Exhibit 10.10

Execution Version

 

 

SECOND LIEN CREDIT AGREEMENT

dated as of March 26, 2009

among

SBARRO, INC.,

as Borrower,

SBARRO HOLDINGS, LLC,

as Holdings,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

and

NATIXIS, NEW YORK BRANCH

as Administrative Agent and Collateral Agent,

 

 

 

 

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Table of Contents

 

     Page

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

   1

Section 1.01

     Defined Terms    1

Section 1.02

     Other Interpretative Provisions    43

Section 1.03

     Accounting Terms and Determinations    44

Section 1.04

     Times of Day    44

Section 1.05

     Classes and Types of Borrowings    44

ARTICLE II THE CREDIT FACILITIES

   44

Section 2.01

     Commitments to Lend    44

Section 2.02

     Notice of Borrowings    45

Section 2.03

     Notice to Lenders; Funding of Loans    45

Section 2.04

     Evidence of Loans    46

Section 2.05

     [Intentionally Omitted]    47

Section 2.06

     Interest    47

Section 2.07

     [Intentionally Omitted]    48

Section 2.08

     Maturity of Loans    48

Section 2.09

     Prepayments    48

Section 2.10

     [Intentionally Omitted]    50

Section 2.11

     Fees    50

Section 2.12

     Pro-rata Treatment    50

Section 2.13

     Sharing of Payments by Lenders    51

Section 2.14

     Payments Generally; Administrative Agent’s Clawback    51

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY

   53

Section 3.01

     Taxes    53

Section 3.02

     [Intentionally Omitted]    55

Section 3.03

     [Intentionally Omitted]    55

Section 3.04

     Increased Costs and Reduced Return; Capital Adequacy    55

Section 3.05

     [Intentionally Omitted]    56

Section 3.06

     [Intentionally Omitted]    56

Section 3.07

     Mitigation Obligations; Replacement of Lenders    56

Section 3.08

     Survival    57

ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

   57

Section 4.01

     Conditions to Initial Borrowing    57

ARTICLE V REPRESENTATIONS AND WARRANTIES

   61

Section 5.01

     Existence, Qualification and Power; Compliance with Laws    61

Section 5.02

     Authorization; No Contravention    61

Section 5.03

     Governmental Authorization; Other Consents    62

Section 5.04

     Binding Effect    62

Section 5.05

     Financial Condition; No Material Adverse Effect    62

Section 5.06

     Litigation    62

 

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Section 5.07

     No Default    63

Section 5.08

     Ownership of Property; Liens    63

Section 5.09

     Environmental Compliance    63

Section 5.10

     Insurance    63

Section 5.11

     Taxes    63

Section 5.12

     ERISA; Foreign Pension Plans; Employee Benefit Arrangements    64

Section 5.13

     Subsidiaries; Equity Interests    65

Section 5.14

     Margin Regulations; Investment Company Act    65

Section 5.15

     Disclosure    66

Section 5.16

     Compliance with Law    66

Section 5.17

     Intellectual Property    66

Section 5.18

     Purpose of Loans    67

Section 5.19

     Solvency    67

Section 5.20

     Collateral Documents    67

Section 5.21

     Ownership    68

Section 5.22

     No Broker’s Fees    68

ARTICLE VI AFFIRMATIVE COVENANTS

   68

Section 6.01

     Financial Statements    68

Section 6.02

     Certificates; Other Information    69

Section 6.03

     Notices    72

Section 6.04

     Payment of Obligations    73

Section 6.05

     Preservation of Existence Etc    73

Section 6.06

     Maintenance of Properties    73

Section 6.07

     Maintenance of Insurance; Certain Proceeds    73

Section 6.08

     Compliance with Laws    74

Section 6.09

     Books and Records    74

Section 6.10

     Inspection Rights    75

Section 6.11

     Use of Proceeds    75

Section 6.12

     Additional Loan Parties; Additional Security    75

Section 6.13

     [Intentionally Omitted]    77

Section 6.14

     Designation of Unrestricted Subsidiaries    78

ARTICLE VII NEGATIVE COVENANTS

   79

Section 7.01

     Limitation on Indebtedness    79

Section 7.02

     Restriction on Liens    81

Section 7.03

     Nature of Business    85

Section 7.04

     Consolidation, Merger and Dissolution    85

Section 7.05

     Asset Dispositions    87

Section 7.06

     Investments    89

Section 7.07

     Restricted Payments, Etc    92

Section 7.08

     Prepayments of Indebtedness, Etc    93

Section 7.09

     Transactions with Affiliates    95

Section 7.10

     Fiscal Year and Accounting Changes; Organizational and Other Documents   
96

Section 7.11

     Restrictions with Respect to Intercorporate Transfers    96

 

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Section 7.12

     Ownership of Subsidiaries; Certain Limitations    98

Section 7.13

     Sale and Leaseback Transactions    98

Section 7.14

     [Intentionally Omitted]    99

Section 7.15

     Additional Negative Pledges    99

Section 7.16

     Financial covenant    99

Section 7.17

     Capital Expenditures    100

ARTICLE VIII DEFAULTS

   101

Section 8.01

     Events of Default    101

Section 8.02

     Acceleration; Remedies    105

Section 8.03

     Allocation of Payments After Event of Default    105

ARTICLE IX AGENCY PROVISIONS

   107

Section 9.01

     Appointment and Authority    107

Section 9.02

     Rights as a Lender    107

Section 9.03

     Exculpatory Provisions    107

Section 9.04

     Reliance by Administrative Agent    108

Section 9.05

     Delegation of Duties    108

Section 9.06

     Resignation of Administrative Agent    108

Section 9.07

     Non-Reliance on Administrative Agent and Other Lenders    109

Section 9.08

     No Other Duties, Etc    109

Section 9.09

     Administrative Agent May File Proofs of Claim    110

Section 9.10

     Collateral and Guaranty Matters    110

Section 9.11

     [Intentionally Omitted]    111

ARTICLE X MISCELLANEOUS

   111

Section10.01

     Amendments, Etc    111

Section10.02

     Notices; Effectiveness; Electronic Communication    113

Section10.03

     No Waiver; Cumulative Remedies    114

Section10.04

     Expenses; Indemnity; Damage Waiver    115

Section10.05

     Payments Set Aside    117

Section10.06

     Successors and Assigns    117

Section10.07

     Treatment of Certain Information; Confidentiality    120

Section10.08

     Right of Setoff    121

Section10.09

     Interest Rate Limitation    121

Section10.10

     Counterparts; Integration; Effectiveness    122

Section10.11

     Survival of Representations and Warranties    122

Section10.12

     Severability    122

Section10.13

     Replacement of Lenders    122

Section10.14

     Governing Law; Jurisdiction; Etc    123

Section10.15

     Waiver of Jury Trial    124

Section10.16

     Patriot Act Notice; Lenders’ Compliance Certification    125

Section10.17

     No Advisory or Fiduciary Responsibility    125

Section10.18

     Judgment Currency    126

Section10.19

     Intercreditor Agreement    126

Section10.20

     Notes Legend    127

 

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Schedules:

      

Schedule 2.01

 

-

         Lenders and Commitments

Schedule 5.03

 

-

         Required Consents, Authorizations, Notices and Filings

Schedule 5.06

 

-

         Litigation

Schedule 5.12

 

-

         ERISA

Schedule 5.13

 

-

         Subsidiaries

Schedule 5.16

 

-

         Compliance with Law

Schedule 5.17

 

-

         Intellectual Property

Schedule 5.21

 

-

         Ownership

Schedule 5.22

 

-

         Broker’s Fees

Schedule 7.01

 

-

         Indebtedness

Schedule 7.02

 

-

         Existing Liens

Schedule 7.06

 

-

         Investments

Schedule 7.09

 

-

         Transactions with Affiliates

Schedule 10.02

 

-

         Administrative Agent’s Office, Certain Addresses for Notices Exhibits:
      

Exhibit A

 

-

         Form of Notice of Borrowing

Exhibit B

 

-

         Form of Note

Exhibit C

 

-

         Form of Assignment and Assumption

Exhibit D

 

-

         Form of Compliance Certificate

Exhibit E

 

-

         Form of Guaranty

Exhibit F-1

 

-

         Form of Security Agreement

Exhibit F-2

 

-

         Form of Pledge Agreement

Exhibit F-3

 

-

         Form of Perfection Certificate

Exhibit G

 

-

         Form of Intercompany Note

Exhibit H

 

-

         Form of Loan Party Accession Agreement

Exhibit I

 

-

         Form of Intercreditor Agreement

 

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SECOND LIEN CREDIT AGREEMENT

This Second Lien Credit Agreement (“Agreement”) is entered into as of March 26,
2009 among SBARRO HOLDINGS, LLC, a Delaware limited liability company
(“Holdings”), SBARRO, INC., a New York corporation (the “Borrower”), each lender
from time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), Natixis, New York Branch, as Administrative Agent and Collateral
Agent.

WHEREAS, the Borrower and Holdings have requested that the Lenders extend credit
to the Borrower in the form of Loans (such term and each other capitalized terms
used but not otherwise defined in these Recitals shall have the meaning assigned
thereto in Article I) on the Closing Date in the Committed Amount which will be
used for the purposes set forth in Section 6.11.

WHEREAS, the First Lien Borrower and the other First Lien Loan Parties have
agreed to amend the First Lien Credit Agreement (the “First Lien Amendment”) to,
among other things, permit the Borrower and Holdings to enter into the
Agreement, incur the Second Lien Secured Obligations and to reduce the First
Lien Revolving Commited Amount;

The Lenders are willing to make the requested credit facility available on the
terms and conditions set forth herein. Accordingly, in consideration of the
mutual covenants and agreements herein contained, the parties hereto agree as
follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings set forth below:

“Accession Agreement” means a Loan Party Accession Agreement, substantially in
the form of Exhibit H hereto, executed and delivered by an Additional Subsidiary
Guarantor after the Closing Date in accordance with Section 6.12(a) or (d).

“Additional Collateral Documents” has the meaning specified in Section 6.12(b).

“Additional Subsidiary Guarantor” means each Person that becomes a Subsidiary
Guarantor after the Closing Date by execution of an Accession Agreement as
provided in Section 6.12(a).

“Acquisition Agreement” means the Acquisition Agreement dated as of November 22,
2006 among Holdings, MidOcean SBR Acquisition Corp. and the Borrower, as the
same may be amended, modified or supplemented from time to time in accordance
with the provisions thereof and of the First Lien Credit Agreement, as amended
by Amendment No. 1 dated January 31, 2007.

“Administrative Agent” means Natixis, New York Branch, in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

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“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

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

“Affiliate” means, with respect to any 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.

“Agent” means the Administrative Agent, the Collateral Agent and any successors
and assigns in such capacity, and “Agents” means any two or more of them.

“Aggregate Commitments” means at any date the Commitments of all the Lenders.

“Agreement” means this Credit Agreement, as amended, modified or supplemented
from time to time.

“AHYDO Interest Payment” has the meaning specified in Section 2.06(e).

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by the aggregate of such Lender’s Commitment Percentage at such
time; provided that if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable
Percentage of such Lender most recently in effect, giving effect to any
subsequent assignments. The initial Applicable Percentage of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 under the caption
“Aggregate Commitment Percentage” or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable.

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

“Asset Disposition” means any sale (including any Sale/Leaseback Transaction,
whether or not involving a Capital Lease), lease (as lessor), transfer or other
disposition (including any such transaction effected by way of merger or
consolidation and including any sale or other disposition by any Group Company
of Equity Interests of a Subsidiary, but excluding any sale or other disposition
by way of Casualty or Condemnation) by any Group Company of any asset. For
avoidance of doubt, an Equity Issuance or capital contribution by any Person
shall not constitute an Asset Disposition by that Person.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor or
by Affiliated investment advisors.

 

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“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent,
substantially in the form of Exhibit C hereto or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, at any date, (i) in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
(ii) in respect of any Synthetic Lease Obligation of any Person, the capitalized
or principal amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease or other agreement were accounted for as a
Capital Lease and (iii) in respect of any Sale/Leaseback Transaction, the lesser
of (A) the present value, discounted in accordance with GAAP at the interest
rate implicit in the related lease, of the obligations of the lessee for net
rental payments over the remaining term of such lease (including any period for
which such lease has been extended or may, at the option of the lessor, be
extended) and (B) the fair market value of the assets subject to such
transaction.

“Audited Financial Statements” means the audited balance sheet of the Borrower
for the fiscal year ended December 31, 2007, and the related statements of
income, shareholders’ equity and cash flows for such fiscal year of the
Borrower, including the notes thereto.

“Bank Secrecy Act” means the Financial Recordkeeping and Reporting of Currency
and Foreign Transactions Act of 1970, 31 U.S.C. 1051 et seq., as the same may be
amended, supplemented, modified, replaced or otherwise in effect from time to
time.

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

“Bankruptcy Law” means the Bankruptcy Code and all other liquidation,
receivership, moratorium, conservatorship, assignment for the benefit of
creditors, insolvency or similar federal, state or foreign law for the relief of
debtors.

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

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” has the meaning specified in Section 1.05.

“Business Acquisition” means the acquisition by the Borrower or one or more of
its Subsidiaries of all (other than Nominal Shares) of the Equity Interests of,
or all (or any division, line of business or any substantial part for which
audited financial statements or other financial information reasonably
satisfactory to the Administrative Agent is available) or substantially all of
the assets or property of, another Person.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located.

 

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“Capital Lease” of any Person means any lease of (or other arrangement conveying
the right to use) property (whether real, personal or mixed) by such Person as
lessee which would, in accordance with GAAP, be required to be accounted for as
a capital lease on the balance sheet of such Person.

“Capital Lease Obligations” means, with respect to any Person, all obligations
of such Person as lessee under Capital Leases, in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.

“Cash Equivalents” means:

(i) any evidence of debt, maturing not more than one year after such time,
issued or guaranteed by the United States of America or any agency thereof;

(ii) commercial paper, maturing not more than one year from the date of issue,
or demand notes issued by any domestic corporation not an Affiliate of the
Borrower, in each case (unless issued by a Lender of its holding company) rated
at least A-2 by S&P or P-2 by Moody’s;

(iii) any certificate of deposit (or time deposits represented by such
certificate of deposit), eurodollar time deposit or bankers’ acceptance,
maturing not more than one year after such time, or overnight Federal funds
transactions with a member of the Federal Reserve System that are issued or sold
by a commercial banking institution that is organized under the Laws of the
United States, any State thereof or the District of Columbia, any foreign bank
or its branches or agencies (fully protected against currency fluctuations) and
has a combined capital and surplus and undivided profits of not less than
$500,000,000;

(iv) any repurchase agreement entered into with any Lender (or other commercial
banking institution of the stature referred to in clause (iii) above) which
(A) is secured by a fully perfected security interest in any obligation of the
type described in any of clauses (i) through (iii) above and (B) has a market
value at the time such repurchase agreement is entered into of not less than
100% of the repurchase obligation of such Lender (or other commercial banking
institution) thereunder;

(v) investments in short-term asset management accounts offered by any Lender
(or other commercial banking institution of the stature referred to in clause
(iii) above) for the purpose of investing in loans to any corporation (other
than the Borrower or an Affiliate of the Borrower), state or municipality, in
each case organized under the laws of any state of the United States or of the
District of Columbia;

(vi) investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least “A” by S&P or Moody’s; and

(vii) shares of any money market fund that (A) has substantially all of its
assets invested continuously in the types of investments referred to in clauses
(i) through (vi) above, (B) has net assets in excess of $500,000,000 and (C) is
rated at least “A-1” by S&P or “P-1” by Moody’s.

 

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“Casualty” means any casualty, damage, destruction or other similar loss with
respect to real or personal property or improvements.

“Casualty Insurance Policy” means any insurance policy maintained by any Group
Company covering losses with respect to Casualties.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (i) the adoption or taking effect of any law, rule, regulation
or treaty; (ii) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority; or (iii) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental
Authority.

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

(i) prior to a Qualifying IPO, (A) Holdings shall cease to beneficially own,
directly or indirectly, 100% of the Equity Interests in the Borrower on a
fully-diluted basis assuming the conversion and exercise of all outstanding
Equity Equivalents (whether or not such securities are then currently
convertible or exercisable), (B) the Sponsor Group shall beneficially own,
directly or indirectly, less than a majority of the Equity Interests of Holdings
entitled to vote for the election of directors thereof or (C) the failure at any
time of the Sponsor Group to control, whether through the ownership of voting
securities or by contract, a majority of the seats on the board of directors (or
persons performing similar functions) of Holdings and the Borrower; or

(ii) after a Qualifying IPO, (A) Holdings shall cease to beneficially own,
directly or indirectly, 100% of the Equity Interests in the Borrower on a
fully-diluted basis assuming the conversion and exercise of all outstanding
Equity Equivalents (whether or not such securities are then currently
convertible or exercisable) or (B)(x) any “person” or “group” (within the
meaning of Section 13(d) or 14(d) of the Exchange Act) (other than the Sponsor
Group) has become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have “beneficial
ownership” of all securities that any such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), by way of merger, consolidation or otherwise, of 35% or more of the
Equity Interests of Holdings on a fully-diluted basis as set forth above, and
(y) such Person or group is or becomes, directly or indirectly, the beneficial
owner of a greater percentage of the Voting Securities of Holdings, calculated
on a fully-diluted basis as set forth above, than the percentage of the voting
power of the Voting Securities of Holdings owned by the Sponsor Group; or

(iii) after a Qualifying IPO, during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of
directors (or persons performing similar functions) of Holdings or the Borrower,
as the case may be, together with any new members of such board of directors
(A) whose

 

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elections by such board of directors or whose nominations for election by the
stockholders of Holdings or the Borrower, as applicable, were approved by a vote
of a majority of the members of such board of directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved (excluding, in the case of
this clause (A), any individual whose initial nomination for, or assumption of
office as, a member of such board of directors occurs as a result of an actual
or threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors) or
(B) nominated by the Sponsor Group, cease for any reason to constitute a
majority of the directors of Holdings or the Borrower, as applicable, still in
office;

(iv) For purposes of this definition, a “beneficial owner” of a security
includes any person who, directly or indirectly, whether by contract or
otherwise, has the power to vote or direct the voting of, such security or the
power to dispose, or direct the disposition of, such security, and “beneficially
owned” shall have a correlative meaning.

(v) a “change of control” (as defined in the Senior Notes Indenture or the First
Lien Credit Agreement) occurs.

“Class A LLC Units” shall mean the Class A limited liability company interests
of MidOcean SBR Holdings, LLC, a Delaware limited liability company.

“Closing Date” means the date on or after the Effective Date when the initial
Borrowing occurs in accordance with Section 4.01.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute and all rules and regulations promulgated thereunder.

“Collateral” means all of the property which is subject or is purported to be
subject to the Liens granted by the Collateral Documents.

“Collateral Agent” means Natixis, New York Branch, in its capacity as collateral
agent for the Finance Parties under the Collateral Documents, and its successor
or successors in such capacity.

“Collateral Documents” means, collectively, the Intercreditor Agreement, the
Security Agreement, the Pledge Agreement, any Additional Collateral Documents,
any additional pledges, security agreements, patent, trademark or copyright
filings or mortgages or deeds of trust required to be delivered pursuant to the
Loan Documents and any instruments of assignment, control agreements, lockbox
letters or other similar instruments or agreements executed pursuant to the
foregoing.

“Commitment” means, with respect to any Lender, the commitment of such Lender to
make a Loan on the Closing Date in a principal amount equal to such Lender’s
Commitment Percentage of the Committed Amount.

 

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“Commitment Percentage” means, for each Lender, the percentage (carried out to
the ninth decimal place) of the aggregate Commitments represented by such
Lender’s Commitment at such time and identified as its Commitment Percentage on
Schedule 2.01, as such percentage may be modified in connection with any
Assignment and Assumption made in accordance with the provisions of
Section 10.06(b).

“Committed Amount” means $25,500,000.

“Competitor” means a Person whose primary business competes directly with the
Borrower and its Subsidiaries.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D hereto.

“Condemnation” means any taking by a Governmental Authority of property or
assets, or any part thereof or interest therein, for public or quasi-public use
under the power of eminent domain, by reason of any public improvement or
condemnation.

“Condemnation Award” means all proceeds of any Condemnation or transfer in lieu
thereof.

“Consolidated Adjusted Working Capital” means at any date the excess of
(i) Consolidated Current Assets (excluding (i) deferred tax assets and (ii) cash
and Cash Equivalents classified as such in accordance with GAAP) over
(ii) Consolidated Current Liabilities (excluding (i) deferred tax liabilities
and (ii) the current portion of any Consolidated Funded Indebtedness).

“Consolidated Capital Expenditures” means for any period the aggregate amount of
all expenditures (whether paid in cash, through the incurrence of Indebtedness
or Attributable Debt or other consideration or accrued as a liability) that
would, in accordance with GAAP, be included as additions to property, plant and
equipment and other capital expenditures of Holdings and its Consolidated
Subsidiaries for such period, excluding interest capitalized during
construction, as the same are or would be set forth in a consolidated statement
of cash flows of Holdings and its Consolidated Subsidiaries for such period, but
excluding (to the extent that they would otherwise be included):

(i) any such expenditures made for the replacement or restoration of assets to
the extent paid for by any Casualty Insurance Policy or Condemnation Award with
respect to the asset or assets being replaced or restored to the extent such
expenditures are permitted under the Loan Documents and the First Lien Finance
Documents;

(ii) any such expenditures made with proceeds of an Equity Issuance of Qualified
Capital Stock of Holdings after the Closing Date to the extent not required to
prepay the First Lien Loans, the Loans or used for any other purpose;

(iii) any such expenditures to the extent Holdings or any of its Consolidated
Subsidiaries has received reimbursement in cash from a third party other

 

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than Holdings or one or more of its Consolidated Subsidiaries and for which none
of Holdings or any of its Consolidated Subsidiary has provided or is required to
provide or incur, directly or indirectly, any consideration or obligation to
such third party or any other Person;

(iv) the book value of any asset owned by Holdings or a Consolidated Subsidiary
prior to or during such period which is included as an addition to property,
plant and equipment or other capital expenditures of Holdings and its
Consolidated Subsidiaries for such period as a result of one or more of them
reusing or beginning to reuse such asset during such period without a
corresponding expenditure actually having been made in such period except that,
for purposes of this clause (iv), (A) any expenditure necessary in order to
permit such asset to be reused shall be included as Consolidated Capital
Expenditures during the period that such expenditure is actually made and
(B) such book value shall have been included in Consolidated Capital
Expenditures when such asset was originally acquired;

(v) the purchase price of equipment purchased during such period to the extent
the consideration therefor consists of any combination of (A) used or surplus
equipment traded in at the time of such purchase and (B) the proceeds of a
concurrent sale of used or surplus equipment, in each case in the ordinary
course of business;

(vi) any expenditures made with the proceeds of a Debt Issuance of Holdings or
any of its Subsidiaries (other than the Loans, First Lien Revolving Loans and
Indebtedness incurred pursuant to Section 7.01(xx) after the Closing Date) to
the extent not required to prepay the Loans or used for any other purpose; and

(vii) the purchase price of assets (other than cash and Cash Equivalents) that
are purchased substantially contemporaneously with the trade-in of existing
assets (other than cash and Cash Equivalents) to the extent that the gross
amount of such purchase price is reduced by the credit granted by the seller of
such assets (other than cash and Cash Equivalents) for the assets (other than
cash and Cash Equivalents) being traded in at such time.

“Consolidated Cash Taxes” means for any period the aggregate amount of all taxes
of Holdings and its Consolidated Subsidiaries for such period to the extent the
same are paid in cash by Holdings or any Consolidated Subsidiary of Holdings
during such period.

“Consolidated Current Assets” means at any date the consolidated current assets
of Holdings and its Consolidated Subsidiaries determined as of such date.

“Consolidated Current Liabilities” means at any date, without duplication,
(i) the consolidated current liabilities of Holdings and its Consolidated
Subsidiaries plus (ii) all Guaranty Obligations of Holdings or any Consolidated
Subsidiary of Holdings in respect of the current liabilities of any Person
(other than Holdings or a Consolidated Subsidiary of Holdings), determined as of
such date.

“Consolidated EBITDA” means for any period the sum of:

(i) Consolidated Net Income for such period (excluding therefrom (x) any
extraordinary or non-recurring items of gain or loss and (y) any gain or loss
from discontinued operations not to exceed $2,500,000 during any period of four
consecutive fiscal quarters); plus

 

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(ii) to the extent not otherwise included in the determination of Consolidated
Net Income for such period, all proceeds of business interruption insurance
policies, if any, received during such period; plus

(iii) without duplication, those amounts which, in the determination of
Consolidated Net Income for such period, have been deducted (and not previously
added-back) for (A) Consolidated Interest Expense, (B) lease expense in respect
of Sale/Leaseback Transactions accounted for as Operating Leases under GAAP,
(C) provisions for Federal, state, local and foreign income tax, value added
tax, franchise taxes and state single business unitary and similar taxes imposed
in lieu of income tax, (D) depreciation, amortization (including, without
limitation, amortization of goodwill and other intangible assets), impairment of
goodwill and other non-cash charges or expenses (excluding any such non-cash
charge or expense to the extent that it represents amortization of a prepaid
cash expense that was paid in a prior period), (E) unrealized losses on
financial derivatives recognized in accordance with SFAS No. 133, (F) non-cash
compensation expense, or other non-cash expenses or charges, arising from the
granting of stock options, the granting of stock appreciation rights and similar
arrangements (including any strike price reductions for dividends paid,
repricing, amendment, modification, substitution or change of any such stock
option, stock appreciation rights or similar arrangements), (G) non-cash
purchase accounting adjustments in accordance with GAAP, (H) Management Fees,
(I) any financial advisory fees, accounting fees, legal fees and other similar
advisory and consulting fees and other out-of-pocket costs and expenses of the
Borrower incurred as a result of the Transaction (whether or not actually
consummated) and deducted from net income during the Borrower’s fiscal years
ending December 28, 2008 and December 27, 2009, (J) [intentionally omitted],
(K) the amount of (x) any expense to the extent that a corresponding amount is
received in cash by a Group Company from a Person other than Holdings or any
Subsidiary of Holdings under any agreement providing for reimbursement of such
expense or (y) any expenses with respect to liability or casualty events,
business interruption or product recalls, to the extent covered by insurance (it
being understood that if the amount received in cash under any such agreement in
any period exceeds the amount of expense paid during such period such excess
amounts received may be carried forward and applied against expenses in future
periods), (L) any financial advisory fees, accounting fees, legal fees and other
similar advisory and consulting fees and related out-of-pocket expenses of the
Borrower and its Consolidated Subsidiaries incurred as a result of Permitted
Acquisitions, Permitted Joint Ventures, Investments permitted by Section 7.06,
or a Qualifying IPO not to exceed an aggregate of $1,000,000, (M) non-recurring
cash charges resulting from severance, consulting, advisory and other similar
transition expenses, stay or sign on bonuses, restructuring, consolidation,
transition integration and other adjustments made as a result of Permitted
Acquisitions, and other Investments permitted under Section 7.06; provided that
the amounts referred to in this clause (M) reported in any fiscal year ending
after December 31, 2006

 

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shall not, in the aggregate, exceed 2,000,000 during any fiscal year and
$4,000,000 in the aggregate since the First Lien First Amendment Effective Date,
(N) any write-off or amortization made in such period of deferred financing
costs or any write-down of assets or asset value, (O) [intentionally omitted],
(P) [intentionally omitted], (Q) Consolidated Pre-Opening Expenses deducted in
calculating Consolidated Net Income for such period not to exceed an aggregate
of $1,000,000 per year beginning with fiscal year 2009, (R) [intentionally
omitted], (S) gains and losses resulting from currency fluctuations, (T) Store
Closing Costs not to exceed an aggregate of $3,000,000 per year beginning with
fiscal year 2009, (U) restructuring-related expenses (including cash charges in
respect of strategic market reviews, management bonuses or early retirement of
Indebtedness) not to exceed $1,500,000 in the aggregate, (V) the cumulative
effect of changes in accounting principles and (W) expenses related to
consolidation, severance or the discontinuance of any portion of operations,
employees and/or management not to exceed an aggregate amount during any four
consecutive fiscal quarters greater than (1) as of the fiscal quarter ending on
March 29, 2009, $3,500,000, (2) as of the fiscal quarter ending on June 28,
2009, $3,000,000, (3) as of the fiscal quarter ending on September 27, 2009,
$2,750,000, (4) as of the fiscal quarter ending on December 27, 2009, $2,500,000
and (5) as of any fiscal quarter ending thereafter, $1,500,000; plus

(iv) for purposes of curing any violation of the covenant set forth in
Section 7.16, the Net Cash Proceeds of any Equity Issuance of Qualified Capital
Stock to the Investor Group and/or to one or more other Persons who are or
become holders of Equity Interests in Holdings, solely to the extent that such
Net Cash Proceeds are actually received by the Borrower (including through
capital contribution of such Net Cash Proceeds by Holdings to the Borrower) no
later than 10 Business Days after the delivery of a Notice of Intent to Cure;
provided that Net Cash Proceeds of Equity Issuances of Qualified Capital Stock
may be included pursuant to the provisions of this clause (iv) in Consolidated
EBITDA of no more than two fiscal quarters in any period of four consecutive
fiscal quarters; and provided further that the aggregate amount of Net Cash
Proceeds of Equity Issuances of Qualified Capital Stock which may be included
pursuant to this clause (iv) in Consolidated EBITDA may not exceed, in any case,
(A) the aggregate amount necessary to cure an Event of Default arising in
respect of the covenant set forth in Section 7.16 for such applicable period for
which such Notice of Intent to Cure is delivered or (B) an amount greater than
10% of the Consolidated EBITDA of Holdings as of the last day of the most recent
period of four consecutive fiscal quarters of Holdings for which financial
statements are required to be delivered pursuant to Section 6.01(a) or (b);
provided further; that the Borrower shall prepay the Loans with 100% of all Net
Cash Proceeds of Equity Issuances of Qualified Capital Stock included pursuant
to this clause (iv) in the manner and in accordance with the provisions
applicable to voluntary prepayments of Loans with Net Cash Proceeds; provided,
however, that the aggregate amount of Net Cash Proceeds of Equity Issuances of
Qualified Capital Stock which are included pursuant to this clause (iv) in
Consolidated EBITDA shall not increase any basket or other amount hereunder and
shall not be used for any other purpose or action hereunder that is specifically
permitted to be taken with the use of proceeds from Equity Issuances; it being
understood that this clause (iv) may not be relied on for purposes of
calculating any financial ratios other than for purposes of determining
compliance with the financial covenant set forth in Section 7.16; minus

 

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(v) without duplication, any amount which, in the determination of Consolidated
Net Income for such period, has been added for (A) interest income,
(B) unrealized gains on financial derivatives recognized in accordance with SFAS
No. 133 and (C) any non-cash income or non-cash gains, all as determined in
accordance with GAAP; minus

(vi) the aggregate amount of cash payments made during such period in respect of
any non-cash accrual, reserve or other non-cash charge or expense accounted for
in a prior period which were added to Consolidated Net Income to determine
Consolidated EBITDA for such prior period and which do not otherwise reduce
Consolidated Net Income for the current period.

To the extent the receipt of any Net Cash Proceeds of any Equity Issuance of
Qualified Capital Stock are an effective addition to Consolidated EBITDA as
contemplated by, and in accordance with, the provisions of clause (iv) above
and, as a result thereof, any Default or Event of Default of the covenant set
forth in Section 7.16 shall have been cured for any applicable period, such cure
shall be deemed to be effective as of the last day of such applicable period.
For purposes of calculating Consolidated EBITDA for any period of four
consecutive fiscal quarters (each, a “Test Period”) pursuant to any
determination of the Total Leverage Ratio for all purposes or any determination
of Consolidated EBITDA for purposes of Section 7.16, if during such Test Period
(or in the case of pro-forma calculations, during the period from the last day
of such Test Period to and including the date as of which such calculation is
made) any Group Company shall have made one or a series of related Asset
Dispositions involving assets having an aggregate fair market value of
$5,000,000 or more or a Permitted Acquisition, Permitted Joint Venture, or
Investment permitted by Section 7.06, Consolidated EBITDA for such Test Period
shall be calculated after giving effect thereto on a Pro-Forma Basis, giving
effect to projected or anticipated cost savings or synergies and with respect to
Asset Dispositions including cost savings from head count reduction, closure of
facilities and similar restructuring charges permitted or required by
Regulations S-K or S-X under the Securities Act or otherwise agreed to by the
Administrative Agent in its reasonable discretion.

“Consolidated Funded Indebtedness” means at any date the Funded Indebtedness of
Holdings and its Consolidated Subsidiaries as of such date, determined on a
consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, for any period, the total interest
expense of Holdings and its Consolidated Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, interest
capitalized during construction, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments under Capital Leases and the implied interest component of Synthetic
Lease Obligations (regardless of whether accounted for as interest expense under
GAAP), all commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers’ acceptances and net costs (included in
interest expense) in respect of Swap Obligations constituting interest rate
swaps, collars, caps or other arrangements requiring payments contingent upon
interest rates of Holdings and its Consolidated Subsidiaries), in each case
determined on a consolidated basis for such period; provided that any interest
on Indebtedness of another Person that is guaranteed by

 

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Holdings or any of its Consolidated Subsidiaries or secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien on, or payable out of the proceeds of the sale of or
production from, assets of Holdings or any of its Consolidated Subsidiaries
(whether or not such guarantee or Lien is called upon) shall be included.

“Consolidated Net Income” means, for any period, the net income (or net loss)
after taxes and before dividends of Holdings and its Consolidated Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded from the calculation of Consolidated Net
Income for any period (i) the income (or loss) of any Person in which any other
Person (other than Holdings or any of its Wholly-Owned Consolidated
Subsidiaries) has an ownership interest, except to the extent that any such
income is actually received in cash by Holdings or such Wholly-Owned
Consolidated Subsidiary in the form of Restricted Payments during such period,
(ii) the income (or loss) of any Person accrued prior to the date it becomes a
Consolidated Subsidiary of Holdings or is merged with or into or consolidated
with Holdings or any of its Consolidated Subsidiaries or that Person’s assets
are acquired by Holdings or any of its Consolidated Subsidiaries, except as
provided in the definitions of “Consolidated EBITDA” and “Pro-Forma Basis”
herein and (iii) the income of any Subsidiary of Holdings (other than a Loan
Party) to the extent that the declaration or payment of Restricted Payments or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary.

“Consolidated Scheduled Debt Payments” means, for any period, the sum of all
regularly scheduled payments of principal on the Loans, the First Lien Loans and
all other Consolidated Funded Indebtedness of Holdings and its Consolidated
Subsidiaries for such period (including, without limitation, the principal
component of Capital Lease Obligations, Purchase Money Indebtedness and
Synthetic Lease Obligations (regardless of whether accounted for as indebtedness
under GAAP) paid or payable during such period), but excluding payments due on
First Lien Revolving Loans and First Lien Swing Line Loans during such period;
provided that Consolidated Scheduled Debt Payments for any period shall not
include voluntary prepayments of Consolidated Funded Indebtedness, mandatory
prepayments of the Loans pursuant to Section 2.09(c), mandatory prepayments of
First Lien Term B Loans pursuant to Section 2.09(c) of the First Lien Credit
Agreement (as in effect on the date hereof) or other mandatory prepayments
(other than by virtue of scheduled amortization) of Consolidated Funded
Indebtedness (but Consolidated Scheduled Debt Payments for a period shall be
adjusted to reflect the effect on scheduled payments of principal for such
period of the application of any prepayments of Consolidated Funded Indebtedness
during or preceding such period).

“Consolidated Subsidiary” means with respect to any Person at any date any
Subsidiary (for avoidance of doubt, other than an Unrestricted Subsidiary) of
such Person or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date in accordance with GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

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“Control” means 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 ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Exposure” means, as applied to each Lender and with respect to its
Loans:

(i) at any time prior to the termination of the Commitments of the Lenders, the
sum of the Commitment Percentage of such Lender multiplied by the Committed
Amount; and

(ii) at any time after the termination of the Commitments of the Lenders the
principal balance of the outstanding Loans of such Lender.

For purposes of the foregoing, (i) the interest of any Lender holding a Loan in
which any other Lender has a Participation Interest pursuant to Section 10.06(d)
shall be calculated net of all such Participation Interests under
Section 10.06(d) of other Lenders and (ii) the Participation Interest of any
Lender pursuant to Section 10.06(d) in a Loan held by any other Lender shall be
counted as if such Lender holding a Participation Interest under
Section 10.06(d) held a proportionate part of the related Loan directly.

“Credit Extension” means a Borrowing.

“Debt Equivalents” of any Person means (i) any Equity Interest of such Person
which by its terms (or by the terms of any security for which it is convertible
or for which it is exchangeable or exercisable), or upon the happening of any
event or otherwise (including an event which would constitute a Change of
Control), (A) matures or is mandatorily redeemable or subject to any mandatory
repurchase requirement, pursuant to a sinking fund or otherwise or (B) is
convertible into or exchangeable for Indebtedness or Debt Equivalents, in each
case in whole or in part, on or prior to the 90 day anniversary of the Maturity
Date and (ii) if such Person is a Subsidiary of the Borrower but not a
Subsidiary Guarantor, any Preferred Stock of such Person; provided, however,
that any Equity Interests that would not constitute Debt Equivalents but for
provisions thereof giving holders thereof (or the holders of any security into
or for which such Equity Interests are convertible, exchangeable or exercisable)
the right to require the issuer thereof to redeem such Equity Interests upon the
occurrence of a Change of Control or an Asset Disposition occurring prior to the
180th day after the Maturity Date shall not constitute Debt Equivalents if such
Equity Interests provide that the issuer thereof will not redeem any such Equity
Interests pursuant to such provisions prior to the payment in full of the Second
Lien Credit Obligations (other than contingent indemnity obligations).

“Debt Issuance” means the issuance by any Group Company of any Indebtedness.

“Default” means any condition or event that constitutes an Event of Default or
that, with the giving of notice, the passage of applicable grace periods, or
both, would be an Event of Default.

“Default Rate” means when used with respect to Second Lien Credit Obligations an
interest rate equal to (A) the Interest Rate plus (B) 2.00% per annum.

 

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“Defaulting Lender” means any Lender that (i) has failed to make a Loan within
one Business Day of the date required to be funded by it hereunder, (ii) has
otherwise failed to pay to the Administrative Agent or any Lender any other
amount required to be paid by it hereunder or any other Loan Document within one
Business Day of the date when due, unless the subject of a good faith dispute or
(iii) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.

“Deposit Account” has the meaning specified in the Security Agreement.

“Discharge of First Lien Finance Obligations” means “Discharge of Senior Finance
Obligations” as defined in the First Lien Credit Agreement.

“Discharge of Second Lien Credit Obligations” means (i) payment in full in cash
of the principal of and interest (including interest accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not a claim
for such interest is, or would be, allowed in such Insolvency or Liquidation
Proceeding) and premium, if any, on all Indebtedness outstanding under the Loan
Documents and termination of all commitments to lend or otherwise extend credit
under the Loan Documents, and (ii) payment in full in cash of all other Second
Lien Credit Obligations that are due and payable or otherwise accrued and owing
at or prior to the time such principal and interest are paid (including legal
fees and other expenses, costs or charges accruing on or after the commencement
of any Insolvency or Liquidation Proceeding, whether or not a claim for such
fees, expenses, costs or charges is, or would be, allowed in such Insolvency or
Liquidation Proceeding).

“Disqualified Stock” means, with respect to any Person, any Capital Stock which
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder) or upon the happening
of any event: (1) matures or is mandatorily redeemable (other than redeemable
only for Capital Stock of such Person which is not itself Disqualified Stock)
pursuant to a sinking fund obligation or otherwise; (2) is convertible or
exchangeable at the option of the holder for Indebtedness or Disqualified Stock;
or (3) is mandatorily redeemable or must be purchased upon the occurrence of
certain events or otherwise in whole or in part; in each case on or prior to the
Maturity Date; provided, however, that any Equity Interests that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
(or the holders of any security into or for which such Equity Interests is
con-vertible, exchangeable or exercisable) the right to require the issuer
thereof to redeem such Equity Interests upon the occurrence of a change in
control or an asset sale occurring prior to the 180th day after the Maturity
Date shall not constitute Disqualified Stock if such Equity Interests provide
that the issuer thereof will not redeem any such Equity Interests pursuant to
such provisions prior to the repayment in full of the Second Lien Credit
Obligations (other than contingent indemnity obligations).

“Dollars” and “$” means lawful money of the United States of America.

“Domestic Subsidiary” means with respect to any Person each Subsidiary of such
Person that is organized under the laws of the United States, the District of
Columbia or any State, and “Domestic Subsidiaries” means any two or more of
them.

 

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“Effective Date” means the date this Agreement becomes effective in accordance
with Section 10.10.

“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund and (iv) any other Person (other than a natural person and other
than a Competitor) approved by (A) the Administrative Agent, and (B) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include Holdings,
the Borrower or any of Holdings’ or the Borrower’s Subsidiaries or Competitors.

“Employee Benefit Arrangements” means in any jurisdiction the benefit schemes or
arrangements in respect of any employees or past employees operated by any Group
Company or in which any Group Company participates and which provide benefits on
retirement, ill-health, injury, death or voluntary withdrawal from or
termination of employment, including termination indemnity payments and life
assurance and post-retirement medical benefits, other than Plans and Foreign
Pension Plans.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of remediation, fines, penalties or
indemnities), of any Group Company directly or indirectly resulting from or
based on (i) violation of any Environmental Law, (ii) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Material, (iii) exposure to any Hazardous Material, (iv) the release or
threatened release of any Hazardous Material into the environment or (v) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

“Equity Equivalents” means with respect to any Person any rights, warrants,
options, convertible securities, exchangeable securities, indebtedness or other
rights, in each case exercisable for or convertible or exchangeable into,
directly or indirectly, Equity Interests of such Person or securities
exercisable for or convertible or exchangeable into Equity Interests of such
Person, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.

“Equity Interests” means all shares of capital stock, partnership interests
(whether general or limited), limited liability company membership interests,
beneficial interests in a trust and any other interest or participation that
confers on a Person the right to receive a share of profits or losses, or
distributions of assets, of an issuing Person, but excluding any debt securities
convertible into such Equity Interests.

 

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“Equity Issuance” means (i) any sale or issuance by any Group Company to any
Person other than Holdings or a Subsidiary of Holdings of any Equity Interests
or any Equity Equivalents (other than any such Equity Equivalents that
constitute Indebtedness) and (ii) the receipt by any Group Company of any cash
capital contributions, whether or not paid in connection with any issuance of
Equity Interests of any Group Company, from any Person other than Holdings or a
Subsidiary of Holdings.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulation promulgated thereunder.

“ERISA Affiliate” means each entity that is a member of a “controlled group of
corporations,” under “common control” or an “affiliated service group” with a
Group Company within the meaning of Section 414(b), (c) or (m) of the Code, or
required to be aggregated with a Group Company under Section 414(o) of the Code
or is under “common control” with a Group Company, within the meaning of
Section 4001(a)(14) of ERISA.

“ERISA Event” means:

(i) a reportable event as defined in Section 4043 of ERISA and the regulations
issued under such Section with respect to a Plan, excluding, however, such
events as to which the PBGC by regulation has waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event;

(ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of any Plan,
and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days;

(iii) the failure to meet the minimum funding standard of Section 412 of the
Code with respect to any Plan (whether or not waived in accordance with
Section 412(d) of the Code), the application for a minimum funding waiver under
Section 303 of ERISA (or for years to which the Pension Protection Act of 2006
(the “PPA”) applies, Section 302(c) of ERISA) with respect to any Plan, the
failure to make by its due date a required installment under Section 412(m) of
the Code (or for years to which the PPA applies, Section 430(j) of the Code)
with respect to any Plan or the failure to make any required contribution to a
Multiemployer Plan;

(iv) (A) the incurrence of any material liability by a Group Company pursuant to
Title I of ERISA or to the penalty or excise tax provisions of the Code relating
to employee benefit plans (as defined in Section 3 of ERISA), or the occurrence
or existence of any event, transaction or condition that could reasonably be
expected to result in the incurrence of any such material liability by a Group
Company pursuant to Title I of ERISA or to such penalty or excise tax provisions
of the Code; or (B) the incurrence of any material liability by a Group Company
or an ERISA Affiliate pursuant to Title IV of ERISA or the occurrence or
existence of any event, transaction or condition that could reasonably be
expected to result in the incurrence of any such material liability or
imposition of any lien on any of the rights, properties or assets of a Group
Company or any ERISA Affiliate pursuant to Title IV of ERISA or to
Section 401(a)(29) or 412 of the Code (or for years to which the PPA applies,
Section 430(k) of the Code);

 

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(v) the provision by the administrator of any Plan of a notice pursuant to
Section 4041(a)(2) of ERISA (or the reasonable expectation of such provision of
notice) of intent to terminate such Plan in a distress termination described in
Section 4041(c) of ERISA, the institution by the PBGC of proceedings to
terminate any Plan or the occurrence of any event or condition which could
reasonably be expected to constitute grounds under ERISA for the termination of
a Plan by the PBGC, or the appointment of a trustee by the PBGC to administer
any Plan;

(vi) the withdrawal of a Group Company or ERISA Affiliate in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential material liability therefor, or
the receipt by a Group Company or ERISA Affiliate of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA;

(vii) the imposition of material liability (or the reasonable expectation
thereof) on a Group Company or ERISA Affiliate pursuant to Section 4062, 4063,
4064 or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA;

(viii) the assertion of a material claim (other than routine claims for
benefits) against any Plan other than a Multiemployer Plan or the assets
thereof, or against a Group Company or, with respect to a Plan subject to Title
IV of ERISA, an ERISA Affiliate, in connection with any Plan;

(ix) the receipt from the United States Internal Revenue Service of notice of
the failure of any Plan (or any Employee Benefit Arrangement intended to be
qualified under Section 401(a) of the Code) to qualify under Section 401(a) of
the Code, or the failure of any trust forming part of any Plan to qualify for
exemption from taxation under Section 501(a) of the Code and, with respect to
Multiemployer Plans, notice thereof to any Group Company; and

(x) the establishment or amendment by a Group Company of any Welfare Plan that
provides post-employment welfare benefits in a manner that would reasonably be
expected to result in a Material Adverse Effect.

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” means for any period an amount equal to:

(i) Consolidated EBITDA for such period determined without regard to any amount
included therein for such period pursuant to clause (iv) of the definition of
“Consolidated EBITDA”; plus

 

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(ii) all cash extraordinary or non-recurring gains, if any, during such period
(whether or not accrued in such period) (other than in respect of Asset
Dispositions); plus

(iii) (x) the decrease, if any, in Consolidated Adjusted Working Capital less
(y) the decrease, if any, in the principal amount of First Lien Revolving Loans
and First Lien Swing Line Loans, in each case from the first day to the last day
of such period; minus

(iv) the amount, if any, which, in the determination of Consolidated Net Income
for such period, has been included in respect of income or gain from Asset
Dispositions of Holdings and its Consolidated Subsidiaries; minus

(v) the aggregate amount (without duplication and in each case except to the
extent paid, directly or indirectly, with proceeds of any Equity Issuance, Debt
Issuance (other than First Lien Revolving Loans) or with the proceeds of any
Asset Disposition not included in the determination of Consolidated Net Income
for the applicable period or with any amount referred to in clause (iii)(K) of
the definition of “Consolidated EBITDA” by any Group Company) of (A) the sum of
(x) cash payments during such period in respect of Consolidated Capital
Expenditures and (y) the aggregate amounts of all cash payments in respect of
such Consolidated Capital Expenditures made during the first 90 days of such
next succeeding period (it being understood and agreed that any cash payments in
respect of Consolidated Capital Expenditures deducted from Excess Cash Flow
pursuant to this clause (v)(A)(y) shall not thereafter be deducted pursuant to
clause (v)(A)(x) above in the determination of Excess Cash Flow for the period
during which such payments were actually paid), (B) cash payments during such
period in respect of (t) Investments permitted under Section 7.06(a)(xxii);
(u) Investments permitted under Section 7.06(a)(xii)(y); (v) Investments
permitted under Section 7.06(a)(xviii); (w) Investments permitted under
Section 7.06(a)(xxv); (x) Permitted Acquisitions allowed under
Section 7.06(a)(xiv); (y) Permitted Joint Ventures allowed under
Section 7.06(a)(xv) and (z) Investments in Foreign Subsidiaries permitted
hereunder and Investments permitted under Section 7.06(a)(xi), (C) prepayments
of Indebtedness (other than intercompany Indebtedness, First Lien Term B Loans,
First Lien Revolving Loans, First Lien Swing Line Loans or Loans), provided that
(x) such prepayments are otherwise permitted hereunder and (y) if such
Indebtedness consists of a revolving line of credit, the commitments under such
line of credit are permanently reduced by the amount of such prepayment during
such period, (D) Consolidated Scheduled Debt Payments actually paid by Holdings
and its Consolidated Subsidiaries during such period, (E) Consolidated Interest
Expense actually paid in cash by Holdings and its Consolidated Subsidiaries
during such period, (F) Consolidated Cash Taxes (exclusive of any taxes referred
to in clause (viii) below deducted in respect of the determination of Excess
Cash Flow for a period prior to the period for which Excess Cash Flow is being
determined) actually paid by Holdings and its Consolidated Subsidiaries during
such period, (G) the aggregate amount of all Restricted Payments allowed under
Section 7.07(iii), amounts under clauses (iv) and (v) of Section 7.07 actually
paid in cash during such period (or, in the case of clause (v), with respect to
such period, provided that any amount so deducted shall not be deducted again in
a subsequent

 

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period), (H) Management Fees actually paid in cash during such period, (I) the
aggregate amount of all financial advisory fees, accounting fees, legal fees and
other similar advisory and consulting fees and related out-of-pocket expenses
incurred as a result of the Transaction, any Qualifying IPO, any Permitted
Acquisition, Permitted Joint Venture or Investment permitted by Section 7.06 and
actually paid in cash by Holdings and its Consolidated Subsidiaries during such
period, in each case to the extent added to Consolidated Net Income in the
determination of Consolidated EBITDA for such period not to exceed an aggregate
of $1,000,000, (J) [intentionally omitted], (K) earn-out obligations paid in
connection with Permitted Acquisitions to the extent such obligations have not
been deducted in determining Consolidated Net Income for the period Excess Cash
Flow is determined, (L) all business interruption insurance proceeds, if any,
(M) cash payments in respect of hedging agreements and interest rate agreements,
(N) cash charges resulting from severance, stay or sign on bonuses,
restructuring, consolidation, transition, consulting, advisory and other similar
transition costs and expenses, integration and other adjustments made as a
result of Permitted Acquisitions and other Investments made under Section 7.06
to the extent not deducted in determining Consolidated EBITDA for such period
provided that the amounts referred to in this clause (N) reported in any fiscal
year ending after December 31, 2006 shall not, in the aggregate, exceed
$2,000,000 during any fiscal year and $4,000,000 in the aggregate since the
First Lien First Amendment Closing Date; (O) [intentionally omitted],
(P) payments received pursuant to the Acquisition Agreement; (Q) Consolidated
Pre-Opening Expenses deducted in calculating Consolidated Net Income for such
period not to exceed an aggregate of $1,000,000 per year beginning with fiscal
year 2009, (R) [intentionally omitted], (S) gains and losses resulting from
currency fluctuations, (T) Store Closing Costs not to exceed an aggregate of
$3,000,000 per year beginning with fiscal year 2009, (U) restructuring-related
expenses (including cash charges arising out of strategic market reviews,
management bonuses, stay or sign on bonuses or consolidation) not to exceed
$1,500,000 in the aggregate, (V) the cumulative effect of changes in accounting
principles and (W) expenses related to severance or the discontinuance of any
portion of operations, employees and/or management not to exceed an aggregate
amount during any four consecutive fiscal quarters greater than (1) as of the
fiscal quarter ending on March 29, 2009, $3,500,000, (2) as of the fiscal
quarter ending on June 28, 2009, $3,000,000, (3) as of the fiscal quarter ending
on September 27, 2009, $2,750,000, (4) as of the fiscal quarter ending on
December 27, 2009, $2,500,000 and (5) as of any fiscal quarter ending
thereafter, $1,500,000; minus

(vi) all cash extraordinary or non-recurring losses and losses from discontinued
operations, if any, during such period (whether or not accrued in such period);
minus

(vii) (x) the increase, if any, in Consolidated Adjusted Working Capital less
(y) the increase, if any, in the principal amount of First Lien Revolving Loans
and First Lien Swing Line Loans, in each case from the first day to the last day
of such period; minus

(viii) an amount equal to the income and withholding taxes (as estimated in good
faith by a senior financial or senior accounting officer of the Borrower giving

 

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effect to the overall tax position of Holdings and its Subsidiaries) payable in
the period following the period for which Excess Cash Flow is determined in
respect of that amount of Excess Cash Flow as is attributable to the actual
repatriation to the Borrower of undistributed earnings of those Subsidiaries of
the Borrower that are “controlled foreign corporations” under Section 956 of the
Code to enable it to prepay the First Lien Loans, the Loans and/or Cash
Collateralize First Lien L/C Obligations as required under Section 2.09(c)(ii)
in respect of Excess Cash Flow for such period; minus amounts paid to any Seller
under the Acquisition Agreement as described on Schedule A of the First Lien
Credit Agreement.

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

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (i) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes) by a jurisdiction (or any political subdivision thereof) as a
result of such recipient being organized or having its principal office in such
jurisdiction or, in the case of any Lender, in having its Lending Office in such
jurisdiction, (ii) any branch profits taxes under Section 884 of the Code or
similar taxes imposed by a jurisdiction in which the Lender is located and
(iii) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 10.13 or a participant under
Section 2.13), any U.S. federal withholding tax (A) that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto (or designates a new Lending Office), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 3.01 or (B) is attributable to such Foreign Lender’s failure to comply
with Section 3.01(e).

“Exempt Deposit Accounts” means (i) deposit accounts the balance of which
consists exclusively of (A) withheld income taxes and federal, state or local
employment taxes in such amounts as are required in the reasonable judgment of
the Borrower to be paid to the Internal Revenue Service or state or local
government agencies within the following two months with respect to employees of
any of the Loan Parties and (B) amounts required to be paid over to an employee
benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the
benefit of employees of one or more Loan Parties, (ii) all segregated Deposit
Accounts constituting (and the balance of which consists solely of funds set
aside in connection with) taxes accounts, payroll accounts, fiduciary benefits
and trust accounts, (iii) all local depository accounts and (iv) deposit
accounts the aggregate balance of which is less than $250,000.

“Existing Indebtedness” has the meaning specified in Section 7.01(i).

“Existing Notes” means the Borrower’s existing 11% Senior Notes due September
15, 2009.

“Failed Loan” has the meaning specified in Section 2.03(d).

 

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“Federal Funds Rate” means, 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 arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (i) 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 (ii) 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 (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

“Finance Party” means each Lender, each Agent and each Indemnitee and their
respective successors and assigns, and “Finance Parties” means any two or more
of them, collectively.

“First Lien Administrative Agent” means the “Administrative Agent” as defined in
the First Lien Credit Agreement.

“First Lien Amendment” is defined in the Recitals.

“First Lien Borrower” means the “Borrower” as defined in the First Lien Credit
Agreement.

“First Lien Closing Date” means the “Closing Date” as defined in the First Lien
Credit Agreement.

“First Lien Collateral Agent” means the “Administrative Agent” as defined in the
First Lien Credit Agreement.

“First Lien Collateral Documents” means the “Collateral Documents” as defined in
the First Lien Credit Agreement.

“First Lien Consolidated Indebtedness” means on any date, the “Funded
Indebtedness” as defined in the First Lien Credit Agreement secured by a
first-priority Lien (which for the avoidance of doubt excludes all of the Second
Lien Credit Obligations).

“First Lien Credit Agreement” means the Credit Agreement, dated as of
January 31, 2007 among the Borrower, each lender from time to time party
thereto, Bank of America, N.A., as administrative agent, collateral agent, swing
line lender and l/c issuer, Credit Suisse, as syndication agent, and Banc of
America Securities LLC and Credit Suisse Securities (USA) LLC, as joint lead
arrangers and joint book managers, Natixis and Bank of Ireland, as
co-documentation agents, as may be amended, restated, modified, increased or
otherwise supplemented from time to time.

“First Lien Credit Obligations” means “Senior Credit Obligations” as defined in
the First Lien Credit Agreement.

 

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“First Lien Finance Documents” means “Finance Documents” as defined in the First
Lien Credit Agreement.

“First Lien First Amendment Closing Date” has the meaning set forth in the First
Lien Credit Agreement.

“First Lien First Amendment Effective Date” has the meaning set forth in the
First Lien Credit Agreement.

“First Lien L/C Obligations” means “L/C Obligations” as defined in the First
Lien Credit Agreement.

“First Lien Lenders” means “Lenders” as defined in the First Lien Credit
Agreement.

“First Lien Letters of Credit” means “Letters of Credit” as defined in the First
Lien Credit Agreement.

“First Lien Loan Documents” means “Loan Documents” as defined in the First Lien
Credit Agreement.

“First Lien Loan Parties” means “Loan Parties” as defined in the First Lien
Credit Agreement.

“First Lien Loans” means “Loans” as defined in the First Lien Credit Agreement.

“First Lien Leverage Ratio” means on any day the ratio of (i) (A) First Lien
Consolidated Indebtedness as of the last day of the fiscal quarter of Holdings
ending on, or most recently preceding, such date, which amount shall be net of
Unrestricted Cash to the extent there are no Revolver Outstandings (as defined
in the First Lien Credit Agreement) (in each case free and clear of all Liens,
other than (w) nonconsensual liens provided for by Law and permitted by
Section 7.02, (x) Liens permitted under Sections 7.02(ii) and (xxiv) and
(y) Liens permitted under Section 7.02(x) relating to the establishment of
depository relations with banks not given in connection with the issuance of
Indebtedness and (z) Liens permitted under Section 7.02(xxix) as of such date in
excess of $1,000,000 that are or would be included on a consolidated balance
sheet of Holdings and its Subsidiaries as of such date to (ii) Consolidated
EBITDA for the four consecutive fiscal quarters of Holdings ended on, or most
recently preceding, such day for which financial statements have been delivered
pursuant to Sections 6.01(a) or (b).

“First Lien Revolving Committed Amount” means the “Revolving Committed Amount”
as defined in the First Lien Credit Agreement.

“First Lien Revolving Loans” means “Revolving Loans” as defined in the First
Lien Credit Agreement.

“First Lien Revolving Outstandings” means “Revolving Outstandings” as defined in
the First Lien Credit Agreement.

 

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“First Lien Swing Line Loans” means “Swing Line Loans” as defined in the First
Lien Credit Agreement.

“First Lien Term B Loans” means “Term B Loans” as defined in the First Lien
Credit Agreement.

“First Lien Transaction Documents” means “Transaction Documents” as defined in
the First Lien Credit Agreement.

“Foreign Cash Equivalents” means:

(i) securities issued or fully guaranteed by the United Kingdom or any
instrumentality thereof (as long as that the full faith and credit of the United
Kingdom is pledged in support of those securities);

(ii) certificates of deposit, eurodollar or UK Sterling time deposits, overnight
bank deposits and bankers’ acceptances of any foreign bank, or its branches or
agencies (fully protected against currency fluctuations) that, at the time of
acquisition, are rated at least “A-1” by S&P or “P-1” by Moody’s, and
(ii) certificates of deposit, eurodollar time deposits, banker’s acceptances and
overnight bank deposits, in each case of any non-U.S. commercial bank having
capital and surplus in excess of $500,000,000 and a Thomson BankWatch Rating of
at least “B”;

(iii) repurchase obligations with a term of not more than seven days with
respect to securities of the types described in clause (i) or (ii) with a bank
or trust company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 in which the Borrower or
one or more of its Subsidiaries shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations; and

(iv) investments, classified in accordance with GAAP as current assets, in
shares of any money market fund that has all or substantially all of its assets
invested continuously in the types of investments referred to in clauses
(i) through (iii) above which are administered by reputable financial
institutions having capital of at least $500,000,000; provided, however, that
the maturities of all obligations of the type specified in clauses (i) through
(iii) above shall not exceed the lesser of the time specified in such clauses.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is a resident for tax
purposes. For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.

“Foreign Pension Plan” means any plan, fund (including, without limitation, any
superannuation fund) or other similar program established or maintained outside
the United States by any Group Company primarily for the benefit of employees of
any Group Company residing outside the United States, which plan, fund or other
similar program provides, or results

 

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in, retirement income, a deferral of income in contemplation of retirement or
payments to be made upon termination of employment, and which plan is not
subject to ERISA or the Code, not including plans, funds or other similar
programs which require employee participation pursuant to applicable law.

“Foreign Subsidiary” means with respect to any Person any Subsidiary of such
Person that is not a Domestic Subsidiary of such Person.

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

“Funded Indebtedness” means, with respect to any Person and without duplication,
(i) all Indebtedness of such Person of the types referred to in clauses (i),
(ii), (iii), (v) and (vii) of the definition of “Indebtedness” in this
Section 1.01, (ii) all Indebtedness of others of the type referred to in clause
(i) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien on, or payable
out of the proceeds of production from, any property or asset of such Person,
whether or not the obligations secured thereby have been assumed by such Person,
(iii) all Guaranty Obligations of such Person with respect to Indebtedness of
others of the type referred to in clause (i) above and (iv) all Indebtedness of
the type referred to in clause (i) above of any other Person (including any
partnership in which such Person is a general partner and any unincorporated
joint venture in which such Person is a joint venturer) to the extent such
Person would be liable therefor under any applicable law or any agreement or
instrument by virtue of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person shall not be liable therefor.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination.

“Governmental Authority” means the government of the United States 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 such as the European Union or the European Central Bank).

“Group Company” means any of Holdings, the Borrower and the Borrower’s
Subsidiaries (regardless of whether or not such Subsidiaries are consolidated
with the Borrower for purposes of GAAP), and “Group Companies” means all of
them, collectively.

 

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“Guaranty” means the Guaranty, substantially in the form of Exhibit E hereto, by
Holdings and the Subsidiary Guarantors in favor of the Administrative Agent, as
the same may be amended, modified or supplemented from time to time.

“Guaranty Obligation” means, with respect to any Person, without duplication,
any obligation (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guarantying, intended to
guaranty, or having the economic effect of guarantying, any Indebtedness of any
other Person in any manner, whether direct or indirect, and including, without
limitation, any obligation, whether or not contingent, (i) to purchase any such
Indebtedness or any property constituting security therefor, (ii) to advance or
provide funds or other credit support for the payment or purchase of such
Indebtedness or obligation or to maintain working capital, solvency or other
balance sheet condition of such other Person (including, without limitation,
maintenance agreements, support agreements, comfort letters, take or pay
arrangements, put agreements, performance guaranties or similar agreements or
arrangements) for the benefit of the holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the owner of such Indebtedness or (iv) to otherwise
assure or hold harmless the owner of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants or
environmental contaminants, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas
and all other substances or wastes regulated pursuant to any Environment Law
because of their hazardous or deleterious properties.

“Holdings” means Sbarro Holdings, LLC, a Delaware limited liability company, and
its successors.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(i) all obligations of such Person for borrowed money;

(ii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;

(iii) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to the extent
of the value of such property (other than customary reservations or retentions
of title under agreements with suppliers entered into in the ordinary course of
business);

(iv) all obligations, other than intercompany items, of such Person to pay the
deferred purchase price of property or services (other than trade accounts
payable and accrued expenses arising in the ordinary course of business and due
within six months of the incurrence thereof);

 

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(v) the Attributable Indebtedness of such Person in respect of Capital Lease
Obligations, Sale/Leaseback Transactions and Synthetic Lease Obligations
(regardless of whether accounted for as indebtedness under GAAP);

(vi) all obligations, contingent or otherwise, of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit, letter
of guaranty, bankers’ acceptance, surety bond, performance bond or similar
instrument;

(vii) all obligations of the types specified in clauses (i) through (vi) above
of others secured by (or for which the holder of such obligations has an
existing right, contingent or otherwise, to be secured by) a Lien on, or payable
out of the proceeds of production from, any property or asset of such Person,
whether or not such obligation is assumed by such Person; provided that the
amount of any Indebtedness of others that constitutes Indebtedness of such
Person solely by reason of this clause (vii) shall not for purposes of this
Agreement exceed the greater of the book value or the fair market value of the
properties or assets subject to such Lien;

(viii) all Guaranty Obligations of such Person;

(ix) all Debt Equivalents of such Person; and

(x) the Indebtedness of any other Person (including any partnership in which
such Person is a general partner and any unincorporated joint venture in which
such Person is a joint venturer) to the extent such Person would be liable
therefor under applicable Law or any agreement or instrument by virtue of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person shall not be
liable therefor;

provided that (i) Indebtedness shall not include (A) deferred compensation
arrangements, (B) earn-out obligations until matured or earned and not paid and
reflected on the balance sheet as a liability, (C) non-compete or consulting
obligations incurred in connection with Permitted Acquisitions, (D) obligations
under any Swap Agreement, (E) deemed Indebtedness pursuant to FASB 133 or 150,
(F) any Existing Notes that have not been validly tendered in connection with
the Tender Offer and (G) obligations owing to the Sellers under the Acquisition
Agreement and (ii) the amount of any Limited Recourse Indebtedness of any Person
shall be equal to the lesser of (A) the aggregate principal amount of such
Limited Recourse Indebtedness for which such Person provides credit support of
any kind (including any undertaking agreement or instrument that would
constitute Indebtedness), is directly or indirectly liable as a guarantor or
otherwise or is the lender and (B) the fair market value of any assets securing
such Indebtedness or to which such Indebtedness is otherwise recourse.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

 

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“Insolvency or Liquidation Proceeding” means (i) any voluntary or involuntary
case or proceeding under the Bankruptcy Code or any other Bankruptcy Law with
respect to any Loan Party, (ii) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
any Loan Party or with respect to a material portion of their respective assets,
(iii) any liquidation, dissolution, reorganization or winding up of any Loan
Party whether voluntary or involuntary and whether or not involving insolvency
or bankruptcy or (iv) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of any Loan Party.

“Insurance Proceeds” means all insurance proceeds (other than business
interruption insurance proceeds), damages, awards, claims and rights of action
with respect to any Casualty.

“Intercompany Note” means a promissory note contemplated by Section 7.06(a)(x)
or (xi), substantially in the form of Exhibit G hereto, and “Intercompany Notes”
means any two or more of them.

“Intercreditor Agreement” means the Intercreditor Agreement, substantially in
the form of Exhibit I between the Administrative Agent and the First Lien
Administrative Agent, as amended, modified, replaced, restated or otherwise
supplemented from time to time.

“Interest Payment Date” means the last Business Day of each of March, June,
September and December to occur while the Loan is outstanding.

“Investment” in any Person means (i) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
assets (other than inventory, machinery, equipment, capital expenditures and
other assets in the ordinary course of business), Equity Interests, Equity
Equivalents, Debt Equivalents, Indebtedness or other securities of such Person,
(ii) any deposit with, or advance, loan or other extension of credit to or for
the benefit of such Person (other than deposits made in connection with
Operating Leases or the purchase of equipment or inventory, each in the ordinary
course of business) or (iii) any other capital contribution to such Person,
including by way of Guaranty Obligations of such Person, any support for a
letter of credit issued on behalf of such Person incurred for the benefit of
such Person. For the purposes of Article VII, the outstanding amount of any
Investment by any Person in another Person shall be calculated as the excess of
(i) the initial amount of such Investment (including the fair market value of
all property transferred by such Person as part of such Investment) over
(ii) the sum of (A) all returns of principal or capital thereof received by the
investing Person on or prior to such time (including returns of principal or
capital in the form of cash dividends, cash distributions and cash repayments of
Indebtedness) and (B) all liabilities of the investing Person constituting all
or a part of the initial amount of such Investment expressly transferred prior
to such time in connection with the sale or disposition of such Investment, but
only to the extent the investing Person is fully released of such liabilities by
such transfer.

“Investor Group” means the Sponsor Group and the limited partners thereof and
members of management of the Borrower.

 

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“Laws” means, collectively, all applicable 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, directives, licenses, authorizations and
permits of any Governmental Authority.

“Lender” means each bank or other lending institution listed on Schedule 2.01
and each Eligible Assignee that becomes a Lender pursuant to Section 10.06(b)
and their respective successors.

“Lien” means any security interest, mortgage, pledge, hypothecation, collateral
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge, or preference, priority or other security interest or preferential
arrangement in the nature of a security interest of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any easement, right of way or other encumbrance on title to Real Property, and
any financing lease having substantially the same economic effect as any of the
foregoing). Solely for the avoidance of doubt, the filing of a UCC financing
statement that is a protective lease filing in respect of an operating lease
that does not constitute a security interest in the leased property or otherwise
give rise to a Lien does not constitute a Lien solely on account of being filed
in a public office.

“Limited Recourse Indebtedness” means with respect to any Person, Indebtedness
to the extent: (i) such Person (A) provides no credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (B) is not directly or indirectly liable as a guarantor or
otherwise or (C) does not constitute the lender; and (ii) no default with
respect thereto would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Loans or the Notes) of such Person to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.

“Loan” means a Loan made under Section 2.01(b).

“Loan Documents” means this Agreement, the Notes, the Guaranty, the Collateral
Documents and each Accession Agreement, collectively, in each case as the same
may be amended, modified or supplemented from time to time, and all other
related agreements and documents executed by a Loan Party in favor of, and
delivered to, any Second Lien Credit Party in connection with or pursuant to any
of the foregoing.

“Loan Party” means each of Holdings, the Borrower and each Subsidiary Guarantor,
and “Loan Parties” means any combination of the foregoing.

“Make-Whole Amount” means, as determined by the Required Lenders, with respect
to a Loan at any Repayment Date the excess of (A) the present value at such
Repayment Date of (1) the principal amount of the Loan to be repaid (the
“Repayment Amount”) plus (2) all required remaining scheduled interest payments
(whether payable in cash or PIK Interest) due on such Repayment Amount through
the Maturity Date, computed using a discount rate equal to the Treasury Rate
plus 50 basis points, over (B) the Repayment Amount on such Repayment Date.

 

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“Management Agreement” means the Professional Services Agreement dated as of
January 31, 2007, by and among MidOcean US Advisor, LP, Holdings and the
Borrower, as in effect on the First Lien Closing Date or otherwise amended,
restated, modified or supplemented from time to time.

“Management Fee” means each of the following fees payable by the Borrower to
Sponsor or one of its Affiliates: (i) a management fee in an amount not to
exceed 2% of Consolidated EBITDA for the most recently ended fiscal year in each
fiscal year, including any “catch-up” payments thereon, (ii) one-time fees, each
payable on the date of the consummation of certain transactions, including
acquisitions, dispositions, equity and debt financings described in the
Management Agreement in an amount not to exceed 1% of the gross amount (or, in
the case of revolving facilities, the maximum committed amount) of such
financings received by (or made available to) the Loan Parties and
(iii) indemnities and reimbursement of reasonable out-of-pocket fees and
expenses, in each case pursuant to, and subject to the terms and conditions of,
the Management Agreement.

“Margin Stock” means “margin stock” as such term is defined in Regulation U.

“Material Adverse Effect” means a material adverse change to the business,
assets, liabilities, operations, results of operations, or financial condition
of such Person and such Person’s Subsidiaries, taken as a whole; provided,
however, that the effect of the following shall not be considered in determining
whether a “Material Adverse Effect” has occurred or is reasonably likely to
occur with respect to any Group Party: any change, effect, circumstance or event
resulting from or arising in connection with (w) changes in laws of general
applicability or interpretations thereof by courts or governmental authorities,
(x) changes in general economic conditions, (y) changes affecting the restaurant
or retail industries generally and (z) any effects resulting from the public
announcement of this Agreement or the transactions contemplated hereby, except,
in the case of clauses (w), (x) and (y), to the extent such change, effect,
circumstance or event has a disproportionate adverse effect on the Group
Companies as compared to other Persons engaged in the same business.

“Maturity Date” means July 31, 2014.

“Maximum Accrual” is defined in Section 2.06(e).

“Moody’s” means Moody’s Investors Service, Inc., a Delaware corporation, and its
successors or, absent any such successor, such nationally recognized statistical
rating organization as the Borrower and the Administrative Agent may select.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 3(37) or
4001(a)(3) of ERISA.

 

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“Net Cash Proceeds” means:

(i) with respect to any Asset Disposition (other than an Asset Disposition
consisting of a lease where one or more Group Companies is acting as lessor
entered into in the ordinary course of business), Casualty or Condemnation,
(A) the gross amount of all cash proceeds (including cash Insurance Proceeds and
cash Condemnation Awards in the case of any Casualty or Condemnation, except to
the extent and for so long as such Insurance Proceeds or Condemnation Awards
constitute Reinvestment Funds) actually paid to or actually received by any
Group Company in respect of such Asset Disposition, Casualty or Condemnation
(including any cash proceeds received as income or other proceeds of any noncash
proceeds of any Asset Disposition, Casualty or Condemnation as and when
received), less (B) the sum of (1) the amount, if any, of all taxes (other than
income taxes) and all income taxes (as estimated by a senior financial or
accounting officer of Holdings and its Subsidiaries) and customary fees, legal
fees, brokerage fees, commissions, costs and other expenses (other than those
payable to any Group Company or to Affiliates of any Group Company except for
(x) those payable pursuant to the Management Agreement and otherwise not
prohibited hereunder and (y) those payable on terms and conditions as favorable
to the applicable Group Company as would be obtainable by it in a comparable
arms’-length transaction with an independent, unrelated third party) that are
incurred in connection with such Asset Disposition, Casualty or Condemnation and
are payable by any Group Company, but only to the extent not already deducted in
arriving at the amount referred to in clause (i)(A) above, (2) appropriate
amounts that must be set aside as a reserve in accordance with GAAP against any
indemnities, liabilities (contingent or otherwise) associated with such Asset
Disposition, Casualty or Condemnation, (3) if applicable, the amount of any
Indebtedness secured by a Permitted Lien that has been repaid or refinanced in
accordance with its terms with the proceeds of such Asset Disposition, Casualty
or Condemnation and (4) any payments to be made by any Group Company as agreed
between such Group Company and the purchaser of any assets subject to an Asset
Disposition, Casualty or Condemnation in connection therewith; and

(ii) with respect to any Equity Issuance or Debt Issuance, the gross amount of
cash proceeds paid to or received by any Group Company in respect of such Equity
Issuance or Debt Issuance as the case may be (including cash proceeds
subsequently as and when received at any time in respect of such Equity Issuance
or Debt Issuance from non-cash consideration initially received or otherwise),
net of underwriting discounts and commissions or placement fees, investment
banking fees, legal fees, consulting fees, accounting fees and other customary
fees and expenses directly incurred by any Group Company in connection therewith
(other than those payable to any Group Company or any Affiliate of any Group
Company except for (x) those payable pursuant to the Management Agreement and
otherwise not prohibited hereunder and (y) those payable on terms and conditions
as favorable to the applicable Group Company as would be obtainable by it in a
comparable arms’-length transaction with an independent, unrelated third party).

“Nominal Shares” means (i) for any Subsidiary of the Borrower that is not a
Domestic Subsidiary, nominal issuances of Equity Interests in an aggregate
amount not to exceed 5.0% of

 

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the Equity Interests or Equity Equivalents of such Subsidiary on a fully-diluted
basis and (ii) in any case, director’s qualifying shares, in each case to the
extent such issuances are required by applicable Laws.

“Note” means a promissory note, substantially in the form of Exhibit B hereto,
evidencing the obligations of the Borrower to repay outstanding Loans, as such
note may be amended, modified or supplemented from time to time.

“Notice of Borrowing” means a request by the Borrower for a Borrowing,
substantially in the form of Exhibit A hereto.

“Notice of Intent to Cure” has the meaning specified in Section 6.02(b)(i)(A).

“Operating Lease” means, as applied to any Person, a lease (including leases
which may be terminated by the lessee at any time) of any property (whether
real, personal or mixed) by such Person as lessee which is not a Capital Lease.

“Organization Documents” means, (i) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-United States
jurisdiction); (ii) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement;
and (iii) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

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

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“Participation Interest” means a Credit Extension by a Lender by way of a
purchase of a participation interest in any Loans as provided in Section 2.13.

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any entity succeeding to any or all of its
functions under ERISA.

“Perfection Certificate” means with respect to any Loan Party a certificate,
substantially in the form of Exhibit F-3 to this Agreement, completed and
supplemented with the schedules and attachments contemplated thereby and duly
executed on behalf of such Loan Party by a Responsible Officer of such Loan
Party.

 

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“Permitted Acquisition” means

(a) a Business Acquisition; provided that:

(i) the Equity Interests or property or assets acquired in such acquisition
relate to a line of business similar to the business of the Borrower or any of
its Subsidiaries engaged in on the First Lien Closing Date or reasonably
related, ancillary or complementary thereto;

(ii) within 30 days after (or such later date as may be agreed to by the
Administrative Agent, in its sole discretion) the date of the consummation of
such Business Acquisition, each applicable Loan Party and the acquired entity
and its Subsidiaries shall have executed and delivered to the Administrative
Agent or the Collateral Agent, as applicable, all items in respect of the Equity
Interests or property or assets acquired in such acquisition (and/or the seller
thereof) required to be delivered by Section 6.12;

(iii) in the case of an acquisition of the Equity Interests of another Person,
(A) except in the case of the incorporation of a new Subsidiary, the board of
directors (or other comparable governing body) of such other Person shall have
duly approved such acquisition and (B) the Equity Interests acquired shall
constitute all (other than Nominal Shares) of the total Equity Interests of the
issuer thereof;

(iv) no Event of Default shall have occurred and be continuing immediately
before or immediately after giving effect to such acquisition, and the Borrower
shall have delivered to the Administrative Agent a Pro-Forma Compliance
Certificate demonstrating that, upon giving effect to such acquisition on a
Pro-Forma Basis, the Borrower shall be in compliance with all of the financial
covenant specified in Sections 7.16 hereof as of the last day of the most recent
period of four consecutive fiscal quarters of the Borrower for which financial
statements are required to be delivered pursuant to Section 6.01(a) or (b) which
precedes or ends on the date of such acquisition; and

(v) after giving effect to such acquisition, the First Lien Revolving Committed
Amount shall be at least $7,500,000 greater than the total First Lien Revolving
Outstandings;

(b) any acquisition consented to by the Required Lenders; and

(c) the acquisition of franchisees in an amount after giving effect to all such
acquisitions not to exceed $2,500,000 in the aggregate (other than Expenditures
included in Consolidated Capital Expenditures), plus any Excess Cash Flow not
required to be paid to the First Lien Lenders and the Lenders hereunder, plus
the proceeds of any Equity Issuances of Holdings issued to make such
acquisition.

Notwithstanding the foregoing, unless otherwise agreed to in writing by the
Required Lenders, (x) from and after the First Lien First Amendment Effective
Date, (1) the aggregate amount of any acquisition (whether individually or
together with any related acquisitions) shall not exceed

 

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$5,750,000 and (2) the aggregate amount of all Permitted Acquisitions shall not
exceed $11,500,000 and (y) no acquisition shall be deemed to be a Permitted
Acquisition unless immediately after giving effect to such acquisition the Total
Leverage Ratio shall be less than the Total Leverage Ratio immediately prior to
such acquisition.

“Permitted Joint Venture” means a joint venture, in the form of a corporation,
limited liability company, business trust, joint venture, association, company
or partnership, entered into by the Borrower or any of its Subsidiaries which
(i) is engaged in a line of business related, ancillary or complementary to
those engaged in by the Borrower and its Subsidiaries and (ii) is formed or
organized in a manner that limits the exposure of Holdings, the Borrower and its
Subsidiaries for the liabilities thereof to (A) the Investments of the Borrower
and its Subsidiaries therein permitted under Section 7.06 and (B) any
Indebtedness of any Permitted Joint Venture or any Guaranty Obligations by
Holdings or any of its Subsidiaries in respect of such Indebtedness, which
Indebtedness or Guaranty Obligations are permitted at the time under
Section 7.01.

“Permitted Liens” has the meaning specified in Section 7.02.

“Permitted Refinancing” means, with respect to any Person, any modification,
refinancing, refunding, renewal or extension of any Indebtedness of such Person;
provided that (i) the principal amount (or accreted value, if applicable)
thereof does not exceed the principal amount (or accreted value, if applicable)
of the Indebtedness so modified, refinanced, refunded, renewed or extended
except by an amount equal to any interest capitalized in connection with, any
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such modification, refinancing, refunding, renewal
or extension and by an amount equal to any existing commitments unutilized
thereunder or as otherwise permitted pursuant to Section 7.01, (ii) such
modification, refinancing, refunding, renewal or extension has a final maturity
date equal to or later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being modified, refinanced, refunded, renewed or
extended, (iii) if the Indebtedness being modified, refinanced, refunded,
renewed or extended is subordinated in right of payment to the Second Lien
Credit Obligations, such modification, refinancing, refunding, renewal or
extension is subordinated in right of payment to the Second Lien Credit
Obligations on terms at least as favorable on the whole to the Lenders as those
contained in the documentation governing the Indebtedness being modified,
refinanced, refunded, renewed or extended, (iv) the terms and conditions
(including, if applicable, as to collateral) of any such modified, refinanced,
refunded, renewed or extended Indebtedness are not, taken as a whole, materially
less favorable to the Loan Parties or the Lenders than the terms and conditions
of the Indebtedness being modified, refinanced, refunded, renewed or extended,
(v) such modification, refinancing, refunding, renewal or extension is incurred
by the Person who is the obligor on the Indebtedness being modified, refinanced,
refunded, renewed or extended, and (vi) at the time thereof, no Default shall
have occurred and be continuing.

“Permitted Subordinated Indebtedness” shall mean unsecured Indebtedness of
Holdings and its Subsidiaries that shall (i) have a stated maturity that is at
least one year later than the maturity date of any Loan and (ii) be subordinated
in right of payment to the Second Lien Credit Obligations at prevailing market
terms applicable to high yield subordinated indebtedness or otherwise on terms
reasonably acceptable to the Administrative Agent.

 

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

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
maintained by or contributed to by any Group Company or any ERISA Affiliate,
including a Multiemployer Plan.

“Platform” has the meaning specified in Section 6.02.

“Pledge Agreement” means the Pledge Agreement, substantially in the form of
Exhibit F-2 hereto, dated as of the date hereof among Holdings, the Borrower,
the Subsidiary Guarantors and the Collateral Agent, as the same may be amended,
modified or supplemented from time to time.

“Pledged Collateral” means the “Collateral” as defined in the Pledge Agreement.

“PPA” has the meaning assigned to such term in the definition of “ERISA Event”

“Preferred Stock” means, as applied to the Equity Interests of a Person, Equity
Interests of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over the Equity Interests of any other class of such Person.

“Pro-Forma Basis” means, for purposes of calculating compliance of any
transaction with any provision hereof which refers to a Pro-Forma Basis, that
the transaction in question shall be deemed to have occurred as of the first day
of the most recent period of four consecutive fiscal quarters of Holdings which
precedes or ends on the date of such transaction and with respect to which the
Administrative Agent has received the financial information for Holdings and its
Consolidated Subsidiaries required under Section 6.01(a) or (b), as applicable,
and the Compliance Certificate required by Section 6.02(b) for such period. In
connection with any calculation of the Total Leverage Ratio or the financial
covenant set forth in Section 7.16 or elsewhere upon giving effect to a
transaction on a “Pro-Forma Basis,” (i) any Indebtedness incurred by Holdings or
any of its Subsidiaries in connection with such transaction (or any other
transaction which occurred during the relevant four fiscal quarter period) shall
be deemed to have been incurred or repaid as the case may be as of the first day
of the relevant four fiscal-quarter period, (ii) if such Indebtedness has a
floating or formula rate, then the rate of interest for such Indebtedness for
the applicable period for purposes of the calculations contemplated by this
definition shall be determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant date of such
calculations and (iii) income statement items (whether positive or negative)
attributable to all property acquired in such transaction or to the Investment
comprising such transaction, as applicable, shall be included as if such
transaction has occurred as of the first day of the relevant four-fiscal-quarter
period, after giving effect to cost savings reasonably acceptable to the
Administrative Agent, (iv) such other pro-forma adjustments which would be
permitted or required by Regulations S-K and S-X under the Securities Act shall
be taken into account and (v) such other adjustments as may be reasonably agreed
between Holdings and the Administrative Agent shall be taken into account.

 

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“Pro-Forma Compliance Certificate” means a certificate of a Responsible Officer
or chief accounting officer of Holdings delivered to the Administrative Agent in
connection with any “transaction” for which a calculation on a “Pro-Forma Basis”
is permitted or required hereunder and containing reasonably detailed
calculations demonstrating, upon giving effect to the applicable transaction on
a Pro-Forma Basis, compliance, as applicable, with the Total Leverage Ratio and
the financial covenant set forth in Section 7.16, as applicable, as of the last
day of the most recent period of four consecutive fiscal quarters of Holdings
which precedes or ends on the date of the applicable transaction and with
respect to which the Administrative Agent shall have received the consolidated
financial information for Holdings and its Consolidated Subsidiaries required
under Section 6.01(a) or (b), as applicable, and the Compliance Certificate
required by Section 6.02(b) for such period.

“Purchase Money Indebtedness” means Indebtedness of the Borrower or any of its
Subsidiaries incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property used in the
business of the Borrower or such Subsidiary.

“Qualified Capital Stock” means any Equity Interests of Holdings that does not
include a cash dividend and is not mandatorily redeemable by Holdings or any of
its Subsidiaries or redeemable at the option of the holder of such Equity
Interests, in each case prior to the 181st day following the Maturity Date
(other than in connection with an asset sale or change of control, so long as
the definitions of asset sale and change of control in the instruments governing
such Equity Interests are no more restrictive with respect to Holdings and its
Subsidiaries than the corresponding definitions herein and so long as the Second
Lien Credit Obligations (other than contingent indemnification obligations) are
either repaid or waived with respect to such asset sale or change of control
prior to the redemption of such Equity Interests).

“Qualifying IPO” means an underwritten primary public offering (other than a
public offering pursuant to a registration statement on Form S-8 (or any
successor form)) of the common stock of Holdings (i) pursuant to an effective
registration statement filed with the SEC in accordance with the Securities Act
(whether alone or in conjunction with a secondary public offering) and
(ii) resulting in gross proceeds of at least $75,000,000.

“Real Property” means, with respect to any Person, all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.

“Register” has the meaning specified in Section 10.06(c).

“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Borrower as prescribed by the Securities
Laws.

“Registration Rights Agreement” means the Registration Rights Agreement dated as
of the First Lien Closing Date among the Borrower, the Subsidiary Guarantors,
Credit Suisse Securities (USA) LLC and Bank of America Securities LLC, relating
to the Senior Notes, as amended, modified, restated or otherwise modified from
time to time.

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

 

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“Regulation T, U or X” means Regulation T, U or X, respectively, of the Board of
Governors of the Federal Reserve System as amended, or any successor regulation.

“Reinstatement Date” has the meaning specified in Section 7.09(i).

“Reinvestment Funds” means, with respect to any Net Cash Proceeds of Insurance
Proceeds, any Condemnation Award or any Asset Disposition in respect of the
single event or series of related events giving rise thereto, that portion of
such funds as shall, according to a certificate of a Responsible Officer of the
Borrower delivered to the Administrative Agent within 30 days after the
occurrence of the Casualty, Condemnation or Asset Disposition giving rise
thereto, be reinvested within 365 days (or if the Borrower has entered into a
commitment to apply such proceeds to a reinvestment within such time period to
the extent such amounts are actually reinvested, within six months of the
expiration of such 365 days) after the occurrence of the Casualty, Condemnation
or Asset Disposition giving rise thereto in the repair, restoration or
replacement of the properties that were the subject of such Casualty,
Condemnation or Asset Disposition; provided that no Event of Default shall have
occurred and be continuing on the date of such reinvestment notice or, if the
Borrower or one or more of its Subsidiaries shall have then entered into one or
more continuing agreements with a Person not an Affiliate of any of them for the
repair, restoration or replacement of the properties that were the subject of
such Casualty, Condemnation or Asset Disposition, none of the Administrative
Agent or the Collateral Agent shall have commenced any action or proceeding to
exercise or seek to exercise any right or remedy with respect to any Collateral
(including any action of foreclosure, enforcement, collection or execution or by
any proceeding under any Insolvency or Liquidation Proceeding).

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

“Relevant Percentage” shall have the meaning set forth in Section 2.01(c).

“Repayment Amount” has the meaning specified in the defined term “Make Whole
Amount”.

“Repayment Date” means the date fixed for the repayment in whole or in part, of
any Loan by or pursuant to this Agreement.

“Required Lenders” means, at any date of determination, Lenders whose aggregate
Credit Exposure constitutes more than 50% of the Credit Exposure of all Lenders
at such time; provided, however, that if any Lender shall be a Defaulting Lender
at such time then there shall be excluded from the determination of Required
Lenders such Lender and its Credit Exposure at such time.

“Responsible Officer” means the chief executive officer, president, senior vice
president, vice president, chief financial officer, treasurer, controller,
assistant treasurer, secretary or assistant secretary of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

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“Restricted Payment” means (i) any dividend or other distribution (whether in
cash, securities or other property), direct or indirect, on account of any class
of Equity Interests or Equity Equivalents of any Group Company, now or hereafter
outstanding, (ii) any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation, termination or similar
payment, purchase or other acquisition for value, direct or indirect, of any
class of Equity Interests or Equity Equivalents of any Group Company, now or
hereafter outstanding and (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire any
class of Equity Interests or Equity Equivalents of any Group Company, now or
hereafter outstanding.

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., a
New York corporation, and its successors or, absent any such successor, such
nationally recognized statistical rating organization as the Borrower and the
Administrative Agent may select.

“Sale/Leaseback Transaction” means any direct or indirect arrangement with any
Person or to which any such Person is a party providing for the leasing to
Holdings or any of its Subsidiaries of any property, whether owned by Holdings
or any of its Subsidiaries as of the Closing Date or later acquired, which has
been or is to be sold or transferred by Holdings or any of its Subsidiaries to
such Person or to any other Person from whom funds have been, or are to be,
advanced by such Person on the security of such property.

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

“Second Lien Credit Obligations” means, with respect to each Loan Party, without
duplication:

(i) in the case of the Borrower, all principal of and interest (including,
without limitation, any interest which accrues after the commencement of any
proceeding under any Insolvency or Liquidation Proceeding with respect to the
Borrower, whether or not allowed or allowable as a claim in any such proceeding)
on any Loan under, or any Note issued pursuant to, this Agreement or any other
Loan Document;

(ii) all fees, expenses, indemnification obligations and other amounts of
whatever nature now or hereafter payable by such Loan Party (including, without
limitation, any amounts which accrue after the commencement of any proceeding
under any Insolvency or Liquidation Proceeding with respect to such Loan Party,
whether or not allowed or allowable as a claim in any such proceeding) pursuant
to this Agreement or any other Loan Document;

(iii) all expenses of the Agents as to which one or more of the Agents have a
right to reimbursement by such Loan Party under Section 10.04(a) of this
Agreement or under any other similar provision of any other Loan Document,
including, without limitation, any and all sums advanced by the Collateral Agent
to preserve the Collateral or preserve its security interests in the Collateral
to the extent permitted under any Loan Document or applicable Law;

 

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(iv) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement by such Loan Party under Section 10.04(b) of this
Agreement or under any other similar provision of any other Loan Document; and

(v) in the case of Holdings and each Subsidiary Guarantor, all amounts now or
hereafter payable by Holdings or such Subsidiary Guarantor and all other
obligations or liabilities now existing or hereafter arising or incurred
(including, without limitation, any amounts which accrue after the commencement
of any proceeding under any Insolvency or Liquidation Proceeding with respect to
the Borrower, Holdings or such Subsidiary Guarantor, whether or not allowed or
allowable as a claim in any such proceeding) on the part of Holdings or such
Subsidiary Guarantor pursuant to this Agreement, the Guaranty or any other Loan
Document;

together in each case with all renewals, modifications, consolidations or
extensions thereof.

“Second Lien Credit Party” means each Lender, the Administrative Agent, the
Collateral Agent and each Indemnitee and their respective successors and
assigns, and “Second Lien Credit Parties” means any two or more of them,
collectively.

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934 and the applicable accounting and auditing principles, rules, standards
and practices promulgated, approved or incorporated by the SEC or the Public
Company Accounting Oversight Board, as each of the foregoing may be amended and
in effect on any applicable date hereunder.

“Security Agreement” means the Security Agreement, substantially in the form of
Exhibit F-1 hereto, dated as of the date hereof among Holdings, the Borrower,
the Subsidiary Guarantors and the Collateral Agent, as the same may be amended,
modified or supplemented from time to time.

“Sellers” shall have the meaning set forth in the First Lien Credit Agreement.

“Senior Notes” means the 10.375% Senior Notes due 2015 issued by the Borrower in
aggregate principal amount of $150,000,000 (as such amount may be increased in
accordance with Section 7.01(ii) hereof) issued and sold on the First Lien
Closing Date pursuant to the Senior Notes Documents and any notes exchanged
therefor pursuant to the Registration Rights Agreement, together with any notes
issued in connection with a Permitted Refinancing (or the incurrence of any
Senior Notes permitted under Section 7.01(ii) hereof) of the Senior Notes or any
replacement notes issued in accordance with the terms of the Senior Notes
Indenture.

“Senior Notes Documents” means the Senior Notes, the Senior Notes Indenture, the
guarantees of the Senior Notes and all other agreements, instruments and other
documents pursuant to which the Senior Notes have been or will be issued or
otherwise setting forth the terms of the Senior Notes.

“Senior Notes Indenture” means the Indenture dated as of the First Lien Closing
Date between the Borrowers, the guarantors party thereto and The Bank of New
York, as trustee as in effect on the date of this Agreement and as thereafter
amended, modified, restated, refinanced and supplemented from time to time in
accordance with and subject to the terms hereof.

 

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“Solvent” means, with respect to any Person as of a particular date, that on
such date (i) such Person is able generally to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (ii) the value of the assets of such Person (both at
fair value and present fair saleable value in each case calculated on a going
concern basis) is greater than the total amount of liabilities (including
contingent and unliquidated liabilities) and (iii) such Person does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities shall be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability (in each case as interpreted in accordance with fraudulent
conveyance, bankruptcy, insolvency and similar laws and other applicable Law).

“Sponsor” means MidOcean Partners III, L.P., MidOcean Partners III-A, L.P. and
MidOcean Partners III-D, L.P. and its successors, together with the Sponsor
Approved Funds.

“Sponsor Approved Funds” means, with respect to the Sponsor, any Fund that is
administered or managed by (i) the Sponsor, (ii) an Affiliate of the Sponsor or
(iii) an entity that administers or manages the Sponsor.

“Sponsor Group” means the Sponsor and any of its Subsidiaries or Affiliates
other than Affiliates that are operating companies or Controlled by operating
companies.

“Store Closing Costs” means each of the following costs attributable to stores
closed within the prior twelve months: (i) operating losses, (ii) construction
and moving expenses, (iii) lease termination expenses, (iv) employee severance
costs, and (v) other related expenses reasonably acceptable to the
Administrative Agent.

“Subordinated Indebtedness” of any Person means all Indebtedness which (i) the
principal of which by its terms is not required to be repaid, in whole or in
part, before six months after the Maturity Date, (ii) is subordinated in right
of payment to such Person’s indebtedness, obligations and liabilities to the
Finance Parties under the Loan Documents pursuant to payment and subordination
provisions reasonably satisfactory in form and substance to the Administrative
Agent and (iii) is issued pursuant to credit documents having covenants,
subordination provisions and events of default that are taken as a whole in no
event less favorable, including with respect to rights of acceleration, to such
Person than the terms hereof or are otherwise reasonably satisfactory in form
and substance to the Administrative Agent.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association or other business entity of which (i) if
a corporation, more than 50% of the total voting power of 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 owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, limited
liability company, association or business entity other than a corporation, more
than 50% of the

 

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partnership or other similar ownership interests thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have more than 50% ownership interest in a
partnership, limited liability company, association or other business entity if
such Person or Persons shall be allocated more than 50% of partnership,
association or other business entity gains or losses or shall be or control the
managing director, manager or a general partner of such partnership, association
or other business entity. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower. Notwithstanding the foregoing (except for the definition of
Unrestricted Subsidiary contained herein), any Unrestricted Subsidiary, any
Permitted Joint Venture and any Applicable Subsidiary (unless such Applicable
Subsidiary shall have become a Subsidiary Guarantor in accordance with Sections
6.12 and 6.16 hereunder) shall be deemed not to be a Subsidiary of the Borrower
or any of its Subsidiaries for purposes of this Agreement.

“Subsidiary Guarantor” means each Subsidiary of Holdings on the Closing Date
(other than the Borrower and a Foreign Subsidiary) and each Subsidiary of
Holdings (other than the Borrower and a Foreign Subsidiary, and for avoidance of
doubt, an Unrestricted Subsidiary) that becomes a party to the Guaranty after
the Closing Date by execution of an Accession Agreement, and “Subsidiary
Guarantors” means any two or more of them.

“Subsidiary Redesignation” has the meaning specified in Section 6.14.

“Swap Agreement” means (i) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts or any other similar transactions
or any combination of any of the foregoing (including any options to enter into
any of the foregoing), whether or not any such transaction is governed by or
subject to any master agreement and (ii) any and all transactions of any kind,
and the related confirmations, which are subject to the terms and conditions of,
or governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement or any other master agreement (any such master agreement,
together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

“Swap Creditor” means any Lender or any Affiliate of any Lender from time to
time party to one or more Swap Agreements permitted hereunder with a Loan Party
(even if any such Lender for any reason ceases after the execution of such
agreement to be a Lender hereunder), and its successors and assigns, and “Swap
Creditors” means any two or more of them, collectively.

“Swap Obligations” of any Person means all obligations (including, without
limitation, any amounts which accrue after the commencement of any bankruptcy or
insolvency proceeding with respect to such Person, whether or not allowed or
allowable as a claim under any

 

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proceeding under any Insolvency or Liquidation Proceeding) owing under any Swap
Agreement, excluding any amounts which such Person is entitled to setoff against
its obligations under applicable Law.

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

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(i) a so-called synthetic, off-balance sheet or tax retention lease or (ii) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
person (without regard to accounting treatment).

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

“Tender Offer” has the meaning specified in the recitals hereto.

“Threshold Amount” means $6,000,000.

“Total Leverage Ratio” means on any day the ratio of (i) (A) Consolidated Funded
Indebtedness as of the last day of the fiscal quarter of Holdings ending on, or
most recently preceding, such date, minus (B) the amount of Holdings’ and its
Consolidated Subsidiaries’ cash and Cash Equivalents (in each case free and
clear of all Liens, other than (w) nonconsensual liens provided for by Law and
permitted by Section 7.02, (x) Liens permitted under Sections 7.02(ii) and
(xxiv) and (y) Liens permitted under Section 7.02(x) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness and (z) Liens permitted under Section 7.02(xxix))
as of such date in excess of $1,000,000 that are or would be included on a
consolidated balance sheet of Holdings and its Subsidiaries as of such date,
plus (C) the aggregate amount of all Net Cash Proceeds of Equity Issuances of
Qualified Capital Stock included in the determination of Consolidated EBITDA for
the period of four consecutive fiscal quarters then ended in accordance with
clause (iv) of the definition of “Consolidated EBITDA” which Net Cash Proceeds
have theretofore been utilized to repay Consolidated Funded Indebtedness during
such period, to (ii) Consolidated EBITDA for the four consecutive fiscal
quarters of Holdings ended on, or most recently preceding, such day for which
financial statements have been (or were required to have been) delivered
pursuant to Section 6.01(a) or (b).

“Transaction” means the events contemplated by the Transaction Documents.

 

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“Transaction Documents” means the Loan Documents and the First Lien Amendment,
collectively, and “Transaction Document” means any one of them.

“Treasury Rate” means, with respect to a Repayment Date, the yield to maturity
at the time of computation 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 Repayment Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such Repayment Date to the Maturity Date;
provided, however, that if the period from such Repayment Date to the Maturity
Date is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the period from such Repayment Date
to the Maturity Date 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.

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

“Unfunded Liabilities” means, except as otherwise provided in
Section 5.12(a)(i)(B), (i) with respect to each Plan, the amount (if any) by
which the present value of all nonforfeitable benefits under each Plan exceeds
the current value of such Plan’s assets allocable to such benefits, all
determined in accordance with the respective most recent valuations for such
Plan based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87.

“United States” means the United States of America, including each of the States
and the District of Columbia, but excluding its territories and possessions.

“Unrestricted Cash” means cash or Cash Equivalents of any of the Loan Parties
(a) that would not appear as “restricted” on a consolidated balance sheet of any
of the Loan Parties and (b) that is not subject to a Lien in favor of a Person
other than the Lenders or the First Lien Collateral Agent or the First Lien
Lenders.

“Unrestricted Subsidiary” means any Subsidiary of the Borrower properly
designated as an Unrestricted Subsidiary pursuant to Section 6.14.

“U.S. Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56 (signed into Law October 26, 2001)), as the same
may be amended, supplemented, modified, replaced or otherwise in effect from
time to time.

“Voting Securities” means Equity Interests of any Person having ordinary power
to vote in the election of members of the board of directors, managers, trustees
or other controlling Persons of such Person (irrespective of whether, at the
time, Equity Interests of any other class or classes of such Person shall have
or might have voting power by reason of the happening of any contingency).

 

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

“Welfare Plan” means a “welfare plan” as such term is defined in Section 3(1) of
ERISA.

“Wholly-Owned Subsidiary” means, with respect to any Person at any date, any
Subsidiary of such Person all of the shares of capital stock or other ownership
interests of which (except Nominal Shares) are at the time directly or
indirectly owned by such Person.

Section 1.02 Other Interpretative Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder” and words of similar import when used in any Loan Document shall be
construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any Law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such Law and any reference to any law or regulation shall, unless
otherwise specified, refer to such Law or regulation as amended, modified or
supplemented from time to time and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including,” the words “to” and
“until” each mean “to but excluding” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

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Section 1.03 Accounting Terms and Determinations.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, except as otherwise
specifically prescribed herein or as disclosed to the Administrative Agent.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either (x) the Borrower or (y) within 30 days after delivery of
any financial statements reflecting any change in GAAP (or after the Lenders
have been informed of the change in GAAP affecting such financial statements, if
later), the Administrative Agent or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and any other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

Section 1.04 Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).

Section 1.05 Classes and Types of Borrowings. The term “Borrowing” denotes the
aggregation of Loans of one or more Lenders made to the Borrower pursuant to
Article II on the same date.

ARTICLE II

THE CREDIT FACILITIES

Section 2.01 Commitments to Lend.

(a) [Intentionally Omitted].

(b) Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make a Loan to the Borrower on the Closing Date in a
principal amount not exceeding its Commitment. The Borrowing shall be made from
the Lenders ratably in proportion to their respective Commitments. The
Commitments are not revolving in nature, and amounts repaid or prepaid prior to
the Maturity Date may not be reborrowed.

(c) Notwithstanding any other provision of this Agreement, all Loans shall be
made at 98.04 percent (98.04%) of the initial principal amount thereof (the
“Relevant Percentage” of the initial principal amount), but, for the avoidance
of doubt, for all purposes of this Agreement, the initial principal amount of
any such Loan shall be equal to 100 percent of such principal amount. The making
of any Loan at the Relevant Percentage of its initial

 

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principal amount shall satisfy an amount of the commitment equal to the full
initial principal amount of that Loan. A subsequent increase in the principal
amount of a Loan, pursuant to Section 2.06(d) or otherwise, shall not affect the
amount of the Commitments satisfied by the making of that Loan, or the amount of
the remaining Commitments.

Section 2.02 Notice of Borrowings.

(a) Borrowings. The Borrower shall give the Administrative Agent a Notice of
Borrowing not later than 12:00 P.M. on the date of the proposed Borrowing, which
shall be a single drawing on the Closing Date, specifying:

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

(ii) the aggregate amount of such Borrowing; and

(iii) the location (which must be in the United States) and number of the
Borrower’s account to which funds are to be disbursed, which shall comply with
the requirements of Section 2.03.

Section 2.03 Notice to Lenders; Funding of Loans.

(a) Notice to Lenders. Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Lender of such Lender’s ratable share (if any)
of the Borrowing referred to therein, and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.

(b) Funding of Loans. (i) Not later than 1:00 P.M. on the date of Borrowing,
each Lender participating therein shall make available its share of such
Borrowing, in Federal or other immediately available funds, to the
Administrative Agent at the Administrative Agent’s Office. Unless the
Administrative Agent determines that any applicable condition specified in
Article IV has not been satisfied, the Administrative Agent shall make the funds
so received available to the Borrower in like funds as received by the
Administrative Agent either by wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower in the applicable Notice of Borrowing, or,
if a Borrowing shall not occur on such date because any condition precedent
herein shall not have been met, promptly return the amounts received from the
Lenders in like funds, without interest.

(c) Funding by the Administrative Agent in Anticipation of Amounts Due from the
Lenders. Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.03, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding

 

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amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower but
excluding the date of payment to the Administrative Agent, at (i) 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 and (ii) in the case of a payment to be made by
the Borrower, the interest rate applicable thereto pursuant to Section 2.06. 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. A notice of the
Administrative Agent to a Lender or the Borrower with respect to any amount
owing under this subsection (c) shall be conclusive, absent manifest error.

(d) Failed Loans. If any Lender shall fail to make any Loan (a “Failed Loan”)
which such Lender is otherwise obligated hereunder to make to the Borrower on
the date of Borrowing thereof, and the Administrative Agent shall not have
received notice from the Borrower or such Lender that any condition precedent to
the making of the Failed Loan has not been satisfied, then, until such Lender
shall have made or be deemed to have made (pursuant to the last sentence of this
subsection (d)) the Failed Loan in full or the Administrative Agent shall have
received notice from the Borrower or such Lender that any condition precedent to
the making of the Failed Loan was not satisfied at the time the Failed Loan was
to have been made, whenever the Administrative Agent shall receive any amount
from the Borrower for the account of such Lender, (i) the amount so received (up
to the amount of such Failed Loan) will, upon receipt by the Administrative
Agent, be deemed to have been paid to the Lender in satisfaction of the
obligation for which paid, without actual disbursement of such amount to the
Lender, (ii) the Lender will be deemed to have made the same amount available to
the Administrative Agent for disbursement as a Loan to the Borrower (up to the
amount of such Failed Loan) and (iii) the Administrative Agent will disburse
such amount (up to the amount of the Failed Loan) to the Borrower or, if the
Administrative Agent has previously made such amount available to the Borrower
on behalf of such Lender pursuant to the provisions hereof, reimburse itself (up
to the amount of the amount made available to the Borrower); provided, however,
that the Administrative Agent shall have no obligation to disburse any such
amount to the Borrower or otherwise apply it or deem it applied as provided
herein unless the Administrative Agent shall have determined in its sole
discretion that to so disburse such amount will not violate any Law, rule,
regulation or requirement applicable to the Administrative Agent.

Section 2.04 Evidence of Loans.

(a) Lender and Administrative Agent Accounts; Notes. The Credit Extensions made
by each Lender shall be evidenced by one or more accounts or records maintained
by such Lender and by the Administrative Agent in the ordinary course of
business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the
Credit Extensions made by the Lenders to the Borrower and the interest and
payments thereon. Any failure to so record or any error in doing so shall not,

 

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however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Second Lien Credit Obligations. In the
event of any conflict between the accounts and records maintained by any Lender
and the accounts and records of the Administrative Agent in respect of such
matters, the accounts and records of the Administrative Agent shall control in
the absence of manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a single Note, substantially in the form of
Exhibit B, payable to the order of such Lender for the account of its Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Lender’s Loans, as applicable, which shall evidence such Lender’s Loans in
addition to such accounts or records. Each Lender having one or more Notes shall
record the date, amount and the date and amount of each payment of principal
made by the Borrower with respect thereto, and may, if such Lender so elects in
connection with any transfer or enforcement of any Note, endorse on the reverse
side or on the schedule, if any, forming a part thereof appropriate notations to
evidence the foregoing information with respect to each outstanding Loan
evidenced thereby; provided that the failure of any Lender to make any such
recordation or endorsement or any error in any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or under any such
Note. Each Lender is hereby irrevocably authorized by the Borrower so to endorse
each of its Notes and to attach to and make a part of each of its Notes a
continuation of any such schedule as and when required.

Section 2.05 [Intentionally Omitted].

Section 2.06 Interest.

(a) [Intentionally Omitted].

(b) Rates Applicable to Loans. Subject to the provisions of subsection
(c) below, the Loans shall bear interest on the outstanding principal amount
thereof at a rate of 15% per annum compounding quarterly.

(c) Additional Interest. (x) immediately upon an Event of Default, all Loans
shall bear interest at the Default Rate and (y) if any Second Lien Credit
Obligation is not paid when due (without regard to any applicable grace
periods), whether at stated maturity, by acceleration or otherwise, such overdue
amount shall thereafter bear interest at the Default Rate, in each case, until
such Default or Event of Default has been cured or waived, to the fullest extent
permitted by applicable Laws.

(d) Interest Payments. Except as set forth in subsection (e) of this
Section 2.06, interest on the Loans shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at maturity, and at such other
times as may be specified herein; provided, that on each Interest Payment Date
after the Closing Date through the third anniversary of the Closing Date,
accrued interest expense will be payable in kind (“PIK Interest”). On any
Interest Payment Date occurring after the third anniversary of the Closing Date,
at the election of the Borrower, accrued interest expense will be payable either
(A) in cash or (B) PIK Interest so long as the First Lien Leverage Ratio is
equal or lesser than 2.75:1.00 after giving pro forma effect to such payment and
if the First Lien Leverage Ratio is greater than 2.75:1.00 the Borrower shall be
deemed to have elected to pay accrued interest in kind. PIK Interest payable to
each Lender shall

 

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be added to the principal amount of the Loan of such Lender in arrears on such
Interest Payment Date and such increased principal amount of the Loan shall
thereafter bear interest at the rate then accruing on the principal amount of
the Loan as provided in subsection (b) of this Section 2.06 and shall thereafter
be treated in all respects as outstanding principal of the Loan. Accrued PIK
Interest on the Loans shall be payable in cash on the date the principal of the
Loans becomes due and payable, whether on the Maturity Date of the Loan, or upon
earlier prepayment, acceleration or otherwise. The Administrative Agent’s
determination of the principal amount of the Loans outstanding at any time shall
be conclusive and binding, absent manifest error. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment,
and before and after the commencement of any proceeding under any Insolvency or
Liquidation Proceeding. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon demand.

(e) AHYDO Payments. Notwithstanding anything to the contrary herein, if at the
end of any accrual period (as defined in Code §1272(a)(5)) ending after the
fifth anniversary of the Closing Date, the aggregate amount of accrued and
unpaid original issue discount (as defined in Code Section 1273(a)(1)) on the
Loans would, but for this paragraph, exceed an amount equal to the product of
the Loan’s issue price (as defined in Code Sections 1273(b) and 1274(a))
multiplied by the yield to maturity (as defined in Treasury Regulation
Section 1.1272-1(b)(1)(i)) (the “Maximum Accrual”), all accrued and unpaid
interest, including PIK Interest, and original issue discount on the Term Loan
as of the end of such accrual period in excess of an amount equal to the Maximum
Accrual shall be paid in cash by Borrower to the Lender (the “AHYDO Interest
Payment”). For the avoidance of doubt, this Section 2.6(e) shall be construed so
as to cause the Loans to not be treated as having been issued with “significant
original issue discount” within the meaning of IRC Section 163(i)(2).

Section 2.07 [Intentionally Omitted].

Section 2.08 Maturity of Loans.

(a) Maturity of Revolving Loans. Loans shall mature on the Maturity Date and any
Second Lien Credit Obligation (together with accrued interest thereon and fees
in respect thereof) shall be due an payable on such date.

Section 2.09 Prepayments.

(a) Voluntary Prepayment of Loans. The Borrower shall have the right voluntarily
to prepay Loans in whole or in part from time to time, subject to the terms of
the Intercreditor Agreement; in an amount specified in a notice to the
Administrative Agent no later than three days prior to the applicable Repayment
Date, by payment of the principal amount of the Loans outstanding on such
Repayment Date (or portion thereof), together with the accrued and unpaid
interest thereon and fees (if any) plus the Make Whole Amount; provided,
however, that each partial prepayment of Loans shall be in a minimum principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each
payment pursuant to this Section shall be applied as set forth in
Section 2.09(e).

(b) [Intentionally Omitted].

 

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(c) Mandatory Prepayments.

(i) Change of Control. If a Change of Control occurs on or prior to the Maturity
Date, the Borrower shall prepay the Loans in an amount, specified in a notice to
the Administrative Agent no later than three days prior to the Repayment Date,
which shall be equal to the principal amount of the Loans outstanding on such
Repayment Date, together with the accrued and unpaid interest thereon and fees
(if any) plus the Make Whole Amount.

(ii) Excess Cash Flow. At all times after the Discharge of First Lien Finance
Obligations, within 105 days after the end of each fiscal year of the Borrower
(commencing with the fiscal year ending December 31, 2010), the Borrower shall
prepay the Loans in an amount equal to (A) 75% of Excess Cash Flow for such
prior fiscal year minus (B) to the extent not deducted under clause (vi)(C) of
the definition of “Excess Cash Flow” in the computation of Excess Cash Flow for
such prior fiscal year, the aggregate amount of all voluntary prepayments during
such prior fiscal year of principal of the Loans.

(iii) Asset Dispositions, Casualties and Condemnations, Etc. At all times after
the Discharge of First Lien Finance Obligations, within five Business Days after
receipt by any Group Company of Net Cash Proceeds from any Asset Disposition
(other than any Asset Disposition permitted under clauses (i) through (xv) and
(xvii), (xviii), (xxi), (xxii) and (xxiii) of Section 7.05), clause (xxvi) of
Section 7.05 to the extent such Asset Disposition relates to sales of inventory
to Foreign Subsidiaries for fair market value in the normal course of business
and licensing of intellectual property to Foreign Subsidiaries for fair market
value in the ordinary course of business, Casualty or Condemnation (excluding,
in the case of any Casualty or Condemnation, Insurance Proceeds and Condemnation
Awards to the extent and so long as they constitute Reinvestment Funds)), the
Borrower shall prepay the Loans in an aggregate amount equal to 100% of the Net
Cash Proceeds of such Asset Disposition, Casualty or Condemnation; provided,
that no such prepayment caused by the receipt of Net Cash Proceeds from any
Asset Disposition shall be required to the extent that the sum of such Net Cash
Proceeds and all other Net Cash Proceeds from Asset Dispositions occurring after
the Closing Date and during the same fiscal year does not exceed $1,000,000 (it
being understood that a prepayment shall only be required of such excess).

(iv) Debt Issuances. At all times after the Discharge of First Lien Finance
Obligations, within five Business Days after receipt by any Group Company of Net
Cash Proceeds from any Debt Issuance (other than any Debt Issuance permitted
pursuant to Section 7.01 of this Agreement), the Borrower shall prepay the Loans
in an aggregate amount equal to 100% of the Net Cash Proceeds of such Debt
Issuance and the Make-Whole Amount.

(v) Application of Mandatory Prepayments. All amounts required to be paid
pursuant to Section 2.09(c) shall be applied to the repayment of the Loans and
shall be accompanied by accrued interest to the date of prepayment on the amount
paid.

 

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(vi) [Intentionally Omitted].

(vii) [Intentionally Omitted].

(viii) Payments Cumulative. Except as otherwise expressly provided in this
Section 2.09 and subject to the terms of the Intercreditor Agreement, payments
required under any subsection or clause of this Section 2.09 are in addition to
payments made or required under any other subsection or clause of this
Section 2.09.

(d) Notice of Mandatory Prepayment Events. The Borrower shall use commercially
reasonable efforts to give to the Administrative Agent and the Lenders at least
one Business Day’s prior written or telecopy notice of each and every event or
occurrence requiring a prepayment under Section 2.09(c)(iii) or (iv), including
the amount of Net Cash Proceeds expected to be received therefrom and the
expected schedule for receiving such proceeds; provided, however, that in the
case of any prepayment event consisting of a Casualty or Condemnation, the
Borrower shall give such notice within five Business Days after the occurrence
of such event.

(e) Notices of Prepayments. Other than as specified in (d) above, the Borrower
shall notify the Administrative Agent by 11:00 A.M. on the day of prepayment of
the Loans. Each notice of prepayment shall specify the prepayment date and the
principal amount to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s pro-rata share, if any, thereof. Once such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable as specified therein.

Section 2.10 [Intentionally Omitted].

Section 2.11 Fees. The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

Section 2.12 Pro-rata Treatment. Except to the extent otherwise provided herein,
each Borrowing, each payment or prepayment of principal of or interest on any
Loan, each payment of fees (other than the administrative fees retained by the
Agents for their own account), shall be allocated pro-rata among the relevant
Lenders in accordance with the Commitment Percentages of such Lenders (or, if
the Commitments of such Lenders have expired or been terminated, in accordance
with the respective principal amounts of the outstanding Loans of such Lenders);
provided that, in the event any amount paid to any Lender pursuant to this
subsection (a) is rescinded or must otherwise be returned by the Administrative
Agent, each Lender shall, upon the request of the Administrative Agent, repay to
the Administrative Agent the amount so paid to such Lender, with interest for
the period commencing on the date such payment is returned by the Administrative
Agent until the date the Administrative Agent receives such repayment at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

 

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Section 2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of the Loans made by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Loans
and accrued interest thereon greater than its pro-rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (i) notify the
Administrative Agent of such fact, and (ii) purchase (for cash at face value)
participation in the Loans of the other Lenders, or make such other adjustments
as shall be equitable, so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans and other amounts owing thereon;
provided that:

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

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

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

Section 2.14 Payments Generally; Administrative Agent’s Clawback.

(a) Payments by the Borrower. All payments to be made by the Borrower shall be
made without condition or deduction for any counterclaim, defense, recoupment or
setoff. Each payment of principal of and interest on Loans and fees hereunder
shall be paid not later than 3:00 P.M. on the date when due, in Dollars and in
Federal or other funds immediately available to the Administrative Agent at the
account designated by it by notice to the Borrower. Payments received after 3:00
P.M. shall be deemed to have been received on the next Business Day, and any
applicable interest or fee shall continue to accrue. The Administrative Agent
may, in its sole discretion, distribute such payments to the applicable Lenders
on the date of receipt thereof, if such payment is received prior to 3:00 P.M.;
otherwise the Administrative Agent may, in its sole discretion, distribute such
payment to the applicable Lenders on the date of receipt thereof or on the
immediately succeeding Business Day. Whenever any payment hereunder shall be due
on a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day (and such extension of time shall
be reflected in computing interest or fees, as the case may be). If the date for
any payment of principal is extended by operation of Law or otherwise, interest
thereon shall be payable for such extended time.

 

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(b) Presumption by the Administrative Agent. Unless the Administrative Agent
shall have received notice (which may be by telephone if promptly confirmed in
writing) from the Borrower prior to the date on which any payment is due to the
Lenders 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,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation. A notice of the Administrative Agent
to any Lender with respect to any amount owing under this subsection (b) shall
be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. 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
conditions to the Borrowing 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.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans are several and not joint. The failure of any Lender to make a Loan
required to be made by it as part of the Borrowing hereunder shall not relieve
any other Lender of its obligation, if any, hereunder to make any Loan on the
date of the Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on such date of
Borrowing.

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

(f) Computations. All computations of interest for Loans shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
Interest shall accrue on each Loan for the day on which 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 subsection (a) above, 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.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

Section 3.01 Taxes.

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

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

(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable by the Administrative Agent or such Lender, as the
case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided that if Borrower reasonably believes that such
Taxes were not correctly or legally asserted, the Administrative Agent or such
Lender, as the case may be, will use reasonable efforts to cooperate with such
Borrower to obtain a refund of such Taxes so long as such efforts would not, in
the sole determination of the Administrative Agent or such Lender, as the case
may be, result in any additional costs, expenses or risks or be otherwise
disadvantageous to it; provided, further, that Borrower shall not be required to
compensate the Administrative Agent or any Lender pursuant to this
Section 3.01(c) for any amounts incurred more than twelve months prior to the
date such Lender or the Administrative Agent, as the case may be, notifies
Borrower of such Lender’s or the Administrative Agent’s intention to claim
compensation therefor, but if the circumstances giving rise to such claim have a
retroactive effect (e.g., in connection with the audit of a prior tax year),
then such twelve-month period shall be extended to include such period of
retroactive effect. 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.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Loan Party to a Governmental Authority,
such Loan

 

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Party shall deliver to the Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders. To the extent it is legally entitled to do so, any Lender
that is entitled to an exemption from or reduction of withholding tax under the
Law of the jurisdiction in which the Borrower is resident for tax purposes, or
any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or time prescribed by applicable
law or reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable Law as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if 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. Without limiting the generality of the foregoing, in the
event that the Borrower is resident for tax purposes in the United States, any
Foreign Lender shall, to the extent it is legally able to do so, deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
reasonably 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:

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

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

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (A) a certificate to the
effect that such Foreign Lender is not (x) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (y) a “10 percent shareholder” of the Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (z) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly
completed copies of Internal Revenue Service Form W-8BEN, or

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

(f) Inability of Lender to Submit Forms. If any Foreign Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is required to withdraw or cancel
any such form or certificate

 

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previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Foreign Lender shall promptly notify the
Borrower and the Administrative Agent of such fact and the Foreign Lender will
be entitled to withdraw or cancel any affected form or certificate, as
applicable.

(g) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any
indemnities, Taxes or Other Taxes as to which it has been indemnified by a Loan
Party or with respect to which a Loan Party has paid additional amounts pursuant
to this Section, it shall pay to the Loan Party an amount equal to such refund
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Loan Party under this Section with respect to the indemnities, Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the Loan Party, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to
the Borrower or any other Person.

Section 3.02 [Intentionally Omitted].

Section 3.03 [Intentionally Omitted].

Section 3.04 Increased Costs and Reduced Return; Capital Adequacy.

(a) Increased Costs Generally. If any Change in Law (except for such changes
with respect to taxes which are governed by Section 3.01) shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets held by, deposits
with or for the account of, or credit extended or participated in by, any Lender
(or its Lending Office);

(ii) subject any Lender (or its Lending Office) to any tax of any kind
whatsoever with respect to this Agreement or any Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except for
Indemnified Taxes or Other Taxes indemnified under Section 3.01(c) and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender);

(iii) impose on any Lender (or its Lending Office) any other condition, cost or
expense affecting this Agreement made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender (or its Lending Office) of making or maintaining any Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or to reduce the amount of any sum received or

 

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receivable by such Lender hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender, the Borrower will pay to such Lender
as the case may be, such additional amount or amounts as will compensate such
Lender, as the case may be, for such additional costs incurred or reduction
suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law
(except for such changes with respect to taxes which are governed by
Section 3.01) affecting such Lender or any Lending Office of such Lender or such
Lender’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s capital or on
the capital of such Lender’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by such Lender to a
level below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Lender’s holding company for any such reduction suffered.

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

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

Section 3.05 [Intentionally Omitted].

Section 3.06 [Intentionally Omitted].

Section 3.07 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or 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 3.01, then such Lender shall use reasonable
efforts to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to

 

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Section 3.01 in the future, and (ii) in each case, would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

(b) Replacement of Lenders. 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 3.01, the Borrower may replace such Lender in accordance
with Section 10.13.

Section 3.08 Survival. All of the Borrower’s obligations under this Article III
shall survive termination of the Commitments and repayment of all other Second
Lien Credit Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

Section 4.01 Conditions to Initial Borrowing. The obligation of each Lender to
make its initial Borrowing hereunder is subject to the satisfaction or waiver of
the following conditions precedent:

(a) Executed Loan Documents. Receipt by the Administrative Agent of duly
executed counterparts from each party thereto of: (i) this Agreement; (ii) the
Notes; (iii) the Guaranty; (iv) the Collateral Documents; and (v) all other Loan
Documents, each in form and substance reasonably satisfactory to the
Administrative Agent, except to the extent that a Guaranty or any Collateral
Document cannot be entered into after using commercially reasonable efforts to
do so (in which case it will be entered into as soon as possible after the
Closing Date).

(b) [Intentionally Omitted].

(c) Organization Documents. After giving effect to the transactions contemplated
hereby, the Administrative Agent shall have received: (i) a copy of the
Organization Documents, including all amendments thereto, of each Loan Party,
certified as of a recent date by the Secretary of State or other applicable
Governmental Authority of its respective jurisdiction of organization, and a
certificate as to the good standing (or comparable status) of each Loan Party
from such Secretary of State, as of a recent date; (ii) a certificate as to the
good standing (or comparable status) of each Loan Party from such Secretary of
State, as of a recent date; (iii) a certificate as to the good standing (or
comparable status) of each Loan Party, as of a recent date, from the Secretary
of State or other applicable authority of its respective jurisdiction of
organization and from each other state in which such Loan Party is qualified or
is required to be qualified to do business except those states wherein the
failure to be qualified to do business would not reasonably be expected to have
a Material Adverse Effect; (iv) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Closing Date and certifying (A) that the
Organization Documents of such Loan Party have not been amended since the date
of the last amendment thereto shown on the certificate of good standing from its
jurisdiction of organization furnished pursuant to clause (ii) above; (B) that
attached thereto is a true and complete copy of the agreement of limited
partnership, operating agreement or by-laws of such

 

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Loan Party, as applicable, as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (C) below,
(C) that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors or other governing body of such Loan Party
authorizing the execution, delivery and performance of the Loan Documents to
which it is to be 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; and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document; and (v) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to
clause (iv) above.

(d) Officer’s Certificates. The Administrative Agent shall have received (i) a
certificate, dated the Closing Date and signed by a Responsible Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
Section 4.01(y) and (ii) a certificate, dated the Closing Date and signed by a
Responsible Officer of each other Loan Party, confirming compliance with the
condition precedent set forth in Section 4.01(y).

(e) Opinions. On the Closing Date, the Administrative Agent shall have received:

(i) a favorable written opinion of Kirkland & Ellis LLP, counsel to the Loan
Parties, addressed to the Administrative Agent, Collateral Agent and each
Lender, dated the Closing Date, in the form reasonably satisfactory to the
Administrative Agent; and

(ii) a favorable written opinion of Stuart Steinberg, Esq., general counsel for
the Borrower and the Subsidiary Guarantors, addressed to the Administrative
Agent, the Collateral Agent and each Lender, dated the Closing Date, in the form
reasonably satisfactory to the Administrative Agent.

(iii) a favorable written opinion from an Independent Qualified Party (as
defined in the Senior Notes Indenture) with respect to the fairness of the
Agreement, which opinion satisfies the requirements of Section 4.07 of the
Senior Notes Indenture.

(f) [Intentionally Omitted].

(g) [Intentionally Omitted].

(h) [Intentionally Omitted].

(i) [Intentionally Omitted].

(j) Perfection of Personal Property Security Interests and Pledges; Search
Reports. On or prior to the Closing Date, the Collateral Agent shall have
received:

(i) a Perfection Certificate from each Loan Party;

(ii) appropriate financing statements (Form UCC-1 or such other financing
statements or similar notices as shall be required by local Law) authenticated

 

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and authorized for filing under the UCC or other applicable local law of each
jurisdiction in which the filing of a financing statement or giving of notice
may be required, or reasonably requested by the Collateral Agent, to perfect the
security interests intended to be created by the Collateral Documents;

(iii) copies of reports from CT Corporation or another independent search
service reasonably satisfactory to the Collateral Agent listing all effective
financing statements, notices of tax or judgment liens or similar notices that
name Holdings, the Borrower and any other Loan Party, as such (under its present
organizational name and any previous organizational name), as debtor or seller
that are filed in the jurisdictions referred to in clause (ii) above or in any
other jurisdiction having files which must reasonably be searched in order to
determine fully the existence of the UCC security interests, notices of the
filing of federal tax Liens (filed pursuant to Section 6323 of the Code) or
judgment Liens on any Collateral, together with copies of such financing
statements, notices of tax or judgment Liens or similar notices (none of which
shall cover the Collateral except to the extent evidencing Permitted Liens or
for which the Collateral Agent shall have received termination statements (Form
UCC-3 or such other termination statements as shall be required by local Law)
authenticated and authorized for filing);

(iv) searches of ownership of intellectual property in the appropriate
governmental offices and such patent, trademark and/or copyright filings as may
be requested by the Collateral Agent to the extent necessary or reasonably
advisable to perfect the Collateral Agent’s security interest in intellectual
property Collateral; and

(v) evidence of the authorization of the filing of all UCC-1 filings to perfect
the security interests intended to be created by the Collateral Documents.

(k) Evidence of Insurance. Receipt by the Collateral Agent of copies of
insurance policies or certificates of insurance of the Loan Parties and their
Subsidiaries evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents, including, but not limited to,
naming the Collateral Agent as additional insured or loss payee, as applicable,
on behalf of the Lenders.

(l) [Intentionally Omitted].

(m) [Intentionally Omitted].

(n) [Intentionally Omitted].

(o) [Intentionally Omitted].

(p) Payment of Fees. All costs, fees and expenses due and payable to the Agents
and the Lenders on or before the Closing Date shall have been paid to the extent
invoiced in reasonable detail.

 

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(q) Counsel Fees. The Borrower shall have paid all reasonable fees, charges and
disbursements of counsel to the Agents to the extent invoiced in reasonable
detail prior to or on the Closing Date.

(r) Margin Regulations. All Loans made by the Lenders to the Borrower shall be
in full compliance with the Federal Reserve’s Margin Regulations within the
meaning of Regulation U.

(s) U.S. Patriot Act. Prior to the Closing Date, each Loan Party shall have
provided the documentation and other information to the Administrative Agent or
any Lender that is required by regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including,
without limitation, the U.S. Patriot Act.

(t) Executed Intercreditor Agreement and First Lien Amendment. Receipt by the
Administrative Agent of fully executed copies of the Intercreditor Agreement and
the First Lien Amendment.

(u) Issuance of Warrants. The Lenders party hereto (or their designees) on the
Closing Date shall have received warrants for Class A LLC Units in an amount
equal to 5% of all issued and outstanding Class A LLC Units.

(v) Payment of First Lien Term B Loans and First Lien Revolving Loans. The
Borrower shall concurrently (i) use the proceeds of the Loans to make a
voluntary prepayment of the First Lien Term B Loans in the principal amount of
$25,000,000 in accordance with the First Lien Amendment and Section 2.09(a) of
the First Lien Credit Agreement and (ii) make a prepayment of the First Lien
Revolving Loans in the principal amount not less than $3,500,000.

(w) Notice. The Borrower shall have delivered to the Administrative Agent, an
appropriate Notice of Borrowing, duly executed and completed, by the time
specified in, and otherwise as permitted by, Section 2.02.

(x) Representations and Warranties. The representations and warranties of
Holdings and the Borrower contained in Article V of this Agreement and of
Holdings, the Borrower and all other Loan Parties in any other Loan Document
shall be (i) in the case of representations and warranties qualified by
“materiality,” “Material Adverse Effect” or similar language, true and correct
in all respects and (ii) in the case of all other representations and
warranties, true and correct in all material respects, in each case on and as of
the date of the initial Borrowing, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct on the basis set forth above as of such
earlier date.

(y) No Default. No Default or Event of Default shall exist or would result from
the initial Borrowing or from the application of the proceeds thereof other than
a Default or Event of Default arising solely due to the fact that a
representation or warranty is not true and correct.

 

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The documents referred to in this Section 4.01 shall be delivered to the
Administrative Agent no later than the Closing Date (or such earlier date as
stated in this Section 4.01). The certificates and opinions referred to in this
Section 4.01 shall be dated the Closing Date.

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, or waived 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.

If the Closing Date does not occur before 5:00 P.M. on March 31, 2009, the
Commitments shall terminate at the close of business on such date.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each of Holdings and the Borrower represents and warrants to the Administrative
Agent and the Lenders that on and as of the Closing Date and after giving effect
to the Transaction and the making of the Loans and the other financial
accommodations on the Closing Date and on and as of each date as required by
Section 4.01:

Section 5.01 Existence, Qualification and Power; Compliance with Laws. Each
Group Company (i) is duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (ii) has all requisite corporate or other organizational power and
authority and all requisite governmental licenses, authorizations, consents and
approvals to (A) own its assets and carry on its business and (B) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party, (iii) is duly qualified and is licensed and in good standing under the
Laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification or license, and
(iv) is in compliance with all Laws (including, without limitation, the U.S.
Patriot Act), except in any case referred to in clause (ii)(A), (iii) or (iv),
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

Section 5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party have been duly authorized by all necessary corporate, partnership, limited
liability company or other organizational action, and do not and will not
(i) contravene the terms of any of such Person’s Organization Documents,
(ii) conflict with or result in any breach or contravention of, or the creation
of any Lien (other than Permitted Liens) under, any Contractual Obligation to
which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject except in any case that such conflict, breach or
contravention would not reasonably be expected individually or in the aggregate
to have a Material Adverse Effect or (iii) violate any Law, except in any case
for such violations could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

 

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Section 5.03 Governmental Authorization; Other Consents. Except for filings
necessary to perfect the Liens in favor of the Collateral Agent in the
Collateral and other consents, authorizations, notices, approvals and exemptions
that have been obtained prior to or as of the Closing Date or as are scheduled
on Schedule 5.03 hereto, no material approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document to which it
is a party.

Section 5.04 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, except (i) as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and
(ii) that rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability (regardless of
whether enforcement is sought by proceedings in equity or at law).

Section 5.05 Financial Condition; No Material Adverse Effect.

(a) Audited Financial Statements. The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein and (ii) fairly
present in all material respects the financial condition of the Borrower as of
the date thereof and its results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein.

(b) [Intentionally Omitted].

(c) Material Adverse Change. Since the date of the Audited Financial Statements,
there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

(d) [Intentionally Omitted].

(e) [Intentionally Omitted].

Section 5.06 Litigation. Except as specifically disclosed in Schedule 5.06,
there are no actions, suits, investigations or legal, equitable, arbitration or
administrative proceedings pending or, to the knowledge of any Loan Party,
threatened against or affecting any Group Company in which there is a reasonable
possibility of an adverse decision that would reasonably be expected to result
in a Material Adverse Effect.

 

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Section 5.07 Default. No Group Company is in default under or with respect to
any Contractual Obligation that could reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement.

Section 5.08 Ownership of Property; Liens. The Group Companies, in the
aggregate, have good and marketable title to, or valid leasehold interests or
license in, all its properties and assets, except for Permitted Liens and minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted and to the extent that would not reasonably be expected
to result in a Material Adverse Effect.

Section 5.09 Environmental Compliance. No Group Company has failed to comply
with any Environmental Law or to obtain, maintain, or comply with any permit,
license or other approval required under any Environmental Law or is subject to
any Environmental Liability in any case which, individually or collectively,
could reasonably be expected to result in a Material Adverse Effect or has
received written notice of any claim with respect to any Environmental Liability
the subject of which notice could reasonably be expected to have a Material
Adverse Effect, and no Group Company knows of any basis for any Environmental
Liability against any Group Company that would reasonably be expected to have a
Material Adverse Effect.

Section 5.10 Insurance. The properties of each Group Company are insured with
financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are prudent in the reasonable business judgment of the Borrower’s officers.

Section 5.11 Taxes.

(a) Each Group Company has filed, or caused to be filed, all federal and
material state, local and foreign tax returns required to be filed and paid
(i) all amounts of taxes shown thereon to be due (including interest and
penalties) and (ii) all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangible taxes) owing by it, except for such taxes (A) which are not
yet delinquent, (B) that are being contested in good faith and by proper
proceedings diligently pursued, and against which adequate reserves are being
maintained in accordance with GAAP or (C) the failure to pay would not
reasonably be expected to result in a Material Adverse Effect. No Loan Party
knows of any pending investigation of such party by any taxing authority or
proposed tax assessments against any Group Company that would, if made, have a
Material Adverse Effect. All amounts have been withheld by each Group Company
from their respective employees for all periods in compliance with the tax,
social security and unemployment withholding provisions of the applicable law
and such withholdings have been timely paid to the respective Governmental
Authorities, except to the extent that the failure to withhold and pay would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

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(b) No Group Company has ever “participated” in a “listed transaction” within
the meaning of Treasury Regulation Section 1.6011-4, except as would not
reasonably be expected to have, in any case, individually or in the aggregate, a
Material Adverse Effect.

Section 5.12 ERISA; Foreign Pension Plans; Employee Benefit Arrangements. Except
as disclosed in Schedule 5.12:

(a) ERISA. (i) There are no Unfunded Liabilities in excess of the Threshold
Amount (A) with respect to any member of the Group Companies and (B) except as
would not reasonably be expected to have a Material Adverse Effect, with respect
to any ERISA Affiliate.

(ii) Each Plan, other than a Multiemployer Plan, complies in all respects with
the applicable requirements of ERISA and the Code, and each Group Company
complies in all respects with the applicable requirements of ERISA and the Code
with respect to all Multiemployer Plans to which it contributes and all Employee
Benefit Arrangements, except to the extent that the failure to comply therewith
would not reasonably be expected to have a Material Adverse Effect.

(iii) Except as would not reasonably be expected to have a Material Adverse
Effect, no ERISA Event has occurred or, subject to the passage of time, is
reasonably expected to occur with respect to any Plan maintained by any member
of the Group Companies and, except to the extent that such ERISA Event would not
reasonably be expected to have a Material Adverse Effect, no ERISA Event has
occurred or, subject to the passage of time, is reasonably expected to occur
with respect to any Plan maintained by an ERISA Affiliate.

(iv) Except as would not reasonably be expected to have a Material Adverse
Effect, no Group Company: (A) is or has been within the last six years a party
to any Multiemployer Plan; or (B) has completely or partially withdrawn from any
Multiemployer Plan.

(v) If any Group Company or any ERISA Affiliate were to incur a complete
withdrawal (as described in Section 4203 of ERISA) from any Multiemployer Plan
as of the Closing Date, the aggregate withdrawal liability, as determined under
Section 4201 of ERISA, with respect to all such Multiemployer Plans would not
exceed an amount that would reasonably be expected to have a Material Adverse
Effect.

(vi) No Group Company has any contingent liability with respect to any
postretirement benefit under a Welfare Plan that would reasonably be expected to
have a Material Adverse Effect.

(b) Foreign Pension Plans. Each Foreign Pension Plan has been maintained in
material compliance with its terms and with the requirements of any and all
applicable Laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities except to the extent that the failure to comply therewith would not
reasonably be expected to have a Material Adverse Effect. No Group Company has
incurred any obligation in an amount that would reasonably be expected to have a
Material Adverse Effect in connection with the termination of or withdrawal from
any Foreign Pension Plan.

 

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(c) Employee Benefit Arrangements. (i) All liabilities under the Employee
Benefit Arrangements are (A) funded to at least the minimum level required by
Law or, if higher, to the level required by the terms governing the Employee
Benefit Arrangements, (B) insured with a reputable insurance company,
(C) provided for or recognized in the financial statements most recently
delivered to the Administrative Agent pursuant to Section 6.01 hereof or
(D) estimated in the formal notes to the financial statements most recently
delivered to the Administrative Agent pursuant to Section 6.01 hereof, where
such failure to fund, insure, provide for, recognize or estimate the liabilities
arising under such arrangements could reasonably be expected to have a Material
Adverse Effect.

(ii) There are no circumstances which may give rise to a liability in relation
to the Employee Benefit Arrangements which are not funded, insured, provided
for, recognized or estimated in the manner described in clause (i) above and
which could reasonably be expected to have a Material Adverse Effect.

(iii) Each Group Company is in compliance with all applicable Laws, trust
documentation and contracts relating to the Employee Benefit Arrangements,
except as would not be expected to have a Material Adverse Effect.

Section 5.13 Subsidiaries; Equity Interests. Schedule 5.13 sets forth a complete
and accurate list as of the Closing Date of all Subsidiaries of Holdings.
Schedule 5.13 sets forth as of the Closing Date the jurisdiction of formation of
each such Subsidiary. All the outstanding Equity Interests of each Subsidiary of
Holdings are validly issued, fully paid and non-assessable (to the extent
applicable) and were not issued in violation of the preemptive rights of any
shareholder and, as of the Closing Date, those owned by Holdings, directly or
indirectly, are free and clear of all Liens (other than those arising under the
Collateral Documents and Permitted Liens).

Section 5.14 Margin Regulations; Investment Company Act.

(a) No Group Company 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” within the meaning of Regulation U. No part of the
Letters of Credit or proceeds of the Loans will be used, directly or indirectly,
for the purpose of purchasing or carrying any “margin stock” within the meaning
of and in violation of Regulation U. If requested by any Lender or the
Administrative Agent, Holdings and the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans was or
will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any “margin security” within the meaning
of Regulation T. “Margin stock” within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of Holdings and
its Consolidated Subsidiaries. None of the transactions contemplated by this
Agreement (including the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act, the Exchange Act or
Regulation T, U or X.

 

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(b) None of the Group Companies is subject to regulation under the Federal Power
Act or the Investment Company Act of 1940, each as amended. In addition, none of
the Group Companies is (i) an “investment company” registered or required to be
registered under the Investment Company Act of 1940, as amended, or
(ii) controlled by such a company.

Section 5.15 Disclosure. No report, financial statement, certificate or other
information (other than general market data not prepared by, or specific to, the
Group Companies, forecasted budgets and projections) furnished concerning or
affecting any Group Company by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby or delivered hereunder or under any other Loan Document (in
each case, as modified or supplemented by other information so furnished), when
taken as a whole, contains as of the date furnished any material misstatement of
a material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading in light of the circumstances under which they
were made; provided that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time made (it being understood
and agreed that projections as to future events are not to be viewed as facts or
guaranties of future performance, that actual results during the period or
periods covered by such projections may differ from the projected results and
that such differences may be material and that the Loan Parties make no
representation that such projections will in fact be realized).

Section 5.16 Compliance with Law. Each Group Company is in compliance with all
requirements of Law (including Environmental Laws) applicable to it or to its
properties, except for any such failure to comply which could not reasonably be
expected to cause a Material Adverse Effect. To the knowledge of the Loan
Parties, none of the Group Companies or any of their respective material
properties or assets is subject to or in default with respect to any judgment,
writ, injunction, decree or order of any court or other Governmental Authority
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. As of the Closing Date, except as disclosed in
Schedule 5.16, none of the Group Companies has received any written
communication from any Governmental Authority that alleges that any of the Group
Companies is not in compliance in any material respect with any Law, except for
allegations that have been satisfactorily resolved and are no longer outstanding
or which, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

Section 5.17 Intellectual Property. Except as set forth on Schedule 5.17, each
Group Company owns, or possesses the right to use, all of the trademarks,
service marks, trade names, copyrights, patents, patent rights, franchises,
licenses and other rights that are reasonably necessary for the operation of its
respective business, without conflict with the rights of any other Person except
for those conflicts which could not reasonably be expected to have a Material
Adverse Effect.

 

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Section 5.18 Purpose of Loans. The proceeds of the Loans will be used solely to
repay First Lien Term B Loans.

Section 5.19 Solvency. The Loan Parties (on a consolidated basis) are and, after
consummation of the Transaction and the financings related thereto, will be
Solvent.

Section 5.20 Collateral Documents.

(a) Article 9 Collateral. Each of the Security Agreement and the Pledge
Agreement is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Finance Parties, a legal, valid and enforceable security
interest in the Collateral described therein and, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.01 to the
Security Agreement and the Pledged Collateral is delivered to the First Lien
Collateral Agent (as bailee for the Collateral Agent pursuant to the terms of
the Intercreditor Agreement) in accordance with the Intercreditor Agreement,
each of the Security Agreement and the Pledge Agreement shall constitute a fully
perfected Lien on, and security interest in (the priority of which is set forth
in the Intercreditor Agreement), all right, title and interest of the grantors
thereunder in such of the Collateral in which a security interest can be
perfected under Article 9 of the UCC by filing or by possession or control
thereof, in each case superior in right to any other Person, other than Liens in
favor of the First Lien Administrative Agent and with respect to other Permitted
Liens, and except for certain items of Collateral with respect to which such
Lien may be perfected only by possession or control thereof and the failure of
the Collateral Agent to have possession or control thereof is expressly
permitted pursuant to the Security Agreement, the Pledge Agreement, the
Intercreditor Agreement and/or any other Loan Document, as applicable.

(b) Intellectual Property. When financing statements in the appropriate form are
filed in the offices specified on Schedule 4.01 to the Security Agreement, the
Assignment of Patents and Trademarks, substantially in the form of Exhibit A to
the Security Agreement, is filed in the United States Patent and Trademark
Office and the Assignment of Copyrights, substantially in the form of Exhibit B
to the Security Agreement, is filed in the United States Copyright Office, then
to the extent that Liens and security interests may be perfected by such
filings, the Security Agreement shall constitute a fully perfected Lien on, and
security interest in (the priority of which is set forth in the Intercreditor
Agreement), all right, title and interest of the grantors thereunder in the
United States patents, trademarks, copyrights, licenses and other intellectual
property rights covered in such Assignments, in each case prior and superior in
right to any other Person, other than Liens in favor of the First Lien
Administrative Agent and with respect to other Permitted Liens (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, trademark applications and copyrights acquired by the
Loan Parties after the Closing Date).

(c) Status of Liens. The Collateral Agent, for the ratable benefit of the
Finance Parties, will at all times have the Liens provided for in the Collateral
Documents and, subject to the filing by the Collateral Agent of continuation
statements to the extent required by the UCC and to the qualifications and
limitations set forth in clauses (a) and (b) above, the Collateral Documents
will at all times constitute valid and continuing liens of record and

 

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perfected security interests in (the priority of which is set forth in the
Intercreditor Agreement) all the Collateral referred to therein, except for
Liens in favor of the First Lien Administrative Agent and as priority may be
affected by Permitted Liens.

Section 5.21 Ownership. Holdings owns good, valid and marketable title to all
the outstanding common stock of the Borrower, free and clear of all Liens of
every kind, whether absolute, matured, contingent or otherwise, other than those
arising under the First Lien Collateral Documents, the Collateral Documents and
Permitted Liens described in clause (iii) or (xv) of Section 7.02. Except as set
forth on Schedule 5.21, as of the Closing Date there are no shareholder
agreements or other agreements pertaining to Holdings’ beneficial ownership of
the common stock of the Borrower, including any agreement that would restrict
Holdings’ right to dispose of such common stock and/or its right to vote such
common stock.

Section 5.22 No Broker’s Fees. Except as set forth in Schedule 5.22, no broker’s
or finder’s fee or commission will be payable by any Loan Party with respect to
transactions contemplated by this Agreement, except as payable to the Lead
Arrangers, the Agents and the Lenders.

ARTICLE VI

AFFIRMATIVE COVENANTS

Each of Holdings and the Borrower agrees that so long as any Lender has any
Commitment hereunder, any Second Lien Credit Obligation or other amount payable
hereunder or under any Note or other Loan Document (in each case other than
contingent indemnification obligations) remains unpaid:

Section 6.01 Financial Statements. The Borrower will deliver to the
Administrative Agent for further distribution to each Lender (or directly to
each Lender at any time when there is not an incumbent Administrative Agent):

(a) Annual Financial Statements. Within 105 days after the end of each fiscal
year of Holdings, commencing with the fiscal year ending December 31, 2008, a
consolidated balance sheet of Holdings and its Consolidated Subsidiaries as of
the end of such fiscal year, the related consolidated statements of operations
and shareholders’ equity and a consolidated statement of cash flows for such
fiscal year, setting forth in each case in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of a “Big
Four” accounting firm or other Registered Public Accounting Firm of nationally
recognized standing reasonably acceptable to the Administrative Agent, which
report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit, provided, that the obligations in this paragraph (a) may be
satisfied by the Borrower by furnishing its Form 10-K.

(b) Interim Financial Statements. (x) Within 50 days after the end of the first
three fiscal quarters of Holdings and (y) within 45 days of the first full
fiscal month following

 

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the Closing Date and each fiscal month thereafter which does not coincide with
the end of a fiscal quarter of Holdings, a consolidated balance sheet of
Holdings and its Consolidated Subsidiaries as of the end of such period,
together with related consolidated statements of operations and a consolidated
statement of cash flows for such period and the then elapsed portion of such
fiscal year, setting forth for all periods beginning after the first anniversary
of the Closing Date in comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, all in reasonable detail,
certified by a Responsible Officer of the Borrower as fairly presenting, in all
material respects, the financial condition, results of operations and cash flows
of Holdings and its Consolidated Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes,
provided, that the quarterly (but not monthly) obligations in this paragraph
(b) may be satisfied by the Borrower by furnishing its Form 10-Q.

(c) Forecasts. For each fiscal year of Holdings beginning after December 31,
2009, at least 45 days after the end of each fiscal year, forecasts prepared by
management of the Borrower, in form reasonably satisfactory to the
Administrative Agent and the Required Lenders, of consolidated balance sheets
and statements of income or operations and cash flows of Holdings and its
Consolidated Subsidiaries, which forecasts shall be presented on an annual basis
for the then current fiscal year, and not including the fiscal year in which the
Maturity Date occurs.

As to any information contained in materials furnished pursuant to
Section 6.02(c), the Borrower shall not be separately required to furnish such
information under Section 6.01(a) or (b), but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in Section 6.01(a) or (b) at the times specified therein.

Section 6.02 Certificates; Other Information. The Borrower will deliver to the
Administrative Agent for further distribution to each Lender (or directly to
each Lender at any time when there is not an incumbent Administrative Agent):

(a) Auditors’ Certificate. Concurrently with the delivery of the financial
statements referred to in Section 6.01(a), a certificate of its independent
certified public accountants certifying such financial statements and stating
that in the course of the audit upon which their opinion on such financial
statements was based (but without any special or additional audit procedures for
the purpose), they obtained knowledge of no condition or event, in each case
relating to accounting matters, which constitutes a Default or an Event of
Default or, if such accountants shall have obtained in the course of such audit
knowledge of any such Default or Event of Default, disclosing in such written
statement the nature and status of such event.

(b) Compliance Certificate. At the time of delivery of the financial statements
provided for in Section 6.01(a) and for the financial statements provided for in
Section 6.01(b) above coinciding with the end of each fiscal quarter of Holdings
(commencing with the delivery of the financial statements for the fiscal quarter
ending March 31, 2009), (i) a duly completed Compliance Certificate signed by a
Responsible Officer of Holdings (A) demonstrating compliance with the financial
covenant contained in Section 7.16 by calculation thereof as of the end of the
fiscal period covered by such financial statements and, if such certificate
demonstrates non-compliance with any such financial covenant, one or more
members of the Investor Group

 

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may deliver, together with such certificate, notice of their intent to cure (a
“Notice of Intent to Cure”) the Event of Default arising in respect of such
non-compliance through capital contributions or the purchase of Equity Interests
as contemplated pursuant to clause (iv) of the definition of “Consolidated
EBITDA,” (B) stating that no Default or Event of Default exists, or if any Event
of Default does exist, specifying the nature and extent thereof and what action
the Borrower proposes to take with respect thereto and (C) stating whether,
since the date of the most recent financial statements delivered hereunder,
there has been any material change in the GAAP applied in the preparation of the
financial statements of Holdings and its Consolidated Subsidiaries, and, if so,
describing such change, and (ii) a management’s discussion and analysis of the
financial condition and results of operations for such fiscal quarter and the
then elapsed portion of the year, as compared to the comparable periods in the
previous year.

(c) Auditor’s Reports. Promptly after any request by the Administrative Agent
(or by any Lender communicated through the Administrative Agent), copies of any
final detailed audit reports, management letters or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of any
Group Company by independent accountants in connection with the accounts or
books of any Group Company, or any audit of any of them.

(d) Reports to Holders of Debt Securities. Promptly after the furnishing
thereof, copies of any statement or report furnished of any holder of debt
securities of any Group Company pursuant to the Senior Notes Documents or any
other indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Lenders pursuant to Section 6.01 or any other clause of
this Section 6.02.

(e) Excess Cash Flow. Within 105 days after the end of each fiscal year of
Holdings, commencing with the fiscal year ending December 30, 200[9], a
certificate of a Responsible Officer of Holdings containing information
regarding the calculation of Excess Cash Flow for such fiscal year.

(f) ERISA Reports. Promptly upon request by the Administrative Agent, the most
recently prepared actuarial reports in relation to any Plan or Foreign Pension
Plan for the time being operated by Group Companies which are prepared in order
to comply with the then current statutory or auditing requirements within the
relevant jurisdiction. Promptly upon request, the Borrower shall also furnish
the Administrative Agent and the Lenders with such additional information
concerning any Plan, Foreign Pension Plan or Employee Benefit Arrangement as may
be reasonably requested, including, but not limited to, with respect to any
Plans, copies of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the Department of
Labor and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each “plan year” (within the meaning of Section 3(39) of
ERISA).

(g) Additional Patents, Trademarks and Copyrights. At the time of delivery of
the financial statements and reports provided for in Section 6.01(a), a report
signed by a Responsible Officer of the Borrower setting forth (i) a list of
registration numbers for all patents, trademarks, service marks, tradenames and
copyrights awarded to any Group Company since the last day of the immediately
preceding fiscal year of Holdings and (ii) a list of all patent

 

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applications, trademark applications, service mark applications, trade name
applications and copyright applications submitted by any Group Company since the
last day of the immediately preceding fiscal year and the status of each such
application, all in such form as shall be reasonably satisfactory to the
Administrative Agent.

(h) Domestication in Other Jurisdiction. Not less than 30 days after any change
in the jurisdiction of organization of any Loan Party, a copy of all documents
and certificates intended to be filed or otherwise executed to effect such
change.

(i) Maintenance of Ratings. The Borrower shall use commercially reasonable
efforts to maintain (i) ratings on the credit facilities provided hereunder and
(ii) a corporate rating, in each case from Moody’s and S&P.

(j) Other Information. With reasonable promptness upon request therefor, such
other information regarding the business, properties or financial condition of
any Group Company as the Administrative Agent or any Lender may reasonably
request, which may include such information as any Lender may reasonably
determine is necessary or advisable to enable it either (i) to comply with the
policies and procedures adopted by it and its Affiliates to comply with the Bank
Secrecy Act, the U.S. Patriot Act and all applicable regulations thereunder or
(ii) to respond to requests for information concerning Holdings and its
Subsidiaries from any governmental, self-regulatory organization or financial
institution in connection with its anti-money laundering and anti-terrorism
regulatory requirements or its compliance procedures under the U.S. Patriot Act,
including in each case information concerning the Borrower’s direct and indirect
shareholders and its use of the proceeds of the Credit Extensions hereunder.

Documents required to be delivered pursuant to Section 6.01 or Section 6.02 may
be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website
address listed on Schedule 10.02; or (ii) on which such documents are posted on
the Borrower’s behalf on an Internet or Intranet website, if any, to which the
Administrative Agent has access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the Borrower
shall deliver copies (which may be electronic) of such documents to the
Administrative Agent which so requests until a written request to cease
delivering copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify (which may be by facsimile or electronic mail)
the Administrative Agent (and each Lender if there is at the time no incumbent
Administrative Agent) of the posting of any such documents. The Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility
to monitor compliance by the Borrower with any such request for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents. Furthermore, if any financial
statement, certificate or other information required to be delivered pursuant to
Section 6.01 or 6.02 shall be required to be delivered on any date that is not a
Business Day, such financial statement, certificate or other information may be
delivered to the Administrative Agent on the next succeeding Business Day after
such date.

 

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Each of Holdings and the Borrower hereby acknowledges that (i) the
Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of Holdings and the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and
(ii) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do
not wish to receive material non-public information with respect to Holdings,
the Borrower or their respective securities) (each, a “Public Lender”). Each of
Holdings and the Borrower hereby agrees that so long as Holdings or the Borrower
is the issuer of any outstanding debt or equity securities that are issued
pursuant to a public offering registered with the SEC or in a private placement
for resale pursuant to Rule 144A under the Securities Act or is actively
contemplating issuing any such securities: (i) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (ii) by marking Borrower Materials
“PUBLIC,” each of Holdings and the Borrower shall be deemed to have authorized
the Administrative Agent and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to Holdings or the
Borrower or its or their securities for purposes of United States Federal and
state securities laws (provided, however, that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in
Section 10.07); (iii) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor”;
and (iv) the Administrative Agent shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor. Notwithstanding the
foregoing, Holdings and the Borrower shall be under no obligation to mark any
Borrower Materials “PUBLIC.”

Section 6.03 Notices. The Borrower will promptly notify the Administrative Agent
(and each Lender if there is then no incumbent Administrative Agent), and the
Administrative Agent will in turn notify the Lenders:

(i) of the occurrence of any Default or Event of Default;

(ii) of (A) any breach or non-performance of, or any default under, any material
Contractual Obligation of the Borrower or any of its Subsidiaries, (B) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any of its Subsidiaries and any Governmental Authority, (C) the
commencement of, or any material adverse development in, any litigation or
proceeding affecting the Borrower or any of its Subsidiaries, including pursuant
to any applicable Environmental Law, under any Loan Document, (D) any
litigation, investigation or proceeding affecting any Loan Party, (E) and any
other matter, event or circumstance, in each case of subclauses (A) through
(E) to the extent that the same have resulted or could reasonably be expected to
result in a Material Adverse Effect;

(iii) of the occurrence of any ERISA Event to the extent that such ERISA Event
has resulted or could reasonably be expected to result in a liability of a Group
Company in excess of $1,000,000;

 

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(iv) of any material change in accounting policies or financial reporting
practice by Holdings or any of its Subsidiaries;

(v) of notices delivered by the Borrower under the First Lien Credit Agreement
that would not otherwise give rise to a notice requirement hereunder; and

(vi) of any amendments, restatements, supplements or other modifications to the
First Lien Loan Documents or the First Lien Transaction Documents.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(i) shall
describe with particularity any and all provisions of this Agreement or the
other Loan Documents that have been breached.

Section 6.04 Payment of Obligations. Each of the Group Companies will pay and
discharge all material taxes, assessments and other governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become more than 90 days delinquent; provided,
however, that no Group Company shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness (A) which is being contested in
good faith by appropriate proceedings and as to which adequate reserves have
been established in accordance with GAAP or (B) the failure to make any such
payment could not reasonably be expected to have a Material Adverse Effect.

Section 6.05 Preservation of Existence Etc. Except as a result of or in
connection with a dissolution, merger or disposition of a Subsidiary of the
Borrower permitted under Section 7.04 or Section 7.05, each Group Company will:
(i) preserve, renew and maintain in full force and effect its legal existence
and good standing under the Laws of the jurisdiction of its organization;
(ii) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary in the normal conduct of its business, except
in the case of clause (i) or (ii) to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (iii) preserve or
renew all of its registered patents, trademarks, trade names and service marks,
the non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

Section 6.06 Maintenance of Properties. Each Group Company will: (i) maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary wear
and tear and Casualty and Condemnation excepted; and (ii) make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect.

Section 6.07 Maintenance of Insurance; Certain Proceeds.

(a) Insurance Policies. Each of the Group Companies will at all times maintain
in full force and effect insurance (including worker’s compensation insurance,
liability insurance, casualty insurance and business interruption insurance) in
such amounts, covering

 

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such risk and liabilities and with such deductibles or self-insurance retentions
as are prudent in the good faith judgment of the officers of the Borrower. The
Collateral Agent shall be named as loss payees or mortgagees, as its interest
may appear, with respect to all such property and casualty policies and
additional insured with respect to all business interruption or liability
policies (other than worker’s compensation, director and officer liability or
other policies in which such endorsements are not customary), in each case
subject to the terms of the Intercreditor Agreement and each provider of any
such insurance shall agree, by endorsement upon the policy or policies issued by
it or by independent instruments furnished to the Collateral Agent, that if the
insurance carrier shall have received written notice from the Collateral Agent
of the occurrence and continuance of an Event of Default, the insurance carrier
shall at all time after the Discharge of First Lien Finance Obligations or to
the extent and in the amount of any such Net Cash Proceeds not applied to prepay
the First Lien Credit Obligations, pay all proceeds otherwise payable to the
Borrower or one or more of its Subsidiaries under such policies directly to the
Collateral Agent and that it will give the Collateral Agent 10 days’ prior
written notice before any such policy or policies shall be altered or canceled,
and that no act or default of any Group Company or any other Person shall affect
the rights of the Collateral Agent or the Lenders under such policy or policies.

(b) Loss Events. In case of any Casualty or Condemnation with respect to any
property of any Group Company or any part thereof having a fair market value in
excess of the Threshold Amount, the Borrower shall promptly give written notice
thereof to the Administrative Agent generally describing the nature and extent
of such damage, destruction or taking.

Section 6.08 Compliance with Laws. Each of the Group Companies will comply with
all requirements of Law applicable to it and its properties to the extent that
noncompliance with any such requirement of Law would reasonably be expected to
have a Material Adverse Effect. Without limiting the generality of the
foregoing, each of the Group Companies will do each of the following as it
relates to any Plan maintained by, or Multiemployer Plan contributed to by, each
of the Group Companies, Foreign Pension Plan or Employee Benefit Arrangement
except to the extent that any failure to comply with clauses (i) through
(v) below would not reasonably be expected to result in a Material Adverse
Effect: (i) maintain each Plan (other than a Multiemployer Plan), Foreign
Pension Plan and Employee Benefit Arrangement in compliance in all respects with
the applicable provisions of ERISA, the Code or other Federal, state or foreign
Law; (ii) cause each Plan (other than a Multiemployer Plan) that is qualified
under Section 401(a) of the Code to maintain such qualifications; (iii) make all
required contributions to any Plan subject to Section 412 of the Code and make
all required contributions to Multiemployer Plans; (iv) ensure that there are no
Unfunded Liabilities in excess of the Threshold Amount unless the aggregate
amount of such Unfunded Liabilities is reduced below the Threshold Amount within
a 30-day period; and (v) make all contributions (including any special payments
to amortize any Unfunded Liabilities) required to be made in accordance with all
applicable laws and the terms of each Foreign Pension Plan in a timely manner.

Section 6.09 Books and Records. Each of the Group Companies will keep books and
records of its transactions that are complete and accurate in all material
respects in accordance with GAAP (including the establishment and maintenance of
appropriate reserves).

 

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Section 6.10 Inspection Rights. Each of the Group Companies will (but, if no
Default or Event of Default shall have occurred and be continuing, not more
often than once per fiscal year at the Borrower’s expense) permit
representatives and independent contractors of the Administrative Agent to visit
and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants (and each Loan Party hereby authorizes, and each
of Holdings and the Borrower shall cause each other Group Company which is not a
Loan Party to authorize, such independent accountants to discuss its affairs,
finances and accounts with the Administrative Agent or any representative or
independent contractor thereof; provided that a representative of such or any
other Loan Party has been given the opportunity to be present), all at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon two (2) Business Days’ advance notice to the Borrower; provided,
however, that when an Event of Default exists the Administrative Agent (or any
of its representatives or independent contractors) may do any of the foregoing
at the expense of the Borrower at any time during normal business hours and
without advance notice.

Section 6.11 Use of Proceeds. The Borrower will use the proceeds of the Loans
solely for the purposes set forth in Section 5.18.

Section 6.12 Additional Loan Parties; Additional Security. Subject to the terms
of the Intercreditor Agreement:

(a) Additional Subsidiary Guarantors. The Borrower will take, and will cause
each of its Subsidiaries (other than Foreign Subsidiaries and Unrestricted
Subsidiaries) to take, such actions from time to time as shall be necessary to
ensure that all Subsidiaries of the Borrower (other than such Foreign
Subsidiaries and Unrestricted Subsidiaries) are Subsidiary Guarantors. Without
limiting the generality of the foregoing, if any Group Company shall form or
acquire any new Subsidiary, the Borrower, as soon as practicable and in any
event within 30 days after such formation or acquisition, will provide the
Collateral Agent with notice of such formation or acquisition setting forth in
reasonable detail a description of all of the assets of such new Subsidiary and
will cause such new Subsidiary (other than any such Foreign Subsidiary) to:

(i) within 30 days after such formation or acquisition, execute an Accession
Agreement pursuant to which such new Subsidiary shall agree to become a
“Guarantor” under the Subsidiary Guaranty, an “Obligor” under the Security
Agreement and an “Obligor” under the Pledge Agreement and/or an obligor under
such other Collateral Documents as may be applicable to such new Subsidiary;

(ii) deliver such proof of organizational authority, incumbency of officers,
opinions of counsel and other documents as is consistent with those delivered by
each Loan Party pursuant to Section 4.01 on the Closing Date or as the
Administrative Agent or the Collateral Agent shall have reasonably requested;
and

(iii) prior to the Discharge of First Lien Finance Obligations, the covenants
made in this Section 6.12(a) to deliver possession of any Collateral to the
Collateral Agent shall be deemed satisfied by the delivery of such Collateral to
the First Lien Collateral Agent.

 

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(b) Additional Security. The Borrower will cause, and will cause each of its
Subsidiaries (other than Foreign Subsidiaries and Unrestricted Subsidiaries) to
cause, all of its owned Real Properties with a fair market value in excess of
$2,000,000 hereafter acquired and all or substantially all personal property
located in the United States to be subject at all times to perfected (the
priority of which is set forth in the Intercreditor Agreement) and, in the case
of owned Real Property, title insured Liens in favor of the Collateral Agent
(subject to the Liens in favor of the First Lien Administrative Agent and the
other Permitted Liens) pursuant to the Collateral Documents or such other
security agreements, pledge agreements, mortgages or similar collateral
documents as the Collateral Agent shall request in its sole reasonable
discretion (collectively, the “Additional Collateral Documents”). With respect
to any owned Real Property having a fair market value in excess of $2,000,000
acquired by any Loan Party subsequent to the Closing Date, such Person will
cause to be delivered to the First Lien Collateral Agent (as bailee for the
Collateral Agent pursuant to the terms of the Intercreditor Agreement) with
respect to such Real Property mortgages, deeds of trust or other appropriate
instruments under applicable law sufficient to create a mortgage, deed of trust
or similar Lien of record on such Real Property (subject to the Liens in favor
of the First Lien Administrative Agent and the other Permitted Liens) and
including landlords’ consents and estoppels, ALTA or other appropriate forms of
mortgagee title insurance policies, maps or plats of survey, flood insurance
certificates and other instruments, certificates and documents, as are in form
and substance reasonably satisfactory to the Collateral Agent. In furtherance of
the foregoing terms of this Section 6.12, the Borrower agrees to promptly
provide the Administrative Agent with written notice of the acquisition by the
Borrower or any of its Subsidiaries (other than Foreign Subsidiaries and
Unrestricted Subsidiaries) of any owned Real Property having a market value
greater than $2,000,000, setting forth in each case in reasonable detail the
location and a description of the asset(s) so acquired. Without limiting the
generality of the foregoing, the Borrower will cause, and will cause each of its
Subsidiaries that is or becomes a Subsidiary Guarantor to cause, 100% of the
Equity Interests of each of their respective direct and indirect Domestic
Subsidiaries that are not Subsidiaries of Foreign Subsidiaries or (x) 65% of
such Equity Interests, if such Subsidiary is a direct Foreign Subsidiary, or
(y) to the extent not prohibited by the terms of any Organization Document or
other agreement governing a Permitted Joint Venture, such percentage as is equal
to their respective ratable ownership of all Equity Interests in Permitted Joint
Ventures and non-Wholly-Owned Subsidiaries) to be subject at all times to a
perfected Lien in favor of the Collateral Agent, subject only to the Liens in
favor of the First Lien Administrative Agent and Permitted Liens described in
Section 7.02(iii) or (iv).

If, subsequent to the Closing Date, a Loan Party shall acquire any material
patents, trademark registrations, service mark registrations, registered trade
names, copyright registrations or any applications related to the foregoing,
securities, instruments, chattel paper or other personal property required to be
delivered to the First Lien Collateral Agent (as bailee for the Collateral Agent
pursuant to the terms of the Intercreditor Agreement) as Collateral hereunder or
under any of the Collateral Documents, the Borrower shall notify the Collateral
Agent of the same no later than the end of the fiscal quarter of Holdings during
which any such acquisitions take place, provided that if any such acquisition is
accomplished by means of a Permitted Acquisition, the Borrower shall promptly
(and in any event within ten Business Days after any Responsible Officer of any
Loan Party acquires knowledge of the same) notify the Collateral Agent of the
same.

 

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All such security interests and mortgages shall be granted pursuant to
documentation consistent with the Collateral Documents executed at Closing and
otherwise reasonably satisfactory in form and substance to the Collateral Agent
and shall constitute valid and enforceable perfected security interests and
mortgages (the priority of which is set forth in the Intercreditor Agreement)
and subject to no other Liens except for Liens in favor of the First Lien Agent
and Permitted Liens. The Additional Collateral Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Collateral Documents, and all taxes, fees and other charges payable in
connection therewith shall have been paid in full. The Borrower shall cause to
be delivered to the Collateral Agent such opinions of counsel, title insurance
and other related documents as may be reasonably requested by the Collateral
Agent to assure itself that this Section 6.12(b) has been complied with. Prior
to the Discharge of First Lien Finance Obligations, the covenants made in this
Section 6.12(b) to deliver any Collateral to the Collateral Agent shall be
deemed satisfied by the delivery of such Collateral to the First Lien Collateral
Agent.

(c) Real Property Appraisals. If the Collateral Agent determines that it or the
Lenders are required by Law or regulation to have appraisals prepared in respect
of the Real Property of any Group Company constituting Collateral, the Borrower
shall provide to the Collateral Agent appraisals which satisfy the applicable
requirements set forth in 12 C.F.R., Part 34—Subpart C or any successor or
similar statute, rule, regulation, guideline or order, and which shall be in
scope, form and substance, and from appraisers, reasonably satisfactory to the
Required Lenders and shall be accompanied by a certification of the appraisal
firm providing such appraisals that the appraisals comply with such
requirements.

(d) Completion of Actions. The Borrower agrees that each action required by this
Section 6.12 shall be completed no later than 90 days (or such later date as
determined by the Administrative Agent) after such action is either requested to
be taken by the Collateral Agent or required to be taken by the Borrower or any
of its Subsidiaries pursuant to the terms of this Section 6.12.

Notwithstanding the foregoing, any assets acquired subsequent to the Closing
whose relative value to the Lenders does not justify the cost and/or effort
required to obtain security interests in such assets, as reasonably determined
by the Collateral Agent (in consultation with the Borrower), shall not be
subject to the requirements hereof. In addition, notwithstanding anything to the
contrary contained herein or in any other Loan Document, in no event shall any
Loan Party be required to (a) deliver control, lockbox or similar type
agreements with respect to any deposit account or (b) leasehold mortgages,
estoppels, consents or landlord waivers with respect to any retail
establishment.

Section 6.13 [Intentionally Omitted].

 

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Section 6.14 Designation of Unrestricted Subsidiaries. Holdings may, at any
time, designate any Subsidiary of Holdings that is not the Borrower or a
Subsidiary of the Borrower as an Unrestricted Subsidiary by prior written notice
to the Administrative Agent; provided that Holdings shall only be permitted to
so designate a new Unrestricted Subsidiary after the Closing Date and so long as
(a) no Default or Event of Default exists or would result therefrom, (b) such
Subsidiary does not own any capital stock or Indebtedness of, or own or hold a
Lien on any property of, Holdings or any other Subsidiary that is not a
subsidiary of the Subsidiary to be so designated, (c) such Unrestricted
Subsidiary shall be capitalized (to the extent capitalized by Holdings or any of
its Subsidiaries) through Investments (and calculated based on the fair market
value of such Investment) permitted by, and in compliance with, clauses (xv) and
(xxv) under Section 7.06(a), with any assets owned by such Unrestricted
Subsidiary at the time of the initial designation thereof to be treated as
Investments pursuant to clauses (xv) and (xxv) under Section 7.06(a); provided
that at the time of the initial Investment by Holdings or any of its
Subsidiaries in such Subsidiary, Holdings shall designate such entity as an
Unrestricted Subsidiary in a written notice to the Administrative Agent.
Holdings may designate any Unrestricted Subsidiary to be a Subsidiary for
purposes of this Agreement (each, a “Subsidiary Redesignation”); provided that
(i) such Unrestricted Subsidiary, both before and after giving effect to such
designation, shall be a wholly owned Subsidiary of Holdings, (ii) no Default or
Event of Default then exists or would occur as a consequence of any such
Subsidiary Redesignation, (iii) calculations are made by Holdings of compliance
on a Pro-Forma Basis with the covenant set forth in Section 7.16 for the
relevant period, as if the respective Subsidiary Redesignation (as well as all
other Subsidiary Redesignations theretofore consummated after the first day of
such period) had occurred on the first day of such period, and such calculations
shall show that such covenant set forth in Section 7.16 would have been complied
with if the Subsidiary Redesignation had occurred on the first day of such
period (for this purpose, if the first day of the respective period occurs prior
to the Closing Date, calculated as if the covenant set forth in Section 7.16 had
been applicable from the first day of such period), (iv) all representations and
warranties contained herein and in the other Loan Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Subsidiary Redesignation (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date, (v) Holdings shall have delivered to the Administrative Agent an
officer’s certificate executed by a Responsible Officer, certifying to the best
of such officer’s knowledge, compliance with the requirements of preceding
clauses (i) through (iv), inclusive, and containing the calculations required by
the preceding clause (iii), and (vi) any Unrestricted Subsidiary subject to a
Subsidiary Redesignation may not thereafter be designated as an Unrestricted
Subsidiary.

 

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ARTICLE VII

NEGATIVE COVENANTS

Each of Holdings and the Borrower agrees that so long as any Lender has any
Commitment hereunder, any Second Lien Credit Obligation or other amount payable
hereunder or under any Note or other Loan Document (in each case other than
contingent indemnification obligations) remains unpaid:

Section 7.01 Limitation on Indebtedness. None of the Group Companies will incur,
create, assume or permit to exist any Indebtedness or Swap Obligations except:

(i) Indebtedness of the Borrower and its Subsidiaries outstanding on the Closing
Date and disclosed on Schedule 7.01 (collectively, the “Existing Indebtedness”);

(ii) (A) Indebtedness of the Loan Parties under this Agreement and the other
Loan Documents, (B) Indebtedness evidenced by the Senior Notes in an aggregate
principal amount not to exceed $150,000,000 and (C) Indebtedness evidenced by
the First Lien Credit Agreement in an aggregate principal amount not to exceed
$225,000,000;

(iii) Purchase Money Indebtedness, Attributable Indebtedness in respect of
Capital Leases and Synthetic Lease Obligations of the Borrower and its
Subsidiaries incurred after the Closing Date to finance Consolidated Capital
Expenditures and Attributable Indebtedness in respect of Sale/Leaseback
Transactions of the Borrower and its Subsidiaries permitted pursuant to
Section 7.13; provided that (x) the aggregate amount of all such Indebtedness
does not exceed $5,750,000 at any time outstanding and (y) no Lien securing such
Indebtedness shall extend to or cover any property or asset of any Group Company
other than the asset so financed and proceeds thereof;

(iv) Indebtedness of the Borrower or its Subsidiaries secured by Liens permitted
by clauses (xvii), (xviii) and (xix) of Section 7.02 and any other Indebtedness
of a Person whose Equity Interests or assets are acquired in a Permitted
Acquisition which is acquired or assumed by the Borrower or a Subsidiary of the
Borrower in such Permitted Acquisition and any Permitted Refinancing thereof;
provided that such Indebtedness was not incurred in connection with, or in
anticipation of, the events described in such clauses or such Permitted
Acquisition;

(v) any Permitted Refinancing of Indebtedness permitted under clause (i),
(ii)(C), (iii) or (iv) above; provided that (u) the principal amount (or
accreted value, if applicable) thereof does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so refinanced except by an
amount equal to any interest capitalized in connection with, any premium or
other reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing, (v) such refinancing Indebtedness has a final
maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being refinanced, (w) such refinancing
Indebtedness shall not be secured by any Lien unless the Indebtedness being
refinanced was subject to a Lien, in which case any Liens on such refinancing
indebtedness shall not extend to any additional assets and shall, if the
existing Liens were subordinated, be subordinated on no less favorable terms,
(x) the terms and conditions (including, if applicable, as to collateral) of any
such refinancing Indebtedness are not, taken as a whole, materially less
favorable to the Loan Parties or the Lenders than the terms and conditions of
the Indebtedness being refinanced, (y) such refinancing, refunding is incurred
by the Borrower or by Holdings and (z) after giving effect to the incurrence of
such refinancing Indebtedness, no Default shall have occurred and be continuing;

 

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(vi) unsecured Subordinated Indebtedness of Holdings or any of its Subsidiaries
that is issued to a seller of assets or Person acquired in a Permitted
Acquisition and any Permitted Refinancing thereof if, immediately prior to and
immediately after giving effect thereto, (A) no Event of Default shall exist or
result therefrom and (B) Holdings and its Subsidiaries will be in compliance on
a Pro-Forma Basis with the financial covenant set forth in Section 7.16;

(vii) (A) contingent liabilities in respect of any indemnification, adjustment
of purchase price, earn-out, non-compete, consulting, deferred compensation and
similar obligations of the Borrower and its Subsidiaries incurred in connection
with Permitted Acquisitions, Permitted Joint Ventures, Investments permitted by
Section 7.06 and Asset Dispositions and (B) obligations in respect of earn-outs,
purchase price adjustments or similar adjustments incurred by the Borrower or
its Subsidiaries under agreements governing Permitted Acquisitions, Investments
permitted by Section 7.06 or Asset Dispositions;

(viii) Swap Obligations of the Borrower or any Subsidiary under Swap Agreements
to the extent entered into after the Closing Date or to manage interest rate,
foreign currency exchange rate and commodity pricing risks and not for
speculative purposes;

(ix) Indebtedness owed to any Person providing property, casualty or liability
insurance to the Borrower or any Subsidiary of the Borrower, so long as such
Indebtedness shall not be in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the annual
period in which such Indebtedness is incurred and such Indebtedness shall be
outstanding only during such year;

(x) Indebtedness consisting of Guaranty Obligations incurred (A) by the Borrower
in respect of Indebtedness, leases or other ordinary course obligations
permitted to be incurred by, or obligations in respect of Permitted
Acquisitions, Investments permitted by Section 7.06 or Permitted Joint Ventures
of, Wholly-Owned Domestic Subsidiaries of the Borrower, (B) by Domestic
Subsidiaries of the Borrower of Indebtedness, leases or other ordinary course
obligations permitted to be incurred by, or obligations in respect of Permitted
Acquisitions, Investments permitted by Section 7.06 or Permitted Joint Ventures
of, the Borrower or Wholly-Owned Domestic Subsidiaries of the Borrower, (C) by
Foreign Subsidiaries of the Borrower of Indebtedness, leases or other ordinary
course obligations permitted to be incurred by, or obligations in respect of
Permitted Acquisitions, Investments permitted by Section 7.06 or Permitted Joint
Ventures of, Wholly-Owned Foreign Subsidiaries of the Borrower and (D) by the
Borrower or any Subsidiary of the Borrower of Indebtedness, leases or other
ordinary course obligations permitted to be incurred by, Foreign Subsidiaries;
provided that the aggregate amount of Guaranty Obligations referred to in this
clause (D), together with all Investments by the Borrower and its Wholly-Owned
Domestic Subsidiaries permitted under Section 7.06(a)(xi), will not exceed
$5,750,000 at any one time outstanding;

 

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(xi) intercompany Indebtedness of the Borrower or a Subsidiary of the Borrower
to the extent permitted by Section 7.06(a)(x) or (xi);

(xii) [Intentionally Omitted];

(xiii)(A) Indebtedness of Holdings, the Borrower and its Subsidiaries 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; provided that (1) such Indebtedness (other than credit or purchase
cards) is extinguished within five Business Days after receipt of notice of its
incurrence and (2) such Indebtedness in respect of credit or purchase cards is
extinguished within 60 days from its incurrence, and (B) contingent
indemnification obligations of the Borrower and its Subsidiaries to financial
institutions, in each case to the extent in the ordinary course of business and
on terms and conditions which are within the general parameters customary in the
banking industry, entered into to obtain cash management services or deposit
account overdraft protection services (in amount similar to those offered for
comparable services in the financial industry) or other services in connection
with the management or opening of deposit accounts or incurred as a result of
endorsement of negotiable instruments for deposit or collection purposes;

(xiv) [Intentionally Omitted];

(xv) accretion or amortization of original issue discount and accretion of
interest paid in kind, in each case in respect of Indebtedness otherwise
permitted by this Section 7.01;

(xvi) [Intentionally Omitted];

(xvii) security given to a public or private utility or any other governmental
authority in the ordinary course of business;

(xviii) [Intentionally Omitted];

(xix) [Intentionally Omitted]; and

(xx) Indebtedness of the Borrower and its Subsidiaries not otherwise permitted
by this Section 7.01 incurred after the Closing Date in an aggregate principal
amount not to exceed $17,250,000 at any time outstanding.

Section 7.02 Restriction on Liens. None of the Group Companies will create,
incur, assume or permit to exist any Lien on any property or assets (including
Equity Interests or other securities of any Person, including the Borrower or
any Subsidiary of the Borrower) now owned or hereafter acquired by it or on any
income or rights in respect of any thereof, or sign or file or authorize the
filing under the Uniform Commercial Code of any jurisdiction of a financing
statement that names any Group Company as debtor, or sign any security agreement
authorizing any secured party thereunder to file such a financing statement,
except Liens described in any of the following clauses (collectively, “Permitted
Liens”):

 

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(i) Liens existing on the Closing Date and listed on Schedule 7.02 hereto and
any modifications, replacements, renewals or extensions thereof; provided that
(A) the Lien does not extend to any additional property other than
(x) after-acquired property that is affixed or incorporated into the property
covered by such Lien or financed by Indebtedness permitted under Section 7.01
and (y) proceeds and products thereof, and (B) the renewal, extension or
modification of the obligations secured or benefited by such Liens is permitted
by Section 7.01;

(ii) Liens created by the Collateral Documents;

(iii) Liens for taxes, assessments and other governmental charges or levies
(A) not more that 90 days delinquent, (B) which are being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
established in accordance with GAAP or (C) which are not otherwise required to
be paid in accordance with Section 6.04;

(iv) Liens securing the charges, claims, demands or levies of landlords,
carriers, suppliers, warehousemen, materialmen, workmen, mechanics, carriers and
other like Liens imposed by Law which were incurred in the ordinary course of
business and which (A) do not, individually or in the aggregate, materially
detract from the value of the property or assets which are the subject of such
Lien or materially impair the use thereof in the operation of the business of
the Borrower or any of its Subsidiaries or (B) which are being contested in good
faith by appropriate proceedings diligently pursued for which adequate reserves
(in the good faith judgment of the management of the Borrower) have been
established in accordance with GAAP, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to such
Lien;

(v) Liens (other than any Liens imposed by ERISA or pursuant to any
Environmental Law) not securing Indebtedness or Swap Obligations incurred or
deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security and
other similar obligations incurred in the ordinary course of business;

(vi) Liens securing obligations in respect of surety bonds (other than appeal
bonds), statutory obligations to Governmental Authorities, tenders, sales,
contracts (other than for borrowed money), bids, leases, government contracts,
indemnity, warranty, release, performance and return-of-money bonds and other
similar obligations or with respect to other regulatory requirements, letters of
credit, bankers’ acceptances issued and completion guarantees incurred in the
ordinary course of business for sums not more than 90 days overdue or being
contested in good faith by appropriate proceedings and for which the Borrower
and its Subsidiaries maintain adequate reserves in accordance with GAAP;

(vii) Liens upon specific items or inventory or other goods and proceeds of the
Borrower or any of its Subsidiaries securing such Person’s obligations in
respect of bankers’ acceptances or documentary letters of credit issued or
created for the account of such Person to facilitate the shipment or storage of
such inventory or other goods;

 

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(viii) pledges or deposits of cash and Cash Equivalents securing deductibles,
self-insurance, co-payment, co-insurance, retentions or similar obligations to
providers of property, casualty or liability insurance in the ordinary course of
business;

(ix) Liens on (A) insurance premiums, dividends and rebates and other
identifiable proceeds therefrom which may become payable under insurance
policies and loss payments which reduce the incurred premiums on such insurance
policies and (B) rights which may arise under State insurance guarantee funds
relating to any such insurance policy, in each case securing Indebtedness
permitted to be incurred pursuant to Section 7.01(ix);

(x) Liens arising solely by virtue of any statutory or common Law provision
relating to banker’s liens, rights of setoff or similar rights, in each case
incurred in the ordinary course of business;

(xi) licenses, sublicenses, leases or subleases granted to third Persons or to
the Borrower or its Subsidiaries by the Borrower and its Subsidiaries in the
ordinary course of business not interfering in any material respect with the
business of any Group Company and not otherwise prohibited by Section 7.05(xiv);

(xii) zoning restrictions, building codes, land use and other similar Laws and
municipal ordinances, easements, rights of way, licenses, reservations,
covenants, conditions, waivers, restrictions on the use of property or other
minor encumbrances or irregularities of title not securing Indebtedness or Swap
Obligations which do not, individually or in the aggregate, materially impair
the use of any property in the operation or business of the Borrower or any of
its Subsidiaries or the value of such property for the purpose of such business;

(xiii) Liens arising from precautionary UCC financing statements regarding, and
any interest or title of a licensor, lessor or sublessor under, Operating Leases
permitted by this Agreement;

(xiv) Liens in favor of licensors, lessors, sublessors, lessees or sublessees
securing Operating Leases or other obligations not constituting Indebtedness;

(xv) Liens arising from judgments, decrees or attachments (or securing of appeal
bonds with respect thereto) in circumstances not constituting an Event of
Default under Section 8.01;

(xvi) Liens securing Indebtedness permitted to be incurred under
Section 7.01(i), (iii), (iv) and (v);

(xvii) any Lien existing on any asset of any Person at the time such Person
becomes a Subsidiary of the Borrower and not created in contemplation of such
event;

(xviii) any Lien on any asset (other than on the Equity Interests of one or more
Subsidiaries) of any Person existing at the time such Person is merged or
consolidated with or into the Borrower or a Subsidiary of the Borrower and not
created in contemplation of such event;

 

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(xix) any Lien existing on any asset (other than on the Equity Interests of one
or more Subsidiaries) prior to the acquisition thereof by the Borrower or a
Subsidiary of the Borrower and not created in contemplation of such acquisition;

(xx) Liens solely on any cash earnest money deposits made by the Borrower or any
of its Subsidiaries in connection with any letter of intent or purchase
agreement with respect to a Permitted Acquisition, an Investment permitted by
Section 7.06 or a Permitted Joint Venture;

(xxi) Liens on cash and Cash Equivalents securing Swap Obligations;

(xxii) Liens on any assets or Equity Interests of a Foreign Subsidiary of the
Borrower securing Indebtedness of such Foreign Subsidiary incurred pursuant to
Section 7.01(xii);

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

(xxiv) Liens that might be deemed to exist on assets subject to a repurchase
agreement permitted hereunder, if such Liens are deemed to exist solely because
of the existence of such repurchase agreement;

(xxv) Liens created solely by the deposit of, and solely on, cash deposited to
consummate the Tender Offer or to defease the Existing Notes in favor of the
trustee under the indenture governing the Existing Notes or the holders of the
Existing Notes;

(xxvi) Liens in favor of Holdings, the Borrower or any Subsidiary Guarantor;

(xxvii) security given to a public or private utility or any other governmental
authority in the ordinary course of business;

(xxviii) 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 Holdings or any of its Subsidiaries to permit satisfaction of overdraft or
similar obligations incurred in the ordinary course of business of the Borrower
and its Subsidiaries or (iii) relating to purchase orders and other agreements
entered into with customers of the Borrower or any of its Subsidiaries in the
ordinary course of business;

(xxix) Liens (i) of a collection bank arising under Section 4-210 of the UCC on
items in the course of collection, (ii) attaching to commodity trading accounts
or other commodities brokerage accounts incurred in the ordinary course of
business and

 

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(iii) in favor of a banking institution arising as a matter of law encumbering
deposits (including the right of set-off) and which are within the general
parameters customary in the banking industry;

(xxx) Liens on Capital Stock or other securities or assets of any Unrestricted
Subsidiary that secure Indebtedness of such Unrestricted Subsidiary;

(xxxi) other Liens securing Indebtedness permitted under Section 7.01 if the
aggregate amount of the obligations or liabilities secured thereby does not
exceed $5,750,000 at any time; and

(xxxii) Liens granted on the Collateral to secure the First Lien Credit
Obligations provided that such Liens are subject to the terms of the
Intercreditor Agreement.

Section 7.03 Nature of Business. None of the Group Companies will alter in any
material respect the character or conduct of the business conducted by such
Person as of the Closing Date and activities directly related thereto and
similar, complimentary or related businesses.

Section 7.04 Consolidation, Merger and Dissolution. Except in connection with an
Asset Disposition permitted by the terms of Section 7.05, none of the Group
Companies will enter into any transaction of merger or consolidation or
liquidate, wind up or dissolve itself or its affairs (or suffer any liquidations
or dissolutions); provided that:

(i) [Intentionally Omitted];

(ii) any Domestic Subsidiary of the Borrower may merge with and into, or be
voluntarily dissolved or liquidated into, the Borrower, so long as (A) the
Borrower is the surviving corporation of such merger, dissolution or
liquidation, (B) the security interests granted to the Collateral Agent for the
benefit of the Finance Parties pursuant to the Collateral Documents in the
assets of the Borrower and such Domestic Subsidiary so merged, dissolved or
liquidated shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such merger, dissolution or
liquidation and are subject to the terms of the Intercreditor Agreement) and
(C) no Person other than the Borrower or a Subsidiary Guarantor receives any
consideration in respect or as a result of such transaction;

(iii) any Domestic Subsidiary of the Borrower may merge with and into, or be
voluntarily dissolved or liquidated into, any other Domestic Subsidiary of the
Borrower, so long as (A) in the case of any such merger, dissolution or
liquidation involving one or more Subsidiary Guarantors, (x) a Subsidiary
Guarantor is the surviving corporation of such merger, dissolution or
liquidation, (y) no Person other than the Borrower or a Subsidiary Guarantor
receives any consideration in respect of or as a result of such transaction and
(B) the security interests granted to the Collateral Agent for the benefit of
the Finance Parties pursuant to the Collateral Documents in the assets of each
Domestic Subsidiary so merged, dissolved or liquidated and in the Equity
Interests of the surviving entity of such merger, dissolution or liquidation
shall remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such merger, dissolution or liquidation and
are subject to the terms of the Intercreditor Agreement);

 

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(iv) any Foreign Subsidiary of the Borrower may be merged with and into, or be
voluntarily dissolved or liquidated into, the Borrower or any Wholly-Owned
Subsidiary of the Borrower, so long as (A) in the case of any such merger,
dissolution or liquidation involving one or more Subsidiary Guarantor, (x) the
Borrower or such Subsidiary Guarantor, as the case may be, is the surviving
corporation of any such merger, dissolution or liquidation and (y) no Person
other than the Borrower or a Subsidiary Guarantor receives any consideration in
respect of or as a result of such transaction and (B) the security interests
granted to the Collateral Agent for the benefit of the Finance Parties pursuant
to the Collateral Documents in the assets of such Foreign Subsidiary, if any,
and the Borrower or such other Subsidiary, as the case may be, and in the Equity
Interests of the surviving entity of such merger, dissolution or liquidation
shall remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such merger, dissolution or liquidation and
are subject to the terms of the Intercreditor Agreement);

(v) the Borrower or any Subsidiary of the Borrower may merge with any Person
(other than Holdings) in connection with a Permitted Acquisition if (A) in the
case of any such merger involving the Borrower, the Borrower shall be the
continuing or surviving corporation in such merger, (B) in the case of any such
merger involving a Subsidiary Guarantor, such Subsidiary Guarantor shall be the
continuing or surviving corporation in such merger or the continuing or
surviving corporation in such merger shall, simultaneously with the consummation
of such merger, become a Subsidiary Guarantor having all the responsibilities
and obligations of the Subsidiary Guarantor so merged, (C) the Loan Parties
shall cause to be executed and delivered such documents, instruments and
certificates as the Administrative Agent may reasonably request so as to cause
the Loan Parties to be in compliance with the terms of Section 6.12 after giving
effect to such transactions and (D) the Borrower shall have delivered to the
Administrative Agent a Pro-Forma Compliance Certificate demonstrating that, upon
giving effect on a Pro-Forma Basis to such transaction, the Loan Parties will be
in compliance with all of the financial covenant set forth in Section 7.16 as of
the last day of the most recent period of four consecutive fiscal quarters of
Holdings which precedes or ends on the date of such transaction and with respect
to which the Administrative Agent has received the consolidated financial
information required under Section 6.01(a) or (b) and the Compliance Certificate
required by Section 6.02(b);

(vi) any Subsidiary of the Borrower may merge with any Person (other than
Holdings) in connection with an Investment permitted by Section 7.06 or
Permitted Joint Venture if (A) in the case of any such merger involving a
Subsidiary Guarantor, such Subsidiary Guarantor shall be the continuing or
surviving corporation in such merger or the continuing or surviving corporation
in such merger shall, simultaneously with the consummation of such merger,
become a Subsidiary Guarantor having all the responsibilities and obligations of
the Subsidiary Guarantor so merged and (B) the Loan Parties shall cause to be
executed and delivered such documents, instruments and

 

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certificates as the Administrative Agent may reasonably request so as to cause
the Loan Parties to be in compliance with the terms of Section 6.12 after giving
effect to such transactions; and

(vii) Holdings shall be permitted to change its type of organization, whether by
merger or otherwise, to a corporation.

In the case of any merger or consolidation permitted by this Section 7.04 of any
Subsidiary of Holdings which is not a Loan Party into a Loan Party, the Loan
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Administrative Agent may reasonably request so as to cause
the Loan Parties to be in compliance with the terms of Section 6.12 after giving
effect to such transaction. Notwithstanding anything to the contrary contained
above in this Section 7.04, no action shall be permitted which results in a
Change of Control.

Section 7.05 Asset Dispositions. None of the Group Companies will make any Asset
Disposition; provided that:

(i) any Group Company may sell or otherwise dispose of inventory, equipment and
other assets in the ordinary course of business;

(ii) any Group Company may make any Asset Disposition to the Borrower or any
Wholly-Owned Domestic Subsidiary of the Borrower;

(iii) Holdings, the Borrower and its Subsidiaries may liquidate or sell Cash
Equivalents and Foreign Cash Equivalents;

(iv) the Borrower or any of its Subsidiaries may dispose of machinery or
equipment which will be replaced or upgraded with machinery or equipment used or
useful in the ordinary course of business of and owned by such Person;

(v) the Borrower or any of its Subsidiaries may dispose of obsolete, worn-out or
surplus tangible assets in the ordinary course of business;

(vi) any Group Company may dispose of non-core assets acquired in Permitted
Acquisitions;

(vii) the Borrower or any Subsidiary of the Borrower may sell, lease or
otherwise transfer all or substantially all or any part of its assets (including
any such transaction effected by way of merger or consolidation) to the Borrower
or any Subsidiary Guarantor;

(viii) any Subsidiary that is not a Subsidiary Guarantor may sell, lease or
otherwise transfer all or any part of its assets (including any such transaction
effected by way of merger or consolidation) to any other Subsidiary that is not
a Subsidiary Guarantor;

 

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(ix) the Borrower or any Subsidiary of the Borrower may issue Equity Interests
in the Borrower or such Subsidiary to qualify directors where required by
applicable Law or to satisfy other requirements of applicable Law with respect
to the ownership of Equity Interests in Foreign Subsidiaries or Nominal Shares
for tax considerations;

(x) any Group Company may transfer assets as a part of the consideration for
Investments in Permitted Joint Ventures or Investments permitted by
Section 7.06;

(xi) Asset Dispositions effected by transactions permitted under Section 7.04
shall be permitted;

(xii) any Group Company may lease, as lessor or sublessor, or license, as
licensor or sublicensor, real or personal property in the ordinary course of
business;

(xiii) any Group Company may write off, discount, sell or otherwise dispose of
defaulted or past due receivables and similar obligations in the ordinary course
of business and not as part of an accounts receivable financing transaction;

(xiv) any Group Company may, in the ordinary course of business, license and
sublicense Intellectual Property;

(xv) any Foreign Subsidiary may make Asset Dispositions to any Group Company;

(xvi) any Group Company may enter into any Sale/Leaseback Transaction not
prohibited by Section 7.01 or Section 7.13;

(xvii) any Group Company may make Asset Dispositions to any other Group Company
or Permitted Joint Venture which is not a Subsidiary Guarantor where such Asset
Disposition constitutes an Investment permitted by Section 7.06(a);

(xviii) any Group Company may make Asset Dispositions to any Loan Party;

(xix) [Intentionally Omitted];

(xx) [Intentionally Omitted];

(xxi) the Borrower or any of its Subsidiaries may enter into co-marketing or
co-branding agreements, distribution agreements and intellectual property
licensing agreements in the ordinary course of business that do not materially
interfere with the business of the Borrower or its Subsidiaries;

(xxii) the Borrower may dispose of stores in the ordinary course of business, in
its reasonable business judgment;

 

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(xxiii) [Intentionally Omitted];

(xxiv) any foreclosure by Holdings, the Borrower or any Subsidiary upon any
assets subject to a Lien in favor of Holdings, the Borrower or any Subsidiary or
the disposition of assets so foreclosed;

(xxv) [Intentionally Omitted]; and

(xxvi) any Group Company may make any other Asset Disposition; provided that
(A) at least 75% of the consideration therefor is cash or Cash Equivalents;
(B) such transaction does not involve the sale or other disposition of a
minority Equity Interest in any Group Company which is a Wholly-Owned
Subsidiary; (C) the aggregate fair market value of all assets sold or otherwise
disposed of by the Group Companies in all such transactions in reliance on this
clause (xxvi) shall not exceed $11,500,000 in the aggregate; and (D) no Default
or Event of Default is then in existence or would otherwise arise therefrom.

Upon consummation of an Asset Disposition permitted under this Section 7.05, the
Lien created thereon under the Collateral Documents (but not the Lien on any
proceeds thereof) shall be automatically released, and the Administrative Agent
shall (or shall cause the Collateral Agent to) (to the extent applicable)
deliver to the Borrower, upon the Borrower’s request and at the Borrower’s
expense, such documentation as is reasonably necessary to evidence the release
of the Collateral Agent’s security interests, if any, in the assets being
disposed of, including amendments or terminations of UCC Financing Statements,
if any, the return of stock certificates, if any, and the release of any
Subsidiary being disposed of in its entirety from all of its obligations, if
any, under the Loan Documents.

Section 7.06 Investments.

(a) Investments. None of the Group Companies will hold, make or acquire, any
Investment in any Person, except the following:

(i) Investments existing on the date hereof disclosed on Schedule 7.06 hereto
and Investments existing on the date hereof in Persons which are Subsidiaries on
the date hereof;

(ii) Holdings, the Borrower or any Domestic Subsidiary of the Borrower may
invest in cash (including cash held in deposit accounts) and Cash Equivalents;

(iii) Foreign Subsidiaries of the Borrower may invest in cash (including cash
held in deposit accounts), Cash Equivalents or Foreign Cash Equivalents;

(iv) the Borrower and each Subsidiary of the Borrower may acquire and hold
receivables, accounts, notes receivable, chattel paper, payment intangibles and
prepaid accounts owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;

 

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(v) the Borrower and each Subsidiary of the Borrower may acquire and own
Investments (including obligations evidencing Indebtedness) received in
connection with the settlement of accounts in the ordinary course or in
connection with the bankruptcy or reorganization of suppliers and customers or
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers or others arising in the ordinary course of business;

(vi) (x) (i) commissions, payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business and (ii) loans and advances to employees of the Group Companies in the
ordinary course of business in an aggregate principal amount not to exceed
$1,150,000 at any one time and (y) loans and advances to franchisees and to
Foreign Subsidiaries with respect to items required to operate a restaurant not
to exceed $5,750,000 in the aggregate;

(vii) the Borrower or any Subsidiary may make deposits in the ordinary course of
business to secure the performance of operating leases and payment of utility
contracts;

(viii) the Borrower or any Subsidiary may make good faith deposits in the
ordinary course of business in connection with Permitted Acquisitions or
obligations in respect of surety bonds, appeal bonds, statutory obligations to
Governmental Authorities, tenders, sales, contracts (other than for borrowed
money), bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of business
for sums not more than 90 days overdue or being contested in good faith by
appropriate proceedings and for which the Borrower and its Subsidiaries maintain
adequate reserves in accordance with GAAP;

(ix) loans by the Borrower to officers and employees of the Borrower the
proceeds of which are used to purchase Holdings’ or its parents’ Equity
Interests or Holdings’ or its parents’ Equity Equivalents;

(x) the Borrower may make Investments in any of its Wholly-Owned Domestic
Subsidiaries and any Subsidiary of the Borrower may make Investments in the
Borrower or any Wholly-Owned Domestic Subsidiary of the Borrower;

(xi) the Borrower and its Subsidiaries may make Investments in any Foreign
Subsidiary or any non-Wholly-Owned Domestic Subsidiary of the Borrower (A) in
the case of Investments by the Borrower or any Wholly-Owned Domestic Subsidiary
of the Borrower, in an aggregate amount together with all Guaranty Obligations
permitted under Section 7.01(x)(D) (determined without regard to any write-downs
or write-offs of any such Investments constituting Indebtedness) at any one time
outstanding not exceeding $8,625,000 and (B) to the extent such Investments
arise from the sale of inventory or consisting of the licensing, co-development,
co-branding, co-marketing (in each case on a revocable basis) in the ordinary
course of business by the Borrower or such Subsidiary to such Foreign Subsidiary
or non-Wholly-Owned Domestic Subsidiary for resale by such Foreign Subsidiary or
non-Wholly-Owned Domestic Subsidiary (including any such Investments resulting
from the extension of the payment terms with respect to such sales);

 

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(xii) (x) Guaranty Obligations permitted by Section 7.01(x) and (y) loans in
lieu of any Restricted Payments permitted under Section 7.07 (iii) or (iv);

(xiii) Investments arising out of the receipt by the Borrower or any of its
Subsidiaries of non-cash consideration for the sale of assets permitted under
Section 7.05;

(xiv) the Borrower and its Subsidiaries may make Investments constituting
Permitted Acquisitions;

(xv) the Borrower and its Subsidiaries may make Investments in Permitted Joint
Ventures in an aggregate amount (determined without regard to any write-downs or
write-offs of any such Investments constituting Indebtedness) at any one time
outstanding not exceeding $11,500,000;

(xvi) the Borrower and its Subsidiaries may in the ordinary course of business
make Investments which consist of the licensing or contribution of intellectual
property pursuant to marketing, co-branding and co-development agreements that
do not materially interfere with the business of the Borrower or its
Subsidiaries;

(xvii) any Person to the extent such Investments consist of prepaid expenses,
negotiable instruments held for collection and lease, utility and workers’
compensation, performance and other similar deposits made in the ordinary course
of business by Holdings or any of its Subsidiaries;

(xviii) any Person to the extent such Investment consists of loans, guarantees
and advances to suppliers, licensees, franchisees or customers of the Borrower
or any of the Subsidiaries made in the ordinary course of business; provided,
however, that the amount of Investments made pursuant to this clause (xviii) do
not exceed $3,450,000 at any one time outstanding;

(xix) [Intentionally Omitted];

(xx) performance guarantees consistent with past practice;

(xxi) any Person where such Investment was acquired by Holdings or any of its
Subsidiaries as a result of a foreclosure by Holdings or any of its Subsidiaries
with respect to any secured Investment or other transfer of title with respect
to any secured Investment;

(xxii) Borrower or its Subsidiaries may purchase additional equity interests in
joint ventures that are, prior to such Investment, at least 51% owned by
Borrower or its Subsidiaries so long as subsequent Investments are not required
at the time of such Investment;

(xxiii) Holdings may make contributions to the capital of the Borrower;

 

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(xxiv) any Group Company may purchase Senior Notes in the open market so long as
any Senior Notes so purchased are not resold or remarketed; and

(xxv) the Borrower and its Subsidiaries may make other Investments not otherwise
permitted by this Section 7.06 in an aggregate amount (determined without regard
to any write-downs or write-offs of any such Investments constituting
Indebtedness but excluding any portion thereof funded with proceeds of an Equity
Issuance of Qualified Capital Stock) at any time outstanding not exceeding the
sum of (A) $8,625,000 plus (B) an amount, not exceeding the greater of
(x) $2,875,000 in the aggregate or (y) 25% of that portion of Excess Cash Flow,
if any, not used or required to be used to prepay the Loans in accordance with
Section 2.09(c) or to make Restricted Payments under Section 7.07(iii) or (iv);

provided that no Group Company may make or own any Investment in Margin Stock in
violation of Regulations T, U or X of the Board of Governors of the Federal
Reserve System.

(b) Limitation on the Creation of Subsidiaries. No Group Company will establish,
create or acquire after the Closing Date any Subsidiary; provided that the
Borrower and its Subsidiaries shall be permitted to establish, create or acquire
Subsidiaries so long as (i) the Investment resulting from such establishment,
creation or acquisition is permitted pursuant to Section 7.06(a) above and
(ii) such new Subsidiary, to the extent reasonably requested by the
Administrative Agent, takes all other actions required pursuant to Section 6.12.

Section 7.07 Restricted Payments, Etc. None of the Group Companies will declare
or pay any Restricted Payments (other than Restricted Payments payable solely in
Equity Interests (exclusive of Debt Equivalents) of such Person), except that:

(i) any Wholly-Owned Subsidiary of the Borrower may make Restricted Payments to
the Borrower or to any Wholly-Owned Subsidiary of the Borrower;

(ii) any non-Wholly-Owned Subsidiary of the Borrower may make Restricted
Payments to the Borrower or to any Wholly-Owned Subsidiary of the Borrower or
ratably to all holders of its outstanding Equity Interests;

(iii) so long as no Default or Event of Default is then in existence or would
otherwise arise therefrom, the Borrower may make cash Restricted Payments to
Holdings to enable Holdings to make Restricted Payments to its parent to permit
its parent to redeem or repurchase Equity Interests (or Equity Equivalents) from
officers, employees and directors of any Group Company (or their estates,
spouses or former spouses) upon the death, permanent disability, retirement or
termination of employment of any such Person or otherwise; provided that (A) no
Default or Event of Default is then in existence or would otherwise arise
therefrom and (B) the aggregate amount of all cash paid in respect of all such
shares so redeemed or repurchased does not exceed $5,750,000 in the aggregate
from and after the Closing Date;

(iv) the Borrower may make cash Restricted Payments to Holdings to enable
Holdings to pay, and in amounts not to exceed the amount necessary to pay, (A)

 

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the then currently due fees and expenses of Holdings’ or its parents’ counsel,
accountants and other advisors and consultants, reimbursements of fees and
expenses of the Sponsor and other operating and administrative expenses of
Holdings or its parent (including employee and compensation expenditures,
directors’ and officers’ insurance premiums and other similar costs and
expenses) incurred in the ordinary course of business that are for the benefit
of, or are attributable to, or are related to, including the financing or
refinancing of, Holdings’ Investment in the Borrower and its Subsidiaries,
(B) the then currently due fees and expenses of Holdings’ or its parents’
independent directors in an aggregate amount not to exceed $2,300,000, plus any
indemnities owed to such person and (C) dividends, distributions or advances to
Holdings or its Subsidiaries to be used by Holdings, its parent or its
Subsidiaries to pay (i) federal, state and local taxes payable by Holdings, its
parent or its Subsidiaries and directly attributable to (or arising as a result
of) the operations of the Borrower and its Subsidiaries (other than Unrestricted
Subsidiaries) and (ii) franchise taxes and other fees required to maintain its
or its parents’ existence;

(v) payments or distributions pursuant to the Transaction Documents on the
Closing Date;

(vi) redemption of stock deemed to occur upon the exercise of stock options or
the purchase of stock issued to employees as part of a stock option plan,
employee incentive plan or employee benefit plan;

(vii) dividend payments with respect to and the refinancing of Disqualified
Stock;

(viii) the purchase of fractional shares by the Borrower upon conversion of any
securities of the Borrower into Capital Stock of the Borrower; and

(ix) distributions of Capital Stock of Unrestricted Subsidiaries; provided,
however, that to the extent the Borrower or its Subsidiaries (other than
Unrestricted Subsidiaries) has any outstanding Investment in such Unrestricted
Subsidiary that is a permitted Investment, then the amount of such Investment at
the time of such distribution shall be a Restricted Payment not permitted by
this clause (ix).

Section 7.08 Prepayments of Indebtedness, Etc.

(a) Amendments of Certain Agreements. None of the Group Companies will, or will
permit any of their respective Subsidiaries to, after the issuance thereof,
amend, waive or modify (or permit the amendment, waiver or modification of) any
of the material terms, agreements, covenants or conditions of or applicable to
the Senior Notes Documents or any Subordinated Indebtedness issued by such Group
Company if such amendment, waiver or modification would add or change any
material terms, agreements, covenants or conditions in any manner materially
adverse, taken as a whole, to any Group Company, or shorten the final maturity
or average life to maturity or require any payment to be made sooner than
originally scheduled or increase the interest rate payable in cash applicable
thereto or change any material provision thereof in a manner that would be
materially adverse to the interests of the Second Lien Credit Parties.

 

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(b) Prohibition Against Payments of Principal of Senior Notes. None of the Group
Companies will directly or indirectly redeem, purchase, prepay, retire, defease
or otherwise acquire for value (other than exchanges solely for Equity Interests
not constituting Debt Equivalents or pursuant to the Registration Rights
Agreement), prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Indebtedness incurred pursuant to the Senior Notes
Documents, or set aside any funds for such purpose, whether such redemption,
purchase, prepayment, retirement or acquisition is made at the option of the
maker or at the option of the holder thereof, and whether or not any such
redemption, purchase, prepayment, retirement or acquisition is required under
the terms and conditions applicable to such Indebtedness, except that
Indebtedness under the Senior Notes may be redeemed, purchased, retired,
defeased, acquired for value or prepaid (x) with Equity Issuances or Excess Cash
Flow not required to be used to prepay the Loans in accordance with
Section 2.09(c) or otherwise utilized for any purpose, or if on a Pro-Forma
Basis after giving effect to any such repayment the Total Leverage Ratio is less
than 3.75 to 1.0, (y) at any time following repayment in full of all Loans and
all accrued interest thereon by utilizing the Net Cash Proceeds of one or more
Asset Dispositions, Casualties, Condemnations and/or Debt Issuances and/or
(z) in connection with any Permitted Refinancing.

(c) Prohibition Against Certain Payments of Principal and Interest of
Subordinated Indebtedness. None of the Group Companies will (i) directly or
indirectly, redeem, purchase, prepay, retire, defease or otherwise acquire for
value (other than exchanges solely for Equity Interests not constituting Debt
Equivalents), prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Indebtedness, or set aside any funds for
such purpose, whether such redemption, purchase, prepayment, retirement or
acquisition is made at the option of the maker or at the option of the holder
thereof, and whether or not any such redemption, purchase, prepayment,
retirement or acquisition is required under the terms and conditions applicable
to such Indebtedness, except that Subordinated Indebtedness may be redeemed,
purchased, retired, defeased, acquired for value or prepaid with the sum of
(A) 25% of cumulative Excess Cash Flow from the Closing Date, but in no event to
exceed $8,625,000 in any fiscal year, plus (B) the Net Cash Proceeds from the
issuance and sale of Qualified Capital Stock (excluding any Qualified Capital
Stock used to cure an Event of Default under Section 7.16 hereof), (ii) make any
cash interest payment in respect of Subordinated Indebtedness (other than
regularly scheduled interest payments to the extent then due in respect of
Subordinated Indebtedness permitted under this Agreement if such payments are
not then prohibited by the subordination provisions thereof) or (iii) release,
cancel, compromise or forgive in whole or in part any Indebtedness evidenced by
any Intercompany Note (unless the Borrower is the obligor with respect to such
Indebtedness or the release, cancellation, compromise or forgiveness thereof is
otherwise permitted as an Investment in accordance with this Agreement).

(d) Equity Interests. Without the express written consent of the Administrative
Agent, no Equity Interests of Holdings or the Borrower shall be subject to
redemption, put, call, repurchase or similar provision prior to the date which
is 90 days after the final Maturity Date for any Loan other than as expressly
permitted by Section 7.07(iii) or Section 7.01.

 

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Section 7.09 Transactions with Affiliates. None of the Group Companies will
engage in any transaction or series of transactions with (i) any officer,
director, holder of any Equity Interest in or other Affiliate of Holdings,
(ii) any Affiliate of any such officer, director or holder or (iii) the Sponsor
or any officer, director, holder of any Equity Interest in or other Affiliate of
the Sponsor, other than:

(i) the transactions set forth in the Management Agreement; provided, however,
that (a) from and after the Effective Date until such time as the Consolidated
EBITDA of Holdings is at least $55,000,000 as of the last day of the most recent
period of four consecutive fiscal quarters of Holdings for which financial
statements are required to be delivered pursuant to Section 6.01(a) or (b) (the
“Reinstatement Date”), any Management Fees payable pursuant to clause (i) of the
definition thereof shall be not be paid in cash (but shall continue to accrue)
and (b) on and after the Reinstatement Date, no greater than $2,000,000 of such
fees shall be paid in cash per fiscal year”;

(ii) transactions expressly permitted by Section 7.01, Section 7.02,
Section 7.04, Section 7.05, Section 7.06, Section 7.07 or Section 7.12;

(iii) normal compensation, severance, indemnities and reimbursement of
reasonable expenses of officers, employees, consultants and directors, including
stock incentive and option plans and agreements relating thereto;

(iv) other transactions and agreements with officers, directors, the Sponsor and
its Affiliates in existence on the Closing Date to the extent disclosed in
Schedule 7.09;

(v) any transaction entered into solely among Foreign Subsidiaries;

(vi) any transaction entered into among Holdings, the Borrower and its
Wholly-Owned Domestic Subsidiaries or among such Wholly-Owned Domestic
Subsidiaries or Permitted Joint Ventures;

(vii) the entering into of a registration rights agreement with the stockholders
or debtholders of the Borrower;

(viii) the issuance or sale of any Capital Stock (other than Disqualified Stock)
of Holdings, the Borrower and the granting of other customary rights in
connection therewith;

(ix) the entering into of a tax sharing agreement, or payments pursuant thereto,
between the Borrower and one or more Subsidiaries, on the one hand, and any
other Person with which the Borrower and such Subsidiaries are required or
permitted to file a consolidated tax return or with which the Borrower and such
Subsidiaries are part of a consolidated group for tax purposes, on the other
hand;

(x) transactions with franchisees, joint venturers, customers, clients,
suppliers, or purchasers or sellers of goods or services (including the Borrower
and its Subsidiaries), in each case in the ordinary course of business and
otherwise in compliance with the terms hereof;

 

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(xi) transactions with Foreign Subsidiaries and Permitted Joint Ventures in the
ordinary course of business involving the sale of items by the Borrower or its
Subsidiaries or the provision of services by the Borrower or its Subsidiaries,
in each case (other than de minimis items) for remuneration at least equal to
Borrower’s or such Subsidiary’s cost of such items sold or services provided;

(xii) other transactions which are engaged in by the Borrower or any of its
Subsidiaries in the ordinary course of its business on terms and conditions as
favorable to such Person as would be obtainable by it in a comparable
arms’-length transaction with an independent, unrelated third party; and

(xiii) entering into the Transaction Documents and the transactions related
thereto, including, without limitation, the issuance of warrants and any
amendments or modifications thereto (to the extent permitted by the
Intercreditor Agreement).

Section 7.10 Fiscal Year and Accounting Changes; Organizational and Other
Documents. None of the Group Companies will (i) change its fiscal year or make
any change in its accounting treatment and reporting policies except as required
(or with the consent of the Administrative Agent, which shall not be
unreasonably withheld) by GAAP or (ii) enter into any amendment, modification or
waiver to its articles or certificate of incorporation, bylaws (or analogous
organizational documents), in each case as in effect on the Closing Date except
for changes that do not materially and adversely affect the rights and
privileges of the Second Lien Credit Parties. The Borrower will cause the Group
Companies promptly to provide the Agent with copies of all amendments to the
foregoing documents and instruments as in effect as of the Closing Date.

Section 7.11 Restrictions with Respect to Intercorporate Transfers. None of the
Group Companies will create or otherwise cause or permit to exist any
encumbrance or restriction which prohibits or otherwise restricts (i) the
ability of any such Group Company to (A) make Restricted Payments or pay any
Indebtedness owed to the Borrower or any Subsidiary of the Borrower, (B) pay
Indebtedness or other obligations owed to any Loan Party, (C) make loans or
advances to the Borrower or any Subsidiary of the Borrower, (D) transfer any of
its properties or assets to the Borrower or any Subsidiary Guarantor or (E) act
as a Subsidiary Guarantor and pledge its assets pursuant to the Loan Documents
(subject to the terms of the Intercreditor Agreement) or any renewals,
refinancings, exchanges, refundings or extensions thereof or (ii) the ability of
Holdings, the Borrower or any Subsidiary of the Borrower to create, incur,
assume or permit to exist any Lien upon its property or assets whether now owned
or hereafter acquired to secure the Second Lien Credi Obligations, except in
each case for prohibitions or restrictions existing under or by reason of

(i) this Agreement and the other Loan Documents the Senior Notes Documents or
the First Lien Loan Documents;

 

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(ii) applicable Law;

(iii) restrictions in effect on the date of this Agreement contained in the
agreements governing the Existing Indebtedness and in any agreements governing
Permitted Refinancing thereof if such restrictions are no more restrictive than
those contained in the agreements governing the Indebtedness being renewed,
extended or refinanced;

(iv) customary non-assignment provisions with respect to contracts, leases or
licensing agreements entered into by the Borrower or any of its Subsidiaries, in
each case entered into in the ordinary course of business;

(v) any restriction or encumbrance with respect to any asset of the Borrower or
any of its Subsidiaries or a Subsidiary of the Borrower imposed pursuant to an
agreement which has been entered into for the sale or disposition of such assets
or all or substantially all of the capital stock or assets of such Subsidiary,
so long as such sale or disposition is permitted under this Agreement;

(vi) customary provisions in joint venture agreements and other similar
agreements entered into in the ordinary course of business in connection with
Permitted Joint Ventures;

(vii) Liens permitted under Section 7.02 and any documents or instruments
governing the terms of any Indebtedness or other obligations secured by any such
Liens; provided that such prohibitions or restrictions apply only to the assets
subject to such Liens;

(viii) restrictions that are customary with respect to any Indebtedness
permitted hereunder that are not materially more restrictive, taken as a whole,
than those permitted hereunder;

(ix) any encumbrance or restriction with respect to a Subsidiary (other than an
Unrestricted Subsidiary) pursuant to an agreement relating to any Capital Stock
or Indebtedness incurred by such Subsidiary on or prior to the date on which
such Subsidiary was acquired by the Borrower (other than Capital Stock or
Indebtedness incurred as consideration in, 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 Subsidiary became a Subsidiary or
was acquired by the Borrower) and outstanding on such date;

(x) any restriction on cash or other deposits or net worth provisions in leases
and other agreements entered into in the ordinary course of business;

(xi) provisions with respect to dividends, the disposition or distribution of
assets or property in joint venture agreements, license agreements, asset sale
agreements, sale-leaseback agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business; and

 

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(xii) restrictions on deposits imposed under contracts entered into in the
ordinary course of business.

Section 7.12 Ownership of Subsidiaries; Certain Limitations.

(a) Holdings and the Borrower will not (i) permit any wholly-owned Loan Party to
issue Equity Interests to any Person, except (A) to any other wholly-owned Loan
Party or (B) Nominal Shares to qualify directors where required by applicable
Law or Nominal Shares to satisfy other requirements of applicable Law with
respect to the ownership of Equity Interests of Foreign Subsidiaries or
(ii) permit any wholly-owned Loan Party to issue any shares of Preferred Stock.

(b) Holdings will not (i) have any material liabilities other than
(A) liabilities under the First Lien Finance Documents, the Loan Documents, the
Senior Notes Documents and the other Transaction Documents and liabilities
otherwise permitted hereunder and (B) tax and other liabilities in the ordinary
course of business or (ii) engage in any business or activity other than
(A) entering into the First Lien Finance Documents, the Loan Documents, the
Senior Notes Documents and the other Transaction Documents and activities
incidental or related thereto, (B) owning the Equity Interests of the Borrower
(including purchasing additional shares of Capital Stock of the Borrower after
the Closing Date) and activities incidental or related thereto or to the
maintenance of the existence of Holdings or compliance with applicable Law and
agreements to which it is a party on the date hereof or agreements to which
Holdings is permitted to be a party hereunder, (C) acting as a Guarantor under
the Guaranty and as a guarantor of the obligations under the First Lien Credit
Agreement, the Senior Notes Indenture and pledging its assets to the First Lien
Collateral Agent, for the benefit of the First Lien Lenders, pursuant to the
First Lien Collateral Documents to which it is a party and to the Collateral
Agent, for the benefit of the Lenders, pursuant to the Collateral Documents to
which it is a party and (D) issuing its own Equity Interests and Equity
Equivalents and repurchasing the same in accordance with the terms hereof or
(E) converting from a limited liability company to a corporation as set forth in
Section 7.04(vii).

(c) Holdings and the Borrower will not permit any Person other than Holdings to
hold any Equity Interests or Equity Equivalents of the Borrower.

Section 7.13 Sale and Leaseback Transactions. None of the Group Companies will
directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any lease (whether an Operating Lease or a Capital
Lease) of any property (whether real, personal or mixed), whether now owned or
hereafter acquired (i) which such Group Company has sold or transferred or is to
sell or transfer to any other Person which is not a Group Company or (ii) which
such Group Company intends to use for substantially the same purpose as any
other property which has been sold or is to be sold or transferred by such Group
Company to another Person which is not a Group Company in connection with such
lease; provided, however, that the Group Companies may enter into such
transactions, in an aggregate amount of up to $8,625,000 in sales proceeds
during the term of this Agreement, if (i) after giving effect on a Pro-Forma
Basis to any such transaction the Borrower shall be in compliance with all other
provisions of this Agreement, including Section 7.01 and Section 7.02, (ii) the
gross cash proceeds of any such transaction are at least equal to the fair
market value of such property (as

 

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determined by a Responsible Officer or the Board of Directors, whose
determination shall be conclusive if made in good faith) and (iii) the Net Cash
Proceeds are forwarded to the Administrative Agent for application as set forth
in Section 2.09(c)(iii) to the extent required therein.

Section 7.14 [Intentionally Omitted].

Section 7.15 Additional Negative Pledges. None of the Group Companies (other
than Foreign Subsidiaries and non-wholly-owned Subsidiaries) will enter into,
assume or become subject to any effective agreement prohibiting or otherwise
restricting the creation or assumption of any Lien in favor of the Collateral
Agent upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for an obligation if security is given for
some other obligation, except (i) pursuant to this Agreement and the other Loan
Documents; (ii) pursuant to any document or instrument governing Capital Lease
Obligations or Purchase Money Indebtedness incurred pursuant to Section 7.01 if
any such restriction contained therein relates only to the asset or assets
acquired in connection therewith or assets which are cross-collateralized;
(iii) pursuant to applicable law; (iv) any Indebtedness permitted by
Section 7.01(i), (ii), (iii), (iv), (v), (vi), (viii) and (xx); (v) restrictions
by reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses and other similar agreements entered
into in the ordinary course of business (provided that such restrictions are
limited to the property or assets secured by such Liens or the property or
assets subject to such leases, licenses, or similar agreements, as the case may
be); (vi) any prohibition or limitation that consists of customary restrictions
and conditions contained in any agreement relating to the sale of any property
permitted under this Agreement; (vii) documents, agreements or constituent
documents governing Joint Ventures; (viii) any agreement in effect at the time a
Subsidiary becomes a Subsidiary of Holdings, Borrower or any of its
Subsidiaries, (ix) any agreement governing the escrow of funds to defease the
Existing Notes; (x) agreements relating to Liens incurred under Section 7.02(i),
(viii), (ix), (xvii), (xviii), (xix) and (xx); (xi) Liens incurred under
Section 7.02 (xxxi) to the extent not otherwise constituting Collateral;
(xii) agreements permitted under Section 7.13 and (xiii) pursuant to the First
Lien Credit Agreement and the other First Lien Loan Documents.

Section 7.16 Financial covenant. Consolidated EBITDA of Holdings shall be at
least the amount set forth below for any four fiscal quarter period ending on
the last day of each fiscal quarter set forth below.

 

Fiscal Quarter Ended

   Amount

March 29, 2009

   $ 32,300,000

June 28, 2009

   $ 32,300,000

September 27, 2009

   $ 32,300,000

December 27, 2009

   $ 34,000,000

March 28, 2010

   $ 34,000,000

 

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Fiscal Quarter Ended

   Amount

June 27, 2010

   $ 34,000,000

September 26, 2010

   $ 34,000,000

December 26, 2010

   $ 36,550,000

March 27, 2011

   $ 36,550,000

June 26, 2011

   $ 36,550,000

September 25, 2011

   $ 36,550,000

January 1, 2012

   $ 40,800,000

April 1, 2012

   $ 40,800,000

July 1, 2012

   $ 40,800,000

September 30, 2012

   $ 40,800,000

December 30, 2012

   $ 45,050,000

March 31, 2013

   $ 45,050,000

June 30, 2013

   $ 45,050,000

September 29, 2013

   $ 45,050,000

December 29, 2013 and the last day of each fiscal quarter thereafter

   $ 51,000,000

Section 7.17 Capital Expenditures. Consolidated Capital Expenditures shall be no
be greater than the amount set forth below for any four fiscal quarter period
ending on the last day of each fiscal quarter set forth below.

 

Fiscal Quarter

   Consolidated
Capital Expenditures

March 29, 2009

   $ 18,400,000

June 28, 2009

   $ 16,100,000

September 27, 2009

   $ 13,800,000

December 27, 2009

   $ 13,800,000

March 28, 2010

   $ 13,800,000

 

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Fiscal Quarter

   Consolidated
Capital Expenditures

June 27, 2010

   $ 13,800,000

September 26, 2010

   $ 13,800,000

December 26, 2010

   $ 13,800,000

March 27, 2011

   $ 14,950,000

June 26, 2011

   $ 15,525,000

September 25, 2011

   $ 16,100,000

January 1, 2012

   $ 16,100,000

April 1, 2012

   $ 16,100,000

July 1, 2012

   $ 16,100,000

September 30, 2012

   $ 16,100,000

December 30, 2012

   $ 16,100,000

March 31, 2013

   $ 16,675,000

June 30, 2013 and thereafter

   $ 17,250,000

; provided, however, that (x) if the aggregate amount of Consolidated Capital
Expenditures made in any four fiscal quarter period shall be less than the
maximum amount of Consolidated Capital Expenditures permitted under this
Section 7.17 for such period (before giving effect to any carryover), then the
amount of such shortfall may be added to the amount of Consolidated Capital
Expenditures permitted under this Section 7.17 for the immediately succeeding
four fiscal quarters and (y) in determining whether any amount is available for
carryover, the amount expended in any fiscal quarter shall first be deemed to be
from the amount allocated to such fiscal quarter (before giving effect to any
carryover).

ARTICLE VIII

DEFAULTS

Section 8.01 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events or conditions (each an
“Event of Default”):

(a) Payment. Any Loan Party shall:

(i) default in the payment when due (whether by scheduled maturity, acceleration
or otherwise) of any principal of any of the Loans (including the failure to
make a payment to repay the Loans upon a Change of Control as set forth in
Section 2.09(c)(i)); or

 

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(ii) default, and such default shall continue for five or more Business Days, in
the payment when due of any interest on the Loans or of any fees or other
amounts owing hereunder, under any of the other Loan Documents or in connection
herewith.

(b) Representations. Any representation or warranty made or deemed to be made by
any Loan Party herein or in any of the other Loan Documents or certificates
delivered or required to be delivered pursuant hereto or thereto shall prove
untrue in any material respect on the date as of which it was made or deemed to
have been made.

(c) Covenants. Any Loan Party shall:

(i) default in the due performance or observance of any term, covenant or
agreement contained in Sections 6.10, 6.11, 6.12 or Article VII; and, in the
case of any Event of Default that otherwise would arise under Section 7.16 and
with respect to which the Borrower has delivered a Notice of Intent to Cure,
such default is not cured as contemplated by the second sentence of the
definition of “Consolidated EBITDA” within 15 Business Days following delivery
of such Notice of Intent to Cure;

(ii) default in the due performance or observance by it of any term, covenant or
agreement contained in Article VI (other than those referred to in subsection
(a) or (c)(i) of this Section 8.01) and such default shall continue unremedied
for a period of 30 days after the earlier of a Responsible Officer of a Loan
Party becoming aware of such default or notice thereof given by the
Administrative Agent; or

(iii) default in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in subsection (a) or (c)(i) or
(ii) of this Section 8.01) contained in this Agreement and such default shall
continue unremedied for a period of 30 days after the earlier of an executive
officer of a Loan Party becoming aware of such default or notice thereof given
by the Administrative Agent.

(d) Other Loan Documents. (i) Any Loan Party shall default in the due
performance or observance of any term, covenant or agreement in any of the other
Loan Documents the consequence of which is to adversely affect the ability of
the Loan Parties to perform their material obligations under the Loan Documents
taken as a whole and such default shall continue unremedied for a period of 30
days after the earlier of an executive officer of a Loan Party becoming aware of
such default or notice thereof given by the Administrative Agent, (ii) except
pursuant to the terms thereof, any Loan Document shall fail in any material
respect to be in full force and effect or any Loan Party shall so assert or
(iii) except pursuant to the terms thereof, any Loan Document shall fail in any
material respect to give the Administrative Agent, the Collateral Agent and/or
the Lenders the security interests, liens, rights, powers and privileges
purported to be created thereby.

(e) Cross-Default. (i) Any Group Company (A) fails to make payment when due
after lapse of all applicable grace periods (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), regardless of amount,
in respect of any

 

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Indebtedness or Guaranty Obligation (other than in respect of (x) Indebtedness
outstanding under the Loan Documents and (y) Swap Agreements) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, (B) fails to perform or observe
any other condition or covenant, or any other event shall occur or condition
shall exist, under any agreement or instrument relating to any such Indebtedness
or Guaranty Obligation, in the case of each of clauses (A) and (B) if the effect
of such failure, event or condition is to cause, or to permit, after lapse of
all applicable grace periods, the holder or holders or beneficiary or
beneficiaries of such Indebtedness or Guaranty Obligation (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
such Indebtedness to be declared to be due and payable prior to its stated
maturity, or such Guaranty Obligation to become payable, or cash collateral in
respect thereof to be demanded or (C) shall fail to comply with the terms of any
Indebtedness or Guaranty Obligation requiring such Group Company to offer to
prepay or repurchase such Indebtedness or the primary Indebtedness underlying
such Guaranty Obligation (or any portion thereof) prior to the stated maturity
thereof; or (ii) there occurs under any Swap Agreement or Swap Obligation an
Early Termination Date (as defined in such Swap Agreement) resulting from
(A) any event of default under such Swap Agreement as to which any Group Company
is the Defaulting Party (as defined in such Swap Agreement) or (B) any
Termination Event (as so defined) as to which any Group Company is an Affected
Party (as so defined), and, in either event, the Swap Termination Value owed by
a Group Company as a result thereof is greater than the Threshold Amount and
such Group Company fails to pay such Swap Termination Value when due after
applicable grace periods; provided that a default, event or condition described
in this Section in respect of the First Lien Loan Documents shall not at any
time constitute an Event of Default other than (a) any breach of Section 8.01(a)
of the First Lien Credit Agreement at the date of final maturity of such First
Lien Credit Obligations or (b) any default, event or condition resulting in the
declaration of all or any portion of such Indebtedness to be immediately due and
payable, which in each case, shall constitute an Event of Default.

(f) Insolvency Events. Any Group Company having assets in excess of $575,000
shall commence (i) a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
Insolvency or Liquidation Proceeding now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize
any of the foregoing or (ii) an involuntary case or other proceeding shall be
commenced against any Group Company having assets in excess of $575,000 seeking
liquidation, reorganization or other relief with respect to it or its debts
under any Insolvency or Liquidation Proceeding now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 90 days, or any order for relief shall be entered against any Group
Company under the federal bankruptcy laws as now or hereafter in effect.

 

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(g) Judgments. One or more judgments, orders, decrees or arbitration awards is
entered against any Group Company that is a “significant subsidiary” (as defined
in Rule 1-02 of Regulation S-X) involving in the aggregate a liability (to the
extent not covered by independent third-party insurance or an indemnity from a
creditworthy third party as to which the insurer or indemnitor, as applicable,
does not dispute coverage), as to any single or related series of transactions,
incidents or conditions, in excess of the Threshold Amount, and the same shall
not have been discharged, vacated or stayed pending appeal within 30 days after
the entry thereof.

(h) ERISA. (i) An ERISA Event occurs which has resulted or could reasonably be
expected to result in liability of any Group Company or any ERISA Affiliate in
an aggregate amount in excess of the Threshold Amount; (ii) there shall exist an
amount of Unfunded Liabilities, individually or in the aggregate, for all Plans
and Foreign Pension Plans (excluding for purposes of such computation any Plans
and Foreign Pension Plans with respect to which assets exceed benefit
liabilities), in an aggregate amount in excess of the Threshold Amount;
(iii) any Foreign Pension Plan is not in substantial compliance with all
applicable pension benefits and tax laws; (iv) any contribution required to be
made in accordance with any applicable law or the terms of any Foreign Pension
Plan has not been made; (v) any event has occurred or condition exists with
respect to any Foreign Pension Plan that has resulted or could result in any
Foreign Pension Plan being ordered or required to be wound up in whole or in
part pursuant to any applicable laws or having any applicable registration
revoked or refused for the purposes of any applicable pension benefits or tax
laws or being placed under the administration of the relevant pension benefits
regulatory authority or being required to pay any taxes or penalties under
applicable pension benefits and tax laws; (vi) an order has been made or notice
has been given pursuant to any applicable pension benefits and tax laws in
respect of any Foreign Pension Plan requiring any person to take or refrain from
taking any action in respect thereof or that there has been a contravention of
any such applicable laws; (vii) an event has occurred or a condition exists that
has resulted or could result in any Group Company being required to pay, repay
or refund any amount other than contributions required to be made or expenses
required to be paid in the ordinary course) to or on account of any Foreign
Pension Plan or a current or former member thereof; or (viii) an event has
occurred or a condition exists that has resulted or could result in a payment
being made out of a guarantee fund established under the applicable pension
benefits laws in respect of a Foreign Pension Plan; and which, with respect to
all the events and obligations described in the preceding clauses (iii) through
(viii) of this Section 8.01(h), would reasonably be expected to have a Material
Adverse Effect.

(i) Guaranties. Any Guaranty given by any Loan Party or any provision thereof
shall, except pursuant to the terms thereof, cease to be in full force and
effect, or any Guarantor thereunder or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor’s obligations under such
Guaranty.

(j) Impairment of Collateral. Any security interest purported to be created by
any Collateral Document shall cease to be, or shall be asserted by any Group
Company not to be, a valid, perfected Lien (except as otherwise expressly
provided in such Collateral Document and the Intercreditor Agreement) in the
securities, assets or properties covered thereby, other than in respect of
assets and properties which, individually and in the aggregate, are not material
to the Group Companies taken as a whole or in respect of which the failure of
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respect thereof to be valid, perfected first priority security interests will
not in the reasonable judgment of the Collateral Agent have a Material Adverse
Effect on the rights and benefits of the Lenders under the Loan Documents taken
as a whole.

Section 8.02 Acceleration; Remedies. Upon the occurrence of and during the
continuation of an Event of Default, and at any time thereafter unless and until
such Event of Default has been cured by the Borrower or waived in writing by the
Required Lenders (or the Lenders as may be required pursuant to Section 10.01),
the Administrative Agent (or the Collateral Agent, as applicable) shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all
of the following actions:

(a) Termination of Commitments. Declare the Commitments terminated whereupon the
Commitments shall be immediately terminated.

(b) Acceleration of Loans. Declare the unpaid principal of and any accrued
interest in respect of all Loans and any and all other indebtedness or
obligations of any and every kind (other than contingent indemnification
obligations) owing by a Loan Party to any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Loan Parties.

(c) [Intentionally Omitted].

(d) Enforcement of Rights. Enforce any and all rights and interests created and
existing under the Loan Documents, including, without limitation, all rights and
remedies existing under the Loan Documents, all rights and remedies against a
Guarantor and all rights of setoff.

(e) Enforcement Rights Vested Solely in Administrative Agent and Collateral
Agent. The Lenders agree that this Agreement may be enforced only by the action
of the Administrative Agent, acting upon the instructions of the Required
Lenders, and, with respect to the Collateral, the Collateral Agent, and that no
other Finance Party shall have any right individually to seek to enforce any
Loan Document or to realize upon the security to be granted hereby.

Notwithstanding the foregoing, if an Event of Default specified in
Section 8.01(f) shall occur with respect to the Borrower or any “significant
subsidiary” (as defined in Rule 1-02 of Regulation S-X), then the Commitments
shall automatically terminate, all Loans, all accrued interest in respect
thereof and all accrued and unpaid fees and other indebtedness or obligations
owing to the Lenders hereunder and under the other Loan Documents shall
immediately become due and payable in each case without the giving of any notice
or other action by the Administrative Agent or the Lenders, which notice or
other action is expressly waived by the Loan Parties.

Section 8.03 Allocation of Payments After Event of Default.

(a) Priority of Distributions. The Borrower hereby irrevocably waives the right
to direct the application of any and all payments in respect of its Second Lien
Credit

 

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Obligations and any proceeds of Collateral after the occurrence and during the
continuance of an Event of Default and agrees that, notwithstanding the
provisions of Sections 2.09(c) and 2.14, after the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable all amounts collected or received on account of any Second Lien
Credit Obligation shall be applied by the Administrative Agent in the following
order:

FIRST, to pay interest on and then principal of any portion of the Loans that
the Administrative Agent may have advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrower;

SECOND, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Administrative Agent or the
Collateral Agent in connection with enforcing the rights of the Finance Parties
under the Loan Documents, including all expenses of sale or other realization of
or in respect of the Collateral, including reasonable compensation to the agents
and counsel for the Collateral Agent, and all expenses, liabilities and advances
incurred or made by the Collateral Agent in connection therewith, and any other
obligations owing to the Collateral Agent in respect of sums advanced by the
Collateral Agent to preserve the Collateral or to preserve its security interest
in the Collateral;

THIRD, to the payment of all of the Second Lien Credit Obligations consisting of
accrued fees and interest;

FOURTH, except as set forth in clauses FIRST through FOURTH above, to the
payment of the outstanding Second Lien Credit Obligations and Swap Obligations
owing to any Loan Party, pro-rata, in proportion to the respective amounts held
by them;

FIFTH, to the payment of the surplus, if any, to whomever may be lawfully
entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Finance Parties shall receive an amount
equal to its pro-rata share of amounts available to be applied pursuant to
clauses THIRD, and FOURTH above; and (iii) to the extent that any amounts
available for distribution pursuant to clause FOURTH above to all other
obligations of the types described in clause FOURTH above in the manner provided
in this Section 8.03.

(b) [Intentionally Omitted].

(c) [Intentionally Omitted].

(d) [Intentionally Omitted].

(e) Reliance by Collateral Agent. For purposes of applying payments received in
accordance with this Section 8.03, the Collateral Agent shall be entitled to
rely upon (i) the Administrative Agent under the Credit Agreement and (ii) the
Representative, if any, for the Swap Creditors for a determination (which the
Administrative Agent, each Representative for any Swap Creditor and the Finance
Parties agree (or shall agree) to provide upon request of the Collateral Agent)
of the outstanding Second Lien Credit Obligations and Swap Obligations owed to
the Agents, the Lenders or the Swap Creditors, as the case may be.

 

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ARTICLE IX

AGENCY PROVISIONS

Section 9.01 Appointment and Authority. Each of the Lenders hereby irrevocably
appoints Natixis, New York Branch, 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 and the Lenders, and none of Holdings, the Borrower or any
other Loan Party shall have rights as a third party beneficiary of any of such
provisions.

Section 9.02 Rights as a Lender. 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 9.03 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:

(i) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(ii) 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 that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number of 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 of its counsel,
may expose the Administrative Agent to liability or that is contrary to any Loan
Document or applicable Law; and

(iii) 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.

 

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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 10.01 and 8.02) 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 or
a Lender.

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 9.04 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 that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or the prior to the making of such Loan.
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.

Section 9.05 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 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 9.06 Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders and the Borrower. Upon
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such notice of resignation, the Required Lenders shall have the right, with the
consent of the Borrower, to appoint a successor, which shall be (i) a Lender or
an Affiliate of a Lender and (ii) a bank with an office in the United States, or
an Affiliate of any such bank with an office in the United States having
combined capital and surplus and undivided profits of not less than
$500,000,000. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that
if the Administrative 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 (i) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders
under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (ii) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time 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 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 the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 10.04 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

Section 9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
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 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 9.08 No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the 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 or a Lender hereunder.

 

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Section 9.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or 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:

(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Second Lien Credit
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.09 and 10.04) allowed in such
judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, 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 2.09 and 10.04.

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 any plan
of reorganization, arrangement, adjustment or composition affecting the Second
Lien Credit Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

Section 9.10 Collateral and Guaranty Matters. Each Lender agrees that any action
taken by the Collateral Agent or the Required Lenders (or, where required by the
express terms of this Agreement, a greater or lesser proportion of the Lenders)
in accordance with the provisions of this Agreement or of the other Loan
Documents, and the exercise by the Collateral Agent or Required Lenders (or,
where so required, such greater or lesser proportion) of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders. Without
limiting the generality of the foregoing, the Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion:

(i) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (A) upon Discharge of Second Lien Credit
Obligations, (B) that is sold or to be sold as part of or in connection with any
sale permitted hereunder or under any other Loan Document, or (C) subject to
Section 10.01, if approved, authorized or ratified in writing by the Required
Lenders;

 

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(ii) to subordinate any Lien on any property granted to or held by the
Administrative Agent or either Collateral Agent under any Loan Document to the
holder of any Lien on such property that is permitted by Section 7.02; and

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

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10.

Section 9.11 [Intentionally Omitted].

ARTICLE X

MISCELLANEOUS

Section 10.01 Amendments, Etc.

(a) Amendments Generally. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by any
Loan Party therefrom, shall in any event be effective unless the same shall be
in writing signed by the Required Lenders (or by the Administrative Agent with
the consent of the Required Lenders or such other number or percentage of the
Lenders as may be specified herein) and the Borrower and the Administrative
Agent shall have received notice and a fully executed written copy thereof, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided that the Administrative Agent
and the Borrower may, with the consent of the other, amend, modify or supplement
this Agreement and any other Loan Document to cure any ambiguity, typographical
error, defect or inconsistency if such amendment, modification or supplement
does not adversely affect the rights of any Agent or any Lender.

(b) Amendments and Waivers Pertinent to Affected Lenders. Notwithstanding
paragraph (a) above and in addition to any other consent that may be required
thereunder, no amendment, waiver or consent shall:

(i) extend or increase the Commitment of any Lender without the written consent
of such Lender;

(ii) postpone any date fixed by this Agreement or any other Loan Document for
any payment (excluding mandatory prepayments) of principal, interest (other than
default interest), fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby;

 

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(iii) reduce the principal of, or the rate of interest specified herein on, any
Loan or (subject to subsection (c) below) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary (A) to amend the definition of “Default
Rate” or to waive any obligation of the Borrower to pay interest at the Default
Rate or (B) to amend any financial covenant hereunder (or any defined term used
therein) even if the effect of such amendment would be to reduce the rate of
interest on any Loan or to reduce any fee payable hereunder;

(iv) change Section 2.13 or Section 8.03 in a manner that would alter the
pro-rata sharing of payments required thereby without the written consent of
each Lender directly affected thereby;

(v) change any provision of this Section or the definition of “Required
Lenders,” or any other provision hereof specifying the percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder;

(vi) release all or substantially all of the value of the Guarantees without the
written consent of each Lender (provided that the Administrative Agent may,
without the consent of any Lender, release any Guarantor (or all or
substantially all of the assets of a Guarantor) that is sold or transferred in
compliance with Section 7.05);

(vii) release all or substantially all of the Collateral securing the Second
Lien Credit Obligations hereunder without the written consent of each Lender
(provided that the Collateral Agent may, without consent from any other Lender,
release any Collateral that is sold or transferred by a Loan Party in compliance
with Section 7.05 or released in compliance with Section 9.10);

(viii) [intentionally omitted];

(ix) affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document, without the prior written consent of the
Administrative Agent.

Notwithstanding anything to the contrary contained in this Section 10.01, this
Agreement and the other Loan Documents may be amended with the consent of the
Administrative Agent at the request of the Borrower without the need to obtain
the consent of any other Lender if such amendment is delivered in order to cure
any ambiguity or defects.

(c) Defaulting Lenders. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

Each Lender and each holder of a Note shall be bound by any waiver, amendment or
modification authorized by this Section 10.01 regardless of whether its Note
shall have been marked to make reference therein, and any consent by any Lender
or holder of a Note pursuant to this Section 10.01 shall bind any Person
subsequently acquiring a Note from it, whether or not such Note shall have been
so marked.

 

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Section 10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand, electronic mail 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 Holdings, the Borrower, the Administrative Agent to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
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 pursuant to Article II if such Lender as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent, Holdings 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.

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.

 

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(c) The 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
GROUP COMPANY MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE GROUP COMPANY MATERIALS. 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 GROUP COMPANY MATERIALS OR THE PLATFORM. In no
event shall the Administrative Agent or any of its Related Parties
(collectively, “Agent Parties”) have any liability to any Loan Party, any Lender
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of any Loan Party’s or
the Administrative Agent’s transmission of Group Company Materials 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 an
nonappealable judgment to have resulted from the gross negligence, bad faith or
willful misconduct of such Agent Party; provided, however, that in no event
shall any Agent Party have any liability to any Loan Party, any Lender or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of Holdings, the Borrower, its Subsidiaries and
the Administrative Agent may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to Holdings, the
Borrower, and the Administrative Agent. 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.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic notices) purportedly given by or on behalf of Holdings, the Borrower
or any other Loan Party 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. Holdings and the Borrower
shall, jointly and severally, indemnify the Administrative Agent, 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 Holdings or the Borrower. All telephonic
notices to and other communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

Section 10.03 No Waiver; Cumulative Remedies. No failure by any Lender or by the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further

 

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exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by Law.

Section 10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Holdings and the Borrower, jointly and severally, agree
to pay on the Closing Date (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, and certain
special and local counsel in connection with their due diligence investigation
of the Loan Parties, the syndication of the credit facilities provided for
herein and the preparation, negotiation, execution, delivery and administration
of this Agreement and the other Loan Documents or any amendments, modifications
or waivers of the provisions hereof or thereof, and (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and any Lender
(including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender) in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans; provided, however, that the Borrower will not be required to pay the fees
and expenses of third party advisors to the Administrative Agent (which shall
not include counsel) retained without consent of Borrower (such consent not to
be unreasonably withheld or delayed) or more than one counsel (plus local and
special counsel).

(b) Indemnification. The Borrower and each Guarantor, jointly and severally,
shall indemnify the Administrative Agent (and any sub-agent thereof), each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all (subject to clause (d) below) actual losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of counsel for the Administrative Agent, of local and special counsel engaged
behalf of the Administrative Agent, and of one financial advisor for all
Indemnitees), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by Holdings, the Borrower or any other Loan Party arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use
of the proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Group
Company, or any Environmental Liability related in any way to Holdings, the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to the Loan Documents or the
transactions contemplated hereby brought by a third party or by Holdings, the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and

 

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nonappealable judgment to have resulted from the gross negligence, bad faith or
willful misconduct of such Indemnitee or a Related Party thereof or (y) result
from a claim brought by Holdings, the Borrower or any other Loan Party against
an Indemnitee or such Indemnitee’s Related Parties for material breach of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such Loan Party has obtained a final nonappealable judgment in its
favor on such claim as determined by a court of competent jurisdiction, and
provided further that Holdings, the Borrower and the other Loan Parties shall
not be required to reimburse the legal fees and expenses of more than one firm
of outside counsel (in addition to any reasonably necessary special counsel and
up to one local counsel in each applicable local jurisdiction) for all
Indemnitees unless, in the written opinion of outside counsel reasonably
satisfactory to the Borrower and the Administrative Agent, representation of all
such Indemnitees would be inappropriate due to the existence of an actual or
potential conflict of interest.

(c) Reimbursement by Lenders. To the extent that Holdings or the Borrower for
any reason fails indefeasibly to pay any amount required under subsection (a) or
(b) of this Section to be paid by it or them to the Administrative Agent (or any
sub-agent thereof), or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent), 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) 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) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.14(d).

(d) Waiver of Consequential Damages. To the fullest extent permitted by
applicable Law, Holdings and the Borrower agree not to assert, and hereby waive,
any claim against any Indemnitee, and each of the Lenders agrees not to assert
or permit any of their respective Subsidiaries to assert any claim against
Holdings, the Borrower or any of its Subsidiaries or any of their respective
directors, officers, employees, attorneys, agents or advisors, 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 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 by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than
[ten Business Days] after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all the other Second
Lien Credit Obligations.

 

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Section 10.05 Payments Set Aside. To the extent that any payment by or on behalf
of Holdings, the Borrower or any other Loan Party is made to the Administrative
Agent or any Lender, or the Administrative Agent 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 or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Insolvency or Liquidation Proceeding or otherwise, then (i) 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 (ii) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by the Administrative Agent,
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 Rate from time to time in
effect. The obligations of the Lenders under clause (ii) of the preceding
sentence shall survive the payment in full of the Second Lien Credit Obligations
and the termination of this Agreement.

Section 10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of subsection
(b) of this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans at the
time owing to it); provided, however, that:

(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans of the, as the case may be, owing to
it, (A) the aggregate amount of any Loans of an assigning Lender subject to each
such assignments, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000 unless each of the Administrative Agent
and, so long as no Event of Default

 

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has occurred and is continuing, the Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met;

(ii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lenders’ rights and obligations under this Agreement
with respect to the Loans or the Commitment assigned;

(iii) (a) any assignment of a Loan must be approved by the Administrative Agent
and so long as no Event of Default has occurred and is continuing, the Borrower,
which approvals shall not be unreasonably withheld, and which shall not be
required if the proposed assignee is itself a Lender with a Loan or an Affiliate
of such Lender; and

(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount of $3,500; provided, however, that (a) no such
fee shall be payable for assignments to an Affiliate or Approved Fund of such
assigning Lender and (b) the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment. The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 10.04 and 10.18 with
respect to facts and circumstances occurring prior to the effective date of such
assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note or Notes to the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection 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
subsection (d) of this Section.

Notwithstanding the foregoing, there shall be no assignment of a Term Commitment
or a Term Loan to a Competitor.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and

 

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addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower,
the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by each of the Borrower at any
reasonable time and from time to time upon reasonable prior notice. In addition,
at any time that a request for a consent for a material or other substantive
change to the Loan Documents is pending, any Lender wishing to consult with
other Lenders in connection therewith may request and receive from the
Administrative Agent a copy of the Register.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitments and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. 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 of each
participant’s interest in the Loans held by it (the “Participant Register”). The
entries in the Participant Register shall be conclusive, absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such Loan or other obligation hereunder as
the owner thereof for all purposes of this Agreement notwithstanding any notice
to the contrary. Any such Participant Register shall be available for inspection
by the Administrative Agent at any reasonable time and from time to time upon
reasonable prior notice. Notwithstanding the foregoing, there shall be no
participation of a Commitment or Loan to a Competitor.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 relating to (a) increases in Commitments of such Participant,
(b) reductions of principal, interest (other than a waiver of Default Rate of
interest) or fees payable to such Participant, (c) extensions of final maturity
or scheduled amortization of the Loans or Commitments in which such Participant
participates and (d) releases of all or substantially all of the value of the
Guarantees, or all or substantially all of the Collateral. Subject to subsection
(e) of this Section, the Borrower agrees that each Participant shall be entitled
to the benefits and subject to the requirements of Sections 3.01, and 3.04 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by Law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.

 

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(e) Limitation upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent or the right to
receive a greater payment results from a Change in Law after the participant
becomes a Participant.

(f) Certain Pledges. Any Lender may at any time, without the consent of the
Borrower or the Administrative Agent, pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
record keeping system, as the case may be, to the extent and as provided for in
any applicable Law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act
or any other similar state laws based on the Uniform Electronic Transactions
Act.

Section 10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(i) to its Affiliates and to it and its Affiliates’ respective partners,
directors, officers, employees, agents, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (ii) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (in which case the
Administrative Agent or such Lender as applicable, shall use reasonable efforts
to notify the Borrower prior to such disclosure, in any case including any
self-regulatory authority, such as the National Association of Insurance
Commissioners); (iii) to the extent required by applicable Laws or regulations
or by any subpoena or similar legal process; (iv) to any other party hereto;
(v) 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,
(vi) subject to an agreement containing provisions substantially the same as
those of this Section, to (A) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement (in each case other than a Competitor), (B) any pledgee
referred to in Section 10.06(f) or (C) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the Borrower
and its obligations (other than a Competitor), (vii) with the consent of the
Borrower or (viii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Section or (B) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower.

 

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For purposes of this Section, “Information” means all information received from
Holdings, the Borrower or any of its Subsidiaries relating to Holdings, the
Borrower or any Subsidiary or any of their respective businesses, other than any
such information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to disclosure by Holdings, the Borrower or any
Subsidiary. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding the foregoing, any Agent and
any Lender may place advertisements in financial and other newspapers and
periodicals or on a home page or similar place for dissemination of information
on the Internet or worldwide web as it may choose, and circulate similar
promotional materials, after the closing of the transactions contemplated by
this Agreement in the form of a “tombstone” or otherwise describing the names of
the Loan Parties, or any of them, and the amount, type and closing date of such
transactions, all at their sole expense.

Each of the Administrative Agent and the Lenders acknowledges that (i) the
Information may include material non-public information concerning Holdings, the
Borrower or one or more Subsidiaries, (ii) it has developed compliance
procedures regarding the use of material non-public information and (iii) it
will handle such material non-public information in accordance with applicable
Laws, including Federal and state securities Laws.

Section 10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
after obtaining the prior written consent of the Administrative Agent, to the
fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency but in any event excluding Exempt Deposit Accounts) at any time held
and other obligations (in whatever currency) at any time owing by such Lender to
or for the credit or the account of Holdings, the Borrower or any other Loan
Party against any and all of the obligations of Holdings, the Borrower or such
Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender, to the extent then due and owing, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender or their respective Affiliates may have. Each
Lender agrees to notify the Borrower and the Administrative Agent promptly after
any such setoff and application, provided that the failure to give such notice
shall not affect the validity of such setoff and application.

Section 10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender

 

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exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (i) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (ii) exclude voluntary prepayments and the effects
thereof and (iii) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Second Lien Credit Obligations hereunder.

Section 10.10 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement. This Agreement
and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.

Section 10.11 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
any Agent or any Lender or on their behalf and notwithstanding that the Agent or
any Lender may have had notice or knowledge of any Default or Event of Default
at the time of any Borrowing, and shall continue in full force and effect until
the Discharge of Second Lien Credit Obligations (other than contingent
indemnification obligations.

Section 10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (i) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (ii) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section 10.13 Replacement of Lenders. If (i) any Lender requests compensation
under Section 3.04, (ii) 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 3.01, (iii) any Lender is a Defaulting Lender or (iv) any
Lender has failed to consent to a proposed amendment, waiver, discharge or
termination which pursuant to the terms of Section 10.01 or any other provision
of any Loan Document requires the consent of all of the Lenders and with respect
to which the Required Lenders shall have granted their consent, the Borrower
shall have the right, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, (i) to remove such Lender by terminating such
Lender’s Commitment in full or (ii) to replace such Lender by causing such
Lender to assign and delegate, without recourse (in accordance with and subject
to

 

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the restrictions contained in, and consents required by, Section 10.06), all of
its interests, rights and obligations under this Agreement and the other Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal amount of its Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents 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 assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter;

(iv) such assignment does not conflict with applicable Laws; and

(v) (A) if the Borrower elects to exercise such right with respect to any Lender
pursuant to clause (i), (ii) or (iii) above, it shall be obligated to remove or
replace, as the case may be, all Lenders that have similar requests then
outstanding for compensation pursuant to Section 3.04 or 3.01 and (B) in the
case of any replacement of Lenders under the circumstances described in clause
(iv) above, the applicable amendment, waiver, discharge or termination that the
Borrower has requested shall become effective upon giving effect to such
replacement (and any related Assignment and Assumptions required to be effected
in connection therewith in accordance with this Section 10.13).

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 and delegation
cease to apply.

Section 10.14 Governing Law; Jurisdiction; Etc.

(a) Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
LETTERS OF CREDIT AND OTHER THAN AS EXPRESSLY SET FORTH IN SUCH OTHER LOAN
DOCUMENTS) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

(b) Submission to Jurisdiction. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND

 

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ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO 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 COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c) Waiver of Venue. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW

Section 10.15 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

 

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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 10.16 Patriot Act Notice; Lenders’ Compliance Certification.

(a) Notice to Borrower. Each Lender and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the U.S. Patriot Act it may be required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of each Loan Party and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify each such Loan
Party in accordance with the U.S. Patriot Act.

(b) Lenders’ Certification. Each Lender or assignee or participant of a Lender
that is not incorporated under the Laws of the United States or a State thereof
(and is not excepted from the certification requirement contained in Section 313
of the U.S. Patriot Act and the applicable regulations because it is both (i) an
Affiliate of a depository institution or foreign bank that maintains a physical
presence in the United States or foreign country and (ii) subject to supervision
by a banking regulatory authority regulating such affiliated depository
institution or foreign bank) shall deliver to the Administrative Agent the
certification or, if applicable, recertification, certifying that such Lender is
not a “shell” and certifying to other matters as required by Section 313 of the
U.S. Patriot Act and the applicable regulations thereunder: (i) within 10 days
after the Closing Date or, if later, the date such Lender, assignee or
participant of a Lender becomes a Lender, assignee or participant of a Lender
hereunder and (ii) at such other times as are required under the U.S. Patriot
Act.

Section 10.17 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby, the Borrower and Holdings each
acknowledge and agree, and acknowledge their respective Affiliates’
understanding, that: (i) the credit facilities provided for hereunder and any
related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the
Borrower, Holdings and their respective Affiliates, on the one hand, and the
Administrative Agent, on the other hand, and each of the Borrower and Holdings
is capable of evaluating and understanding and understands and accepts the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading to such
transaction, each of the Administrative Agent is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary, for the
Borrower, Holdings or any of their respective Affiliates, stockholders,
creditors or employees or any other Person; (iii) the Administrative Agent has
not assumed nor will not assume an advisory, agency or fiduciary responsibility
in favor of the Borrower or Holdings with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Administrative Agent has advised or is currently
advising the Borrower,

 

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Holdings or any of their respective Affiliates on other matters) and the
Administrative Agent has no obligation to the Borrower, Holdings or any of their
respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Administrative Agent and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Borrower, Holdings and their respective Affiliates, and the
Administrative Agent has no obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) the
Administrative Agent has not provided and will not provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of the Borrower and Holdings has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. Each of the Borrower and Holdings hereby waives and
releases, to the fullest extent permitted by law, any claims that it may have
against the Administrative Agent with respect to any breach or alleged breach of
agency or fiduciary duty.

Section 10.18 Judgment Currency.

(a) The obligations of the Loan Parties hereunder and under the other Loan
Documents to make payments in a specified currency (the “Obligation Currency”)
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by a Finance Party of the full amount of the Obligation
Currency expressed to be payable to it under this Agreement or another Loan
Document. If, for the purpose of obtaining or enforcing judgment against any
Loan Party in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in the Obligation Currency, the conversion shall be made, at the rate of
exchange (as quoted by the Administrative Agent or if the Administrative Agent
does not quote a rate of exchange on such currency, by a known dealer in such
currency designated by the Administrative Agent) determined, in each case, as of
the Business Day immediately preceding the date on which the judgment is given
(such Business Day being hereinafter referred to as the “Judgment Currency
Conversion Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Borrower covenants and agrees to pay, or cause to be paid, or remit, or cause to
be remitted, such additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

(c) For purposes of determining any rate of exchange or currency equivalent for
this Section 10.18, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.

Section 10.19 Intercreditor Agreement. Notwithstanding anything herein or in any
Loan Document to the contrary, the Liens and security interests granted to the
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pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder and thereunder are subject to the provisions of the
Intercreditor Agreement. In the event of a conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control.

Section 10.20 Notes Legend. Every Note issued, if any, and delivered hereunder
shall bear a legend in substantially the following form:

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, LOANS MADE UNDER
THIS AGREEMENT ARE MADE WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL
AMOUNT OF LOANS, (1) THE ISSUE PRICE IS $[            ]; (2) THE AMOUNT OF THE
ORIGINAL ISSUE DISCOUNT IS $[            ]; (3) THE ISSUE DATE IS
[                    ], 2009; AND (4) THE YIELD TO MATURITY IS [    ]%
(COMPOUNDED AS OF EACH INTEREST PAYMENT DATE).

[Signature Pages Follow]

 

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

 

SBARRO, INC. By:  

/s/ Daniel G. Montgomery

Name:   Dan Montgomery Date:   Chief Financial Officer SBARRO HOLDINGS, LLC By:
  MidOcean SBR Holdings, LLC, its Sole Member By:  

/s/ Daniel G. Montgomery

Name:   Dan Montgomery Date:   Chief Financial Officer

 

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NATIXIS, NEW YORK BRANCH
as Administrative Agent and Collateral Agent

By:  

/s/ Samantha X. Tang/Stacey Caruth

Name:   Samantha X. Tang/Stacey Caruth Date:   Associate Director/Associate
Director

 

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COLUMN INVESTMENTS S.A.R.L.,
as Lender

By:  

/s/ J. Edward Virtue

Name:   J. Edward Virtue Date:   Attorney in Fact

 

S-3