Interests of such person; provided, however,
that the aggregate amount of such payments, dividends, distributions or advances
shall not exceed $1,000,000; and

(g)    the Borrower may (x) declare and pay dividends to Holdings to enable
Holdings to make payments or purchases in respect of the Existing Holdings Notes
using the proceeds of issuances of 2017 Exchange Notes, (y) issue 2017 Exchange
Notes in exchange for Existing Holdings Notes pursuant to the 2017 Exchange and
(z) declare and pay dividends to Holdings to enable Holdings to pay accrued and
unpaid interest with respect to Existing Holdings Notes in connection with the
transactions described in clauses (x) and (y).

SECTION 6.07 Transactions with Affiliates. (a) Sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transaction with, any of its Affiliates, unless such
transaction is (i) otherwise expressly permitted (or required) with such
Affiliates or holders under this Agreement or (ii) upon terms no less favorable
to the Borrower or such Subsidiary, as applicable, than would be obtained in a
comparable arm’s-length transaction with a person that is not an Affiliate;
provided, that this clause (ii) shall not apply to (A) the indemnification of
directors of Holdings, the Borrower or the Subsidiaries in accordance with
customary practice or (B) to the extent otherwise permitted under this
Agreement, and solely to the extent in the ordinary course of business or
consistent with past practices (each of which shall not be prohibited by this
Section 6.07), the following:

(i)    any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
equity purchase agreements, deferred compensation agreements, stock options and
stock ownership plans or similar employee benefit plans approved by the Board of
Directors of Holdings;

(ii)    [reserved];

(iii)    transactions among the Borrower and the Loan Parties (other than
Holdings) and transactions among the Loan Parties (other than Holdings);

(iv)    the payment of fees and indemnities to directors, officers, employees
and consultants of Holdings, the Borrower and the Subsidiaries in the ordinary
course of business;

(v)    the existence of, or the performance by the Borrower or any of its
Subsidiaries of its obligations under the terms of, the Transaction Documents,
agreements set forth on Schedule 6.07 and any amendment thereto or similar
agreements which it may enter into thereafter; provided, however, that the
existence of, or the performance by

 

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the Borrower or any of its Subsidiaries of its obligations under, any future
amendment to any such existing agreement or under any similar agreement entered
into after the Closing Date shall only be permitted by this clause (v) to the
extent that the terms of any such existing agreement together with all
amendments thereto, taken as a whole, or new agreement are not otherwise more
disadvantageous to the Lenders in any material respect than the original
agreement as in effect on the Closing Date;

(vi)    transactions to effect the Transactions and the payment of all fees and
expenses related to the Transactions, as described herein or contemplated by the
Transaction Documents;

(vii)    any employment agreements entered into by Holdings, the Borrower or any
of the Subsidiaries in the ordinary course of business;

(viii)    transactions permitted by, and complying with, the provisions of,
Section 6.04;    

(ix)    transactions permitted by, and complying with, the provisions of,
Section 6.05;    

(x)    transactions permitted by, and complying with the provisions of,
Section 6.06;

(xi)    any purchase by any director, officer, employee or consultant of the
Borrower or Holdings of Equity Interests of Holdings or any contribution by
Holdings to, or purchases of, equity capital of the Borrower; provided that any
Equity Interests of the Borrower shall be pledged to the Administrative Agent on
behalf of the Lenders pursuant to the Collateral Agreement;

(xii)    [reserved;]

(xiii)    payments or loans (or cancellation of loans) to employees or
consultants that are (A) approved by a majority of the Board of Directors or the
managing member of the Borrower in good faith, (B) made in compliance with
applicable law and (C) otherwise permitted under this Agreement;

(xiv)    transactions with Wholly Owned Subsidiaries for the purchase or sale of
goods, products, parts and services entered into in the ordinary course of
business in a manner consistent with past practice;

(xv)    any transaction in respect of which the Borrower delivers to the
Administrative Agent (for delivery to the Lenders) a letter addressed to the
Board of Directors of the Borrower and Holdings from an accounting, appraisal or
investment banking firm, in each case of nationally recognized standing that is
(A) in the good faith determination of the Borrower qualified to render such
letter and (B) reasonably satisfactory to the Administrative Agent, which letter
states that such transaction is on terms that are no less favorable to the
Borrower or such Subsidiary, as applicable, than would be obtained in a
comparable arm’s-length transaction with a person that is not an Affiliate;

 

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(xvi)    transactions contemplated by the Second Lien Commitment Letter and the
Second Lien Facility[reservedl;

(xvii)    transactions with customers, clients, suppliers, or purchasers or
sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Agreement that are fair to
the Borrower or the Subsidiaries;

(xviii)    transactions with joint ventures for the purchase or sale of goods,
equipment and services entered into in the ordinary course of business and in a
manner consistent with past practice;

(xix)    transactions between Holdings, the Borrower or any of its Subsidiaries
and any person that is an Affiliate solely by virtue of having a director who is
also a director of Holdings, the Borrower or any direct or indirect parent
company of the Borrower, provided, however, that such director abstains from
voting as a director of Holdings or the Borrower or such direct or indirect
parent company, as the case may be, on any matter involving such other person;

(xx)    intercompany transactions for the purpose of improving the consolidated
tax efficiency of the Borrower and the Subsidiaries;

(xxi)    the termination of management agreements and payments in connection
therewith at the net present value of future payments;

(xxii)    transactions among the Borrower and its Subsidiaries that are not
prohibited under this Agreement in the ordinary course of business;

(xxiii)    entering into tax sharing agreements or arrangements approved by the
Board of Directors of Holdings or the Borrower, provided that any payments
thereunder are permitted by Section 6.06;

(xxiv)    any agreements or arrangements between a third party and an Affiliate
of the Borrower that are acquired or assumed by the Borrower or any Subsidiary
in connection with an acquisition or merger of such third party (or assets of
such third party) by or with the Borrower or any Subsidiary; provided, that
(A) such acquisition or merger is permitted under this Agreement and (B) such
agreements or arrangements are not entered into in contemplation of such
acquisition or merger or otherwise for the purpose of avoiding the restrictions
imposed by this Section 6.07; and

(xxv)    any contribution to the capital of the Borrower by Holdings.

SECTION 6.08 Business of Holdings, the Borrower and the Subsidiaries.
Notwithstanding any other provisions hereof, engage at any time in any business
or business activity other than:

 

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(a)    in the case of the Borrower and any Subsidiary, (i) any business or
business activity conducted by any of them on the Closing Date and any business
or business activities incidental or related thereto, (ii) any business or
business activity that is reasonably similar thereto or a reasonable extension,
development or expansion thereof or ancillary thereto, including the
consummation of the Transactions, (iii) any business or business activity that
the senior management of the Borrower deems beneficial for the Borrower or such
Subsidiary or (iv) any business or business activity of any person acquired
pursuant to a Permitted Business Acquisition provided that such Permitted
Business Acquisition was in a Similar Business; and

(b)    in the case of Holdings, (i) ownership of the Equity Interests in the
Borrower together with activities directly related thereto, and (A) Holdings
shall own no assets other than such Equity Interests, its books and records,
deposit accounts of Holdings existing prior to the Closing Date, any replacement
deposit accounts or additional deposit accounts entered into in the ordinary
course of Holdings’ business, all cash deposits held therein, and cash paid to
Holdings in accordance with the terms hereof, and (B) Holdings shall not grant a
Lien on any of its assets other than Liens created pursuant to the Loan
Documents, Liens created pursuant to the security agreements relating to the
Second Lien Facility Indebtedness incurred pursuant to Section 6,01(k) (subject
to the Junior Lien Intercreditor and Subordination Agreement), and ordinary
course Liens incurred under customary deposit account agreements entered into by
Holdings with respect to deposit accounts existing prior to the Closing Date
(and any replacement deposit accounts entered into in the ordinary course of
Holdings’ business); (ii) performance of its obligations under and in connection
with the Loan Documents, the Second Lien Facilityany Indebtedness incurred
pursuant to Section 6.01(k), the New Notes, the 2017 Exchange Notes, and any
Permitted Refinancing Indebtedness in respect of the Loan Documents or the 2017
Exchange Notes, and the Existing HoldingsNew Notes; (iii) issuance of Equity
Interests and activities related thereto; (iv) as otherwise required by law; and
(v) holding any cash received in accordance with the terms hereof and investing
such proceeds in Permitted Investments.

SECTION 6.09 Limitation on Modifications and Payments of Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; etc. (a) Amend or modify in any manner materially adverse to the
Lenders the articles or certificate of incorporation or by-laws or limited
liability company operating agreement or other Organizational Documents of the
Borrower or any of the Subsidiaries.

(b)    (i) Make, or agree or offer to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of principal of or interest on any Junior Indebtedness (or any
Permitted Refinancing Indebtedness in respect of the foregoing) or any payment
or other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Junior Indebtedness
(or any Permitted Refinancing Indebtedness in respect of the foregoing)
(collectively, a “Junior Indebtedness Payment), except for (A) Refinancing with
Permitted Refinancing Indebtedness in respect thereof permitted by Section 6.01,
(B) payments of regularly scheduled interest, other than (x) payments in respect
of the Indebtedness subordinated in right of payment to the Obligations
prohibited by the subordination provisions thereof, (y) cash payments of
interest with respect to the 2017 Exchange Notes, which shall only be permitted
if, (I) the pro forma

 

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Senior Secured Leverage Ratio immediately after giving effect to such cash
payment of interest is less than or equal to 4.375 to 1.00 (such ratio being
calculated, solely for purposes of this clause, based on the most recently
available internally generated financials for the Borrower and its
subsidiaries), (II) (i) if all interest due is paid in cash, the Consolidated
Fixed Charge Coverage Ratio immediately after giving effect to such cash payment
of interest, is greater than or equal to 1.375 to 1.00 on a pro forma basis
after giving effect to such payment (such ratio being calculated, solely for
purposes of this clause, based on the most recently available internally
generated financials for the Borrower and its subsidiaries), or (ii) if paid
partially in cash and partially as paid-in-kind interest, the Consolidated Fixed
Charge Coverage Ratio immediately after giving effect to such cash payment of
interest is greater than or equal to 1.25 to 1.00 but less than 1.375 to 1.00 on
a pro form basis after giving effect to such payment (such ratio being
calculated, solely for purposes of this clause, based on the most recently
available internally generated financials for the Borrower and its subsidiaries)
and (III) the Average Liquidity calculated as of the record date for such
interest payment minus the contemplated amount of the cash interest payment
shall be greater than or equal to $80,000,000, and (z) payments of interest in
cash or other property of the Loan Parties and their Subsidiaries with respect
to the Second Lien FacilityNew Notes or any other indebtedness incurred pursuant
to Section 6.01(k), other than payments in kind, (C) to the extent this
Agreement is then in effect, principal on the scheduled maturity date thereof,
subject to any subordination provisions applicable thereto, (D) purchases,
redemptions, retirement, acquisition, cancellation or termination of any
Affinion Investments Notes, Extended Senior Subordinated Notes and Senior Notes
(I) solely with the proceeds of the issuance of 2017 Exchange Notes, (II) in
exchange for 2017 Exchange Notes and (III) with other cash of the Borrower and
its Subsidiaries to pay accrued and unpaid interest with respect to any Affinion
Investments Notes, Extended Senior Subordinated Notes or Senior Notes, in
connection with the transactions described in clauses (I) and (Il)[reserved],
and (E) purchases, redemptions, retirement, acquisition, cancellation or
termination of Junior Indebtedness with the proceeds of contributions to common
capital, or issuances of Equity Interests of, Holdings, conversion of Junior
Indebtedness to Equity Interests of Holdings or exchange of Junior Indebtedness
for Equity Interests of Holdings, in each case, other than Disqualified Stock of
Holdings (including, for the avoidance of doubt, any offsetting of amounts
outstanding under the Second Lien Facility against the exercise price of
warrants issued to lenders under the Second Lien Facility);

(ii)    Amend or modify, or permit the amendment or modification of, any
provision of any Junior Indebtedness documentation (and any Permitted
Refinancing Indebtedness in respect of the foregoing), or any agreement relating
thereto, other than amendments or modifications that (A) 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 (provided that
amending the Second Lien Commitment Letter or Second Lien Facility or any other
instrument or document governing Indebtedness incurred pursuant to
Section 6.01(k) to permit any payments in cash or other property of the Loan
Parties or their Subsidiaries, with respect to interest, other than payments in
kind, or to otherwise increase the yield thereof (it being understood that
modifications to the terms of warrants issued to lenders under such Indebtedness
shall not be deemed a modification to yield as long as such warrants are not for
Disqualified Stock) shall be

 

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deemed materially adverse to the Lenders) and (B) to the extent applicable,
otherwise comply with the definition of “Permitted Refinancing Indebtedness.”

(c)    Enter into any agreement or instrument that by its terms restricts
(i) the payment of dividends or distributions or the making of cash advances by
any Material Subsidiary to the Borrower or any Subsidiary that is a direct or
indirect parent of such Subsidiary or (ii) the granting of Liens by Holdings,
the Borrower or any Loan Party, or any Subsidiary required to be a Loan Party,
pursuant to the Security Documents, in each case, other than those arising under
any Loan Document, except, in each case, restrictions existing by reason of:

(A)    (I) restrictions imposed by applicable law, (II) restrictions on the
payment of dividends and distributions and the making of cash advances,
contractual or otherwise, imposed on Insurance Subsidiaries, and
(III) restrictions on the pledge of the direct Equity Interests of Insurance
Subsidiaries under applicable laws;

(B)    contractual encumbrances or restrictions (1) in effect on the Closing
Date with respect to Liens permitted under Section 6.02(a) or as otherwise
disclosed on Schedule 6.09(c), (2) pursuant to the 2017 Exchange Notes
Documents, (3) pursuant to documentation related to any Indebtedness permitted
pursuant to Section 6.01 as long as such encumbrances or restrictions are no
more restrictive, taken as a whole, than those contained in this Agreement, (4)
[reserved], or (5) pursuant to documentation related to any permitted renewal,
extension or refinancing of any Indebtedness described in clauses (1) and (2)
that does not expand the scope of any such encumbrance or restriction or make
such restriction more onerous;

(C)    any restriction on the Equity Interests or assets of a Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of such Equity
Interests or assets permitted under Section 6.05 pending the closing of such
sale or disposition;

(D)    customary provisions in joint venture agreements and other similar
agreements applicable to the assets of, or the Equity Interests in, joint
ventures entered into in the ordinary course of business;

(E)    other than with respect to Holdings, any restrictions imposed by any
agreement relating to Indebtedness permitted by Section 6.01 and secured by a
Lien permitted by Section 6.02 to secure such Indebtedness to the extent that
such restrictions apply only to the property or assets securing such
Indebtedness;

(F)    customary provisions contained in leases or licenses of intellectual
property and other similar agreements entered into in the ordinary course of
business;

(G)    customary provisions restricting subletting or assignment of any lease
governing a leasehold interest;

 

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(H)    customary provisions restricting assignment of any agreement entered into
in the ordinary course of business;

(I)    customary restrictions and conditions contained in any agreement relating
to the sale of any asset permitted under Section 6.05 applicable to the asset to
be sold pending the consummation of such sale;

(J)    restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;

(K)    customary provisions contained in leases, licenses, contracts and other
similar agreements entered into in the ordinary course of business that impose
restrictions on the property subject to such lease; or

(L)    any agreement in effect at the time such subsidiary becomes a Subsidiary,
so long as such agreement was not entered into in contemplation of such person
becoming a Subsidiary and such restriction does not apply to the Borrower or any
other Material Subsidiary or any of their respective assets.

SECTION 6.10 Financial Maintenance Covenants. Beginning with the fiscal quarter
ending on JuneSeptember 30, 20172020, except with the written consent of the
Required Lenders, permit:

(a)    the TotalSenior Secured Leverage Ratio on the last day of any fiscal
quarter to exceed the ratios set forth below:

 

Fiscal Quarter End Date    TotalSenior Secured Leverage Ratio June 30, 2017   
7.500:1.000 September 30, 2017    7.500:1.000 December 31,2017    7.500:1.000
March 31, 2018    7.250:1.000 June 30, 2018    7.000:1.000 September 30, 2018   
6.750:1.000 December 31, 2018    6.500:1.000 March 31, 2019    6.375:1.000
June 30, 2019    6.250:1.000 September 30, 2019    6.000:1.000 December 31,2019
   5.875:1.000 March 31, 2020    5.750:1.000 JuneSeptember 30, 2020   
5.750:1.00010.75 to 1.00 September 30, 2020    5.500:1.000 December 31, 2020   
5.500:1.00010.75 to 1.00 March 31, 2021    5.250:1.00010.75 to 1.00

 

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Fiscal Quarter End Date    TotalSenior Secured Leverage Ratio June 30, 2021   
5.000:1.00010.50 to 1.00 September 30, 2021    5.000:1.00010.50 to 1.00
December 31, 2021    4.750:1.00010.25 to 1.00 March 31, 2022 and thereafter   
4.500:1.00010.25 to 1.00

(b)    the Consolidated Fixed Charge Coverage Ratio on the last day of any
fiscal quarter to be less than the ratios set forth below:

 

Fiscal Quarter End Date    Consolidated Fixed Charge Coverage Ratio June 30,
20172022    10.25 to 1.000:1.000 September 30, 2017    1.000:1.000
December 31,2017    1.000:1.000 March 31, 2018    1.000:1.000 June 30, 2018   
1.000:1.000 September 30, 20182022    1.075:1.00010.25 to 1.00 December 31,
20182022    1.100:1.00010.00 to 1.00 March 31, 2019    1.100:1.000 June 30, 2019
   1.100:1.000 September 30, 2019    1.100:1.000 December 31,2019    1.050:1.000
March 31, 2020    1.050:1.000 June 30, 2020    1.050:1.000 September 30, 2020   
1.000:1.000 December 31, 2020    1.000:1.000 March 31, 20242023    9.75 to
1.000:1.000 June 30, 20242023    9.50 to 1.000:1.000 September 30, 20212023   
9.25 to 1.000:1.000 December 31, 20212023 and thereafter    9.00 to 1.000:1.000
March 31, 2022 and thereafter    1.000:1.000

(b)     [Reserved.]

SECTION 6.11 Limitations on Change in Fiscal Periods. Allow the fiscal year of
the Borrower to end on a day other than December 31 or change the Borrower’s
method of determining fiscal quarters.

SECTION 6.12 Swap Agreements. Enter into any Swap Agreement other than
(a) non-speculative Swap Agreements entered into in the ordinary course of
business to

 

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hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities (including
currency risks), and (b) non-speculative Swap Agreements entered into in the
ordinary course of business in order to effectively cap, collar or exchange
interest rates (from fixed to floating rates, from one floating rate to another
floating rate or otherwise) with respect to any interest-bearing liability or
investment of Holdings, the Borrower or any Subsidiary.

ARTICLE VII

Events of Default

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

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

(b)    default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

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

(d)    any default shall be made in the due observance or performance by the
Borrower of any covenant or agreement contained in Section 5.01(a) (with respect
to the Borrower), 5.05(a), 5.09 or in Article VI;

(e)    default shall be made in the due observance or performance by the
Borrower or any Loan Party of (x) any covenant or agreement contained in
Section 5.04 and such default shall continue unremedied for a period of 5 days
after notice thereof from the Administrative Agent to the Borrower or (y) any
covenant or agreement contained in any Loan Document (other than those specified
in paragraphs (b), (c) and (d) above and clause (x) above) and such default
shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower;

(f)    (i) any event or condition occurs that (a) results in any Material
Indebtedness becoming due prior to its scheduled maturity or (b) enables or
permits (with all applicable grace periods having expired) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or

 

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to require the prepayment, repurchase, redemption or defeasance thereof, prior
to its scheduled maturity or (ii) Holdings, the Borrower or any Subsidiary shall
fail to pay the principal of any Material Indebtedness at the stated final
maturity thereof; provided, that this clause (f) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness if such sale or transfer is
permitted hereunder and under the documents providing for such Indebtedness;

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

(h)    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 Holdings, the Borrower or any of its subsidiaries, or of a
substantial part of the property or assets of Holdings, the Borrower or any of
its subsidiaries, under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other federal, state or foreign bankruptcy,
moratorium, insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Borrower or any of its subsidiaries or for a substantial part of
the property or assets of Holdings, the Borrower or any of its subsidiaries or
(iii) the winding-up or liquidation of Holdings, the Borrower or any of its
subsidiaries (except, in the case of any subsidiary, in a transaction permitted
by Section 6.05); 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;

(i)    Holdings, the Borrower or any of its subsidiaries 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, moratorium, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition described
in paragraph (h) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Borrower or any of its subsidiaries or for a substantial part of
the property or assets of Holdings, the Borrower or any of its subsidiaries,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due;

(j)    the failure by Holdings, the Borrower or any Loan Party or any Material
Subsidiary to pay one or more final judgments aggregating in excess of
$16,500,000, which judgments are not discharged or effectively waived or stayed
for a period of 30 consecutive days, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of Holdings, the Borrower or
any Subsidiary to enforce any such judgment;

(k)    (i) an ERISA Event shall have occurred, (ii) a trustee shall be appointed
by a United States district court to administer any Plan, (iii) the Borrower, a
Subsidiary or any ERISA Affiliate shall engage in any non-exempt “prohibited
transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan or (iv) any other event or condition shall occur or exist
with respect to a Plan or a Multiemployer Plan; and in each case in clauses
(i) through (iv) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a Material
Adverse Effect;

 

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(l)    (i) any Loan Document shall for any reason be asserted in writing by
Holdings, the Borrower or any Loan Party (or, in the case of any Security
Document with respect to the pledge of Equity Interests of the Borrower, the
pledgor thereunder) not to be a legal, valid and binding obligation of any party
thereto, (ii) any security interest purported to be created by any Security
Document and to extend to assets that are not immaterial to the Borrower and the
Loan Parties on a consolidated basis or the Equity Interests of the Borrower,
shall cease to be, or shall be asserted in writing by the Borrower or any other
Loan Party (or, in the case of any Security Document with respect to the pledge
of Equity Interests of the Borrower, the pledgor thereunder) not to be, a valid
and perfected security interest (perfected as or having the priority required by
this Agreement or the relevant Security Document and subject to such limitations
and restrictions as are set forth herein and therein) in the securities, assets
or properties covered thereby, except to the extent that any such loss of
perfection or priority results from the limitations of foreign laws, rules and
regulations as they apply to pledges of Equity Interests in Foreign Subsidiaries
or Collateral owned by Foreign Subsidiary Loan Parties or the application
thereof, or from the failure of the Administrative Agent to maintain possession
of certificates actually delivered to it representing securities pledged under
the Collateral Agreement, or to file Uniform Commercial Code continuation
statements or take the actions described on Schedule 3.04 and except to the
extent that such loss is covered by a lender’s title insurance policy and the
Administrative Agent shall be reasonably satisfied with the credit of such
insurer, or (iii) the Guarantees pursuant to the Security Documents by Holdings,
the Borrower or any material Loan Parties of any of the Obligations shall cease
to be in full force and effect (other than in accordance with the terms
thereof), or shall be asserted in writing by Holdings, the Borrower or any Loan
Party not to be in effect or not to be legal, valid and binding obligations;

(m)    the Obligations shall fail to constitute “Senior Debt” (or the equivalent
thereof) and “Designated Senior Debt” (or the equivalent thereof) under the
Affinion Investments Notes; or

(n)    any Junior Indebtedness or any guarantees thereof that is subordinated in
right of payment to the Obligations, shall cease for any reason to be validly
subordinated to the Obligations as provided in the documentation governing such
Junior Indebtedness or any Loan Party shall contest the subordination of any
Junior Indebtedness or any guarantees thereof;

then, and in every such event (other than an event with respect to any Loan
Party described in paragraph (h) or (i) above), and at any time thereafter
during the continuance of such event, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrower, take any or all of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans then
outstanding so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document constituting Obligations,
shall become forthwith due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding and (iii) demand Cash Collateral pursuant to
Section 2.22; and in any event with respect to any Loan Party described in
paragraph (h) or (i) above, the Commitments shall automatically terminate, the
principal of the Loans then outstanding, together with accrued interest thereon
and any

 

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unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document constituting Obligations, shall automatically
become due and payable and the Administrative Agent shall be deemed to have made
a demand for Cash Collateral to the full extent permitted under Section 2.22,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.

SECTION 7.02 Exclusion of Certain Subsidiaries. Solely for the purposes of
determining whether an Event of Default has occurred under clause (h), (i) or
(j) of Section 7.01, any reference in any such clause to any subsidiary shall be
deemed not to include any Immaterial Subsidiary affected by any event or
circumstance referred to in any such clause.

ARTICLE VIII

The Agents

SECTION 8.01 Appointment and Authority. (a) Each of the Lenders and each Issuing
Bank hereby irrevocably appoints HPS Investment Partners, LLC to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof 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 Lenders and the Issuing Banks, and the Borrower
shall not have rights as a third party beneficiary of any of such provisions.

(b)    The Administrative Agent shall also act as the “Collateral Agent” under
the Loan Documents, and each of the Lenders and the Issuing Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as the agent
of such Lender and the Issuing Bank for purposes of acquiring, holding and
enforcing any and all Liens on Collateral granted by any of the Loan Parties to
secure any of the Obligations, together with such powers and discretion as are
reasonably incidental thereto. In this connection, the Administrative Agent, as
“Collateral Agent” and any co-agents, sub-agents and attorneys-in-fact appointed
by the Administrative Agent pursuant to Section 8.05 for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Security Documents, or for exercising any rights and remedies thereunder at the
direction of the Administrative Agent, shall be entitled to the benefits of all
provisions of this Article VIII and Article IX (including Section 9.04(d), as
though such co-agents, sub-agents and attorneys-in-fact were the “collateral
agent” under the Loan Documents) as if set forth in full herein with respect
thereto.

(c)    With respect to Foreign Security Documents governed by Swiss law (“Swiss
Security”), the Collateral Agent shall:

(i)    hold and administer any non-accessory Swiss Security (nicht-akzessorische
Schweizer Sicherheiten) as indirect representative (indirekter Stellvertreter)
in its own name but on behalf and for the benefit of the Agents, the
Administrative Agent and the Lenders; and

 

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(ii)    hold and administer any accessory Swiss Security (akzessorische
Schweizer Sicherheiten) (e.g. a right of pledge) (a “Swiss Accessory Security”)
for itself and as direct representative (direkter Stellvertreter) in the name
and on behalf of the Agents, the Administrative Agent and the Lenders.

(d)    The Administrative Agent and each Agent and Lender hereby appoints the
Collateral Agent as its direct representative (direkter Stellvertreter) and
authorizes the Collateral Agent (whether or not by or through employees or
agents):

(i)    to accept, execute and deliver in its name and on its behalf as its
direct representative (direkter Stellvertreter) any Foreign Security Documents
creating a Swiss Accessory Security;

(ii)    to accept, execute and deliver in its name and on its behalf as its
direct representative (direkter Stellvertreter) any amendments, confirmations
and/or alterations to any Foreign Security Documents creating a Swiss Accessory
Security and to administer, exercise such rights, remedies, powers and
discretions as are delegated to or conferred upon the Collateral Agent
thereunder together with such powers and discretions as are reasonably
incidental thereto; and

(iii)    to take such other action in its name and on its behalf as its direct
representative (direkter Stellvertreter) as may from time to time be authorized
under or in accordance with the Loan Documents.

(iv)    The Administrative Agent and each Agent and Lender hereby ratifies and
approves all acts and declarations previously done by the Collateral Agent on
its behalf.

SECTION 8.02 Rights as a Lender. (a) The person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the person
serving as the Administrative 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 the Borrower or any Subsidiary or other Affiliate
thereof as if such person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

SECTION 8.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:

(a)    shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or Event of Default has occurred and is continuing;

 

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(b)    shall not 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 or that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Loan Documents), provided that the Administrative
Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Administrative Agent to liability or that
is contrary to any Loan Document or applicable law; and

(c)    shall not, 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 the Borrower or any of its Affiliates that
is communicated to or obtained by the person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 7.01 and 9.09) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or an Issuing Bank.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement 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 the
Administrative Agent.

SECTION 8.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (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. The Administrative 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 an Issuing Bank, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or an Issuing Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or an Issuing Bank prior to the making
of such Loan or the issuance of such Letter of Credit. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

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SECTION 8.05 Delegation of Duties. The Administrative 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 any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article VIII shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

SECTION 8.06 Resignation of the Administrative Agent and the Collateral Agent.
(a) The Administrative Agent and/or Collateral Agent may at any time give to the
Lenders, the Issuing Banks and the Borrower notice of its resignation as
Administrative Agent and/or Collateral Agent. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
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, and the Administrative Agent and/or Collateral Agent, as applicable
further agrees that for the 30 day period immediately following its notice of
resignation, it will not appoint a successor unless the Borrower shall have
consented to such successor, such consent not to be unreasonably withheld or
delayed. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent and/or Collateral Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders
and the Issuing Banks, appoint a successor Administrative Agent and/or
Collateral Agent meeting the qualifications set forth above; provided that if
the Administrative Agent and/or Collateral Agent shall notify the 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 Administrative Agent and/or Collateral Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except in its capacity as Collateral Agent holding collateral
security on behalf of any Secured Parties, it 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 the Administrative Agent shall instead be made by
or to each Lender and the Issuing Banks directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section. Upon the acceptance of a successor’s appointment as
Administrative Agent and/or Collateral Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and/or Collateral
Agent, and the retiring Administrative Agent and/or Collateral 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
Section). The fees payable by the Borrower to a successor Administrative Agent
and/or Collateral Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
retiring Administrative Agent’s and/or Collateral Agent’s resignation hereunder
and under the other Loan Documents, the provisions of this Article VIII and
Section 9.05 shall

 

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continue in effect for the benefit of such retiring Administrative Agent and/or
Collateral 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
Administrative Agent and/or Collateral Agent was acting as Administrative Agent
and/or Collateral Agent.

(b) Any resignation by HPS Investment Partners, LLC as Administrative Agent
pursuant to this Section shall also constitute its resignation (and the
resignation of any HPS Lender) as an Issuing Bank and Swingline Lender. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Issuing Bank(s) and Swingline
Lender(s), (b) the retiring the Swingline Lender(s) shall be discharged from all
of its duties and obligations hereunder and under the other Loan Documents, and
(c) at the sole election of the retiring Administrative Agent, in its capacity
as an Issuing Bank, either (i) the retiring Administrative Agent, in its
capacity as an Issuing Bank, shall be discharged from all of its duties and
obligations hereunder and under the other Loan Documents, and the successor
Issuing Bank shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangements satisfactory to the retiring Issuing Bank to effectively assume the
obligations of the retiring Issuing Bank with respect to such Letters of Credit
or (ii) the retiring Administrative Agent, in its capacity as an Issuing Bank,
shall remain party to this Agreement as an Issuing Bank, and in such capacity
shall continue to have all of the rights and obligations of an “Issuing Bank”
under this Agreement and the other Loan Documents with respect to each Letter of
Credit previously issued by such Issuing Bank and outstanding at the time of its
resignation as Administrative Agent (including, without limitation, the right to
receive Issuing Bank Fees pursuant to Section 2.12(b)), but shall not be
required to issue any new (or renew or extend any existing) Letters of Credit.

SECTION 8.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the Issuing Banks acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties 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 and each Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties 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 8.08 No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the Lead Arranger or Agents listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, the Collateral Agent, a Lender or an Issuing Bank
hereunder.

SECTION 8.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Borrowing shall then be due and payable
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otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise

(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, Letters of Credit and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
Issuing Banks and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Banks and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the Issuing Banks and the
Administrative Agent under Sections 2.12 and 9.05) allowed in such judicial
proceeding; and

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

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

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the
Issuing Banks any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the Issuing Banks to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the Issuing Banks in any such proceeding.

SECTION 8.10 Collateral Matters. (a) (i) The Lenders and the Issuing Banks
irrevocably authorize the Collateral Agent, at its option and in its discretion,
to release any Lien on any property granted to or held by the Collateral Agent
under any Loan Document (A) upon termination of the Commitments and payment in
full of all Obligations (other than contingent indemnification obligations) and
the expiration or termination of all Letters of Credit (other than Letters of
Credit as to which other arrangements satisfactory to the Collateral Agent and
the Issuing Banks shall have been made), (B) that is sold or to be sold to a
party that is not a Loan Party as part of or in connection with any sale
permitted hereunder or under any other Loan Document, or (C) subject to
Section 9.09, if approved, authorized or ratified in writing by the Required
Lenders.

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

(b) The Lenders and the Issuing Banks irrevocably authorize the Administrative
Agent, at its option and in its discretion, to release any guarantor from its
obligations under the Guaranty Agreement and the other Security Documents if
such person ceases to be a Loan Party as a result of a transaction permitted
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Upon request by the Administrative Agent at any time, each of the Required
Lenders will confirm in writing the Administrative Agent’s or Collateral
Agent’s, as applicable, authority to release or subordinate its interest in
particular types or items of property, or to release any guarantor from its
obligations under the Guarantee and the other Security Documents.

(c)    The Lenders (i) irrevocably agree that they will be bound by and will
take no actions contrary to the provisions of any Junior Lien Intercreditor and
Subordination Agreement and (ii) authorize and instruct the Administrative Agent
and Collateral Agent to enter into any Junior Lien Intercreditor and
Subordination Agreement (and any amendments, amendments and restatements,
restatements or waivers of or supplements to or other modifications to, such
agreements in connection with the incurrence by any Loan Party of Indebtedness
pursuant to Section 6.01, in order to permit such Indebtedness to be secured by
a valid, perfected lien (with such priority as may be designated by the Borrower
or relevant Subsidiary, to the extent such priority is permitted by Section 6.02
and the Loan Documents)), and to subject the Liens on the Collateral securing
the Obligations to the provisions thereof.

SECTION 8.11 Withholding Tax. To the extent required by any applicable laws (as
determined in good faith by the Administrative Agent), the Administrative Agent
may withhold from any payment to any Lender or under any Loan Document an amount
equivalent to any applicable withholding Tax. Without limiting or expanding the
provisions of Section 2.17, each Lender shall indemnify and hold harmless the
Administrative Agent against, and shall make payment in respect thereof within
10 days after demand therefor, any and all Taxes and any and all related losses,
claims, liabilities and expenses (including fees, charges and disbursements of
any counsel for the Administrative Agent) incurred by or asserted against the
Administrative Agent by the IRS or any other Governmental Authority as a result
of the failure of the Administrative Agent to properly withhold Tax from amounts
paid to or for the account of such Lender for any reason (including because the
appropriate form was not delivered or not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstance
that rendered the exemption from, or reduction of withholding Tax ineffective).
A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender under this Agreement or any
other Loan Document against any amount due the Administrative Agent under this
Section 8.11. The agreements in this Section 8.11 shall survive the resignation
and/or replacement of the Administrative Agent, any assignment of rights by, or
the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all other Obligations.

ARTICLE IX

Miscellaneous

SECTION 9.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in

 

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subsection (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 as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i)    if to any Loan Party, to its address set forth on Schedule 9.01(a)(i);

(ii)    if to the Administrative Agent or Collateral Agent, to the applicable
address as set forth on Schedule 9.01(a)(ii) and including copies to any
sub-agents as set forth therein; and

(iii)    if to the Swingline Lender (if any) or Issuing Bank (if any), to it at
the address or telecopy number set forth separately in writing.

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by 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 and other
communications delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

(b)    Notices and other communications to the Lenders and each Issuing Bank
hereunder may 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 any Issuing Bank pursuant to Article II if such Lender or any
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 or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

(c)    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 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.

(d)    Each of the Borrower, the Administrative Agent, each Issuing Bank and
each Swingline Lender may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the other parties
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change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrower, the Administrative Agent,
each Issuing Bank and each Swingline Lender. In addition, each Lender agrees to
notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which notices
and other communications may be sent and (ii) accurate wire instructions for
such Lender. Furthermore, each Public Lender agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected
the “Private Side Information” or similar designation on the content declaration
screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and applicable Law,
including United States Federal and state securities Laws, to make reference to
the Communications that are not made available through the “Public Side
Information” portion of the Platform and that may contain material non-public
information with respect to the Borrower or its securities for purposes of
United States Federal or state securities laws.

(e)    The Administrative Agent, each Issuing Bank and the Lenders shall be
entitled to rely and act upon any notices (including telephonic Borrowing
Requests) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify the Administrative Agent, each Issuing
Bank, each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such person on
each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

SECTION 9.02 Survival of Agreement. All covenants, agreements, representations
and warranties made by the Borrower and the other Loan Parties herein, in the
other Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and each
Issuing Bank and shall survive the making by the Lenders of the Loans, the
execution and delivery of the Loan Documents and the issuance of the Letters of
Credit, regardless of any investigation made by such persons or on their behalf,
and shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or L/C Disbursement or any Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. Without prejudice to the survival of any other
agreements contained herein, indemnification and reimbursement obligations
contained herein (including pursuant to Sections 2.15, 2.17 and 9.05) shall
survive the payment in full of the principal and interest hereunder, the
expiration of the Letters of Credit and the termination of the Commitments or
this Agreement.

SECTION 9.03 Binding Effect. This Agreement shall become effective when it shall
have been executed by Holdings, the Borrower and the Administrative Agent and
when the Administrative Agent shall have received copies hereof that, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure

 

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to the benefit of Holdings, the Borrower, each Issuing Bank, the Administrative
Agent and each Lender and their respective permitted successors and assigns.

SECTION 9.04 Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any affiliate of
an Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section (and any
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of an Issuing Bank that issues
any Letter of Credit), Participants (to the extent provided in paragraph (c) of
this Section), and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement or the
other Loan Documents.

(b)    (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may at any time assign to one or more assignees (each, an “Assignee”) all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans (including for purposes of this
Section 9.04(b), participations in Letter of Credit obligations and in Swingline
Loans) at the time owing to it) with the prior written consent of:

(A)    the Borrower (such consent not to be unreasonably withheld or delayed);
provided, that no consent of the Borrower shall be required for an assignment to
a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if
an Event of Default has occurred and is continuing, any other person or in
connection with the initial syndication of the Loans; provided, that any
liability of the Borrower to an assignee that is an Approved Fund or affiliate
of the assigning Lender under Section 2.15 or 2.17 shall be limited to the
amount, if any, that would have been payable hereunder by the Borrower in the
absence of such assignment; provided further that the Borrower shall be deemed
to have consented to any such assignment unless it shall object thereto by
written notice to the Administrative Agent within ten days after having received
notice thereof;

(B)    the Administrative Agent; provided, that no consent of the Administrative
Agent shall be required for an assignment of in the case of a Term Loan, all or
any portion of such Term Loan to a Lender, an Affiliate of a Lender or an
Approved Fund of such Lender; and

(C)    the Swingline Lenders and the Issuing Banks; provided, that the consent
of the Swingline Lenders and the Issuing Banks shall not be required if such
assignment is an assignment of a Term Loan.

(ii) Assignments shall be subject to the following additional conditions:

 

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(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitments or Loans under a given Tranche, the amount of the
Commitments or Loans of the assigning Lender under a given Tranche subject to
each such assignment (as of the date such Assignment and Acceptance is recorded
in the Register by the Administrative Agent) shall not be less than (x)
$1,000,000 in respect of Term Loans, and (y) $5,000,000 in respect of the
Revolving Facility Loans, unless each of the Borrower and the Administrative
Agent otherwise consent; provided that simultaneous assignments to two or more
Related Funds or by two or more Related Funds to a single Assignee shall be
treated as one assignment for purposes of the minimum assignment requirement,
and shall be in an amount that is an integral multiple of $1,000,000 (or the
entire remaining amount of such Lender’s Commitment);

(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 (which may be waived or reduced at the
Administrative Agent’s sole discretion); provided, that (i) assignments pursuant
to Section 2.19 shall not require the signature of the assigning Lender to
become effective and (ii) any such processing and recordation fee in connection
with assignments pursuant to Section 2.19 shall be paid by the Borrower or the
assignee;

(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and all documentation and
other information with respect to the assignee that is required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act, including any tax forms
required to be provided pursuant to Section 2.17(g); and

(D) in connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative
Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent or any Lender
hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans and participations in Letters
of Credit and Swingline Loans in accordance with its Applicable Percentage.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
applicable Law without compliance with

 

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the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

For the purposes of this Section 9.04, “Approved Fund” means 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 of its activities and that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(v)
below, from and after the effective date specified in each Assignment and
Acceptance (which shall be the date of such recordation) the Assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.05). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 9.04 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.

(iv) The Administrative Agent, acting solely for this purpose as a non-fiduciary
agent of the Borrower, shall maintain at one of its offices in the United States
of America a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and stated interest) of the Loans and L/C
Exposure owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent, Issuing Bank and the
Lenders shall treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower, the Issuing Bank
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

(v) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an Assignee, all documents required under
Section 9.04(b)(ii)(C) (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless and until it
has been recorded in the Register as provided in this paragraph, provided that
for the avoidance of doubt, the date that is the later of (i) the trade date

 

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specified (if any) in the Assignment and Assumption and (ii) the day such
Assignment and Assumption has been recorded in the Register shall be the
effective date of the assignment.

(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(other than a natural person, or the Borrower or any of the Affiliated Lenders)
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided, that (a) such Lender’s obligations under this
Agreement shall remain unchanged, (b) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (c) the Borrower, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and the other Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement and the other Loan
Documents; provided, that (x) such agreement may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver that (1) requires the consent of each Lender directly
affected thereby pursuant to Section 9.04(a)(i) or clause (i), (ii), (iii),
(iv), (v) or (vi) of the first proviso to Section 9.09(b) and (2) directly
affects such Participant and (y) no other agreement with respect to such
Participant may exist between such Lender and such Participant.

(ii) The Borrower agrees that each Participant shall be entitled to the benefits
of Sections 2.16 and 2.17 (subject to the requirements and limitations therein,
including the requirements under Section 2.17(g) (it being understood that the
documentation required under Section 2.17(g) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Section 2.19 as if it were an assignee under paragraph (b) of this Section; and
(B) shall not be entitled to receive any greater payment under Sections 2.16 or
2.17, with respect to any participation, than its participating Lender would
have been entitled to receive, except to the extent such entitlement to receive
a greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation. Each Lender that sells a participation
agrees, at the Borrower’s request and expense, to use reasonable efforts to
cooperate with the Borrower to effectuate the provisions of Section 2.19 with
respect to any Participant. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.06 as though it were a
Lender; provided that such Participant agrees to be subject to Section 2.18(c)
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document)

 

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to any Person except to the extent that such disclosure is necessary to
establish that such commitment, loan, letter of credit or other obligation is in
registered form under Section 5f.l03-l(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(d) Any Lender may, without the consent of the Administrative Agent or the
Borrower, 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, and this Section shall not apply to any such pledge or assignment of a
security interest; provided, that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Lender as a party hereto.

(e) The Borrower, at its expense and upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (d) above.

(f) [Reserved].

(g) Notwithstanding the foregoing, no assignment may be made or participation
sold to (i) a natural person, (ii) an Ineligible Institution without the prior
written consent of the Borrower, (iii) any Defaulting Lender or any of its
subsidiaries, or any person who, upon becoming a Lender hereunder, would
constitute any of the foregoing persons described in this clause (iii) or (iv)
any Affiliated Lenders, except as provided in section (h) below. Upon the
request of any Lender, the Administrative Agent shall inform such Lender as to
whether an actual proposed Participant or Assignee is an Ineligible Institution.

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

(i) In connection with an assignment to an Affiliated Lender, (A) the Affiliated
Lender shall have identified itself in writing as an Affiliated Lender to the
assigning Term Lender and the Administrative Agent prior to the execution of
such assignment and (B) the Affiliated Lender shall be deemed to have
represented and warranted to the assigning Term Lender and the Administrative
Agent that the requirements set forth in this Section 9.04(h)(i) and
Section 9.04(h)(iv) below shall have been satisfied upon consummation of the
applicable assignment;

(ii) Affiliated Lenders will not (A) have the right to receive information,
reports or other materials provided solely to Lenders by the Administrative
Agent and/or the Collateral Agent or any other Lender, except to the extent made
available to the Borrower, (B) attend or participate in meetings attended solely
by the Lenders and the Administrative Agent and/or the Collateral Agent or
(C) access any electronic site established for the Lenders or confidential
communications from counsel to or financial advisors of the Administrative
Agent, the Collateral Agent or the Lenders;

 

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(iii) (A) for purposes of any consent to any amendment, waiver or modification
of, or any action under, and for the purpose of any direction to the
Administrative Agent, the Collateral Agent or any Lender to undertake any action
(or refrain from taking any action) under, this Agreement or any other Loan
Document, each Affiliated Lender will be deemed to have consented in the same
proportion as the Term Lenders that are not Affiliated Lenders consented to such
matter, unless such matter requires the consent of all or all affected Lenders
and adversely affects such Affiliated Lender more than other Term Lenders in any
material respect, (B) for purposes of voting on any plan of reorganization or
plan of liquidation pursuant to any Debtor Relief Laws (a “Bankruptcy Plan”),
each Affiliated Lender hereby agrees (x) not to vote on such Bankruptcy Plan,
(y) if such Affiliated Lender does vote on such Bankruptcy Plan notwithstanding
the restriction in the foregoing clause (x), such vote will be deemed not to be
in good faith and shall be “designated” pursuant to Section 1126(e) of the
Bankruptcy Code (or any similar provision in any other Debtor Relief Laws), and
such vote shall not be counted in determining whether the applicable class has
accepted or rejected such Bankruptcy Plan in accordance with Section 1126(c) of
the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws)
and (z) not to contest any request by any party for a determination by a court
of competent jurisdiction effectuating the foregoing clause (y), in each case
under this clause (B) unless such Bankruptcy Plan adversely affects such
Affiliated Lender more than other Term Lenders in any material respect and
(C) each Affiliated Lender hereby irrevocably appoints the Administrative Agent
(such appointment being coupled with an interest) as such Affiliate of the
Borrower’s attorney-in-fact, with full authority in the place and stead of such
Affiliate of the Borrower and in the name of such Affiliated Lender (solely in
respect of Term Loans held by such Affiliated Lender and not in respect of any
other claim or status such Affiliated Lender may otherwise have), from time to
time in the Administrative Agent’s discretion to take any action and to execute
any instrument that the Administrative Agent may deem reasonably necessary or
appropriate to carry out the provisions of this Section 9.04(h)(iii), including
to ensure that any vote of such Affiliated Lender on any Bankruptcy Plan is
withdrawn or otherwise not counted;

(iv) the aggregate principal amount of Term Loans held at any one time by
Affiliated Lenders may not exceed 25% of the aggregate outstanding principal
amount of Term Loans;

(v) the Affiliated Lender will not be entitled to bring actions against the
Administrative Agent or the Collateral Agent, in its role as such, or receive
advice of counsel or other advisors to the Administrative Agent, the Collateral
Agent or any Lender or challenge the attorney-client privilege of their
respective counsel; and

(vi) the Loans held by any Affiliated Lenders in the aggregate shall not account
for more than 49.9% of the amounts included in determining whether the Required
Lenders have (A) consented to any amendment, modification, waiver, consent or
other action with respect to any of the terms of any Loan Document or any
departure

 

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by any Loan Party therefrom, (B) otherwise acted on any matter related to any
Loan Document or (C) directed or required the Administrative Agent or any Lender
to undertake any action (or refrain from taking any action) with respect to or
under any Loan Document.

Each Affiliated Lender that is a Term Lender hereunder agrees to comply with the
terms of this Section 9.04(h) (notwithstanding that it may be granted access to
the Platform or any other electronic site established for the Lenders by the
Administrative Agent), and each Affiliated Lenders agrees that in any subsequent
assignment of all or any portion of its Term Loans it shall identify itself in
writing to the assignee as an Affiliated Lender prior to the execution of such
assignment.

(i) Resignation as an Issuing Bank or a Swingline Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time an
Issuing Bank or Swingline Lender assigns all of its Revolving Facility
Commitment and Revolving Facility Loans pursuant to Section 9.04(b), such
Issuing Bank or Swingline Lender may, (i) upon 30 days’ notice to the Borrower
and the Lenders, resign as an Issuing Bank and/or (ii) upon 30 days’ notice to
the Borrower, resign as a Swingline Lender. In the event of any such resignation
as an Issuing Bank or a Swingline Lender, the Borrower shall be entitled to
appoint from among the Revolving Facility Lenders a successor Issuing Bank or
Swingline Lender hereunder; provided, however, that no failure by the Borrower
to appoint any such successor shall affect the resignation of such Issuing Bank
as an Issuing Bank or Swingline Lender as a Swingline Lender, as the case may
be. If such Issuing Bank resigns as an Issuing Bank, it shall retain all the
rights, powers, privileges and duties of an Issuing Bank hereunder with respect
to all Letters of Credit outstanding as of the effective date of its resignation
as an Issuing Bank and all unreimbursed L/C Disbursements with respect thereto
(including the right to require the Lenders to make ABR Loans or fund risk
participations in unreimbursed amounts pursuant to Section 2.05(c)). If such
Swingline Lender resigns as Swingline Lender, it shall retain all the rights of
the Swingline Lender provided for hereunder with respect to Swingline Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to fund risk participations in outstanding
Swingline Loans pursuant to Section 2.04(b). Upon the appointment of a successor
Issuing Bank and/or Swingline Lender, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of a
retiring Issuing Bank or Swingline Lender, as the case may be, and (b) the
successor Issuing Banks shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to the resigning Issuing Bank to effectively
assume the obligations of such Issuing Bank with respect to such Letters of
Credit.

SECTION 9.05 Expenses; Indemnity. (a) The Borrower agrees to pay (i) all
reasonable out-of-pocket expenses (including Other Taxes) incurred by the
Administrative Agent and its Affiliates in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation,
execution and delivery and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated) (including reasonable fees, charges and disbursements of counsel
for the Administrative Agent), (ii) all reasonable out-of-pocket expenses
incurred by each Issuing Bank in connection with the issuance, amendment,
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demand for payment thereunder and (iii) all out-of-pocket expenses incurred by
the Administrative Agent, any Lender and each Issuing Bank (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Lender or any Issuing Bank), in connection with the enforcement or protection of
their rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans
made or the Letters of Credit issued hereunder, including all such out-of-pocket
costs incurred during any workout, restructuring or negotiations in respect of
such Loans or Letters of Credit; provided that, the Borrower’s obligations under
this Section 9.05(a) for fees and expenses of legal counsel shall be limited to
fees and expenses of (x) one primary outside legal counsel for all persons
described in clauses (i) through (ii) above, taken as a whole, (y) in the case
of any actual or perceived conflict of interest, one outside legal counsel for
each group of affected Persons similarly situated, taken as a whole, in each
appropriate jurisdiction and (z) if necessary, one local or foreign legal
counsel in each appropriate jurisdiction (which may include a single special
counsel acting in multiple jurisdictions).

(b) The Borrower shall indemnify the Administrative Agent, Lead Arranger, the
Agents, each Issuing Bank, each Lender, their respective Affiliates and each of
their respective directors, trustees, officers, employees and agents (each such
person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
costs and expenses, including reasonable counsel fees, charges and disbursements
(except the allocated costs of in-house counsel and limited to the fees and
expenses of (x) one primary outside legal counsel to the Indemnitees, taken as a
whole, (y) in the case of any actual or perceived conflict of interest, one
outside legal counsel for each group of affected Persons similarly situated,
taken as a whole, in each appropriate jurisdiction and (z) if necessary, one
local or foreign legal counsel in each appropriate jurisdiction (which may
include a single special counsel acting in multiple jurisdictions)), incurred by
or asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement or any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto and thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use or proposed
use of the proceeds therefrom (including any refusal by any Issuing Bank to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit) or (iii) 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, by the
Borrower or any other Loan Party or any of the Borrower’s or such Loan Party’s
directors, shareholders or creditors; provided, that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are (x) determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
primarily from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the 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 the 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. The provisions of this
Section 9.05 shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
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discharge of any of the Obligations, the resignation of the Administrative Agent
or any Issuing Bank or any Swingline Lender, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, any Issuing Bank
or any Lender. All amounts due under this Section 9.05 shall be payable no later
than ten Business Days after written demand therefor, accompanied by reasonable
documentation with respect to any reimbursement, indemnification or other amount
requested. This Section 9.05(b) shall not apply with respect to Taxes other than
any Taxes that represent losses, claims, damages, etc. arising from any non-Tax
claim.

(c) To the fullest extent permitted by applicable law, the Borrower shall not
assert, and 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 subsection (b) above shall be liable for any damages arising from the use
by unintended recipients of any information or other materials distributed to
such unintended recipients by such Indemnitee 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 other than for direct or actual damages resulting from the gross
negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction

(d) To the extent that the Borrower for any reason fails to indefeasibly pay any
amount required under subsection (a) or (b) of this Section to be paid by it to
the Administrative Agent (or any sub-agent thereof), any Issuing Bank 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 applicable Issuing Bank or
such Related Party, as the case may be, such Lender’s Applicable Percentage
(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) or the applicable 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) or applicable Issuing Bank in connection with such
capacity. The obligations of the Lenders under this subsection (d) are subject
to the provisions of Section 2.18(f).

SECTION 9.06 Right of Set-off. If an Event of Default shall have occurred and be
continuing, each Lender and each Issuing Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
or such Issuing Bank to or for the credit or the account of Holdings, the
Borrower or any other Subsidiary against any of and all the obligations of
Holdings or the Borrower now or hereafter existing under this Agreement or any
other Loan Document held by such Lender or such Issuing Bank, irrespective of
whether or not such Lender or such Issuing Bank shall have made any demand under
this Agreement or such other Loan Document and although the obligations may be
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Defaulting Lender shall exercise any such right of setoff, (x) all amounts so
set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Section 2.23 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and
deemed held in trust for the benefit of the Administrative Agent and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
The rights of each Lender and each Issuing Bank under this Section 9.06 are in
addition to other rights and remedies (including other rights of set-off) that
such Lender or such Issuing Bank may have.

SECTION 9.07 Payments Set Aside. To the extent that any payment by or on behalf
of the Borrower is made to the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender, or the Administrative Agent, the Collateral Agent,
any Issuing Bank or any Lender exercises its right of setoff, and such payment
or the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent, the
Collateral Agent, such Issuing Bank or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and each Issuing Bank severally agrees to pay to the Administrative Agent or the
Collateral Agent, as applicable, upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative
Agent or the Collateral Agent (as applicable), plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the Federal Funds Effective Rate from time to time in effect.

SECTION 9.08 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.

SECTION 9.09 Waivers; Amendment. (a) None of the Arranger, the Agents or the
Lenders shall by any act (except by a written instrument pursuant to clause
(b) below), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of any
Arranger, Agent or Lender, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by any Arranger, Agent
or Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which such Arranger, Agent or Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified, orexcept (x) in the case of this

 

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Agreement, pursuant to an agreement or agreements in writing entered into by
Holdings, the Borrower and the Required Lenders and (y) in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into by
each party thereto and the Administrative Agent and consented to by the Required
Lenders; provided, however, that no such agreement shall:

(i) decrease or forgive the principal amount of, or extend the final maturity
of, or decrease the rate of interest on, any Loan or any L/C Disbursement
without the prior written consent of each Lender directly affected thereby;
provided that any amendment to the financial covenant definitions in this
Agreement shall not constitute a reduction in the rate of interest for purposes
of this clause (i),

(ii) increase or extend the Commitment of any Lender or decrease the Commitment
Fees or L/C Participation Fees or other fees of any Lender without the prior
written consent of such Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory prepayment or reduction in the aggregate Commitments shall not
constitute an increase of the Commitments of any Lender or a decrease of fees of
any Lender),

(iii) extend, waive or reduce the amount of any scheduled installment of
principal or extend any date on which payment of interest on any Loan or any L/C
Disbursement or any Fees is due, without the prior written consent of each
Lender adversely affected thereby (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory prepayment or reduction in the aggregate Commitments shall not
constitute an extension, waiver or reduction of the amount of a scheduled
installment of principal or date of payment of interest or fees),

(iv) amend or modify the provisions of Section 2.18(b) or (c) in a manner that
would by its terms alter the pro rata sharing of payments required thereby, or
require any Lender to make available Interest Periods longer than six months
without its consent, without the prior written consent of the each Lender
adversely affected thereby,

(v) amend or modify the provisions of this Section or the definition of the term
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the prior written
consent of each Lender adversely affected thereby (it being understood that,
with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the applicable Loans and
Commitments),

(vi) release all or substantially all the Collateral or release any of Holdings,
the Borrower or any other Loan Party from its Guarantee under the Guaranty
Agreement, unless, in the case of a Loan Party, all or substantially all of the
Equity Interests of such Loan Party are sold or otherwise disposed of in a
transaction permitted by this Agreement, without the prior written consent of
each Lender,

 

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(vii) subordinate the Liens in favor of the Administrative Agent or Collateral
Agent, as applicable, securing the Obligations, with respect to all or
substantially all of the Collateral, without the prior written consent of each
Lender,

(viii) effect any waiver, amendment or modification that by its terms adversely
affects the rights of Lenders participating in any Class of Loans, as the case
may be, differently from those of Lenders participating in another Class of
Loans, without the consent of the Majority Lenders participating in the
adversely affected Class (it being agreed that the Required Lenders, may waive,
in whole or in part, any prepayment required by Section 2.11 so long as the
application of any prepayment still required to be made is not changed), and

(ix) effect any waiver, amendment or modification of Section 5.4 of the
Collateral Agreement, or any comparable provision of any other Security
Document, in a manner that materially adversely affects the rights in respect of
payments or collateral of Lenders, without the consent of each Lender so
affected;

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, a Swingline Lender or an
Issuing Bank hereunder without the prior written consent of the Administrative
Agent, such Swingline Lender or such Issuing Bank acting as such at the
effective date of such agreement, as applicable. Each Lender shall be bound by
any waiver, amendment or modification authorized by this Section 9.09 and any
consent by any Lender pursuant to this Section 9.09 shall bind any Assignee of
such Lender.

(c) Without the consent of any Lender, the Loan Parties and the Administrative
Agent may (in their respective sole discretion, or shall, to the extent required
by any Loan Document) enter into any amendment, modification or waiver of any
Loan Document, or enter into any new agreement or instrument, to effect the
granting, perfection, protection, expansion or enhancement of any security
interest in any Collateral or additional property to become Collateral for the
benefit of the Secured Parties, or as required by local law to give effect to,
or protect any security interest for the benefit of the Secured Parties, in any
property or so that the security interests therein comply with applicable law.

(d) Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender and (y) any other waiver, amendment or modification
requiring the consent of all Lenders or each affected Lender that by its terms
affects any Defaulting Lender more adversely than other affected Lenders shall
require the consent of such Defaulting Lender.

(e) Subject to the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent, Holdings and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the

 

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other Loan Documents with the Term Loans and the Revolving Facility Loans and
the accrued interest and fees in respect thereof and (b) to include
appropriately the Lenders holding such credit facilities in any determination of
Required Lenders.

(f) Notwithstanding anything to the contrary contained in this Section 9.09,
this Agreement may be amended with the written consent of the Administrative
Agent, the Borrower and the Lenders providing the Replacement Term Loans (as
defined below) to permit the refinancing of all or a portion of the outstanding
Term Loans of any Class (“Refinanced Term Loans”) with one or more tranches of
replacement term loans (“Replacement Term Loans”) hereunder; provided that
(a) the aggregate principal amount of such Replacement Term Loans shall not
exceed the aggregate principal amount of such Refinanced Term Loans (plus
accrued interest, fees, expenses and premium), (b) the Effective Yield for such
Replacement Term Loans shall not be higher than the Effective Yield for such
Refinanced Term Loans, unless the final stated maturity of such Replacement Term
Loans is at least one year later than the final stated maturity of such
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
such Refinanced Term Loans, at the time of such refinancing (except by virtue of
amortization or prepayment of the Refinanced Term Loans prior to the time of
such incurrence), (d) any Replacement Term Loans have a final stated maturity
equal to or later than the final stated maturity date of the Refinanced Term
Loans at the time of such refinancing, (e) any Replacement Term Loans may
participate on a pro rata basis or less than a pro rata basis (but not greater
than a pro rata basis) in any voluntary or mandatory prepayment made by the
Borrower pursuant to Section 2.11 with any Class of Term Loans that ranks pari
passu as to security with such Replacement Term Loans (and junior basis as to
any Class of Term Loans that ranks senior as to security with such Replacement
Term Loans) and (f) all other terms applicable to such Replacement Term Loans
(excluding pricing, interest, fees, rate floors, call, premiums and maturity
date, subject to preceding clauses (b), (c) and (d)) shall be substantially
identical to, or less favorable to the Lenders providing such Replacement Term
Loans than, those applicable to such Refinanced Term Loans, except to the extent
necessary to provide for covenants and other terms applicable to any period
after the Latest Maturity Date in effect immediately prior to such refinancing.

(g) Notwithstanding anything to the contrary contained in this Section 9.09, if
at any time after Closing Date, the Administrative Agent and the Borrower shall
have jointly identified an obvious error or any error or omission of a technical
nature, in each case, in any provision of the Loan Documents, then the
Administrative Agent and the Borrower shall be permitted to amend such provision
and such amendment shall become effective without any further action or consent
of any other party to any Loan Document if the same is not objected to in
writing by the Required Lenders within five Business Days following receipt of
notice thereof.

(h) Notwithstanding anything to the contrary contained in this Section 9.09, any
waiver, amendment or modification of this Agreement that (x) in the absence of
this clause (h) would require the consent of the Required Lenders and (y) by its
terms affects solely the rights, benefits, duties or obligations under this
Agreement of one Class of Lenders and not any other Class of Lenders may, in
each case, be effected by an agreement or agreements in writing entered into by
the Borrower and Majority Lenders of such affected Class of Lenders (together
with any other individual Lender directly affected thereby whose consent would
be required by the first and second provisos appearing in Section 9.09(b)).

 

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(i) Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the Administrative Agent, the Borrower and the Revolving
Facility Lenders shall be permitted to amend this Agreement in order to (i) add
new or additional Issuing Banks and/or Swingline Lenders or to reflect that
Letters of Credit may be issued by a Third Party LC Issuer, (ii) revise the
Letter of Credit and Swingline provisions in this Agreement to accommodate the
administrative or operational needs of such new or additional Issuing Bank,
Third Party LC Issuer and/or Swingline Lenders, provided that (X) any such
Issuing Banks and/or Swingline Lenders and any such revised provisions must be
reasonably acceptable to the Administrative Agent and the Revolving Facility
Lenders, and (Y) such amendments shall not be materially adverse to the Term
Lenders, (iii) modify the required notice period for borrowing of Revolving
Facility Loans and (iv) increase or decrease the L/C Commitment and Swingline
Commitment amounts, provided that in no event shall such L/C Commitment or
Swingline Commitment amounts exceed the Revolving Facility Commitment. Such
amendment(s) shall become effective without any further action or consent of any
other party to any Loan Document.

(j) Notwithstanding anything to the contrary contained in this Section 9.09,
this Agreement and the other Loan Documents may be amended, restated,
supplemented and/or otherwise modified with the written consent of the
Administrative Agent, Holdings, the Borrower and the Required Lenders, in order
to (i) increase the interest rate or yield applicable to the Credit Facilities,
including by increasing the Applicable Margin or similar component of the
interest rate, by modifying the method of computing interest applicable to the
Credit Facilities (including by creating any new interest rate “floors”) or
paying additional upfront fees, consent fees or original issue discount on or
with respect to the Credit Facilities and (ii) increase a letter of credit,
unused commitment, facility or utilization fee or other fees having similar
effect under the Credit Facilities.

SECTION 9.10 Interest Rate Limitation. Notwithstanding any other provision
herein, the aggregate interest rate charged with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable Requirements of Law, shall not exceed the
Highest Lawful Rate. If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate, the outstanding amount of the Loans made hereunder shall bear interest at
the Highest Lawful Rate until the total amount of interest due hereunder equals
the amount of interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, the Borrower shall pay to Administrative
Agent an amount equal to the difference between the amount of interest paid and
the amount of interest which would have been paid if the Highest Lawful Rate had
at all times been in effect. Notwithstanding the foregoing, it is the intention
of the Lenders and the Borrower to conform strictly to any applicable usury
laws. Accordingly, if any Lender contracts for, charges, or receives any

 

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consideration which constitutes interest in excess of the Highest Lawful Rate,
then any such excess shall be cancelled automatically and, if previously paid,
shall at such Lender’s option be applied to the outstanding amount of the Loans
made hereunder or be refunded to the Borrower.

SECTION 9.11 [Reserved].

SECTION 9.12 Entire Agreement. This Agreement and the other Loan Documents
represent the entire agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof. There are no promises, undertakings, representations or warranties by
the Arranger, any Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

SECTION 9.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.14 Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions. Without
limiting the foregoing provisions of this Section 9.14, if and to the extent
that the enforceability of any provisions in this Agreement relating to
Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good
faith by the Administrative Agent, any Issuing Bank or Swingline Lender, as
applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited.

SECTION 9.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute but one contract, and shall become effective as
provided in Section 9.03. Delivery of an executed counterpart to this Agreement
by facsimile (or other electronic) transmission pursuant to procedures approved
by the Administrative Agent shall be as effective as delivery of a manually
signed original.

 

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SECTION 9.16 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 9.17 Jurisdiction; Consent to Service of Process. (a) Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender or any Issuing Bank may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against Holdings, the
Borrower or any other Loan Party or their properties in the courts of any
jurisdiction.

(b) Each of the parties hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

SECTION 9.18 Confidentiality. Each of the Lenders, each Issuing Bank and each of
the Agents agrees that it shall maintain in confidence any information relating
to Holdings, the Borrower and the other Loan Parties furnished to it by or on
behalf of Holdings, the Borrower or the other Loan Parties (other than
information that (a) has become generally available to the public other than as
a result of a disclosure by such party, (b) has been independently developed by
such Lender, such Issuing Bank or such Agent without violating this Section 9.18
or (c) was available to such Lender, such Issuing Bank or such Agent from a
third party having, to such person’s knowledge, no obligations of
confidentiality to Holdings, the Borrower or any other Loan Party) and shall not
reveal the same other than to its directors, trustees, officers, employees and
advisors with a need to know or to any person that approves or administers the
Loans on behalf of such Lender (so long as each such person shall have been
instructed to keep the same confidential in accordance with this Section 9.18),
except: (a) to the extent necessary to comply with law or any legal process or
the requirements of any Governmental Authority, the National Association of
Insurance Commissioners or of any securities exchange on which securities of the
disclosing party or any Affiliate of the disclosing party are listed or traded,
(b) as part of normal reporting or review procedures to Governmental Authorities
or the National Association of Insurance Commissioners, (c) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, trustees, advisors

 

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and representatives (so long as each such person shall have been instructed to
keep the same confidential in accordance with this Section 9.18), (d) in order
to enforce its rights under any Loan Document in a legal proceeding, (e) to any
prospective assignee of, or prospective Participant in, any of its rights under
this Agreement (so long as such person shall have been instructed to keep the
same confidential in accordance with this Section 9.18), (f) to any direct or
indirect contractual counterparty in Swap Agreements or such contractual
counterparty’s professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section) or (g) 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.

SECTION 9.19 Direct Website Communications.

(a) Delivery. (i) 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 (a) 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), (b) relates
to the payment of any principal or other amount due under this Agreement prior
to the scheduled date therefor, (c) provides notice of any Default or Event of
Default under this Agreement or (d) 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 acceptable to the Administrative Agent. 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 but only to the extent requested by the Administrative Agent.
Nothing in this Section 9.19 shall prejudice the right of the Agents, the Lead
Arranger or 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.

(ii) The Administrative Agent agrees that receipt of the Communications by the
Administrative Agent at its e-mail address set forth in Section 9.01 shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Loan Documents. Each Lender agrees that notice to it (as
provided in the next sentence) specifying that the Communications have been
posted to the Platform (as defined below) shall constitute effective delivery of
the Communications to such Lender for purposes of the Loan Documents. Each
Lender agrees (a) to notify the Administrative Agent in writing (including by
electronic communication) from time to time of such Lender’s e-mail address to
which the foregoing notice may be sent by electronic transmission and (b) that
the foregoing notice may be sent to such e-mail address.

(b) Posting. The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make the Communications available to the Lenders and
each

 

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Issuing Bank by posting the Communications on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such person’s
securities. The Borrower hereby agrees that it will use commercially reasonable
efforts to identify that portion of the Communications that may be distributed
to the Public Lenders and that (w) all such Communications shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Communications “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger, each Issuing Bank and the Lenders to treat
such Communications as not containing any material non-public information
(although it may be sensitive and proprietary) with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Communications constitute
Information, they shall be treated as set forth in Section 9.18); (y) all
Communications marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Side Information;” and (z) the
Administrative Agent and the Arranger shall be entitled to treat any
Communications that are not marked “PUBLIC” as being suitable only for posting
on a portion of the Platform not designated “Public Side Information.”

(c) Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS IN OR OMISSIONS FROM THE COMMUNICATIONS. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING 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 PARTY IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. In no event shall the
Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to the Borrower, any Lender, any Issuing Bank or
any other person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of the Borrower’s or
the Administrative Agent’s transmission of Communications through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to the Borrower, any Lender, any Issuing Bank or any other person
for indirect, special, incidental, consequential or punitive damages (as opposed
to direct or actual damages).

SECTION 9.20 Release of Liens and Guarantees. In the event that any Loan Party
conveys, sells, leases, assigns, transfers or otherwise disposes of all or any
portion of any of the Equity Interests or assets of any Loan Party (other than
the Equity Interests of the Borrower) to a person that is not (and is not
required to become) a Loan Party in a transaction permitted by this Agreement,
then the Administrative Agent shall promptly (and the Lenders hereby authorize
the Administrative Agent to) take such action and execute any such documents

 

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as may be reasonably requested by Holdings or the Borrower and at the Borrower’s
expense to release any Liens created by any Loan Document in respect of such
assets or Equity interests, and, in the case of a disposition of the Equity
Interests of any Loan Party in a transaction permitted by this Agreement and as
a result of which such Loan Party would cease to be a Subsidiary, terminate such
Loan Party’s obligations under the Guaranty Agreement, Collateral Agreement and
any other applicable Security Document; provided that the release of any
Subsidiary because it ceases to be a Wholly Owned Subsidiary shall constitute an
Investment in an amount equal to the fair market value of the net assets of such
relevant Subsidiary and such release shall only be permitted if such Investment
of all such assets is permitted under Section 6.04 for such release to be
permitted hereunder. In addition, the Administrative Agent agrees to take such
actions as are reasonably requested by Holdings or the Borrower and at the
Borrower’s expense to terminate the Liens and security interests created by the
Loan Documents when all the Obligations (other than contingent indemnities and
expense reimbursement obligations to the extent no claim therefor has been made)
are paid in full and all Letters of Credit and Commitments are terminated. Any
representation, warranty or covenant contained in any Loan Document relating to
any such Equity Interests, asset or subsidiary of the Borrower shall no longer
be deemed to be made once such Equity Interests or asset or subsidiary is so
conveyed, sold, leased, assigned, transferred or disposed of.

SECTION 9.21 Power of Attorney. Each Lender (including each Swingline Lender)
and each Issuing Bank hereby (i) authorizes the Administrative Agent as its
agent and attorney-in-fact to execute and deliver, on behalf of and in the name
of such Lender or Issuing Bank (or Affiliate), all and any Loan Documents
(including Security Documents) and related documentation, (ii) authorizes the
Administrative Agent to appoint any further agents or attorneys-in-fact to
execute and deliver, or otherwise to act, on behalf of and in the name of the
Administrative Agent for any such purpose and (iii) authorizes the
Administrative Agent to delegate its powers under this power of attorney and to
do any and all acts and to make and receive all declarations that are deemed
necessary or appropriate to the Administrative Agent.

SECTION 9.22 PATRIOT Act Notice. Each Lender, each Issuing Bank, the
Administrative Agent (for itself and not on behalf of any Lender) and the
Collateral Agent hereby notifies each Loan Party that pursuant to the
requirements of the PATRIOT Act, it is required to obtain, verify and record
information that identifies the Loan Parties, which information includes the
name, address and taxpayer information number of each Loan Party and other
information that will allow such Lender, such Issuing Bank, the Administrative
Agent or the Collateral Agent, as applicable, to identify such Loan Party in
accordance with the PATRIOT Act. The Borrower shall, promptly following a
request by any Lender, any Issuing Bank, the Administrative Agent or the
Collateral Agent, provide all documentation and other information that such
Lender, such Issuing Bank, the Administrative Agent or the Collateral Agent, as
applicable, reasonably requests in order to comply with its ongoing obligations
under applicable “know your customer” and anti-money-laundering rules and
regulations, including the PATRIOT Act.

SECTION 9.23 No Advisory or Fiduciary Relationship. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and
other services regarding this Agreement

 

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provided by the Administrative Agent, the Lead Arranger, and the other Agents
are arm’s-length commercial transactions between the Borrower and its
Affiliates, on the one hand, and the Administrative Agent, the Arranger, and the
other Agents, on the other hand, (B) the Borrower has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (C) the Borrower is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; (ii) (A) the Administrative Agent, the Lead Arranger, and
the other Agents each is and has been acting solely as a principal and, except
as expressly agreed in writing by the relevant parties, has not been, is not,
and will not be acting as an advisor, agent or fiduciary for the Borrower or any
of its Affiliates, or any other person and (B) neither the Administrative Agent,
the Lead Arranger, nor any of the other Agents has any obligation to the
Borrower or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent, the Lead Arranger, and the other
Agents and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower and
its Affiliates, and neither the Administrative Agent, the Lead Arranger, nor any
of the other Agents has any obligation to disclose any of such interests to the
Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower
hereby waives and releases any claims that it may have against the
Administrative Agent, the Lead Arranger, and the other Agents with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

SECTION 9.24 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

 

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(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

[Remainder of page left intentionally blank.]

 

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

 

 

AFFINION GROUP HOLDINGS, INC., as

Holdings

By:  

 

Name:   Title:   AFFINION GROUP, INC., as Borrower By:  

 

Name:   Title:  

 

 

[Signature Page to Credit Agreement]

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

HPS INVESTMENT PARTNERS, LLC, as

Administrative Agent and Collateral Agent

By:  

 

Name:   Title:  

 

[Signature Page to Credit Agreement]

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

[Lender signature pages on file with Administrative Agent]

 

[Signature Page to Credit Agreement]

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Annex D-1

Form of Investor Warrant Agreement

[See Attached]

 

 

Annex D-1

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Final Form

INVESTOR WARRANT AGREEMENT

This INVESTOR WARRANT AGREEMENT (this “Agreement”) is made as of [April] [    ],
2019, by and between AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the
“Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited
liability trust company (the “Warrant Agent”). Capitalized terms used herein but
not otherwise defined shall have the meanings given them in Section 25 hereof.

RECITALS

WHEREAS, in connection with a recapitalization transaction, it is expected that
AGHI Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the
Company (“Merger Sub”), will merge with an into the Company (the “Merger”), with
the Company as the surviving corporation in accordance with, and subject to the
terms and conditions of, that certain Agreement and Plan of Merger, dated as of
March 1, 2019, by and between the Company and Merger Sub (the “Merger
Agreement”);

WHEREAS, as a result of the Merger, at the Effective Time (as defined in the
Merger Agreement) of the Merger, all of the issued and outstanding common stock,
par value $0.01 per share, of the Company (“Existing Company Common Stock”) will
be converted into the right to receive Investor Warrants (the “Investor
Warrants”) to purchase shares of common stock, par value $0.01 per share, of the
surviving Company (“Common Stock”) on, and subject to, the terms and conditions
set forth herein;

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, exercise and cancellation of the Investor
Warrants; and

WHEREAS, the Company desires to provide for the form and provisions of the
Investor Warrants, the terms upon which they shall be issued and exercised, and
the respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the Holders (as defined below).

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

Section 1. Appointment of the Warrant Agent. The Company hereby appoints the
Warrant Agent to act as an agent for the Company for the Investor Warrants, and
the Warrant Agent hereby accepts such appointment and agrees to perform the same
in accordance with the terms and conditions set forth herein.

Section 2. Investor Warrants.

(a) Form of Investor Warrant.

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(i) Each Investor Warrant shall be issued in certificated form only in
substantially the form attached as Exhibit A hereto, the provisions of which are
incorporated herein, and shall be dated the date on which countersigned by the
Warrant Agent, shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks of
identification and such legends and endorsements typed, stamped, printed,
lithographed or engraved thereon as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation pursuant thereto
or with any rule or regulation of any securities exchange on which the Investor
Warrants may be listed, or to conform to usage. In the event a Person whose
facsimile signature has been placed upon any Investor Warrant shall have ceased
to serve in the capacity in which such Person signed the Investor Warrant before
such Investor Warrant is issued, it may be issued with the same effect as if he
or she had not ceased to be such at the date of issuance.

(ii) Pending the preparation of definitive certificates representing the
Investor Warrants (“Warrant Certificates”), temporary Warrant Certificates may
be issued, which may be printed, lithographed, typewritten, mimeographed or
otherwise produced, and which will be substantially of the tenor of the
definitive Warrant Certificates in lieu of which they are issued.

If temporary Warrant Certificates are issued, the Company will cause definitive
Warrant Certificates to be prepared without unreasonable delay. After the
preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates
evidencing Warrants of the same number and tenor upon surrender by the Holder of
the temporary Warrant Certificates to the Warrant Agent at the office of the
Warrant Agent, without charge to such Holder. Upon surrender for cancellation of
any one or more temporary Warrant Certificates, the Company shall execute and
the Warrant Agent shall countersign and deliver in exchange therefor Warrant
Certificates of the same tenor and for a like aggregate number of Investor
Warrants. Until so exchanged, the temporary Warrant Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Warrant Certificates.

(iii) Each Warrant Certificate representing Domestic Restricted Warrants shall
bear legends in substantially the following form:

“THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE ARE SUBJECT TO
THE PROVISIONS OF AN INVESTOR WARRANT AGREEMENT, DATED AS OF [APRIL] [ ], 2019,
THE STOCKHOLDERS AGREEMENT, DATED AS OF [APRIL] [    ], 2019, AS AMENDED, AND
THE CERTIFICATE OF INCORPORATION AND BY-LAWS OF AFFINION GROUP HOLDINGS, INC.
(THE “COMPANY”), EACH

 

2

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AS MAY BE AMENDED FROM TIME TO TIME, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER
AND EXERCISE SET FORTH THEREIN. COPIES OF THE INVESTOR WARRANT AGREEMENT, THE
STOCKHOLDERS AGREEMENT, AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS ARE ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE ARE NOT AND WILL
NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “1933 ACT”), OR UNDER ANY U.S. STATE OR FOREIGN SECURITIES LAWS, IN
RELIANCE UPON APPLICABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND SUCH STATE AND FOREIGN SECURITIES LAWS. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE IN CONTRAVENTION OF THE 1933 ACT OR ANY U.S. STATE OR
FOREIGN SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
(INCLUDING THE SECURITIES TO BE ISSUED UPON THE EXERCISE OF THIS WARRANT) MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
1933 ACT AND ANY APPLICABLE U.S. STATE OR FOREIGN SECURITIES LAWS, OR A
CERTIFICATE EXECUTED BY AN AUTHORIZED OFFICER OF THE TRANSFEREE ACCEPTABLE TO
THE COMPANY CERTIFYING THAT NO SUCH REGISTRATION IS REQUIRED.”

(iv) Each Warrant Certificate representing Regulation S Warrants shall bear
legends in substantially the following form:

“THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE ARE SUBJECT TO
THE PROVISIONS OF AN INVESTOR WARRANT AGREEMENT, DATED AS OF [APRIL] [ ], 2019,
THE STOCKHOLDERS AGREEMENT, DATED AS OF [APRIL] [    ], 2019, AS AMENDED, AND
THE CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE COMPANY, EACH AS MAY BE
AMENDED FROM TIME TO TIME, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER AND
EXERCISE SET FORTH THEREIN. COPIES OF THE INVESTOR WARRANT AGREEMENT,
STOCKHOLDERS AGREEMENT, AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS ARE ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”) AND HAVE INSTEAD BEEN ISSUED IN RELIANCE ON REGULATION S PROMULGATED UNDER
THE 1933 ACT. AS A RESULT, THE SECURITIES REPRESENTED BY THIS CERTIFICATE
(INCLUDING THE

 

3

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SECURITIES TO BE ISSUED UPON THE EXERCISE OF THIS WARRANT) MAY NOT BE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE 1933 ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION. ANY HEDGING TRANSACTIONS INVOLVING THIS WARRANT OR
THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE 1933 ACT. THE COMPANY WILL NOT REGISTER ANY TRANSFER OF THIS
WARRANT OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE NOT MADE IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE 1933 ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE COMPANY MAY REQUIRE
A CERTIFICATE EXECUTED BY AN AUTHORIZED OFFICER OF THE TRANSFEREE IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY CERTIFYING THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE 1933 ACT.”

(v) Each of the certificates representing the shares issued upon the exercise of
a Domestic Restricted Warrant shall bear legends in substantially the following
form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
THE STOCKHOLDERS AGREEMENT OF AFFINION GROUP HOLDINGS, INC. (THE “COMPANY”),
DATED AS OF [APRIL] [    ], 2019, AS AMENDED, AND THE CERTIFICATE OF
INCORPORATION AND BY-LAWS OF THE COMPANY, EACH AS MAY BE AMENDED FROM TIME TO
TIME, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. COPIES OF
THE STOCKHOLDERS AGREEMENT AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER ANY
U.S. STATE OR FOREIGN SECURITIES LAWS, IN RELIANCE UPON APPLICABLE EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND SUCH STATE AND FOREIGN
SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE IN CONTRAVENTION OF THE 1933 ACT OR ANY U.S.
STATE OR FOREIGN SECURITIES LAWS. THE SHARES MAY NOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE
U.S. STATE OR FOREIGN SECURITIES LAWS, OR A CERTIFICATE EXECUTED BY AN
AUTHORIZED OFFICER OF THE TRANSFEREE ACCEPTABLE TO THE COMPANY CERTIFYING THAT
NO SUCH REGISTRATION IS REQUIRED.”

 

4

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(vi) Each of the certificates representing shares issued upon the exercise of a
Regulation S Warrant shall bear legends in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
THE STOCKHOLDERS AGREEMENT OF AFFINION GROUP HOLDINGS, INC. (THE “COMPANY”),
DATED AS OF [APRIL] [    ], 2019, AS AMENDED, AND THE CERTIFICATE OF
INCORPORATION AND BY-LAWS OF THE COMPANY, EACH AS MAY BE AMENDED FROM TIME TO
TIME, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. COPIES OF
THE STOCKHOLDERS AGREEMENT AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND HAVE INSTEAD BEEN
ISSUED IN RELIANCE ON REGULATION S PROMULGATED UNDER THE 1933 ACT. AS A RESULT,
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES ACT,
PURSUANT TO REGISTRATION UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION. ANY HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.
THE COMPANY WILL NOT REGISTER ANY TRANSFER OF THESE SECURITIES NOT MADE IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER
THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE
COMPANY MAY REQUIRE A CERTIFICATE EXECUTED BY AN AUTHORIZED OFFICER OF THE
TRANSFEREE IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY CERTIFYING THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE 1933 ACT.”

(vii) Subject to the terms hereof, including without limitation, if applicable,
the restrictions on exercise under securities law, this Agreement, the
Stockholders Agreement and the Company’s Certificate of Incorporation and
by-laws, each Investor Warrant shall be exercisable for the number of shares of
Common Stock set forth thereon as the same may be adjusted from time to time as
set forth herein.

 

5

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(b) Execution and Delivery of Warrant Certificates.

(i) At any time and from time to time on or after the date of this Agreement,
Warrant Certificates evidencing the Investor Warrants may be executed by the
Company and delivered to the Warrant Agent for countersignature, and the Warrant
Agent shall, when, as and if directed by the Company in writing, countersign and
deliver such Warrant Certificates to the respective Persons entitled thereto, as
specified by the Company. The Warrant Agent is further hereby authorized to
countersign and deliver Warrant Certificates as required by this Section 2(b),
Section 2(c), Section 3(b)(iii), Section 4(a), Section 9(a), Section 10.

(ii) The Warrant Certificates shall be executed in the corporate name and on
behalf of the Company by any of the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer or any one of the Executive Vice
Presidents, Senior Vice Presidents or Vice Presidents of the Company, either
manually or by facsimile signature printed thereon. The Warrant Certificates
shall be countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such person had not ceased to be such
officer of the Company, and any Warrant Certificate may be signed on behalf of
the Company by such person as, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company, although at the
date of the execution of this Agreement any such person was not such officer.

(c) Register; Registered Holder.

(i) Warrant Register. The Warrant Agent shall maintain books (the “Warrant
Register”) for the registration of original issuance and the registration of
transfer of the Investor Warrants in accordance with the restrictions on
transfer set forth herein. Upon the initial issuance of any Investor Warrants,
the Warrant Agent shall issue and register the Investor Warrants in the names of
the respective Holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company.

(ii) Registered Holder. The term “Holder” shall mean any Person in whose name
ownership in the Investor Warrants shall be registered upon the Warrant
Register. Prior to due presentment for registration or transfer of any Investor
Warrant, the Company and the Warrant Agent may deem and treat the Holder as the
absolute owner of such Investor Warrant and of each Investor Warrant
(notwithstanding any notation of ownership or other writing on a Warrant
Certificate made by anyone other than the Company or the Warrant Agent), for the
purpose of any exercise thereof, and for all other purposes, and neither the
Company nor the Warrant Agent shall be affected by any notice to the contrary.

 

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Section 3. Exercise of Investor Warrant.

(a) Subject to this Section 3, Section 9 and securities law, each Investor
Warrant, when countersigned by the Warrant Agent, may be exercised, in whole or
in part, by the Holder thereof during the Exercise Period applicable to such
Investor Warrant. Any exercise of an Investor Warrant shall be effected by:

(i) delivery to the Warrant Agent at the office of Warrant Agent, or, if
applicable, at the office of its successor as Warrant Agent, of: (A) the Warrant
Certificate evidencing the Investor Warrant, (B) a written notice in the form
attached as Exhibit B hereto (the “Exercise Notice”), properly completed and
executed, stating that such Holder elects to exercise the Investor Warrants in
accordance with the provisions of this Section 3, specifying the name or names
in which such Holder wishes the certificate or certificates for shares of Common
Stock to be issued and making the appropriate securities law representation
contained therein, (B) to the extent the Stockholders Agreement is still in
effect at the time of exercise, a joinder to the Stockholders Agreement, in form
and substance reasonably acceptable to the Company and (C) to the extent the
Restated Registration Rights Agreement dated as of [April] [ ], 2019 as may be
amended from time to time (the “Registration Rights Agreement”) is still in
effect at the time of exercise, a joinder to the Registration Rights Agreement,
in form and substance reasonably acceptable to the Company; and

(ii) payment of the Exercise Price for the shares of Common Stock issuable upon
exercise of such Investor Warrants. Such Exercise Price shall be payable (A) by
wire transfer of immediately available funds to the account of the Company,
(B) by a certified or official bank check payable to the order of the Company or
(C) by the surrender (which surrender shall be evidenced by cancellation of the
number of Investor Warrants represented by any Investor Warrant certificate
presented in connection with a Cashless Exercise (as defined below)) of an
Investor Warrant or Investor Warrants (represented by one or more relevant
Investor Warrant certificates), and without the payment of the Exercise Price in
cash, in return for the delivery to the surrendering Holder of that number of
shares of Common Stock equal to (I) the number shares of Common Stock for which
such Investor Warrant is exercisable as of the date of exercise (if the Exercise
Price were being paid in cash, wire transfer or certified or official bank
check) reduced by (II) that number of shares of Common Stock equal to the
quotient obtained by dividing (x) the aggregate Exercise Price to be paid by
(y) the Market Price of one share of Common Stock on the Business Day which next
precedes the day of exercise of the Investor Warrant. An exercise of an Investor
Warrant in accordance with clause (C) is herein referred to as a “Cashless
Exercise.” The documentation and consideration, if any, delivered in accordance
with this Section 3(a) are collectively referred to herein as the “Warrant
Exercise Documentation.”

 

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(b) As promptly as practicable, and in any event within five Business Days after
receipt of the Warrant Exercise Documentation, the Company shall:

(i) deliver or cause to be delivered the certificates representing the number of
validly issued, fully paid and non-assessable shares of Common Stock properly
specified in the Warrant Exercise Documentation;

(ii) if applicable, deliver or caused to be delivered cash in lieu of any
fraction of a share of Common Stock, as hereinafter provided; and

(iii) if less than the full number of Investor Warrants evidenced by a Warrant
Certificate are being exercised, deliver or cause to be delivered (and the
Warrant Agent shall so deliver or cause to be delivered at the request of the
Company) a new Warrant Certificate(s), of like tenor, for the number of Warrants
evidenced by such Warrant Certificate, less the number of Investor Warrants then
being exercised.

(c) An exercise shall be deemed to have been made at the close of business on
the date of delivery of the Warrant Exercise Documentation so that, to the
extent permitted by applicable law, the Person entitled to receive shares of
Common Stock upon such exercise shall be treated for all purposes as having
become the Holder of such shares of Common Stock at such time. No such surrender
shall be effective to constitute the Person entitled to receive such shares of
Common Stock as the Holder thereof while the transfer books of the Company for
Common Stock are closed for any purpose (but not for any period in excess of
five Business Days), but any such surrender of this Warrant Certificate for
exercise during any period while such books are so closed shall become effective
for exercise immediately upon the reopening of such books, as if the exercise
had been made on the date this Warrant Certificate was surrendered and for the
number of shares of Common Stock specified in the Warrant Exercise Documentation
and at the Exercise Price.

(d) The Company shall pay all expenses in connection with, and all taxes and
other governmental charges (other than income taxes of the Holder) that may be
imposed in respect of, the issue or delivery of any shares of Common Stock
issuable upon the exercise of Investor Warrants. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock in
any name other than that of the Holder of the Investor Warrants as recorded in
the Warrant Register.

(e) In connection with the exercise of any Investor Warrants, no fractions of
shares of Common Stock shall be issued, but in lieu thereof the Company shall
pay a cash adjustment in respect of such fractional interest in an amount equal
to such fractional interest multiplied by the Market Price of a share of Common
Stock on the Business Day which next precedes the day of exercise. If more than
one such Investor Warrant shall be exercised by the Holder thereof at the same
time, the number of full shares of Common Stock issuable on such exercise shall
be computed on the basis of the total number of Investor Warrants so exercised.

 

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Section 4. Adjustments.

(a) Adjustment of Number Issuable. The number of shares of Common Stock issuable
upon the valid exercise of an Investor Warrant (the “Number Issuable”) shall be
subject to adjustment from time to time as follows:

(i) In case the Company shall at any time or from time to time after the Issue
Date:

(A) pay a dividend or make a distribution on the outstanding shares of Common
Stock in capital stock of the Company;

(B) forward split or subdivide the outstanding shares of Common Stock into a
larger number of shares; or

(C) reverse split or combine the outstanding shares of Common Stock into a
smaller number of shares;

then, and in each such case (A) through (C), the Number Issuable in effect
immediately prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Company) so that the Holder of any Investor
Warrant thereafter exercised shall be entitled to receive the number of shares
of Common Stock or other securities of the Company which such Holder would have
owned or had been entitled to receive upon or by reason of any of the events
described above, had such Investor Warrant been exercised immediately prior to
the happening of such event. An adjustment made pursuant to this Section 4(a)(i)
shall become effective retroactively (x) in the case of any such dividend or
distribution, immediately prior to the close of business on the record date for
the determination of holders of shares of Common Stock entitled to receive such
dividend or distribution, or (y) in the case of any such split, subdivision,
combination or reclassification, immediately prior to the close of business on
the date upon which such corporate action becomes effective.

(ii) Notwithstanding anything to the contrary contained in this Section 4(a),
the Company shall be entitled to make such upward adjustments in the Number
Issuable, in addition to those otherwise required by this Section 4(a), as the
Board in its discretion shall determine to be advisable in order that any stock
dividend, split, subdivision or combination of shares, distribution of rights or
warrants to purchase shares, stock or securities or distribution of securities
convertible into or exchangeable for shares of Common Stock hereafter made the
Company to its stockholders shall not be taxable; provided, however, that any
such adjustment shall treat all holders of Investor Warrants with similar
protections on an equal basis.

 

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(b) Adjustment of Exercise Price. If the Company (A) pays any cash dividend or
distribution in respect of the Common Stock, (B) purchases or causes any of its
subsidiaries to purchase any shares of Common Stock (excluding transactions by
and among the Company and its subsidiaries) or (C) makes any other distribution
of the assets of the Company to the holders of Common Stock on account of their
ownership thereof (other than a dividend in shares of Capital Stock), the
Exercise Price shall be reduced, but not below the par value of the Common
Stock, by the amount of such dividend, distribution or aggregate purchase price
on a per share basis (or in the case of non-cash dividends, distributions or
purchase prices, the Fair Market Value thereof as determined in good faith by
the Board). In the event that the Exercise Price is or has been reduced to the
par value of the Common Stock and the Company declares a dividend or any other
distribution, such excess shall be distributed to the Holders accordance with
Section 7.

(c) Reorganization, Reclassification. Consolidation. Merger or Sale of Assets.
In case of any capital reorganization or reclassification or other change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a split, subdivision or combination), or in case of any consolidation or merger
of the Company with or into another Person (other than a consolidation or merger
in which the Company is the resulting or surviving person and which does not
result in any reclassification or change of outstanding Common Stock), or in
case of any sale or other disposition to another Person of all or substantially
all of the assets of the Company, other than a sale/leaseback, mortgage or other
similar financing transaction (any of the foregoing, a “Transaction”), the
Company, and/or such successor or purchasing Person, as the case may be, shall
make appropriate arrangements to provide that each Holder of an Investor Warrant
outstanding immediately prior to the consummation of the Transaction shall have
the right thereafter to receive upon the exercise of such Investor Warrant, in
lieu of the Common Stock immediately theretofore acquirable, the kind and amount
of shares, stock or other securities (of the Company or another issuer) or
property or cash receivable upon such Transaction by a holder of the number of
shares of Common Stock for which such Investor Warrant could have been exercised
immediately prior to such Transaction.

(d) Warrant Agent’s Disclaimer. The Warrant Agent has no duty to determine when
an adjustment under this Section 4 should be made, how it should be made or what
any such adjustment should be. The Warrant Agent makes no representation as to
the validity or value of any securities or assets issued upon the exercise of
any Investor Warrants. The Warrant Agent shall not be responsible for the
Company’s failure to comply with this Section 4.

Section 5. No Redemptions. The Company shall not have any right to redeem any of
the Investor Warrants evidenced hereby.

 

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Section 6. Certain Covenants

(a) Authorized Shares. The Company covenants and agrees that all shares of
capital stock of the Company which may be issued upon the exercise of the
Investor Warrants will be duly authorized, validly issued and fully paid and
non-assessable upon issuance and will be free and clear of all liens and will
not be subject to any pre-emptive or similar rights. The Company shall at all
times reserve and keep available solely for issuance upon the exercise of the
Investor Warrants, such number of its authorized but unissued shares of Common
Stock as will from time to time be sufficient to permit the exercise of all
outstanding Investor Warrants, and shall take all action required to increase
the authorized number of shares of Common Stock if at any time there shall be
insufficient authorized but unissued shares of Common Stock to permit such
reservation or to permit the exercise of all outstanding Investor Warrants.

(b) Certificate as to Adjustments. The Company shall deliver to the Warrant
Agent and each of the Holders promptly following the consummation of any
transaction which would result in an increase or decrease in the Number Issuable
pursuant to Section 4 a notice thereof, setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Number Issuable after giving effect
to such adjustment, and shall cause a copy of such certificate to be mailed to
each of the Holders. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of such event. Within thirty days following
the occurrence of any event requiring an adjustment pursuant to Section 4, the
Company shall instruct the Warrant Agent, and in accordance with such
instructions the Warrant Agent shall issue each Holder a new Warrant Certificate
reflecting the required adjustment(s) to the Investor Warrant, reasonably
promptly (but in any event within ten days) following, and subject only to, the
permanent surrender by the Holder of the Warrant Certificate for which such new
Warrant Certificate relates.

(c) No Impairment. The Company will not, by amendment of its charter or through
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement or the Investor
Warrants issued hereunder, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of each Holder against
impairment. Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any shares of Common Stock obtainable upon the
exercise of an Investor Warrant and (ii) take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock upon the exercise of an
Investor Warrant.

Section 7. Dividends. If and only to the extent the Exercise Price has been
reduced to the par value of the Common Stock, each Holder shall be entitled to
any dividend (or remainder of a dividend after taking into account any reduction
in Exercise Price resulting from the application of Section 4(b)), whether
payable in cash, in kind or other property, that would be

 

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distributed to such Holder if such Holder’s Investor Warrants had been converted
in full into Common Stock immediately prior to the close of business on the
record date for the determination of the stockholders entitled to receive such
dividend (assuming full physical settlement thereof).

Section 8. Holder Not Deemed a Stockholder. Except as specifically provided for
herein (including, without limitation, Section 7), nothing contained in this
Agreement shall be construed to (a) grant any Holder any rights to vote or
receive dividends or be deemed the holder of shares of Common Stock of the
Company for any purpose, (b) confer upon any Holder any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, or (c) impose
any liabilities on a Holder to purchase any securities or as a stockholder of
the Company, whether asserted by the Company or creditors of the Company, prior
to the issuance of the underlying shares of Common Stock.

Section 9. Certain Transfer and Exercise Restrictions.

(a) Subject to Applicable Securities Laws. No Investor Warrant shall be sold or
transferred unless either such Investor Warrant first shall have been registered
under the Securities Act or any applicable U.S. state or foreign securities law,
or (i) upon reasonable request by the Company, the Company first shall have been
furnished with a certificate executed by an authorized officer of the transferee
in form and substance reasonably acceptable to the Company, or (ii) upon
reasonable request by the Warrant Agent, the Warrant Agent first shall have been
furnished with an opinion of legal counsel, in form and substance reasonably
acceptable to the Warrant Agent, in each case such certificate or opinion to the
effect that such sale or transfer is exempt from the registration requirements
of the Securities Act and applicable U.S. state or foreign securities law and
bears a restrictive legend, if applicable. Any transfer of an Investor Warrant
and the rights represented by the corresponding Warrant Certificate shall be
effected by the surrender of such Warrant Certificate, along with the form of
assignment attached as Exhibit C hereto, properly completed and executed by the
Holder thereof, at the office of the Warrant Agent, together with an appropriate
investment letter, if deemed reasonably necessary by counsel to the Company, to
assure compliance with applicable securities laws. Thereupon, the Warrant Agent
shall issue in the name or names specified by the Holder thereof and, in the
event of a partial transfer, in the name of the Holder thereof, a new Warrant
Certificate or Warrant Certificates evidencing the right to purchase such number
of shares of Common Stock as shall be equal to the then applicable Number
Issuable.

(b) Subject to Applicable Laws. Notwithstanding anything to the contrary, no
Investor Warrant may be Transferred or exercised unless (i) the transferor,
transferee, exercising Holder or its designated recipient of Common Stock
issuable on the exercise of such Investor Warrant and the Company, as
applicable, have completed and submitted all filings, registrations or other
notifications to any Governmental Entity that may be required pursuant to
applicable Law in connection with such Transfer or exercise,

 

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(ii) all necessary approvals, deemed approvals (including waiting period
expiration) or waivers, as the case may be, of any Governmental Entity that may
be required pursuant to applicable Law in connection with such Transfer or
exercise have been obtained, including, if applicable, the approval, deemed
approval (including waiting period expiration) or waiver, as the case may be, of
the FCA and (iii) any waiting periods required by applicable Law for the
consummation of such Transfer or Exercise have expired or been terminated. For
the avoidance of doubt, an Investor Warrant may be exercised in part to the
extent that such filing, registration, notification, approval, waiver or
expiration or termination of any waiting period is not necessary or required.

(c) Limitation on Exercise.

(i) Notwithstanding anything to the contrary, no Investor Warrant may be
exercised in contravention of applicable law, including without limitation, if
applicable, Section 5 of the Securities Act or any of the rules and regulations
promulgated thereunder.

(ii) Notwithstanding anything to the contrary, no Investor Warrant may be
exercised to the extent that such exercise would result in a violation of
Article IV(d) of the Company’s Certificate of Incorporation with all references
therein to the term “Transfer” and words of similar import being read as
reference to the term “issue” and words of similar import.

(d) Regulation S Warrants.

(i) Without limiting the other restrictions set forth in this Section 9, each
Holder of a Regulation S Warrant or the securities issued upon the exercise
thereof agrees that for a period of one year from the date hereof (the
“distribution compliance period”), in the event of a Transfer of the Regulation
S Warrants or the securities issuable upon the exercise thereof, the Holder will
(A) ensure that the Transfer is not made to a U.S. person unless pursuant to an
exemption from registration under the Securities Act or such Investor Warrant or
the securities issued upon the exercise thereof, as applicable, have been
registered under the Securities Act; (B) unless the Investor Warrants or the
securities issued upon the exercise thereof have been registered under the
Securities Act, require the transferee to certify that it either (I) is not a
U.S. person, is not acquiring the Securities for the account or benefit of a
U.S. person and is acquiring such securities in an “offshore transaction” as
defined in Regulation S, or (II) it is acquiring the Securities in a transaction
that does not require registration under the Securities Act; (C) require that
the transferee agree to resell or otherwise Transfer the Regulation S Warrants
or the securities issuable upon the exercise thereof only in accordance with
Regulation S, pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration and not to engage
in hedging transactions unless in compliance with the Securities Act and
(D) disclose that the Regulation S Warrants or the securities issuable upon the
exercise thereof have not been

 

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registered under the Securities Act and cannot be sold in the United States or
to U.S. persons absent registration under the Securities Act or an exemption
from such registration. In connection with such a Transfer, the Company will
(x) ensure that the Regulation S Warrants or the securities issuable upon the
exercise thereof bear a legend as set forth in Section 2 hereof; (y) refuse to
register any transfer of Regulation S Warrants or the securities issuable upon
the exercise thereof not made in accordance with Regulation S, pursuant to an
effective registration statement under the Securities Act or pursuant to an
exemption from registration; and (z) send a confirmation to the transferee
stating that the transferee is subject to the foregoing restrictions on
Transfers.

(ii) Without limiting the other restrictions set forth in this Section 9, each
Holder of a Regulation S Warrant or the securities issued upon the exercise
thereof agrees (A) it will not engage in hedging transactions unless in
compliance with the Securities Act and (B) any Transfer of Regulation S Warrants
or the securities issued upon the exercise thereof will be made only in
accordance with the provisions of this Section 9. The Holder acknowledges that
the Company will refuse to register any Transfer not made in accordance with the
foregoing provisions.

(iii) Without limiting the other restrictions set forth in this Section 9, no
Regulation S Warrant may be exercised unless the exercising Holder shall have
delivered to the Company (1) a certification, reasonably acceptable to the
Company, that it is not a U.S. person (as defined in Regulation S) and the
Regulation S Warrant is not being exercised on behalf of a U.S. person (as
defined in Regulation S), and it is purchasing the shares of Common Stock in an
offshore transaction in accordance with Regulation S or (2) an opinion of
counsel reasonably acceptable to the Company to the effect that the Regulation S
Warrant and the securities delivered upon exercise thereof have been registered
under the Securities Act or are exempt from registration thereunder.

(e) Stockholders Agreement.

(i) So long as the Stockholders Agreement remains in effect, any Holder or its
permitted assigns that holds Investor Warrants or receives shares of Common
Stock upon the valid exercise of an Investor Warrant shall be subject to the
Stockholders Agreement and bound by all the terms and conditions thereof as if
an original party thereto and shall execute a joinder to the Stockholders
Agreement.

(ii) The Stockholders Agreement as initially adopted contains, and as any given
date prior to the expiration of the Investor Warrants may continue to contain,
certain restrictions on transfer applicable to the Investor Warrants. By
receiving an Investor Warrant, a Holder agrees that it and the Investor Warrant
are subject to, and bound by, the restrictions on transfer set forth in the
Stockholders Agreement.

 

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Section 10. Replacement of Investor Warrants. Upon receipt of evidence
satisfactory to the Company and the Warrant Agent of the loss, theft,
destruction or mutilation of a Warrant Certificate and, in the case of loss,
theft or destruction, upon delivery of an indemnity reasonably satisfactory to
the Company and the Warrant Agent, or, in the case of mutilation, upon surrender
and cancellation thereof, the Warrant Agent will issue a new warrant certificate
of like tenor for a number of Investor Warrants equal to the number of Investor
Warrants evidenced by such Warrant Certificate.

Section 11. Governing Law. THIS AGREEMENT AND THE INVESTOR WARRANTS ISSUED
HEREUNDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF
THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

Section 12. Rights Inure to Holder. The Investor Warrants evidenced by a Warrant
Certificate will inure to the benefit of and be binding upon the Holder thereof
and the Company and their respective successors and permitted assigns. Nothing
in this Agreement shall be construed to give to any Person other than the
Company and the Holder thereof any legal or equitable right, remedy or claim
under a Warrant Certificate, and such Warrant Certificate shall be for the sole
and exclusive benefit of the Company and such Holder. Nothing in this Agreement
shall be construed to give a Holder any rights as a holder of shares of Common
Stock until such time, if any, as the Investor Warrants evidenced by its Warrant
Certificate are exercised in accordance with the provisions hereof.

Section 13. Warrant Agent.

(a) Reliance on Company Statement. Whenever in the performance of its duties
under this Agreement, the Warrant Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the Chief Executive
Officer, Chief Operating Office, Chief Financial Officer or another executive
officer of the Company and delivered to the Warrant Agent. The Warrant Agent may
rely upon such statement for any action taken or suffered in good faith by it
pursuant to the provisions of this Agreement.

(b) Compensation and Indemnity.

(i) For services rendered hereunder, the Warrant Agent shall be entitled to such
compensation as shall be agreed to in writing between the Company and the
Warrant Agent and the Company promises to pay such compensation and to reimburse
the Warrant Agent for the out-of-pocket expenses (including attorneys’ and other
professionals’ fees and expenses) incurred by it in connection with the services
rendered by it hereunder. The provisions of this paragraph shall survive the
termination of this Agreement and the resignation or removal of the Warrant
Agent.

 

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(ii) The Company agrees to indemnify the Warrant Agent and its Affiliates and
their respective employees, officers or directors for, and to hold it harmless
against, any and all loss, liability, damage, claim, cost or expense, including
reasonable attorneys’ fees and expenses (including the reasonable costs and
expenses of defending against any claim of liability, regardless of who asserts
such claim), incurred by the Warrant Agent that arises out of or in connection
with its accepting appointment as, or acting as, Warrant Agent hereunder, except
such losses, liabilities, damages, claims, costs or expenses as may result from
the gross negligence or willful misconduct of, or breach of this Agreement by,
the Warrant Agent, its Affiliates or any of its or their officers, directors,
employees, managers, agents and advisors (including without limitation persons
retained by the Warrant Agent to provide services hereunder as set forth in
Section 13(q)) (as determined by a court of competent jurisdiction in a final
and non-appealable judgment). The Warrant Agent shall incur no liability and
shall be indemnified and held harmless by the Company for, or in respect of, any
actions taken, omitted to be taken or suffered to be taken in good faith by the
Warrant Agent in reliance upon any signature, endorsement, assignment,
certificate, order, request, notice, instruction or other instrument or document
believed by the Warrant Agent to be valid, genuine and sufficient and in
effecting any exercise or transfer of an Investor Warrant believed by it in good
faith to be authorized, and in delaying or refusing in good faith to effect any
exercise or transfer of an Investor Warrant. The Warrant Agent shall notify the
Company, by letter or facsimile transmission, of a claim against the Warrant
Agent or of any action commenced against the Warrant Agent, promptly after the
Warrant Agent shall have received written notice thereof (to the extent not
prohibited by applicable law). The failure of the Warrant Agent to so notify the
Company shall not in any way relieve the Company of its obligations pursuant to
this Section 13(b) except to the extent that the Company is prejudiced by such
failure or delay. The Company shall be entitled to participate at its own
expense in the defense of any such claim or other action and, if the Company so
elects, the Company shall assume the defense of any suit brought to enforce any
such claim. In the event that the Company shall assume the defense of any such
suit, the Company shall not be liable for the fees and expenses incurred
thereafter of any counsel retained by the Warrant Agent, so long as the Company
shall retain counsel reasonably satisfactory to the Warrant Agent (it being
understood that it would be unreasonable for Parent to withhold approval for
Akin Gump Strauss Hauer & Feld LLP to serve as such counsel); provided that the
Company shall not be entitled to assume the defense of any such action if the
named parties to such action include both the Warrant Agent and the Company and
representation of both parties by the same legal counsel would, in the written
opinion of the Warrant Agent’s counsel, be inappropriate due to actual or
potential conflicting interests between the Warrant Agent and the Company. The
provisions of this paragraph shall survive the termination of this Agreement and
the resignation or removal of the Warrant Agent.

 

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(c) Exclusions. The Warrant Agent shall have no responsibility with respect to
the validity of this Agreement or with respect to the validity or execution of
any Warrant Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Warrant Certificate; nor shall it be responsible to
make any adjustments required under the provisions of Section 4 hereof (other
than in reliance upon and as directed by requests by the Company to make such
adjustments) or responsible for the manner, method, or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Investor Warrant
or as to whether any shares of Common Stock will when issued be valid and fully
paid and nonassessable.

(d) Acceptance of Agency. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Investor Warrants exercised and concurrently account
for, and pay to the Company, all moneys received by the Warrant Agent for the
purchase of shares of the Company’s Common Stock through the exercise of
Investor Warrants.

(e) Payment of Taxes. The Company shall from time to time promptly pay all taxes
and charges that may be imposed upon the Company or the Warrant Agent in respect
of the issuance or delivery of shares of Common Stock upon the exercise of
Investor Warrants, but the Company shall not be obligated to pay any transfer
taxes in respect of the Investor Warrants or such shares.

(f) Appointment of Successor Warrant Agent. The Warrant Agent, or any successor
to it hereafter appointed, may resign its duties and be discharged from all
further duties and liabilities hereunder after giving 60 days’ notice in writing
to the Company. If the office of the Warrant Agent becomes vacant by resignation
or incapacity to act or otherwise, the Company shall appoint in writing a
successor Warrant Agent in place of the Warrant Agent. If the Company shall fail
to make such appointment within a period of 30 days after it has been notified
in writing of such resignation or incapacity by the Warrant Agent or by the
Holder of an Investor Warrant (who shall, with such notice, submit his, her, or
its Investor Warrant for inspection by the Company or such other evidence
reasonably satisfactory to the Company), then the Company may serve as the
Warrant Agent. If the Company does not agree to serve as the Warrant Agent
within 10 days after such 30 day period, then the Holder of any Investor Warrant
may apply to the Supreme Court of the State of New York for the County of New
York for the appointment of a successor Warrant Agent at the Company’s cost.
After appointment, any successor Warrant Agent shall be vested with all the
authority, powers, rights, immunities, duties, and obligations of its
predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor

 

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Warrant Agent hereunder; and upon request of any successor Warrant Agent the
Company shall make, execute, acknowledge, and deliver any and all instruments in
writing for more fully and effectually vesting in and confirming to such
successor Warrant Agent all such authority, powers, rights, immunities, duties,
and obligations.

(g) Notice of Successor Warrant Agent. In the event a successor Warrant Agent
shall be appointed, the Company shall give written notice thereof to the
predecessor Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.

(h) Merger or Consolidation of Warrant Agent. Any corporation into which the
Warrant Agent may be merged or with which it may be consolidated or any
corporation resulting from any merger or consolidation to which the Warrant
Agent shall be a party shall be the successor Warrant Agent under this Agreement
without any further act.

(i) Further Assurances. The Company agrees to perform, execute, acknowledge, and
deliver or cause to be performed, executed, acknowledged, and delivered all such
further and other acts, instruments, and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing of the
provisions of this Agreement.

(j) The Warrant Agent shall not be liable for any act or omission by it unless
such act or omission constitutes gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
judgment); in no event shall the Warrant Agent be liable to any Holder, the
Company or any third party for special, punitive, indirect or consequential
damages, including but not limited to lost profits, irrespective of whether the
Warrant Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action arising in connection with this Agreement.

(k) The Warrant Agent shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing
between the Warrant Agent and the Company.

(l) The Warrant Agent makes no representations and has no responsibility for the
validity, sufficiency, value or genuineness of any of the Warrant Certificates
and the Warrant Agent assumes no responsibility with respect to the distribution
of the Warrant Certificates except as herein otherwise provided.

(m) The Warrant Agent shall not be obligated to take any action hereunder which
might in the Warrant Agent’s judgment involve any risk of expense, loss or
liability, unless it shall have been furnished with indemnity and/or security
reasonably satisfactory to it; provided, however, that this provision shall not
affect the power of the Warrant Agent to take such action as it may consider
proper, whether with or without any such security or indemnity.

 

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(n) The Warrant Agent may conclusively rely on and shall be protected in acting
or refraining from acting upon any statement, request, document, certificate,
agreement, opinion, notice, letter or other instrument whatsoever not only as to
its due execution and validity and effectiveness of its provisions, but also as
to the truth and accuracy of any information contained therein, which the
Warrant Agent shall in good faith reasonably believe to be genuine and to have
been signed or presented by the proper person or persons.

(o) The Warrant Agent may conclusively rely on and shall be protected in acting
or refraining from acting upon written or oral instructions from any officer of
the Company.

(p) The Warrant Agent may consult with counsel it selects, including in-house
counsel, with respect to any questions relating to its duties and
responsibilities and the advice or opinion of such counsel, or any opinion of
counsel to the Company provided to the Warrant Agent shall be full and complete
authorization and protection in respect of any reasonable action taken, suffered
or omitted to be taken by the Warrant Agent hereunder in accordance with the
advice or opinion of such counsel.

(q) The Warrant Agent may perform any duties hereunder either directly or by or
through agents and attorneys and the Warrant Agent shall not be responsible for
any misconduct or negligence (other than willful misconduct or gross negligence)
on the part of any agent or attorney appointed with due care by it hereunder.

(r) The Warrant Agent, its officers, directors, employees and shareholders may
become the owners of, or acquire any interest in, any Warrant Certificate, with
the same rights that it or they would have if it were not the Warrant Agent, and
may engage or be interested in any financial or other transaction with the
Company as freely as if it were not the Warrant Agent.

(s) The statements contained herein and in the Warrant Certificates shall be
taken as statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same except such as describe the
Warrant Agent or action taken or to be taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrant Certificates
except as herein otherwise provided.

(t) The Warrant Agent shall not at any time be under any duty or responsibility
to any holder of any Warrant Certificate to make or cause to be made any
adjustment of the Exercise Price or number of the Warrant Shares or other
securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any adjustments, or with
respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity, value or the kind or amount of any
Warrant Shares or of any securities or property which may at any time be issued
or delivered upon the exercise of any Investor Warrant or with respect to
whether any such Warrant Shares or other securities will when issued be validly
issued and fully paid and nonassessable, and makes no representation with
respect thereto.

 

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(u) Notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Warrant Agent shall have any liability to any holder of a
Warrant Certificate or other person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use commercially
reasonable efforts to have any such order, decree or ruling lifted, stayed or
otherwise overturned.

(v) In addition to the foregoing, the Warrant Agent shall be protected and shall
incur no liability for, or in respect of, any action taken or omitted by it in
connection with its administration of this Agreement if such acts or omissions
are in reliance upon (i) the proper execution of the certification concerning
beneficial ownership appended to the form of assignment and the form of the
election attached hereto unless the Warrant Agent shall have actual knowledge
that, as executed, such certification is untrue, or (ii) the non-execution of
such certification including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such non-execution.

Section 14. Amendments; Waiver. Except as otherwise provided herein, this
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company, the Warrant Agent and (i) the Holders of
two-thirds of the then outstanding Investor Warrants, (ii) Elliott, and
(iii) either Metro SPV or Mudrick; provided, that (1) no amendment, waiver or
modification that would disproportionately and adversely affect any Holder in
any material respect as compared to other Holders shall be effective against
such Holder without the written consent of such Holder, and (2) Section 9(e)(ii)
may not be waived, modified or amended without the consent of such persons that
would be required to waive, modify or amend such transfer restrictions set forth
in the Stockholders Agreement. Notwithstanding the foregoing, this Agreement may
be amended without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein to the extent such amendments do not adversely affect the
interest of any Holder. No provision hereunder may be waived other than in a
written instrument executed by the waiving party; provided, however, that the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall have obtained the written
consent of those Holders of Investor Warrants whose consent would have been
required to amend this Agreement to strike such prohibition on, or obligation
of, the Company from this Agreement. For the avoidance of doubt, with respect to
this Section 14, each stockholder that is party to the Stockholders Agreement is
a third-party beneficiary to clause (2) of the proviso to the first sentence of
this Section 14 and is entitled to the rights and benefits thereunder and may
enforce the application of such proviso.

 

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Section 15. Headings. The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.

Section 16. Counterparts. This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument. This Agreement, to the extent signed and delivered by means of a
facsimile machine or electronic delivery (i.e., by email of a PDF signature
page), shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine or electronic delivery to deliver a
signature or the fact that any signature or agreement or instrument was
transmitted or communicated through the use of a facsimile machine or by
electronic delivery as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

Section 17. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future applicable laws
during the term thereof, such provision shall be fully severable, this Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Agreement, a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.

Section 18. Persons Benefitting. This Agreement shall be binding upon the
Company and the Warrant Agent and shall inure to the benefit of, and the
obligations created hereby shall be binding upon, the successors and assigns of
each of the parties hereto and nothing in this Agreement, express or implied, is
intended to or shall confer, except as otherwise provided in this Section 18,
upon any other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement. Each Holder, by acceptance of an Investor
Warrant Certificate, agrees to all of the terms and provisions of this Agreement
applicable thereto, and each such Holder shall be deemed to be a third party
beneficiary of this Agreement. The Warrant Agent may assign or transfer its
rights under this Agreement to any of its Affiliates without the prior written
consent of any party hereto, provided that the Warrant Agent shall notify the
Company in writing of such assignment or transfer promptly following the
effectiveness thereof, and such Affiliate or Affiliates, as the case may be,
shall be bound by the terms and conditions of this Agreement as if a party
hereto.

Section 19. Entire Agreement. This Agreement constitutes the entire agreement
and understanding among the parties with respect to the subject matter hereof
and supersedes all prior oral and written, and all contemporaneous oral,
agreements and understandings relating to the subject matter hereof.

 

21

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Section 20. Termination. This Agreement shall terminate upon the earlier of
(i) one day after the end of the Exercise Period or, if and to the extent
applicable, the delivery by the Company to the Holders of all shares of Common
Stock and other securities or property in respect of all Investor Warrants duly
exercised during the Exercise Period and (ii) when all Investor Warrants have
been exercised upon the delivery to the Holders of all shares of Common Stock
and other securities or property in respect of all Investor Warrants duly
exercised. Notwithstanding the foregoing, Section 13(b) shall survive the
termination of this Agreement and the resignation or removal of the Warrant
Agent.

Section 21. Notices. All notices and other communications hereunder will be in
writing and will be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile, upon written confirmation of receipt by
facsimile, e mail or otherwise (including electronic confirmation of successful
transmission generated by the facsimile machine of the sender), (b) on the first
Business Day following the date of dispatch if delivered utilizing a next-day
service by a recognized next-day courier service or (c) on the earlier of
confirmed receipt or the fifth Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices hereunder will be delivered, if to the Company or the
Warrant Agent, to the address set forth below, or if to any Holder, to the
address set forth in the Warrant Register, or in each case pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:

If to the Company:

Affinion Group Holdings, Inc.

6 High Ridge Park

Stamford, CT 06905

Phone: (203) 956-1237

Attention: Brian Fisher, Esq.

Electronic mail: bfisher@affiniongroup.com

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, NY 10036

Attention: Rosa A. Testani

Facsimile: 212-872-8115

Electronic mail: rtestani@akingump.com

If to the Warrant Agent:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn NY 11219

Attention: Relationship Management

Electronic mail: [•]

 

22

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With a copy to:

American Stock Transfer & Trust Company, LLC

48 Wall Street, 22nd Floor

New York, NY 10005

Attention: Legal Department

Email: legalteamAST@astfinancial.com

Section 22. Force Majeure. In no event shall the Warrant Agent be responsible or
liable for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Warrant Agent shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

Section 23. Patriot Act. The parties hereto acknowledge that in accordance with
Section 326 of the U.S.A. Patriot Act, the Warrant Agent, like all financial
institutions and in order to help fight the funding of terrorism and money
laundering, is required to obtain, verify, and record information that
identifies each person or legal entity that establishes a relationship or opens
an account with the Warrant Agent. The parties to this Agreement agree that they
will provide the Warrant Agent with such information as it may reasonably
request in order for the Warrant Agent to satisfy the requirements of the U.S.A.
Patriot Act.

Section 24. Notice to Holders of Investor Warrants.

(a) The Company shall give prompt written notice (and in any event, no later
than two (2) Business Days) to the Holders upon receipt of notice from a
Tag-Along Seller (as defined in the Shareholders Agreement) of such Tag-Along
Seller’s intention to consummate a Transfer (as defined in the Shareholders
Agreement) pursuant to Section 4.3(b) of the Shareholders Agreement.

(b) For the avoidance of doubt, any Holder that elects to exercise, in
accordance with Section 3, all or any portion of its Investor Warrants in
connection with any of the events requiring notice pursuant to this Section 24
may condition such exercise upon the actual taking of the vote or consummation
of the transaction, as applicable. To the extent a Holder elects to exercise all
or any portion of its Investor Warrants pursuant to this Section 24, the Company
will provide such Holder with the opportunity to execute a joinder to the
Stockholders Agreement.

Section 25. Definitions. For the purposes of this Warrant Certificate, the
following terms shall have the meanings indicated below:

“Affiliate” means with respect to any specified Person, any other Person
directly or indirectly Controlling, Controlled by or under direct or indirect
common Control with such specified Person.

 

23

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“Agreement” has the meaning given it in the Preamble.

“Board” means the board of directors of the Company.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law or executive
order to close.

“Cashless Exercise” has the meaning given it in Section 3.

“Common Stock” has the meaning given it in the Recitals.

“Company” has the meaning given it in the Preamble.

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and the policies of a Person (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise), and the terms “Controlled by” and “Controlling” shall
have correlative meanings.

“Derivative Security” means any right, option, warrant or other security
convertible into or exercisable for Common Stock.

“Domestic Restricted Warrant” means an Investor Warrant issued in reliance on
Regulation D or Section 4(a)(2) of the Securities Act.

“Elliott” means [ ].

“Equity Incentive Plans” means any equity incentive plans for officers,
employees or directors of the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated from time to time thereunder.

“Exercise Notice” has the meaning given it in Section 3(a).

“Exercise Price” is equal to $[ ]1 per share.

“Exercise Period” means, with respect to any Investor Warrant, on any Business
Day after the date hereof and on or before the Expiration Date.

“Expiration Date” means the earlier to occur of (i) 5:00 p.m., New York City
time, on [April] [    ], 2024, (ii) five Business Days following notice that a
Sale of the Company had occurred, if the Holder has not received at least five
Business Days’ prior notice thereof or (iii) upon the consummation of a Sale of
the Company if the Holder has received at least five Business Days’ prior notice
thereof.

 

1 

NTD: Struck at a $1.75 billion valuation.

 

24

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“Fair Market Value” means the amount which a willing buyer, under no compulsion
to buy, would pay a willing seller, under no compulsion to sell, in an
arm’s-length transaction but in all events without application of any minority,
illiquidity, transfer or voting restriction, or similar discounts or reductions.

“FCA” means the U.K. Financial Conduct Authority.

“Governmental Entity” means any U.S. or non-U.S. federal, national,
supranational, state, provincial, local or similar government, governmental,
regulatory or administrative authority, branch, agency or commission or any
court, tribunal, or arbitral or judicial body.

“Holder” has the meaning given it in Section 2(c)(ii).

“Investor Warrant” means an Investor Warrant in substantially the form attached
as Exhibit A hereto.

“Issue Date” means April [ ], 2019.

“Law” means any statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or order of any Governmental Entity.

“Market Price” per share of Common Stock means, on any date specified herein:
(a) if the Common Stock is then listed or admitted to trading on any national
securities exchange, the average of the high and low trading prices of the
Common Stock on such date; (b) if the Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security, the average of the high and low sale prices of
the Common Stock on such date; (c) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the reported
high bid and low asked price of the Common Stock on such date as shown by NASDAQ
or reported by any member firm of the NYSE selected by the Company; or (d) if
neither (a), (b) nor (c) is applicable, the Fair Market Value per share
determined in good faith by the Board.

“Metro SPV” means Metro SPV LLC.

“Mudrick” means Mudrick Capital Management, L.P.

“NASDAQ” means the Nasdaq Stock Market.

“Number Issuable” with respect to an Investor Warrant has the meaning given it
in Section 4(a).

“NYSE” means the New York Stock Exchange, Inc.

“Person” means any individual, corporation, limited liability company,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.

 

25

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“Regulation D” means Regulation D promulgated under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Warrant” means an Investor Warrant issued pursuant to Regulation
S.

“Required Consents” means the material filings, registrations, notifications,
approvals, waivers or expiration or termination of any waiting periods that are
necessary or required, as set forth in Section 9(b).

“Sale of the Company” means a transaction or series of related transactions
pursuant to which (i) a person or group (as such terms are used and defined in
Rule 13d-3 promulgated under the Exchange Act) (other than a Subsidiary of the
Company) acquires or otherwise becomes the beneficial owner of more than 50% of
the Company’s issued and outstanding Common Stock or (ii) the Company
consummates the sale of all or substantially all of its assets, on a
consolidated basis to any Person (other than a Subsidiary of the Company).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated from time to time thereunder.

“Stockholders Agreement” means that certain Stockholders Agreement, dated as of
[April] [    ], 2019, as may be amended from time to time in accordance with its
terms, by and among the Company and the stockholders party thereto, as in effect
from time to time, and any successor agreement thereto.

“Subsidiary” means, with respect to any Person (herein referred to as the
“parent”) (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.

“Transaction” has the meaning given it in Section 4(c).

“Transfer” means any voluntary or involuntary attempt to, directly or indirectly
through the transfer of interests in controlled Affiliates or otherwise, sell,
assign, transfer, grant a participation in, pledge or otherwise dispose of any
Investor Warrants, or the consummation of any such transaction, or taking a
pledge of, any of the Investor Warrants; provided, however, that a transaction
that is a pledge shall not be deemed to be a Transfer, but a foreclosure
pursuant thereto shall be deemed to be a Transfer; provided, further, that, with
respect to any widely held “investment company” as defined in the Investment
Company Act of 1940, as amended, a sale, transfer, assignment, pledge,
hypothecation, encumbrance or other disposition of ownership interests in such
investment company shall not be deemed a Transfer. The term “Transferred” shall
have a correlative meaning.

“Transfer Agent” has the meaning given it in Section 2.

 

26

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“Warrant Agent” has the meaning given it in the Preamble.

“Warrant Certificate” has the meaning given it in Section 2(a).

“Warrant Exercise Documentation” has the meaning given it in Section 3(a).

*         *         *         *         *

 

 

27

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first written above.

 

AFFINION GROUP HOLDINGS, INC. By:  

 

  Name:   Title AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Warrant Agent
By:  

 

  Name:   Title

[Signature Page to Investor Warrant Agreement]

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

Exhibit A – Form of Investor Warrant

SPECIMEN WARRANT CERTIFICATE

THIS INVESTOR WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M.

NEW YORK CITY TIME, APRIL [ ], 2029

[LEGEND TO BE INSERTED IN ACCORDANCE WITH SECTION 2]

AFFINION GROUP HOLDINGS, INC.

INVESTOR WARRANT TO PURCHASE COMMON STOCK

WARRANT NO.: A – _____                 NUMBER OF INVESTOR WARRANTS:
______________

THIS CERTIFIES THAT, for value received [•] is the registered holder of an
Investor Warrant or Investor Warrants (the “Investor Warrant”) to purchase one
fully paid and non-assessable share of Common stock, par value $0.01 per share
(“Common Stock”), of AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the
“Company”), for each Investor Warrant evidenced by this Warrant Certificate.
Subject to the conditions set forth herein and in the Investor Warrant Agreement
dated as of [April] [ ], 2019, by and between the Company and the Warrant Agent,
as in effect from time to time (the “Investor Warrant Agreement”) (including as
referenced therein the restrictions on exercise and transfer set forth in the
Company’s organizational documents), as in effect from time to time, the
Investor Warrant entitles the holder thereof to purchase from the Company, at
any time during the Exercise Period and terminating on the Expiration Date, such
number of shares of Common Stock of the Company at the price of $[    ] per
share (as may be adjusted in accordance with the terms of the Investor Warrant
Agreement) upon surrender of this Warrant Certificate and payment of the
Exercise Price at the office or agency of the Warrant Agent.

Payment of the Exercise Price may be made, at the option of the holder of the
Investor Warrant and subject to conditions set forth herein and in the Investor
Warrant Agreement, by the following methods (or any combination thereof): (1) in
cash or by wire transfer of immediately available funds; (2) by a certified or
official bank check payable to the order of the Company; or (3) by means of a
Cashless Exercise pursuant to Section 3(a)(ii) of the Investor Warrant
Agreement. In no event shall the registered holder of this Investor Warrant be
entitled to receive a net-cash settlement or other consideration in lieu of a
physical settlement in shares of Common Stock. The Investor Warrant Agreement
provides that upon the occurrence of certain events the number of shares of
Common Stock purchasable hereunder, set forth on the face hereof, may, subject
to certain conditions, be adjusted. The term “Exercise Price” as used in this
Warrant Certificate refers to the price per Share at which Shares may be
purchased at the time the Investor Warrant is exercised.

No fraction of a share of Common Stock will be issued upon any exercise of an
Investor Warrant. If, upon exercise of an Investor Warrant, a holder would be
entitled to receive a fractional interest in a share of Common Stock, the
Company shall, upon exercise, round down to the nearest whole number the number
of shares of Common Stock to be issued to the Investor Warrant holder and shall
pay a cash adjustment in respect of such fractional interest in an amount equal
to such fractional interest multiplied by the Market Price of a share of Common
Stock on the Business Day which next precedes the day of exercise.

 

1

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

Upon any exercise of the Investor Warrant for less than the total number of full
shares of Common Stock provided for herein, there shall be issued to the
registered holder hereof or his, her, or its assignee a new Warrant Certificate
bearing the same restrictive legends, if any, covering the number of shares of
Common Stock for which the Investor Warrant has not been exercised.

Warrant Certificates, when surrendered at the office or agency of the Warrant
Agent by the registered holder hereof in person or by attorney duly authorized
in writing, may be exchanged in the manner and subject to the limitations
provided in the Investor Warrant Agreement, but without payment of any service
charge, for another Warrant Certificate or Warrant Certificates of like tenor
and evidencing in the aggregate a like number of Investor Warrants.

Upon due presentment for registration of transfer of the Warrant Certificate at
the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Investor Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Investor Warrant
Agreement, without charge except for any applicable tax or other government
charge.

The Company and the Warrant Agent may deem and treat the registered holder as
the absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the registered holder, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.

Except as set forth in the Investor Warrant Agreement, this Investor Warrant
does not entitle the registered holder to any of the rights of a stockholder of
the Company.

Capitalized terms used herein but not defined shall have the meaning set forth
in the Investor Warrant Agreement.

*         *         *         *         *

 

2

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

AFFINION GROUP HOLDINGS, INC.       By:  

 

   

 

Name:  

 

    Name:   Title:  

 

             Title:  

 

 

DATED:       Countersigned                AMERICAN STOCK TRANSFER & TRUST
COMPANY, LLC, as Warrant Agent By:  

 

        Authorized Signatory      

[Signature Page to Investor Warrant of Affinion Group Holdings, Inc.]

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

Exhibit B

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE INVESTOR WARRANTS

The undersigned holder hereby exercises the right to purchase
                        shares of common stock, par value $0.01 per share
(“Warrant Shares”), of AFFINION GROUP HOLDINGS, INC., a Delaware corporation
(the “Company”), evidenced by the attached Warrant Certificate (the “Investor
Warrant”). Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Investor Warrant Agreement (the “Agreement”),
dated as of [April] [ ], 2019, by and between the Company and American Stock
Transfer & Trust Company, LLC, as Warrant Agent, as in effect from time to time.

 

  1.

Payment of Exercise Price (check applicable box).

[ ] payment in the sum of $                 [is enclosed] [has been wire
transferred to the Company at the following account:                 ] in
accordance with the terms of the Investor Warrant.

[ ] Holder hereby elects to make the payment for the Warrant Shares in
accordance with Section 3(a)(ii) of the Agreement.

 

  2.

Confirmation. The undersigned hereby represents and warrants that the Required
Consents have been made or obtained, as applicable.

 

  3.

Delivery of Warrant Shares. The Company shall deliver the Warrant Shares in the
name of the undersigned or in such other name as is specified below in
accordance with Section 3(b) of the Agreement at the following address:

 

 

(PLEASE TYPE OR PRINT NAME AND ADDRESS)

 

 

 

(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER) and be delivered to
                                         
                                         
                                         
                                         
                                        

and, if such number of Investor Warrants shall not be all the Investor Warrants
evidenced by this Warrant Certificate, that a new Warrant Certificate bearing
the same restrictive legends, if any, for the balance of such Investor Warrants
be registered in the name of, and delivered to, the registered holder at the
address stated below its signature.

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

  4.

Representations and Warranties.

(i) If the Investor Warrant is a Domestic Restricted Warrant (or any other
Investor Warrant that is not a Regulation S Warrant) the undersigned hereby
certifies:

[CHECK A OR B, AS APPLICABLE]

☐ A. that it is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended;

[OR]

☐ B. enclosed herewith is an opinion of counsel to the effect that the
Regulation S Warrant and the securities delivered upon exercise thereof either
(i) have been registered under the Securities Act or (ii) are exempt from
registration thereunder.

(ii) If the Investor Warrant is a Regulation S Warrant, the undersigned hereby
certifies:

[CHECK A OR B, AS APPLICABLE]

☐ A. that it is not a U.S. person (as defined in Regulation S) or purchasing for
the account or benefit of a U.S. person, other than a distributor, and it is
purchasing the Warrant Shares in an offshore transaction in accordance with
Regulation S;

[OR]

☐ B. enclosed herewith is an opinion of counsel to the effect that the
Regulation S Warrant and the securities delivered upon exercise thereof either
(i) have been registered under the Securities Act or (ii) are exempt from
registration thereunder.

*         *         *         *         *

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

Dated:  

 

   

 

      (SIGNATURE)      

 

      (ADDRESS)      

 

     

 

               (TAX IDENTIFICATION NUMBER)

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

ACKNOWLEDGMENT

The Company hereby acknowledges receipt of this Exercise Notice and hereby
undertakes, in accordance with Section 3(b) of the Agreement, to issue the above
indicated number of shares of Common Stock upon satisfactory receipt of the
Warrant Exercise Documentation and the restrictions on exercise and transfer set
forth in the Agreement (including as referenced therein the restrictions on
exercise and transfer set forth in the Agreement and in the Company’s
organizational documents), in the name and to the address set forth above by the
exercising holder.

 

AFFINION GROUP HOLDINGS, INC. By:  

 

  Name:   Title:

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

Exhibit C

ASSIGNMENT

To be Executed by the Registered Holder in Order to Assign Investor Warrants

For Value Received,                                          
                                                 hereby sells, assigns and
transfers unto

 

 

(PLEASE TYPE OR PRINT NAME AND ADDRESS)

 

 

 

 

(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

and be delivered to

 

(PLEASE PRINT OR TYPE NAME AND ADDRESS)

                                                                              
of the Investor Warrants represented by this Warrant Certificate and does hereby
irrevocably constitute and appoint                                          
                Attorney to transfer this Warrant Certificate on the books of
the Company, with full power of substitution in the premises.

By signing below, the transferring holder hereby represents and warrants to the
Company that such holder is making this transfer in accordance with, and subject
to the terms, conditions and restrictions set forth in, the Agreement and the
Company’s organizational documents (collectively, the “Transfer Restrictions”).

Without limiting the Transfer Restrictions, if the transferring holder is
seeking to transfer all or any portion of a Regulation S Warrant:

[CHECK A, B OR C, AS APPLICABLE]

 

☐

A. such transferring holder hereby certifies as follows:

 

  1.

The offer and sale of the Investor Warrants was not and will not be made to a
person in the United States (unless such person is excluded from the definition
of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by it for
which it is acting is excluded from the definition of “U.S. person” pursuant to
Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such
offer and sale was not and will not be specifically targeted at an identifiable
group of U.S. citizens abroad.

 

  2.

Unless the circumstances described in the parenthetical in paragraph 1 above are
applicable, either (a) at the time the buy order was originated, the buyer was
outside the United States or we and any person acting on our behalf reasonably
believed that the buyer was outside the United States or (b) the transaction was
executed in, on or through the facilities of a designated offshore securities
market, and neither we nor any person acting on our behalf knows that the
transaction was pre-arranged with a buyer in the United States.

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

  3.

Neither we, any of our affiliates, nor any person acting on our or their behalf
has made any directed selling efforts in the United States with respect to the
Investor Warrants.

 

  4.

The proposed transfer of Investor Warrants is not part of a plan or scheme to
evade the registration requirements of the Securities Act.

 

  5.

If we are a dealer or a person receiving a selling concession, fee or other
remuneration in respect of the Investor Warrants, and the proposed transfer
takes place during the one-year distribution compliance period (as defined in
Rule 902(f) of Regulation S), or we are an officer or director of the Company,
we certify that the proposed transfer is being made in accordance with the
provisions of Rule 904(b) of Regulation S.

[OR]

☐ B. such transferring holder hereby certifies that the transferee is an
“accredited investor” (as such term is defined under Rule 501(a) of Regulation D
under the Securities Act) and the transfer will be exempt from registration
under applicable federal, State and foreign securities law.

[OR]

☐ C. enclosed herewith is an opinion of counsel to the effect that either
(i) the Investor Warrant has been registered under the Securities Act or
(ii) the proposed transfer is exempt from registration thereunder.

Notwithstanding the foregoing certification, in accordance with Section 9(a) of
the Agreement, prior to permitting or giving effect to the transfer, the Company
may require the transferring parties to furnish an opinion of legal counsel,
reasonably satisfactory to the Company, to the effect that the sale or transfer
is exempt from the registration requirements of the Securities Act and
applicable U.S. state or foreign securities law and indicating whether the new
Warrant Certificates must bear a restrictive legend.

Furthermore, by signing below, the transferring holder hereby agrees and
acknowledges that no sale, assignment or transfer of the Investor Warrants shall
be effective except to the extent such sale, assignment or transfer complies
fully with the Transfer Restrictions.

 

Dated:   

 

     

 

         (SIGNATURE)

THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME WRITTEN UPON THE
FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM PURSUANT TO S.E.C. RULE 17 Ad – 15).

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

Appendix I

Holder’s Contact Information

 

Name:                                                   Address:
                                                                  City, State,
Zip:                                                       Telephone Number:
                                                Facsimile Number:
                                                 E-mail Address:
                                                     

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

Annex D-2

Form of New Penny Warrants Agreement

[See Attached]

 

Annex D-1

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

Final Form

WARRANT AGREEMENT

This WARRANT AGREEMENT (this “Agreement”) is made as of April [•], 2019, by and
between AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the “Company”),
and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability
trust company (the “Warrant Agent”). Capitalized terms used herein but not
otherwise defined shall have the meanings given them in Section 25 hereof.

RECITALS

WHEREAS, the Company proposes to issue Warrants (the “Warrants”) to purchase
shares of Common Stock, par value $0.01 per share, of the Company (“Common
Stock”) to certain investors (i) who participate in an exchange offer for
Affinion Group, Inc.’s currently outstanding 12.5%/PIK Step-Up to 15.5% Notes
due 2022 (the “Existing Notes”) being consummated on or about the date hereof
(the “Exchange Offer”), (ii) pursuant to that certain Investor Purchase
Agreement, dated as of February [28], 2019, by and among the Company and the
investors party thereto (the “Investor Purchase Agreement”) or (iii) that
exercise pre-emptive rights with respect to the proposed issuance of equity in
the Exchange Offer or pursuant to the Investor Purchase Agreement (collectively,
the “Initial Warrant Issuance”), in each case if and to the extent the issuance
of common stock in the Company to such investors would require the consent of,
or notice to, a governmental authority and such consent has not been obtained or
notice has not been given;

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, exercise and cancellation of the Warrants; and

WHEREAS, the Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the Holders (as defined below).

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

Section 1. Appointment of the Warrant Agent. The Company hereby appoints the
Warrant Agent to act as an agent for the Company for the Warrants, and the
Warrant Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth herein.

Section 2. Warrants.

(a) Form of Warrant.

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(i) Each Warrant shall be issued in certificated form only in substantially the
form attached as Exhibit A hereto, the provisions of which are incorporated
herein, and shall be dated the date on which countersigned by the Warrant Agent,
shall have such insertions as are appropriate or required or permitted by this
Agreement and may have such letters, numbers or other marks of identification
and such legends and endorsements typed, stamped, printed, lithographed or
engraved thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant thereto or with any
rule or regulation of any securities exchange on which the Warrants may be
listed, or to conform to usage. In the event a Person whose facsimile signature
has been placed upon any Warrant shall have ceased to serve in the capacity in
which such Person signed the Warrant before such Warrant is issued, it may be
issued with the same effect as if he or she had not ceased to be such at the
date of issuance.

(ii) Pending the preparation of definitive certificates representing the
Warrants (“Warrant Certificates”), temporary Warrant Certificates may be issued,
which may be printed, lithographed, typewritten, mimeographed or otherwise
produced, and which will be substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued.

If temporary Warrant Certificates are issued, the Company will cause definitive
Warrant Certificates to be prepared without unreasonable delay. After the
preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates
evidencing Warrants of the same number and tenor upon surrender by the Holder of
the temporary Warrant Certificates to the Warrant Agent at the office of the
Warrant Agent, without charge to such Holder. Upon surrender for cancellation of
any one or more temporary Warrant Certificates, the Company shall execute and
the Warrant Agent shall countersign and deliver in exchange therefor Warrant
Certificates of the same tenor and for a like aggregate number of Warrants.
Until so exchanged, the temporary Warrant Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Warrant
Certificates.

(iii) Each Warrant Certificate representing Domestic Restricted Warrants shall
bear legends in substantially the following form:

“THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE ARE SUBJECT TO
THE PROVISIONS OF A WARRANT AGREEMENT, DATED AS OF [APRIL] [ ], 2019, THE
STOCKHOLDERS AGREEMENT, DATED AS OF [APRIL] [ ], 2019, AS AMENDED, AND THE
CERTIFICATE OF INCORPORATION AND BY-LAWS OF AFFINION GROUP HOLDINGS, INC. (THE
“COMPANY”), EACH AS MAY BE AMENDED FROM TIME TO TIME, INCLUDING CERTAIN
RESTRICTIONS ON TRANSFER AND EXERCISE SET FORTH THEREIN. COPIES OF THE WARRANT
AGREEMENT, THE STOCKHOLDERS AGREEMENT, AND THE CERTIFICATE OF INCORPORATION AND
BY-LAWS ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

 

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THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE ARE NOT AND WILL
NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “1933 ACT”), OR UNDER ANY U.S. STATE OR FOREIGN SECURITIES LAWS, IN
RELIANCE UPON APPLICABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND SUCH STATE AND FOREIGN SECURITIES LAWS. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE IN CONTRAVENTION OF THE 1933 ACT OR ANY U.S. STATE OR
FOREIGN SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
(INCLUDING THE SECURITIES TO BE ISSUED UPON THE EXERCISE OF THIS WARRANT) MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
1933 ACT AND ANY APPLICABLE U.S. STATE OR FOREIGN SECURITIES LAWS, OR A
CERTIFICATE EXECUTED BY AN AUTHORIZED OFFICER OF THE TRANSFEREE ACCEPTABLE TO
THE COMPANY CERTIFYING THAT NO SUCH REGISTRATION IS REQUIRED.”

(iv) Each Warrant Certificate representing Regulation S Warrants shall bear
legends in substantially the following form:

“THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE ARE SUBJECT TO
THE PROVISIONS OF A WARRANT AGREEMENT, DATED AS OF [APRIL] [ ], 2019, THE
STOCKHOLDERS AGREEMENT, DATED AS OF [APRIL] [ ], 2019, AS AMENDED, AND THE
CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE COMPANY, EACH AS MAY BE AMENDED
FROM TIME TO TIME, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER AND EXERCISE SET
FORTH THEREIN. COPIES OF THE WARRANT AGREEMENT, STOCKHOLDERS AGREEMENT, AND THE
CERTIFICATE OF INCORPORATION AND BY-LAWS ARE ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE COMPANY.

THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”) AND HAVE INSTEAD BEEN ISSUED IN RELIANCE ON REGULATION S PROMULGATED UNDER
THE 1933 ACT. AS A RESULT, THE SECURITIES REPRESENTED BY THIS CERTIFICATE
(INCLUDING THE SECURITIES TO BE ISSUED UPON THE EXERCISE OF THIS WARRANT) MAY
NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE 1933 ACT, OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION. ANY HEDGING TRANSACTIONS INVOLVING
THIS WARRANT OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE

 

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WITH THE 1933 ACT. THE COMPANY WILL NOT REGISTER ANY TRANSFER OF THIS WARRANT OR
THE SECURITIES TO BE ISSUED UPON ITS EXERCISE NOT MADE IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE COMPANY MAY REQUIRE A
CERTIFICATE EXECUTED BY AN AUTHORIZED OFFICER OF THE TRANSFEREE IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY CERTIFYING THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE 1933 ACT.”

(v) Each of the certificates representing the shares issued upon the exercise of
a Domestic Restricted Warrant shall bear legends in substantially the following
form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
THE STOCKHOLDERS AGREEMENT OF AFFINION GROUP HOLDINGS, INC. (THE “COMPANY”),
DATED AS OF [APRIL] [ ], 2019, AS AMENDED, AND THE CERTIFICATE OF INCORPORATION
AND BY-LAWS OF THE COMPANY, EACH AS MAY BE AMENDED FROM TIME TO TIME, INCLUDING
CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. COPIES OF THE STOCKHOLDERS
AGREEMENT AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS ARE ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER ANY
U.S. STATE OR FOREIGN SECURITIES LAWS, IN RELIANCE UPON APPLICABLE EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND SUCH STATE AND FOREIGN
SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE IN CONTRAVENTION OF THE 1933 ACT OR ANY U.S.
STATE OR FOREIGN SECURITIES LAWS. THE SHARES MAY NOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE
U.S. STATE OR FOREIGN SECURITIES LAWS, OR A CERTIFICATE EXECUTED BY AN
AUTHORIZED OFFICER OF THE TRANSFEREE ACCEPTABLE TO THE COMPANY CERTIFYING THAT
NO SUCH REGISTRATION IS REQUIRED.”

(vi) Each of the certificates representing shares issued upon the exercise of a
Regulation S Warrant shall bear legends in substantially the following form:

 

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
THE STOCKHOLDERS AGREEMENT OF AFFINION GROUP HOLDINGS, INC. (THE “COMPANY”),
DATED AS OF [APRIL] [ ], 2019, AS AMENDED, AND THE CERTIFICATE OF INCORPORATION
AND BY-LAWS OF THE COMPANY, EACH AS MAY BE AMENDED FROM TIME TO TIME, INCLUDING
CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. COPIES OF THE STOCKHOLDERS
AGREEMENT AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS ARE ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND HAVE INSTEAD BEEN
ISSUED IN RELIANCE ON REGULATION S PROMULGATED UNDER THE 1933 ACT. AS A RESULT,
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES ACT,
PURSUANT TO REGISTRATION UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION. ANY HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.
THE COMPANY WILL NOT REGISTER ANY TRANSFER OF THESE SECURITIES NOT MADE IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER
THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE
COMPANY MAY REQUIRE A CERTIFICATE EXECUTED BY AN AUTHORIZED OFFICER OF THE
TRANSFEREE IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY CERTIFYING THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE 1933 ACT.”

(vii) Subject to the terms hereof, including without limitation, if applicable,
the restrictions on exercise under securities law, this Agreement, the
Stockholders Agreement and the Company’s Certificate of Incorporation and
by-laws, each Warrant shall be exercisable for the number of shares of Common
Stock set forth thereon as the same may be adjusted from time to time as set
forth herein.

(b) Execution and Delivery of Warrant Certificates(c) .

(i) At any time and from time to time on or after the date of this Agreement,
Warrant Certificates evidencing the Warrants may be executed by the Company and
delivered to the Warrant Agent for countersignature, and the Warrant Agent
shall, when, as and if directed by the Company in writing, countersign and
deliver such Warrant Certificates to the respective Persons entitled thereto, as
specified by the Company. The Warrant Agent is further hereby authorized to
countersign and deliver Warrant Certificates as required by this Section 2(b),
Section 2(c), Section 3(b)(iii), Section 4(a), Section 9(a), Section 10.

 

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(ii) The Warrant Certificates shall be executed in the corporate name and on
behalf of the Company by any of the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer or any one of the Executive Vice
Presidents, Senior Vice Presidents or Vice Presidents of the Company, either
manually or by facsimile signature printed thereon. The Warrant Certificates
shall be countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such person had not ceased to be such
officer of the Company, and any Warrant Certificate may be signed on behalf of
the Company by such person as, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company, although at the
date of the execution of this Agreement any such person was not such officer.

(c) Register; Registered Holder.

(i) Warrant Register. The Warrant Agent shall maintain books (the “Warrant
Register”) for the registration of original issuance and the registration of
transfer of the Warrants in accordance with the restrictions on transfer set
forth herein. Upon the initial issuance of any Warrants, the Warrant Agent shall
issue and register the Warrants in the names of the respective Holders thereof
in such denominations and otherwise in accordance with instructions delivered to
the Warrant Agent by the Company.

(ii) Registered Holder. The term “Holder” shall mean any Person in whose name
ownership in the Warrants shall be registered upon the Warrant Register. Prior
to due presentment for registration or transfer of any Warrant, the Company and
the Warrant Agent may deem and treat the Holder as the absolute owner of such
Warrant and of each Warrant (notwithstanding any notation of ownership or other
writing on a Warrant Certificate made by anyone other than the Company or the
Warrant Agent), for the purpose of any exercise thereof, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.

Section 3. Exercise of Warrant.

(a) Subject to this Section 3, Section 9 and securities law, each Warrant, when
countersigned by the Warrant Agent, may be exercised, in whole or in part, by
the Holder thereof during the Exercise Period applicable to such Warrant. Any
exercise of a Warrant shall be effected by:

 

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(i) delivery to the Warrant Agent at the office of Warrant Agent, or, if
applicable, at the office of its successor as Warrant Agent, of: (A) the Warrant
Certificate evidencing the Warrant, (B) a written notice in the form attached as
Exhibit B hereto (the “Exercise Notice”), properly completed and executed,
stating that such Holder elects to exercise the Warrants in accordance with the
provisions of this Section 3, specifying the name or names in which such Holder
wishes the certificate or certificates for shares of Common Stock to be issued
and making the appropriate securities law representation contained therein,
(B) to the extent the Stockholders Agreement is still in effect at the time of
exercise, a joinder to the Stockholders Agreement, in form and substance
reasonably acceptable to the Company and (C) to the extent the Restated
Registration Rights Agreement dated as of [April] [ ], 2019 as may be amended
from time to time (the “Registration Rights Agreement”) is still in effect at
the time of exercise, a joinder to the Registration Rights Agreement, in form
and substance reasonably acceptable to the Company; and

(ii) payment of the Exercise Price for the shares of Common Stock issuable upon
exercise of such Warrants. Such Exercise Price shall be payable (A) by wire
transfer of immediately available funds to the account of the Company, (B) by a
certified or official bank check payable to the order of the Company or (C) by
the surrender (which surrender shall be evidenced by cancellation of the number
of Warrants represented by any Warrant certificate presented in connection with
a Cashless Exercise (as defined below)) of a Warrant or Warrants (represented by
one or more relevant Warrant certificates), and without the payment of the
Exercise Price in cash, in return for the delivery to the surrendering Holder of
that number of shares of Common Stock equal to (I) the number shares of Common
Stock for which such Warrant is exercisable as of the date of exercise (if the
Exercise Price were being paid in cash, wire transfer or certified or official
bank check) reduced by (II) that number of shares of Common Stock equal to the
quotient obtained by dividing (x) the aggregate Exercise Price to be paid by
(y) the Market Price of one share of Common Stock on the Business Day which next
precedes the day of exercise of the Warrant. An exercise of a Warrant in
accordance with clause (C) is herein referred to as a “Cashless Exercise.” The
documentation and consideration, if any, delivered in accordance with this
Section 3(a) are collectively referred to herein as the “Warrant Exercise
Documentation.”

(b) As promptly as practicable, and in any event within five Business Days after
receipt of the Warrant Exercise Documentation, the Company shall:

(i) deliver or cause to be delivered the certificates representing the number of
validly issued, fully paid and non-assessable shares of Common Stock properly
specified in the Warrant Exercise Documentation;

(ii) if applicable, deliver or caused to be delivered cash in lieu of any
fraction of a share of Common Stock, as hereinafter provided; and

 

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(iii) if less than the full number of Warrants evidenced by a Warrant
Certificate are being exercised, deliver or cause to be delivered (and the
Warrant Agent shall so deliver or cause to be delivered at the request of the
Company) a new Warrant Certificate(s), of like tenor, for the number of Warrants
evidenced by such Warrant Certificate, less the number of Warrants then being
exercised.

(c) An exercise shall be deemed to have been made at the close of business on
the date of delivery of the Warrant Exercise Documentation so that, to the
extent permitted by applicable law, the Person entitled to receive shares of
Common Stock upon such exercise shall be treated for all purposes as having
become the Holder of such shares of Common Stock at such time. No such surrender
shall be effective to constitute the Person entitled to receive such shares of
Common Stock as the Holder thereof while the transfer books of the Company for
Common Stock are closed for any purpose (but not for any period in excess of
five Business Days), but any such surrender of this Warrant Certificate for
exercise during any period while such books are so closed shall become effective
for exercise immediately upon the reopening of such books, as if the exercise
had been made on the date this Warrant Certificate was surrendered and for the
number of shares of Common Stock specified in the Warrant Exercise Documentation
and at the Exercise Price.

(d) The Company shall pay all expenses in connection with, and all taxes and
other governmental charges (other than income taxes of the Holder) that may be
imposed in respect of, the issue or delivery of any shares of Common Stock
issuable upon the exercise of Warrants. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Common Stock in any name
other than that of the Holder of the Warrants as recorded in the Warrant
Register.

(e) In connection with the exercise of any Warrants, no fractions of shares of
Common Stock shall be issued, but in lieu thereof the Company shall pay a cash
adjustment in respect of such fractional interest in an amount equal to such
fractional interest multiplied by the Market Price of a share of Common Stock on
the Business Day which next precedes the day of exercise. If more than one such
Warrant shall be exercised by the Holder thereof at the same time, the number of
full shares of Common Stock issuable on such exercise shall be computed on the
basis of the total number of Warrants so exercised.

Section 4. Adjustments.

(a) Adjustment of Number Issuable. The number of shares of Common Stock issuable
upon the valid exercise of a Warrant (the “Number Issuable”) shall be subject to
adjustment from time to time as follows:

(i) In case the Company shall at any time or from time to time after the Issue
Date:

(A) pay a dividend or make a distribution on the outstanding shares of Common
Stock in capital stock of the Company;

 

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(B) forward split or subdivide the outstanding shares of Common Stock into a
larger number of shares; or

(C) reverse split or combine the outstanding shares of Common Stock into a
smaller number of shares;

then, and in each such case (A) through (C), the Number Issuable in effect
immediately prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Company) so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the number of shares of Common
Stock or other securities of the Company which such Holder would have owned or
had been entitled to receive upon or by reason of any of the events described
above, had such Warrant been exercised immediately prior to the happening of
such event. An adjustment made pursuant to this Section 4(a)(i) shall become
effective retroactively (x) in the case of any such dividend or distribution,
immediately prior to the close of business on the record date for the
determination of holders of shares of Common Stock entitled to receive such
dividend or distribution, or (y) in the case of any such split, subdivision,
combination or reclassification, immediately prior to the close of business on
the date upon which such corporate action becomes effective.

(ii) In case the Company shall at any time or from time to time distribute to
holders of its Common Stock any assets (including but not limited to cash),
securities, or warrants to purchase securities (including but not limited to new
Common Stock), (the “Other Property”), then the Number Issuable after such
record or other distribution date of such distribution of Other Property shall
be determined by multiplying the Number Issuable immediately prior to such
record or distribution date by a fraction, of which the denominator shall be the
Market Price per share of Common Stock on the record or distribution date, less
the Fair Market Value of the portion of the Other Property to be distributed to
a holder of one share of Common Stock or other equity security, and the
numerator shall be such Market Price. Such adjustment shall become effective
immediately after the record or distribution date. Such adjustment shall be made
whenever the distribution date is fixed, and in the event that such distribution
is not so made, the number of shares of Common Stock purchasable hereunder shall
again be adjusted to be the number that was in effect immediately prior to the
record or distribution date. Notwithstanding the foregoing, no adjustment shall
be made pursuant to this Section 4(a)(ii) to the extent a holder of a Warrant
participates in the distribution on an as-exercised basis in accordance with
Section 7.

(iii) Notwithstanding anything to the contrary contained in this Section 4(a),
the Company shall be entitled to make such upward adjustments in the Number
Issuable, in addition to those otherwise required by this Section 4(a), as the
Board in its discretion shall determine to be advisable in order that any stock
dividend, split, subdivision or combination of shares, distribution of rights or
warrants to purchase shares, stock or securities or distribution of securities
convertible into or exchangeable for shares of Common Stock hereafter made the
Company to its stockholders shall not be taxable; provided, however, that any
such adjustment shall treat all holders of Warrants with similar protections on
an equal basis.

 

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(b) Reorganization, Reclassification. Consolidation. Merger or Sale of Assets.
In case of any capital reorganization or reclassification or other change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a split, subdivision or combination), or in case of any consolidation or merger
of the Company with or into another Person (other than a consolidation or merger
in which the Company is the resulting or surviving person and which does not
result in any reclassification or change of outstanding Common Stock), or in
case of any sale or other disposition to another Person of all or substantially
all of the assets of the Company, other than a sale/leaseback, mortgage or other
similar financing transaction (any of the foregoing, a “Transaction”), the
Company, and/or such successor or purchasing Person, as the case may be, shall
make appropriate arrangements to provide that each Holder of a Warrant
outstanding immediately prior to the consummation of the Transaction shall have
the right thereafter to receive upon the exercise of such Warrant, in lieu of
the Common Stock immediately theretofore acquirable, the kind and amount of
shares, stock or other securities (of the Company or another issuer) or property
or cash receivable upon such Transaction by a holder of the number of shares of
Common Stock for which such Warrant could have been exercised immediately prior
to such Transaction.

(c) Warrant Agent’s Disclaimer. The Warrant Agent has no duty to determine when
an adjustment under this Section 4 should be made, how it should be made or what
any such adjustment should be. The Warrant Agent makes no representation as to
the validity or value of any securities or assets issued upon the exercise of
any Warrants. The Warrant Agent shall not be responsible for the Company’s
failure to comply with this Section 4.

Section 5. No Redemptions. The Company shall not have any right to redeem any of
the Warrants evidenced hereby.

Section 6. Certain Covenants; Representations and Warranties of the Company

(a) Authorized Shares. The Company covenants and agrees that all shares of
capital stock of the Company which may be issued upon the exercise of the
Warrants will be duly authorized, validly issued and fully paid and
non-assessable upon issuance and will be free and clear of all liens and will
not be subject to any pre-emptive or similar rights. The Company shall at all
times reserve and keep available solely for issuance upon the exercise of the
Warrants, such number of its authorized but unissued shares of Common Stock as
will from time to time be sufficient to permit the exercise of all outstanding
Warrants, and shall take all action required to increase the authorized number
of shares of Common Stock if at any time there shall be insufficient authorized
but unissued shares of Common Stock to permit such reservation or to permit the
exercise of all outstanding Warrants.

 

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(b) Certificate as to Adjustments. The Company shall deliver to the Warrant
Agent and each of the Holders promptly following the consummation of any
transaction which would result in an increase or decrease in the Number Issuable
pursuant to Section 4 a notice thereof, setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Number Issuable after giving effect
to such adjustment, and shall cause a copy of such certificate to be mailed to
each of the Holders. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of such event. Within thirty days following
the occurrence of any event requiring an adjustment pursuant to Section 4, the
Company shall instruct the Warrant Agent, and in accordance with such
instructions the Warrant Agent shall issue each Holder a new Warrant Certificate
reflecting the required adjustment(s) to the Warrant, reasonably promptly (but
in any event within ten days) following, and subject only to, the permanent
surrender by the Holder of the Warrant Certificate for which such new Warrant
Certificate relates.

(c) No Impairment. The Company will not, by amendment of its charter or through
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement or the Warrants
issued hereunder, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of each Holder against impairment.
Without limiting the generality of the foregoing, the Company will (i) not
increase the par value of any shares of Common Stock obtainable upon the
exercise of a Warrant and (ii) take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon the exercise of a Warrant.

(d) Governmental Filings and Approvals.

(i) The Company hereby represents and warrants to each Holder that is a party to
the Investor Purchase Agreement that, as of the date hereof, the Company has
disclosed to such Holder the Governmental Entities (other than the FCA or with
respect to filings required under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, or with respect to filings required under the
competition laws of Germany or Turkey), whose consent (or notice to), arising
from or related to the Company’s or its subsidiaries’ operations, would
reasonably be expected to be required to be obtained or given by such Holder to
exercise the Warrants acquired in the Initial Warrant Issuance, including to the
extent reasonably required to permit such Holder to exercise its Warrants in
light of the restrictions on exercise set forth in Section 9(c), except with
respect to immaterial consents or notices.

(ii) The Company shall use commercially reasonable efforts to cooperate with any
Holder that seeks to (i) obtain governmental regulatory approvals, consents or
similar authorizations, or (ii) give notice to governmental regulators, in each
case to the extent reasonably required to permit the Holder to exercise all or
any portion of its Warrants, and shall

 

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reimburse such Holder for the filing fees, if any, associated with obtaining
such approvals or giving such consents; provided, however, that the Company
shall not be obligated under any circumstances to, among other things (1) make
any dispositions or pledges of any of its assets, (2) grant or incur any lien or
encumbrance or agree to any restriction on its business or conduct (affirmative
or negative), (3) participate in any litigation or other civil or criminal
procedure as a named plaintiff, defendant or otherwise or (4) incur any material
out-of-pocket expenses.

Section 7. Dividends. Each Holder shall be entitled to any dividend, whether
payable in cash, in kind or other property, that would be distributed to such
Holder if such Holder’s Warrants had been converted in full into Common Stock
immediately prior to the close of business on the record date for the
determination of the stockholders entitled to receive such dividend.

Section 8. Holder Not Deemed a Stockholder. Except as specifically provided for
herein (including, without limitation, Section 7), nothing contained in this
Agreement shall be construed to (a) grant any Holder any rights to vote or
receive dividends or be deemed the holder of shares of Common Stock of the
Company for any purpose, (b) confer upon any Holder any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, or (c) impose
any liabilities on a Holder to purchase any securities or as a stockholder of
the Company, whether asserted by the Company or creditors of the Company, prior
to the issuance of the underlying shares of Common Stock.

Section 9. Certain Transfer and Exercise Restrictions.

(a) Subject to Applicable Securities Laws. No Warrant shall be sold or
transferred unless either such Warrant first shall have been registered under
the Securities Act or any applicable U.S. state or foreign securities law, or
(i) upon reasonable request by the Company, the Company first shall have been
furnished with a certificate executed by an authorized officer of the transferee
in form and substance reasonably acceptable to the Company, or (ii) upon
reasonable request by the Warrant Agent, the Warrant Agent first shall have been
furnished with an opinion of legal counsel, in form and substance reasonably
acceptable to the Warrant Agent, in each case such certificate or opinion to the
effect that such sale or transfer is exempt from the registration requirements
of the Securities Act and applicable U.S. state or foreign securities law and
bears a restrictive legend, if applicable. Any transfer of a Warrant and the
rights represented by the corresponding Warrant Certificate shall be effected by
the surrender of such Warrant Certificate, along with the form of assignment
attached as Exhibit C hereto, properly completed and executed by the Holder
thereof, at the office of the Warrant Agent, together with an appropriate
investment letter, if deemed reasonably necessary by counsel to the Company, to
assure compliance with applicable securities laws. Thereupon, the Warrant Agent
shall issue in the name or names specified by the Holder thereof and, in the
event of a partial transfer, in the name of the Holder thereof, a new Warrant
Certificate or Warrant Certificates evidencing the right to purchase such number
of shares of Common Stock as shall be equal to the then applicable Number
Issuable.

 

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(b) Subject to Applicable Laws. Notwithstanding anything to the contrary, no
Warrant may be Transferred or exercised unless (i) the transferor, transferee,
exercising Holder or its designated recipient of Common Stock issuable on the
exercise of such Warrant and the Company, as applicable, have completed and
submitted all filings, registrations or other notifications to any Governmental
Entity that may be required pursuant to applicable Law in connection with such
Transfer or exercise, (ii) all necessary approvals or waivers, as the case may
be, of any Governmental Entity that may be required pursuant to applicable Law
in connection with such Transfer or exercise have been obtained, including, if
applicable, the approval or waiver, as the case may be, of the FCA and (iii) any
waiting periods required by applicable Law for the consummation of such Transfer
or Exercise have expired or been terminated. For the avoidance of doubt, a
Warrant may be exercised in part to the extent that such filing, registration,
notification, approval, waiver or expiration or termination of any waiting
period is not necessary or required.

(c) Limitation on Exercise.

(i) Notwithstanding anything to the contrary, no Warrant may be exercised in
contravention of applicable law, including without limitation, if applicable,
Section 5 of the Securities Act or any of the rules and regulations promulgated
thereunder.

(ii) Notwithstanding anything to the contrary, no Warrant may be exercised to
the extent that such exercise would result in a violation of Article IV(d) of
the Company’s Certificate of Incorporation with all references therein to the
term “Transfer” and words of similar import being read as reference to the term
“issue” and words of similar import.

(d) Regulation S Warrants.

(i) Without limiting the other restrictions set forth in this Section 9, each
Holder of a Regulation S Warrant or the securities issued upon the exercise
thereof agrees that for a period of one year from the date hereof (the
“distribution compliance period”), in the event of a Transfer of the Regulation
S Warrants or the securities issuable upon the exercise thereof, the Holder will
(A) ensure that the Transfer is not made to a U.S. person unless pursuant to an
exemption from registration under the Securities Act or such Warrant or the
securities issued upon the exercise thereof, as applicable, have been registered
under the Securities Act; (B) unless the Warrants or the securities issued upon
the exercise thereof have been registered under the Securities Act, require the
transferee to certify that it either (I) is not a U.S. person, is not acquiring
the Securities for the account or benefit of a U.S. person and is acquiring such
securities in an “offshore transaction” as defined in Regulation S, or (II) it
is acquiring the Securities in a transaction that does not require registration
under the Securities Act; (C) require that the transferee agree to resell or
otherwise Transfer the Regulation S Warrants or the securities issuable upon the
exercise thereof only in accordance with

 

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Regulation S, pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration and not to engage
in hedging transactions unless in compliance with the Securities Act and
(D) disclose that the Regulation S Warrants or the securities issuable upon the
exercise thereof have not been registered under the Securities Act and cannot be
sold in the United States or to U.S. persons absent registration under the
Securities Act or an exemption from such registration. In connection with such a
Transfer, the Company will (x) ensure that the Regulation S Warrants or the
securities issuable upon the exercise thereof bear a legend as set forth in
Section 2 hereof; (y) refuse to register any transfer of Regulation S Warrants
or the securities issuable upon the exercise thereof not made in accordance with
Regulation S, pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration; and (z) send a
confirmation to the transferee stating that the transferee is subject to the
foregoing restrictions on Transfers.

(ii) Without limiting the other restrictions set forth in this Section 9, each
Holder of a Regulation S Warrant or the securities issued upon the exercise
thereof agrees (A) it will not engage in hedging transactions unless in
compliance with the Securities Act and (B) any Transfer of Regulation S Warrants
or the securities issued upon the exercise thereof will be made only in
accordance with the provisions of this Section 9. The Holder acknowledges that
the Company will refuse to register any Transfer not made in accordance with the
foregoing provisions.

(iii) Without limiting the other restrictions set forth in this Section 9, no
Regulation S Warrant may be exercised unless the exercising Holder shall have
delivered to the Company (1) a certification, reasonably acceptable to the
Company, that it is not a U.S. person (as defined in Regulation S) and the
Regulation S Warrant is not being exercised on behalf of a U.S. person (as
defined in Regulation S), and it is purchasing the shares of Common Stock in an
offshore transaction in accordance with Regulation S or (2) an opinion of
counsel reasonably acceptable to the Company to the effect that the Regulation S
Warrant and the securities delivered upon exercise thereof have been registered
under the Securities Act or are exempt from registration thereunder.

(e) Stockholders Agreement.

(i) So long as the Stockholders Agreement remains in effect, any Holder or its
permitted assigns that holds Warrants or receives shares of Common Stock upon
the valid exercise of a Warrant shall be subject to the Stockholders Agreement
and bound by all the terms and conditions thereof as if an original party
thereto and shall execute a joinder to the Stockholders Agreement.

 

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(ii) The Stockholders Agreement as initially adopted contains, and as any given
date prior to the expiration of the Warrants may continue to contain certain
restrictions on transfer applicable to the Warrants. By receiving a Warrant, a
Holder agrees that it and the Warrant are subject to, and bound by, the
restrictions on transfer set forth in the Stockholders Agreement.

Section 10. Replacement of Warrants. Upon receipt of evidence satisfactory to
the Company and the Warrant Agent of the loss, theft, destruction or mutilation
of a Warrant Certificate and, in the case of loss, theft or destruction, upon
delivery of an indemnity reasonably satisfactory to the Company and the Warrant
Agent, or, in the case of mutilation, upon surrender and cancellation thereof,
the Warrant Agent will issue a new warrant certificate of like tenor for a
number of Warrants equal to the number of Warrants evidenced by such Warrant
Certificate.

Section 11. Governing Law. THIS AGREEMENT AND THE WARRANTS ISSUED HEREUNDER
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

Section 12. Rights Inure to Holder. The Warrants evidenced by a Warrant
Certificate will inure to the benefit of and be binding upon the Holder thereof
and the Company and their respective successors and permitted assigns. Nothing
in this Agreement shall be construed to give to any Person other than the
Company and the Holder thereof any legal or equitable right, remedy or claim
under a Warrant Certificate, and such Warrant Certificate shall be for the sole
and exclusive benefit of the Company and such Holder. Nothing in this Agreement
shall be construed to give a Holder any rights as a holder of shares of Common
Stock until such time, if any, as the Warrants evidenced by its Warrant
Certificate are exercised in accordance with the provisions hereof.

Section 13. Warrant Agent.

(a) Reliance on Company Statement. Whenever in the performance of its duties
under this Agreement, the Warrant Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the Chief Executive
Officer, Chief Operating Office, Chief Financial Officer or another executive
officer of the Company and delivered to the Warrant Agent. The Warrant Agent may
rely upon such statement for any action taken or suffered in good faith by it
pursuant to the provisions of this Agreement.

 

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(b) Compensation and Indemnity.

(i) For services rendered hereunder, the Warrant Agent shall be entitled to such
compensation as shall be agreed to in writing between the Company and the
Warrant Agent and the Company promises to pay such compensation and to reimburse
the Warrant Agent for the out-of-pocket expenses (including attorneys’ and other
professionals’ fees and expenses) incurred by it in connection with the services
rendered by it hereunder. The provisions of this paragraph shall survive the
termination of this Agreement and the resignation or removal of the Warrant
Agent.

(ii) The Company agrees to indemnify the Warrant Agent and its Affiliates and
their respective employees, officers or directors for, and to hold it harmless
against, any and all loss, liability, damage, claim, cost or expense, including
reasonable attorneys’ fees and expenses (including the reasonable costs and
expenses of defending against any claim of liability, regardless of who asserts
such claim), incurred by the Warrant Agent that arises out of or in connection
with its accepting appointment as, or acting as, Warrant Agent hereunder, except
such losses, liabilities, damages, claims, costs or expenses as may result from
the gross negligence or willful misconduct of, or breach of this Agreement by,
the Warrant Agent, its Affiliates or any of its or their officers, directors,
employees, managers, agents and advisors (including without limitation persons
retained by the Warrant Agent to provide services hereunder as set forth in
Section 13(q)) (as determined by a court of competent jurisdiction in a final
and non-appealable judgment). The Warrant Agent shall incur no liability and
shall be indemnified and held harmless by the Company for, or in respect of, any
actions taken, omitted to be taken or suffered to be taken in good faith by the
Warrant Agent in reliance upon any signature, endorsement, assignment,
certificate, order, request, notice, instruction or other instrument or document
believed by the Warrant Agent to be valid, genuine and sufficient and in
effecting any exercise or transfer of a Warrant believed by it in good faith to
be authorized, and in delaying or refusing in good faith to effect any exercise
or transfer of a Warrant. The Warrant Agent shall notify the Company, by letter
or facsimile transmission, of a claim against the Warrant Agent or of any action
commenced against the Warrant Agent, promptly after the Warrant Agent shall have
received written notice thereof (to the extent not prohibited by applicable
law). The failure of the Warrant Agent to so notify the Company shall not in any
way relieve the Company of its obligations pursuant to this Section 13(b) except
to the extent that the Company is prejudiced by such failure or delay. The
Company shall be entitled to participate at its own expense in the defense of
any such claim or other action and, if the Company so elects, the Company shall
assume the defense of any suit brought to enforce any such claim. In the event
that the Company shall assume the defense of any such suit, the Company shall
not be liable for the fees and expenses incurred thereafter of any counsel
retained by the Warrant Agent, so long as the Company shall retain counsel
reasonably satisfactory to the Warrant Agent (it being understood that it would
be unreasonable for Parent to withhold approval for Akin Gump Strauss Hauer &
Feld LLP to serve as such counsel); provided that the Company shall not be
entitled to assume the defense of any such action if the named parties to such
action include both the Warrant Agent and the Company and representation of both
parties by the same legal counsel would, in the

 

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written opinion of the Warrant Agent’s counsel, be inappropriate due to actual
or potential conflicting interests between the Warrant Agent and the Company.
The provisions of this paragraph shall survive the termination of this Agreement
and the resignation or removal of the Warrant Agent.

(c) Exclusions. The Warrant Agent shall have no responsibility with respect to
the validity of this Agreement or with respect to the validity or execution of
any Warrant Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Warrant Certificate; nor shall it be responsible to
make any adjustments required under the provisions of Section 4 hereof (other
than in reliance upon and as directed by requests by the Company to make such
adjustments) or responsible for the manner, method, or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant or as to
whether any shares of Common Stock will when issued be valid and fully paid and
nonassessable.

(d) Acceptance of Agency. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for, and
pay to the Company, all moneys received by the Warrant Agent for the purchase of
shares of the Company’s Common Stock through the exercise of Warrants.

(e) Payment of Taxes. The Company shall from time to time promptly pay all taxes
and charges that may be imposed upon the Company or the Warrant Agent in respect
of the issuance or delivery of shares of Common Stock upon the exercise of
Warrants, but the Company shall not be obligated to pay any transfer taxes in
respect of the Warrants or such shares.

(f) Appointment of Successor Warrant Agent. The Warrant Agent, or any successor
to it hereafter appointed, may resign its duties and be discharged from all
further duties and liabilities hereunder after giving 60 days’ notice in writing
to the Company. If the office of the Warrant Agent becomes vacant by resignation
or incapacity to act or otherwise, the Company shall appoint in writing a
successor Warrant Agent in place of the Warrant Agent. If the Company shall fail
to make such appointment within a period of 30 days after it has been notified
in writing of such resignation or incapacity by the Warrant Agent or by the
Holder of a Warrant (who shall, with such notice, submit his, her, or its
Warrant for inspection by the Company or such other evidence reasonably
satisfactory to the Company), then the Company may serve as the Warrant Agent.
If the Company does not agree to serve as the Warrant Agent within 10 days after
such 30 day period, then the Holder of any Warrant may apply to the Supreme
Court of the State of New York for the County of New York for the appointment of
a successor Warrant Agent at the Company’s cost. After appointment, any
successor Warrant Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Warrant Agent with like
effect as if originally named as Warrant Agent hereunder, without

 

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any further act or deed; but if for any reason it becomes necessary or
appropriate, the predecessor Warrant Agent shall execute and deliver, at the
expense of the Company, an instrument transferring to such successor Warrant
Agent all the authority, powers, and rights of such predecessor Warrant Agent
hereunder; and upon request of any successor Warrant Agent the Company shall
make, execute, acknowledge, and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such successor Warrant
Agent all such authority, powers, rights, immunities, duties, and obligations.

(g) Notice of Successor Warrant Agent. In the event a successor Warrant Agent
shall be appointed, the Company shall give written notice thereof to the
predecessor Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.

(h) Merger or Consolidation of Warrant Agent. Any corporation into which the
Warrant Agent may be merged or with which it may be consolidated or any
corporation resulting from any merger or consolidation to which the Warrant
Agent shall be a party shall be the successor Warrant Agent under this Agreement
without any further act.

(i) Further Assurances. The Company agrees to perform, execute, acknowledge, and
deliver or cause to be performed, executed, acknowledged, and delivered all such
further and other acts, instruments, and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing of the
provisions of this Agreement.

(j) The Warrant Agent shall not be liable for any act or omission by it unless
such act or omission constitutes gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
judgment); in no event shall the Warrant Agent be liable to any Holder, the
Company or any third party for special, punitive, indirect or consequential
damages, including but not limited to lost profits, irrespective of whether the
Warrant Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action arising in connection with this Agreement.

(k) The Warrant Agent shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing
between the Warrant Agent and the Company.

(l) The Warrant Agent makes no representations and has no responsibility for the
validity, sufficiency, value or genuineness of any of the Warrant Certificates
and the Warrant Agent assumes no responsibility with respect to the distribution
of the Warrant Certificates except as herein otherwise provided.

 

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(m) The Warrant Agent shall not be obligated to take any action hereunder which
might in the Warrant Agent’s judgment involve any risk of expense, loss or
liability, unless it shall have been furnished with indemnity and/or security
reasonably satisfactory to it; provided, however, that this provision shall not
affect the power of the Warrant Agent to take such action as it may consider
proper, whether with or without any such security or indemnity.

(n) The Warrant Agent may conclusively rely on and shall be protected in acting
or refraining from acting upon any statement, request, document, certificate,
agreement, opinion, notice, letter or other instrument whatsoever not only as to
its due execution and validity and effectiveness of its provisions, but also as
to the truth and accuracy of any information contained therein, which the
Warrant Agent shall in good faith reasonably believe to be genuine and to have
been signed or presented by the proper person or persons.

(o) The Warrant Agent may conclusively rely on and shall be protected in acting
or refraining from acting upon written or oral instructions from any officer of
the Company.

(p) The Warrant Agent may consult with counsel it selects, including in-house
counsel, with respect to any questions relating to its duties and
responsibilities and the advice or opinion of such counsel, or any opinion of
counsel to the Company provided to the Warrant Agent shall be full and complete
authorization and protection in respect of any reasonable action taken, suffered
or omitted to be taken by the Warrant Agent hereunder in accordance with the
advice or opinion of such counsel.

(q) The Warrant Agent may perform any duties hereunder either directly or by or
through agents and attorneys and the Warrant Agent shall not be responsible for
any misconduct or negligence (other than willful misconduct or gross negligence)
on the part of any agent or attorney appointed with due care by it hereunder.

(r) The Warrant Agent, its officers, directors, employees and shareholders may
become the owners of, or acquire any interest in, any Warrant Certificate, with
the same rights that it or they would have if it were not the Warrant Agent, and
may engage or be interested in any financial or other transaction with the
Company as freely as if it were not the Warrant Agent.

(s) The statements contained herein and in the Warrant Certificates shall be
taken as statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same except such as describe the
Warrant Agent or action taken or to be taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrant Certificates
except as herein otherwise provided.

(t) The Warrant Agent shall not at any time be under any duty or responsibility
to any holder of any Warrant Certificate to make or cause to be made any
adjustment of the Exercise Price or number of the Warrant Shares or other
securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any adjustments, or with
respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity, value or the kind or

 

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amount of any Warrant Shares or of any securities or property which may at any
time be issued or delivered upon the exercise of any Warrant or with respect to
whether any such Warrant Shares or other securities will when issued be validly
issued and fully paid and nonassessable, and makes no representation with
respect thereto.

(u) Notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Warrant Agent shall have any liability to any holder of a
Warrant Certificate or other person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use commercially
reasonable efforts to have any such order, decree or ruling lifted, stayed or
otherwise overturned.

(v) In addition to the foregoing, the Warrant Agent shall be protected and shall
incur no liability for, or in respect of, any action taken or omitted by it in
connection with its administration of this Agreement if such acts or omissions
are in reliance upon (i) the proper execution of the certification concerning
beneficial ownership appended to the form of assignment and the form of the
election attached hereto unless the Warrant Agent shall have actual knowledge
that, as executed, such certification is untrue, or (ii) the non-execution of
such certification including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such non-execution.

Section 14. Amendments; Waiver. Except as otherwise provided herein, this
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company, the Warrant Agent and (i) the Holders of
two-thirds of the then outstanding Warrants, (ii) Elliott, and (iii) either
Metro SPV or Mudrick; provided, that (1) no amendment, waiver or modification
that would disproportionately and adversely affect any Holder in any material
respect as compared to other Holders shall be effective against such Holder
without the written consent of such Holder, and (2) Section 9(e)(ii) may not be
waived, modified or amended without the consent of such persons that would be
required to waive, modify or amend such transfer restrictions set forth in the
Stockholders Agreement. Notwithstanding the foregoing, this Agreement may be
amended without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein to the extent such amendments do not adversely affect the
interest of any Holder. No provision hereunder may be waived other than in a
written instrument executed by the waiving party; provided, however, that the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall have obtained the written
consent of those Holders of Warrants whose consent would have been required to
amend this Agreement to strike such prohibition on, or obligation of, the
Company from this agreement. For the avoidance of doubt, with respect to this
Section 14, each stockholder that is a party to the Stockholders Agreement is a
third-party beneficiary to clause (2) of the proviso to the first sentence of
this Section 14 and is entitled to the rights and benefits thereunder and may
enforce the application of such proviso.

 

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Section 15. Headings. The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.

Section 16. Counterparts. This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument. This Agreement, to the extent signed and delivered by means of a
facsimile machine or electronic delivery (i.e., by email of a PDF signature
page), shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine or electronic delivery to deliver a
signature or the fact that any signature or agreement or instrument was
transmitted or communicated through the use of a facsimile machine or by
electronic delivery as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

Section 17. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future applicable laws
during the term thereof, such provision shall be fully severable, this Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Agreement, a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.

Section 18. Persons Benefitting. This Agreement shall be binding upon the
Company and the Warrant Agent and shall inure to the benefit of, and the
obligations created hereby shall be binding upon, the successors and assigns of
each of the parties hereto and nothing in this Agreement, express or implied, is
intended to or shall confer, except as otherwise provided in this Section 18,
upon any other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement. Each Holder, by acceptance of a Warrant
Certificate, agrees to all of the terms and provisions of this Agreement
applicable thereto, and each such Holder shall be deemed to be a third party
beneficiary of this Agreement. The Warrant Agent may assign or transfer its
rights under this Agreement to any of its Affiliates without the prior written
consent of any party hereto, provided that the Warrant Agent shall notify the
Company in writing of such assignment or transfer promptly following the
effectiveness thereof, and such Affiliate or Affiliates, as the case may be,
shall be bound by the terms and conditions of this Agreement as if a party
hereto.

Section 19. Entire Agreement. This Agreement constitutes the entire agreement
and understanding among the parties with respect to the subject matter hereof
and supersedes all prior oral and written, and all contemporaneous oral,
agreements and understandings relating to the subject matter hereof.

 

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Section 20. Termination. This Agreement shall terminate upon the earlier of
(i) the delivery by the Company to the Holders of all shares of Common Stock and
other securities or property in respect of all Warrants duly exercised during
the Exercise Period and (ii) when all Warrants have been exercised upon the
delivery to the Holders of all shares of Common Stock and other securities or
property in respect of all Warrants duly exercised. Notwithstanding the
foregoing, Section 13(b) shall survive the termination of this Agreement and the
resignation or removal of the Warrant Agent.

Section 21. Notices. All notices and other communications hereunder will be in
writing and will be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile, upon written confirmation of receipt by
facsimile, e mail or otherwise (including electronic confirmation of successful
transmission generated by the facsimile machine of the sender), (b) on the first
Business Day following the date of dispatch if delivered utilizing a next-day
service by a recognized next-day courier service or (c) on the earlier of
confirmed receipt or the fifth Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices hereunder will be delivered, if to the Company or the
Warrant Agent, to the address set forth below, or if to any Holder, to the
address set forth in the Warrant Register, or in each case pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:

If to the Company:

Affinion Group Holdings, Inc.

6 High Ridge Park

Stamford, CT 06905

Phone: (203) 956-1237

Attention: Brian Fisher, Esq.

Electronic mail: bfisher@affiniongroup.com

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, NY 10036

Attention: Rosa A. Testani

Facsimile: 212-872-8115

Electronic mail: rtestani@akingump.com

If to the Warrant Agent:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn NY 11219

Attention: Relationship Management

Electronic mail: [•]

 

22

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With a copy to:

American Stock Transfer & Trust Company, LLC

48 Wall Street, 22nd Floor

New York, NY 10005

Attention: Legal Department

Email: legalteamAST@astfinancial.com

Section 22. Force Majeure. In no event shall the Warrant Agent be responsible or
liable for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Warrant Agent shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

Section 23. Patriot Act. The parties hereto acknowledge that in accordance with
Section 326 of the U.S.A. Patriot Act, the Warrant Agent, like all financial
institutions and in order to help fight the funding of terrorism and money
laundering, is required to obtain, verify, and record information that
identifies each person or legal entity that establishes a relationship or opens
an account with the Warrant Agent. The parties to this Agreement agree that they
will provide the Warrant Agent with such information as it may reasonably
request in order for the Warrant Agent to satisfy the requirements of the U.S.A.
Patriot Act.

Section 24. Notice to Holders of Warrants; Mandatory Exercise.

(a) Notwithstanding anything herein to the contrary, the Company shall give 10
Business Days’ written notice to the holders prior to the following:

(i) [the record date for determining the stockholders of the Company entitled to
vote on any of the actions that would require the consent of stockholders
pursuant to Section 2.2 of the Stockholders Agreement;]

(ii) [the record date for determining the stockholders of the Company entitled
to vote to approve any amendment to director compensation pursuant to clause
(ii) of Section 2.5 of the Stockholders Agreement;]

(iii) [the record date for determining the stockholders entitled to exercise
pre-emptive rights pursuant to Section 4.4 of the Stockholders Agreement;]

(iv) [the record date for determining the stockholders entitled to vote to
approve any amendment to the Stockholders Agreement pursuant to Section 6.11 of
the Stockholders Agreement;]

(v) [the record date for determining the stockholders entitled to any dividend,
distribution or pro rata repurchase or redemption of, or in respect of, the
Common Stock; and]

 

23

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(vi) the consummation of a Sale of the Company.

(b) The Company shall give prompt written notice (and in any event, no later
than two (2) Business Days) to the Holders upon receipt of notice from a
[Tag-Along Seller] (as defined in the Stockholders Agreement) of such Tag-Along
Seller’s intention to consummate a [Transfer] (as defined in the Stockholders
Agreement) pursuant to Section [4.3(b)] of the Stockholders Agreement.

(c) For the avoidance of doubt, any Holder that elects to exercise, in
accordance with Section 3, all or any portion of its Warrants in connection with
any of the events requiring notice pursuant to this Section 24 may condition
such exercise upon the actual taking of the vote or consummation of the
transaction, as applicable. To the extent a Holder elects to exercise all or any
portion of its Warrants pursuant to this Section 24, the Company will provide
such Holder with the opportunity to execute a joinder to the Stockholders
Agreement.

(d) The Company shall give prompt written notice to each of the Holders in the
event that, to the knowledge of the Company, Elliott has received all requisite
approvals of, and submitted all appropriate notices to, any Governmental Entity
required for Elliott to exercise its Warrants. No later than two (2) Business
Days after Elliott has received all requisite approvals of, and submitted all
appropriate notices to, any Governmental Entity required for Elliott to exercise
its Warrants:

(i) Elliott shall be deemed to have mandatorily exercised all of its Warrants,
by way of Cashless Exercise (unless Elliott shall have previously elected full
physical settlement and delivered the aggregate Exercise Price together with
such other documentation, in accordance with the requirements set forth herein,
required to effect such full physical settlement); and

(ii) Each other Holder shall be deemed to have mandatorily exercised all of its
Warrants, by way of Cashless Exercise (unless such Holder shall have previously
elected full physical settlement and delivered the aggregate Exercise Price
together with such other documentation, in accordance with the requirements set
forth herein, required to effect such full physical settlement).

Section 25. Definitions. For the purposes of this Warrant Certificate, the
following terms shall have the meanings indicated below:

“Affiliate” means with respect to any specified Person, any other Person
directly or indirectly Controlling, Controlled by or under direct or indirect
common Control with such specified Person.

“Agreement” has the meaning given it in the Preamble.

“Board” means the board of directors of the Company.

 

24

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“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law or executive
order to close.

“Cashless Exercise” has the meaning given it in Section 2.

“Common Stock” has the meaning given it in the Recitals.

“Company” has the meaning given it in the Preamble.

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and the policies of a Person (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise), and the terms “Controlled by” and “Controlling” shall
have correlative meanings.

“Derivative Security” means any right, option, warrant or other security
convertible into or exercisable for Common Stock.

“Domestic Restricted Warrant” means a Warrant issued in reliance on Regulation D
or Section 4(a)(2) of the Securities Act.

“Elliott” means [    ].

“Equity Incentive Plans” means any equity incentive plans for officers,
employees or directors of the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated from time to time thereunder.

“Exchange Offer” has the meaning given it in the Recitals.

“Exercise Notice” has the meaning given it in Section 3(a).

“Exercise Price” is equal to $0.000001 per share.

“Exercise Period” means, with respect to any Warrant, any time on or after the
Issue Date.

“Existing Notes” has the meaning given it in the Recitals.

“Fair Market Value” means the amount which a willing buyer, under no compulsion
to buy, would pay a willing seller, under no compulsion to sell, in an
arm’s-length transaction but in all events without application of any minority,
illiquidity, transfer or voting restriction, or similar discounts or reductions.

 

25

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“FCA” means the U.K. Financial Conduct Authority.

“Governmental Entity” means any U.S. or non-U.S. federal, national,
supranational, state, provincial, local or similar government, governmental,
regulatory or administrative authority, branch, agency or commission or any
court, tribunal, or arbitral or judicial body.

“Holder” has the meaning given it in Section 2(c)(ii).

“Initial Warrant Issuance” has the meaning given it in the Recitals.

“Investor Purchase Agreement” has the meaning given it in the Recitals.

“Issue Date” means [April] [    ], 2019.

“Law” means any statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or order of any Governmental Entity.

“Market Price” per share of Common Stock means, on any date specified herein:
(a) if the Common Stock is then listed or admitted to trading on any national
securities exchange, the average of the high and low trading prices of the
Common Stock on such date; (b) if the Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security, the average of the high and low sale prices of
the Common Stock on such date; (c) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the reported
high bid and low asked price of the Common Stock on such date as shown by NASDAQ
or reported by any member firm of the NYSE selected by the Company; or (d) if
neither (a), (b) nor (c) is applicable, the Fair Market Value per share
determined in good faith by the Board.

“Metro SPV” means Metro SPV LLC.

“Mudrick” means Mudrick Capital Management, L.P.

“NASDAQ” means the Nasdaq Stock Market.

“Number Issuable” with respect to a Warrant has the meaning given it in
Section 4(a).

“NYSE” means the New York Stock Exchange, Inc.

“Other Property” has the meaning given it in Section 4(a)(ii).

“Person” means any individual, corporation, limited liability company,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.

“Regulation D” means Regulation D promulgated under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

 

26

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“Regulation S Warrant” means a Warrant issued pursuant to Regulation S.

“Required Consents” means the material filings, registrations, notifications,
approvals, waivers or expiration or termination of any waiting periods that are
necessary or required, as set forth in Section 9(b).

“Sale of the Company” means a transaction or series of related transactions
pursuant to which (i) a person or group (as such terms are used and defined in
Rule 13d-3 promulgated under the Exchange Act) (other than a Subsidiary of the
Company) acquires or otherwise becomes the beneficial owner of more than 50% of
the Company’s issued and outstanding Common Stock or (ii) the Company
consummates the sale of all or substantially all of its assets, on a
consolidated basis to any Person (other than a Subsidiary of the Company).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated from time to time thereunder.

“Stockholders Agreement” means that certain Stockholders Agreement, dated as of
[April] [ ], 2019, as may be amended from time to time in accordance with its
terms, by and among the Company and the stockholders party thereto, as in effect
from time to time, and any successor agreement thereto.

“Subsidiary” means, with respect to any Person (herein referred to as the
“parent”) (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.

“Transaction” has the meaning given it in Section 4(b).

“Transfer” means any voluntary or involuntary attempt to, directly or indirectly
through the transfer of interests in controlled Affiliates or otherwise, sell,
assign, transfer, grant a participation in, pledge or otherwise dispose of any
Warrants, or the consummation of any such transaction, or taking a pledge of,
any of the Warrants; provided, however, that a transaction that is a pledge
shall not be deemed to be a Transfer, but a foreclosure pursuant thereto shall
be deemed to be a Transfer; provided, further, that, with respect to any widely
held “investment company” as defined in the Investment Company Act of 1940, as
amended, a sale, transfer, assignment, pledge, hypothecation, encumbrance or
other disposition of ownership interests in such investment company shall not be
deemed a Transfer. The term “Transferred” shall have a correlative meaning.

“Transfer Agent” has the meaning given it in Section 2.

“Warrant” means a Warrant in substantially the form attached as Exhibit A
hereto.

“Warrant Agent” has the meaning given it in the Preamble.

“Warrant Certificate” has the meaning given it in Section 2(a).

 

27

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“Warrant Exercise Documentation” has the meaning given it in Section 3(a).

*         *         *         *         *

 

 

28

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first written above.

 

AFFINION GROUP HOLDINGS, INC. By:  

 

  Name:   Title AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Warrant Agent
By:  

 

  Name:   Title

[Signature Page to Warrant Agreement]

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

Exhibit A – Form of Warrant

SPECIMEN WARRANT CERTIFICATE

THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M.

NEW YORK CITY TIME, [APRIL] [    ], 2029

[LEGEND TO BE INSERTED IN ACCORDANCE WITH SECTION 2]

AFFINION GROUP HOLDINGS, INC.

WARRANT TO PURCHASE COMMON STOCK

WARRANT NO.: A – _____                                          
                                                                        NUMBER
OF WARRANTS: ______________

THIS CERTIFIES THAT, for value received [•] is the registered holder of a
Warrant or Warrants (the “Warrant”) to purchase one fully paid and
non-assessable share of Common stock, par value $0.01 per share (“Common
Stock”), of AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the
“Company”), for each Warrant evidenced by this Warrant Certificate. Subject to
the conditions set forth herein and in the Warrant Agreement dated as of [April]
[    ], 2019, by and between the Company and the Warrant Agent, as in effect
from time to time (the “Warrant Agreement”) (including as referenced therein the
restrictions on exercise and transfer set forth in the Company’s organizational
documents), as in effect from time to time, the Warrant entitles the holder
thereof to purchase from the Company, at any time during the Exercise Period,
such number of shares of Common Stock of the Company at the price of $0.01 per
share, upon surrender of this Warrant Certificate and payment of the Exercise
Price at the office or agency of the Warrant Agent.

Payment of the Exercise Price may be made, at the option of the holder of the
Warrant and subject to conditions set forth herein and in the Warrant Agreement,
by the following methods (or any combination thereof): (1) in cash or by wire
transfer of immediately available funds; (2) by a certified or official bank
check payable to the order of the Company; or (3) by means of a cashless
exercise pursuant to Section 3(a)(ii) of the Warrant Agreement. In no event
shall the registered holder of this Warrant be entitled to receive a net-cash
settlement or other consideration in lieu of a physical settlement in shares of
Common Stock. The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock purchasable hereunder, set forth on
the face hereof, may, subject to certain conditions, be adjusted. The term
“Exercise Price” as used in this Warrant Certificate refers to the price per
Share at which Shares may be purchased at the time the Warrant is exercised.

No fraction of a share of Common Stock will be issued upon any exercise of a
Warrant. If, upon exercise of a Warrant, a holder would be entitled to receive a
fractional interest in a share of Common Stock, the Company shall, upon
exercise, round down to the nearest whole number the number of shares of Common
Stock to be issued to the Warrant holder and shall pay a cash adjustment in
respect of such fractional interest in an amount equal to such fractional
interest multiplied by the Market Price of a share of Common Stock on the
Business Day which next precedes the day of exercise.

Upon any exercise of the Warrant for less than the total number of full shares
of Common Stock provided for herein, there shall be issued to the registered
holder hereof or his, her, or its assignee a new Warrant Certificate bearing the
same restrictive legends, if any, covering the number of shares of Common Stock
for which the Warrant has not been exercised.

 

1

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Warrant Certificates, when surrendered at the office or agency of the Warrant
Agent by the registered holder hereof in person or by attorney duly authorized
in writing, may be exchanged in the manner and subject to the limitations
provided in the Warrant Agreement, but without payment of any service charge,
for another Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants.

Upon due presentment for registration of transfer of the Warrant Certificate at
the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any applicable tax or other government charge.

The Company and the Warrant Agent may deem and treat the registered holder as
the absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the registered holder, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.

Except as set forth in the Warrant Agreement, this Warrant does not entitle the
registered holder to any of the rights of a stockholder of the Company.

Capitalized terms used herein but not defined shall have the meaning set forth
in the Warrant Agreement.

*         *         *         *         *

 

2

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AFFINION GROUP HOLDINGS, INC.

 

By:  

 

    

 

Name:  

 

                      Name:   

 

Title:  

 

     Title:   

 

 

DATED:    Countersigned   

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Warrant Agent

 

By:  

 

  Authorized Signatory

[Signature Page to Warrant of Affinion Group Holdings, Inc.]

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

Exhibit B

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE WARRANTS

The undersigned holder hereby exercises the right to purchase             
shares of common stock, par value $0.01 per share (“Warrant Shares”), of
AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the “Company”), evidenced
by the attached Warrant Certificate (the “Warrant”). Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Warrant Agreement (the “Agreement”), dated as of [April] [ ], 2019, by and
between the Company and American Stock Transfer & Trust Company, LLC, as Warrant
Agent, as in effect from time to time.

 

  1.

Payment of Exercise Price (check applicable box).

[    ] payment in the sum of $             [is enclosed] [has been wire
transferred to the Company at the following account:         ] in accordance
with the terms of the Warrant.

[    ] Holder hereby elects to make the payment for the Warrant Shares in
accordance with Section 3(a)(ii) of the Agreement.

 

  2.

Confirmation. The undersigned hereby represents and warrants that the Required
Consents have been made or obtained, as applicable.

 

  3.

Delivery of Warrant Shares. The Company shall deliver the Warrant Shares in the
name of the undersigned or in such other name as is specified below in
accordance with Section 3(b) of the Agreement at the following address:

 

 

(PLEASE TYPE OR PRINT NAME AND ADDRESS)

 

 

 

 

 

 

(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

and be delivered to                                         
                                         
                                         
                                         
                                              

and, if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate bearing the same restrictive
legends, if any, for the balance of such Warrants be registered in the name of,
and delivered to, the registered holder at the address stated below its
signature.

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

  4.

Representations and Warranties.

 

  (i)

If the Warrant is a Domestic Restricted Warrant (or any other Warrant that is
not a Regulation S Warrant) the undersigned hereby certifies:

[CHECK A OR B, AS APPLICABLE]

☐ A. that it is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended;

[OR]

☐ B. enclosed herewith is an opinion of counsel to the effect that the
Regulation S Warrant and the securities delivered upon exercise thereof either
(i) have been registered under the Securities Act or (ii) are exempt from
registration thereunder.

 

  (ii)

If the Warrant is a Regulation S Warrant, the undersigned hereby certifies:

[CHECK A OR B, AS APPLICABLE]

☐ A. that it is not a U.S. person (as defined in Regulation S) or purchasing for
the account or benefit of a U.S. person, other than a distributor, and it is
purchasing the Warrant Shares in an offshore transaction in accordance with
Regulation S;

[OR]

☐ B. enclosed herewith is an opinion of counsel to the effect that the
Regulation S Warrant and the securities delivered upon exercise thereof either
(i) have been registered under the Securities Act or (ii) are exempt from
registration thereunder.

*     *     *     *     *

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

Dated:  

 

    

 

       (SIGNATURE)                    

 

       (ADDRESS)       

 

      

 

       (TAX IDENTIFICATION NUMBER)

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

ACKNOWLEDGMENT

The Company hereby acknowledges receipt of this Exercise Notice and hereby
undertakes, in accordance with Section 3(b) of the Agreement, to issue the above
indicated number of shares of Common Stock upon satisfactory receipt of the
Warrant Exercise Documentation and the restrictions on exercise and transfer set
forth in the Agreement (including as referenced therein the restrictions on
exercise and transfer set forth in Warrant Agreement and in the Company’s
organizational documents), in the name and to the address set forth above by the
exercising holder.

 

AFFINION GROUP HOLDINGS, INC. By:  

 

  Name:   Title:

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

Exhibit C

ASSIGNMENT

To be Executed by the Registered Holder in Order to Assign Warrants

For Value Received, ___________________________________ hereby sells, assigns
and transfers unto

 

 

(PLEASE TYPE OR PRINT NAME AND ADDRESS)

 

 

 

 

 

 

(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

and be delivered to

______________________________________________________________________________________________

(PLEASE PRINT OR TYPE NAME AND ADDRESS)

                              of the Warrants represented by this Warrant
Certificate and does hereby irrevocably constitute and appoint             
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.

By signing below, the transferring holder hereby represents and warrants to the
Company that such holder is making this transfer in accordance with, and subject
to the terms, conditions and restrictions set forth in, the Warrant Agreement
and the Company’s organizational documents (collectively, the “Transfer
Restrictions”).

Without limiting the Transfer Restrictions, if the transferring holder is
seeking to transfer all or any portion of a Regulation S Warrant:

[CHECK A, B OR C, AS APPLICABLE]

☐ A. such transferring holder hereby certifies as follows:

 

  1.

The offer and sale of the Warrants was not and will not be made to a person in
the United States (unless such person is excluded from the definition of “U.S.
person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is
acting is excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such offer
and sale was not and will not be specifically targeted at an identifiable group
of U.S. citizens abroad.

 

  2.

Unless the circumstances described in the parenthetical in paragraph 1 above are
applicable, either (a) at the time the buy order was originated, the buyer was
outside the United States or we and any person acting on our behalf reasonably
believed that the buyer was outside the United States or (b) the transaction was
executed in, on or through the facilities of a designated offshore securities
market, and neither we nor any person acting on our behalf knows that the
transaction was pre-arranged with a buyer in the United States.

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

  3.

Neither we, any of our affiliates, nor any person acting on our or their behalf
has made any directed selling efforts in the United States with respect to the
Warrants.

 

  4.

The proposed transfer of Warrants is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

 

  5.

If we are a dealer or a person receiving a selling concession, fee or other
remuneration in respect of the Warrants, and the proposed transfer takes place
during the one-year distribution compliance period (as defined in Rule 902(f) of
Regulation S), or we are an officer or director of the Company, we certify that
the proposed transfer is being made in accordance with the provisions of Rule
904(b) of Regulation S.

[OR]

☐ B. such transferring holder hereby certifies that the transferee is an
“accredited investor” (as such term is defined under Rule 501(a) of Regulation D
under the Securities Act) and the transfer will be exempt from registration
under applicable federal, State and foreign securities law.

[OR]

☐ C. enclosed herewith is an opinion of counsel to the effect that either
(i) the Warrant has been registered under the Securities Act or (ii) the
proposed transfer is exempt from registration thereunder.

Notwithstanding the foregoing certification, in accordance with Section 9(a) of
the Warrant Agreement, prior to permitting or giving effect to the transfer, the
Company may require the transferring parties to furnish an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that the sale or
transfer is exempt from the registration requirements of the Securities Act and
applicable U.S. state or foreign securities law and indicating whether the new
Warrant Certificates must bear a restrictive legend.

Furthermore, by signing below, the transferring holder hereby agrees and
acknowledges that no sale, assignment or transfer of the Warrants shall be
effective except to the extent such sale, assignment or transfer complies fully
with the Transfer Restrictions.

 

Dated:  

 

                        

 

         (SIGNATURE)   

THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME WRITTEN UPON THE
FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM PURSUANT TO S.E.C. RULE 17 Ad – 15).

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Appendix I

Holder’s Contact Information

 

Name:                                                                      

Address:                                          
                                       

City, State, Zip:                                          
                            

Telephone Number:                                          
                     

Facsimile Number:                                          
                      

E-mail Address:                                          
                           

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Annex E-1

Fifth Amended and Restated Certificate of Incorporation

[See attached]

 

Annex E-1

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

Final Form

FIFTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

AFFINION GROUP HOLDINGS, INC.

(Dated [April] [    ], 2019)

ARTICLE I

The name of the Corporation is Affinion Group Holdings, Inc.

ARTICLE II

The address of the registered office of the Corporation in the State of Delaware
is 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. The
name of the registered agent of the Corporation at such address is Corporation
Service Company.

ARTICLE III

The purpose for which the Corporation is organized is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the “DGCL”) and to possess and
exercise all of the powers and privileges granted by such law and any other law
of the State of Delaware.

ARTICLE IV

The total number of shares of all classes of stock which the Corporation shall
have authority to issue is 550,000,000, consisting of 540,000,000 shares of
Common Stock, par value $0.000001 per share (the “Common Stock”), and 10,000,000
shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”)
(collectively with the Common Stock, the “Capital Stock”).

The following is a statement of the designations, preferences, voting powers,
qualifications, special or relative rights and privileges in respect of the
authorized capital stock of the Corporation.

(a) Common Stock.

(1) Rights and Privileges. Except as expressly set forth otherwise herein, the
Common Stock shall have (i) all rights and privileges typically associated with
such securities as set forth in the DGCL, including, without limitation, the
right to receive dividends, the right to vote, subject to Article IV(a)(3)(ii),
on all matters presented to the holders of the Common Stock for a vote and the
rights upon a liquidation and (ii) the additional rights and privileges
hereinafter set forth.

[Signature Page to Third Amended and Restated Certificate of Incorporation]

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

(2) Dividends. Subject to the rights of the Preferred Stock, dividends may be
paid on the Common Stock, as and when declared by the Board, out of the assets
of the Corporation legally available for the payment of such dividends. If and
when dividends on the Common Stock are declared payable from time to time by the
Board, whether payable in cash, in property or in shares of capital stock of the
Corporation, the holders of Common Stock shall be entitled to share equally, pro
rata, based on the number of shares of Common Stock held by each such holder, in
such dividends.

(3) Voting.

(i) Unless otherwise required by applicable Law, each share of Common Stock
shall, subject to Article IV(a)(3)(ii), entitle the holder thereof to cast one
vote.

(ii) Limitation on Voting; Automatic Voting.

(I) For so long as ownership or voting of Common Stock of the Corporation is
subject to the review and approval or deemed approval of the FCA, no Person
shall be entitled to vote any shares of Common Stock representing, in aggregate,
more than 19.9% of the total combined voting power of all securities of the
Corporation entitled to vote on any matter (or such higher or lower threshold as
may from time to time be established for determining when a Person shall
(i) acquire control of Affinion International Limited for the purposes of
Section 181 of FSMA or (ii) increase its existing control of Affinion
International Limited for the purposes of Section 182 of FSMA) unless such
Person has delivered evidence reasonably satisfactory to the Corporation that
(i) such Person has completed and submitted all material filings, registrations
or other notifications to the FCA that may be required pursuant to applicable
Law in connection with the ownership or voting of such Person’s Common Stock
entitled to vote on such matter and (ii) all necessary and material approvals or
deemed approvals, or waivers, as the case may be, of the FCA that may be
required pursuant to applicable Law in connection with the ownership or voting
of such Person’s Common Stock entitled to vote on such matter have been obtained
from.

(II) Without limiting the foregoing and notwithstanding anything to the contrary
herein, no Person shall be entitled to vote any shares of Common Stock on any
matter unless (i) such Person has completed and submitted all material filings,
registrations or other notifications to any Governmental Entity that may be
required pursuant to applicable Law in connection with the ownership or voting
of such Person’s Common Stock entitled to vote on such matter, or that no such
material filings, registrations or other notifications are required, and
(ii) all necessary and material approvals or waivers, as the case may be, of any
Governmental Entity that may be required pursuant to applicable Law in
connection with the ownership or voting of such Person’s Common Stock entitled
to vote on such matter have been obtained, including, if applicable, the
approval or deemed approval of the FCA and, at the Corporation’s request, such
Person has delivered evidence reasonably satisfactory to the Corporation of
compliance with the foregoing.

 

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(III) To the extent that a Person is not entitled to vote a portion of its
shares without violating the restrictions Article IV(a)(3)(ii)(I) - (II), the
portion of shares that, if voted by such Person, would violate such
restrictions, shall be voted as directed by the Secretary of the Corporation,
any Assistant Secretary of the Corporation or, in the absence of any of them,
any officer of the Corporation authorized by the Board in the same proportion as
all outstanding shares of Common Stock not voted by (i) such Person or (ii) any
other Person that is subject to having its voting restricted by this Article
IV(a)(3)(ii), are actually voted on such matter. The provisions of Article
IV(a)(3)(ii)(I)- (II) shall continue to apply iteratively until no Person that
has not complied with the provisions of Article IV(a)(3)(ii)(I)- (II) to vote
more than the regulated maximum would be deemed by the applicable regulator to
possess the power directly or indirectly to vote more than the regulated maximum
(or, in the case of the FCA specifically, 19.9%).

(IV) The final application of this Article IV(a)(3)(ii) will be as determined by
the Board, which determination shall be absolute and binding absent manifest
error.

(b) Preferred Stock. Subject to the provisions of this Article IV, the Preferred
Stock may be issued from time to time in one or more classes or series. The
Board shall have the authority to the fullest extent permitted under the DGCL to
adopt by resolution from time to time one or more certificates of designations
providing for the designation of one or more classes or series of the Preferred
Stock and the voting powers, whether full or limited or no voting powers, and
such designations, preferences and relative, participating, optional, or other
special rights and qualifications, limitations or restrictions thereof, and to
fix or alter the number of shares comprising any such class or series, subject
to any requirements of the DGCL and this Fifth Amended and Restated Certificate
of Incorporation, as amended from time to time.

The authority of the Board with respect to each such class or series shall
include, without limitation of the foregoing, the right to determine and fix the
following preferences and powers, which may vary as between different classes or
series of the Preferred Stock:

(1) the distinctive designation of such class or series and the number of shares
to constitute such class or series;

(2) the rate at which dividends on the shares of such class or series shall be
declared and paid, or set aside for payment, whether dividends at the rate so
determined shall be cumulative or accruing, and whether the shares of such class
or series shall be entitled to any participating or other dividends in addition
to dividends at the rate so determined, and if so, on what terms;

 

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(3) the right or obligation, if any, of the Corporation to redeem shares of the
particular class or series of the Preferred Stock, and, if redeemable, the
price, terms and manner of such redemption;

(4) the special and relative rights and preferences, if any, and the amount or
amounts per share, which the shares of such class or series of the Preferred
Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;

(5) the terms and conditions, if any, upon which shares of such class or series
shall be convertible into, or exchangeable for, shares of capital stock of any
other class or series, including the price or prices or the rate or rates of
conversion or exchange and the terms of adjustment, if any;

(6) the obligations, if any, of the Corporation to retire, redeem or purchase
shares of such class or series pursuant to a sinking fund or fund of a similar
nature or otherwise, and the terms and conditions of such obligation;

(7) voting rights, if any, including special voting rights with respect to the
election of Directors and matters adversely affecting any class or series of the
Preferred Stock;

(8) limitations, if any, on the issuance of additional shares of such class or
series or any shares of any other class or series of the Preferred Stock; and

(9) such other preferences, powers, qualifications, special or relative rights
and privileges thereof as the Board, by the vote of the members of the Board
then in office acting in accordance with this Fifth Amended and Restated
Certificate of Incorporation, or any Preferred Stock, may deem advisable and are
not inconsistent with law, the provisions of this Fifth Amended and Restated
Certificate of Incorporation or the provisions of any certificate of
designations.

(c) Certain Restrictions on Transfer. Unless otherwise expressly approved by the
Board, prior to the consummation of a Qualified Public Offering or a Listing, no
shares of Common Stock shall be Transferred (i) if such Transfer would
constitute a violation of applicable Laws, (ii) to any Person who is not an
“accredited investor” (as such term is defined under Rule 501(a) of Regulation D
under the Securities Act) if, at the time of such Transfer, or as a result of
giving effect to such Transfer, the Corporation has more than 450 “holders of
record” of Common Stock assuming the exercise of all outstanding options to
purchase shares of Common Stock or (iii) to any Person if, at the time of such
Transfer, or as a result of giving effect to such Transfer, the Corporation has
more than 1,900 “holders of record” of Common Stock assuming the exercise of all
outstanding options to purchase shares of Common Stock or (iii) if such Transfer
would otherwise require the Corporation to register any class of Common Stock
under the Exchange Act or any other applicable federal or state securities laws;
provided that, the term “holders of record” shall have the meaning ascribed
thereto for the purposes of Section 12 (g) of the Exchange Act.

 

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(d) Defined Terms. For purposes of this Fifth Amended and Restated Certificate
of Incorporation:

(1) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder from time to time.

(2) “FCA” means the U.K. Financial Conduct Authority.

(3) “FSMA” means the U.K. Financial Services and Markets Act 2000, as amended.

(4) “GAAP” means the generally accepted accounting principles as in effect from
time to time in the U.S.

(5) “Governmental Entity” means any U.S. or non-U.S. federal, national,
supranational, state, provincial, local or similar government, governmental,
regulatory or administrative authority, branch, agency or commission or any
court, tribunal, or arbitral or judicial body.

(6) “Law” means any statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or order of any Governmental Entity.

(7) “Listing” means an OTC Listing or Public Listing.

(8) “OTC Listing” means the listing of the Common Stock for quotation on the OTC
Bulletin Board (or other available over the counter market) after the date
hereof.

(9) “Person” shall be construed broadly and shall include, without limitation,
an individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a government entity.

(10) “Public Listing” means the listing of the Common Stock on a U.S. national
securities exchange registered with the Securities and Exchange Commission after
the date hereof.

(11) “Qualified Public Offering” means an underwritten public offering of Common
Stock by the Corporation pursuant to an effective registration statement filed
by the Corporation with the Securities and Exchange Commission (other than on
Forms S-4 or S-8 or successors to such forms) under the Securities Act after the
date hereof.

(12) “Subsidiary” means any Person the majority of the equity of which,
directly, or indirectly through one or more other Persons, (a) the Corporation
has the right to acquire or (b) is owned or controlled by the Corporation. As
used in this definition, “control,” including, its correlative meanings,
“controlled by” and “under common control with,” means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of equity, by contract or otherwise). For the
avoidance of doubt, Subsidiary shall include any Person that is included in the
Corporation’s consolidated group for purposes of preparing the Corporation’s
consolidated financial statements in accordance with GAAP.

 

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(13) “Transfer” means any direct or indirect sale, assignment, transfer,
conveyance, gift, bequest by will or under intestacy laws, pledge, hypothecation
or other encumbrance, or any other disposition, of the stated security (or any
interest therein or right thereto, including the issuance of any total return
swap or other derivative whose economic value is primarily based upon the value
of the stated security) or of all or part of the voting power (other than the
granting of a revocable proxy) associated with the stated security (or any
interest therein) whatsoever, or any other transfer of beneficial ownership of
the stated security, with or without consideration and whether voluntarily or
involuntarily (including by operation of law).

(14) “U.S.” means the United States of America.

ARTICLE V

In furtherance and not in limitation of the powers conferred by the laws of the
State of Delaware, the Board is expressly authorized and empowered to make,
alter, amend or repeal the By-Laws of the Corporation (as they may be amended,
restated, supplemented or otherwise revised from time to time, the “By-Laws”) in
any manner not inconsistent with the laws of the State of Delaware or this Fifth
Amended and Restated Certificate of Incorporation.

ARTICLE VI

The annual meeting of the stockholders for the election of the directors of the
Corporation (the “Directors”) and for the transaction of such other business as
may properly come before the meeting shall be held at such date, time and place,
if any, as shall be determined solely by the resolution of the Board in its sole
and absolute discretion. The business and affairs of the Corporation shall be
managed by, or under the direction of, the Board. Subject to the following
paragraph, the stockholders shall have the right to elect a number of Directors
of the Board (as set forth in the By-Laws) to be designated as Directors, in
accordance with the By-Laws. The number of Directors may be increased or
decreased from time to time as provided in the By-Laws. With respect to each
matter brought before the Board (or any committee thereof) for vote, each
Director shall be entitled to cast one vote.

Subject to the rights of the holders of one or more series of Preferred Stock
then outstanding as provided for or fixed pursuant to the provisions of Article
IV, the total number of Directors constituting the entire Board shall not be
less than three nor more than eleven, with the then-authorized number of
Directors fixed from time to time as provided in the By-Laws. The initial number
of Directors constituting the entire Board shall be seven. The Board shall be of
one class. Except for the terms of such additional Directors, if any, as elected
by the holders of any series of Preferred stock and as provided for or fixed
pursuant to the provisions of Article IV hereof, each Director shall serve for a
one year term ending on the date of the annual meeting following the annual
meeting at which such Director was elected; provided, that the term of each
Director shall continue until the election and qualification of a successor and
be subject to such Director’s earlier death, resignation or removal. Subject to
the rights of the holders of one or more series of Preferred Stock then
outstanding as provided for or fixed pursuant to the provisions of Article IV or
as otherwise provided in the Stockholders Agreement, dated [April] [    ], 2019,
by and among the Corporation and the stockholders party thereto, or the By-Laws,
vacancies on the Board by reason

 

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of death, resignation, retirement, disqualification, removal from office, or
otherwise, and newly created directorships resulting from any increase in the
authorized number of Directors shall be solely filled by a majority of the
Directors then in office, although less than a quorum, or by a sole remaining
Director and shall not be filled by the stockholders. A Director elected to fill
a vacancy or a newly created directorship shall hold office until the election
at the next Annual Meeting, subject to the election and qualification of a
successor and to such Director’s earlier death, resignation or removal.

A Director of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
Director, except for liability (a) for any breach of the Director’s duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the DGCL, or (d) for any transaction from which
the Director derived any improper personal benefit. If the DGCL is amended after
the date of incorporation of the Corporation to authorize corporate action
further eliminating or limiting the personal liability of Directors, then the
liability of a Director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the DGCL, as so amended.

The Corporation hereby acknowledges that certain Directors (the “Specified
Persons”) may have rights to indemnification and advancement of expenses
provided by a stockholder of the Corporation or its affiliates (directly or
through insurance obtained by any such entity) (collectively, the “Stockholder
Indemnitors”). The Corporation hereby agrees and acknowledges that (i) it is the
indemnitor of first resort with respect to the Specified Persons, (ii) it shall
be required to advance the full amount of expenses incurred by the Specified
Persons, as required by the terms of these By-Laws, without regard to any rights
the Specified Persons may have against the Stockholder Indemnitors and (iii) it
irrevocably waives, relinquishes and releases the Stockholder Indemnitors from
any and all claims against the Stockholder Indemnitors for contribution,
subrogation or any other recovery of any kind in respect thereof. The
Corporation further agrees that no advancement or payment by the Stockholder
Indemnitors on behalf of the Corporation with respect to any claim for which the
Specified Persons have sought indemnification from the Corporation shall affect
the foregoing and the Stockholder Indemnitors shall have a right of contribution
and/or be subrogated to the extent of such advancement or payment to all of the
rights of recovery of the Specified Persons against the Corporation. These
rights shall be a contract right.

Any repeal or modification of any of the foregoing paragraphs in this Article VI
by the stockholders of the Corporation shall not adversely affect any right or
protection of a Director of the Corporation existing at the time of such repeal
or modification.

ARTICLE VII

The Corporation shall, to the fullest extent permitted by the provisions of
Section 145 of the DGCL, as the same now exists or may be amended and
supplemented, indemnify, hold harmless and advance expenses to its Directors and
officers, both as to action in his or her official capacity and as to action in
another capacity while holding such office. The Corporation may, by action of
the Board, extend such indemnification and advancement of expenses to any and
all persons whom it shall have power to indemnify, including but not limited to
its employees, agents

 

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or representatives, on such terms and conditions and to the extent determined by
the Board in its sole and absolute discretion. The indemnification and
advancement of expenses provided for herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any bylaw,
agreement, vote, of the stockholders or disinterested Directors or otherwise and
shall continue as to any person who has ceased to be a Director, officer,
employee, agent or representative and shall inure to the benefit of the heirs,
executors, and administrators of such person. The Corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the Corporation would
have the power to indemnify him or her against such liability under this Article
VII.

Any amendment, repeal or modification of the foregoing paragraph, or the
adoption of any provision inconsistent with this Article VII, shall not
adversely affect any right or protection existing at the time of such amendment,
repeal, modification or adoption.

ARTICLE VIII

To the maximum extent permitted from time to time under the DGCL, the
Corporation renounces any interest or expectancy of the Corporation in, or in
being offered an opportunity to participate in, any and all business
opportunities that are presented to any of its stockholders.

Without limiting the foregoing renunciation, the Corporation acknowledges that
certain of the stockholders are in the business of making investments in, and
have investments in, other businesses similar to and that may compete with the
Corporation’s businesses (“Competing Businesses”), and agrees that each such
Stockholder and its affiliates shall have the right to make additional
investments in or have relationships with other Competing Businesses independent
of its investment in the Corporation. No stockholder that has nominated or
designated a Director shall be obligated to present to the Corporation or one of
its Subsidiaries any particular investment opportunity that such stockholder
gains access to, even if such opportunity is of a character that, if presented
to the Corporation or one of its Subsidiaries, could be taken by the Corporation
or such Subsidiary, and such stockholder shall continue to have the right to
take for such stockholder’s own respective account or to recommend to others any
such particular investment opportunity.

The provisions of this Article VIII shall in no way limit or eliminate any such
stockholder’s duties, responsibilities and obligations with respect to the
protection of any proprietary information of the Corporation and any of its
subsidiaries, including any applicable duty not to disclose or use such
proprietary information improperly or to obtain therefrom an improper personal
benefit.

No amendment or repeal of this Article VIII shall apply to or have any effect on
the liability or alleged liability of any Director of the Corporation for or
with respect to opportunities of which such Director becomes aware prior to such
amendment or repeal.

ARTICLE IX

The Corporation elects not to be governed by Section 203 of the DGCL.

 

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ARTICLE X

The Corporation reserves the right to amend this Fifth Amended and Restated
Certificate of Incorporation in any manner permitted by the DGCL, as the same
exists or may hereafter be amended, and any rights and powers conferred upon
stockholders, Directors and officers herein are granted subject to this
reservation.

*    *    *    *    *

 

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Annex E-2

Fifth Amended and Restated By-laws

[See attached]

 

Annex E-2

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Final Form

 

 

 

AFFINION GROUP HOLDINGS, INC.

Incorporated under the laws

of the State of Delaware

 

 

FIFTH AMENDED AND RESTATED

BY-LAWS

 

 

As adopted on [April] [    ], 2019

 

 

 

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FIFTH AMENDED AND RESTATED BY-LAWS OF

AFFINION GROUP HOLDINGS, INC.

ARTICLE I

OFFICES

 

1.1.

Registered Office.

The registered office of Affinion Group Holdings, Inc. (the “Corporation”) in
the State of Delaware shall be 160 Greentree Drive, Suite 101, Dover, County of
Kent, Delaware 19904. The name of the registered agent of the Corporation at
such address is National Registered Agents, Inc.

 

1.2.

Other Offices.

The Corporation may also have an office or offices at any other place or places
within or outside the State of Delaware.

ARTICLE II

MEETING OF STOCKHOLDERS; STOCKHOLDERS’ CONSENT

IN LIEU OF MEETING

 

2.1.

Annual Meetings.

The annual meeting of the stockholders for the election of directors and such
other actions as are required by the General Corporation Law of the State of
Delaware (the “DGCL”) to be taken at a stockholders’ annual meeting and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, date and hour as shall be fixed by the Board of
Directors (the “Board”) and designated in the notice or waiver of notice
thereof, except that no annual meeting need be held if all actions, including
the election of directors, required by the DGCL to be taken at a stockholders’
annual meeting are taken by written consent in lieu of meeting pursuant to
Section 2.11 of this Article II.

 

2.2.

Special Meetings.

A special meeting of the stockholders for any purpose or purposes may be called
by (A) the Board; (B) the Chairman; (C) the President; (D) the record holders of
at least 25% of the issued and outstanding shares of common stock, par value
$0.01 per share, of the Corporation (the “Common Stock”); to be held at such
place, date and hour as shall be designated in the notice or waiver of notice
thereof.

 

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2.3.

Notice of Meetings.

Except as otherwise required by statute, these By-Laws, the Stockholders
Agreement dated [April] [ ], 2019, among the Corporation and the stockholders
party thereto, as may be amended from time to time (the “Stockholders
Agreement”) or the Certificate of Incorporation of the Corporation, as may be
amended from time to time (the “Certificate of Incorporation”), notice of each
annual or special meeting of the stockholders shall be given to each stockholder
of record entitled to vote at such meeting not less than 10 nor more than 60
days before the day on which the meeting is to be held by delivering written
notice thereof to him personally, or by mailing a copy of such notice, postage
prepaid, directly to him at his address as it appears in the records of the
Corporation, or by transmitting such notice thereof to him at such address by
electronic mail, telegraph, cable or other telephonic transmission. Every such
notice shall state the place, the date and hour of the meeting, and, in case of
a special meeting, the purpose or purposes for which the meeting is called.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy, or who shall,
in person or by his attorney thereunto authorized, waive such notice in writing,
either before or after such meeting. A written waiver of notice of meeting
signed by a stockholder or a waiver by electronic transmission by a stockholder,
whether given before or after the meeting time stated in such notice, is deemed
equivalent to notice. Attendance of a stockholder at a meeting is a waiver of
notice of such meeting, except when the stockholder attends a meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business at the meeting on the ground that the meeting is not lawfully
called or convened. Except as otherwise provided in these By-Laws or the
Stockholders Agreement, neither the business to be transacted at, nor the
purpose of, any meeting of the stockholders need be specified in any such notice
or waiver of notice. Notice of any adjourned meeting of stockholders shall not
be required to be given, except when expressly required by law.

 

2.4.

Quorum.

At each meeting of the stockholders, except as otherwise provided by the
Certificate of Incorporation, these By-Laws or the Stockholders Agreement, the
holders of a majority of the issued and outstanding shares of Common Stock
entitled to vote at such meeting, present in person or represented by proxy,
shall constitute a quorum for the transaction of business by the holders of
Common Stock. Notwithstanding the foregoing, except as otherwise provided by the
Certificate of Incorporation, these By-Laws or the Stockholders Agreement, in
the case of any vote by a class of common stock or preferred stock, including
for the election of directors, a majority of the issued and outstanding shares
of such class of common stock or preferred stock entitled to vote at such
meeting, present in person or represented by proxy, shall constitute a quorum
for the transaction of business by such class. Except as otherwise provided by
the Certificate of Incorporation, these By-Laws or the Stockholders Agreement,
in the absence of a quorum, a majority in interest of the holders of Common
Stock or any given class of common stock or preferred stock present in person or
represented by proxy and entitled to vote, or, in the absence of all the holders
of Common Stock or a given class of common stock or preferred stock entitled to
vote, any officer entitled to preside at, or act as secretary of, such meeting,
shall have the power to adjourn the meeting from time to time, until
stockholders holding the requisite amount of the relevant class of stock to
constitute a quorum shall be present or represented. At any such adjourned
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally called.

 

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2.5.

Organization.

Unless otherwise determined by the Board, except as otherwise provided by the
Stockholders Agreement, at each meeting of the stockholders, one of the
following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:

(a) the Chairman, if any;

(b) the President;

(c) any director, officer or stockholder of the Corporation designated by the
Board to act as chairman of such meeting and to preside thereat if the Chairman
or the President shall be absent from such meeting; or

(d) a stockholder of record who shall be chosen chairman of such meeting by a
majority in voting interest of the stockholders present in person or by proxy
and entitled to vote thereat.

The Secretary or, if he shall be presiding over such meeting in accordance with
the provisions of this Section 2.5 or if he shall be absent from such meeting,
the person (who shall be an Assistant Secretary, if an Assistant Secretary has
been appointed and is present) whom the chairman of such meeting shall appoint,
shall act as secretary of such meeting and keep the minutes thereof.

 

2.6.

Order of Business.

Except as otherwise provided by the Stockholders Agreement, the order of
business at each meeting of the stockholders shall be determined by the chairman
of such meeting, but such order of business may be changed by a majority in
voting interest of those present in person or by proxy at such meeting and
entitled to vote thereat. The Board may make such rules or regulations for the
conduct of meetings of stockholders as it shall deem necessary, appropriate or
convenient.

 

2.7.

Voting.

Except as otherwise provided by law, these By-Laws, the Stockholders Agreement
or the Certificate of Incorporation, at each meeting of the stockholders, every
stockholder of the Corporation shall be entitled to one vote in person or by
proxy for each share of Common Stock of the Corporation held by him and
registered in his name on the books of the Corporation on the date fixed
pursuant to Section 6.7 of Article VI as the record date for the determination
of stockholders entitled to vote at such meeting. A person whose stock is
pledged shall be entitled to vote, unless, in the transfer by the pledgor on the
books of the Corporation, he has expressly empowered the pledgee to vote
thereon, in which case only the pledgee or his proxy may represent such stock
and vote thereon. If shares or other securities having voting power stand in the
record of two or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety or otherwise, or if
two or more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary shall be given written notice to the contrary and
furnished with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting shall
have the following effect:

 

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(a) if only one votes, his act binds all;

(b) if more than one votes, the act of the majority so voting binds all; and

(c) if more than one votes, but the vote is evenly split on any particular
matter, such shares shall be voted in the manner provided by law.

If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section 2.7 shall
be a majority or even-split in interest. Except as otherwise provided in the
Certificate of Incorporation or the Stockholders Agreement, the Corporation
shall not vote directly or indirectly any share of its own capital stock. Any
vote of stock may be given by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by such stockholder
or by his attorney thereunto authorized, delivered to the secretary of the
meeting; provided, however, that no proxy shall be voted after three years from
its date, unless said proxy provides for a longer period. At all meetings of the
stockholders, all matters (except where other provision is made by law, the
Certificate of Incorporation, these By-Laws or the Stockholders Agreement) shall
be decided by the vote of a majority in interest of the stockholders present in
person or by proxy at such meeting and entitled to vote thereon, a quorum being
present, and all matters submitted to the holders of a given class or series of
Common Stock shall be decided by a majority in interest of the holders of such
class or series of Common Stock present in person or by proxy at such meeting
and entitled to vote therein, a quorum being present. Unless demanded by a
stockholder present in person or by proxy at any meeting and entitled to vote on
thereon, the vote on any question need not be by ballot. Upon a demand by any
such stockholder for a vote by ballot upon any such question, such vote by
ballot shall be taken. On a vote by ballot, each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and shall state the
number of shares voted.

 

2.8.

Inspection.

The chairman of the meeting may at any time appoint one or more inspectors to
serve at any meeting of the stockholders. Any inspector may be removed, and a
new inspector or inspectors appointed, by the Board at any time. Such inspectors
shall decide upon the qualifications of voters, accept and count votes, declare
the results of such vote, and subscribe and deliver to the secretary of the
meeting a certificate stating the number of shares of stock issued and
outstanding and entitled to vote thereon and the number of shares voted for and
against the question, respectively. The inspectors need not be stockholders of
the Corporation, and any director or officer of the Corporation may be an
inspector on any question other than a vote for or against his election to any
position with the Corporation or on any other matter in which he may be directly
interested. Before acting as herein provided, each inspector shall subscribe an
oath faithfully to execute the duties of an inspector with strict impartiality
and according to the best of his ability.

 

2.9.

List of Stockholders.

It shall be the duty of the Secretary or other officer of the Corporation who
shall have charge of its stock ledger to prepare and make, at least 10 days
before every meeting of the stockholders, a complete list of the stockholders
entitled to vote thereat, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to any such meeting, during ordinary business hours, for
a period of at least 10

 

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days prior to such meeting, either at a place within the city where such meeting
is to be held, which place shall be specified in the notice of the meeting or,
if not so specified, at the place where the meeting is to be held. Such list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.

 

2.10.

Transaction of Business.

(a) Annual Meetings of Stockholders.

(i) Nominations of persons for election to the Board and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders only (A) pursuant to the Corporation’s notice of meeting (or any
supplement thereto) delivered pursuant to Section 2.3 of these By-Laws, (B) by
or at the direction of the Board, (C) by any stockholder of the Corporation who
is entitled to vote at the meeting, who has complied with the notice procedures
set forth in subparagraphs (ii) and (iii) of this Section 2.10(a) and who was a
stockholder of record at the time such notice is delivered to the Secretary of
the Corporation, (D) as otherwise set forth in the Certificate of Incorporation
or (E) as otherwise set forth in the Stockholders Agreement.

(ii) Except as otherwise set forth in the Certificate of Incorporation or the
Stockholders Agreement, for nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (C) of
Section 2.10(a)(i), the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation, and, in the case of business other
than nominations, such other business must be a proper matter for stockholder
action. To be timely, a stockholder’s notice shall be delivered to the Secretary
at the principal executive offices of the Corporation not less than 90 days nor
more than 120 days prior to the first anniversary of the preceding year’s annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 20 days, or delayed by more than 70 days, from
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 120th day prior to such annual meeting and not
later than the close of business on the later of the 90th day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made by the Corporation. Such stockholder’s
notice shall set forth (A) as to each person whom the stockholder proposes to
nominate for election or re-election as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), including such person’s written consent to being named in the
proxy statement as a nominee and to serving as a director if elected; (B) as to
any other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
text of the proposal or business (including the text of any resolutions proposed
for consideration and in the event that such business includes a proposal to
amend these By-Laws, the language of the proposed amendment), the reasons for
conducting such business at the meeting and any material interest in such
business of such stockholder and the beneficial owner, if any, on whose behalf
the proposal is made; and (C) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the

 

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name and address of such stockholder, as they appear on the Corporation’s books,
and of such beneficial owner, (ii) the class and number of shares of the
Corporation which are owned beneficially and of record by such stockholder and
such beneficial owner, and that such shares have been held for the period
required by any applicable law, (iii) a representation that the stockholder is a
holder of record of stock of the Corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to propose such
business or nomination and (iv) a representation whether the stockholder or the
beneficial owner, if any, intends or is part of a group which intends (x) to
deliver a proxy statement and/or form of proxy to holders of at least the
percentage of the Corporation’s outstanding capital stock required to approve or
adopt the proposal or elect the nominee and/or (y) otherwise to solicit proxies
from stockholders in support of such proposal or nomination. The foregoing
notice requirements shall be deemed satisfied by a stockholder if the
stockholder has notified the Corporation of his intention to present a proposal
at an annual meeting in compliance with Rule 14a-8 (or any successor thereof)
promulgated under the Exchange Act and such stockholder’s proposal has been
included in a proxy statement that has been prepared by the Corporation to
solicit proxies for such annual meeting. The Corporation may require any
proposed nominee to furnish such other information as it may reasonably require
to determine the eligibility of such proposed nominee to serve as a director of
the Corporation.

(iii) Notwithstanding anything in the second sentence of Section 2.10(a)(ii) to
the contrary, in the event that the number of directors to be elected to the
Board at an annual meeting is increased and there is no public announcement by
the Corporation naming all of the nominees for director or specifying the size
of the increased Board made by the Corporation at least 100 days prior to the
first anniversary of the preceding year’s annual meeting, a stockholder’s notice
required by these By-Laws shall also be considered timely, but only with respect
to nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the Corporation
not later than the close of business on the tenth day following the day on which
such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders. Except as otherwise set forth in the
Certificate of Incorporation or the Stockholders Agreement, only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting as set forth in the Corporation’s notice of meeting
pursuant to Section 2.3 of these By-Laws. Nominations of persons for election to
the Board may be made at a special meeting of stockholders at which directors
are to be elected pursuant to the Corporation’s notice of meeting (i) by or at
the direction of the Board, (ii) by any stockholder of the Corporation who is
entitled to vote at the meeting, who complies with the notice procedures set
forth in these By-Laws and who is a stockholder of record at the time such
notice is delivered to the Secretary of the Corporation, (iii) as otherwise set
forth in the Certificate of Incorporation or (iv) as otherwise set forth in the
Stockholders Agreement. Except as otherwise set forth in the Certificate of
Incorporation or the Stockholders Agreement, nominations by stockholders of
persons for election to the Board may be made at such a special meeting of
stockholders if the stockholder’s notice as required by Section 2.10(a)(ii) of
these By-Laws shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on the later of
the 90th day prior to such special meeting or the tenth day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Board to be elected at such meeting.

 

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(c) General.

(i) Except as otherwise set forth in the Certificate of Incorporation or the
Stockholders Agreement, only persons who are nominated in accordance with the
procedures set forth in these By-Laws shall be eligible to serve as directors
elected by the Corporation’s stockholders and only such business shall be
conducted at a meeting of stockholders as shall have been brought before the
meeting in accordance with the procedures set forth in these By-Laws. Except as
otherwise provided by law, the Certificate of Incorporation, these By-Laws or
the Stockholders Agreement, the chairman of the meeting shall have the power and
duty to determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set forth in these
By-Laws and, if any proposed nomination or business is not in compliance with
these By-Laws, to declare that such defective nomination shall be disregarded or
that such proposed business shall not be transacted. Notwithstanding the
foregoing provisions of these By-Laws, if the nominating or proposing
stockholder (or a qualified representative of the nominating or proposing
stockholder) does not appear at the annual or special meeting of stockholders of
the Corporation to present a nomination or business, such nomination shall be
disregarded and such proposed business shall not be transacted, notwithstanding
that proxies in respect of such vote may have been received by the Corporation.

(ii) For purposes of these By-Laws, “public announcement” shall mean disclosure
in a press release reported by the Dow Jones News Service, Associated Press or
comparable national news service or in a document publicly filed by the
Corporation with Securities and Exchange Commission pursuant to Section 13, 14
or 15(d) of the Exchange Act.

(iii) For purposes of these By-Laws, no adjournment nor notice of adjournment of
any meeting shall be deemed to constitute a new notice of such meeting for
purposes of this Section 2.10, and in order for any notification required to be
delivered by a stockholder pursuant to this Section 2.10 to be timely, such
notification must be delivered within the periods set forth above with respect
to the originally scheduled meeting.

(iv) Notwithstanding the foregoing provisions of these By-Laws, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in these
By-Laws. Nothing in these By-Laws shall be deemed to affect any rights of
(A) stockholders to request inclusion of proposals in the Corporation’s proxy
statement pursuant to Rule 14a-8 under the Exchange Act, (B) the holders of any
series of preferred stock to elect directors (including any certificate of
designations relating to such series), (C) any stockholder set forth in the
Certificate of Incorporation or (D) any stockholder set forth in the
Stockholders Agreement.

 

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2.11.

Stockholders’ Consent in Lieu of Meeting.

Except as otherwise set forth in the Certificate of Incorporation or the
Stockholders Agreement, any action required or permitted to be taken at any
annual or special meeting of the stockholders of the Corporation, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an office or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded.

 

2.12.

Participation in meetings by remote communication.

The Board, acting in its sole discretion, may establish guidelines and
procedures in accordance with applicable provisions of the DGCL and any other
applicable law for the participation by stockholders and proxyholders in a
meeting of stockholders by means of remote communications, and may determine
that any meeting of stockholders will not be held at any place but will be held
solely by means of remote communication. Stockholders and proxyholders complying
with such procedures and guidelines and otherwise entitled to vote at a meeting
of stockholders shall be deemed present in person and entitled to vote at a
meeting of stockholders, whether such meeting is to be held at a designated
place or solely by means of remote communication.

ARTICLE III

BOARD OF DIRECTORS

 

3.1.

General Powers.

The business, property and affairs of the Corporation shall be managed by or
under the direction of the Board, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law or by the
Certificate of Incorporation or the Stockholders Agreement directed or required
to be exercised or done by the stockholders.

 

3.2.

Number and Term of Office.

Subject to the rights of the holders of shares of any series of preferred stock
to elect directors under specified circumstances and except as otherwise set
forth in the Stockholders Agreement, the total number of directors constituting
the entire Board shall be fixed from time to time as provided herein. Except as
otherwise set forth in the Stockholders Agreement, the number of directors
constituting the entire Board shall be seven. Directors need not be
stockholders. Except as otherwise set forth in the Stockholders Agreement, with
respect to each matter brought before the Board (or any committee thereof) for
vote, each director shall be entitled to cast one vote.

The Board shall be of one class. Except as otherwise set forth in the
Stockholders Agreement, each director shall serve for a term ending on the date
of the next annual meeting following the annual meeting at which such director
was elected; provided, that the term of each Director shall continue until the
election and qualification of a successor in accordance with all applicable
provisions of the Certificate of Incorporation or the Stockholders Agreement or
until such director’s earlier death, resignation or removal.

 

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3.3.

Election of Directors.

Subject to the terms of and except as otherwise set forth in the Certificate of
Incorporation or the Stockholders Agreement, at each meeting of the stockholders
for the election of directors at which a quorum is present, the persons
receiving the greatest number of votes, up to the number of directors to be
elected, of the stockholders present in person or by proxy and entitled to vote
thereon shall be the directors; provided, that, for purposes of such vote no
stockholder shall be allowed to cumulate his votes. Unless an election by ballot
shall be demanded as provided in Section 2.7 of Article II, election of
directors may be conducted in any manner approved at such meeting.

 

3.4.

Resignation, Removal and Vacancies.

Any director may resign at any time by giving written notice to the Board, the
Chairman, the President or the Secretary. Such resignation shall take effect at
the time specified therein or, if the time is not specified, upon receipt
thereof; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

Except as otherwise required by applicable law or as otherwise set forth in the
Certificate of Incorporation or the Stockholders Agreement, any director may be
removed, with or without cause, at any time, by vote of the holders of a
majority of the shares then entitled to vote at an election of directors or by
written consent of the stockholders pursuant to Section 2.11 of Article II.

Except as otherwise required by applicable law or as otherwise set forth in the
Certificate of Incorporation or the Stockholders Agreement, vacancies occurring
on the Board for any reason may be filled only by vote of the Board or the
directors’ written consent pursuant to Section 3.6 of this Article III. Except
as otherwise set forth in the Stockholders Agreement, if the number of directors
then in office is less than a quorum, such vacancies may be filled by a vote of
the majority of the directors then in office. Except as otherwise set forth in
the Stockholders Agreement, in the event that any officer of the Corporation
then serving on the Board resigns or is removed from his position as an officer,
such officer will, effective as of such resignation or removal, be removed from
the Board.

 

3.5.

Meetings.

(a) Annual Meetings. As soon as practicable after each annual election of
directors, the Board shall meet for the purpose of organization and the
transaction of other business, unless it shall have transacted all such business
by written consent pursuant to Section 3.6 of this Article III.

(b) Other Meetings. Other meetings of the Board shall be held at such times and
at such places as the Board, the Chairman, the President or any director shall
from time to time determine.

 

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(c) Notice of Meetings. Notice shall be given to each director of each meeting,
including the time, place and purpose of such meeting. Notice of each such
meeting shall be mailed to each director, addressed to him at his residence or
usual place of business, at least two days before the date on which such meeting
is to be held, or shall be sent to him at such place by electronic mail,
telegraph, cable, wireless or other form of recorded communication, or be
delivered personally or by telephone not later than the day before the day on
which such meeting is to be held, but notice need not be given to any director
who shall attend such meeting. A written waiver of notice, signed by the person
entitled thereto, whether before or after the time of the meeting stated
therein, shall be deemed equivalent to notice.

(d) Place of Meetings. The Board may hold its meetings at such place or places
within or outside the State of Delaware as the Board may from time to time
determine, or as shall be designated in the respective notices or waivers of
notice thereof.

(e) Quorum and Manner of Acting. Except as otherwise expressly required by law
or these By-Laws or in the Stockholders Agreement, in order to constitute a
quorum for the transaction of business at any meeting of the Board, the
directors present in person shall consist of a majority of the total number of
directors then in office. The vote of a majority of those directors present at
any such meeting at which a quorum is present shall be necessary for the passage
of any resolution or act of the Board, except as otherwise expressly required by
law or these By-Laws or the Stockholders Agreement. In the absence of a quorum
for any such meeting, a majority of the directors present thereat may adjourn
such meeting from time to time until a quorum shall be present. Except as
otherwise set forth in the Stockholders Agreement, each director shall be
entitled to cast one vote.

(f) Organization. At each meeting of the Board, one of the following shall act
as chairman of the meeting and preside thereat, in the following order of
precedence:

(i) the Chairman, if any;

(ii) the President (if a director); or

(iii) any director designated by a majority of the directors present.

The Secretary or, in the case of his absence, an Assistant Secretary, if an
Assistant Secretary has been appointed and is present, or any person whom the
chairman of the meeting shall appoint shall act as secretary of such meeting and
keep the minutes thereof.

(g) Action by Telephonic Communications. Members of the Board may participate in
a meeting of the Board by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
provision shall constitute presence in person at such meeting.

 

3.6.

Directors’ Consent in Lieu of Meeting.

Except as otherwise required by applicable law or as otherwise required by the
Certificate of Incorporation or the Stockholders Agreement, any action required
or permitted to be taken at any meeting of the Board may be taken without a
meeting, without prior notice and without a vote, if a consent in writing or by
electronic transmission, setting forth the action so taken, shall be provided by
all of the directors then in office and such consent is filed with the minutes
of the proceedings of the Board.

 

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3.7.

Action by Means of Conference Telephone or Similar Communications Equipment.

Any one or more members of the Board may participate in a meeting of the Board
by means of conference telephone or similar communications equipment by which
all persons participating in the meeting can hear each other, and participation
in a meeting by such means shall constitute presence in person at such meeting.

 

3.8.

Committees.

Subject to the requirements set forth in the Certificate of Incorporation, the
Board may, by resolution or resolutions passed by a majority of the whole Board,
designate one or more committees, such committee or committees to have such name
or names as may be determined from time to time by resolution adopted by the
Board, and each such committee to consist of one or more directors of the
Corporation, which to the extent provided in said resolution or resolutions
shall have and may exercise the powers of the Board in the management of the
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it. A majority of all
the members of any such committee may determine its action and fix the time and
place of its meetings, unless the Board, the Certificate of Incorporation or the
Stockholders Agreement shall otherwise provide. The Board shall have power to
change the members of any such committee at any time, to fill vacancies and to
discharge any such committee, either with or without cause, at any time.

 

3.9.

Compensation.

Unless otherwise restricted by the Certificate of Incorporation, these By-Laws
or the Stockholders Agreement, the Board shall have the authority to fix the
compensation of Directors; provided, that, except as otherwise set forth herein,
each Director shall be equally compensated in respect of their respective duties
as Directors. Except as otherwise set forth in the Certificate of Incorporation
or the Stockholders Agreement, the Directors may be reimbursed for their
reasonable and documented expenses and costs, if any, of attendance at each
meeting of the Board and non-employee Directors may be paid either a fixed sum
for attendance at each meeting of the Board or other compensation as Director.
No such payment shall preclude any Director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of committees of the
Board may be allowed like compensation and reimbursement of expenses for
attending committee meetings. Each of the Chairman and the chair of any
committee of the Board may receive customary additional compensation in respect
of its duties in such respective capacities.

 

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ARTICLE IV

OFFICERS

 

4.1.

Executive Officers.

The principal officers of the Corporation shall be a Chairman, if one is
appointed (and any references to the Chairman shall not apply if a Chairman has
not been appointed), a President, a Secretary and a Treasurer, and may include
such other officers as the Board may appoint pursuant to Section 4.3 of this
Article IV. Any two or more offices may be held by the same person.

 

4.2.

Authority and Duties.

All officers, as between themselves and the Corporation, shall have such
authority and perform such duties in the management of the Corporation as may be
provided in these By-Laws or, to the extent so provided, by the Board.

 

4.3.

Other Officers.

The Corporation may have such other officers, agents and employees as the Board
may deem necessary, including one or more Chief Executive Officers, Co-Chief
Executive Officers, Chief Operating Officers, Co-Chief Operating Officers, Chief
Financial Officers, Co-Chief Financial Officers, Executive Vice Presidents, Vice
Presidents, Assistant Secretaries, and Assistant Treasurers, each of whom shall
hold office for such period, have such authority and perform such duties as the
Board, the Chairman or the President may from time to time determine. The Board
may delegate to any principal officer the power to appoint and define the
authority and duties of, or remove, any such officers, agents or employees.

 

4.4.

Term of Office, Resignation and Removal.

All officers shall be elected or appointed by the Board and shall hold office
for such term as may be prescribed by the Board. Each officer shall hold office
until his successor has been elected or appointed and qualified or until his
earlier death or resignation or removal in the manner hereinafter provided. The
Board may require any officer to give security for the faithful performance of
his duties.

Any officer may resign at any time by giving written notice to the Board, the
Chairman, the President or the Secretary. Such resignation shall take effect at
the time specified therein or, if the time be not specified, at the time it is
accepted by action of the Board. Except as aforesaid, the acceptance of such
resignation shall not be necessary to make it effective.

All officers and agents elected or appointed by the Board shall be subject to
removal at any time by the Board or by the stockholders of the Corporation with
or without cause.

 

4.5.

Vacancies.

If the office of Chairman, President, Secretary or Treasurer becomes vacant for
any reason, the Board shall fill such vacancy, and if any other office becomes
vacant, the Board may fill such vacancy. Any officer so appointed or elected by
the Board shall serve only until such time as the unexpired term of his
predecessor shall have expired, unless reelected or reappointed by the Board.

 

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4.6.

The Chairman.

The Chairman shall give counsel and advice to the Board and the officers of the
Corporation on all subjects concerning the welfare of the Corporation and the
conduct of its business and shall perform such other duties as the Board may
from time to time determine. Unless otherwise determined by the Board, he shall
preside at meetings of the Board and of the stockholders at which he is present.

 

4.7.

The President.

Unless otherwise determined by the Board, the President shall be the chief
executive officer of the Corporation and, if the President is not the chief
executive officer of the Corporation, all references to the President herein
shall be deemed to refer to the chief executive officer. The President shall
have general and active management and control of the business and affairs of
the Corporation subject to the control of the Board and shall see that all
orders and resolutions of the Board are carried into effect. The President shall
from time to time make such reports of the affairs of the Corporation as the
Board may require and shall perform such other duties as the Board may from time
to time determine.

 

4.8.

The Secretary.

The Secretary shall, to the extent practicable, attend all meetings of the Board
and all meetings of the stockholders and shall record all votes and the minutes
of all proceedings in a book to be kept for that purpose. He may give, or cause
to be given, notice of all meetings of the stockholders and of the Board, and
shall perform such other duties as may be prescribed by the Board, the Chairman
or the President, under whose supervision he shall act. He shall keep in safe
custody the seal of the Corporation and affix the same to any duly authorized
instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of the Treasurer or, if appointed, an Assistant
Secretary or an Assistant Treasurer. He shall keep in safe custody the
certificate books and stockholder records and such other books and records as
the Board may direct, and shall perform all other duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
by the Board, the Chairman or the President.

 

4.9.

The Treasurer.

The Treasurer shall have the care and custody of the corporate funds and other
valuable effects, including securities, shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board. The
Treasurer shall disburse the funds of the Corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, shall render to the
Chairman, President and directors, at the regular meetings of the Board or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the Corporation and shall perform all other
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.

 

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ARTICLE V

CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

 

5.1.

Execution of Documents.

The Board shall designate, by either specific or general resolution, the
officers, employees and agents of the Corporation who shall have the power to
execute and deliver deeds, contracts, mortgages, bonds, debentures, checks,
drafts and other orders for the payment of money and other documents for and in
the name of the Corporation, and may authorize such officers, employees and
agents to delegate such power (including authority to redelegate) by written
instrument to other officers, employees or agents of the Corporation. Unless so
designated or expressly authorized by these By-Laws or the Stockholders
Agreement, no officer, employee or agent shall have any power or authority to
bind the Corporation by any contract or engagement, to pledge its credit or to
render it liable pecuniarily for any purpose or amount.

 

5.2.

Deposits.

All funds of the Corporation not otherwise employed shall be deposited from time
to time to the credit of the Corporation or otherwise as the Board or Treasurer,
or any other officer of the Corporation to whom power in this respect shall have
been given by the Board, shall select.

 

5.3.

Proxies with Respect to Stock or Other Securities of Other Corporations.

The Board shall designate the officers of the Corporation who shall have
authority from time to time to appoint an agent or agents of the Corporation to
exercise in the name and on behalf of the Corporation the powers and rights
which the Corporation may have as the holder of stock or other securities in any
other entity, and to vote or consent with respect to such stock or securities.
Such designated officers may instruct the person or persons so appointed as to
the manner of exercising such powers and rights, and such designated officers
may execute or cause to be executed in the name and on behalf of the Corporation
and under its corporate seal or otherwise, such written proxies, powers of
attorney or other instruments as they may deem necessary or proper in order that
the Corporation may exercise its powers and rights.

ARTICLE VI

SHARES AND THEIR TRANSFER; FIXING RECORD DATE

 

6.1.

Certificates for Shares.

Shares of stock in the Corporation need not be certificated. The Corporation
may, at its election, issue to any stockholder of record a certificate
certifying the number and class of shares owned by him in the Corporation, which
shall be in such form as shall be prescribed by the Board. Certificates, if
issued, shall be numbered and issued in consecutive order and shall be signed
by, or in the name of, the Corporation by the Chairman, the President or any
Vice President, and by the Treasurer (or an Assistant Treasurer, if appointed)
or the Secretary (or an Assistant Secretary, if appointed). In case any officer
or officers who shall have signed any such certificate or certificates shall
cease to be such officer or officers of the Corporation, whether because of
death, resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates may
nevertheless be adopted by the Corporation and be issued and delivered as though
the person or persons who signed such certificate had not ceased to be such
officer or officers of the Corporation.

 

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6.2.

Record.

A record in one or more counterparts shall be kept of the name of the person,
firm or corporation owning the shares of stock of the Corporation. If
certificates are issued for any shares, the record shall include the number of
each certificate the Corporation issued, the number of shares represented by
each such certificate, the date thereof and, in the case of cancellation, the
date of cancellation. Except as otherwise expressly required by law, the person
in whose name shares of stock stand on the stock record of the Corporation shall
be deemed the owner thereof for all purposes regarding the Corporation.

 

6.3.

Transfer and Registration of Stock.

The transfer of stock and certificates which represent the stock of the
Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the
Delaware Code (the Uniform Commercial Code), as amended from time to time.

Registration of transfers of shares of the Corporation shall be made only on the
books of the Corporation upon request of the registered holder thereof, or of
his attorney thereunto authorized by power of attorney duly executed and filed
with the Secretary of the Corporation, and, if a certificate or certificates for
such shares have been issued, upon the surrender of the certificate or
certificates for such shares properly endorsed or accompanied by a stock power
duly executed.

The Board may appoint suitable agents to facilitate transfers by stockholders
under such regulations as the Board may from time to time prescribe, including
the appointment of a transfer agent to act as registrar of transfers of stock.

 

6.4.

Addresses of Stockholders.

Each stockholder shall designate to the Secretary an address at which notices of
meetings and all other corporate notices may be served or mailed to him, and, if
any stockholder shall fail to designate such address, corporate notices may be
served upon him by mail directed to him at his post-office address, if any, as
the same appears on the share record books of the Corporation or at his last
known post-office address.

 

6.5.

Lost, Destroyed and Mutilated Certificates.

The holder of any shares of the Corporation for which a certificate has been
issued shall immediately notify the Corporation of any loss, destruction or
mutilation of the certificate therefor, and the Board may, in its discretion,
cause to be issued to him a new certificate or certificates for such shares,
upon the surrender of the mutilated certificates or, in the case of loss or
destruction of the certificate, upon satisfactory proof of such loss or
destruction, and the Board may, in its discretion, require the owner of the lost
or destroyed certificate or his legal representative to give the Corporation a
bond in such sum and with such surety or sureties as it may direct to indemnify
the Corporation against any claim that may be made against it on account of the
alleged loss or destruction of any such certificate.

 

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6.6.

Regulations.

The Board may make such rules and regulations as it may deem expedient, not
inconsistent with these By-Laws or the Stockholders Agreement, concerning the
issue, transfer and registration of certificates for stock of the Corporation.

 

6.7.

Fixing Date for Determination of Stockholders of Record.

(a) In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board, and
which record date shall be not more than 60 nor less than 10 days before the
date of such meeting. If no record date is fixed by the Board, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board may fix a new record date for the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which date shall
be not more than 10 days after the date upon which the resolution fixing the
record date is adopted by the Board. If no record date has been fixed by the
Board, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
is required by the DGCL, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Corporation by delivery to its registered office in the State of Delaware,
its principal place of business or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation’s registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board and prior action by the Board is required by the
DGCL, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board adopts the resolution taking such prior action.

(c) In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the Board adopts the resolution
relating thereto.

 

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ARTICLE VII

SEAL

The Board may provide a corporate seal, which shall be in the form of a circle
and shall bear the full name of the Corporation, the year of incorporation of
the Corporation and the words and figures “Corporate Seal-Delaware.”

ARTICLE VIII

FISCAL YEAR

The fiscal year of the Corporation shall be the calendar year unless otherwise
determined by the Board.

ARTICLE IX

INDEMNIFICATION AND INSURANCE

 

9.1.

Indemnification.

(a) As provided in the Certificate of Incorporation and to the fullest extent
permitted by the DGCL as the same exists or may hereafter be amended, a director
of the Corporation shall not be liable to the Corporation or its stockholders
for breach of fiduciary duty as a director.

(b) Without limitation of any right conferred by paragraph (a) of this
Section 9.1, each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a “proceeding”), by reason of the fact that he or she
is or was a director, officer, employee or representative of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee or representative of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan (each, an “indemnitee”), whether the basis of such
proceeding is alleged action in an official capacity while serving as a
director, officer, employee or representative or in any other capacity while
serving as a director, officer, employee or representative, shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by the
DGCL, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than permitted prior thereto), against
all expense, liability and loss (including attorneys’ fees, judgments, fines,
excise taxes or amounts paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith and such indemnification shall continue
as to an indemnitee who has ceased to be a director, officer, employee or
representative and shall inure to the benefit of the indemnitee’s heirs,
testators, intestates, executors and administrators; provided, however, that
such person acted in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the Corporation, and with respect to a
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful; provided, further, however, that no indemnification shall be made
in the case of an action, suit or proceeding by or in the right of the
Corporation in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such director, officer, employee, representative
or agent is liable to the Corporation, unless a court having jurisdiction shall
determine that, despite such adjudication, such person is fairly and reasonably
entitled to indemnification. Except as provided in Section 9.1(c)

 

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of this Article IX with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) initiated by such indemnitee was authorized
by the Board. The right to indemnification conferred in this Article IX shall be
a contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an “advancement of expenses”); provided, however, that,
if the DGCL requires, an advancement of expenses incurred by an indemnitee in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a “final adjudication”) (i) that such
indemnitee breached his fiduciary duty to the Corporation or (ii) that such
indemnitee is not entitled to be indemnified for such expenses under this
Section or otherwise.

(c) If a claim under Section 9.1(b) of this Article IX is not paid in full by
the Corporation with 60 days after a written claim has been received by the
Corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be 10 days, the indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of any undertaking, the indemnitee shall also be entitled to be paid the
expense of prosecuting or defending such suit. The Corporation shall be entitled
to recover expenses upon a final adjudication that the indemnitee has not met
the applicable standard of conduct set forth in the DGCL in (i) any suit brought
by the indemnitee to enforce a right to indemnification hereunder (but not in a
suit brought by the indemnitee to enforce a right to an advancement of
expenses), and (ii) in any suit by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking. Neither the failure of the
Corporation (including the Board, independent legal counsel, or the
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the DGCL, nor an actual determination by the Corporation (including the Board,
independent legal counsel or the stockholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Section or otherwise shall be on the
Corporation.

(d) The rights to indemnification and to the advancement of expenses conferred
in this Article IX shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the Certificate of
Incorporation, the Stockholders Agreement, or any other agreement, vote of
stockholders or disinterested directors or otherwise.

 

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9.2.

Insurance.

The Corporation may purchase and maintain insurance, at its expense, to protect
itself and any person who is or was a director, officer, employee or agent of
the Corporation or any person who is or was serving at the request of the
Corporation as a director, officer, employer or agent of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the DGCL.

ARTICLE X

AMENDMENT

Other than as set forth in the Stockholders Agreement, these By-Laws may be
amended, changed or repealed, or new By-Laws adopted, by the vote of the holders
of a majority of the shares then entitled to vote or by the stockholders’
written consent pursuant to Section 2.11 of Article II, or by the vote of the
Board or by the directors’ written consent pursuant to Section 3.6 of Article
III.

ARTICLE XI

STOCKHOLDERS AGREEMENT

In the event of a conflict or inconsistency between the terms and conditions of
these By-Laws and the Stockholders Agreement, the provisions of the Stockholders
Agreement shall control.

* * * * *

 

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Annex E-3

Form of Stockholders Agreement

[See attached]

 

Annex E-1

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Final Form for Support Agreement

STOCKHOLDERS AGREEMENT

BY AND AMONG

AFFINION GROUP HOLDINGS, INC.,

AND

THE STOCKHOLDERS (AS DEFINED HEREIN)

DATED AS OF [    ], 2019

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TABLE OF CONTENTS

 

       Page   ARTICLE I

 

STOCKHOLDERS; VOTING

 

Section 1.1.

  Stockholders; Voting      1  

Section 1.2.

  Restrictive Legend      2   ARTICLE II   MANAGEMENT AND CONTROL OF BUSINESS  

Section 2.1.

  Board of Directors      3  

Section 2.2.

  Board Meetings; Board Action      6  

Section 2.3.

  Directors’ Non-exclusive Services      7  

Section 2.4.

  Reimbursement of Expenses      7  

Section 2.5.

  Director Compensation      8   ARTICLE III   INFORMATION RIGHTS  

Section 3.1.

  Information Rights of Stockholders; Records Required by the DGCL; Right of
Inspection      8  

Section 3.2.

  Information Rights of the Company      10   ARTICLE IV   TRANSFER  

Section 4.1.

  Transfer of Company Common Stock; Derivative Securities      10  

Section 4.2.

  General Provisions Regarding Transfers      10  

Section 4.3.

  Right of First Offer      11  

Section 4.4.

  Tag-Along Rights      13  

Section 4.5.

  Drag-Along Rights      16  

Section 4.6.

  Preemptive Rights      18  

Section 4.7.

  All Other Transfers Void      20  

Section 4.8.

  Admission of Substitute Stockholder; Liabilities      21  

Section 4.9.

  Registration Rights      21  

 

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ARTICLE V   REPRESENTATIONS AND WARRANTIES  

Section 5.1.

  Representations and Warranties of Each Party      22   ARTICLE VI  
MISCELLANEOUS  

Section 6.1.

  [Management Investors      23  

Section 6.2.

  Complete Agreement      23  

Section 6.3.

  Other Actions      23  

Section 6.4.

  Governing Law      23  

Section 6.5.

  No Assignment      23  

Section 6.6.

  Binding Effect      23  

Section 6.7.

  Severability      24  

Section 6.8.

  No Partition      24  

Section 6.9.

  Additional Documents and Acts      24  

Section 6.10.

  No Employment Rights      24  

Section 6.11.

  Amendments; Termination of Equity Rights      24  

Section 6.12.

  No Waiver      25  

Section 6.13.

  Notices      25  

Section 6.14.

  Consent to Jurisdiction; WAIVER OF JURY TRIAL      25  

Section 6.15.

  No Third Party Beneficiary      26  

Section 6.16.

  Confidentiality      26  

Section 6.17.

  Cumulative Remedies; Specific Performance      28  

Section 6.18.

  Exhibits and Schedules      28  

Section 6.19.

  Interpretation      28  

Section 6.20.

  Termination      28   EXHIBIT A  

DEFINITIONS

   EXHIBIT B  

FORM OF ADOPTION AGREEMENT

   ANNEX I  

CONFIDENTIALITY AGREEMENT

  

 

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STOCKHOLDERS AGREEMENT

This Stockholders Agreement (this “Agreement”) is made and entered into as of
[•], 2019 (the “Effective Date”) by and among Affinion Group Holdings, Inc., a
Delaware corporation (the “Company”), Elliott Associates, L.P., a Delaware
limited partnership, and Elliott International, L.P., a Cayman Islands limited
partnership (collectively, the “Elliott Stockholder”), Metro SPV LLC (the “Metro
Stockholder”), Mudrick Distressed Opportunity Fund Global, L.P., Blackwell
Partners LLC—Series A, Boston Patriot Batterymarch St. LLC, Mudrick Distressed
Opportunity Specialty Fund, L.P., Mudrick Distress Opportunity Drawdown Fund,
L.P., Mercer QIF Fund PLC (collectively, the “Mudrick Stockholder”), Empyrean
Investments, LLC, a Delaware limited liability company (the “Empyrean
Stockholder”), and any other holders of shares of Company Common Stock (as
defined herein) as of or following the Closing (as defined herein) (together
with the Elliott Stockholder, the Metro Stockholder and the Mudrick Stockholder,
the “Stockholders”). Capitalized terms used, but not otherwise defined, herein
have the meanings set forth in Exhibit A attached hereto and made a part hereof
by reference.

RECITALS

 

A.

This Agreement is being entered into in connection with the consummation of the
transactions contemplated by the Recapitalization (the “Closing”).

 

B.

The parties hereto desire to enter into this Agreement to establish certain
arrangements with respect to the Company Common Stock and other related
corporate matters of the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the Company and the
Stockholders, intending to be legally bound, hereby agree as follows:

ARTICLE I

STOCKHOLDERS; VOTING

Section 1.1. Stockholders; Voting. Except for the obligations contained in
Section 6.16, and subject to the last sentence of Section 4.8(a), a Person shall
cease to be a Stockholder for all purposes upon the disposition of all of such
Person’s Company Common Stock and Penny Warrants.

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Section 1.2. Restrictive Legend.

(a) Each certificate representing the Company Common Stock will contain a legend
in substantially the following form and any other legends required under the
Company’s Charter Documents:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A
STOCKHOLDERS AGREEMENT MADE AS OF [    ], 2019 INCLUDING RESTRICTIONS ON
TRANSFER, TO WHICH THE COMPANY AND ALL STOCKHOLDERS ARE PARTY. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THE
PROVISIONS OF SUCH AGREEMENT, AND ANY HOLDER OF SHARES OF THE COMPANY (WHETHER
ACQUIRED UPON ISSUANCE OR TRANSFER) SHALL BE, AND BE DEEMED TO BE, A PARTY TO
AND BOUND BY THAT AGREEMENT, WHICH SHALL CONTINUE TO BE EFFECTIVE
NOTWITHSTANDING ANY ISSUE OR TRANSFER OF SHARES OF THE COMPANY. A COPY OF THE
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE
HOLDER HEREOF UPON WRITTEN REQUEST.

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITY OR BLUE SKY LAWS AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT OR LAWS.”

(b) Subject to any lock-up or other agreement that may apply to a Stockholder’s
Company Common Stock as may be specifically agreed to with an applicable
Stockholder, the requirement that the shares of Company Common Stock contain the
second paragraph of the legend set forth in clause (a) above shall cease and
terminate when such shares are transferred pursuant to Rule 144 promulgated
under the 1933 Act (“Rule 144”). Upon the consummation of an event described in
the immediately preceding sentence, the Company, upon surrender of certificates
containing the second paragraph of such legend (if certificated), shall, at its
own expense, and upon delivery, if requested by the Board, of a written opinion
of legal counsel in form and substance reasonably satisfactory to the Company’s
legal counsel to the effect that the proposed Transfer is being made pursuant to
Rule 144, deliver to the holder of any such securities as to which the
requirement for the second paragraph of such legend shall have terminated, one
or more new certificates evidencing such securities not bearing the second
paragraph of such legend (if certificated).

(c) In the event that the Company Common Stock, or any shares thereof, shall
cease to be subject to the restrictions on Transfer set forth in Section 4.2,
the requirement that such shares of Company Common Stock contain the first
paragraph of the legend set forth in clause (a) above shall cease and terminate.
Upon the consummation of an event described in the

 

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immediately preceding sentence, the Company, upon surrender of certificates
containing the first paragraph of such legend (if certificated), shall, at its
own expense, deliver to the holder of any such securities as to which the
requirement for the first paragraph of such legend shall have terminated, one or
more new certificates evidencing such securities not bearing the first paragraph
of such legend (if certificated).

ARTICLE II

MANAGEMENT AND CONTROL OF BUSINESS

Section 2.1. Board of Directors.

(a) Company Subsidiaries. The Company shall not cause or permit any of its
direct or indirect Subsidiaries to take any action in subversion of the rights
of Stockholders as set forth herein (it being understood that any action by the
Company permitted hereunder, including with respect to actions relating to it
and its Subsidiaries on a consolidated basis, shall not require additional
consent hereunder solely because such action instead is taken by a direct or
indirect Subsidiary of the Company). From and after the date of this Agreement
and until the German Approval is obtained by the Elliott Stockholder, the
Company shall, and shall cause its direct or indirect Subsidiaries to, operate
in the ordinary course of business, consistent with past practice.

(b) Election of Directors. The board of directors of the Company (the “Board”)
shall be comprised of seven (7) Directors, which may only be reduced in
accordance with this Section 2.1, and from and after the date on which the
German Approval is obtained, the Company and each Stockholder shall use its
reasonable best efforts to cause the following individuals to be Directors:

(i) for so long as the Elliott Stockholder, together with its Affiliates,
(x) collectively owns at least thirty percent (30%) of the Company Common Stock
on a Fully Diluted Basis, three (3) individuals appointed by the Elliott
Stockholder; (y) collectively owns less than thirty percent (30%) but more than
twenty percent (20%) of the Company Common Stock on a Fully Diluted Basis, two
(2) individuals appointed by the Elliott Stockholder; and (z) collectively owns
less than twenty percent (20%) but more than ten percent (10%) of the Company
Common Stock on a Fully Diluted Basis, one (1) individual appointed by the
Elliott Stockholder (any such Directors, the “Elliott Directors”);

(ii) the Chief Executive Officer of the Company, who shall initially be Todd
Siegel (the “CEO Director”);

 

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(iii) for so long as the Metro Stockholder, together with its Affiliates,
collectively owns at least ten percent (10%) of the Company Common Stock on a
Fully Diluted Basis, one (1) individual appointed by the Metro Stockholder (the
“Metro Director”);

(iv) for so long as the Mudrick Stockholder, together with its Affiliates,
collectively owns at least ten percent (10%) of the Company Common Stock on a
Fully Diluted Basis, one (1) individual appointed by the Mudrick Stockholder
(the “Mudrick Director”); and

(v) one (1) Independent individual, who shall be selected with the unanimous
approval of each of the Elliott Stockholder, the Metro Stockholder and the
Mudrick Stockholder (none of whom shall unreasonably withhold, condition or
delay such approval, and who shall collectively use a selection process
unanimously approved by such parties, provided that if such Stockholders are
unable to unanimously approve a selection process within 60 days following the
date of this Agreement, then the Elliott Stockholder shall select a candidate
for approval as otherwise provided in this clause (v)) (the “Independent
Director”); provided, that the right of Mudrick Stockholder and Metro
Stockholder to participate in such process and approve such Independent Director
shall be subject to their continuing to collectively own at least twenty percent
(20%) of the Common Stock on a Fully Diluted Basis.

(c) The Chairman of the Board shall be such Elliott Director as may be
designated by the Elliott Stockholder.

(d) The Elliott Stockholder may transfer or assign its right to designate
Directors pursuant to Section 2.1(b)(i) in connection with a Permitted Transfer
of its Company Common Stock (such transferee, a “Substitute Elliott
Stockholder”); provided, that in no event will the Elliott Stockholder and all
Substitute Elliott Stockholders together be entitled to appoint in total more
Directors pursuant to the designation rights in Section 2.1(b)(i), as a result
of such transfer or series of transfers, than the Elliott Stockholder would have
otherwise been entitled to designate pursuant to Section 2.1(b)(i) immediately
prior to such transfer or assignment. Neither the Metro Stockholder nor the
Mudrick Stockholder shall be permitted to Transfer its right to designate a
Director pursuant to Section 2.1(b)(iii) or (iv) in connection with a Permitted
Transfer of such Stockholder’s Company Common Stock, unless such Permitted
Transfer is to an existing Stockholder that is party to this Agreement and who,
pre-Transfer, holds at least seven percent (7%) of the Company Common Stock on a
Fully Diluted Basis (each, a “Stockholder Group Member”), and, post-Transfer
holds at least ten percent (10%) of the Company Common Stock on a Fully Diluted
basis (any such transferee, a “Substitute Principal Stockholder”).

 

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(e) Removal of Directors. Except as otherwise set forth in this Section 2.1(e),
once appointed, a Director shall serve on the Board until (A) his or her death,
disability, disqualification or resignation, or (B) the removal of such Director
from the Board by the Stockholder having the right to designate such Director
pursuant to Section 2.1(b) with or without cause or (C) such time as the
Stockholder who has the right to designate such Director pursuant to
Section 2.1(b) fails to meet the requisite ownership threshold to designate such
Director pursuant to Section 2.1(b) (provided, that if such designating
Stockholder continues to have the right to designate any directors to the Board,
it may choose which of its designees is removed from the Board). For so long as
the Mudrick Stockholder and Metro Stockholder collectively own at least twenty
percent (20%) of the Company Common Stock on a Fully Diluted Basis, the removal
of the Independent Director shall require the unanimous approval of each of
Elliott Stockholder, Metro Stockholder and Mudrick Stockholder, none of whom
shall unreasonably withhold, condition or delay such approval.

(f) Vacancies. Except as otherwise set forth in this Section 2.1(f), if at any
time a vacancy is created on the Board by reason of the death, disability,
disqualification, resignation or removal of any Director, a designee shall be
appointed to fill such vacancy or vacancies by the Stockholder(s) entitled to
appoint such Director pursuant to Section 2.1(b); provided that if a Stockholder
fails to exercise its right to designate a Director in a timely manner and such
vacancy would make it impossible for a quorum to be present at a duly called
meeting of the Board, the majority of the remainder of the Board shall be
permitted to appoint a Director to fill the seat in order to hold a meeting,
subject to the right of such Principal Stockholder to remove and/or replace the
emergency Director with its own designee.

(i) A vacancy created as a result of the loss of the Elliott Stockholder’s right
to designate a Director pursuant to Section 2.1(b)(i) (unless such right has
been properly transferred to a Substitute Elliott Stockholder) shall thereafter
be filled by the vote of holders of a majority of the Outstanding Company Common
Stock.

(ii) A vacancy created as a result of the loss of any Stockholder’s right to
designate a Director pursuant to Section 2.1(b) (iii) or (iv) (unless such right
has been properly transferred to a Substitute Principal Stockholder as provided
herein) shall immediately result in an automatic reduction of the Board by one
(1) member.

(iii) If at any time the CEO Director is no longer serving as chief executive
officer of the Company, (A) then the CEO Director shall be deemed to have
resigned from the Board immediately and (B) the Board shall cause the vacancy
caused by such resignation to be filled by the new chief executive officer of
the Company in accordance with the requirements of the Charter Documents.

(iv) If at any time there is no chief executive officer of the Company, then
notwithstanding the right of the Board to fill any vacancy pursuant to the
Charter Documents, the CEO Director seat shall be vacant until a chief executive
officer of the Company is appointed whether on an interim or permanent basis.

 

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Section 2.2. Board Meetings; Board Action.

(a) Participation. Any or all Directors may participate in a meeting of the
Board in person, by means of a conference telephone or other communications
equipment allowing all Persons participating in the meeting to hear each other
at the same time or, (i) in the case of an Elliott Director, by providing a
proxy to another Elliott Director attending such meeting in person or by
conference telephone, (ii) in the case of the Mudrick Director, by providing a
proxy to the Metro Director attending such meeting in person or by conference
telephone, and (iii) in the case of the Metro Director, by providing a proxy to
the Mudrick Director attending such meeting in person or by conference
telephone. Participation by any such means shall constitute presence in Person
at the meeting.

(b) Voting. Each Director shall be entitled to one (1) vote. The affirmative
vote of the majority of the entire Board (at any meeting of the Board at which a
quorum is present) shall be the act of the Board. Notwithstanding the foregoing,
on any matter coming before the Board at a meeting of which an Elliott Director,
Mudrick Director or Metro Director is participating by proxy, such Director’s
vote may be exercised by the Director to whom the proxy has been given.

(c) Quorum. The quorum for a meeting of the Board shall require: (i) for so long
as the Board is comprised of seven (7) Directors, five (5) Directors present in
person, by telephone or by proxy including at least (A) three (3) of the Elliott
Directors in attendance (or by proxy) and (B) one (1) of the Metro Director or
the Mudrick Director in attendance; (ii) for so long as the Board is comprised
of six (6) Directors, four (4) Directors present in person, by telephone or by
proxy including at least (A) two (2) of the Elliott Directors in attendance (or
by proxy) and (B) one (1) of the Metro Director or the Mudrick Director in
attendance; and (iii) for so long as the Board is comprised of five
(5) Directors, three (3) Directors present in person, by telephone or by proxy
including at least one (1) Elliott Director in attendance, in each case of
clauses (i), (ii) and (iii), for so long as such Stockholders are entitled to
designate such number of Directors. Notwithstanding the foregoing quorum
requirement, if any Director(s) required for a quorum fails to be in attendance
at a duly called meeting of the Board, then the presence of such Director(s)
shall not be required at the next duly called meeting of the Board in order to
transact business called at the prior meeting; provided, that the foregoing
quorum requirement shall be reinstated at the subsequent meetings of the Board.

(d) Action by Written Consent. For so long as the Board is comprised of seven
(7) Directors, Board decisions taken by written consent in lieu of a meeting of
the Board will require the written consent of five (5) directors, comprised of
at least (i) two (2) Elliott Director and (ii) one (1) of the Metro Director or
the Mudrick Director, in each case for so long as such parties are entitled to
designate such number of Directors. Any other Board decisions taken by written
consent in lieu of a meeting of the Board will require the written consent of at
least a majority of the Directors then in office, including at least (A) one (1)
Elliott Director for so long as the Elliott Stockholder is entitled to designate
any Directors, and (B) one (1) of the Metro Director or the Mudrick Director,
for so long as either of the Metro Stockholder or the Mudrick Stockholder is
entitled to designate any Directors.

 

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(e) Required Stockholder Approvals. Notwithstanding anything to the contrary in
this Agreement, the Company may not (i) amend any of its Charter Documents in
any manner that is disproportionately and materially adverse to the rights or
obligations of any Stockholder relative to the rights of another Stockholder,
without the prior written consent of such Stockholder, but subject to the
proviso and the requirement regarding the timing for bringing any proceeding
that would apply under Section 6.11(a) in the case of an amendment to this
Agreement, or (ii) cause the Company or any of its material Subsidiaries to
voluntarily dissolve, voluntarily file for bankruptcy, liquidate or wind up,
without the prior written consent of at least one of the Metro Stockholder or
the Mudrick Stockholder, in the case of this clause (ii), for so long as such
Stockholder, together with its Affiliates, collectively owns at least ten
percent (10%) of the Company Common Stock on a Fully Diluted Basis.

(f) Related Party Transactions. Notwithstanding anything to the contrary in this
Agreement, the Company may not, directly or indirectly (and the Company shall
cause its Subsidiaries not to) enter into any transaction or series of related
transactions involving more than $50,000 with any holder of five percent (5%) or
more of the shares of the Outstanding Company Common Stock or any of their
respective executive officers, directors or Affiliates (a “Related Party
Transaction”) without the affirmative vote of a majority of the disinterested
Directors of the Board, unless such transaction is entered into (x) in the
ordinary course of business with a portfolio company of such holder (provided
such holder does not own a majority of the voting interests in such portfolio
company or otherwise control such company) or (y) in connection with new or
continued employment or service of the directors, officers or employees of the
Company or its Subsidiaries; provided that for the purposes of this
Section 2.2(d), the term “Affiliates” shall not include the Company or any of
its Subsidiaries; provided further that no such approval shall be required for
any indemnification agreement entered into on the date hereof with a Director.

Section 2.3. Directors’ Non-exclusive Services. No Director shall be required to
manage the Company as his sole and exclusive function and any Director or
Stockholder may have other business interests and may engage in other activities
in addition to those relating to the Company. Notwithstanding the foregoing,
Directors who are employees of the Company or its Subsidiaries shall be required
to have such employment as their primary business function.

Section 2.4. Reimbursement of Expenses. Each Director shall be entitled to
reimbursement from the Company of all reasonable and documented expenses
reasonably incurred and paid by such Director in connection with such Director’s
services as a Director or otherwise incurred for the benefit of, or on behalf
of, the Company. Without limiting the foregoing, each Principal Stockholder, for
so long as they are entitled to designate a Director to the Board, shall also be
entitled to reimbursement from the Company of all reasonable and documented
expenses incurred and paid by such Principal Stockholder in connection with the

 

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attendance by such Principal Stockholder’s designated Director(s) at Board
meetings or committee meetings and in connection with other matters related
thereto. The Board may establish, from time to time, policies relating to
expense reimbursement (including, what expenses, such as retained counsel or
other advisors, will be reimbursable), which policies shall treat and apply to
each Director (other than any employee of the Company serving as a Director)
equally.

Section 2.5. Director Compensation. Each of the Directors (other than any
employee of the Company serving as a Director) shall be entitled to directorship
fees or other compensation as determined by the Board from time to time;
provided that each non-employee Director, other than the chairperson who may
receive additional compensation, shall receive the same fee. The Board shall
have the discretion to determine if Directors should be provided additional fees
for serving on one or more committees of the Company; provided that each
committee member, other than the chairperson who may receive additional
compensation, shall receive the same fee. Further, nothing contained herein
shall preclude any Director that is an employee of the Company from receiving
wages or similar compensation pursuant to any employment agreement with the
Company for services rendered thereto.

ARTICLE III

INFORMATION RIGHTS

Section 3.1. Information Rights of Stockholders; Records Required by the DGCL;
Right of Inspection.

(a) Each Stockholder, other than any Stockholder that is a Competitor, shall
have the right to receive the following information (which right the Company may
satisfy by providing access to each Stockholder to a confidential website such
as Intralinks and timely posting such information on such website (which website
shall have a system of email notification of new postings and may require
confirmation by viewers of the site of the confidentiality obligations set forth
in Section 6.16, a “Secure Site”), and each Stockholder may share and discuss
such information (along with any other information provided to Stockholders
pursuant to this Agreement and otherwise made available to Stockholders via the
Secure Site) with its Affiliates, directors, officers, partners, managers,
stockholders, employees, investors and advisors as well as any bona fide
prospective purchaser of Company Common Stock that (x) is not a Competitor and
(y) has entered into, and delivered to the Company, a confidentiality agreement
substantially in the form set forth on Annex I attached hereto regarding the
treatment of such information (and for the avoidance of doubt, at its election,
the Company may share and discuss such information with any prospective
purchaser of Company Common Stock):

(i) within ninety (90) days of the end of each fiscal year, copies of all annual
financial statements of the Company and its Subsidiaries on a consolidated basis
as of the end of such fiscal year, which financial statements shall (w) include
a comparison to the prior fiscal year results; (x) be prepared in accordance
with GAAP; (y) be audited by a nationally recognized accounting firm approved by
the Board; and (z) be certified by the chief financial officer of the Company.

 

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(ii) for each of the first three fiscal quarters of each fiscal year of the
Company, copies of all unaudited quarterly financial statements of the Company
and its Subsidiaries on a consolidated basis as of the end of such fiscal
quarter, which financial statements shall (x) include year-to-date results and a
comparison to the corresponding period in the prior fiscal year; (y) be prepared
in accordance with GAAP; and (z) be delivered no later than forty-five (45) days
following the end of such fiscal quarter.

(b) Each Stockholder Group Member may request, and the Company shall reasonably
provide, a conference call with senior officers of the Company to discuss the
status of the Company and its business and the business of its Subsidiaries
(including updates to the budgets and projections of the Company and its
Subsidiaries), which calls shall include a reasonable and customary question and
answer session, once each fiscal quarter.

(c) During the term of the Company’s existence there shall be maintained in the
Company’s principal office or at the office of the Company’s agents and
representatives all records required to be kept pursuant to the DGCL, including
(whether or not so required) a current list of the names, addresses and shares
of Company Common Stock held by each of the Stockholders (including the dates on
which each of the Stockholders became a Stockholder), copies of federal, state
and local information or income tax returns for each of the Company’s tax years,
copies of this Agreement and each of the Company’s Charter Documents, including
all amendments thereto and restatements thereof, and correct and complete books
and records of account of the Company. Prior to any termination of the Company’s
existence, the Company shall use all reasonable efforts to ensure that, for a
period of six (6) years after any such termination, such information, to the
extent still in existence and available, may be obtained by a Stockholder’s
request in writing to a legal advisor or agent of the Company to be designated
prior to any such termination, with the cost (as reasonably determined by such
legal advisor or agent) of accessing and providing such information being borne
by the requesting Stockholder.

(d) On written request stating the purpose, a Stockholder that (together with
its Affiliates) holds at least five percent (5%) of the Outstanding Company
Common Stock may make reasonable inquiries of management and examine, at any
reasonable time during business hours, for any proper purpose reasonably related
to such Stockholder’s interest as a Stockholder of the Company, and at the
Stockholder’s expense, records of the Company and its Subsidiaries; provided
that the Company may limit access to certain information if and to the extent
required by applicable law, if the Board reasonably deems such information to be
competitively sensitive with respect to the Stockholder requesting such access
or if granting such access could reasonably be expected in the loss or
impairment of the Company to claim attorney client privilege, work product
doctrine, or a similar protective privilege or doctrine with respect to the
information (provided that the Company shall use its reasonable best efforts to
allow for such

 

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access in a way that would not have any of the foregoing effects). Upon written
request by any Stockholder made to the Company, the Company shall provide or
make available to such Stockholder without charge true copies of this Agreement,
the Company’s Charter Documents, and all amendments thereto and restatements
thereof, which documents may be provided to such Stockholder by posting them on
a Secure Site.

Section 3.2. Information Rights of the Company. The Company may from time to
time (including in connection with the admission of a new or Substitute
Stockholder), but a Stockholder may be compelled to answer no more frequently
than once per calendar quarter (unless, with respect to clause (i) hereof,
required by applicable law), reasonably request of any or all Stockholders
information (i) needed by the Company to comply with applicable law and/or
(ii) regarding such Stockholder’s “accredited investor” status (within the
meaning of Regulation D promulgated under the Securities Act).

ARTICLE IV

TRANSFER

Section 4.1. Transfer of Company Common Stock; Derivative Securities. Any
Stockholder may Transfer, offer to Transfer, or accept an offer from any
proposed Transferee for, all or any shares of its Company Common Stock or any
amount of its Derivative Securities to another Person in accordance with and
subject to the terms and conditions set forth in this Article IV (including
compliance with Section 4.3). A Transfer completed in accordance with this
Article IV is referred to in this Agreement as a “Permitted Transfer.”

Section 4.2. General Provisions Regarding Transfers.

(a) Without limiting any other provisions or restrictions or conditions of this
Article IV, no Transfer of Company Common Stock or any Derivative Security or
any other rights or obligations or interests of a Stockholder, as applicable,
may be made under any circumstances unless such Transfer is made in accordance
with the procedures set forth herein and such Transfer would not result in any
of the following:

(i) Securities Laws. Any violation of the Securities Act of 1933, as amended
(the “Securities Act”), or any regulation issued pursuant thereto, or any state
securities laws or regulations, or any other applicable federal or state laws or
order of any court having jurisdiction over the Company; or

(ii) Registration. Without limiting the restrictions set forth in the Charter
Documents, until the Company becomes obligated to file reports under Section 13
or 15(d) of the Exchange Act, any requirement that the Company register the
Company Common Stock or any other capital stock of the Company under
Section 12(g) of the Exchange Act or any regulation issued pursuant thereto.

 

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Compliance with the restrictions on Transfer set forth in this Section 4.2(a)
may be administered by the Company or the Company’s transfer agent under the
direction and control of the Company, and the Company and its transfer agent
shall be entitled to take such measures as are reasonably necessary to prevent
any Transfers in violation of this Section 4.2(a). In furtherance of the
foregoing, it is understood and agreed by all Stockholders, additional
Stockholders and Substitute Stockholders that Transfers may not be permitted if,
following such Transfer, the Company’s securities would be held by a number of
holders or non-accredited investors that would result (including as a result of
passage of time, and giving effect to the exercise of all Derivative Securities)
in a requirement that the Company file a registration statement under the
Exchange Act or any regulation issued pursuant thereto, unless the Company has
already become required, or the Board has elected, to file such a registration
statement in connection with an IPO.

(b) Mechanics. Any Transfer of Company Common Stock or Derivative Securities
shall be subject to the restrictions of this Section 4.2. The Person proposing
to make any such Transfer shall deliver to the Company (i) the name of the
Person or Persons to whom the proposed Transfer is to be made (“Transferee”) and
(ii) if reasonably requested by the Board, a written opinion of legal counsel in
form and substance reasonably satisfactory to the Company’s legal counsel to the
effect that the proposed Transfer may be effected without registration under the
Securities Act or any applicable state law.

(c) Adoption Agreement. Prior to the consummation of an IPO, no direct Transfer
of Company Common Stock by any Stockholder will be permitted unless the
Transferee in such Transfer (if not already a party hereto) executes an Adoption
Agreement, pursuant to which such Transferee shall become a Stockholder bound by
this Agreement. Upon any Transfer by a Stockholder of all of its Company Common
Stock, that Stockholder shall cease to be a Stockholder for all purposes under
this Agreement.

(d) Prohibited Persons. Notwithstanding anything herein to the contrary, unless
approved by the Board or pursuant to a Tag-Along Sale or Drag-Along Sale, no
Transfer of any Company Common Stock or Derivative Securities otherwise
permitted by this Agreement shall be permitted or made by any Stockholder if
such Transfer, whether directly or indirectly, is to a Prohibited Person.

Section 4.3. Right of First Offer

(a) Subject to the terms and conditions of this Section 4.3, for so long as a
Stockholder (together with its Affiliate Transferees) remains a Stockholder
Group Member (each, a “ROFO Owner”), such Stockholder shall have a right of
first offer to purchase any Company Common Stock or Derivative Securities that
any other Stockholder Group Member (a “ROFO Initiator”) proposes to Transfer. No
Stockholder Group Member may Transfer any Company Common Stock or Derivative
Securities without first complying with the terms and conditions of this
Section 4.3; provided that this Section 4.3 shall not apply to (i) Affiliate
Transfers, (ii) any Tag-Along Sale in which a Tag-Along Rightholder may Transfer
pursuant to Section 4.4, (iii) a Drag-Along Sale or (iii) in connection with an
IPO.

 

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(b) Each time a ROFO Initiator proposes to Transfer any Company Common Stock or
Derivative Securities owned by it (the “Transfer Interests”), the ROFO Initiator
shall give a written notice (the “ROFO Initiator Notice”) to each of the ROFO
Owners who is not an Affiliate of the ROFO Initiator, specifying the number of
shares of Company Common Stock or Derivative Securities proposed to be sold by
such ROFO Initiator, and concurrently with such ROFO Initiator Notice, the ROFO
Initiator shall submit to the chief legal officer of the Company, on a
confidential basis, the price at which such ROFO Initiator desires to sell such
Company Common Stock and/or Derivative Securities (the “Offer Price”).

(c) Within five (5) Business Days after the receipt of a ROFO Initiator Notice
(the “ROFO Exercise Period”), each ROFO Owner wishing to exercise its right of
first offer under this Section 4.3 shall submit a written notice to the chief
legal officer of the Company with the price at which such ROFO Owner desires to
purchase the Transfer Interests (each, a “Bid Price”), and indicating any other
material terms and conditions on which, such ROFO Owners are willing to purchase
all (but not less than all) of the Transfer Interests (each, a “ROFO Exercise
Notice”). A ROFO Owner’s failure to deliver a valid ROFO Exercise Notice prior
to the expiration of the ROFO Exercise Period shall be deemed an election by
such ROFO Owner not to exercise its rights pursuant to this Section 4.3. If any
ROFO Owner provides a ROFO Exercise Notice within the ROFO Exercise Period, on
the Business Day immediately following the expiration of the ROFO Exercise
Period, the Company shall notify the ROFO Initiator and the ROFO Owners who
submitted a ROFO Exercise Notice of the Transfer Price. The “Transfer Price”
shall be mean an amount determined as follows: (i) in the event only one Bid
Price was submitted by one or more ROFO Owners and it exceeds the Offer Price,
then the Transfer Price shall be an amount equal to the average of the Bid Price
and the Offer Price; (ii) in the event multiple Bid Prices were submitted and at
least one exceeds the Offer Price, then the Transfer Price shall be an amount
equal to the average of the highest Bid Price and the Offer Price; (iii) if only
one Bid Price is submitted by one or more ROFO Owners and such Bid Price equals
the Offer Price, then the Transfer Price shall be an amount equal the Offer
Price (this or the foregoing circumstances described in clauses (i) and (ii), an
“Accepted Offer Event”); (iv) in the event only one Bid Price was submitted and
the Offer Price exceeds it, then the Transfer Price shall be an amount equal to
the average of the Bid Price and the Offer Price; and (v) in the event multiple
Bid Prices were submitted and the Offer Price exceeds the highest Bid Price
submitted, then the Transfer Price shall be an amount equal to the average of
the lowest Bid Price and the Offer Price (this or the foregoing circumstances
described in clause (iv), a “Rejected Offer Event”).

 

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(d) If there is an Accepted Offer Event, the ROFO Initiator shall Transfer all
of the Transfer Interests at the Transfer Price on commercially reasonable terms
negotiated in good faith to the ROFO Owners who submitted the Transfer Price;
any ROFO Owner who submitted an Offer Price shall have the right, but not the
obligation, to participate in the Transfer in connection with an Accepted Offer
Event at the Transfer Price in proportion to their (together with their
respective Affiliate Transferees) ownership percentages of Company Common Stock
on a Fully Diluted Basis.

(e) If there is a Rejected Offer Event, then the ROFO Initiator shall have
ninety (90) days after the expiration of the ROFO Exercise Period during which
to Transfer, subject to compliance with Section 4.2 and all of the Transfer
Interests to a third party purchaser (which may include any Stockholder of the
Company) (“Third Party Purchaser”) at a price equal to or greater than the
Transfer Price and on terms no more favorable to such Third Party Purchaser in
all material respects than those contained in the ROFO Exercise Notice. If, at
the end of such 90-day period, the ROFO Initiator has not completed a Transfer
of the Transfer Interests to a Third Party Purchaser, the ROFO Initiator shall
no longer be permitted to Transfer the Transfer Interests to any Person without
again complying with the requirements of this Section 4.3.

(f) If no ROFO Owner delivers a ROFO Exercise Notice prior to the end of the
ROFO Exercise Period, then the ROFO Initiator shall have ninety (90) days after
the expiration of the ROFO Exercise Period during which to Transfer, subject to
compliance with Section 4.2 and, if applicable Section 4.4, all (but not less
than all, unless there is a reduction to the number of Company Common Stock or
Derivative Securities to be sold by the ROFR Initiator due to the participation
of Tag-Along Rightholders pursuant to Section 4.4) of the Transfer Interests to
a Third Party Purchaser (which Transfer, for the avoidance of doubt, may be for
greater, equal to, or less than the Offer Price). If, at the end of such 90-day
period, the ROFO Initiator has not completed a Transfer of the Transfer
Interests to a Third Party Purchaser, the ROFO Initiator shall no longer be
permitted to Transfer the Transfer Interests to any Person without again
complying with the requirements of this Section 4.3.

Section 4.4. Tag-Along Rights.

(a) Without limiting the other terms and conditions hereof (including
Section 4.1), if at any time the Elliott Stockholder or any of its Affiliates
(the “Tag-Along Seller”) proposes to Transfer, directly or indirectly, for value
any of its Company Common Stock and/or Warrants, then each other Stockholder
Group Member (each, a “Tag-Along Rightholder”) shall have the right to sell its
pro rata portion of Company Common Stock and/or Warrants in such Transfer;
provided, that no such tag-along rights shall apply to any Transfers (i) of less
than twenty percent (20%) of the Outstanding Company Common Stock held by
Elliott Stockholder and its Affiliates together (provided, that Transfers to the
same party or related parties, whether at one time or in a series, shall be
aggregated for purposes of determining whether the exception set forth in this
Section 4.4(a)(i) applies), (ii) to Affiliates, (iii) as part of an IPO, or
(iv) that are Drag-Along Sales.

 

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(b) The Tag-Along Seller shall give written notice to the Company of each
proposed Transfer by it that gives rise to the rights of the Tag-Along
Rightholders set forth in this Section 4.4 no less than thirty (30) days prior
to the proposed consummation of such Transfer and the Company, within three
(3) Business Days after receiving notice from such Tag-Along Seller, shall give
written notice of such Transfer to each Tag-Along Rightholder. The close of
business on the date immediately prior to the date on which written notice is
given by the Company in accordance with this Section 4.4(b) shall be deemed to
be the “Tag-Along Record Date.” The notice provided by the Tag-Along Seller, and
forwarded by the Company, shall set forth in reasonable detail based on
information available to the Tag-Along Seller, the name of such Tag-Along
Seller, the number of shares of Company Common Stock that will be held by such
Tag-Along Seller as of the Tag-Along Record Date and the number of shares of
Company Common Stock and/or Warrants proposed to be sold by such Tag-Along
Seller, the name of and contact information for the proposed purchaser, (the
“Tag-Along Purchaser”), the proposed amount and form of consideration and terms
and conditions of payment offered by such Tag-Along Purchaser, the percentage
(or a reasonable estimate of the minimum and maximum percentage) of Company
Common Stock on a Fully Diluted Basis Tag-Along Rightholders may sell to such
Tag-Along Purchaser (determined in accordance with Section 4.4(a)), the per
share purchase price and any other material terms or conditions (the “Tag-Along
Notice”). The tag-along rights provided by this Section 4.4 must be exercised by
any Tag-Along Rightholder electing to sell Tag-Along Offered Shares no later
than the tenth (10th) Business Day following the Tag-Along Record Date, which
exercise shall be by delivery of a written irrevocable offer (the “Tag-Along
Rightholder’s Offer”) to the Tag-Along Seller and the Company indicating such
Tag-Along Rightholder’s election to have its Company Common Stock and/or
Warrants included in the Tag-Along Sale and specifying the number thereof (up to
the maximum number of shares of Company Common Stock and/or Warrants as
determined in accordance with Section 4.4(a)) it elects to sell; provided that
any Tag-Along Rightholder may waive its tag-along rights under this Section 4.4
with respect to such Tag-Along Sale prior to the expiration of such ten
(10)-Business Day period by giving written notice thereof to the Tag-Along
Seller, with a copy to the Company (and failure to deliver a Tag-Along
Rightholder’s Offer by the tenth (10th) Business Day following the Tag-Along
Record Date will be deemed to be a waiver of such Tag-Along Rightholder’s
tag-along rights under this Section 4.4 with respect to such Tag-Along Sale).
Subject to the other terms herein, delivery of the Tag-Along Rightholder’s Offer
will constitute an irrevocable binding commitment by such Tag-Along Rightholder
to sell the number of shares of Company Common Stock and/or Warrants specified
in the Tag-Along Rightholder’s Offer of such Tag-Along Rightholder on the terms
set forth in the Tag-Along Notice. The Tag-Along Seller shall attempt to obtain
the inclusion in the proposed Tag-Along Sale of the entire number of Tag-Along
Offered Shares that the Tag-Along Rightholders timely elect to have included in
such Tag-Along Sale. If the Tag-Along Seller is unable to obtain such inclusion
of all such securities, then the number of shares of Company Common Stock and/or
Warrants to be sold in such Tag-Along Sale shall be allocated on a pro rata
basis among the Tag-Along Seller and each Tag-Along Rightholder who shall have
timely elected to participate in such Tag-Along Sale in proportion to the total
number of shares of Company Common Stock and/or Warrants offered and eligible to
be sold in the Tag-Along Sale by each such Stockholder. Neither the Tag-Along
Seller nor any of its Affiliates shall receive any direct or indirect
consideration in connection with the Tag-Along Sale (including by way of fees,
consulting arrangements or a non-compete payment) other than consideration
received in exchange for its Company Common Stock.

 

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(c) If the Tag-Along Seller has not consummated the Tag-Along Sale within ninety
(90) days of the delivery to Stockholders of the related Tag-Along Notice (for
any reason other than the failure of a Tag-Along Rightholder to sell its shares
of Company Common Stock and/or Warrants under this Section 4.4), provided that
such period may be extended to one hundred twenty (120) days in order obtain
regulatory approvals that are a condition to such Tag-Along Sale or (ii) the
amount or form of consideration shall have changed from those in the Tag-Along
Notice, then, in either case, the Tag-Along Notice and any Tag-Along
Rightholder’s Offer shall be null and void, and it shall be necessary for a
separate Tag-Along Notice to be furnished, and the terms and provisions of this
Section 4.4 separately complied with, in order to subsequently consummate such
proposed Tag-Along Sale pursuant to this Section 4.4 unless the Tag-Along Seller
receives the written consent of each of the Tag-Along Rightholders who delivered
a Tag-Along Rightsholder’s Offer agreeing to an extension. Notwithstanding any
other provision of this Section 4.3, there shall be no liability on the part of
any Tag-Along Seller to any other Stockholder arising from the failure of any
Tag-Along Seller or Tag-Along Purchaser to consummate the Tag-Along Sale for any
reason, and the decision to consummate such Tag-Along Sale shall be in the sole
discretion of the Tag-Along Seller.

(d) Each Person selling Company Common Stock or Warrants in a proposed Tag-Along
Sale shall take or cause to be taken all such reasonable actions consistent with
the terms of this Agreement as may be necessary or reasonably desirable in order
expeditiously to consummate such sale and any related transactions, including:
executing, acknowledging and delivering consents, assignments, waivers and other
documents or instruments; furnishing information and copies of documents
reasonably requested of it; and otherwise reasonably cooperating with the
selling Stockholders, the Company, and the prospective purchaser. Without
limiting the generality of the foregoing, with respect to a proposed Tag-Along
Sale, each such participating Stockholder agrees to execute and deliver such
agreements as may be reasonably specified by the Tag-Along Seller (including, if
applicable, any conversion or exercise of any Warrants in exchange for Company
Common Stock prior to the consummation of the applicable sale), so long as all
selling Stockholders party to such agreement will be subject to the same terms;
provided that the participating Stockholders that are not the Tag-Along Seller,
(i) shall not be required to make representations and warranties other than with
respect to unencumbered title to its Company Common Stock and/or Warrants, as
applicable, and the power, authority and legal right of such Stockholder to
transfer its Company Common Stock and/or Warrants, as applicable, (ii) may be
liable, but shall only be severally, not jointly, liable with all other sellers
(whether by purchase price adjustment, indemnity payments or otherwise) in
respect of representations, warranties, covenants and other agreements made in
respect of the Company and its Subsidiaries, (iii) may be required to remain
subject to confidentiality restrictions in respect of the business of the
Company and its Subsidiaries consistent with those set forth in this Agreement
and (iv) shall not be required to agree to any noncompetition, non-solicitation
or similar restrictive covenant; and provided, further, that with respect to
representations, warranties and covenants of the type described in clause (ii),
the aggregate amount of such liability (x) will not exceed the lesser of
(A) such Stockholder’s pro rata portion of any such liability, to be determined
in accordance with such Stockholder’s portion of the total amount of shares of
Company Common Stock on a Fully Diluted Basis included in such sale and (B) the
net proceeds actually received by such Stockholder in connection with such sale
and (y) will be satisfied, at

 

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least as to such liability of the participating Stockholders that are not the
Tag-Along Seller, first from the proceeds of such sale that are escrowed or
otherwise withheld (which escrow or withholding will be of the proceeds payable
to all Stockholders participating in such sale, on a pro rata basis) (if any),
and then from the proceeds of such sale actually received by such participating
Stockholders (if any).

(e) The closing of a Tag-Along Sale will take place at such time and place as
the Tag-Along Seller shall reasonably specify by written notice to each
participating Stockholder.

(f) In any Tag-Along Sale, the sale of Company Common Stock and/or Derivative
Securities, as applicable, by all selling Stockholders shall (i) be made on the
same terms (including the price per share and the type of consideration to be
received), (ii) be subject to the same conditions, except as set forth in the
provisos in Section 4.4(d) and except that with respect to the sale of any
Derivative Securities or other equity awards (unless otherwise provided in the
applicable Equity Incentive Plan) the consideration payable on account thereof
may be adjusted by the Board to take into consideration any exercise, conversion
or similar price therefor, and (iii) be entitled to receive the proceeds from
such sale (in such amount calculated as provided herein) at the same time. No
selling Stockholder shall be entitled to receive any other material benefits or
consideration in connection with any Tag-Along Sale that is not shared pro rata
with all other selling Stockholders.

Section 4.5. Drag-Along Rights

(a) Prior to and including the occurrence of a IPO, at any time the Elliott
Stockholder, either acting alone or together with one or more additional
Stockholders who collectively (with the Elliott Stockholder) hold more than
fifty percent (50%) of the Outstanding Company Common Stock (collectively, the
“Dragging Stockholder”) desire(s) or propose(s) (i) a Transfer for value,
directly or indirectly, of Outstanding Company Common Stock held by the Dragging
Stockholder collectively, constituting all of its Outstanding Company Common
Stock, or (ii) a sale of all of the assets of the Company and its Subsidiaries
on a consolidated basis, in each case, to any independent third party purchaser
(an “Approved Sale”), the Dragging Stockholder shall have the right (the
“Drag-Along Right”), by providing notice of such Approved Sale to the Company,
to require the Company and each Stockholder to comply with this Section 4.5 with
respect to such Approved Sale. Each Stockholder, together with the Company, is
hereby obligated to cooperate with, consent to and raise no objections against
or, without waiving its rights under this Agreement, assert any claims in
connection with such Approved Sale, and each Stockholder is hereby obligated to
sell its own Company Common Stock and/or Derivative Securities, as applicable,
(i) for its pro rata share based on its equity security ownership of the amounts
and consideration set forth in the Company Notice (as defined below), and
(ii) subject to the limitations set forth in the next paragraph, otherwise on
the same terms and subject to the same conditions to which the Dragging
Stockholder is subject with respect to its equity securities. In furtherance of
the foregoing, each Stockholder acknowledges that no Stockholder shall be
entitled to dissenters’ or appraisal rights under any circumstances and such
Stockholder

 

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waives any such rights as may exist under applicable law, including the DGCL,
with respect to an Approved Sale. The Company shall provide each such
Stockholder with written notice of any Approved Sale at least thirty days prior
to the consummation thereof setting forth in reasonable detail the terms of such
Approved Sale, including the number of shares of Company Common Stock or
Derivative Securities to be sold (including, in the case of Derivative
Securities, the number of underlying shares of Company Common Stock represented
thereby), the identity of the prospective transferee(s), its applicable Per
Share Drag Price and form of consideration to be paid in respect of the Company
Common Stock or Derivative Securities to be Transferred by it in connection with
such Approved Sale (which, for the avoidance of doubt, does not involve any non
pro rata roll over of equity other than in any de minimis respect), and the date
on which such Approved Sale is proposed to be consummated (the “Company
Notice”). The Stockholders shall not be required to comply with, and shall have
no rights under, Section 4.3 and Section 4.4 in connection with any Approved
Sale.

(b) Each Stockholder required to sell Company Common Stock or Derivative
Securities pursuant to an Approved Sale (each, a “Drag-Along Seller”) shall
cooperate in consummating such Approved Sale, including by becoming a party to
the sales, merger, or other agreement pursuant to which it is proposed such
Approved Sale will be consummated and all other appropriate related agreements,
delivering, at the consummation of such sale, share certificates (if any) and
other instruments for such securities duly endorsed for transfer, free and clear
of all liens and encumbrances, and voting or consenting in favor of such
transaction (to the extent a vote or consent is required) and taking any other
necessary or appropriate action in furtherance thereof, including the execution
and delivery of any other appropriate agreements, certificates, instruments, and
other documents. In addition, each Drag-Along Seller shall, if and to the extent
requested by the Dragging Stockholder, agree to be severally responsible for its
proportionate share, based on the relative consideration payable to each
Stockholders in such Approved Sale, of (i) the third-party expenses incurred on
behalf and for the benefit of all Drag-Along Sellers in connection with such
Approved Sale, to the extent not paid by the Company or any other Person, and
(ii) the monetary obligations and liabilities applicable to all Drag-Along
Sellers in connection with such Approved Sale. Such monetary obligations and
liabilities (x) shall include (to the extent such obligations are incurred):
monetary obligations and liabilities for indemnification (including for
(A) breaches of representations and warranties made with respect to such
Drag-Along Seller’s ownership of Company Common Stock or Derivative Securities
(but not, for the avoidance of doubt, breaches of representations and warranties
made with respect to the Company, other than as contemplated by clause
(y) below), (B) breaches by such Drag-Along Seller of covenants in effect prior
to closing made by such Drag-Along Seller and relating to such Drag-Along
Seller, and (C) other matters to be agreed, but only, in the case of clause (C),
to the extent such breaches or inaccuracies are of a type for which insurance
has not been obtained on commercially reasonable terms), and (y) shall also
include amounts paid into escrow or subject to holdbacks, and amounts subject to
post-closing purchase price adjustments; provided that all such obligations are
equally applicable on a several and not joint basis to each Drag-Along Seller
based on the consideration to be received in respect of all Company Common Stock
or Derivative Securities Transferred in connection with such Approved Sale. The
foregoing notwithstanding, (1) without the written consent of a Drag-Along
Seller, the amount of such obligations and liabilities for which such Drag-Along
Seller shall be responsible shall not exceed the net proceeds received by such
Drag-Along Seller in connection with such Approved

 

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Sale, and, to the extent that an indemnification escrow has been established,
such obligations and liabilities shall be satisfied out of any funds escrowed
for such purpose prior to recourse against such Drag-Along Seller, (2) a
Drag-Along Seller shall not be responsible for the fraud or willful misconduct
of any other Drag-Along Seller or the Dragging Stockholder or any
indemnification obligations and liabilities for (I) breaches of representations
and warranties made by any other Drag-Along Seller with respect to such other
Drag-Along Seller’s ownership of and title to Company Common Stock or Derivative
Securities, organization, authority, or conflicts and consents, or any other
matters that relate to such other Drag-Along Seller, and (II) breaches of
covenants made by any other Drag-Along Seller relating to such other Drag-Along
Seller, and (3) no Drag-Along Seller shall be required to enter into any
non-competition or non-solicitation or similar restrictive covenant in
connection with such Approved Sale.

(c) IN THE EVENT ANY STOCKHOLDER FAILS TO TIMELY COMPLY WITH ITS OBLIGATIONS
UNDER THIS SECTION 4.5 WITH RESPECT TO AN APPROVED SALE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE COMPANY AND EACH STOCKHOLDER (OTHER THAN THE
PRINCIPAL STOCKHOLDERS) HEREBY GRANTS A PROXY AND POWER OF ATTORNEY TO ANY
NOMINEE OF THE DRAGGING STOCKHOLDERS TO TAKE ALL NECESSARY ACTIONS AND EXECUTE
AND DELIVER ALL DOCUMENTS DEEMED NECESSARY AND APPROPRIATE BY SUCH PERSON TO
EFFECTUATE THE CONSUMMATION OF ANY APPROVED SALE. SUCH PROXY AND POWER ARE
COUPLED WITH AN INTEREST, ARE PERPETUAL AND IRREVOCABLE, AND BESTOW ON THE
NOMINEE THE FULL POWER TO VOTE AND ACT FOR SUCH DRAG-ALONG SELLER WITH RESPECT
TO THE CONSUMMATION OF THE APPROVED SALE.

(d) Notwithstanding anything in Article IV to the contrary, following delivery
of a Company Notice, no Stockholder shall thereafter Transfer any Company Common
Stock or Derivative Securities unless and until the transaction that is the
subject of the Company Notice is terminated.

Section 4.6. Preemptive Rights. Any issuance of New Securities by the Company or
any of its Subsidiaries, other than an issuance of Exempt Securities, shall be
subject to the following provisions:

(a) Right to Purchase New Securities. Except as otherwise provided in this
Section 4.6 (including Section 4.6(e) hereof) and until the earlier of an IPO,
the Company hereby grants to each Stockholder that, together with its
Affiliates, holds of record at least seven percent (7%) of the Outstanding
Company Common Stock (the “Qualified Stockholder”) the right to purchase its pro
rata share of any and all issuances, sales or distributions of New Securities
proposed to be made by the Company or any of its Subsidiaries as set forth
herein. Notwithstanding the foregoing, or anything herein to the contrary, if
the purchase by any Qualified Stockholder of its pro rata share of the New
Securities would not be permitted without the prior approval of a governmental
body of applicable jurisdiction (including the U.K.

 

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Financial Conduct Authority), such approval has not been obtained, and such
approval would not be required if the Qualified Stockholder were to purchase
Penny Warrants in lieu of some or all of the New Securities, then, under this
Section 4.6, the offer to such Qualified Stockholder shall be the right to
purchase the number of Penny Warrants (at the same price as the New Securities)
and New Securities that would result from making such a substitution.

(b) Issuance Notice. The Company shall give each Person that on the date of an
Issuance Notice is a Qualified Stockholder written notice of the Company’s
intention to issue or sell New Securities (which notice may be provided by
posting the requisite information on a Secure Site and notifying (or causing
notification to be delivered to) each of such Qualified Stockholders of such
posting in writing) (the “Issuance Notice”), describing the type and terms of
the New Securities, the price at which such New Securities will be issued or
sold and the general terms upon which the Company proposes to issue or sell the
New Securities, including the anticipated date of such issuance, sale or
distribution, the general use of proceeds thereof, a description of both the
business purpose of the offering of such New Securities and the dilutive
effects, if any, of such offering, and the record date for determining Qualified
Stockholders and the pro rata share of each of them which, if not specified in
the Issuance Notice, shall be the date of the Issuance Notice (the “Preemptive
Offer Record Date”). Each Qualified Stockholder shall have ten (10) Business
Days from the date the Issuance Notice is sent to deliver notice (the “Response
Notice”) of its intention to purchase all or any portion of its pro rata share
of the New Securities, based on the ratio of the shares of Company Common Stock
on a Fully Diluted Basis held by such Qualified Stockholder on the Preemptive
Offer Record Date to the number of shares of Company Common Stock on a Fully
Diluted Basis held by all the Qualified Stockholders on the Preemptive Offer
Record Date, and stating therein the quantity of New Securities it intends to
purchase (each Qualified Stockholder who delivers a Response Notice hereunder is
a “Purchaser” for purposes of this Section 4.6); provided that if the Company
determines that a ten (10)-Business Day period is not practical, the Company
shall specify a shorter period (which shall be as long a period as is reasonably
practical but in no event less than three (3) Business Days) in the Issuance
Notice. Such Response Notice shall constitute the irrevocable agreement of such
Purchaser to purchase the quantity of New Securities indicated in the Response
Notice at the price and upon the terms stated in the Issuance Notice; provided,
however, that if the Company is proposing to issue, sell or distribute
securities for consideration other than all cash, and subject to the limitations
on the rights set forth in this Section 4.6, the Company shall accept from such
Purchaser the cash value of such non-cash consideration as determined in good
faith by the Board. Any purchase of New Securities by a Purchaser pursuant to
this Section 4.6 shall be consummated on or prior to the later of (x) the date
on which all other offered securities described in the applicable Issuance
Notice are issued, sold or distributed and (y) the second (2nd) Business Day
following delivery of the Response Notice by such Purchaser.

(c) Sale to Other Persons. The Company shall have sixty (60) days from the date
of the applicable Issuance Notice to consummate an issuance, sale or
distribution of any New Securities which the Qualified Stockholders have not
elected to purchase pursuant to Section 4.6(b) to other Persons at a price and
on terms and conditions not less favorable to the Company than those contained
in the Issuance Notice, on the condition that any Person purchasing New
Securities pursuant to such offer must comply with Sections 4.2 and 4.8. In the
event that the

 

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sale of New Securities is not fully consummated within such sixty (60)-day
period, then the Company shall be obligated once again to offer the purchase
rights set forth in this Section 4.6 before it may subsequently sell such New
Securities (provided that such sixty (60)-day period shall automatically toll,
but not for longer than one-hundred and eighty (180) days to the extent
regulatory approval would be required for such Person to acquire such New
Securities).

(d) Exempt Securities. Notwithstanding the foregoing provisions of this
Section 4.6, Qualified Stockholders shall not have the right to participate in
the issuance of any New Securities which are otherwise authorized to be issued
in accordance with this Agreement (i) if such New Securities were issued as
consideration in any merger, consolidation or combination with or acquisition of
securities or assets of another Person in exchange for New Securities, (ii) if
made upon exchange, conversion or exercise of any rights, convertible
securities, options, warrants or other equity or debt securities to purchase
Company Common Stock or other capital stock of the Company, (iii) if made by any
Subsidiary of the Company to the Company or any of its direct or indirect wholly
owned Subsidiaries, or (iv) if made as securities which are the subject of a
registration statement being filed under the Securities Act pursuant to a
Qualified IPO, (v) if made to Directors, officers, employees, managers or
consultants as compensation pursuant to any Equity Incentive Plans approved in
accordance with Section 2.2 or (vi) in connection with a stock split, pro-rata
stock dividend or other similar pro rata distribution of the Company (the New
Securities described in the foregoing clauses (i) through (vi), “Exempt
Securities”).

(e) Nothing in this Section 4.6 shall prevent the Company or its Subsidiaries
from issuing or selling to any Person (the “Accelerated Buyer”) any New
Securities without first complying with the provisions of this Section 4.6;
provided, that in connection with such issuance or sale (i) the Company gives
reasonably prompt notice to the Qualified Stockholders of such issuance (after
such issuance has occurred), which notice shall describe in reasonable detail
the New Securities purchased by the Accelerated Buyer and the purchase price
thereof and (ii) the Accelerated Buyer and the Company enable the Qualified
Stockholders to effectively exercise their respective rights under this
Section 4.6 with respect to their purchase of their pro rata share of the New
Securities issued to the Accelerated Buyer within 15 Business Days after receipt
of the notice by the Qualified Stockholder of such issuance to the Accelerated
Buyer on the terms specified in this Section 4.6. The Preemptive Offer Record
Date for such issuance shall be the date such New Securities are issued to the
Accelerated Buyer.

(f) Notwithstanding the foregoing, and without limiting any other right or
remedy that may be available to the Company, the Board may deny any right
contemplated by this Section 4.6 to any Person that is a transferee or purported
transferee of any securities of the Company in violation of Section 4.2.

Section 4.7. All Other Transfers Void. Any Transfer or purported Transfer in
violation of the provisions of this Article IV shall be null and void ab initio,
shall be of no force or effect and shall constitute a material breach of this
Agreement.

 

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Section 4.8. Admission of Substitute Stockholder; Liabilities.

(a) After the consummation of any Transfer of any shares of Company Common Stock
or Derivative Securities in compliance with the requirements of this Article IV,
the assignee of Company Common Stock or Derivative Securities so transferred
shall be required to comply with all of the terms and provisions of this
Agreement. An assignee of a Company Common Stock or Derivative Securities will
be admitted as a Substitute Stockholder only if (i) the Transfer of such Company
Common Stock or Derivative Securities complies in all respects with this Article
IV and (ii) the prospective Substitute Stockholder delivers a signed Adoption
Agreement pursuant to Section 4.2(c); provided, that in respect of Derivative
Securities (other than the Penny Warrants), the Transferee will only be required
to execute an Adoption Agreement at such time as the Transferred Derivative
Security is converted into, exercised for or exchanged for, Company Common Stock
or other capital stock of the Company). Unless otherwise agreed to by the Board,
the admission of a Substitute Stockholder shall not release the transferring
Stockholder from any liability to the Company or to the other Stockholders in
respect of its shares of Company Common Stock or Derivative Securities that may
have existed prior to such admission.

(b) No Transfer of all or any other quantity of Company Common Stock or
Derivative Securities shall be effective until the date upon which the
applicable requirements of this Article IV have been met. Any Substitute
Stockholder shall take such securities subject to the restrictions on transfer
imposed by this Agreement.

(c) The Company shall reflect, or shall cause its transfer agent to reflect, the
admission of such Substitute Stockholder in the records of the Company
(including the Stockholder Registry) as soon as possible after satisfaction of
the conditions set forth in this Agreement.

Section 4.9. Registration Rights. Simultaneously with the execution of this
Agreement, the Company shall enter into a customary registration rights
agreement with the Stockholder Group Members, pursuant to which such
Stockholders shall have registration rights customary for the initial public
offering of a financial sponsor-owned portfolio company, including, in each case
subject to customary lock-up and cut-back obligations, six (6) demand rights for
the Elliott Stockholder and one (1) demand right for each of the Metro
Stockholder, the Mudrick Stockholder and the Empyrean Stockholder and unlimited
piggy-back rights (with pro rata priority) and shelf registration rights for all
Stockholder Group Members.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.1. Representations and Warranties of Each Party. Except as otherwise
specified below, as of the Effective Date, each of the parties to this
Agreement, severally and not jointly and severally, represents and warrants,
solely with respect to itself, to each of the other parties to this Agreement as
follows:

(a) Due Organization and Good Standing. If the party is the Company or a
Stockholder that is a corporation, limited liability company, partnership or
other entity, it is duly incorporated or organized, validly existing and in good
standing (to the extent that its jurisdiction of organization recognizes the
concept of good standing) under the laws of its jurisdiction of incorporation or
organization. If the Stockholder is an individual, the Stockholder is of legal
age to execute, deliver and perform this Agreement and is legally competent to
do so.

(b) Authority Relative to this Agreement. It has all necessary power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by it has been duly and
validly authorized by all requisite action, and no other proceedings on its part
are necessary to authorize this Agreement. This Agreement has been duly and
validly executed and delivered by it and, assuming the due authorization,
execution and delivery by the other parties to this Agreement, constitutes a
legal, valid and binding obligation of it, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles. It has not granted nor is it a party to any proxy, voting trust or
other agreement that is inconsistent with, conflicts with or violates any
provision of this Agreement.

(c) No Conflict. The execution, delivery and performance by it of this Agreement
do not and shall not violate any applicable law or conflict with or constitute a
default, breach or violation of (with or without notice or lapse of time, or
both) the terms, conditions or provisions of any contract, agreement or
instrument to which it is subject, which would prevent it from performing any of
its obligations hereunder or thereunder.

 

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ARTICLE VI

MISCELLANEOUS

Section 6.1. [Management Investors. The provisions of Annex II to this Agreement
shall apply to the Management Holders and Executive Management Holders (as such
terms are defined therein).]1

Section 6.2. Complete Agreement. This Agreement and the other agreements
expressly referenced in this Agreement constitute the complete and exclusive
statement of agreement among the Stockholders with respect to the subject matter
hereof. This Agreement supersedes all prior written and oral statements by and
among the Stockholders or any of them, and except as otherwise specifically
contemplated by this Agreement, no representation, statement, or condition or
warranty not contained in this Agreement will be binding on the Stockholders or
the Company or have any force or effect whatsoever.

Section 6.3. Other Actions. The Company by its execution hereof acknowledges
that it has actual notice of the terms of this Agreement, consents hereto and
hereby covenants with each of the Stockholders that it will at all times during
the term of this Agreement be governed by the terms and provisions hereof in
carrying out its business and affairs and, accordingly, shall give or cause to
be given such notices, execute or cause to be executed such documents and do or
cause to be done all such acts, matters and things as may from time to time be
necessary or required to carry out the terms and intent hereof.

Section 6.4. Governing Law. This Agreement and the rights of the parties
hereunder will be governed by, interpreted, and enforced in accordance with the
laws of the State of Delaware, without reference to conflicts of law principles.

Section 6.5. No Assignment. Except as otherwise expressly set forth herein, no
party hereto may assign any of its respective rights or delegate any of its
respective obligations under this Agreement, and any attempted assignment or
delegation in violation of the foregoing shall be null and void. Notwithstanding
the foregoing, any Person that acquires Company Common Stock pursuant to a
Transfer made in accordance with Article IV shall be entitled to rights under
and be bound by this Agreement as if an original party hereto except as
otherwise set forth herein.

Section 6.6. Binding Effect. Subject to the provisions of this Agreement
relating to transferability or assignment, this Agreement will be binding upon
and inure to the benefit of the Company and each of the Stockholders, and their
respective heirs, devisees, spouses, distributees, representatives, successors
and permitted assigns. Directors are express third party beneficiaries of the
provisions of Section 2.5, in all cases upon the terms and conditions set forth
herein.

 

1 

NTD: To be updated prior to closing of the Exchange Offer and Rights Offering.

 

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Section 6.7. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under any present or future laws applicable
to the Company effective during the term of this Agreement, such provision will
be fully severable; this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement.

Section 6.8. No Partition. The parties acknowledge that the assets and
properties of the Company are not and will not be suitable for partition. Thus,
each Stockholder (on behalf of such Stockholder and their successors and
assigns) hereby irrevocably waives any and all rights that such Stockholder may
have to maintain any action for partition of such assets and properties, if any.

Section 6.9. Additional Documents and Acts. Each party hereto agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be reasonably necessary or appropriate to effectuate,
carry out, and perform all of the terms, provisions, and conditions of this
Agreement and the transactions contemplated hereby.

Section 6.10. No Employment Rights. Nothing in this Agreement shall confer upon
any Person any right to be employed or to continue employment by the Company or
any of its Affiliates, or interfere in any manner with any right of the Company
or any of its Affiliates to terminate such employment at any time.

Section 6.11. Amendments; Termination of Equity Rights.

(a) All amendments to this Agreement will be in writing and approved by a
Stockholder Majority Vote; provided that (i) any amendments that materially and
disproportionately adversely affect the rights or obligations of a Stockholder
under this Agreement relative to the rights of another Stockholder under this
Agreement must be approved by such adversely affected Stockholder and (ii) this
proviso shall not apply to any amendment that (x) corrects clerical errors, or
(y) reflects the grant of rights associated with new equity interests otherwise
issued in compliance with this Agreement and the Charter Documents that do not
discriminate among the existing Stockholders. Notwithstanding anything in this
Agreement to the contrary, a Stockholder may not bring any proceeding accordance
with Section 6.14 and Section 6.17(b) for breach of the foregoing amendment
provisions of this Agreement more than one (1) year after the effectiveness of
the challenged amendment (it being understood the parties intend to shorten the
applicable statute of limitations with respect to such claims).

 

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(b) Any amendment or other modification to Section 3.1 (Information Rights of
Stockholders; Records Required by the DGCL; Right of Inspection), Article IV
(Transfers) or the board rights of any specified Stockholder in Article II
(Management and Control of Business) (other than to increase the size of the
Board and to grant rights in respect of newly created board positions under the
circumstances described in clause (ii)(y) of the proviso in the first sentence
of Section 6.11(a)) shall require the written consent of each Stockholder
holding more than five percent (5%) of the Company Common Stock on a Fully
Diluted Basis; provided, however, that any amendment to Section 3.1 that only
provides for a reasonable extension of time for the delivery of the financial
statements or the other information to be delivered pursuant thereto shall only
require approval by a Stockholder Majority Vote.

Section 6.12. No Waiver. No delay, failure or waiver by any party to exercise
any right or remedy under this Agreement, and no partial or single exercise of
any such right or remedy, will operate to limit, preclude, cancel, waive or
otherwise affect such right or remedy, nor will any single or partial exercise
of such right or remedy limit, preclude, impair or waive any further exercise of
such right or remedy or the exercise of any other right or remedy.

Section 6.13. Notices. Except as otherwise provided elsewhere in this Agreement
regarding notices by electronic mail or other electronic means to Stockholders
and the Board and regarding proxies, all notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be delivered (a) by personal delivery, (b) by a nationally recognized
overnight courier service, (c) by telefacsimile or electronic mail, using
equipment that provides written confirmation of delivery, or (d) by deposit in
the U.S. Mail, postage prepaid, registered or certified mail, return receipt
requested, to the Company at its principal executive office and to any
Stockholder at the address then shown as the current address of such Stockholder
specified on the Stockholder Registry. Any such notice shall be deemed to have
been given on the date so delivered, if delivered personally, by overnight
courier service or by electronic mail; or if by telefacsimile, on the first
(1st) day following the transmission of such facsimile; or if mailed, four
(4) calendar days after mailing. Any party may, at any time by giving five
(5) calendar days’ prior written notice to the Company, specify a different
address (physical or electronic) or telefacsimile number for notice purposes by
sending notice thereof in the foregoing manner. Any notice required to be given
by the Company to Stockholders, including pursuant to Section 228(e) of the
DGCL, may be given by posting to a Secure Site and shall be deemed to be
delivered on the date such posting is made.

Section 6.14. Consent to Jurisdiction; WAIVER OF JURY TRIAL.

(a) Consent to Jurisdiction. The Company and each Stockholder (i) irrevocably
submits to the exclusive jurisdiction of any state court in the State of
Delaware, and the United States District Court for the District of Delaware (and
the appropriate appellate courts), for the purposes of any suit, action or other
proceeding arising out of this Agreement and (ii) agrees to commence any such
action, suit or proceeding either in the United States District Court for the
District of Delaware or if such suit, action or other proceeding may not be
brought in such court

 

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for jurisdictional reasons, in any state court in the State of Delaware.
Notwithstanding the foregoing, any party hereto may commence an action, suit or
proceeding with any governmental body anywhere in the world for the sole purpose
of seeking recognition and enforcement of a judgment of any court referred to in
the first sentence of this Section 6.14(a). The Company and each Stockholder
further (x) agrees that service of any process, summons, notice or document by
U.S. registered mail to such party’s respective address set forth on the
Stockholder Registry (or in the case of the Company, at the Company’s principal
office in Delaware) shall be effective service of process for any action, suit
or proceeding in Delaware with respect to any matters to which it has submitted
to jurisdiction in this Section 6.14(a) and (y) irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement in (A) any state court in the State of Delaware,
or (B) the United States District Court for the District of Delaware, and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.

(b) WAIVER OF JURY TRIAL. THE COMPANY AND EACH STOCKHOLDER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, INVOLVING OR
OTHERWISE IN RESPECT OF THIS AGREEMENT OR SUCH STOCKHOLDER’S OWNERSHIP OF
COMPANY COMMON STOCK. THE COMPANY AND EACH STOCKHOLDER (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE COMPANY OR ANY STOCKHOLDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE COMPANY OR SUCH STOCKHOLDER WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(ii) ACKNOWLEDGES THAT THE COMPANY AND EACH STOCKHOLDER HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.14(b).

Section 6.15. No Third Party Beneficiary. Except as expressly provided in
Section 6.6, this Agreement is made solely and specifically among and for the
benefit of the parties hereto (including each Stockholder), and their respective
successors and permitted assigns, and no other Person will have any rights,
interest, or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third party beneficiary or otherwise.

Section 6.16. Confidentiality.

(a) The terms of this Agreement, the identity of any Person with whom the
Company may be holding discussions with respect to any investment, acquisition,
disposition or other transaction, any information disclosed to or received by
any Stockholder pursuant to Section 3.1 or Annex I and all other business,
financial or other information relating directly to the conduct of the business
and affairs of the Company or its Subsidiaries or the relative or absolute
rights or interests of any of the Stockholders (collectively, the “Confidential
Information”) that has not

 

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been publicly disclosed pursuant to authorization by the Board is confidential
and proprietary information of the Company, the disclosure of which would cause
irreparable harm to the Company and the Stockholders. Accordingly, each
Stockholder represents that it has not and agrees that it will not and will
direct its shareholders, partners, stockholders, directors, officers, agents,
advisors and Affiliates not to, disclose to any Person any Confidential
Information or confirm any statement made by third Persons regarding
Confidential Information until the Company has publicly disclosed the
Confidential Information pursuant to authorization by the Board; provided,
however, that any Stockholder (or its Affiliates) may disclose such Confidential
Information: (i) to the extent required by law (it being specifically understood
and agreed that anything required to be set forth in a registration statement or
any other document required to be filed pursuant to law will be deemed required
by law, so long as the requirement to file such registration statement does not
arise primarily in connection with a Transfer of securities of the Company),
regulation or the listing standards of any national securities exchange, (ii) to
the extent that the Confidential Information is publicly known or subsequently
becomes publicly known other than through a breach of this Section 6.16(a) by
such Stockholder, (iii) to the extent that the Confidential Information is
already in possession of, or is subsequently received by, a Stockholder from a
third party not known by the Stockholder after due inquiry to be subject to an
obligation of confidentiality owed to the Company, or (iv) to a prospective
Transferee that (x) is not associated with any Competitor and (y) has entered
into reasonable confidentiality arrangements enforceable by the Company as
described in Section 3.1(a), subject to the terms and conditions of such
arrangements.

(b) Subject to the provisions of Section 6.16(a) each Stockholder agrees not to
disclose any Confidential Information to any Person (other than a Person
agreeing in a manner enforceable by the Company to maintain all Confidential
Information in strict confidence or a judge, magistrate or referee in any
action, suit or proceeding relating to or arising out of this Agreement or
otherwise), and to keep confidential all documents (including responses to
discovery requests) containing any Confidential Information. Each Stockholder
hereby consents in advance to any motion for any protective order brought by the
Company or any other Stockholder represented as being intended by the movant to
implement the purposes of this Section 6.16; provided that, if a Stockholder
receives a request to disclose any Confidential Information under the terms of a
valid and effective order issued by a court or governmental agency and the order
was not sought by or on behalf of or consented to by such Stockholder, then such
Stockholder may disclose the Confidential Information to the extent required if
the Stockholder as promptly as practicable (i) notifies the Company of the
existence, terms and circumstances of the order, (ii) consults in good faith
with the Company on the advisability of taking legally available steps to resist
or to narrow the order and cooperates with the reasonable requests of the
Company, at the Company’s sole cost and expense, in connection with the
foregoing, and (iii) if disclosure of the Confidential Information is required,
exercises its commercially reasonable efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded to the
portion of the disclosed Confidential Information that the Company designates.
The cost (including attorneys’ fees and expenses) of obtaining a protective
order covering Confidential Information designated by the Company will be borne
by the Company.

 

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(c) The covenants contained in this Section 6.16 will survive the Transfer of
the Company Common Stock of any Stockholder and the termination of this
Agreement.

Section 6.17. Cumulative Remedies; Specific Performance.

(a) The rights and remedies of any party hereto as set forth in this Agreement
are not exclusive and are in addition to any other rights and remedies now or
hereafter provided by law or at equity.

(b) The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that, in
addition to any other rights and remedies at law or in equity existing in its
favor, any party hereto shall be entitled to specific performance and/or other
injunctive relief from any court of law or equity of competent jurisdiction
(without posting any bond or other security) in order to enforce or prevent
violation of the provisions of this Agreement.

Section 6.18. Exhibits and Schedules. All Exhibits and Schedules attached hereto
are hereby incorporated by reference into, and made a part of, this Agreement.

Section 6.19. Interpretation. The titles and section headings set forth in this
Agreement are for convenience only and shall not be considered as part of
agreement of the parties hereto. When the context requires, the plural shall
include the singular and the singular the plural, and any gender shall include
all other genders or neuter. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” No provision
of this Agreement shall be interpreted or construed against any party because
such party or its counsel was the drafter thereof. Any reference to the DGCL or
other statutes or laws will include all amendments, modifications, or
replacements of the specific sections and provisions concerned. Numbered or
lettered articles, sections, and subsections herein contained refer to articles,
sections, and subsections of this Agreement unless otherwise expressly stated.

Section 6.20. Termination. This Agreement will be automatically effective as of
the Effective Date and will continue in effect thereafter until the earlier to
occur of (a) its termination by the written agreement of the undersigned parties
hereto (other than the Company) or their respective successors in interest,
(b) its termination by the unanimous written consent of all Stockholders of the
Company, (c) the dissolution, liquidation or winding up of the Company, (d) the
occurrence of an IPO and (e) the consummation of an Approved Sale in which, for
whatever reason, all of the Stockholder Group Members participate either as
Dragging Stockholders or Drag-Along Sellers. This Article VI shall survive any
termination of this Agreement.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.

 

COMPANY: AFFINION GROUP HOLDINGS, INC. By:  

                                                              

  Name: Gregory S. Miller   Title: Executive Vice President and Chief  
Financial Officer STOCKHOLDERS: By:  

                                                                           

Name:   Title:  

 

[Signature Page to Stockholders Agreement]

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EXHIBIT A

DEFINITIONS

As used in this Agreement, the following terms will have the following meanings,
and all section references shall be to sections in this Agreement unless
otherwise provided:

“Accelerated Buyer” has the meaning set forth in Section 4.6(e).

“Accepted Offer Event” has the meaning set forth in Section 4.3(c).

“Adoption Agreement” means an agreement substantially in the form attached
hereto as Exhibit B, permitting a Person to become a party to this Agreement.

“Affiliate(s)” means any individual, partnership, corporation, trust or other
entity or association, directly or indirectly, through one (1) or more
intermediaries, controlling, controlled by, or under common control with a
Person. The term “control,” as used in the immediately preceding sentence,
means, with respect to a corporation or limited liability company the right to
exercise, directly or indirectly, twenty percent (20%) or more of the voting
rights attributable to the controlled corporation or limited liability company,
and, with respect to any individual, partnership, trust, other entity or
association, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled entity. With
respect to any Person who is a general partner of a Person, such general partner
is an Affiliate of such Person. With respect to a trust, any Affiliate shall
include any Person which is a trustee or lifetime beneficiary of such trust.

“Affiliate Transfer” means, (i) with respect to a Stockholder that is not a
natural person, a Transfer of Company Common Stock from a Stockholder to its
members (if the Stockholder is a limited liability company), to its partners (if
the Stockholder is a general or limited partnership), to its shareholders (if
the Stockholder is a corporation) or by way of a distribution or to its
beneficiaries (if the Stockholder is a trust) or a Transfer of Company Common
Stock to an Affiliate of the transferring Stockholder or (ii) with respect to a
Stockholder that is a natural person, Transfers to such Stockholder’s legatees
or heirs, following the death of such Stockholder, and Transfers to a family
member or to a trust primarily for such Stockholder’s benefit or the benefit of
its family members.

“Agreement” has the meaning set forth in the preamble.

“Approved Sale” has the meaning set forth in Section 4.5(a).

 

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“Bid Price” has the meaning set forth in Section 4.3(b).

“Board” has the meaning set forth in Section 2.1(b).

“Business Day” means any day other than a Saturday, Sunday or date on which
commercial banks in the State of Delaware are authorized by law to close for
business.

“CEO Director” has the meaning set forth in Section 2.1(b)(ii).

“Charter Documents” means, with respect to the Company, the certificate of
incorporation and bylaws of the Company, as the same may be amended,
supplemented, modified or restated from time to time, and with respect to any
other Person, the articles, bylaws, certificate of incorporation, certificate of
formation, operating agreement, partnership agreement or any other similar
incorporating or formation documents of such Person, as the same may be amended,
supplemented, modified or restated from time to time.

“Closing” has the meaning set forth in the recitals.

“Company” has the meaning set forth in the preamble.

“Company Common Stock” means all of the Common Stock, par value $0.01 per share,
of the Company.

“Company Notice” has the meaning set forth in Section 4.5(b).

“Competitor” means (x) any Person who competes with the Company or any of its
Subsidiaries as determined by the Board (which shall include the approval of the
Independent Director) and (y) any Person who is known by the Board to directly
or indirectly own (other than as a passive investor) more than 10% of the equity
securities of a Person described in the foregoing clause (x).

“Confidential Information” has the meaning set forth in Section 6.16(a).

“Derivative Securities” means direct or indirect options, rights, warrants or
equity securities convertible into or exercisable or exchangeable for, any
Company Common Stock or any other capital stock of the Company, including the
Warrants.

 

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“DGCL” means the Delaware General Corporation Law, as the same may be amended
from time to time. All references herein to sections of the DGCL shall include
any corresponding provisions of succeeding law.

“Director” means any member of the Board (other than any Person (if any)
effecting observer rights on the Board).

“Drag-Along Right” has the meaning set forth in Section 4.5(a).

“Drag-Along Seller” has the meaning set forth in Section 4.5(b).

“Dragging Stockholders” has the meaning set forth in Section 4.5(a).

“Effective Date” has the meaning set forth in the preamble.

“Elliot Director” has the meaning set forth in Section 2.1(b)(i).

“Elliott Stockholder” has the meaning set forth in the preamble.

“Empyrean Stockholder” has the meaning set forth in the preamble.

“Equity Incentive Plans” means any equity incentive plans for officers,
employees or Directors of the Company.

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

“Exchange Offer and Rights Offering” means the exchange offer for the Company’s
then outstanding Existing Notes and the rights offering for 18% Senior PIK Notes
due 2024.

“Exempt Securities” has the meaning set forth in Section 4.6(d).

“Existing Notes” means the Senior Cash 12.5% / PIK Step-Up to 15.5% New Notes
due 2022 that were issued by the Affinion Group on May 10, 2017.

 

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“Fully Diluted Basis” means, with respect to any Stockholder, such Stockholder’s
equity ownership in the Company when including all Outstanding Common Stock,
Company Common Stock issuable pursuant to the Penny Warrants (assuming exercise
on a cashless basis taking into account the exercise price thereof), and vested
and unrestricted Company Common Stock under any Equity Incentive Plans, but
which shall exclude any debt securities convertible into Company Common Stock.

“GAAP” means the generally accepted accounting principles as in effect from time
to time in the U.S.

“German Approval” means the expiration of any waiting period or notice or
approval required under the competition laws of Germany.

“Independent” means any individual who is not (a) an officer or employee of the
Company or any of its Subsidiaries or (b) a partner, officer or employee of any
Principal Stockholder or any of its Affiliates.

“Independent Director” has the meaning set forth in Section 2.1(b)(v).

“IPO” means the first public underwritten offering of the equity securities of
the Company (or a direct or indirect parent holding company or Subsidiary)
pursuant to an effective registration statement under the Securities Act (other
than on Forms S-4, S-8 or successors to such forms) marketed by a nationally
recognized investment bank after the closing of which such equity securities are
listed on the New York Stock Exchange or NASDAQ.

“ICG Director” has the meaning set forth in Section 2.1(b)(iii).

“Investor Warrants” means the warrants exercisable for Company Common Stock in
connection with the Investor Warrant Agreement made on the date of this
Agreement by and between the Company and American Stock Transfer & Trust
Company, LLC as warrant agent.

“Issuance Notice” has the meaning set forth in Section 4.6(b).

“Majority” means greater than fifty percent (50%) (subject, in the case of
voting, to any applicable adjustments or limitations on voting as set forth in
the Charter Documents).

“Majority of the Board” means the affirmative vote or written consent of a
Majority of the members of the Board.

 

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“Majority Vote” means the affirmative vote or written consent of a Majority of
the Directors or of the Stockholders that hold a Majority of the Outstanding
Company Common Stock entitled to vote on a given matter.

“Merger” means the merger, in connection with the Recapitalization and
immediately following consummation of the Exchange Offer and Rights Offering, of
[AGHI Merger Sub, Inc.] and the Company, with the Company as the surviving
entity.

“Metro Stockholder” has the meaning set forth in the preamble.

“Mudrick Director” has the meaning set forth in Section 2.1(b)(iv).

“Mudrick Stockholder” has the meaning set forth in the preamble.

“New Securities” means Company Common Stock and other capital stock and rights,
convertible securities, options or warrants to purchase Company Common Stock or
other capital stock issued subsequent to the Effective Date, whether or not
authorized as of the Effective Date.

“Non-Elliott Stockholder” means any Stockholder other than the Elliott
Stockholder and any of its Affiliates that are Stockholders.

“Offer Price” has the meaning set forth in Section 4.3(c).

“Outstanding Company Common Stock” means, as of any given time, the then issued
and outstanding Company Common Stock, excluding any Derivative Securities and
any unvested or restricted Company Common Stock issued pursuant to an Equity
Incentive Plan.

“Penny Warrants” means warrants exercisable for $0.000001 per share of Company
Common Stock upon receipt of all necessary filings, registrations,
notifications, approvals, waivers or expiration or termination of any waiting
period of any governmental body that may be required pursuant to applicable law
including, if applicable, the approval or waiver, as the case may be, of the
U.K. Financial Conduct Authority.

“Permitted Transfers” has the meaning set forth in Section 4.1.

“Per Share Drag Price” means: (i) to the extent that a Drag-Along Seller is
selling the same type of security being sold by the Dragging Stockholder, the
same consideration per security for such security as is proposed to be received
by the Dragging Stockholder (less, in the case of

 

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Derivative Securities, the exercise price in respect of Derivative Securities
and, in each case, as adjusted for any applicable control premium); and (ii) to
the extent that a Drag-Along Seller is selling any series or class of Company
Common Stock (including any Derivative Securities) that is not being sold by the
Dragging Stockholder, a price equal to the implied equity value of each such
share of Company Common Stock, determined by reference to the per share price
being paid with respect to the Company Common Stock (or Derivative Securities)
being sold by the Dragging Stockholder (less, in the case of Derivative
Securities, the exercise price thereof and, in each case, as adjusted for any
applicable control premium).

“Person” means an individual, partnership, limited liability company,
corporation, joint venture, trust, business trust, association, or similar
entity, whether domestic or foreign, and the heirs, executors, legal
representatives, successors and assigns of such entity where the context
requires.

“Principal Stockholders” means each of the Elliott Stockholder, the Metro
Stockholder and the Mudrick Stockholder and any Substitute Elliott Stockholder
or Substitute Principal Stockholder, in each case, for so long as such
Stockholder holds at least ten percent (10%) of Company Common Stock on a Fully
Diluted Basis.

“Prohibited Person” means (i) any Person appearing on the Specially Designated
Nationals and Blocked Persons List of the Office of Foreign Assets Control in
the United States Department of the Treasury; (ii) any other Person with whom a
transaction is prohibited by Executive Order 13224, the USA PATRIOT Act, the
Trading with the Enemy Act or the foreign asset control regulations of the
United States Treasury Department, in each case as amended from time to time;
(iii) any other Person whom the Board (acting reasonably and in good faith and
the determination of which includes the Independent Director) considers would
create a material reputational risk for the Company; (iv) any other Person that
is a Competitor; or (v) any other Person (or an Affiliate thereof) that holds
Existing Notes after the consummation of Exchange Offer and Rights Offering.

“Purchaser” has the meaning set forth in Section 4.6(b).

“Qualified Stockholder” has the meaning set forth in Section 4.6(a).

“Recapitalization” means the recapitalization of the Company comprised of, among
other things, the Exchange Offer and Rights Offering and the Merger.

“Rejected Offer Event” has the meaning set forth in Section 4.3(c).

“Related Party Transaction” has the meaning set forth in Section 2.2(d).

 

A-6

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“Response Notice” has the meaning set forth in Section 4.6(b).

“ROFO Exercise Notice” has the meaning set forth in Section 4.3(c).

“ROFO Exercise Period” has the meaning set forth in Section 4.3(c).

“ROFO Initiator” has the meaning set forth in Section 4.3(a).

“ROFO Initiator Notice” has the meaning set forth in Section 4.3(b).

“ROFO Owner” has the meaning set forth in Section 4.3(a).

“Rule 144” has the meaning set forth in Section 1.2(b).

“SEC” means the Securities and Exchange Commission and any governmental body or
agency succeeding to the functions thereof.

“Secure Site” has the meaning set forth in Section 3.1(a).

“Securities Act” has the meaning set forth in Section 4.2(a)(i).

“Stockholder” has the meaning given in the preamble.

“Stockholder Group Member” has the meaning set forth in Section 2.1(d).

“Stockholder Majority Vote” means the affirmative vote or written consent of the
holders of a Majority of the Outstanding Company Common Stock (subject to any
adjustments or limitations on voting as set forth in the Charter Documents).

“Stockholder Registry” means a register of the Company indicating: (i) with
respect to each issuance of Company Common Stock or other capital stock of the
Company, the date of such issuance, the number of shares issued and the
Stockholder to whom such shares were issued and (ii) with respect to each
Permitted Transfer of Company Common Stock or other capital stock of the
Company, the date of such Transfer, the number of shares Transferred and the
identity of each of the Transferor and the Transferee(s) thereof.

 

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“Subsidiary” means any Person the majority of the equity of which, directly, or
indirectly through one or more other Persons, (a) the Company has the right to
acquire or (b) is owned or controlled by the Company. As used in this
definition, “control,” including, its correlative meanings, “controlled by” and
“under common control with,” means possession, directly or indirectly, of power
to direct or cause the direction of management or policies (whether through
ownership of equity, by contract or otherwise). For the avoidance of doubt,
Subsidiary shall include any Person that is included in the Company’s
consolidated group for purposes of preparing the Company’s consolidated
financial statements in accordance with GAAP.

“Substitute Elliott Stockholder” has the meaning set forth in Section 2.1(d).

“Substitute Principal Stockholder” has the meaning set forth in Section 2.1(d).

“Substitute Stockholder” means a Person who acquired Company Common Stock and/or
Derivative Securities who has been admitted as a Stockholder pursuant to Article
IV of this Agreement, including the Substitute Elliott Stockholder and
Substitute Principal Stockholder, if applicable.

“Tag-Along Notice” has the meaning set forth in Section 4.4(b).

“Tag-Along Offered Shares” has the meaning set forth in Section 4.4(a).

“Tag-Along Purchaser” has the meaning set forth in Section 4.4(a).

“Tag-Along Record Date” has the meaning set forth in Section 4.4(b).

“Tag-Along Rightholder” has the meaning set forth in Section 4.4(a).

“Tag-Along Rightholder’s Offer” has the meaning set forth in Section 4.4(b).

“Tag-Along Sale” has the meaning set forth in Section 4.4(a).

“Tag-Along Seller” has the meaning set forth in Section 4.4(a).

“Third Party Purchaser” has the meaning set forth in Section 4.3(d).

 

A-8

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“Transfer” means the sale, sale of any option or contract to purchase, purchase
of any option or contract to sell, grant of any option, right or warrant to
purchase, assignment, loan, offer, transfer, exchange or other disposition of
any shares of Company Common Stock and/or Derivative Securities, whether or not
for value, and whether voluntarily, by operation of law or otherwise, and
includes foreclosure.

“Transfer Interests” has the meaning set forth in Section 4.3(b).

“Transfer Price” has the meaning set forth in Section 4.3(c).

“Transferee” has the meaning set forth in Section 4.2(b).

“United States” means any federal department, division, agency, bureau, office,
branch, court, commission, or other governmental instrumentality of the U.S. or
any authority acting on its behalf.

“U.S.” means the United States of America.

“Warrants” means the Penny Warrants and the Investor Warrants.

 

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EXHIBIT B

ADOPTION AGREEMENT

This Adoption Agreement (this “Adoption”) is executed pursuant to the terms of
the Stockholders Agreement, dated as of [•], by and among Affinion Group
Holdings, Inc., a Delaware corporation (the “Company”), and the Stockholder
parties thereto, a copy of which is attached hereto (as it may be amended from
time to time, the “Stockholders Agreement”), by the transferee (“Transferee”)
executing this Adoption. Capitalized terms used and not defined herein shall
have the meaning set forth in the Stockholders Agreement. By the execution of
this Adoption, Transferee agrees as follows:

(1) Acknowledgement. Transferee acknowledges that Transferee is acquiring the
Company Common Stock and/or other voting or equity securities of the Company
(the “Securities”), subject to the terms and conditions of the Stockholders
Agreement.

(2) Agreement. Transferee (a) agrees that the Securities acquired by Transferee,
and any other Securities that may be acquired by Transferee in the future, shall
be subject to the terms of the Stockholders Agreement and (b) hereby adopts the
Stockholders Agreement, and agrees to be bound by all of the terms and
conditions thereof, with the same force and effect as if he were originally a
party thereto.

(3) Notice. Any notice required or permitted by the Stockholders Agreement shall
be given to Transferee at the address listed beside Transferee’s signature
below.

[Signature page follows]

 

B-1

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IN WITNESS WHEREOF, the undersigned have duly executed this Adoption Agreement
as of __________ ___, _____.

 

AFFINION GROUP HOLDINGS, INC. By:  

                                                                       

Name:   Title:   TRANSFEREE:

 

TRANSFEREE’S ADDRESS:

 

 

 

 

 

Annex I – Page 1

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ANNEX I

FORM OF

CONFIDENTIALITY AGREEMENT

Affinion Group Holdings, Inc.

6 High Ridge Park

Stamford, CT 06905

[INSERT DATE]

[INSERT NAME OF POTENTIAL TRANSFEREE]

[INSERT ADDRESS OF POTENTIAL TRANSFEREE]

Ladies and Gentlemen:

In connection with the consideration by [INSERT NAME OF POTENTIAL TRANSFEREE]
(“you” or “your”) of a potential investment in the Common Stock, par value $0.01
per share, of Affinion Group Holdings, Inc., a Delaware corporation (the
“Company” and together with you, collectively, the “Parties” and each
individually, a “Party”), or other securities of the Company (the
“Transaction”), certain affiliates or stockholders of the Company, the Company
or their respective representatives have furnished or may furnish you and your
Representatives (as hereinafter defined) with non-public information regarding
the Company, including, without limitation, information concerning the Company’s
financial and operational performance, properties, prospects, activities and
plans. You recognize and acknowledge that such information furnished or to be
furnished to you and/or your Representatives in the future (whether oral or
written) is proprietary to the Company and may include trade secrets or other
highly confidential non-public business information the disclosure of which
could harm the Company. In consideration for, and as a condition of, such
non-public information being furnished to you (and your agents, representatives,
attorneys, advisors, directors, officers, employees and affiliates,
collectively, your “Representatives”), you agree to treat any and all
information concerning the Company or any of its subsidiaries that has been or
is to be furnished to you or your Representatives (regardless of the manner in
which it is furnished, including, without limitation, in written or electronic
format or orally, gathered by visual inspection or otherwise) by or on behalf of
the Company or any of its affiliates or stockholders, together with any
documents you create that contain or are based upon any such information, in
whole or in part (collectively, “Company Information”), in accordance with the
provisions of this letter agreement (this “Agreement”).

 

Annex I – Page 2

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The term “Company Information” does not include information that you can
demonstrate: (i) is obtained by you or your Representatives from a third party,
who, after reasonable inquiry, is not known by you to be bound by any duty of
confidentiality to or confidential agreement with the Company or any other
Person(as defined below) with respect to Company Information or is otherwise
prohibited from transmitting the information to you by a contractual, legal,
fiduciary or other obligation to the Company or any other Person; (ii) is or
becomes part of the public domain (other than through a breach of this Agreement
by you or any of your Representatives); (iii) is independently ascertained or
developed by or for you or your Representatives or any third party without use
of or reference to Company Information; or (iv) is approved for public release
by written authorization of the Company. For purposes of this Agreement, the
term “Person” shall be broadly interpreted to include, without limitation, any
individual, partnership, limited liability company, corporation, joint venture,
trust, business trust, association or similar entity, whether domestic or
foreign, and the heirs, executors, legal representatives, successors and assigns
of such entity where the context requires.

1. You hereby agree that you and your Representatives will, except to the extent
required by applicable law or legal process, (a) keep the Company Information
strictly confidential, (b) not disclose any of the Company Information in any
manner whatsoever without the prior written consent of the Company and (c) not
use the Company Information for any purpose other than considering and
negotiating the Transaction; provided, however, that you may disclose any of
such information to your Representatives (i) who need to know such information
for the sole purpose of advising you and (ii) who are informed by you of the
confidential nature of such information; provided, further, that you will (x) be
responsible for any violation of this Agreement by any of your Representatives
as if they were parties hereto and (y) provide the Company with the names of any
of your Representatives who receives Company Information. You agree to promptly
notify the Company in writing of any unauthorized use or disclosure of the
Company Information and such notice shall include a detailed description of the
circumstances of the disclosure and the Persons involved.

2. In the event that you or any of your Representatives are required by
applicable law or legal process to disclose any of the Company Information, you
will promptly notify (except where such notice would be legally prohibited) the
Company in writing so that the Company may seek a protective order or other
appropriate remedy and (except to the extent legally prohibited) will reasonably
cooperate with the Company (at the Company’s expense) to limit the disclosure to
the greatest extent possible consistent with such applicable law or legal
process, including, without limitation, in appropriate circumstances, seeking
reliable assurances that confidential or “attorneys eyes only” treatment shall
be accorded the Company Information. Any such Company Information that is
(x) not required to be disclosed or (y) accorded confidential treatment shall
continue to be Company Information to which this Agreement shall continue to
apply. You acknowledge and agree that, for purposes of this Agreement, there
shall be no “applicable law” requiring you to disclose any Company Information
solely by virtue of the fact that, absent such disclosure, you would be
prohibited from purchasing, selling, or engaging in derivative transactions with
respect to, any securities of the Company or otherwise proposing or making an
offer to do any of the foregoing.

 

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3. All Company Information shall remain the property of the Company. Neither you
nor any of your Representatives shall by virtue of disclosure to you or any of
your Representatives, or your or any of your Representative’s use, of any
Company Information acquire any rights with respect thereto, all of which rights
(including, without limitation, all intellectual property rights) shall remain
exclusively with the Company.

4. If you determine that you do not wish to proceed with a Transaction, you will
promptly advise the Company of that decision. As soon as possible upon the
Company’s written request, you and your Representatives shall destroy (or at the
Company’s option (in its sole discretion) return to the Company) all Company
Information that has been disclosed to you or any of your Representatives,
except for any such Company Information stored on electronic backup media to the
extent that such information cannot be expunged without unreasonable effort.
Upon returning or destroying such Company Information, you shall provide written
notice to the Company certifying compliance with the foregoing sentence.
Notwithstanding the provisions of this paragraph, you acknowledge and agree that
this Agreement will continue to apply to any returned, held, retained or
destroyed Company Information on the terms set forth herein.

5. You hereby represent and warrant that you are an “accredited investor” within
the meaning of Regulation D promulgated under the Securities Act of 1933, as
amended.

6. You acknowledge and agree that all Company Information is furnished on an “AS
IS” basis, without warranty of any kind. THE COMPANY AND ITS AFFILIATES
EXPRESSLY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR
IMPLIED, REGARDING THE COMPANY INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT OR
FITNESS FOR A PARTICULAR PURPOSE.

7. You acknowledge that an award of money damages would be inadequate for any
breach of this Agreement by you or any of your Representatives and would cause
the Company irreparable harm. Therefore, you hereby agree that, in the event of
any breach or threatened breach of this Agreement by you or any of your
Representatives, the Company will be entitled to seek equitable relief,
including, without limitation, injunctive relief and specific performance, as
remedies for any such breach or threatened breach without the requirement of
posting a bond or other security. Such remedies will not be the exclusive
remedies for any breach of this Agreement, but will be in addition to all other
remedies available at law or in equity to the Company.

8. This Agreement or any provision hereof may not be amended, modified or waived
by course of dealing, usage in trade, conduct or any exchanges of communication,
including, without limitation, e-mail or any other electronic or digital means,
other than by amendment, in writing duly executed with the handwritten
signatures of an authorized signatory of each of the Parties. The rights and
remedies of the Parties are cumulative, and not alternative. Neither the failure
nor any delay by any Party in exercising any right, power, or privilege under
this

 

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Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement can be
discharged by one Party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other Party; (b) no waiver that
may be given by a Party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one Party will be deemed to
be a waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement.

9. This Agreement constitutes the complete agreement between the Parties
concerning the subject matter hereof and supersedes and cancels any and all
prior communications and agreements between the Parties with respect thereto.
This Agreement relates only to the subject matter hereof and shall not be
construed as an agreement to agree to enter into the Transaction or any
transaction by either Party. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect. If
any of the covenants or provisions of this Agreement are determined to be
unenforceable by reason of its extent, duration, scope or otherwise, then the
Parties contemplate that the court making such determination shall reduce such
extent, duration, scope or other provision and enforce them in their reduced
form for all purposes contemplated by this Agreement.

10. Neither Party may assign any rights or delegate any duties under this
Agreement without the prior written consent of the other Party, which consent
shall be at the other Party’s sole discretion. Any such attempted assignment or
delegation without the other Party’s prior written consent will be null and void
ab initio. This Agreement will be binding upon the Parties and their respective
authorized successors and assigns.

11. You acknowledge and agree that no contract or agreement providing for any
Transaction shall be deemed to exist between you and the Company or any of its
affiliates or stockholders unless and until a final definitive agreement has
been executed and delivered, and each Party hereby waives, in advance, any
claims (including, without limitation, breach of contract) in connection with
any Transaction unless and until a final definitive agreement has been executed
and delivered with respect thereto. The Parties also agree that unless and until
a final definitive agreement regarding a Transaction has been executed and
delivered, neither Party will be under any legal obligation of any kind
whatsoever with respect to such a Transaction by virtue of this Agreement,
except for the matters specifically agreed to herein. You acknowledge and agree
that the Company and its affiliates and stockholders reserve the right, in their
sole discretion, to reject any and all proposals made by you or any of your
Representatives with regard to the Transaction, and to terminate discussions and
negotiations with you at any time.

 

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12. This Agreement shall be deemed to have been made and executed in the State
of Delaware, and any dispute arising hereunder shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. You and the Company (i) irrevocably submit to the
exclusive jurisdiction of any state court in the State of Delaware and the
United States District Court for the District of Delaware (and the appropriate
appellate courts) for the purposes of any suit, action or other proceeding
arising out of this Agreement and (ii) agree to commence any such action, suit
or proceeding either in the United States District Court for the District of
Delaware or if such suit, action or other proceeding may not be brought in such
court for jurisdictional reasons, in any state court in the State of Delaware.

13. EACH OF THE COMPANY AND YOU HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT OR YOU MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, INVOLVING OR OTHERWISE IN
RESPECT OF THIS AGREEMENT.

14. Any notice hereunder shall be made in writing by overnight courier, personal
delivery, facsimile or email (if telephonically confirmed), in each case to:

If to the Company:

Affinion Group Holdings, Inc.

6 High Ridge Park

Stamford, CT 06905

Attention:

Facsimile:

If to you:

[INSERT ADDRESS OF POTENTIAL TRANSFEREE]

Attention:______________________

Facsimile:______________________

Telephone:______________________

Email:______________________

15. This Agreement shall expire on the earlier of (i) the date of the last to
occur of (x) a definitive agreement relating to the Transaction is entered into
by you and either the Company or any of its affiliates or stockholders and
(y) you have become a party to the Stockholders Agreement, dated as of
[                ] 2019, as amended from time to time, by and among the Company
and the stockholders of the Company and (ii) the twenty-four (24) month
anniversary of the date hereof.

 

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16. This Agreement may be executed in two (2) or more counterparts, each of
which will be deemed to be an original and all of which taken together will be
deemed to constitute this Agreement when a duly authorized representative of
each Party has signed a counterpart. The Parties may sign and deliver this
Agreement by facsimile or electronic (that is, .PDF) transmission. Each Party
agrees that the delivery of this Agreement by facsimile or electronic
transmission will have the same force and effect as delivery of original
signatures.

 

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Please confirm your agreement with the foregoing by signing and returning one
copy of this Agreement to the undersigned, whereupon this letter agreement shall
become a binding agreement between you and the Company.

 

Very truly yours, AFFINION GROUP HOLDINGS, INC. By:  

                                                                           

  Name:   Title:

Accepted and agreed as of the date first written above:

[INSERT NAME OF POTENTIAL TRANSFEREE]

 

By:  

                                                                                

  Name:   Title:]

 

Annex I – Page 8

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[ANNEX II2

Each Management Holder and Executive Management Holder shall be bound by the
provisions contained in this Annex II.

1. Non-Solicitation. During the period commencing on the date hereof and ending
on the third anniversary of the date of termination of the Management Holder’s
employment with the Company and its Affiliates for any reason, the Management
Holder shall not directly or indirectly through another Person (i) induce or
attempt to induce any employee of the Company or any Affiliate of the Company to
leave the employ of the Company or such Affiliate, or in any way interfere with
the relationship between the Company or any such Affiliate, on the one hand, and
any employee thereof, on the other hand, (ii) hire any person who was an
employee of the Company or any Affiliate of the Company or (iii) induce or
attempt to induce any customer, supplier, licensee or other business relation of
the Company or any Affiliate of the Company to cease doing business with the
Company or such Affiliate, or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation, on the one hand, and
the Company or any such Affiliate, on the other hand.

2. Non-Competition. Each Management Holder acknowledges that, in the course of
his employment with the Company and/or its Affiliates and their predecessors, he
has become familiar, or will become familiar, with the Company’s and its
Affiliates’ and their respective predecessors’ Confidential Information and that
such Management Holder’s services have been and will be of special, unique and
extraordinary value to the Company and its Affiliates. Therefore, each
Management Holder agrees that, during the period commencing on the date hereof
and ending on the second anniversary of the Management Holder’s termination of
employment with the Company and its Affiliates for any reason (the “Non-Compete
Period”), such Management Holder shall not, directly or indirectly, engage in
any business that markets, provides, administers or makes available
affinity-based membership programs, affinity-based insurance programs, benefit
packages as an enhancement to financial institutions or other customer accounts
or loyalty-based programs (whether as of the date hereof or during the
Non-Compete Period), anywhere in the world in which the Company or its
subsidiaries is doing business. For purposes of this Paragraph 2, the phrase
“directly or indirectly engage in” shall include any direct or indirect
ownership or profit participation interest in such enterprise, whether as an
owner, stockholder, partner, joint venturer or otherwise, and shall include any
direct or indirect participation in such enterprise as an employee, consultant,
licensor of technology or otherwise; provided, however, that nothing in this
Paragraph 2 shall prohibit any Management Holder from being a passive owner of
not more than 5% of the outstanding stock of any class of a corporation which is
publicly traded, so long as such Management Holder has no active participation
in the business of such corporation.

 

 

2 

NTD: To be updated to reflect parties’ agreement on management incentives and
for other customary conforming changes to be consistent with other changes to
the agreement.

 

Annex II – Page 1

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3. Non-Disclosure; Non-Use of Confidential Information. The Management Holder
shall not disclose or use at any time, either during his employment with the
Company and its Affiliates or thereafter, any Confidential Information (as
hereinafter defined) of which the Management Holder is or becomes aware, whether
or not such information is developed by him, except to the extent that such
disclosure or use is directly related to and required by the Management Holder’s
performance in good faith of duties assigned to the Management Holder by the
Company. The Management Holder will take all appropriate steps to safeguard
Confidential Information in his possession and to protect it against disclosure,
misuse, espionage, loss and theft. The Management Holder shall deliver to the
Company at the termination of his employment with the Company and its
Affiliates, or at any time the Company may request, all memoranda, notes, plans,
records, reports, computer tapes and software and other documents and data (and
copies thereof) relating to the Confidential Information or the Work Product (as
hereinafter defined) of the business of the Company or any of its Affiliates
that the Management Holder may then possess or have under his control.

4. Proprietary Rights. The Management Holder recognizes that the Company and its
Affiliates possess a proprietary interest all Confidential Information and Work
Product and have the exclusive right and privilege to use, protect by copyright,
patent or trademark, or otherwise exploit the processes, ideas and concepts
described therein to the exclusion of the Management Holder, except as otherwise
agreed between the Company and the Management Holder in writing. The Management
Holder expressly agrees that any Work Product made or developed by the
Management Holder or the Management Holder’s agents or affiliates during the
course of the Management Holder’s employment, including any Work Product which
is based on or arises out of Work Product, shall be the property of and inure to
the exclusive benefit of the Company and its Affiliates. The Management Holder
further agrees that all Work Product developed by the Management Holder (whether
or not able to be protected by copyright, patent or trademark) during the course
of such Management Holder’s employment, or involving the use of the time,
materials or other resources of the Company or any of its Affiliates, shall be
promptly disclosed to the Company and shall become the exclusive property of the
Company, and the Management Holder shall execute and deliver any and all
documents necessary or appropriate to implement the foregoing.

5. Repurchase Rights.

(a) Company Repurchase Right. From and after a Repurchase Event with respect to
any Management Holder, the Company and its subsidiaries shall have the right,
but not the obligation, to repurchase all or any portion of the shares of
Company Common Stock held by such holder (including any Deemed Held Shares) in
accordance with this Paragraph 5 for the Purchase Price. The Company or any of
its subsidiaries may exercise its right to purchase such shares of Company
Common Stock until the date that is the later of (i) six months after the
Repurchase Event (but only three months after the Repurchase Event for an
Executive Management Holder) and (ii) six months after the date all Options have
been exercised by the applicable Management Holder or such Management Holder’s
successors, assigns or representatives (but only three months after all Options
have been exercised in the case of

 

Annex II – Page 2

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Options originally granted to an Executive Management Holder) (such date, the
“Repurchase Date”). The determination date for purposes of determining the Fair
Market Value shall be the closing date of the purchase of the applicable shares
(which closing date shall not be later than the Repurchase Date unless so
required by Paragraph 5(b)).

(b) Closing. The closing date of any purchase of shares of Company Common Stock,
pursuant to this Paragraph 5 shall take place on a date designated by the
Company or one of its subsidiaries, as applicable, in accordance with the
applicable provisions of this Paragraph 5; provided that the closing date will
be deferred until such time as the applicable Management Holder has held the
shares of Company Common Stock for a period of at least six months and one day.
The Company or one of its subsidiaries, as applicable, will pay for the shares
of Company Common Stock purchased by it pursuant to this Paragraph 5 by delivery
of a check or wire transfer of funds, in exchange for the delivery by the
Management Holder of the certificates representing such shares of Company Common
Stock, duly endorsed for transfer to the Company or such subsidiary, as
applicable. The Company shall have the right to record such purchase on its
books and records without the consent of the Management Holder.

(c) Restrictions on Repurchase. Notwithstanding anything to the contrary
contained in this Agreement, all purchases of shares of Company Common Stock by
the Company shall be subject to applicable restrictions contained in federal law
and the DGCL and in the Company’s and its respective subsidiaries’ debt and
equity financing agreements. Notwithstanding anything to the contrary contained
in this Agreement, if any such restrictions prohibit or otherwise delay any
purchase of shares of Company Common Stock which the Company is otherwise
entitled or required to make pursuant to this Paragraph 5, then the Company
shall have the option to make such purchases pursuant to this Paragraph 5 within
thirty (30) days of the date that it is first permitted to make such purchase
under the laws and/or agreements containing such restrictions, but in no event
later than the first anniversary of the applicable Repurchase Event.
Notwithstanding anything to the contrary contained in this Agreement, the
Company and its subsidiaries shall not be obligated to effectuate any
transaction contemplated by this Paragraph 5 if such transaction would violate
the terms of any restrictions imposed by agreements evidencing the Company’s
Indebtedness. In the event that any shares of Company Common Stock are sold by a
Management Holder pursuant to this Paragraph 5, the Management Holder, and such
Management Holder’s successors, assigns or representatives, will take all
reasonable steps necessary and desirable to obtain all required third-party,
governmental and regulatory consents and approvals with respect to such
Management Holder and take all other actions necessary and desirable to
facilitate consummation of such sale in a timely manner.

(d) Additional Payment for Repurchased Shares. Notwithstanding anything to the
contrary set forth in this Paragraph 5, if (x) an Executive Management Holder
experiences a Repurchase Event (other than an employment termination for Cause),
(y) the Company exercises the repurchase right triggered by such Repurchase
Event, and (z) within six (6) months after the Repurchase Event, any of the
following events occur (each, a “Look-Back Event”)—(i) the consummation of a
Qualified Public Offering, (ii) the consummation of an Asset Sale, (iii) the
consummation of a Control Disposition, (iv) the signing of a definitive
agreement for an Asset

 

Annex II – Page 3

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Sale or (v) the signing of a definitive agreement for a Control Disposition—then
the Company shall pay or cause to be paid to such Executive Management Holder
the Additional Consideration (as defined herein); provided that, with respect to
the events described in clauses (iv) and (v) above, such payment of the
Additional Consideration shall be made if and only if such event is consummated
on or before the first anniversary of the Repurchase Event. For purposes of this
Paragraph 5(d), the “Additional Consideration” shall be an amount equal to the
product of (A)(x) the per share consideration for the Company Common Stock with
respect to the Look-Back Event (which, in the case of a Qualified Public
Offering, shall be the price at which the shares of Company Common Stock were
offered to the public, and, in the case of an Asset Sale, shall be the per share
amount distributable in respect of the Company Common Stock), less (y) the
Purchase Price per share of Company Common Stock paid to the Management Holder
at the closing of such repurchase, multiplied by (B) the number of shares of
Company Common Stock so repurchased, provided that if the result of such
calculation is zero or a negative number, no additional amount shall be paid to
the Executive Management Holder.

6. Certain Definitions.

(a) As used herein, “Affiliate” of the Company means a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Company, as applicable. As used in this
definition, the term “control,” including the correlative terms “controlling,”
“controlled by” and “under common control with,” means the possession, directly
or indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or any partnership or other
ownership interest, by contract or otherwise) of a Person.

(b) As used herein, “Asset Sale” means the sale of all or substantially all of
the assets of the Company and its subsidiaries on a consolidated basis.

(c) As used herein, “Cause” has the meaning ascribed to such term in the Stock
Incentive Plan.

(d) As used herein, “Confidential Information” means information that is not
generally known to the public and that is used, developed or obtained by the
Company in connection with its business, including, but not limited to,
information, observations and data obtained by the Management Holder while
employed by the Company or any predecessors thereof (including those obtained
prior to the date of this Agreement) concerning (i) the business or affairs of
the Company (or such predecessors), (ii) products or services, (iii) fees, costs
and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs
and reports, (vii) computer software, including operating systems, applications
and program listings, (viii) flow charts, manuals and documentation,
(ix) databases, (x) accounting and business methods, (xi) inventions, devices,
new developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (xii) customers and clients and customer or
client lists, (xiii) other copyrightable works, (xiv) all production methods,
processes, technology

 

Annex II – Page 4

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and trade secrets, and (xv) all similar and related information in whatever
form. Confidential Information will not include any information that has been
published in a form generally available to the public prior to the date the
Management Holder proposes to disclose or use such information. Confidential
Information will not be deemed to have been published or otherwise disclosed
merely because individual portions of the information have been separately
published, but only if all material features comprising such information have
been published in combination.

(e) As used herein, “Control Disposition” means a Disposition which would have
the effect of transferring to a Person or Group a number of shares of Common
Stock such that, following the consummation of such Disposition, such Person or
Group possesses the voting power to elect a majority of the Board (whether by
merger, consolidation or sale or transfer of Common Stock). For purposes of this
definition, (i) “Disposition” means any direct or indirect transfer, assignment,
sale, gift, pledge, hypothecation or other encumbrance, or any other
disposition, of Common Stock (or any interest therein or right thereto) or of
all or part of the voting power (other than the granting of a revocable proxy)
associated with the Common Stock (or any interest therein) whatsoever, or any
other transfer of beneficial ownership of Common Stock whether voluntary or
involuntary, including, without limitation (x) as a part of any liquidation of a
Management Holder’s assets or (b) as a part of any reorganization of a
Management Holder pursuant to the United States or other bankruptcy law or other
similar debtor relief laws and (y) “Group” has the meaning ascribed to such term
in Section 13(d)(3) of the Exchange.

(f) As used herein, “Deemed Held Shares” shall mean the shares of Company Common
Stock which such Management Holder may obtain by exercising any options,
warrants or other rights to acquire Company Common Stock (including, without
limitation, the Company Common Stock issuable upon conversion of the Class C/D
Common Stock) held by such Management Holder that are vested as of the
determination.

(g) As used herein, “Executive Management Holder” means each Stockholder that
was an “Executive Management Holder” as such term is defined in the Management
Investor Rights Agreement, dated as of October 17, 2005, as amended April 30,
2010, by and among the Company, Affinion Group Holdings, LLC and the holders
party thereto (the “Management Investor Rights Agreement”) on the date of this
Agreement immediately prior to giving effect to the amendment and restatement of
the Management Investor Rights Agreement as this Agreement, together with any
such other Management Holders as the Board may designate.

(h) As used herein, “Fair Market Value” has the meaning ascribed to such term in
the Stock Incentive Plan.

(i) As used herein, “Indebtedness” means with respect to any Person, (a) all
indebtedness of such Person for borrowed money, whether current or funded, or
secured or unsecured, (b) all indebtedness of such Person for the deferred
purchase price of property or

 

Annex II – Page 5

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services represented by a note, bond, debenture or similar instrument and any
other obligation or liability represented by a note, bond, debenture or similar
instrument, (c) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (d) all indebtedness of such Person secured by a
purchase money mortgage or other lien to secure all or part of the purchase
price of the property subject to such mortgage or lien, (e) all 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
generally accepted accounting principles in the United States of America
(“GAAP”) and, for the purposes of this Agreement, the amount of such obligations
at any time shall be the capitalized amount thereof at such time determined in
accordance with GAAP, (f) all unpaid reimbursement obligations of such Person
with respect to letters of credit, bankers’ acceptances or similar facilities
issued for the account of such Person, (g) all obligations of such Person under
any forward contract, futures contract, swap, option or other financing
agreement or arrangement (including caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices, (h) all interest, fees and other
expenses owed with respect to the indebtedness referred to above (and any
prepayment penalties or fees or similar breakage costs or other fees and costs
required to be paid in order for such Indebtedness to be satisfied and
discharged in full), and (i) all indebtedness referred to above which is
directly or indirectly guaranteed by such Person or which such Person has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which it has otherwise assured a creditor against loss.

(j) As used herein, the term “Management Holder” means each Stockholder that was
a “Management Holder” as such term is defined in the Management Investor Rights
Agreement on the date of this Agreement immediately prior to giving effect to
the amendment and restatement of the Management Investor Rights Agreement as
this Agreement, together with any other person that executes a joinder to this
Agreement as a “Management Holder.”

(k) As used herein, the term “Option” means the options issued to Management
Holders or Executive Management Holders pursuant to the Stock Incentive Plan, as
it is amended, supplemented, restated or otherwise modified from time to time,
or any other option plan approved by the Company.

(l) As used herein, the term “Person” means an individual, partnership, limited
liability company, corporation, joint venture, trust, business trust,
association, or similar entity, whether domestic or foreign, and the heirs,
executors, legal representatives, successors and assigns of such entity where
the context requires.

(m) As used herein, “Purchase Price” means: (i) (x) in the case where a
Management Holder, other than an Executive Management Holder, resigns as an
employee of the Company or

 

Annex II – Page 6

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any of its subsidiaries during the 36 month period commencing on the Original
Issue Date (or, in the case of shares issued pursuant to an award under the
Stock Incentive Plan or a similar plan, the 36 month period commencing on the
date of grant of such award) or is terminated for Cause, or (y) in the case
where an Executive Management Holder is terminated for Cause, the lower of the
Original Cost or the Fair Market Value; and (ii) in all other cases, the Fair
Market Value. For purposes of this definition, (i) “Original Issue Date” means
with respect to any share of Common Stock issued to a Management Holder, the
date of issuance of such share of Common Stock to such Management Holder, as
applicable, and (ii) “Original Cost” means the price per share paid by the
Affinion Group Holdings, LLC for its shares of Company Common Stock on the date
of consummation of the transactions contemplated by the Purchase Agreement dated
as of July 26, 2005, by and among Affinion Group, Inc. (f/k/a Affinity
Acquisition, Inc.), the Company (f/k/a Affinity Acquisition Holdings, Inc.) and
Cendant Corporation, as it may be amended, supplemented, restated or otherwise
modified from time to time, subject to appropriate adjustment by the Board for
stock splits, stock dividends or other distributions, combinations and similar
transactions.

(n) As used herein, “Qualified Public Offering” means an underwritten public
offering of Common Stock by the Company pursuant to an effective registration
statement filed by the Company with the Securities and Exchange Commission
(other than on Forms S-4 or S-8 or successors to such forms) under the
Securities Act, pursuant to which the aggregate offering price of the Common
Stock sold in such offering is at least $150 million.

(o) As used herein, “Repurchase Event” means, with respect to a Management
Holder, such Management Holder shall cease to be employed by the Company or any
of its subsidiaries for any reason (including upon death or Disability) or a
Bankruptcy Event shall have occurred with respect to such Management Holder.

(p) As used herein, “Stock Incentive Plan” means each of the Affinion Group
Holdings, Inc. 2005 Stock Incentive Plan and the Affinion Group Holdings, Inc.
2007 Stock Award Plan, as each may be amended, supplemented, restated or
otherwise modified from time to time, and any other equity plan approved by the
Company.

(q) As used herein, “Work Product” means all inventions, innovations,
improvements, technical information, systems, software developments, methods,
designs, analyses, drawings, reports, service marks, trademarks, trade names,
logos and all similar or related information (whether patentable or
unpatentable) that relates to the Company’s or any of its Affiliates’ actual or
anticipated business, research and development or existing or future products or
services and that are conceived, developed or made by the Management Holder
(whether or not during usual business hours and whether or not alone or in
conjunction with any other person) while employed by the Company (including
those conceived, developed or made prior to the date of this Agreement) together
with all patent applications, letters patent, trademark, trade name and service
mark applications or registrations, copyrights and reissues thereof that may be
granted for or upon any of the foregoing.]

 

Annex II – Page 7

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Annex E-4

Summary Description of Registration Rights Agreement

 

    

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Demand Registration Rights    As a result of the Merger, the Company’s existing
Registration Rights Agreement shall terminate and be replaced by a new
Registration Rights agreement with holders of 7% or more of the New Common
Stock. The new Registration Rights agreement will not have any demand
registration rights prior to an IPO (nor will there be any demand registration
rights to force an IPO).    The reorganized Company shall enter into a
registration rights agreement with any party that on or after the Effective Date
holds 7% or more of the New Common Stock. The new Registration Rights agreement
will not have any demand registration rights prior to an IPO (nor will there be
any demand registration rights to force an IPO).

 

Annex E-2

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Annex E-5

Summary Description of Management Incentive Plan

 

    

RECAPITALIZATION

  

IN-COURT RESTRUCTURING

Issuance    A Management Incentive Program (“MIP”) will be established and
administered by the board of directors of reorganized Affinion Holdings. The MIP
will consist of two incentive pools from which the board may grant incentive
awards to key management employees of reorganized Affinion Holdings. The phantom
awards pool will have an initial aggregate amount not to exceed 10% of the New
Notes and the treatment of which will generally mirror the treatment of the New
Notes. The stock option pool will consist of up to 10% of the New Common Stock.
Phantom awards and stock options will be granted in the discretion of the board
at such times it deems appropriate following the closing of the Transactions. It
is anticipated that the MIP program would be structured in a manner to provide
for vesting of certain awards based on time, based on performance, or based on
exit return to equityholders, in amounts to be determined by the board following
the closing of the Transactions.

 

Annex E-1

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Annex F

Certain Waivers to Second Lien Commitment Letter

 

Satisfaction Upon Consummation of Transactions    Solely in the event that the
Rights Offering is consummated, the payment of the Early Termination Fee and the
Closing Fee (each, under and as defined in the Second Lien Commitment Letter)
contemplated by the Second Lien Commitment Letter shall not be required to be
made in cash; provided that, without prejudice to any amounts payable to the
Second Lien Lenders on maturity or otherwise under the Second Lien Facility if
the Rights Offering is not consummated, the Affinion Parties agree that upon
consummation of the Rights Offering, the Second Lien Lenders will be entitled to
(i) a repayment in cash equal to the actual amount funded in cash by such Second
Lien Lender under the Second Lien Credit Facility, the amount of all interest
actually paid in kind, accrued and unpaid interest, and the amount of all
customary indemnity and expense reimbursement obligations due under the
documentation for the Second Lien Credit Facility to the extent not repaid as
Restructuring Expenses, (ii) a repayment of amounts equal to the Closing Fee in
the form of New Notes (the “Second Lien Closing Fee”), (iii) a repayment of
amounts equal to the Early Termination Fee in the form of New Notes (the “Second
Lien Funding Premium”) and (iv) the payment of any other fees, premiums or
amounts (if any) owing to the Second Lien Lenders under the Second Lien Credit
Facility in the form of New Notes. Waiver of Conditions to Closing    The
conditions precedent set forth in clauses (i), (iii) and (iv) set forth in the
section entitled “Conditions to Closing” shall be deemed satisfied and the
expiration of the Second Lien Commitment Letter on March 31, 2019 set forth in
Section 17 of the Second Lien Commitment Letter shall be deemed waived until the
day immediately prior to the date that the Affinion Parties are required to
commence the Chapter 11 Cases pursuant to the Support Agreement; provided that,
in no event shall the Affinion Parties be permitted to request funding of the
Second Lien Credit Facility if the Chapter 11 Cases have commenced or if the
Support Agreement has terminated for any reason. In addition, the Second Lien
Commitment Parties agree that no representations or warranties contained in the
definitive documentation for the Second Lien Credit Facility shall fail to be
satisfied as a result of the entry of the Support Agreement, as long as the
Support Agreement has not been terminated and there shall be no requirement to
provide a representation as to solvency.

 

Annex F-1

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Other Provisions   

The Second Lien Commitment Parties agree to waive any requirement of the
Affinion Parties to use reasonable best efforts to issue warrants to the Second
Lien Commitment Parties as contemplated by the Second Lien Commitment Letter;
provided that, for the avoidance of doubt, due to the failure to issue such
warrants, the step-down in (i) the interest rate and (ii) the Early Termination
Fee contemplated in the Second Lien Commitment Letter shall not apply.

 

Any intercreditor and subordination agreement (any such intercreditor and
subordination agreement, an “Intercreditor and Subordination Agreement”) that
may be entered into on or following the date hereof between the Administrative
Agent and any representative of the Second Lien Lenders shall be consistent with
the November 13, 2018 draft Intercreditor and Subordination Agreement circulated
by Latham & Watkins LLP; provided, however, that to the extent that any terms of
any such Intercreditor and Subordination Agreement are not consistent with the
terms of the proposed Second Lien Credit Facility set forth in the Support
Agreement and this Term Sheet (the “Proposed Second Lien Financing”), the terms
of such Intercreditor Agreement and Subordination Agreement shall not be deemed
breached as a result thereof and the Second Lien Lenders (and/or any
representative thereof) and the Affinion Parties shall be permitted to take all
actions consistent with the Proposed Second Lien Financing.

 

Annex F-2

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Exhibit B to the Support Agreement

Investor Purchase Agreement

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AMENDED AND RESTATED INVESTOR PURCHASE AGREEMENT

This AMENDED AND RESTATED INVESTOR PURCHASE AGREEMENT, dated March 4, 2019 (this
“Agreement”), by and among Affinion Group Holdings, Inc., a Delaware corporation
(the “Company”), Affinion Group, Inc. (the “Issuer”, and, together with the
Company, the “Affinion Parties” and each individually, an “Affinion Party”)) and
Elliott Management Corporation, (together with its affiliates, “Elliott”), Metro
SPV LLC (“ICG”), Mudrick Capital Management, LP (“Mudrick”), Corbin ERISA
Opportunity Fund, Ltd. and Corbin Opportunity Fund, L.P. (collectively,
“Corbin”), Empyrean Capital Partners, L.P. (together with its affiliates,
“Empyrean”, and together with Elliott, ICG, Mudrick, and Corbin, the
“Investors”) amends and restates that certain investor purchase agreement, dated
March 1, 2019, by and among the Affinion Parties and the Investors (the
“Original Investor Purchase Agreement”). The foregoing parties hereto are
collectively referred to as the “Parties” and each individually is referred to
as a “Party.” Unless otherwise specified herein, all capitalized terms used and
not defined herein shall have the meanings ascribed to them in the Support
Agreement, dated as March 1, 2019, by and among the Affinion Parties, on the one
hand, and certain holders of debt and equity of the Affinion Parties, on the
other hand (such agreement, together with all exhibits, term sheets, schedules
and annexes thereto, as amended, restated or otherwise modified pursuant to the
terms thereof, the “Support Agreement”).

WHEREAS, concurrently with the execution of the Original Investor Purchase
Agreement, the Affinion Parties commenced implementing an out-of-court
restructuring in accordance with the terms and conditions set forth in the
Support Agreement and the agreements contemplated thereby (the
“Recapitalization”) relating to the existing equity, debt and other obligations
of the Company and certain of its subsidiaries;

WHEREAS, the Recapitalization provides for (i) an exchange offer pursuant to
which the Company will offer to all holders of the Issuer’s outstanding Senior
Cash 12.5%/PIK Step-Up to 15.5% Notes due 2022 (the “Existing Notes”) to
exchange their Existing Notes (the “Exchange Offer”) (x) to the extent such
Existing Notes are tendered on or prior to the Expiration Time (as defined in
the Offering Memorandum, as defined below), for a newly created class of common
stock, par value $0.01 per share, of the Company (the “Class M Common Stock”),
which will, by operation of the Merger, be cancelled and the holders thereof
shall receive shares of a new common stock, par value $0.000001, of the
surviving Company (the “New Common Stock”) and, to the extent necessary, New
Penny Warrants in lieu of New Common Stock, as consideration therefor, and
(y) to the extent such Existing Notes are tendered on or prior to the Consent
Time (as defined in the Offering Memorandum, as defined below), for the right to
subscribe for their pro rata portion of up to $288.0 million aggregate principal
amount of the Issuer’s new 18% Senior PIK Notes due 2024 (the “New Notes”), (ii)
a consent solicitation relating to the Existing Notes to eliminate substantially
all of the restrictive covenants and certain events of default and related
provisions from the indenture governing the Existing Notes, and (iii) the offer,
issuance and sale (the “Noteholder Rights Offering”) of up to $288.0 million
aggregate principal amount of New Notes, pursuant to the terms in that certain
Confidential Offering Memorandum, Consent Solicitation, Rights Offering and
Disclosure Statement, to be dated on or about March 4, 2019 (the “Offering
Memorandum”);

WHEREAS, the Recapitalization provides that immediately after the consummation
of the Exchange Offer, AGHI Merger Sub, Inc., a Delaware corporation and newly
formed wholly owned subsidiary of the Company (“Merger Sub”) will merge with and
into the Company, with the Company as the surviving entity (the “Merger”), as a
result of which (i) the existing Class C Common Stock, par value $0.01 per
share, and Class D Common Stock, par value $0.01 per share, will be cancelled
and the holders thereof will receive $0.01 per share as merger consideration,
(ii) the existing common stock, par value $0.01 per share, of the Company (the
“Existing Common Stock”) will be cancelled and the holders thereof will receive
Investor Warrants of the surviving Company as merger consideration and (iii) the
Class M Common Stock will be cancelled and the holders thereof will receive New
Common Stock as merger consideration;

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WHEREAS, if the Affinion Parties do not consummate a Recapitalization, then the
Affinion Parties may seek to restructure the debt and certain of their other
obligations of the Company, to cancel the existing equity interests of the
Company and to recapitalize in accordance with the terms and conditions set
forth in the Support Agreement through jointly-administered voluntary cases
commenced by the Affinion Parties (the “Chapter 11 Cases”) under chapter 11 of
title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (as amended, the
“Bankruptcy Code”), in the United States Bankruptcy Court for the District of
Delaware (together with any court with jurisdiction over the Chapter 11 Cases,
the “Bankruptcy Court”) pursuant to a prepackaged plan of reorganization (as may
be amended, restated, supplemented, or otherwise modified from time to time, the
“Plan”) (the “In-Court Restructuring” and, together with the Recapitalization,
the “Transactions” and each of the Recapitalization and the In-Court
Restructuring, a “Transaction”);

WHEREAS, the In-Court Restructuring provides, among other things, that the
percentage of New Notes to be offered in the Noteholder Rights Offering will be
increased to 100% and the Equityholder Rights Offering (as defined herein) would
be eliminated;

WHEREAS, the Investors have reviewed the Support Agreement;

WHEREAS, subject to the terms and conditions hereof, each Investor has agreed to
purchase, to the extent required by this Agreement, (i) New Notes issuable to it
upon the full exercise of its Subscription Rights and (ii) its Purchase
Percentage of Unsubscribed New Notes; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the parties hereby agree as follows:

Section 1. Definitions. The following terms will have the meaning set forth
below:

“Additional Financing Premium” has the meaning assigned to it in Section 2.03(c)
hereof.

“Affiliate” of any Person means any Person that directly or indirectly controls,
or is under common control with, or is controlled by, such Person, including any
funds or accounts managed by, or entities under common management of, such
Person. As used in this definition, “control” (including with its correlative
meanings, “controlled by” and “under common control with”) 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 ownership
of securities or partnership or other ownership interests, by contract or
otherwise).

“Affinion Parties” has the meaning assigned to it in the Preamble.

“Agreement” has the meaning assigned to it in the Preamble.

“Bankruptcy Code” has the meaning assigned to it in the Recitals.

“Bankruptcy Court” has the meaning assigned to it in the Recitals.

“Business Day” means a day other than a Saturday, Sunday or other day on which
banks located in New York, New York are authorized or required by law to close.

“Chapter 11 Cases” has the meaning assigned to it in the Recitals.

“Claim” has the meaning assigned to it in Section 5.04(a) hereof.

“Claim Proceeding” has the meaning assigned to it in Section 5.04(b) hereof.

“Class M Common Stock” has the meaning assigned to it in the Recitals.

“Closing Date” has the meaning assigned to it in Section 2.03(a) hereof.

 

2

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“Company” has the meaning assigned to it in the Preamble.

“Defaulting Investor” has the meaning assigned to it in Section 8.15 hereof.

“Elliott” has the meaning assigned to it in the Preamble.

“Equityholder Rights Offering” means the offering to holders of Existing Common
Stock and Existing Warrants to purchase up to their pro rata share of
$12.0 million aggregate principal of New Notes to be issued in the Transaction,
as described in the Support Agreement.

“Escrow Funding Date” has the meaning assigned to it in Section 2.02(b) hereof.

“Exchange Offer” has the meaning assigned to it in the Recitals.

“Existing Common Stock” has the meaning assigned to it in the Recitals.

“Existing Notes” has the meaning assigned to it in the Recitals.

“Existing Warrant Agreement” means that certain Warrant Agreement, dated as of
May 10, 2017, by and among Affinion Holdings and American Stock Transfer & Trust
Company LLC, as warrant agent.

“Existing Warrants” means the warrants to purchase Existing Common Stock issued
pursuant to the Existing Warrant Agreement.

“Financing Premium” has the meaning assigned to it in Section 2.03(c) hereof.

“Governmental Authority” means (a) any national, federal, state, county,
municipal, local or foreign or supranational government, or other political
subdivision thereof, (b) any entity exercising executive, legislative, judicial,
regulatory, tribunal, taxing or administrative functions of or pertaining to
government, and (c) any arbitrator or arbitral body or panel, department,
ministry, instrumentality, agency, court, commission or body of competent
jurisdiction.

“In-Court Restructuring” has the meaning assigned to it in the Recitals.

“Indemnifying Party” has the meaning assigned to it in Section 5.04(a) hereof.

“Indenture” means the indenture governing the New Notes.

“Initial Financing Premium” has the meaning assigned to it in Section 2.03(c)
hereof.

“Investment” means the purchase of New Notes by an Investor in an amount equal
to its Investment Amount.

“Investment Amount” has the meaning assigned to it in Section 2.02(b) hereof.

“Investment Notice” has the meaning assigned to it in Section 2.02(b) hereof.

“Investors” has the meaning assigned to it in the Preamble.

“Issuer” has the meaning assigned to it in the Preamble.

“Judgments” mean, collectively, judgments, orders, injunctions, decrees,
rulings, stipulations or awards (whether rendered by a court, administrative
agency or other Governmental Authority, or by settlement or agreement,
arbitration or otherwise).

“Laws” means, collectively, laws, codes, statutes, regulations, requirements,
variances, writs, ordinances of any Governmental Authority or Judgments.

 

3

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“Loss” means any liability, charge, legal action or proceeding, assessed
interest, penalty, tax, fee, obligation of any kind or nature (whether accrued
or fixed, or absolute or contingent), loss, damage, claim, cost or expense,
including court costs and reasonable attorneys’ fees and expenses and
disbursements.

“Merger” has the meaning assigned to it in the Recitals.

“Merger Sub” has the meaning assigned to it in the Recitals.

“New Common Stock” has the meaning assigned to it in the Recitals.

“New Notes” has the meaning assigned to it in the Recitals.

“New Penny Warrants” means penny warrants to purchase New Common Stock, which
warrants shall have substantially the same terms, mutatis mutandis, as set forth
in the Existing Warrant Agreement.

“Noteholder Rights Offering” has the meaning assigned to it in the Recitals.

“Offering Memorandum” has the meaning assigned to it in the Recitals.

“Party” has the meaning assigned to it in the Preamble.

“Person” includes all natural persons, corporations, business trusts, limited
liability companies, associations, companies, partnerships, joint ventures and
other entities, as well as governments and their respective agencies and
political subdivisions.

“Plan” has the meaning assigned to it in the Recitals.

“Post-Pre-Emptives Diluted Equity” means the fully diluted shares of New Common
Stock after giving effect to issuances pursuant to the Exchange Offer, the
Merger, the Preemptive Offer and this Agreement, but excluding the Investor
Warrants or any other derivative securities, rights to acquire New Common Stock
or issuances of New Common Stock pursuant to the MIP.

“Purchase” means the purchase of New Notes by an Investor in an amount equal to
its Purchase Amount.

“Purchase Amount” has the meaning assigned to it in Section 2.02(b) hereof.

“Purchase Percentage” means, with respect to an Investor, the applicable
percentage amount for such Investor as set forth on Schedule A hereof.

“Related Parties” has the meaning assigned to it in Section 8.13 hereof.

“Rights Offering” means, (i) in the case of the Recapitalization, the Noteholder
Rights Offering for 96% of the New Notes and the Equityholder Rights Offering
for 4% of the New Notes and (ii) in the case of the In-Court Reorganization, the
Noteholder Rights Offering for 100% of the New Notes.

“Subscription Amount” has the meaning assigned to it in Section 2.02(b) hereof.

“Subscription Rights” means the right to subscribe for New Notes provided to
holders of Existing Notes and holders of Existing Common Stock and Existing
Warrants as described in the terms of the Offering Memorandum.

“Support Agreement” has the meaning assigned to it in the Preamble.

“Term Sheet” means the term sheet attached to the Support Agreement.

“Transaction” has the meaning assigned to it in the Recitals.

 

4

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“Transfer Agent” means American Stock Transfer & Trust Company, LLC.

“Trustee” means the trustee under the New Notes.

“Unsubscribed New Notes” means an aggregate principal amount of New Notes equal
to (1) $300.0 million minus (2) the sum of (x) the aggregate Subscription Amount
for all Investors and (y) the aggregate principal amount of New Notes duly
subscribed for (including by payment of the purchase price for such New Notes on
or prior to the Escrow Funding Date) by persons (other than the Investors) in
accordance with the Offering Memorandum or the Equityholder Rights Offering.

“Voting Percentage” means, with respect to an Investor, as of any date of
determination, the principal amount of Existing Notes held by such Investor over
the aggregate principal amount of Existing Notes as of the date hereof. For the
avoidance of doubt, for purposes of this calculation, (i) any Existing Notes
held by an Investor that are tendered in the Exchange Offer and (ii) any
Existing Notes held by any other holder thereof in respect of which any Investor
has the right to subscribe for New Notes in the Rights Offering, shall, in each
case, be considered held by such Investor for purposes of this definition.

Section 2. The Exchange Offer and Financing

2.01 The Exchange Offer and the Offer. The Company and the Issuer will commence,
administer and consummate the Exchange Offer and the Rights Offering in
accordance with the Support Agreement. The Exchange Offer and the Rights
Offering shall be conducted and consummated by and among the applicable Affinion
Party and the participants therein on the terms, subject to the conditions and
limitations and in accordance with the procedures set forth herein and in the
Support Agreement.

2.02 Financing.

(a) On and subject to the terms and conditions hereof, each Investor hereby
agrees (i) to fully exercise all Subscription Rights, based on such Investor’s
aggregate principal amount of Existing Notes or Existing Common Stock and
Existing Warrants, as the case may be, in accordance with the terms of the
Offering Memorandum and the Equityholder Rights Offering, (ii) on the Closing
Date, to duly purchase, at par (and the Issuer agrees to sell to such Investor)
a principal amount of New Notes equal to such Investor’s Subscription Amount (as
defined below), and (iii) on the Closing Date, to duly purchase, at par (and the
Issuer agrees to sell to such Investor) a principal amount of New Notes equal to
such Investor’s Purchase Amount (as defined below).

(b) On or before the eighth (8th) Business Day following the Consent Time (the
“Escrow Funding Date”), the Issuer shall notify each Investor in writing (the
“Investment Notice”) of:

(i) the aggregate principal amount of New Notes duly subscribed for (including
by payment of the purchase price for such New Notes on or prior to the Escrow
Funding Date) by (x) holders of Existing Notes and (y) holders of Existing
Common Stock and Existing Warrants;

(ii) the principal amount of New Notes (excluding Unsubscribed New Notes) to be
issued and sold by the Issuer to such Investor as a result of such Investor’s
full exercise of its Subscription Rights (the “Subscription Amount”);

(iii) the aggregate principal amount of Unsubscribed New Notes, if any, and the
aggregate purchase price required for the purchase thereof;

(iv) the principal amount of Unsubscribed New Notes (based upon such Investor’s
Purchase Percentage) to be issued and sold by the Issuer to such Investor and
the aggregate purchase price thereof (as it relates to each Investor, such
Investor’s “Purchase Amount”, and, together with the Subscription Amount, the
“Investment Amount”); and

 

5

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(v) the account information (including wiring instructions) for the account to
which such Investor shall deliver and pay the Investment Amount.

(c) Each Investor hereby agrees to take all actions and execute and deliver all
documents required to execute its Purchase and exercise all its obligations as a
purchaser of New Notes through the termination of this agreement as set forth in
Section 8.10 herein.

2.03 Payment; Closing. (a) Each Investor hereby agrees to pay its Investment
Amount, by wire transfer of immediately available funds to an account designated
by the Issuer, by 10:00 a.m., New York City time, (i) in the case of a
Recapitalization, on the closing date of the Rights Offering, which is expected
to be the third business day following the expiration of the Exchange Offer, so
long as (x) all conditions to the Investors obligations hereunder have been
satisfied or waived in accordance with the terms hereof, (y) all conditions to
the consummation of the Exchange Offer and the Rights Offering have been
satisfied or waived in accordance with the terms thereof and (z) all conditions
to the occurrence of the effective date of the Recapitalization in accordance
with the Support Agreement have been satisfied or waived in accordance with the
Support Agreement (other than those conditions that are to be satisfied by
action taken upon the effectiveness of the Recapitalization, but subject to the
satisfaction or waiver of such conditions upon the effectiveness of the
Recapitalization) or (ii) in the event of an In-Court Restructuring, on the
effective date of the Plan so long as (x) all conditions to the Investors
obligations hereunder have been satisfied or waived in accordance with the terms
hereof, (y) all conditions to the consummation of the Plan and the Rights
Offering have been satisfied or waived in accordance with the terms thereof and
(z) all conditions to the occurrence of the effective date of the In-Court
Restructuring in accordance with the Support Agreement have been satisfied or
waived in accordance with the Support Agreement (other than those conditions
that are to be satisfied by action taken upon the effectiveness of the In-Court
Restructuring, but subject to the satisfaction or waiver of such conditions upon
the effectiveness of the In-Court Restructuring) (the “Closing Date”).

(b) On the Closing Date, the Issuer shall take all necessary actions with the
Trustee to have the New Notes be issued in accordance with the New Indenture,
and shall notify the Investors of any actions required to be taken by, or on
behalf of the Investors through their respective broker, for the New Notes
purchased by any Investor on the Closing Date to be credited to such Investor.
All New Common Stock and New Penny Warrants, if any, issued in connection with
the Funding Premium will be issued in book entry uncertificated form, and the
Transfer Agent shall send each Investor a statement reflecting ownership of the
New Common Stock and New Penny Warrants, as applicable, held by such Investor.

(c) The Issuer hereby agrees to issue to the Investors on the Closing Date,
whether or not the Investors effect a Purchase but subject to the occurrence of
the Closing Date and the provisions of this Section 2.03(c), (i) both (1)
$45,000,000 in aggregate principal amount of New Notes and (2) New Common Stock
representing, in the aggregate, 12.5% of the Post-Pre-Emptives Diluted Equity
(collectively, the “Initial Financing Premium”) and (ii) $12,000,000 in
aggregate principal amount of New Notes (the “Additional Financing Premium” and,
together with the Initial Financing Premium, the “Financing Premium”). The
Financing Premium shall be deemed earned on the Closing Date, and paid (1) in
the case of the Initial Financing Premium, to each Investor pro rata in
accordance with such Investor’s Purchase Percentage and (2) in the case of the
Additional Financing Premium, to the Investors indicated on Schedule B hereto in
the amount indicated across from such Investors name thereon, in each case, in
consideration for the Investors’ execution of this Agreement; provided, however,
that the Issuer will not be obligated to pay the Financing Premium to an
Investor if such Investor is in material default as of the Closing Date under
any of its obligations the satisfaction of which is required to effect the
Transaction or

 

6

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the Support Agreement and such default is not cured by such Investor on or
before (i) with respect to a default under this Agreement, the fifth (5th)
Business Day following the Issuer’s delivery of a notice of such breach to such
Investor, and (ii) with respect to a default under the Support Agreement, the
end of the applicable cure period under the Support Agreement.

(d) To the extent the acquisition of New Common Stock would result in an
Investor beneficially owning 19.9% or more of the New Common Stock, and such
Investor’s acquisition of New Common Stock would require the consent of, or
notice to, a governmental authority (including without limitation the U.K.
Financial Conduct Authority), and such consent has not been obtained, or notice
has not been given, such Investor shall receive (i) New Common Stock in an
amount resulting in such Investor holding a beneficial ownership stake of 19.9%
of the New Common Stock and (ii) an amount of New Penny Warrants exercisable
into the amount of New Common Stock such Investor would have received above such
19.9% threshold.

Section 3. Representations and Warranties of the Affinion Parties. The
representations and warranties set forth in Section 17(b) of the Support
Agreement are hereby incorporated by reference herein and shall apply mutatis
mutandis to this Agreement. Each Affinion Party makes such representations and
warranties on the date hereof and on the Closing Date.

Section 4. Representations and Warranties of each Investor. Each Investor
represents and warrants, severally and not jointly, to the Issuer as of the date
hereof as follows:

4.01 Such Investor has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.

4.02 This Agreement has been duly executed and delivered by such Investor. This
Agreement is the legal, valid, and binding obligation of such Investor,
enforceable against such Investor in accordance with its terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally.

4.03 Such Investor is not a party to any contracts or other agreements that
would conflict with, restrict, or prohibit such Investor’s ability to fulfill
its obligations under this Agreement.

4.04 Such Investor is (i) a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act); (ii) an institutional “accredited investor”
(within the meaning of Rule 501 (a)(1), (2), (3), (7) or (8) of Regulation D
under the Securities Act); (iii) an “institutional account” with the meaning of
FINRA Rule 4512(c); or not subject to a disqualification described in Rule
506(d) of Regulation D under the Securities Act.

4.05 Such Investor acknowledges that it has had the opportunity to speak with a
representative of the Affinion Parties and to obtain and review information
reasonably requested by such Investor from the Affinion Parties.

4.06 Such Investor understands that it may be required to bear the economic risk
of its investment in the New Notes indefinitely, and is able to bear such risk
and the risk of a complete loss of its investment in the New Notes.

4.07 Such Investor understands that the New Notes, the New Common Stock and the
New Penny Warrants have not been registered under the Securities Act or any
state securities laws and that the New Notes, the New Common Stock and the New
Penny Warrants are being offered to such Investor in reliance on specific
exemptions from the registration requirements of the Securities Act and state
securities laws and regulations and agrees that the Affinion Parties may rely
upon the truth and accuracy of, and such Investor’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Investor set forth herein in order to determine the availability of such
exemptions

 

7

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and the eligibility of such Investor to acquire the New Notes, the New Common
Stock and the New Penny Warrants. Such Investor understands that there is no
established market for the New Notes, the New Common Stock or the New Penny
Warrants and that no public market for the New Notes, the New Common Stock or
the New Penny Warrants may develop. Such Investor understands that no United
States federal or state agency or any other Governmental Authority has passed on
or made any recommendation or endorsement of the New Notes, the New Common Stock
or the New Penny Warrants or the fairness or suitability of the investment in
the New Notes, the New Common Stock or the New Penny Warrants, nor have such
authorities passed upon or endorsed the merits of the Exchange Offer or the
Rights Offering. Such Investor understands that the New Notes, the New Common
Stock and the New Penny Warrants will be subject to certain transfer
restrictions, including, as set forth in the Stockholders Agreement to be
adopted in the Transactions, the Company’s Fifth Amended and Restated
Certificate of Incorporation and as otherwise described in the Offering
Memorandum.

4.08 Such Investor is acquiring the New Notes, New Common Stock and New Penny
Warrants for investment purposes only for the account of such Investor and not
for distribution in violation of any federal or state securities laws.

Section 5. Additional Covenants. The Issuer, the Company and the Investor hereby
agree and covenant as follows:

5.01 Legends. The certificates evidencing New Penny Warrants to be issued
hereunder, if any, will bear the legend as set forth in the New Warrant
Agreement.

5.02 Further Assurances. From time to time after the date of this Agreement, the
Parties hereto shall execute, acknowledge and deliver to the other Parties such
other instruments, documents, and certificates and will take such other actions
as the other Parties may reasonably request in order to consummate the
Transactions.

5.03 Commercially Reasonable Efforts. The Affinion Parties shall use
commercially reasonable efforts to cause the conditions set forth in Section 6
to be satisfied and to consummate the Transactions.

5.04 Indemnity and Reimbursement.

(a) Indemnity. Each of the Company and the Issuer (in such capacity, the
“Indemnifying Party”) shall indemnify, defend and hold harmless each Indemnified
Party (as defined below) for any Losses in connection with, arising from or
relating to any direct or third party claim, litigation, investigation or
proceeding (collectively, a “Claim”) brought in connection with any act or
omission in connection with, arising from or relating to this Agreement, the
Exchange Offer, the Rights Offering or the consummation of the transactions
contemplated by this Agreement; provided, that the foregoing indemnity will not,
as to each Indemnified Party, apply to any Losses (i) to the extent it is found
in a final, non-appealable judgment of a court of competent jurisdiction to have
resulted from the willful misconduct or gross negligence of such Indemnified
Party; and/or (ii) arising out of any Claim made or initiated by such
Indemnified Party, including any such Claim for breach of this Agreement. As
used herein, an “Indemnified Party” shall mean an Investor, its Affiliates and
its and their directors, officers, partners, members, employees, agents,
counsel, advisors, representatives and assignees.

(b) Procedures. Promptly after receipt by an Indemnified Party of knowledge that
a Claim exists (a “Claim Proceeding”), such Indemnified Party will, if a claim
is to be made hereunder against the Indemnifying Party in respect thereof,
promptly (and in any event within ten Business Days) notify the Indemnifying
Party in writing of the commencement thereof; provided that (i) the omission so
to notify the Indemnifying Party will not relieve it from any liability that it
may have hereunder except to the extent it has been materially prejudiced by
such failure and (ii) the omission so to notify the Indemnifying Party will

 

8

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not relieve it from any liability that it may have to an Indemnified Party
otherwise than on account of this Section 5.04. In case any such Claim
Proceedings are brought against any Indemnified Party and it notifies the
Indemnifying Party of the commencement thereof, the Indemnifying Party will be
entitled to participate therein, and, to the extent that it may elect by written
notice delivered to such Indemnified Party, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party; provided that if the
defendants in any such Claim Proceedings include both such Indemnified Party and
the Indemnifying Party and such Indemnified Party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to the Indemnifying Party, such
Indemnified Party shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such Claim
Proceedings on behalf of such Indemnified Party. Upon receipt of notice from the
Indemnifying Party to such Indemnified Party of its election so to assume the
defense of such Claim Proceedings and approval by such Indemnified Party of
counsel, the Indemnifying Party shall not be liable to such Indemnified Party
for expenses incurred by such Indemnified Party in connection with the defense
thereof (other than reasonable costs of investigation) unless (x) such
Indemnified Party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the preceding sentence, (y) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
such Indemnified Party to represent such Indemnified Party within a reasonable
time after notice of commencement of the Claim Proceedings or (z) the
Indemnifying Party shall have authorized in writing the employment of counsel
for such Indemnified Party.

(c) Settlements. The Indemnifying Party shall not be liable for any settlement
of any such proceeding effected without its written consent, but if settled with
such consent, the Indemnifying Party shall indemnify the Indemnified Party from
and against any Loss by reason of such settlement, subject to the rights of the
Indemnifying Party in Section 5.04(a) to claim exemption from its indemnity
obligations. The Indemnifying Party shall not, without the prior written consent
of an Indemnified Party (which consent shall not be unreasonably withheld,
conditioned or delayed), enter into any settlement of any Claim Proceeding
unless such settlement (i) includes an explicit and unconditional release of all
Indemnified Parties from the party bringing such Claim Proceeding, (ii) does not
include a statement as to or an admission of fault, culpability, or a failure to
act by or on behalf of any Indemnified Party and (iii) does not include any
equitable remedy or obligation of any kind binding on the Indemnified Party. The
obligations of the Indemnifying Party under this Section 5.04 shall survive any
termination or rejection of this Agreement.

(d) Reimbursement. Each of the Company and the Issuer shall also reimburse
Elliott, ICG and Mudrick as agreed in writing by such party and the Company and
the Issuer; provided that the terms of such written agreements shall in no way
limit any amounts payable to the Indemnified Parties under this Section 5.

Section 6. Conditions to Investors’ Obligations.

6.01 Conditions to Investors’ Obligations. The obligation of the Investors to
consummate the Investment on the Closing Date shall be subject to the
satisfaction of each of the following conditions on the Closing Date:

(a) Representations and Warranties. The representations and warranties of each
of the Affinion Parties set forth in Section 17(b) of the Support Agreement (and
incorporated by reference herein) shall be true and correct in all material
respects as if made at and as of the Closing Date (except for
(i) representations and warranties already so qualified by materiality or
Material Adverse Effect, which shall be true and correct in all respects, and
(ii) representations and warranties made as of a specified date, which shall be
true and correct only as of the specified date);

 

9

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(b) Performance. The Affinion Parties shall have performed in all material
respects its obligations hereunder required to be performed by them at or prior
to the Closing Date;

(c) Restructuring Support Agreement. The Support Agreement shall not have
terminated, and no material default thereunder by any Affinion Party shall have
occurred and be continuing, unless waived in writing by the requisite Holders
under the Support Agreement or cured within the time period specified in, and
otherwise in accordance with, the Support Agreement;

(d) Effectiveness of Definitive Documentation. All conditions to the
effectiveness set forth in (i) the Amended Senior Secured Credit Agreement, the
Supplemental Indenture, the New Indenture, the Charter Amendment, the New
Warrant Agreement, the Registration Rights Agreement, the Stockholders Agreement
and the Warrant Agreement Amendment and, (ii) in the event of the In-Court
Restructuring, the Plan and the DIP/Cash Collateral Documents, shall have
occurred or been waived in accordance with the terms thereof (other than the
consummation of this Agreement) and the transactions contemplated by the
Definitive Documentation (in the form attached to, or as otherwise provided in,
the Support Agreement upon execution and delivery thereof) shall not have been
amended or modified in any material respect without the consent of the
Investors;

(e) Material Adverse Effect. No Material Adverse Effect shall have occurred
since the date of the Support Agreement;

(f) Subscription Notice. The Issuer shall have delivered to each Investor a
Subscription Notice in accordance with Section 2.02;

(g) Financing Premium. The Affinion Parties shall have issued or shall issue to
the applicable Investors on the Closing Date, the Financing Premium as set forth
in Section 2.03(c);

(h) Other Agreements. The Company and each applicable Affinion Party shall
substantially concurrently with the consummation of the Investment execute
(i) the Amended Senior Secured Credit Agreement, the Supplemental Indenture, the
New Indenture, the Charter Amendment, the New Warrant Agreement, the
Registration Rights Agreement, the Stockholders Agreement and the Warrant
Agreement Amendment and, (ii) in the event of the In-Court Restructuring, the
Plan and the DIP/Cash Collateral Documents.

(i) Closing Certificate. Each of the Affinion Parties shall have furnished to
the Investors prior to 9:00 a.m., New York City time, on the Closing Date, a
certificate, signed by an executive officer of such Affinion Party and dated as
of the Closing Date, to the effect that the conditions specified in
Sections 6.01(a) and 6.01(b) have been satisfied.

(j) Credit Agreement Amendment. The Credit Agreement Amendment is effective and
operative substantially concurrently with the consummation of the Investment on
the Closing Date.

(k) Second Lien Credit Facility Payments. All payments required to be made by
the Affinion Parties with respect to the Second Lien Credit Facility pursuant to
the terms of the Support Agreement shall be made substantially concurrently with
the consummation of the Investment on the Closing Date.

Section 7. Conditions to the Issuer’s Obligations

7.01 Conditions to Issuer’s Obligations. The obligations of the Issuer to issue
New Notes, New Common Stock and New Penny Warrants, if any, to each Investor in
respect of its Investment pursuant to Section 2 (but not the obligations of the
Company, or the Issuer in respect of its indemnification obligations pursuant to
Section 5.04) are subject to the satisfaction (or the waiver by the Issuer) of
the following conditions as of the Closing Date:

 

10

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(a) Representations and Warranties. (i) The representations and warranties of
the Investor set forth in Sections 4.01, 4.02, and 4.04 must be true in all
respects as if made at and as of the Closing Date (except for representations
and warranties made as of a specified date, which shall be true and correct only
as of the specified date), and (ii) the other representations and warranties of
the Investor set forth in Section 4 shall be true and correct in all material
respects as if made at and as of the Closing Date (except for representations
and warranties made as of a specified date, which shall be true and correct only
as of the specified date);

(b) Performance. The Investor shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the Closing
Date; provided, however, that a default by Investors whose obligations to fund
have been or are fully satisfied by a non-Defaulting Investor (as defined below)
shall not give rise to the ability of the Affinion Parties to fail to consummate
the Transactions contemplated hereby.

(c) No Legal Impediment to Issuance. No statute, rule, regulation or order shall
have been enacted, adopted or issued by any Governmental Authority, and no
judgment, injunction, decree or order of any federal, state or foreign court
shall have been issued that prohibits the Investment or the consummation of the
other Transactions;

(d) Effectiveness of Term Sheet. All conditions to the effectiveness set forth
in the Term Sheet shall have occurred or been waived in accordance with the
terms thereof (other than the consummation of this Agreement) and the
transactions contemplated by the Term Sheet (in the form attached to the Support
Agreement upon execution and delivery thereof) shall not have been amended or
modified in any material respect without the consent of the Issuer; and

(e) Restructuring Support Agreement. The Support Agreement shall not have
terminated and no material default thereunder by the Investor shall have
occurred and be continuing, unless waived in writing by the Company or cured
within the time period specified in, and otherwise in accordance with, the
Support Agreement.

Notwithstanding anything herein to the contrary, in the event that the
Transaction (including, for the avoidance of doubt, the Merger, Exchange Offer
and the Rights Offering) is consummated and, in connection therewith, the
Investor performed in all material respects its obligations hereunder and under
the Support Agreement required to be performed by it at or prior to the Closing
Date, all of the foregoing closing conditions in this Section 7.01, to the
extent not satisfied as of the Closing Date, shall be deemed waived by the
Company and Issuer.

Section 8. Miscellaneous.

8.01 Notices. All notices, requests, consents, and other communications
hereunder to any Party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by facsimile, electronic mail,
nationally recognized overnight courier, or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such Party at the
address set forth below or such other address as may hereafter be designated in
writing by such Party to the other Parties:

If to the Investors:

As specified on the signature pages hereto,

with a copy (which shall not constitute notice) to:

 

11

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White & Case LLP

1221 Avenue of Americas

New York, NY 10020

Attention: Jonathan Michels, Esq.

Electronic mail: jmichels@whitecase.com

Covington & Burling LLP

620 Eighth Avenue

New York, NY 10018-1405

Attention: Kelly Labritz, Esq.

Electronic mail: klabritz@cov.com

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019

Attention: Elina Tetelbaum, Esq.

Electronic mail: etetelbaum@wlrk.com

If to the Company or Issuer:

c/o Affinion Group, Inc.

6 High Ridge Park

Stamford, CT 06905

Attention: Brian Fisher, Esq.

Facsimile: 203-956-1206

Electronic mail: bfisher@affiniongroup.com

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, NY 10036

Attention: David H. Botter, Sarah Link Schultz & Rosa A. Testani

Facsimile: 212-872-1002

Electronic mail: dbotter@akingump.com, sschultz@akingump.com, &
rtestani@akingump.com

8.02 No Survival of Representations and Warranties, etc.. None of the
representations and warranties made in Section 3 or Section 4 hereof shall
survive the termination of this Agreement.

8.03 Assignment. This Agreement is intended to bind and inure to the benefit of
the Parties hereto and their respective successors, assigns, heirs, executors,
administrators, and representatives; provided, however, that nothing contained
in this Section 8.03 shall be deemed to permit any transfer other than in
accordance with the terms of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the Parties
to this Agreement, and nothing expressed or referred to in this Agreement will
be construed to give any person, other than the Parties to this Agreement, any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. Notwithstanding the foregoing, the
Investor, may assign its rights and obligations hereunder to any Affiliate
thereof, provided that any such assignment shall not release such Party from any
of its obligations under this Agreement to the extent such obligations are not
satisfied by any Affiliate to which such obligations are assigned.

 

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8.04 Entire Agreement; Several Obligations. This Agreement, including the terms
of the agreements contemplated hereby and referred to herein contain the entire
agreement by and between the Company, the Issuer and the Investors with respect
to the Transactions and supersedes all prior agreements and representations,
written or oral, with respect thereto. To the extent there is an inconsistency
between the provisions in this Agreement and the agreements contemplated hereby
and referred to herein, the provisions in this Agreement shall control.

8.05 Waivers and Amendments.

(a) Any provision of this Agreement (including its Exhibits, Annexes, Schedules,
and any attachments thereto) may be amended or waived, if, and only if, such
amendment or waiver is in writing and signed by (i) the Affinion Parties;
(ii) Investors having, in the aggregate, a Voting Percentage equal to at least
70%; (iii) if any amendment or waiver increases the Investment Amount or
decreases the Financing Premium of an Investor set forth in this Agreement,
Investors having, in the aggregate, a Voting Percentage equal to at least 85%
and (iv) if any amendment or waiver materially disproportionately adversely
affects an Investor (as compared to any other Investor), such Investor.

(b) Any waiver of any obligation by the Affinion Parties shall be signed by the
Investors. Any waiver by any of the Affinion Parties need not be signed by any
Investor.

(c) No failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

8.06 Choice of Laws; Submission to Jurisdiction; Waiver of Jury Trial. The
validity of this Agreement, the construction, interpretation, and enforcement
hereof, and the rights of the Parties hereto with respect to all matters arising
hereunder or related hereto shall be determined under, governed by, and
construed and enforced in accordance with the internal laws of the State of New
York without regard to any conflicts of laws principles (but including and
giving effect to Sections 5-1401 and 5-1402 of the New York General Obligations
Law) that would result in the application of the law of another jurisdiction.
Each Party to this Agreement agrees that, in connection with any legal suit or
proceeding arising with respect to this Agreement, it shall submit to the
non-exclusive jurisdiction of the United States District Court for the Southern
District of New York or the applicable New York state court located in New York
County and agrees to venue in such courts. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

8.07 Counterparts. This Agreement may be executed in any number of counterparts
and by different Parties and separate counterparts, each of which when so
executed and delivered, shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by electronic means
shall be effective as delivery of a manually executed counterpart of this
Agreement.

8.08 Headings. The section headings of this Agreement are for convenience of
reference only and shall not, for any purpose, be deemed to be part of this
Agreement or otherwise affect the meaning or interpretation of this Agreement.

8.09 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

 

13

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8.10 Termination. Unless otherwise agreed to in writing by the Parties hereto,
the rights and obligations of the Parties under this Agreement shall terminate:

(a) upon the termination of the Support Agreement pursuant to its terms;

(b) if the Company and the Investors agree to terminate this Agreement;

(c) on the date on which the Exchange Offer and the Rights Offering in the
Recapitalization are consummated; or

(d) on the date on which the Rights Offering in the In-Court Restructuring is
consummated in accordance with the Plan.

Regardless of the termination of this Agreement pursuant to this Section 8.10,
(i) the Parties shall remain liable for breaches of this Agreement prior to its
termination and (ii) the Company and the Issuer shall remain liable for the
indemnity and reimbursement obligations set forth in Section 5.04.

8.11 No Interpretation Against Drafter. This Agreement is the product of
negotiations between the Parties hereto represented by counsel, and any rules of
construction relating to interpretation against the drafter of an agreement
shall not apply to this Agreement and are expressly waived.

8.12 Specific Performance. Without limiting the rights of each Party hereto to
pursue all other legal and equitable rights available to such Party for any
other Party’s failure to perform each of its obligations under this Agreement,
it is understood and agreed by each of the Parties that any breach of or
threatened breach of this Agreement would give rise to irreparable harm for
which money damages would not be an adequate remedy and, accordingly, the
Parties agree that, in addition to any other remedies, each non-breaching Party
shall be entitled to specific performance and injunctive or other equitable
relief for any such breach or threatened breach.

8.13 No Recourse Against Related Parties. Notwithstanding anything to the
contrary set forth in this Agreement, none of the Parties’ Related Parties or
any of their Related Parties (in each case other than the Affinion Parties, the
Investor or any of their respective assignees under this Agreement) shall have
any liability, personal or otherwise, or obligation relating to or arising out
of this Agreement or the transactions contemplated by this Agreement for any
breach, loss, or damage for (i) any damages suffered as a result of the failure
of the Exchange Offer or the Rights Offering to be consummated and (ii) any
other damages suffered as a result of or under this Agreement and the
Transactions (or in respect of any oral representations made or alleged to be
made in connection herewith or therewith). As used herein, “Related Parties” of
a person or entity means any of its former, current, and/or future direct or
indirect equity holders, controlling persons, stockholders, directors, officers,
employees, agents, advisors, Affiliates, subsidiaries, members, managers,
general or limited partners or assignees.

8.14 [Reserved].

8.15 Defaulting Investors. At any time following the date hereof and prior to
the Closing Date, if any Investor has materially breached this Agreement,
including any representation, warranty or covenant contained herein and, if such
provision can be cured, has not been cured within 5 days of notice from the
Affinion Parties or an Investor that has not materially breached this Agreement
(such defaulting Investor, a “Defaulting Investor”), (i) the non-Defaulting
Investors shall have the obligation, based on relative amount of the Defaulting
Investor’s Purchase Percentage assumed, to acquire such Defaulting Investors’
Purchase Percentage (provided, that to the extent Elliott is a Defaulting
Investor, the acquisition obligation set forth in this clause (i) shall not
apply) and (ii) prior to any acquisition under clause (i), (x) such Defaulting
Investors’ Purchase Percentage shall not be included in any calculation for
purposes of determining any vote or otherwise under this Agreement other than
Section 7.01(b) of this Agreement or the Support Agreement and (y) such
Defaulting Investors shall not have any rights under this Agreement.

 

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Upon the acquisition of any Defaulting Investors’ Purchase Percentage, the
Investors and the Affinion Parties shall prepare an updated Schedule A. Each of
the Affinion Parties and the Investors shall cooperate in good faith to
negotiate any reallocation of the Purchase Percentages in connection with the
acquisition of a Defaulting Investors’ Purchase Percentage in accordance with
this Section 8.15. For the avoidance of doubt, the performing Investors that
acquire such Defaulting Investors’ Purchase Percentage, shall be entitled to
their pro rata amount, based on such Investor’s Purchase Percentage (adjusted
for the removal of the Defaulting Investors’ Purchase Percentage), of the
Financing Premium of such Defaulting Investor.

[Signature Pages to Follow]

 

15

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.

 

AFFINION GROUP HOLDINGS, INC.

 

Name:

 

Gregory S. Miller

Title:

  Executive Vice President, Chief Financial Officer   and Chief Operating
Officer

AFFINION GROUP, INC.

 

Name:

  Gregory S. Miller

Title:

  Executive Vice President, Chief Financial Officer and Chief Operating Officer

 

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

INVESTORS Name of Institution: Elliott Associates, L.P.  

By:

  Elliott Capital Advisors, L.P., as general partner  

By:

  Braxton Associates, Inc., as general partner By:  

 

Name:

  Elliot Greenberg

Title:

  Vice President

Address:

  40 West 57th Street, 30th Floor   New York, NY

Name of Institution: Elliott International, L.P.

 

By:

  Hambledon, Inc., its General Partner  

By:

  Elliott International Capital Advisors Inc., as attorney-in-fact    

By:

 

 

Name:

  Elliot Greenberg

Title:

  Vice President   Address: 40 West 57th Street, 30th Floor   New York, NY

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

Name of Institution: Metro SPV LLC

     

By:

 

 

 

Name:

  Andrew Hawkins  

Title:

  Authorized Signatory  

Address:

  600 Lexington Avenue, 24th Floor     New York, NY 10022  

Name of Institution: Mudrick Capital Management, LP

By:

 

 

 

Name:

  John O’Callaghan  

Title:

  Corporate Secretary  

Address:

  527 Madison Avenue, 6th Floor     New York, NY 10022

Email:

  JMudrick@mudrickcapital.com; SMurugavell@mudrickcapital.com

Name of Institution: Corbin Capital Partners, L.P.

 

By:

 

 

 

Name:

  Daniel Friedman  

Title:

  General Counsel  

Address:

  590 Madison Avenue, 31st Floor     New York, NY 10022  

Name of Institution: Empyrean Capital Partners, L.P.

By:

 

 

 

Name:

  C. Martin Meekins  

Title:

  Authorized Signatory

Address:

  10250 Constellation Blvd., Suite 2950   Los Angeles, CA 90067

 

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Schedule A

 

Investor

   Purchase Percentage  

Elliott

     60.041407 % 

ICG

     15.133506 % 

Mudrick

     14.654599 % 

Empyrean

     9.020552 % 

Corbin

     1.149936 % 

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Schedule B

 

Investor

   Additional Financing
Premium Amount  

Elliott

   $ 4,000,000  

Mudrick

   $ 4,000,000  

Empyrean

   $ 4,000,000  

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

Exhibit C to the Support Agreement

Warrant Agreement Amendment

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Exhibit D to the Support Agreement

Merger Agreement

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

Execution Version

Dated March 1, 2019

AFFINION GROUP HOLDINGS, INC.

-AND-

AGHI MERGER SUB, INC.

 

 

AGREEMENT AND PLAN OF MERGER

 

 

 

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THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made as of March 1,
2019, by and between AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the
“Company”) and AGHI MERGER SUB, INC., a Delaware corporation and a direct wholly
owned subsidiary of the Company (“Merger Sub”).

WHEREAS, the Company, together with its subsidiaries, has launched, or intends
to launch, a recapitalization transaction pursuant to which, among other things,
(i) the Company and Affinion Group, Inc., will offer to exchange newly created
and issued shares of Class M Common Stock, par value $0.01 per share, of the
Company (the “Class M Common Stock”) for Affinion Group, Inc.’s outstanding
12.5% Senior Cash / PIK Step-Up to 15.5% Notes due 2022 (the “Existing Notes”)
to certain eligible holders of Existing Notes and (ii) such Class M Common Stock
will by operation of the Merger (as defined below) be cancelled and the holders
thereof shall receive shares of new Common Stock, par value $0.000001 per share,
of the Surviving Company (as defined below) (the “New Common Stock”) and, to the
extent necessary, penny warrants to purchase New Common Stock (the “New Penny
Warrants”);

WHEREAS, the Board of Directors of the Company has, by the unanimous vote of all
of its directors, (i) determined that it is in the best interest of the Company
and its stockholders for the Company to enter into this Agreement and has
declared this Agreement and the transactions contemplated by this Agreement,
including the adoption of the Fifth Amended and Restated COI (as defined below),
advisable, (ii) approved this Agreement and approved the execution, delivery and
performance of this Agreement by the Company and the consummation of the Merger
and the other transactions contemplated by this Agreement, including filing with
the Secretary of State of the State of Delaware (the “Secretary of State”) the
Fifth Amended and Restated COI, and (iii) resolved to recommend adoption of this
Agreement and the transactions contemplated by this Agreement, including the
adoption of the Fifth Amended and Restated COI, by the stockholders of the
Company (the “Company Recommendation”);

WHEREAS, the Board of Directors of Merger Sub has, by unanimous vote of all of
its directors, (i) determined that it is in the best interest of Merger Sub and
the Company, as its sole stockholder, for Merger Sub to enter into this
Agreement and declared this Agreement advisable, (ii) approved this Agreement
and approved the execution, delivery and performance of this Agreement by Merger
Sub and the consummation of the Merger and the other transactions contemplated
by this Agreement and (iii) resolved to recommend adoption of this Agreement by
the stockholder of Merger Sub; and

WHEREAS, the Company and Merger Sub (together, the “Parties”) have agreed to
merge (the “Merger”) in accordance with the General Corporation Law of the State
of Delaware (the “DGCL”) and pursuant to the provisions of this Agreement, and
the combined undertaking, property and liabilities of both companies shall vest
in the Company as the surviving company of the merger which shall continue as a
Delaware corporation (the surviving company to be known in this Agreement as the
“Surviving Company”).

NOW, THEREFORE, the Parties hereto agree as follows:

 

1.

The closing of the Merger (the “Closing”) shall take place at 9:00 a.m., New
York City time, on the third Business Day after satisfaction or (to the extent
permitted by applicable Law) waiver of the conditions set forth in Section 13
hereto (other than those conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or (to the extent permitted by
applicable Law) waiver of those conditions at the Closing. Notwithstanding the
foregoing, the Closing may be consummated at such other time or date as the
Company and Merger Sub may agree to in writing. The date on which the Closing
occurs is referred to in this Agreement as the “Closing Date”. The Closing shall
be held at the offices of Akin Gump Strauss Hauer & Feld LLP, One Bryant Park,
New York, NY 10036, unless another place is agreed to in writing by the Company
and Merger Sub.

 

2

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2.

Subject to the provisions set forth in this Agreement, and in accordance with
the DGCL, at the Closing, the Parties will cause a certificate of merger (the
“Certificate of Merger”) to be executed, acknowledged and filed with the
Secretary of State in accordance with the relevant provisions of the DGCL, and
shall make all other filings or recordings required under the DGCL in connection
with the Merger.

 

3.

The Merger shall become effective upon the filing of the Certificate of Merger
with the Secretary of State or at such later time as the Company and Merger Sub
shall agree and shall specify in the Certificate of Merger (the time the Merger
becomes effective being hereinafter referred to as the “Effective Time”).

 

4.

Upon the terms and subject to the conditions set forth in this Agreement, and in
accordance with the DGCL, Merger Sub shall be merged with and into the Company
at the Effective Time.

 

5.

As a result of the Merger, the separate corporate existence of Merger Sub shall
cease and the Company shall continue as the Surviving Company and shall succeed
to and assume all the property, rights, privileges, immunities, powers,
franchises, debts, liabilities and duties of Merger Sub in accordance with the
DGCL.

 

6.

At the Effective Time, the Fourth Amended and Restated Certificate of
Incorporation of the Company shall be amended and restated as a result of the
Merger so as to read in its entirety as set forth in Exhibit A and, as so
amended and restated, shall be the certificate of incorporation of the Surviving
Company (the “Fifth Amended and Restated COI”) until thereafter changed or
amended as provided therein or by applicable Law.

 

7.

At the Effective Time, the Fourth Amended and Restated By-Laws of the Company
shall be amended and restated so as to read in its entirety as set forth in
Exhibit B hereto and, as so amended and restated, shall be the bylaws of the
Surviving Company (the “Fifth Amended and Restated By-Laws”) until thereafter
changed or amended as provided therein or by applicable Law.

 

8.

The officers and directors of the Company immediately prior to the Merger shall
be the officers and directors of the Surviving Company upon and after the
effectiveness of the Merger.

 

9.

In accordance with the Fifth Amended and Restated Certificate of Incorporation,
the authorized share capital of the Surviving Company shall be 540,000,000
shares of New Common Stock and 10,000,000 shares of Preferred Stock, par value
$0.01 per share, of the Surviving Company.

 

10.

At the Effective Time:

 

  a.

each issued and outstanding share of Common Stock, par value $0.01 per share, of
the Company (the “Existing Common Stock”), shall be converted into the right to
receive 0.0910571 validly issued new warrants to purchase New Common Stock,
having the terms set forth in the Investor Warrant Agreement, in the form
attached hereto as Exhibit C (the “Investor Warrants”) as merger consideration
therefor;

 

1 

Number subject to adjustment so that outstanding Investor Warrants represent the
right in the aggregate to acquire 10% of the total outstanding New Common Stock
on a fully diluted basis immediately following the consummation of the Merger
and the transactions related thereto (but before the dilutive impact of any
equity incentive plan).

 

3

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  b.

each issued and outstanding share of Class M Common Stock shall be converted
into the right to receive 1 validly issued, fully paid and nonassessable shares
of New Common Stock as merger consideration therefor; provided that, to the
extent the acquisition of New Common Stock would result in a stockholder
beneficially owning 19.9% or more of the outstanding amount of New Common Stock,
and which stockholder’s acquisition of New Common Stock would require the
consent of, or notice to, a governmental authority (including without limitation
the U.K. Financial Conduct Authority), and such consent has not been obtained,
or notice has not been given, such stockholder will receive New Penny Warrant
Agreements to the extent of any such excess, having the rights, terms and
provisions set forth in the New Penny Warrant Agreement, in the form attached
hereto as Exhibit D, as merger consideration therefor, in lieu of shares of New
Common Stock;

 

  c.

each issued and outstanding share of Class C Common Stock, par value $0.01 per
share, of the Company (the “Class C Common Stock”), and each issued and
outstanding share of Class D Common Stock, par value $0.01 per share, of the
Company (the “Class D Common Stock”), shall be converted into the right to
receive $0.01 per share as merger consideration therefor;

 

  d.

each issued and outstanding share of capital stock of Merger Sub, par value
$0.01 per share, shall be automatically cancelled and retired and cease to
exist, and no consideration shall be delivered in exchange therefor;

 

  e.

by virtue of the Merger and without any action on the part of the Company,
Merger Sub or any holder of any shares of common stock or capital stock of
Merger Sub, each share of Existing Common Stock, Class C Common Stock, Class D
Common Stock and Class M Common Stock held in the treasury of the Company
immediately prior to the Effective Time shall automatically be cancelled and
retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor;

 

  f.

notwithstanding any other provision of this Agreement to the contrary, holders
of shares of Existing Common Stock, Class C Common Stock, Class D Common Stock
and Class M Common Stock that are issued and outstanding immediately prior to
the Effective Time who have not voted such shares in favor of or executed
written consents consenting to the adoption of this Agreement and the approval
of the Merger and the other transactions contemplated by this Agreement and have
properly demanded such rights in accordance with Section 262 of the DGCL (the
“Dissenting Shares”) shall be entitled to only such rights as are granted by,
and shall be entitled only to receive such payments for such Dissenting Shares
in accordance with, Section 262 of the DGCL; provided, however, that if any such
stockholder of the Company shall fail to perfect or shall effectively waive,
withdraw or lose such stockholder’s rights under Section 262 of the DGCL with
respect to such shares or if a court of competent jurisdiction shall otherwise
determine that such stockholder is not entitled to the relief provided by
Section 262 of the DGCL, such stockholder’s shares of Existing Common Stock,
Class C Common Stock, Class D Common Stock or Class M Common Stock shall
thereupon cease to be Dissenting Shares and shall be deemed to have been
converted as of the Effective Time into the right to receive the applicable
merger consideration provided for such shares of Existing Common Stock, Class C
Common Stock, Class D Common Stock or Class M Common Stock set forth in this
Section 10. At the Effective Time, the Dissenting Shares shall cease to have any
rights with respect thereto, except the rights provided in Section 262 of the
DGCL and as provided in the previous sentence.

 

4

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11.

 

  a.

Immediately following the Effective Time, any holder of a book-entry share that
immediately prior to the Effective Time represented outstanding shares of
Existing Common Stock, Class C Common Stock, Class D Common Stock or Class M
Common Stock (“Book-Entry Shares”) shall not be required to deliver a letter of
transmittal to American Stock Transfer & Trust Co LLC (the “Transfer Agent”) to
receive the merger consideration that such holder is entitled to receive
pursuant to this Agreement (the “Merger Consideration”). In lieu thereof, each
holder of record of one or more Book-Entry Shares whose shares of Existing
Common Stock, Class C Common Stock, Class D Common Stock or Class M Common Stock
were converted into the right to receive the Merger Consideration shall upon
receipt by the Transfer Agent of an “agent’s message” in customary form (or such
other evidence, if any, as the Transfer Agent may reasonably request), be
entitled to receive, and the Surviving Company shall cause the Transfer Agent to
deliver as promptly as reasonably practicable after the Effective Time, Merger
Consideration pursuant to this Agreement (which, in the case of any New Common
Stock, shall be in uncertificated book-entry form, and in the case of any
Investor Warrants or New Penny Warrants shall be in the form of certificated
warrants).

 

  b.

In the event any portion of the applicable Merger Consideration is to be paid to
a person other than the person in whose name the applicable surrendered
Book-Entry Share is registered, it shall be a condition to the payment of such
Merger Consideration that such Book-Entry Share shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such delivery
shall pay any transfer or other taxes required by reason of the transfer or
establish to the reasonable satisfaction of the Transfer Agent that such taxes
have been paid or are not applicable. Until surrendered as contemplated by this
Section 11, each Book-Entry Share shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
applicable Merger Consideration. No interest shall be paid or will accrue on any
payment to holders of Book-Entry Shares pursuant to the provisions of this
Section 11.

 

  c.

Notwithstanding the foregoing, the required receipt of an “agent’s message”
shall not apply with respect to shares of Existing Common Stock, Class C Common
Stock, Class D Common Stock or Class M Common Stock that are not Dissenting
Shares. As a result, at the Effective Time, the Surviving Company shall cause
the Transfer Agent to deliver as promptly as reasonably practicable after the
Effective Time, Merger Consideration pursuant to this Agreement (which, in the
case of any New Common Stock, shall be in uncertificated book-entry form, and in
the case of any Investor Warrants or New Penny Warrants shall be in the form of
certificated warrants) in respect of any shares of Existing Common Stock,
Class C Common Stock, Class D Common Stock or Class M Common Stock that are not
Dissenting Shares.

 

12.

Immediately following the execution of this Agreement, the Company shall, in its
capacity as the sole stockholder of Merger Sub, adopt this Agreement.

 

13.

The respective obligations of each Party to this Agreement to effect the Merger
is subject to the satisfaction or waiver (where permissible pursuant to
applicable Law) on or prior to the Closing Date of each of the following
conditions:

 

  a.

This Agreement will have been (i) approved by the holders of the Existing Common
Stock that constitute a Stockholder Supermajority Vote (as defined in the
Shareholders Agreement, dated as of November 9, 2015, among the Company and the
stockholders party thereto) (the “Stockholder Supermajority Consent”) and
(ii) adopted by the consent of the holders of a majority of the outstanding
shares of the Existing Common Stock of the Company (the “Stockholder Adoption”).

 

5

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  b.

The New Penny Warrant Agreement will have been executed and delivered.

 

  c.

The Company has filed with the Securities and Exchange Commission a definitive
Information Statement on Schedule 14C disclosing the Stockholder Supermajority
Consent and the Stockholder Adoption, and the 20 calendar day waiting period
following such filing shall have expired.

 

  d.

No supranational, national, state, municipal, local, or foreign government, any
instrumentality, subdivision, court, administrative agency or commission, or
other governmental authority, or any quasi-governmental or private body
exercising any regulatory or other governmental or quasi-governmental authority
having jurisdiction over any Party shall have enacted, issued, promulgated,
enforced, or entered any Laws or Orders, whether temporary, preliminary, or
permanent, that make illegal, enjoin, or otherwise prohibit consummation of the
Merger, or the other transactions contemplated by this Agreement.

 

14.

This Agreement may be amended by the Parties at any time before or after receipt
of the Stockholder Supermajority Consent or Stockholder Adoption; provided,
however, that (i) after such approval has been obtained, there shall be made no
amendment that by applicable Law requires further approval by the stockholders
of the party for which such approval has been obtained without such approval
having been obtained and (ii) to the extent required by applicable securities
law, a new definitive Information Statement on Schedule 14C may have to be
filed, in which case the Information Statement on Schedule 14C shall be read as
a reference to such new Information Statement on Schedule 14C. Notwithstanding
the foregoing, this Agreement may not be amended and no term or condition may be
waived or modified except by an instrument in writing signed on behalf of each
of the Parties and approved by the Board of Directors of each of Merger Sub and
the Company.

 

15.

This Agreement and all disputes or controversies arising out of or relating to
this Agreement or the transactions contemplated hereby (whether in law,
contract, tort, equity or otherwise) shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to
principles of conflicts of laws that would require the application of the laws
of any other jurisdiction.

 

16.

This Agreement may be executed in one or more counterparts (including by
facsimile or electronic mail), each of which shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the Parties hereto and delivered to the other Parties hereto.

 

17.

Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the sole extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remainder of such term or provision or the remaining terms and
provisions of this Agreement in any jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.

 

6

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18.

This Agreement (including the Exhibits) and any agreements entered into
contemporaneously herewith constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and thereof. This Agreement (including
the Exhibits) is not intended to and shall not confer upon any person other than
the parties hereto any rights or remedies hereunder.

[Signature page follows]

 

7

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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the day
and year first above written.

 

For and on behalf of AFFINION GROUP HOLDINGS, INC.

/s/ Greg S. Miller

Name:   Greg S. Miller Title:   Executive Vice President, Chief Financial
Officer and Chief Operating Officer For and on behalf of AGHI MERGER SUB, INC.

/s/ Greg S. Miller

Name:   Greg S. Miller Title:   Director

[Signature Page to Agreement and Plan of Merger]

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

EXHIBIT A

Fifth Amended and Restated COI

[see attached]

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

EXHIBIT B

Fifth Amended and Restated By-Laws

[see attached]

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

EXHIBIT C

Investor Warrant Agreement

[see attached]

 

11

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EXHIBIT D

New Penny Warrant Agreement

[see attached]

 

12

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Exhibit E to the Support Agreement

DIP Commitment

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

Exhibit F to the Support Agreement

Form of Transferee Joinder

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

Form of Transferee Joinder

This joinder (this “Joinder”) to the Support Agreement (the “Agreement”), dated
as of [                    ], 2019, by and among: (i) Affinion Holdings and each
of the other Affinion Parties thereto and (ii) the Consenting Stakeholders, is
executed and delivered by [                    ] (the “Joining Party”) as of
[                    ], 2019. Each capitalized term used herein but not
otherwise defined shall have the meaning ascribed to it in the Agreement.

1. Agreement to be Bound. The Joining Party hereby agrees to be bound by all of
the terms of the Agreement, a copy of which is attached to this Joinder as Annex
1 (as the same has been or may be hereafter amended, restated, or otherwise
modified from time to time in accordance with the provisions thereof). The
Joining Party shall hereafter be deemed to be a Party for all purposes under the
Agreement and one or more of the entities comprising the Consenting
Stakeholders.

2. Representations and Warranties. The Joining Party hereby represents and
warrants to each other Party to the Agreement that, as of the date hereof, such
Joining Party (a) is the legal or beneficial holder of, and has all necessary
authority (including authority to bind any other legal or beneficial holder)
with respect to, the claims identified below its name on the signature page
hereof, and (b) makes, as of the date hereof, the representations and warranties
set forth in Section 17 of the Agreement to each other Party.

3. Governing Law. This Joinder shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to any conflicts
of law provisions which would require or permit the application of the law of
any other jurisdiction.

4. Notice. All notices and other communications given or made pursuant to the
Agreement shall be sent, if to the Joining Party, to the address set forth on
its signature page, and if to any other Party to the Agreement, in accordance
with the instructions set forth in the Agreement.

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.

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

[JOINING PARTY]

By:

Name:

Title:

Address for Notices:

[Signature Page to Joinder Agreement]

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Annex 1 to the Form of Transferee Joinder