Exhibit 10.1

 

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of January 28, 2013

 

among

 

MICHAELS STORES, INC.,

 

as Borrower,

 

DEUTSCHE BANK AG NEW YORK BRANCH,

 

as Administrative Agent,

 

THE OTHER LENDERS PARTY HERETO,

 

and

 

BARCLAYS BANK PLC,

 

CREDIT SUISSE SECURITIES (USA) LLC,

 

GOLDMAN SACHS BANK USA,

 

J.P. MORGAN SECURITIES LLC,

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

 

MORGAN STANLEY SENIOR FUNDING, INC., and

 

WELLS FARGO SECURITIES, LLC,

 

as Co-Documentation Agents

 

 

DEUTSCHE BANK SECURITIES INC.,
BARCLAYS BANK PLC,

CREDIT SUISSE SECURITIES (USA) LLC,

GOLDMAN SACHS BANK USA,

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

MORGAN STANLEY SENIOR FUNDING, INC., and

WELLS FARGO SECURITIES, LLC,

as Co-Lead Arrangers and as Joint Bookrunners

 

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Table of Contents

 

 

Page

 

 

ARTICLE I Definitions and Accounting Terms

2

 

SECTION 1.01. Defined Terms

2

 

SECTION 1.02. Other Interpretive Provisions

61

 

SECTION 1.03. Accounting Terms

62

 

SECTION 1.04. Rounding

62

 

SECTION 1.05. References to Agreements, Laws, Etc.

62

 

SECTION 1.06. Times of Day

62

 

SECTION 1.07. Timing of Payment or Performance

62

 

SECTION 1.08. Currency Equivalents Generally

62

 

SECTION 1.09. Change of Currency

63

ARTICLE II The Commitments and Credit Extensions

63

 

SECTION 2.01. The Loans

63

 

SECTION 2.02. Borrowings, Conversions and Continuations of Loans

63

 

SECTION 2.03. [RESERVED]

65

 

SECTION 2.04. [RESERVED]

65

 

SECTION 2.05. Prepayments

65

 

SECTION 2.06. Termination of Commitments

75

 

SECTION 2.07. Amortization of Loans

75

 

SECTION 2.08. Interest

75

 

SECTION 2.09. Fees

76

 

SECTION 2.10. Computation of Interest and Fees

76

 

SECTION 2.11. Evidence of Indebtedness

76

 

SECTION 2.12. Payments Generally

77

 

SECTION 2.13. Sharing of Payments

78

 

SECTION 2.14. Provisions Applicable to Canadian Loan Parties

79

 

SECTION 2.15. Refinancing Amendments

79

 

SECTION 2.16. Extended Term Loans

80

 

SECTION 2.17. Incremental Borrowings

83

ARTICLE III Taxes, Increased Costs Protection and Illegality

86

 

SECTION 3.01. Taxes

86

 

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Table of Contents

(continued)

 

 

Page

 

 

 

SECTION 3.02. Illegality

88

 

SECTION 3.03. Inability to Determine Rates

89

 

SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurocurrency Rate Loans

89

 

SECTION 3.05. Funding Losses

90

 

SECTION 3.06. Matters Applicable to All Requests for Compensation

91

 

SECTION 3.07. Replacement of Lenders under Certain Circumstances

92

 

SECTION 3.08. Survival

93

ARTICLE IV Conditions Precedent to Credit Extensions

93

 

SECTION 4.01. Conditions to Making of Term B Loans

93

 

SECTION 4.02. Conditions to All Credit Extensions

95

ARTICLE V Representations and Warranties

95

 

SECTION 5.01. Existence, Qualification and Power; Compliance with Laws

95

 

SECTION 5.02. Authorization; No Contravention

95

 

SECTION 5.03. Governmental Authorization; Other Consents

96

 

SECTION 5.04. Binding Effect

96

 

SECTION 5.05. Financial Statements; No Material Adverse Effect

96

 

SECTION 5.06. Litigation

96

 

SECTION 5.07. No Default

97

 

SECTION 5.08. Ownership of Property; Liens

97

 

SECTION 5.09. Environmental Compliance

97

 

SECTION 5.10. Taxes

98

 

SECTION 5.11. ERISA Compliance

98

 

SECTION 5.12. Subsidiaries; Equity Interests

98

 

SECTION 5.13. Margin Regulations; Investment Company Act

99

 

SECTION 5.14. Disclosure

99

 

SECTION 5.15. Intellectual Property; Licenses, Etc.

99

 

SECTION 5.16. Solvency

99

 

SECTION 5.17. Subordination of Junior Financing

99

 

SECTION 5.18. Labor Matters

100

 

SECTION 5.19. Anti-Terrorism Laws; OFAC

100

ARTICLE VI Affirmative Covenants

100

 

ii

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Table of Contents

(continued)

 

 

Page

 

 

 

SECTION 6.01. Financial Statements

100

 

SECTION 6.02. Certificates; Other Information

101

 

SECTION 6.03. Notices

103

 

SECTION 6.04. Payment of Obligations

104

 

SECTION 6.05. Preservation of Existence, Etc.

104

 

SECTION 6.06. Maintenance of Properties

104

 

SECTION 6.07. Maintenance of Insurance

104

 

SECTION 6.08. Compliance with Laws

105

 

SECTION 6.09. Books and Records

105

 

SECTION 6.10. Inspection Rights

105

 

SECTION 6.11. Covenant to Guarantee Obligations and Give Security

106

 

SECTION 6.12. Compliance with Environmental Laws

108

 

SECTION 6.13. Further Assurances and Post-Closing Conditions

108

 

SECTION 6.14. Corporate Separateness

109

 

SECTION 6.15. Pension Plans

109

 

SECTION 6.16. Maintenance of Rating

109

 

SECTION 6.17. Redemption of Senior Subordinated Notes

109

ARTICLE VII Negative Covenants

110

 

SECTION 7.01. Asset Sales

110

 

SECTION 7.02. Limitation on Restricted Payments

110

 

SECTION 7.03. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock

117

 

SECTION 7.04. Liens

124

 

SECTION 7.05. [RESERVED]

124

 

SECTION 7.06. Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets

124

 

SECTION 7.07. Transactions with Affiliates

125

 

SECTION 7.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries

127

 

SECTION 7.09. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries

129

 

SECTION 7.10. Change in Nature of Business

129

 

SECTION 7.11. [RESERVED]

129

 

SECTION 7.12. Use of Proceeds

129

 

SECTION 7.13. Accounting Changes

130

 

iii

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Table of Contents

(continued)

 

 

Page

 

 

 

SECTION 7.14. Amendments of Indebtedness, Etc.

130

ARTICLE VIII Events Of Default and Remedies

130

 

SECTION 8.01. Events of Default

130

 

SECTION 8.02. Remedies Upon Event of Default

133

 

SECTION 8.03. Exclusion of Immaterial Subsidiaries

133

 

SECTION 8.04. Application of Funds

133

ARTICLE IX Administrative Agent and Other Agents

134

 

SECTION 9.01. Appointment and Authorization of Agents

134

 

SECTION 9.02. Delegation of Duties

135

 

SECTION 9.03. Liability of Agents

135

 

SECTION 9.04. Reliance by Agents

135

 

SECTION 9.05. Notice of Default

136

 

SECTION 9.06. Credit Decision; Disclosure of Information by Agents

136

 

SECTION 9.07. Indemnification of Agents

136

 

SECTION 9.08. Agents in their Individual Capacities

137

 

SECTION 9.09. Successor Agents

137

 

SECTION 9.10. Administrative Agent May File Proofs of Claim

138

 

SECTION 9.11. Collateral and Guaranty Matters

138

 

SECTION 9.12. Other Agents; Arrangers and Managers

139

 

SECTION 9.13. Appointment of Supplemental Administrative Agents

139

 

SECTION 9.14. Solidary Interests/Quebec Liens (Hypothecs)

140

ARTICLE X Miscellaneous

141

 

SECTION 10.01. Amendments, Etc.

141

 

SECTION 10.02. Notices and Other Communications; Facsimile Copies

144

 

SECTION 10.03. No Waiver; Cumulative Remedies

145

 

SECTION 10.04. Attorney Costs and Expenses

145

 

SECTION 10.05. Indemnification by the Borrower

146

 

SECTION 10.06. Payments Set Aside

147

 

SECTION 10.07. Successors and Assigns

147

 

SECTION 10.08. Confidentiality

151

 

SECTION 10.09. Setoff

151

 

SECTION 10.10. Interest Rate Limitation

152

 

iv

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Table of Contents

(continued)

 

 

Page

 

 

SECTION 10.11. Counterparts

152

SECTION 10.12. Integration

152

SECTION 10.13. Survival of Representations and Warranties

152

SECTION 10.14. Severability

153

SECTION 10.15. Tax Forms

153

SECTION 10.16. GOVERNING LAW

155

SECTION 10.17. WAIVER OF RIGHT TO TRIAL BY JURY

155

SECTION 10.18. Binding Effect

155

SECTION 10.19. Lender Action

156

SECTION 10.20. USA PATRIOT Act; Canadian Anti-Money Laundering Legislation

156

SECTION 10.21. Judgment Currency

156

SECTION 10.22. Other Liens on Collateral; Terms of Intercreditor Agreement; Etc.

157

SECTION 10.23. Effect of the Amendment and Restatement of the Existing Credit
Agreement

158

SECTION 10.24. No Advisory or Fiduciary Responsibility

158

 

v

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SCHEDULES

 

1.01B

Collateral Documents

1.01D

Mortgaged Properties

1.01E

Excluded Subsidiary

1.01F

Foreign Subsidiary

2.01

Commitments

5.05

Financial Statement Exceptions

5.10

Taxes

5.11

ERISA and other Pension Plan Compliance

5.12

Subsidiaries and Other Equity Investments

6.07

Insurance

7.03

Existing Indebtedness

7.04

Existing Liens

10.02

Administrative Agent’s Office, Certain Addresses for Notices

 

 

EXHIBITS

 

 

Form of

 

 

A

Committed Loan Notice

B

[Reserved]

C

Note

D

Compliance Certificate

E

Assignment and Assumption

F-1

Domestic Guaranty

F-2

Canadian Guarantee

G-1

Security Agreement

G-2

Canadian Security Agreement

H

Intercreditor Agreement

I

Opinion Matters — Counsel to Loan Parties

J

Intercompany Note

K

Specified Discount Prepayment Notice

L

Specified Discount Prepayment Response

M

Discount Range Prepayment Notice

N

Discount Range Prepayment Offer

O

Solicited Discounted Prepayment Notice

P

Solicited Discounted Prepayment Offer

Q

Acceptance and Prepayment Notice

R

Guarantor Consent and Reaffirmation

S

Canadian Guarantor Consent and Reaffirmation

 

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AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as
of January 28, 2013, among MICHAELS STORES, INC., a Delaware corporation (the
“Borrower”), DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent, each
lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and BARCLAYS BANK PLC, CREDIT SUISSE SECURITIES (USA)
LLC, GOLDMAN SACHS BANK USA, J.P. MORGAN SECURITIES LLC, MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, MORGAN STANLEY SENIOR FUNDING, INC., and WELLS
FARGO SECURITIES, LLC, as Co-Documentation Agents.

 

PRELIMINARY STATEMENTS

 

Pursuant to the Recapitalization Agreement (as this and other capitalized terms
used in these preliminary statements are defined in Section 1.01 below), Bain
Paste Mergerco, Inc. and Blackstone Paste Mergerco, Inc. (collectively, the
“MergerCos”) were merged with the Borrower, with the Borrower as the surviving
corporation (the “Recapitalization”).

 

Simultaneously with the consummation of the Recapitalization, the Borrower
entered into that certain Credit Agreement, dated as of October 31, 2006 (as
amended and in effect immediately prior to the Restatement Effective Date, the
“Existing Credit Agreement”), by, among others, the Borrower, the “Lenders” as
defined therein, and DEUTSCHE BANK AG NEW YORK BRANCH, as “Administrative Agent”
as defined therein, pursuant to which the Borrower incurred an Original Loan (as
defined in the Existing Credit Agreement) on the Closing Date in an aggregate
principal amount of $2,400,000,000.

 

The proceeds of the Original Loan made on the Closing Date, together with the
proceeds of (i) the issuance of certain unsecured notes, (ii) the funding of
$400,000,000 under the ABL Credit Agreement on the Closing Date and (iii) the
Equity Contribution, were used to finance the Debt Prepayment and pay the Merger
Consideration and the Closing Date Transaction Expenses.  Immediately prior to
the Restatement Effective Date, outstanding term loans in the aggregate
principal amount of approximately $1,495,000,000 (the “Outstanding Term Loans”)
were outstanding under the Existing Credit Agreement.

 

The Borrower desires to refinance the Outstanding Term Loans in full with
Refinancing Term Loans pursuant to a Refinancing Amendment under Section 2.15 of
the Existing Credit Agreement, and, in connection therewith, to amend and
restate the Existing Credit Agreement in its entirety to, among other things,
(i) provide for such Refinancing Term Loans, which will take the form of a new
tranche of senior secured term loans under this Agreement, and (ii) increase the
aggregate principal amount of such tranche borrowed and outstanding under this
Agreement to $1,640,000,000 on the Restatement Effective Date.

 

The proceeds of the Loans on the Restatement Effective Date will be used to
(i) refinance in full the Outstanding Term Loans, (ii) finance the redemption of
a portion of the Senior Subordinated Notes in the aggregate principal amount of
approximately $137,000,000 and (c) fund certain related fees and expenses
associated with the Transaction.

 

The Lenders and each Additional Lender providing the Refinancing Term Loans have
indicated their willingness to lend and to consent to the other amendments
herein, in each case on the terms and subject to the conditions set forth
herein.

 

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In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I

 

Definitions and Accounting Terms

 

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

 

“ABL Collateral Agent” shall mean the “Collateral Agent” as defined in the ABL
Credit Agreement, or Person performing comparable functions under the ABL Credit
Agreement.

 

“ABL Collateral Documents” shall mean the “Security Documents” as defined in the
ABL Credit Agreement, or comparable term as used in the ABL Credit Agreement.

 

“ABL Credit Agreement” shall mean the Second Amended and Restated Credit
Agreement, dated as of September 17, 2012, among the Borrower, as the lead
borrower, the other borrowers named therein, the facility guarantors identified
therein, Wells Fargo Bank, National Association, as administrative agent and as
collateral agent, and the lenders identified therein, as the same may be
amended, restated, modified, supplemented, extended, renewed, refunded, replaced
or refinanced from time to time in one or more agreements or indentures (in each
case with the same or new lenders, institutional investors or agents), including
any agreement or indenture extending the maturity thereof or otherwise
restructuring all or any portion of the Indebtedness thereunder or increasing
the amount loaned or issued thereunder or altering the maturity thereof (so long
as, in the case of any replacement or refinancing, all commitments under the
agreements or indentures so replaced or refinanced shall have been terminated,
all unpaid amounts thereunder (other than indemnities) shall have been paid in
full and all parties to any replacement or refinancing agreements or indentures,
or a trustee or agent on their behalf, shall have become party to the
Intercreditor Agreement as of the applicable date of replacement or refinancing,
as the case may be).

 

“ABL Lenders” shall mean the “Lenders” as defined in the ABL Credit Agreement.

 

“ABL Loan Documents” shall mean the ABL Credit Agreement and the related
guaranties, pledge agreements, security agreements, mortgages, notes and other
agreements and instruments entered into in connection with the ABL Credit
Agreement.

 

“ABL Loans” shall mean the “Revolving Credit Loans” as defined in the ABL Credit
Agreement, or other loans borrowed under the ABL Credit Agreement.

 

“ABL Priority Collateral” means, collectively, all “ABL Priority Collateral” as
defined in the Intercreditor Agreement.

 

“Acceptable Discount” has the meaning specified in Section 2.05(a)(iii)(D)(2).

 

“Acceptable Prepayment Amount” has the meaning specified in
Section 2.05(a)(iii)(D)(3).

 

“Acceptance and Prepayment Notice” means a notice of the Borrower’s acceptance
of the Acceptable Discount in substantially the form of Exhibit Q attached
hereto.

 

2

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“Acceptance Date” has the meaning specified in Section 2.05(a)(iii)(D)(2).

 

“ACH” means automated clearing house transfers.

 

“Acquired Indebtedness” means, with respect to any specified Person,
(a) Indebtedness of any other Person existing at the time such other Person is
merged or amalgamated with or into or became a Restricted Subsidiary of such
specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging or amalgamating with or into or
becoming a Restricted Subsidiary of such specified Person, and (b) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.

 

“Acquisition” means, with respect to a specified Person, (a) an Investment in or
a purchase of a 50% or greater interest in the Capital Stock of any other
Person, (b) a purchase or acquisition of all or substantially all of the assets
of any other Person, (c) a purchase or acquisition of a real estate portfolio or
Stores from any other Person or assets constituting a business unit, line of
business or division of any other Person, or (d) any merger, amalgamation or
consolidation of such Person with any other Person or other transaction or
series of transactions resulting in the acquisition of all or substantially all
of the assets, or a 50% or greater interest in the Capital Stock of, any Person,
in each case in any transaction or group of transactions which are part of a
common plan.

 

“Act” has the meaning set forth in Section 10.20.

 

“Additional Assets” means (a) any asset used or useful in a Similar Business,
including any such asset acquired through any capital expenditure, (b) the
Capital Stock of a Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock by the Borrower or another Restricted
Subsidiary or is merged or amalgamated with or into the Borrower or another
Restricted Subsidiary and that is primarily engaged in a Similar Business,
(c) Capital Stock constituting a minority interest in any Person that at such
time is a Restricted Subsidiary that is primarily engaged in a Similar Business,
(d) all or substantially all of the assets of a Similar Business or (e) any
other asset that replaces an asset that is the subject of an Asset Sale.

 

“Additional First Lien Indebtedness” has the meaning specified in the definition
of Additional First Lien Intercreditor Agreement.

 

“Additional First Lien Intercreditor Agreement” means an intercreditor agreement
among the Administrative Agent, the Collateral Agent and one or more Senior
Representatives for applicable holders of Permitted First Priority Refinancing
Debt or any other Indebtedness permitted by Section 7.03 that is secured by
Permitted Liens on the Collateral that are pari passu (but without regard to
control of remedies) with the Liens on the Collateral securing the Obligations
(“Additional First Lien Indebtedness”) providing that, inter alia, the Liens on
the Collateral as between the Collateral Agent (for the benefit of the Secured
Parties) and one or more Senior Representatives (for the benefit of any such
Senior Representatives and the applicable holders of Permitted First Priority
Refinancing Debt or Additional First Lien Indebtedness, as the case may be)
shall be pari passu (but without regard to control of remedies), as such
intercreditor agreement may be amended, modified, restated and/or supplemented
from time to time in accordance with the terms hereof and thereof.  The
Additional First Lien Intercreditor Agreement shall be in a form customary for
transactions of the type contemplated thereby and otherwise reasonably
satisfactory to the Administrative Agent and the Borrower and, to the extent
agreed to by the Collateral Agent, one or more Senior Representatives for the
applicable holders of Permitted First Priority Refinancing Debt or Additional
First Lien Indebtedness, as the case may be, and the ABL Collateral Agent, may
be in the form of an amendment and restatement of the Intercreditor Agreement.

 

3

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“Additional Incremental Lender” has the meaning specified in Section 2.17(c).

 

“Additional Junior Lien Indebtedness” has the meaning specified in the
definition of Additional Junior Lien Intercreditor Agreement.

 

“Additional Junior Lien Intercreditor Agreement” means an intercreditor
agreement among the Administrative Agent, the Collateral Agent and one or more
Senior Representatives for applicable holders of Permitted Junior Priority
Refinancing Debt or any other Indebtedness permitted by Section 7.03 that is
secured by Permitted Liens on the Collateral that are junior to the Liens on the
Collateral securing the Obligations (“Additional Junior Lien Indebtedness”)
providing that, inter alia, the Liens on the Collateral in favor of one or more
Senior Representatives (for the benefit of any such Senior Representatives and
the applicable holders of Permitted Junior Priority Refinancing Debt or
Additional Junior Lien Indebtedness, as the case may be, shall be junior to the
Liens on the Collateral in favor of the Collateral Agent (for the benefit of the
Secured Parties), as such intercreditor agreement may be amended, modified,
restated and/or supplemented from time to time in accordance with the terms
hereof and thereof.  The Additional Junior Lien Intercreditor Agreement shall be
in a form customary for transactions of the type contemplated thereby and
otherwise reasonably satisfactory to the Administrative Agent and the Borrower
and, to the extent agreed to by the Collateral Agent, one or more Senior
Representatives for the applicable holders of Permitted Junior Priority
Refinancing Debt or Additional Junior Lien Indebtedness, as the case may be, and
the ABL Collateral Agent, may be in the form of an amendment and restatement of
the Intercreditor Agreement.

 

“Additional Lender” means, at any time, any bank or other financial institution
or institutional lender (other than any such bank, financial institution or
institutional lender that is a Lender at such time) that agrees to provide any
portion of Credit Agreement Refinancing Indebtedness pursuant to a Refinancing
Amendment in accordance with Section 2.15, provided that each Additional Lender
shall be subject to the approval of the Administrative Agent to the extent that
each such Additional Lender is not then an existing Lender, an Affiliate of a
then existing Lender or an Approved Fund (such approval not to be unreasonably
withheld or delayed), and the Borrower.

 

“Administrative Agent” means Deutsche Bank AG New York Branch, in its capacity
as administrative agent under any of the Loan Documents, or any successor
administrative agent.  Unless the context otherwise requires, the term
“Administrative Agent” as used herein and in the other Loan Documents shall
include the Collateral Agent.

 

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

 

“Affiliate Transaction” has the meaning set forth in Section 7.07(a).

 

4

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“Agent-Related Persons” means the Agents and the Arrangers, together with their
respective Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

 

“Agents” means, collectively, the Administrative Agent, the Collateral Agent,
the Co-Documentation Agents and the Supplemental Administrative Agents (if any).

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

“Agreement” means this Credit Agreement.

 

“Agreement Currency” has the meaning provided in Section 10.21.

 

“Applicable Discount” has the meaning specified in Section 2.05(a)(iii)(C)(2).

 

“Applicable Rate” means a percentage per annum equal to with respect to Term B
Loans, (i) until delivery of financial statements for the first full fiscal
quarter of the Borrower ending after the Restatement Effective Date, (A) for
Eurocurrency Rate Loans, 2.75% and (B) for Base Rate Loans, 1.75%, and
(ii) thereafter, the following percentages per annum based upon the Consolidated
Secured Debt Ratio as set forth in the most recent Compliance Certificate
received by the Administrative Agent pursuant to Section 6.02(b):

 

Pricing 
Level

 

Consolidated Secured Debt 
Ratio

 

Eurocurrency Rate for Term 
Loans

 

Base Rate for Term Loans

 

 

 

 

 

 

 

 

 

1

 

Greater than or equal to 1.50:1.00

 

 

2.75

%

 

1.75

 

%

 

 

 

 

 

 

 

 

2

 

Less than 1.50:1.00

 

2.50

%

1.50

%

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Secured Debt Ratio shall become effective as of the first Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(b); provided that, at the option of the Administrative
Agent or the Required Lenders, the highest Pricing Level (i.e. Pricing Level 1)
shall apply (x) as of the first Business Day after the date on which a
Compliance Certificate was required to have been delivered but was not
delivered, and shall continue to so apply to and including the date on which
such Compliance Certificate is so delivered (and thereafter the Pricing Level
otherwise determined in accordance with this definition shall apply) and (y) as
of the first Business Day after an Event of Default under Section 8.01(a) shall
have occurred and be continuing, and shall continue to so apply to but excluding
the date on which such Event of Default is cured or waived (and thereafter the
Pricing Level otherwise determined in accordance with this definition shall
apply).

 

Notwithstanding the foregoing, (x) the Applicable Rate in respect of Incremental
Term Loans of any Class, Extended Term Loans of any Extension Series or
Refinancing Term Loans of any Refinancing Series shall be the applicable
percentages per annum provided pursuant to the relevant Incremental Amendment,
Extension Amendment or Refinancing Amendment, as the case may be, and (y) the
Applicable Rate in respect of certain Loans shall be increased as, and to the
extent, necessary to comply with the provisions of Section 2.17.

 

“Approved Fund” means any Fund that is administered, advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers, advises or

 

5

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manages a Lender.

 

“Appropriate Lender” means, at any time, with respect to Loans of any Class, the
Lenders of such Class.

 

“Arrangers” means Deutsche Bank Securities Inc., Barclays Bank PLC, Credit
Suisse Securities (USA) LLC, Goldman Sachs Bank USA, J.P. Morgan Securities LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior
Funding, Inc., and Wells Fargo Securities, LLC, each in its capacity as a Joint
Bookrunner and a Co-Lead Arranger under this Agreement.

 

“Asset Sale” means (a) the sale, conveyance, transfer or other disposition,
whether in a single transaction or a series of related transactions, of property
or assets (including by way of a Sale and Lease-Back Transaction) of the
Borrower or any of its Restricted Subsidiaries (each referred to in this
definition as a “disposition”) or (b) the issuance or sale of Equity Interests
of any Restricted Subsidiary, whether in a single transaction or a series of
related transactions (other than directors’ qualifying shares and shares issued
to foreign nationals as required under applicable law); in each case, other
than:

 

(i)            any disposition of Cash Equivalents or Investment Grade
Securities or obsolete or worn out property or equipment in the ordinary course
of business or any disposition of inventory or goods (or other assets) held for
sale in the ordinary course of business (it being understood that the sale of
inventory or goods (or other assets) in bulk in connection with the closing of
any number of Stores in the ordinary course of business shall be considered a
sale in the ordinary course of business);

 

(ii)           the disposition of all or substantially all of the assets of the
Borrower in a manner permitted pursuant to Section 7.06 or any disposition that
constitutes a Change of Control;

 

(iii)          the making of any Restricted Payment that is permitted to be
made, and is made, under Section 7.02 or the making of any Permitted Investment;

 

(iv)          any disposition of assets or issuance or sale of Equity Interests
of any Restricted Subsidiary in any transaction or series of transactions with
an aggregate fair market value of less than $25,000,000;

 

(v)           any disposition of property or assets or issuance of securities by
a Restricted Subsidiary of the Borrower to the Borrower or by the Borrower or a
Restricted Subsidiary of the Borrower to another Restricted Subsidiary of the
Borrower;

 

(vi)          to the extent allowable under Section 1031 of the Code, any
exchange of like property (excluding any boot thereon) for use in a Similar
Business;

 

(vii)         the lease, assignment, sublease, license or sublicense of any real
or personal property in the ordinary course of business;

 

(viii)        any issuance or sale of Equity Interests in, or Indebtedness or
other securities of, an Unrestricted Subsidiary;

 

(ix)          foreclosures on or expropriations of assets;

 

(x)           (A) sales of accounts receivable, or participations therein, in
connection

 

6

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with any Receivables Facility, or (B) the disposition of an account receivable
in connection with the collection or compromise thereof in the ordinary course
of business and not as part of a financing transaction;

 

(xi)          the granting of a Lien that is a Permitted Lien;

 

(xii)         the issuance by a Restricted Subsidiary of Preferred Stock or
Disqualified Stock that is permitted by Section 7.03; and

 

(xiii)        any financing transaction with respect to property built or
acquired by the Borrower or any Restricted Subsidiary after the Closing Date,
including asset securitizations permitted by this Agreement and any Sale and
Lease-Back Transaction.

 

“Asset Sale/Casualty Event Offer” has the meaning set forth in
Section 2.05(c)(iii).

 

“Assignees” has the meaning specified in Section 10.07(b).

 

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit E attached to the Existing Credit Agreement.

 

“Attorney Costs” means and includes all reasonable and documented fees, expenses
and disbursements of any law firm or other external legal counsel.

 

“Auction Agent” means (a) the Administrative Agent or (b) any other financial
institution or advisor employed by the Borrower (whether or not an Affiliate of
the Administrative Agent) to act as an arranger in connection with any
Discounted Term Loan Prepayment pursuant to Section 2.05(a)(iii); provided that
the Borrower shall not designate the Administrative Agent as the Auction Agent
without the written consent of the Administrative Agent (it being understood
that the Administrative Agent shall be under no obligation to agree to act as
the Auction Agent); provided, further, that neither the Borrower nor any of its
Affiliates may act as the Auction Agent.

 

“Audited Financial Statements” means the audited consolidated balance sheets of
the Borrower and its Subsidiaries as of each of January 28, 2012, January 29,
2011 and January 30, 2010, and the related audited consolidated statements of
income, stockholders’ equity and cash flows for the Borrower and its
Subsidiaries for the fiscal years ended January 28, 2012, January 29, 2011 and
January 30, 2010, respectively.

 

“Available Incremental Amount” has the meaning specified in Section 2.17(d)(iv).

 

“Average Monthly Balance” means, as of any date of determination, with respect
to any Indebtedness of the Borrower and/or its Restricted Subsidiaries under a
revolving credit facility, the quotient of (a) the sum of each Individual
Monthly Balance for each fiscal month ended on or prior to such date of
determination and included in the Relevant Reference Period divided by (b) 12;
provided that (i) if any Indebtedness under a revolving credit facility is
incurred during the Relevant Reference Period ended on or prior to such date of
determination to finance an Acquisition, an Investment or any other Restricted
Payment (which incurrence shall be notified to the Administrative Agent as
required by Section 6.02(h)), each Individual Monthly Balance for a fiscal month
included in such Relevant Reference Period and ended prior to the date of the
respective incurrence of such Indebtedness shall be increased by the aggregate
principal amount of all such Indebtedness incurred to finance such
Acquisition, Investment or Restricted Payment, as the case may be, and the
Average Monthly Balance shall be calculated using each such Individual Monthly
Balance as so increased and (ii) if any

 

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Indebtedness under a revolving credit facility is repaid with the net cash
proceeds of a Material Disposition during the Relevant Reference Period ended on
or prior to such date of determination (and is notified to the Administrative
Agent pursuant to a certificate delivered pursuant to Section 6.02(h)), each
Individual Monthly Balance for a fiscal month included in such Relevant
Reference Period and ended prior to the date of the respective repayment of such
Indebtedness shall be decreased by the aggregate principal amount of such
Indebtedness so repaid (it being understood that a notice delivered in good
faith by a Responsible Officer of the Borrower pursuant to Section 6.02(h), and
any judgment made in good faith by a Responsible Officer of the Borrower that no
notice is required to be delivered pursuant to the terms of Section 6.02(h) in
connection with a given incurrence or repayment of Indebtedness under a
revolving credit facility (e.g., because proceeds of a revolving credit facility
are not then being applied to finance an Acquisition, Investment or other
Restricted Payment), shall be conclusive for purposes of any determination of an
increase or decrease of the Average Monthly Balance pursuant to this proviso).

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by DBNY as its “prime rate”
and (c) the Eurocurrency Rate for a Eurocurrency Rate Loan denominated in
Dollars with an Interest Period of one month commencing on such day (or, if such
day is not a Business Day, the immediately preceding Business Day) plus 1%.  The
“prime rate” is a rate set by DBNY based upon various factors including DBNY
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.  Any change in such rate announced by DBNY shall
take effect at the opening of business on the day specified in the public
announcement of such change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Board of Directors” means (a) with respect to a corporation, the board of
directors of the corporation, (b) with respect to a partnership, the board of
directors of the general partner of the partnership and (c) with respect to any
other Person, the board or committee of such Person serving a similar function.

 

“Borrower” has the meaning provided in the introductory paragraph of this
Agreement; provided that when used in the context of determining the fair market
value of an asset or liability under this Agreement, “Borrower” shall, unless
otherwise expressly stated, be deemed to mean the Board of Directors of the
Borrower when the fair market value of such asset or liability is equal to or in
excess of $200,000,000 (unless otherwise expressly stated), in which case the
determination of the Board of Directors shall be deemed conclusive for purposes
of this Agreement.

 

“Borrower Guaranty” means the Borrower Guaranty made by the Borrower in favor of
the Administrative Agent on behalf of the Secured Parties, substantially in the
form of Exhibit F-1 attached to the Existing Credit Agreement.

 

“Borrower Offer of Specified Discount Prepayment” means the offer by any Company
Party to make a voluntary prepayment of Loans at a Specified Discount to par
pursuant to Section 2.05(a)(iii)(B).

 

“Borrower Solicitation of Discounted Prepayment Offers” means the solicitation
by any Company Party of offers for, and the subsequent acceptance, if any, by a
Lender of, a voluntary prepayment of Loans at a discount to par pursuant to
Section 2.05(a)(iii)(D).

 

“Borrower Solicitation of Discount Range Prepayment Offers” means the
solicitation by any Company Party of offers for, and the corresponding
acceptance by a Lender of, a voluntary

 

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prepayment of Loans at a specified range of discounts to par pursuant to
Section 2.05(a)(iii)(C).

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and Class and, in the case of Eurocurrency Rate Loans, having the same Interest
Period, made by each of the Lenders having Commitments of the respective
Class pursuant to Section 2.01 or under any Incremental Amendment, Extension
Amendment or Refinancing Amendment.

 

“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 and if
such day relates to any interest rate settings as to a Eurocurrency Rate Loan,
any fundings, disbursements, settlements and payments in respect of any such
Eurocurrency Rate Loan, or any other dealings to be carried out pursuant to this
Agreement in respect of any such Eurocurrency Rate Loan, means any such day on
which dealings in deposits in Dollars are conducted by and between banks in the
London interbank eurodollar market.

 

“Canadian Guarantee” means, collectively, (a) the Canadian Guarantee made by the
Canadian Subsidiary Guarantors in favor of the Administrative Agent on behalf of
the Secured Parties, substantially in the form of Exhibit F-2 attached to the
Existing Credit Agreement and (b) each other guaranty and Guaranty Supplement
delivered by a Canadian Subsidiary Guarantor pursuant to Section 6.11.

 

“Canadian Security Agreement” means, collectively, (a) the Security Agreement
executed by the Canadian Subsidiary Guarantors, substantially in the form of
Exhibit G-2 attached to the Existing Credit Agreement, and (b) any Deed of
Immovable and Moveable Hypothec, together with, in each case, each other
security agreement supplement executed and delivered by a Canadian Subsidiary
Guarantor pursuant to Section 6.11.

 

“Canadian Subsidiary” means any Subsidiary that is organized under the laws of
Canada or any province thereof.

 

“Canadian Subsidiary Guarantors” means, collectively, (i) Michaels of Canada ULC
and (ii) each other Canadian Subsidiary of the Borrower that, in the sole
discretion of the Borrower, shall have entered into the Canadian Guarantee and
complied with the requirements of clause (b) of the definition of “Collateral
and Guarantee Requirement”.

 

“Capital Expenditures” means, for any period, the aggregate of (a) all
expenditures (whether paid in cash or accrued as liabilities) by the Borrower
and the Restricted Subsidiaries during such period that, in conformity with
GAAP, are or are required to be included as additions during such period to
property, plant or equipment reflected in the consolidated balance sheet of the
Borrower and the Restricted Subsidiaries and (b) the value of all assets under
(or subject to) Capitalized Lease Obligations incurred by the Borrower and the
Restricted Subsidiaries during such period; provided that the term “Capital
Expenditures” shall not include (i) expenditures made in connection with the
replacement, substitution, restoration or repair of assets to the extent
financed with (x) insurance proceeds paid on account of the loss of or damage to
the assets being replaced, restored or repaired or (y) awards of compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced, (ii) the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment to the extent that the gross amount of
such purchase price is reduced by the credit granted by the seller of such
equipment for the equipment being traded in at such time, (iii) the purchase of
plant, property or equipment or software to the extent financed with the
proceeds of Asset Sales that are not required to be applied to prepay Loans
pursuant to Section 2.05(c), (iv) expenditures that are accounted for as capital
expenditures by the Borrower or any Restricted Subsidiary and that actually are
paid for by

 

9

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a Person other than the Borrower or any Restricted Subsidiary, to the extent
neither the Borrower nor any Restricted Subsidiary has provided or is required
to provide or incur, directly or indirectly, any consideration or obligation to
such Person or any other Person (whether before, during or after such period),
(v) the book value of any asset owned by the Borrower or any Restricted
Subsidiary prior to or during such period to the extent that such book value is
included as a capital expenditure during such period as a result of such Person
reusing or beginning to reuse such asset during such period without a
corresponding expenditure actually having been made in such period, provided
that (A) any expenditure necessary in order to permit such asset to be reused
shall be included as a Capital Expenditure during the period in which such
expenditure actually is made and (B) such book value shall have been included in
Capital Expenditures when such asset was originally acquired, (vi) expenditures
that constitute Acquisitions permitted hereunder, (vii) any expenditure which
but for this clause (vii) would otherwise constitute a “Capital Expenditure”, to
the extent financed with the proceeds of the sale or issuance of any Equity
Interests of the Borrower or (viii) that portion of interest on Indebtedness
incurred for Capital Expenditures which is paid in cash and capitalized in
accordance with GAAP during such period.

 

“Capital Stock” means (a) in the case of a corporation, shares in the capital of
such corporation; (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of capital stock; (c) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited); and (d) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

 

“Capitalized Lease Obligation” means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized and reflected as a liability on a
balance sheet (excluding the footnotes thereto) prepared in accordance with
GAAP.

 

“Cash Collateral Account” means a blocked account at DBNY (or another commercial
bank selected in compliance with Section 9.09) in the name of the Administrative
Agent and under the sole dominion and control of the Administrative Agent, and
otherwise established in a manner reasonably satisfactory to the Administrative
Agent.

 

“Cash Equivalents” means:

 

(a)           United States dollars and Canadian dollars;

 

(b)           (i)  euro or any national currency of any participating member
state of the EMU; or

 

(ii)           in the case of any Foreign Subsidiary that is a Restricted
Subsidiary, such local currencies held by it from time to time in the ordinary
course of business;

 

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

 

(d)           certificates of deposit, time deposits and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any commercial bank having capital and surplus of
not less than $250,000,000 in the case of U.S. banks and, in the case of any

 

10

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Foreign Subsidiary that is a Restricted Subsidiary, $100,000,000 (or the U.S.
dollar equivalent as of the date of determination) in the case of non-U.S.
banks, and in each case in a currency permitted under clauses (a) or (b) above;

 

(e)           repurchase obligations for underlying securities of the types
described in clauses (c) and (d) entered into with any financial institution
meeting the qualifications specified in clause (d) above and in each case in a
currency permitted under clauses (a) or (b) above;

 

(f)            commercial paper rated at least P-2 by Moody’s or at least A-2 by
S&P and in each case maturing within 24 months after the date of creation
thereof and in each case in a currency permitted under clauses (a) or (b) above;

 

(g)           marketable short term money market and similar securities having a
rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if
at any time neither Moody’s nor S&P shall be rating such obligations, an
equivalent rating from another Rating Agency) and in each case maturing within
24 months after the date of creation thereof and in each case in a currency
permitted under clauses (a) or (b) above;

 

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

 

(i)            Indebtedness or Preferred Stock issued by Persons with a rating
of A or higher from S&P or A2 or higher from Moody’s with maturities of 24
months or less from the date of acquisition and in each case in a currency
permitted under clauses (a) or (b) above;

 

(j)            Investments with average maturities of 12 months or less from the
date of acquisition in money market funds rated AAA- (or the equivalent thereof)
or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s and in
each case in a currency permitted under clauses (a) or (b) above;

 

(k)           investment funds investing substantially all of their assets in
securities of the type described in clauses (a) through (j) above; and

 

(l)            credit card receivables and debit card receivables so long as
same are payable by a financial institution and are considered “cash
equivalents” in accordance with GAAP and are so reflected on the Borrower’s
balance sheet.

 

Notwithstanding the foregoing, Cash Equivalents shall include amounts
denominated in currencies other than those set forth in clauses (a) and
(b) above, provided that such amounts are converted into any currency listed in
clauses (a) and (b) as promptly as practicable and in any event within ten
Business Days following the receipt of such amounts.

 

“Cash Management Services” means any of the following to the extent not
constituting a line of credit: ACH transactions, treasury and/or cash management
services, including, without limitation, controlled disbursement services,
foreign exchange facilities, deposit and other accounts and merchant services.

 

“Casualty Event” means any event that gives rise to the receipt by the Borrower
or any Restricted Subsidiary of any insurance proceeds or condemnation awards in
respect of any equipment,

 

11

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fixed assets or real property (including any improvements thereon) to replace or
repair such equipment, fixed assets or real property.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as subsequently amended.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“CFC” means a “controlled foreign corporation” within the meaning of
Section 957(a) of the Code.

 

“Change in Law” means the occurrence, after the Restatement Effective Date, of
any of the following:  (a) the adoption or taking effect of any law, rule,
regulation or treaty (excluding the taking effect after the Restatement
Effective Date of a law, rule, regulation or treaty adopted prior to the
Restatement Effective Date), (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority.  It is understood and agreed that (i) the Dodd—Frank Wall Street
Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173), all Laws
relating thereto, all interpretations and applications thereof and any
compliance by a Lender with any request or directive relating thereto and
(ii) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States regulatory authorities, in
each case pursuant to Basel III, shall, in each case, for the purposes of this
Agreement, be deemed to be adopted and taking effect subsequent to the
Restatement Effective Date.

 

“Change of Control” means the occurrence of any of the following after the
Restatement Effective Date:

 

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

 

(b)           the Borrower becomes aware of (by way of a report or any other
filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
notice or otherwise) the acquisition by (i) any Person (other than one or more
Permitted Holders) or (ii) Persons (other than one or more Permitted Holders)
that together are (1) a group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, or any successor provision), or (2) acting
for the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act) as a group in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 50% or more of the total voting power of the Voting Stock of the
Borrower or any of its direct or indirect parent companies holding directly or
indirectly 100% of the total voting power of the Voting Stock of the Borrower;
or

 

(c)           any “Change of Control” (or any comparable term) in any document
pertaining to (i) the ABL Credit Agreement, (ii) the Senior Notes, the Senior
Subordinated Notes, Incremental Equivalent Debt, Credit Agreement Refinancing
Indebtedness (except to the extent incurred pursuant to a Refinancing
Amendment), other Indebtedness (other than any Loan) or any Refinancing
Indebtedness in respect of the foregoing, in each case with an aggregate
outstanding

 

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principal amount in excess of the Threshold Amount or (iii) any Disqualified
Stock with an aggregate liquidation preference in excess of the Threshold
Amount.

 

“Civil Code” means the Civil Code of Quebec and all regulations thereunder, as
amended from time to time, and any successor statutes.

 

“Class” (a) when used with respect to Lenders, refers to whether such Lenders
have Loans or Commitments with respect to a particular Class of Loans or
Commitments, (b) when used with respect to Commitments, refers to whether such
Commitments are Term Commitments, Incremental Term Commitments, Extended Term
Commitments of a given Extension Series, Refinancing Term Commitments of a given
Refinancing Series, in each case not designated part of another existing
Class and (c) when used with respect to Loans or a Borrowing, refers to whether
such Loans, or the Loans comprising such Borrowing, are Term B
Loans, Incremental Term Loans, Extended Term Loans made pursuant to a given
Extension Series, or Refinancing Term Loans made pursuant to a given Refinancing
Series, in each case not designated part of another existing Class.  Commitments
(and, in each case, the Loans made pursuant to such Commitments) that have
different terms and conditions shall be construed to be in different Classes. 
Commitments (and, in each case, the Loans made pursuant to such Commitments)
that have the same terms and conditions shall be construed to be in the same
Class.

 

“Closing Date” means October 31, 2006.

 

“Closing Date Transaction” means the “Transaction” as defined in the Existing
Credit Agreement.

 

“Closing Date Transaction Expenses” means the “Transaction Expenses” as defined
in the Existing Credit Agreement.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended, and rules and
regulations related thereto.

 

“Co-Documentation Agent” means Barclays Bank PLC, Credit Suisse Securities (USA)
LLC, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., and Wells
Fargo Securities, LLC, each as a Co-Documentation Agent under this Agreement.

 

“Collateral” means all the “Collateral” as defined in any Collateral Document
and shall include the Mortgaged Properties.

 

“Collateral Access Agreement” means an agreement reasonably satisfactory in form
and substance to the Collateral Agent executed by (a) a bailee or other Person
in possession of Collateral, and (b) each landlord of real property leased by
any Loan Party, pursuant to which such Person (i) acknowledges the Collateral
Agent’s Lien on the Collateral, (ii) releases or subordinates such Person’s
Liens in the Collateral held by such Person or located on such real property,
(iii) agrees to furnish the Collateral Agent with access to the Collateral in
such Person’s possession or on the real property for the purposes of conducting
a liquidation and (iv) makes such other agreements with the Collateral Agent as
the Collateral Agent may reasonably require.

 

“Collateral Agent” means the Administrative Agent, in its capacity as collateral
agent under any of the Loan Documents, or any successor collateral agent.

 

“Collateral and Guarantee Requirement” means, at any time, the requirement that:

 

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(a)           the Administrative Agent shall have received (w) each Collateral
Document required to be delivered on the Closing Date pursuant to
Section 4.01(a)(iii) of the Existing Credit Agreement, pursuant to Section 4.01
of this Agreement or pursuant to Section 6.11 at such time as is designated
therein, (x) the Intercreditor Agreement, (y) the Additional First Lien
Intercreditor Agreement (if then in effect), and (z) the Additional Junior Lien
Intercreditor Agreement (if then in effect), in each case duly executed by each
Loan Party thereto;

 

(b)           all Obligations shall have been unconditionally guaranteed by the
Borrower (in the case of Obligations under clause (y) of the first sentence of
the definition thereof), each Restricted Subsidiary that is a Domestic
Subsidiary and not an Excluded Subsidiary and, after the formation thereof,
Holdco;

 

(c)           all guarantees issued or to be issued in respect of the Senior
Subordinated Notes shall be subordinated to the Guaranties to the same extent
that the Senior Subordinated Notes are subordinated to the Obligations;

 

(d)           the Obligations and the Guaranties shall have been secured by a
first priority security interest (subject to the terms of the Intercreditor
Agreement, the Additional First Lien Intercreditor Agreement (if then in
effect), and the Additional Junior Lien Intercreditor Agreement (if then in
effect)) in all Equity Interests (other than Equity Interests of Unrestricted
Subsidiaries and any Equity Interest of any Restricted Subsidiary pledged to
secure Indebtedness permitted under Section 7.03(b)(xix)) of each Wholly Owned
Subsidiary directly owned by any Guarantor; provided that pledges of voting
Equity Interests of each Foreign Subsidiary (including each Foreign Subsidiary
held by a Canadian Subsidiary Guarantor) and each Domestic Subsidiary that is
described in clause (e)(ii) of the definition of Excluded Subsidiary shall be
limited to 65% of the total combined voting power of all Equity Interests of
such Foreign Subsidiary at any time; provided further that in the case of
Canadian Subsidiary Guarantor that owns Equity Interests in a Foreign
Subsidiary, the pledge of voting Equity Interests of such Canadian Subsidiary
Guarantor shall be limited to 65% of the total combined voting power of all
Equity Interests of such Canadian Subsidiary Guarantor (or, if such Canadian
Subsidiary Guarantor is an unlimited liability company, such  lesser percentage
as is acceptable to the Collateral Agent);

 

(e)           except to the extent otherwise permitted hereunder or under any
Collateral Document, the Obligations and the Guaranties shall have been secured
by a security interest in, and mortgages on, substantially all tangible and
intangible assets of the Borrower and each other Guarantor (including accounts,
inventory, equipment, investment property, contract rights, intellectual
property, other general intangibles, owned real property and proceeds of the
foregoing), in each case, with the priority required by the Collateral
Documents, the Intercreditor Agreement, the Additional First Lien Intercreditor
Agreement (if then in effect), and the Additional Junior Lien Intercreditor
Agreement (if then in effect); provided that security interests in real property
shall be limited to the Mortgaged Properties;

 

(f)            none of the Collateral shall be subject to any Liens other than
Liens permitted by Section 7.04; and

 

(g)           the Collateral Agent shall have received (i) counterparts of a
Mortgage with respect to each owned property required to be delivered pursuant
to Section 6.11 (the “Mortgaged Properties”) duly executed and delivered by the
record owner of such property, (ii) a policy or policies of title insurance
issued by a nationally recognized title insurance company insuring the Lien of
each such Mortgage as a valid first priority Lien on the property described
therein (subject to the applicable provisions of the Intercreditor Agreement,
the Additional First

 

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Lien Intercreditor Agreement (if then in effect), and the Additional Junior Lien
Intercreditor Agreement (if then in effect)), free of any other Liens except as
expressly permitted by Section 7.04, together with such endorsements,
coinsurance and reinsurance as the Administrative Agent may reasonably request,
(iii) such existing surveys, existing abstracts, existing appraisals and other
documents as the Administrative Agent may reasonably request with respect to any
such Mortgaged Property and (iv) to the extent required by applicable law, flood
certificates covering each Mortgaged Property in form and substance reasonably
acceptable to the Collateral Agent, certified to the Collateral Agent in its
capacity as such and certifying whether or not such Mortgaged Property is
located in a flood hazard zone by reference to the applicable FEMA map.

 

The foregoing definition shall not require the creation or perfection of pledges
of or security interests in, or the obtaining of title insurance or surveys with
respect to, particular assets if and for so long as, in the reasonable judgment
of the Collateral Agent (confirmed in writing by notice to the Borrower), the
cost of creating or perfecting such pledges or security interests in such assets
or obtaining title insurance or surveys in respect of such assets shall be
excessive in view of the benefits to be obtained by the Lenders therefrom.  The
Collateral Agent may grant extensions of time for the perfection of security
interests in or the obtaining of title insurance with respect to particular
assets (including extensions beyond the Closing Date for the perfection of
security interests in the assets of the Loan Parties on such date) where it
reasonably determines, in consultation with the Borrower, that perfection cannot
be accomplished without undue effort or expense by the time or times at which it
would otherwise be required by this Agreement or the Collateral Documents.

 

Notwithstanding the foregoing provisions of this definition or anything in this
Agreement or any other Loan Document to the contrary, Liens required to be
granted from time to time pursuant to the Collateral and Guarantee Requirement
shall be subject to exceptions and limitations set forth in the Collateral
Documents as in effect on the Restatement Effective Date and, to the extent
appropriate in the applicable jurisdiction, as agreed between the Collateral
Agent and the Borrower.

 

“Collateral Documents” means, collectively, the Security Agreement, the
Mortgages, the Canadian Security Agreement, each of the mortgages, collateral
assignments, Security Agreement Supplements, Guarantor Consent and
Reaffirmation, security agreements, pledge agreements or other similar
agreements delivered to the Collateral Agent and the Lenders pursuant to
Section 6.11 or Section 6.13 and each of the other agreements, instruments or
documents that creates or purports to create or affirm a Lien or Guaranty in
favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Commitment” means a Term Commitment, an Incremental Term Commitment, an
Extended Term Commitment of a given Extension Series, or a Refinancing Term
Commitment of a given Refinancing Series, as the context may require.

 

“Committed Loan Notice” means a notice of (a) a Borrowing with respect to a
given Class of Loans, (b) a conversion of Loans of a given Class from one Type
to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to
Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A attached hereto.

 

“Company Parties” means the collective reference to any Holdco (after the
formation thereof), the Borrower and their Subsidiaries, and “Company Party”
means any one of them.

 

“Compensation Period” has the meaning specified in Section 2.12(c)(ii).

 

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

 

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“Consolidated Depreciation and Amortization Expense” means with respect to any
Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.

 

“Consolidated Interest Expense” means, with respect to any Person for any
period, without duplication, the sum of:

 

(a)           consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, to the extent such expense was deducted (and not
added back) in computing Consolidated Net Income (including (i) amortization of
original issue discount resulting from the issuance of Indebtedness at less than
par, (ii) all commissions, discounts and other fees and charges owed with
respect to letters of credit or bankers acceptances, (iii) non-cash interest
payments (but excluding any non cash interest expense attributable to the
movement in the mark to market valuation of Hedging Obligations or other
derivative instruments pursuant to GAAP), (iv) the interest component of
Capitalized Lease Obligations, and (v) net payments, if any, made (less net
payments, if any, received) pursuant to interest rate Hedging Obligations with
respect to Indebtedness, and excluding (A) penalties and interest related to
taxes, (B) any additional interest with respect to any Indebtedness due to the
failure to comply with any registration rights agreement relating to such
Indebtedness, (C) amortization of deferred financing fees, debt issuance costs,
discounted liabilities, commissions, fees and expenses, (D) any expensing of
bridge, commitment and other financing fees, (E) any prepayment premium or
penalty, and (F) commissions, discounts, yield and other fees and charges
(including any interest expense) related to any Receivables Facility); plus

 

(b)           consolidated capitalized interest of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued; less

 

(c)           interest income for such period.

 

For purposes of this definition, interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by such
Person to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP.

 

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

 

(a)           any after-tax effect of extraordinary, non—recurring or unusual
gains or losses (less all fees and expenses relating thereto) or expenses,
Closing Date Transaction Expenses to the extent incurred on or prior to
December 31, 2007, Transaction Expenses, severance costs, relocation costs,
costs related to the Perfect Store Initiative, Hybrid Distribution Network
Costs, pre-opening, opening, consolidation and closing costs for any facilities
(including Stores), signing, retention or completion bonuses or recruiting
costs, transition costs, costs incurred in connection with acquisitions after
the Closing Date, restructuring costs, Specified Legal Expenses, integration and
systems establishment costs, and curtailments or modifications to pension and
post—retirement employee benefit plans shall be excluded,

 

(b)           the Net Income for such period shall not include the cumulative
effect of a change in accounting principles during such period,

 

16

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(c)           any net after-tax gains or losses on disposal of disposed,
abandoned or discontinued operations shall be excluded,

 

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

 

(e)           the Net Income for such period of any Person that is not a
Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the
equity method of accounting, shall be excluded; provided that Consolidated Net
Income of the Borrower shall be increased by the amount of dividends or
distributions or other payments that are actually paid in cash (or to the extent
converted into cash) to the referent Person or a Restricted Subsidiary thereof
in respect of such period by such Person,

 

(f)            solely for the purpose of determining the amount available for
Restricted Payments under clause (iii)(A) of Section 7.02(a) hereof, the Net
Income for such period of any Restricted Subsidiary (other than any Guarantor)
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of its Net Income is not at
the date of determination permitted without any prior governmental approval
(which has not been obtained) or, directly or indirectly, by the operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule, or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, unless such restriction with respect to the
payment of dividends or similar distributions has been legally waived, provided
that Consolidated Net Income of the Borrower will be increased by the amount of
dividends or other distributions or other payments actually paid in cash (or to
the extent converted into cash) to the Borrower or a Restricted Subsidiary
thereof in respect of such period, to the extent not already included therein,

 

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

 

(h)           any after—tax effect of income (loss) from the early
extinguishment or conversion of Indebtedness or Hedging Obligations or other
derivative instruments shall be excluded,

 

(i)            any impairment charge or asset write-off or write-down, in each
case, pursuant to GAAP and the amortization of intangibles arising pursuant to
GAAP shall be excluded,

 

(j)            any non-cash compensation charge or expense including any such
charge or expense arising from the grant of stock appreciation or similar
rights, stock options, restricted stock or other equity-incentive programs shall
be excluded,

 

(k)           any fees and expenses incurred during such period, or any
amortization thereof for such period, in connection with any
acquisition, Investment, Asset Sale, issuance or repayment of Indebtedness,
issuance of Equity Interests (including in any initial public offering of the
Borrower or Holdco), refinancing transaction or amendment or modification of any
debt instrument (in each case, including any such transaction consummated prior
to the Closing Date and any such transaction undertaken but not completed) and
any charges or non-recurring merger

 

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costs incurred during such period as a result of any such transaction shall be
excluded,

 

(l)            accruals and reserves that are established within twelve months
after the Closing Date that are so required to be established as a result of the
Transaction in accordance with GAAP shall be excluded,

 

(m)          any unrealized net gain or loss (after any offset) resulting in
such period from currency transaction or translation gains or losses including
those related to currency remeasurements of Indebtedness (including any net loss
or gain resulting from (i) Swap Contracts for currency exchange risk and
(ii) resulting from intercompany indebtedness) and any other foreign currency
transaction or translation gains and losses, to the extent such gains or losses
are non-cash items, shall be excluded,

 

(n)           any unrealized net gains and losses (after any offset) resulting
from Swap Contracts or embedded derivatives that require similar accounting
treatment and the application of Accounting Standards Codification Topic
No. 815, Derivatives and Hedging shall be excluded.

 

In addition, to the extent not already included in the Net Income of such Person
and its Restricted Subsidiaries, notwithstanding anything to the contrary in the
foregoing, Consolidated Net Income shall include the amount of proceeds received
from business interruption insurance and reimbursements of any expenses and
charges that are covered by indemnification or other reimbursement provisions in
connection with any Permitted Investment or any sale, conveyance, transfer or
other disposition of assets permitted hereunder.

 

Notwithstanding the foregoing, for the purpose of Section 7.02 only (other than
Section 7.02(a)(iii)(D)), there shall be excluded from Consolidated Net Income
any income arising from any sale or other disposition of Restricted Investments
made by the Borrower and its Restricted Subsidiaries, any repurchases and
redemptions of Restricted Investments from the Borrower and its Restricted
Subsidiaries, any repayments of loans and advances which constitute Restricted
Investments by the Borrower or any of its Restricted Subsidiaries, any sale of
the stock of an Unrestricted Subsidiary or any distribution or dividend from an
Unrestricted Subsidiary, in each case only to the extent such amounts increase
the amount of Restricted Payments permitted pursuant to Section 7.02(a)(iii)(D).

 

“Consolidated Secured Debt Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Total Indebtedness of the Borrower and its Restricted
Subsidiaries that is secured by Liens as at the last day of the Relevant
Reference Period to (b) the Borrower’s EBITDA for the Relevant Reference Period,
in each case with such pro forma adjustments to Consolidated Total Indebtedness
(other than Indebtedness under a revolving credit facility) and EBITDA as are
appropriate and consistent with the pro forma adjustment provisions set forth in
the definition of “Fixed Charge Coverage Ratio”; provided that (x) in the event
that any Indebtedness under a revolving credit facility is incurred after the
last day of the Relevant Reference Period ended prior to such date of
determination to finance an Acquisition, an Investment or any other Restricted
Payment (which incurrence shall be notified to the Administrative Agent as
required by Section 6.02(h)), (i) each Individual Monthly Balance for a fiscal
month included in such Relevant Reference Period and ended prior to the date of
the respective incurrence of such Indebtedness shall be increased by the
aggregate principal amount of all such Indebtedness incurred to finance such
Acquisition, Investment or Restricted Payment, as the case may be, (ii) the
Average Monthly Balance included in the determination of Consolidated Total
Indebtedness as at the last day of such Relevant Reference Period shall be
calculated using each such Individual Monthly Balance as so increased, and
(iii) Consolidated Total Indebtedness as at the last day of such Relevant
Reference Period shall be recalculated to give pro forma effect to the
adjustments contemplated by preceding clauses (i) and (ii), and (y) in the event
that any Indebtedness under a revolving credit facility is

 

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repaid after the last day of the Relevant Reference Period ended prior to such
date of determination with the net cash proceeds of a Material Disposition (and
is notified to the Administrative Agent pursuant to a certificate delivered
pursuant to Section 6.02(h)), (i) each Individual Monthly Balance for a fiscal
month included in such Relevant Reference Period and ended prior to the date of
the respective repayment of such Indebtedness shall be decreased by the
aggregate principal amount of all such Indebtedness so repaid with the net cash
proceeds of such Material Disposition, (ii) the Average Monthly Balance included
in the determination of Consolidated Total Indebtedness as at the last day of
such Relevant Reference Period shall be calculated using each such Individual
Monthly Balance as so decreased, and (iii) Consolidated Total Indebtedness as at
the last day of such Relevant Reference Period shall be recalculated to give pro
forma effect to the adjustments contemplated by preceding clauses (i) and
(ii) (it being understood that a notice delivered in good faith by a Responsible
Officer of the Borrower pursuant to Section 6.02(h), and any judgment made in
good faith by a Responsible Officer of the Borrower that no notice is required
to be delivered pursuant to the terms of Section 6.02(h) in connection with a
given incurrence or repayment of Indebtedness under a revolving credit facility
(e.g., because proceeds of a revolving credit facility are not then being
applied to finance an Acquisition, Investment or other Restricted Payment),
shall be conclusive for purposes of any determination of an increase or decrease
of the Average Monthly Balance pursuant to this proviso).  Notwithstanding
anything to the contrary herein, for purposes of the calculation of the
Consolidated Secured Debt Ratio used in determining the availability of
Incremental Facilities or Incremental Equivalent Debt, (i) any Incremental
Facilities or Incremental Equivalent Debt that are or is unsecured and any
refinancing thereof shall nevertheless be deemed to be secured on a pari passu
basis with the Term B Loans and (ii) any cash proceeds of any Incremental
Facility or Incremental Equivalent Debt will not be netted for purposes of
determining compliance with the Consolidated Secured Debt Ratio.

 

“Consolidated Total Indebtedness” means, as at any date of determination, an
amount equal to the remainder of (i) the sum of, without duplication, (a) the
aggregate amount of all outstanding Indebtedness of the Borrower and its
Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for
borrowed money, Obligations in respect of Capitalized Lease Obligations and debt
obligations evidenced by promissory notes, bonds, debentures, letters of credit,
bankers’ acceptances and similar instruments (and excluding, for the avoidance
of doubt, (x) any undrawn letters of credit and bankers’ acceptances and
reimbursement obligations in respect of commercial and trade letters of credit
and (y) all obligations relating to Receivables Facilities), (b) the aggregate
amount of all outstanding Disqualified Stock of the Borrower and all Preferred
Stock of its Restricted Subsidiaries on a consolidated basis, with the amount of
such Disqualified Stock and Preferred Stock equal to the greater of their
respective voluntary or involuntary liquidation preferences and maximum fixed
repurchase prices, in each case determined on a consolidated basis in accordance
with GAAP, and (c) any Contingent Obligations of the Borrower and its Restricted
Subsidiaries in respect of the obligations described in clauses (a) and
(b) above, less (ii) the aggregate amount of Unrestricted cash and Cash
Equivalents included on the consolidated balance sheet of the Borrower and any
Restricted Subsidiaries as of such date.  For purposes hereof, the “maximum
fixed repurchase price” of any Disqualified Stock or Preferred Stock that does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Stock or Preferred Stock as if such Disqualified
Stock or Preferred Stock were purchased on any date on which Consolidated Total
Indebtedness shall be required to be determined pursuant to this Agreement, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Stock or Preferred Stock, such fair market value shall be
determined reasonably and in good faith by the Borrower.

 

“Consolidated Total Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Total Indebtedness of the Borrower and its Restricted
Subsidiaries as at the last day of the Relevant Reference Period to (b) the
Borrower’s EBITDA for the Relevant Reference Period, in each case with such pro
forma adjustments to Consolidated Total Indebtedness and EBITDA as are
appropriate and consistent with the pro forma adjustment provisions set forth in
the definition of “Consolidated

 

19

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Secured Debt Ratio”, except that for purposes of the definition of Required
Percentage, pro forma adjustments shall not be made for events that occur after
the last day of the applicable Excess Cash Flow Period.

 

“Consolidated Working Capital” means, at any date, the excess of (a) the sum of
all amounts (other than cash and Cash Equivalents) that would, in conformity
with GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of the Borrower and the Restricted
Subsidiaries at such date over (b) the sum of all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of the
Borrower and the Restricted Subsidiaries on such date, including deferred
revenue but excluding in each case, without duplication, (i) the current portion
of any Funded Debt, (ii) all Indebtedness consisting of Loans, ABL Loans and
Capitalized Lease Obligations, to the extent otherwise included therein,
(iii) the current portion of interest and (iv) the current portion of current
and deferred income taxes.

 

“Contingent Obligations” means, with respect to any Person, any obligation of
such Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation, or (ii)               to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation against loss in respect thereof.

 

“Contract Consideration” has the meaning set forth in the definition of “Excess
Cash Flow”.

 

“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.

 

“Control” has the meaning specified in the definition of “Affiliate.”

 

“Corrective Extension Amendment” has the meaning provided in Section 2.16.

 

“Credit Agreement Refinancing Indebtedness” means any (a) Permitted First
Priority Refinancing Debt, (b) Permitted Junior Priority Refinancing Debt,
(c) Permitted Unsecured Refinancing Debt or (d) other Indebtedness incurred
pursuant to a Refinancing Amendment, in each case, issued, incurred or otherwise
obtained (including by means of the extension or renewal of existing
Indebtedness) in exchange for, or to extend, renew, replace, repurchase, retire
or refinance, in whole or part, then existing Loans of a given Class (including
any successive Credit Agreement Refinancing Indebtedness) (“Refinanced Debt”);
provided that (i) such exchanging, extending, renewing, replacing, repurchasing,
retiring or refinancing Indebtedness is in an original aggregate principal
amount (or accreted value, if applicable) not greater than the aggregate
principal amount (or accreted value, if applicable) of the Refinanced Debt
except by an amount equal to unpaid accrued interest and premium (including
tender premiums) and penalties thereon plus other reasonable amounts paid, and
fees, expenses and original issue discount reasonably incurred, in connection
with such exchanging, extending, renewing, replacing, repurchasing, retiring or
refinancing Indebtedness, (ii) such Indebtedness has a later maturity and a
Weighted Average Life to Maturity equal to or greater than that of the
Refinanced Debt (other than due to

 

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prior scheduled amortization or prepayments of the Refinanced Debt), and
(iii) unless such Credit Agreement Refinancing Indebtedness is incurred solely
by means of extending or renewing then existing Indebtedness described in clause
(a), (b) or (c) above without resulting in any Net Proceeds, such Refinanced
Debt shall be repaid, repurchased, retired, defeased or satisfied and discharged
with 100% of the Net Proceeds from any Credit Agreement Refinancing
Indebtedness, and all accrued interest, fees and premiums (if any) in connection
therewith shall be paid, on the date such Credit Agreement Refinancing
Indebtedness is issued, incurred or obtained.

 

“DBNY” means Deutsche Bank AG New York Branch and any successor thereto by
merger, consolidation or otherwise.

 

“DBSI” means Deutsche Bank Securities Inc. and any successor thereto by merger,
consolidation or otherwise.

 

“Debt Prepayment” means the prepayment by the Borrower on the Closing Date of
any and all Indebtedness outstanding under the Prior Credit Agreement.

 

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

 

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

 

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per annum;
provided that with respect to a Eurocurrency Rate Loan, the Default Rate shall
be an interest rate equal to the interest rate (including any Applicable Rate)
otherwise applicable to such Loan plus 2.0% per annum, in each case, to the
fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans required to be funded by it hereunder within one (1) Business Day of
the date required to be funded by it hereunder, unless the subject of a good
faith dispute or subsequently cured, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one (1) Business Day of the date when due, unless the
subject of a good faith dispute or subsequently cured, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“Designated Non-cash Consideration” means the fair market value of non-cash
consideration received by the Borrower or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Non-cash Consideration
pursuant to an Officer’s Certificate, setting forth the basis of such valuation,
executed by the principal financial officer of the Borrower, less the amount of
Cash Equivalents received in connection with a subsequent sale, redemption,
repurchase of or collection or payment on, such Designated Non-cash
Consideration.

 

“Designated Preferred Stock” means Preferred Stock of the Borrower or any parent
company thereof (in each case other than Disqualified Stock) that is issued for
cash (other than to a Restricted Subsidiary or an employee stock ownership plan
or trust established by the Borrower or any of

 

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its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant
to an Officer’s Certificate executed by the principal financial officer of the
Borrower or the applicable parent company thereof, as the case may be, on the
issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in Section 7.02(a)(iii).

 

“Discount Prepayment Accepting Lender” has the meaning specified in
Section 2.05(a)(iii)(B)(2).

 

“Discount Range” has the meaning specified in Section 2.05(a)(iii)(C)(1).

 

“Discount Range Prepayment Amount” has the meaning specified in
Section 2.05(a)(iii)(C)(1).

 

“Discount Range Prepayment Notice” means a written notice of a Borrower
Solicitation of Discount Range Prepayment Offers made pursuant to
Section 2.05(a)(iii)(C) substantially in the form of Exhibit M attached hereto.

 

“Discount Range Prepayment Offer” means the irrevocable written offer by a
Lender, substantially in the form of Exhibit N attached hereto, submitted in
response to an invitation to submit offers following the Auction Agent’s receipt
of a Discount Range Prepayment Notice.

 

“Discount Range Prepayment Response Date” has the meaning specified in
Section 2.05(a)(iii)(C)(1).

 

“Discount Range Proration” has the meaning specified in
Section 2.05(a)(iii)(C)(3).

 

“Discounted Prepayment Determination Date” has the meaning specified in
Section 2.05(a)(iii)(D)(3).

 

“Discounted Prepayment Effective Date” means in the case of a Borrower Offer of
Specified Discount Prepayment, Borrower Solicitation of Discount Range
Prepayment Offer or Borrower Solicitation of Discounted Prepayment Offer, five
(5) Business Days following the Specified Discount Prepayment Response Date, the
Discount Range Prepayment Response Date or the Solicited Discounted Prepayment
Response Date, as applicable, in accordance with Section 2.05(a)(iii)(B)(1),
Section 2.05(a)(iii)(C)(1) or Section 2.05(a)(iii)(D)(1), respectively, unless a
shorter period is agreed to between the Borrower and the Auction Agent.

 

“Discounted Term Loan Prepayment” has the meaning specified in
Section 2.05(a)(iii)(A).

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of
such Person which, by its terms, or by the terms of any security into which it
is convertible or for which it is putable or exchangeable, or upon the happening
of any event, (a) matures or is mandatorily redeemable (other than solely as a
result of a change of control or asset sale, so long as any rights of the
holders thereof upon the occurrence of a change of control or asset sale event
shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable) pursuant to a sinking fund obligation
or otherwise, or is redeemable at the option of the holder thereof (other than
solely as a result of a change of control or asset sale, so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable), in whole or in part, or (b) provides
for the scheduled payments of dividends in cash, in each case prior to the date
91 days after the earlier of the

 

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Latest Maturity Date at the time such Disqualified Stock is first issued or the
date Loans are no longer outstanding; provided, however, that if such Capital
Stock is issued to any plan for the benefit of employees of the Borrower or its
Subsidiaries or by any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Borrower or its Subsidiaries in order to satisfy applicable
statutory or regulatory obligations.

 

“Disposition” has the meaning set forth in the definition of “Excess Cash Flow”.

 

“Disqualified Institutions” means any banks, financial institutions or other
Persons separately identified by the Borrower to the Arrangers in writing prior
to the Restatement Effective Date.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Domestic Subsidiary” means (i) any Subsidiary that is organized under the Laws
of the United States, any state thereof or the District of Columbia and
(ii) unless otherwise expressly provided herein, each Canadian Subsidiary that,
in the sole discretion of the Borrower, elects to become (and, upon such
election, becomes) a Canadian Subsidiary Guarantor.

 

“Domestic Subsidiary Guarantors” means, collectively, each Domestic Subsidiary
of the Borrower that is not a Canadian Subsidiary and that shall have entered
into the Subsidiary Guaranty and complied with the requirements of clause (b) of
the definition of “Collateral and Guarantee Requirement”.

 

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

 

(a)           increased (without duplication) by:

 

(i)            provision for taxes based on income or profits or capital,
including, without limitation, state, franchise and similar taxes (such as the
Pennsylvania capital tax and Texas margin tax) and foreign withholding taxes of
such Person paid or accrued during such period deducted (and not added back) in
computing Consolidated Net Income; plus

 

(ii)           Fixed Charges of such Person for such period plus bank fees and
costs of surety bonds in connection with financing activities, plus amounts
excluded from Consolidated Interest Expense as set forth in clauses (A), (B),
(C), (D), (E) and (F) in the definition thereof, to the extent the same were
deducted (and not added back) in calculating such Consolidated Net Income; plus

 

(iii)          Consolidated Depreciation and Amortization Expense of such Person
for such period to the extent the same was deducted (and not added back) in
computing Consolidated Net Income; plus

 

(iv)          any expenses or charges (other than depreciation or amortization
expense) related to any Equity Offering, Permitted Investment, acquisition,
disposition, recapitalization or the incurrence of Indebtedness permitted to be
incurred by this Agreement (including any refinancing or amendment thereof) (in
each case, whether or not successful), including (A) such fees, expenses or
charges related to this Agreement and the ABL Credit Agreement and (B) any
amendment or other modification of the Senior Notes, the Senior Subordinated
Notes, this Agreement, the other Loan Documents,

 

23

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the ABL Credit Agreement and the other ABL Loan Documents, in each case,
deducted (and not added back) in computing Consolidated Net Income; plus

 

(v)           the amount of any restructuring charge or reserve deducted (and
not added back) in such period in computing Consolidated Net Income; plus

 

(vi)          any other non cash charges, including (v) any write-offs or
write-downs, (w) equity-based awards compensation expense, (x) losses on sales,
disposals or abandonment of, or any impairment charge or asset write off related
to, intangible assets, long-lived assets and investments in debt and equity
securities, (y) all losses from investments recorded using the equity method,
and (z) other non-cash charges, non-cash expenses or non-cash losses, in each
case reducing Consolidated Net Income for such period (provided that if any such
non-cash charges represent an accrual or reserve for potential cash items in any
future period, (1) the Borrower may determine not to add back such non-cash
charge in the current period and (2) to the extent the Borrower does decide to
add back such non-cash charge, the cash payment in respect thereof in such
future period shall be subtracted from EBITDA to such extent, and excluding
amortization of a prepaid cash item that was paid in a prior period); plus

 

(vii)         the amount of any minority interest expense consisting of
Subsidiary income attributable to minority equity interests of third parties in
any non-Wholly Owned Subsidiary deducted (and not added back) in such period in
calculating Consolidated Net Income; plus

 

(viii)        the amount of management, monitoring, consulting, advisory and
other fees (including termination fees) and related indemnities and expenses
paid or accrued in such period to the Investors to the extent otherwise
permitted under Section 7.07 and to the extent deducted (and not added back) in
such period in computing Consolidated Net Income; plus

 

(ix)          the amount of “run rate” net cost savings, synergies and operating
expense reductions projected by the Borrower in good faith to be realized as a
result of specified actions taken, committed to be taken or with respect to
which substantial steps have been taken or are expected in good faith to be
taken no later than eighteen (18) months after the end of such period
(calculated on a pro forma basis as though such cost savings, operating expense
reductions and/or synergies had been realized on the first day of such period
and as if such cost savings, operating expense reductions and/or synergies were
realized during the entirety of such period), net of the amount of actual
benefits realized during such period from such actions; provided that (x) such
cost savings are reasonably identifiable and factually supportable (it is
understood and agreed that “run-rate” means the full recurring benefit for a
period that is associated with any action taken, committed to be taken or with
respect to which substantial steps have been taken or are expected to be taken)
and (y) the aggregate amount of cost savings added pursuant to this clause
(ix) shall not exceed 10.0% of EBITDA determined on a pro forma basis for any
four consecutive quarter period (which adjustments may be incremental to pro
forma adjustments made pursuant to the definition of “Fixed Charge Coverage
Ratio”); plus

 

(x)           the amount of loss on sale of receivables and related assets to
the Receivables Subsidiary in connection with a Receivables Facility; plus

 

(xi)          any costs or expense incurred by the Borrower or a Restricted
Subsidiary

 

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pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement or any stock subscription or
shareholder agreement, to the extent that such cost or expenses are funded with
cash proceeds contributed to the capital of the Borrower or net cash proceeds of
an issuance of Equity Interests of the Borrower (other than Disqualified Stock)
solely to the extent that such net cash proceeds are excluded from the
calculation set forth in Section 7.02(a)(iii); plus

 

(xii)         any net loss from disposed or discontinued operations; plus

 

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

 

(b)           decreased (without duplication), in each case to the extent
included in arriving at such Consolidated Net Income, by:

 

(i)            non—cash gains increasing Consolidated Net Income of such Person
for such period, excluding any non-cash gains to the extent they represent the
reversal of an accrual or reserve for a potential cash item that reduced EBITDA
in any prior period and any non-cash gains with respect to cash actually
received in a prior period so long as such cash did not increase EBITDA in such
prior period, plus

 

(ii)           any net income from disposed or discontinued operations; and

 

(c)           increased or decreased by (without duplication), as applicable,
any adjustments resulting from the application of FASB Interpretation No. 45
(Guarantees).

 

For purposes of calculating EBITDA for any period, the impact of changes in
estimates for inventory cost capitalization and the initial adoption of an
accounting policy for gift card breakage made in the fourth quarter of fiscal
year 2005 shall be excluded.

 

“Effective Date Refinancing” has the meaning specified in Section 10.23.

 

“Effective Yield” means, as to any Loans of any Class, the effective yield on
such Loans as determined by the Administrative Agent, taking into account the
applicable interest rate margins, any interest rate floors or similar devices
and all fees, including upfront or similar fees or original issue discount
(amortized over the shorter of (x) the life of such Loans and (y) the four years
following the date of incurrence thereof) payable generally to Lenders making
such Loans, but excluding any arrangement, structuring, commitment or other
similar fees payable in connection therewith that are not generally shared with
the relevant Lenders and customary consent fees paid generally to consenting
Lenders.

 

“Eligible Assignee” means any Assignee permitted by and consented to in
accordance with Section 10.07(b); provided that in any event, “Eligible
Assignee” shall not include any natural person.

 

“EMU” means the economic and monetary union as contemplated in the Treaty on
European Union.

 

“Environmental Laws” means any and all Federal, state, provincial, local, and
foreign statutes, Laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants,

 

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franchises, licenses, agreements or governmental restrictions relating to
pollution, the protection of the environment, natural resources, or, to the
extent relating to exposure to Hazardous Materials, human health or to the
release of any materials into the environment, including those related to
Hazardous Materials, air emissions and discharges to waste or public systems.

 

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

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“Equity Contributions” means the contribution on the Closing Date of cash in an
aggregate amount of not less than $1,630,000,000 to the MergerCos as common
equity and/or preferred equity.

 

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

 

“Equity Offering” means any public or private sale of common stock or Preferred
Stock of the Borrower or any of its direct or indirect parent companies
(excluding Disqualified Stock), other than (a) public offerings with respect to
the Borrower’s or any direct or indirect parent company’s common stock
registered on Form S-8; (b) issuances to any Subsidiary of the Borrower; and
(c) any such public or private sale that constitutes an Excluded Contribution.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is under common control with any Loan Party within the meaning of Section 414 of
the Code or Section 4001 of ERISA.

 

“ERISA Event” means, in the case of a Plan or Multiemployer Plan subject to
ERISA, (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal
by any Loan Party or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer
Plan or written notification that a Multiemployer Plan is in reorganization;
(d) the filing of a written notice of intent to terminate, the treatment of a
Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA,
or the commencement of proceedings in writing by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party
or any ERISA Affiliate or (g) the failure

 

26

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of any Pension Plan to satisfy the minimum funding standard required for any
plan year or part thereof under Section 412 of the Code or Section 302 of ERISA
or a waiver of such standard or extension of any amortization period is sought
or granted under Section 412 of the Code or Section 303 or 304 of ERISA.

 

“euro” means the single currency of participating member states of the EMU.

 

“Eurocurrency Rate” means, for any Interest Period with respect to any
Eurocurrency Rate Loan, the rate per annum determined by the Administrative
Agent, at approximately 11:00 a.m. (London time) on the date which is two
Business Days prior to the beginning of such Interest Period by reference to the
British Bankers’ Association Interest Settlement Rates for deposits in Dollars
(as set forth by any service selected by the Administrative Agent which has been
nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provision of this definition, the
“Eurocurrency Rate” shall be the interest rate per annum, determined by the
Administrative Agent to be the average of the rates per annum at which deposits
in Dollars are offered for such relevant Interest Period to major banks in the
London interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date which is two Business Days
prior to the beginning of such Interest Period; provided that, solely with
respect to the Term B Loans, the Eurocurrency Rate shall be deemed to not be
less than 1.00% per annum.

 

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the
Eurocurrency Rate.

 

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

 

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

 

(a)           the sum, without duplication, of:

 

(i)            Consolidated Net Income for such period,

 

(ii)           an amount equal to the amount of all non-cash charges incurred
during such period, to the extent deducted in arriving at such Consolidated Net
Income, but excluding any such non-cash charges and expenses representing an
accrual or reserve for potential items in any future period and excluding
amortization of a prepaid cash item that was paid in a prior period,

 

(iii)          decreases in Consolidated Working Capital and long-term account
receivables for such period (other than any such decreases arising from
Acquisitions by the Borrower and the Restricted Subsidiaries completed during
such period), and

 

(iv)          an amount equal to the aggregate net non-cash loss on the sale,
lease, transfer or other disposition (each, a “Disposition”) of assets by the
Borrower and its Restricted Subsidiaries during such period (other than
Dispositions in the ordinary course of business) to the extent deducted in
arriving at such Consolidated Net Income; over

 

(b)           the sum, without duplication, of:

 

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

 

27

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back to Consolidated Net Income pursuant to clauses (a) through (n) of the
definition thereof,

 

(ii)           without duplication of amounts deducted pursuant to clause
(xi) below in prior fiscal years, the amount of Capital Expenditures made in
cash during such period, except to the extent that such Capital Expenditures
were financed with the proceeds of Indebtedness of the Borrower or the
Restricted Subsidiaries,

 

(iii)          the aggregate amount of all principal payments of Indebtedness of
the Borrower and the Restricted Subsidiaries (including (A) the principal
component of payments in respect of Capitalized Lease Obligations, (B) the
amount of any mandatory prepayment of Loans pursuant to Section 2.05(c) with the
proceeds of an Asset Sale, to the extent such Asset Sale resulted in an increase
to Consolidated Net Income and not in excess of the amount of such increase and
(C) the amount of all voluntary prepayments of Loans made pursuant to
Section 2.05(a)(iii), in an amount equal to the discounted amount actually paid
in cash in respect of the principal amount of such Loans, but excluding all
other prepayments of Loans) made during such period (other than in respect of
any revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), except to the extent financed with the
proceeds of other Indebtedness of the Borrower or the Restricted Subsidiaries,

 

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

 

(v)           increases in Consolidated Working Capital and long-term account
receivables for such period (other than any such increases arising from
Acquisitions by the Borrower and the Restricted Subsidiaries during such
period),

 

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

 

(vii)         the amount of Investments and Acquisitions made during such period
pursuant to clauses (c), (e), (h) and (m) of the definition of Permitted
Investments to the extent such Investments and Acquisitions were financed with
internally generated cash flow of the Borrower and the Restricted Subsidiaries,

 

(viii)        the amount of Restricted Payments paid during such period pursuant
to Sections 7.02(a), 7.02(b)(iv), (x), (xi), (xiii), (xv), (xix) and (xx) to the
extent such Restricted Payments were financed with internally generated cash
flow of the Borrower and the Restricted Subsidiaries; provided, however, that in
the case of Restricted Payments made pursuant to Section 7.02(a), the deduction
pursuant to this clause (viii) shall not exceed an amount equal to Consolidated
Net Income for such period,

 

(ix)          the aggregate amount of expenditures actually made by the Borrower
and the Restricted Subsidiaries in cash during such period (including
expenditures for the payment of financing fees), to the extent that such
expenditures were not expensed during such period,

 

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(x)           the aggregate amount of any premium, make-whole or penalty
payments actually paid in cash by the Borrower and the Restricted Subsidiaries
during such period that are required to be made in connection with any
prepayment of Indebtedness,

 

(xi)          without duplication of amounts deducted from Excess Cash Flow in
prior periods, the aggregate consideration (to the extent to be funded by
internally generated cash) required to be paid in cash by the Borrower or any of
the Restricted Subsidiaries pursuant to binding contracts (the “Contract
Consideration”) entered into prior to or during such period relating to
Acquisitions or Capital Expenditures to be consummated or made during the period
of four consecutive fiscal quarters of the Borrower following the end of such
period, provided that to the extent the aggregate amount of internally generated
cash actually utilized to finance such Acquisitions or Capital Expenditures
during such period of four consecutive fiscal quarters is less than the Contract
Consideration, the amount of such shortfall shall be added to the calculation of
Excess Cash Flow at the end of such period of four consecutive fiscal quarters,

 

(xii)         the amount of cash taxes paid and, without duplication, cash
distributions for payment of taxes, in such period, to the extent they exceed
the amount of tax expense deducted in determining Consolidated Net Income for
such period, and

 

(xiii)        cash expenditures made in respect of Swap Contracts to the extent
not reflected in the computation of Consolidated Net Income for such period.

 

“Excess Cash Flow Period” shall mean each fiscal year of the Borrower,
commencing with the fiscal year of the Borrower ending on January 27, 2014.

 

“Excess Proceeds” has the meaning set forth in Section 2.05(c)(ii).

 

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

 

“Excluded Contribution” means net cash proceeds, marketable securities or
Qualified Proceeds received by the Borrower from (a) contributions to its common
equity capital, and (b) the sale (other than to a Subsidiary of the Borrower or
to any management equity plan or stock option plan or any other management or
employee benefit plan or agreement of the Borrower) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock) of the Borrower, in each case
designated as Excluded Contributions pursuant to an Officer’s Certificate
executed by the principal financial officer of the Borrower on the date such
capital contributions are made or the date such Equity Interests are sold, as
the case may be, which are excluded from the calculation set forth in
Section 7.02(a)(iii).

 

“Excluded Subsidiary” means (a) any Subsidiary that is not a Wholly-Owned
Subsidiary, (b) any Receivables Subsidiary, (c) each Subsidiary listed on
Schedule 1.01E hereto, (d) any Subsidiary that is prohibited by applicable Law
or Contractual Obligation existing on the Restatement Effective Date (or, in the
case of any Subsidiary acquired after the Restatement Effective Date, any
Contractual Obligation in existence at the time of the acquisition of such
Subsidiary but not entered into in contemplation thereof) from guaranteeing the
Obligations, (e) any Domestic Subsidiary that is (i) a Subsidiary of a Foreign
Subsidiary or (ii) a Subsidiary that is treated as a disregarded entity or as a
partnership for United States Federal income tax purposes and substantially all
of whose assets consist of Equity Interests and/or Indebtedness of one or more
Foreign Subsidiaries that are CFCs, (f) any Restricted Subsidiary acquired
pursuant to an Acquisition permitted hereunder financed with Secured
Indebtedness incurred pursuant to Section 7.03(b)(xix) and each Restricted
Subsidiary thereof that guarantees such

 

29

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Indebtedness; provided that each such Restricted Subsidiary shall cease to be an
Excluded Subsidiary under this clause (f) if such Secured Indebtedness is repaid
or becomes unsecured or if such Restricted Subsidiary ceases to guarantee such
Secured Indebtedness, as applicable, (g) any Immaterial Subsidiary and (h) any
other Subsidiary with respect to which, in the reasonable judgment of the
Administrative Agent (confirmed in writing by notice to the Borrower), the cost
or other consequences (including any adverse tax consequences) of providing a
Guaranty shall be excessive in view of the benefits to be obtained by the
Lenders therefrom.

 

“Executive Order” means Executive Order No. 13224 of September 23, 2001,
entitled Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)).

 

“Existing Credit Agreement” has the meaning specified in the preliminary
statements to this Agreement.

 

“Existing Term Loan Tranche” has the meaning provided in Section 2.16.

 

“Extended Term Commitments” means one or more commitments hereunder to convert
Loans under an Existing Term Loan Tranche to Extended Term Loans of a given
Extension Series pursuant to an Extension Amendment.

 

“Extended Term Loans” has the meaning provided in Section 2.16.

 

“Extending Term Lender” has the meaning provided in Section 2.16.

 

“Extension” means any establishment of Extended Term Commitments and Extended
Term Loans pursuant to Section 2.16 and the applicable Extension Amendment.

 

“Extension Amendment” has the meaning provided in Section 2.16.

 

“Extension Election” has the meaning provided in Section 2.16.

 

“Extension Minimum Condition” means a condition to consummating any Extension
that a minimum amount (to be determined and specified in the relevant Extension
Request, in the Borrower’s sole discretion) of any or all applicable Classes of
Loans be submitted for Extension.

 

“Extension Request” has the meaning provided in Section 2.16.

 

“Extension Series” has the meaning provided in Section 2.16.

 

“Facility” or “Facilities” means the Loans made pursuant to Section 2.01, a
given Class of Incremental Term Loans, a given Extension Series of Extended Term
Loans, or a given Refinancing Series of Refinancing Term Loans, as the context
may require.

 

“Fair Market Value” means, with respect to any asset or liability, the fair
market value of such asset or liability as determined by the Borrower in good
faith; provided that if the fair market value is equal to or exceeds
$200,000,000, such determination shall be made by the Board of Directors of the
Borrower, in which case the determination of the Board of Directors shall be
deemed conclusive for purposes of this Agreement.

 

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“FATCA” means sections 1471, 1472, 1473 and 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations promulgated thereunder and published guidance with respect
thereto and any agreements entered into pursuant to Section 1471(b)(1) of the
Code or otherwise pursuant to any of the foregoing.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate equal
for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person for any Relevant
Reference Period, the ratio of EBITDA of such Person for such Relevant Reference
Period to the Fixed Charges of such Person for such Relevant Reference Period. 
In the event that the Borrower or any Restricted Subsidiary incurs, assumes,
guarantees, redeems, retires or extinguishes any Indebtedness (other than
Indebtedness incurred or repaid under any revolving credit facility in the
ordinary course of business for working capital purposes) or issues or redeems
Disqualified Stock or Preferred Stock subsequent to the commencement of the
Relevant Reference Period for which the Fixed Charge Coverage Ratio is being
calculated but prior to or simultaneously with the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge
Coverage Ratio Calculation Date”), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, guarantee,
redemption, retirement or extinguishment of Indebtedness, or such issuance or
redemption of Disqualified Stock or Preferred Stock, as if the same had occurred
at the beginning of the applicable Relevant Reference Period.

 

For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, amalgamations, mergers, and consolidations that have
been made by the Borrower or any of its Restricted Subsidiaries during the
Relevant Reference Period or subsequent to such Relevant Reference Period and on
or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation
Date shall be calculated on a pro forma basis assuming that all such
Investments, acquisitions, dispositions, amalgamations, mergers and
consolidations (and the change in any associated fixed charge obligations and
the change in EBITDA resulting therefrom) had occurred on the first day of the
Relevant Reference Period.  If since the beginning of such Relevant Reference
Period any Person that subsequently became a Restricted Subsidiary or was
merged, amalgamated or consolidated with or into the Borrower or any of its
Restricted Subsidiaries since the beginning of such Relevant Reference Period
shall have made any Investment, acquisition, disposition, amalgamation, merger
or consolidation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect thereto for such Relevant Reference Period as if such Investment,
acquisition, disposition, merger and consolidation had occurred at the beginning
of the applicable Relevant Reference Period.

 

For purposes of this definition, whenever pro forma effect is to be given to an
Investment, acquisition, disposition, amalgamation, merger or consolidation
(including the Transaction) and the amount of income or earnings relating
thereto, the pro forma calculations shall be made in good faith by a responsible
financial or accounting officer of the Borrower (and may include, for the
avoidance of doubt, cost savings and operating expense reductions resulting from
such Investment, acquisition, disposition, amalgamation, merger or consolidation
(including the Transaction) which is being given pro forma effect that have been
or are expected to be realized).  If any Indebtedness bears a floating rate of

 

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interest and is being given pro forma effect, the interest on such Indebtedness
shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio
Calculation Date had been the applicable rate for the Relevant Reference Period
(taking into account any Hedging Obligations applicable to such Indebtedness). 
Interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by a responsible financial or accounting
officer of the Borrower to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP.  Interest on Indebtedness that may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Borrower may designate.

 

“Fixed Charge Coverage Ratio Calculation Date” has the meaning specified in the
definition of “Fixed Charge Coverage Ratio”.

 

“Fixed Charge Coverage Ratio Incurrence Test” means, at a given date of
determination, that the Fixed Charge Coverage Ratio for the Relevant Reference
Period would have been at least 2.00 to 1.00, determined on a pro forma basis
after giving effect to the incurrence of $1.00 of additional Indebtedness or the
issuance of Disqualified Stock or Preferred Stock with a liquidation preference
of $1.00 (including a pro forma application of the net proceeds therefrom), as
if the additional Indebtedness had been incurred, or the Disqualified Stock or
Preferred Stock had been issued, as the case may be, and the application of the
proceeds therefrom had occurred at the beginning of such Relevant Reference
Period.

 

“Fixed Charges” means, with respect to any Person for any period, the sum,
without duplication, of (a) Consolidated Interest Expense of such Person for
such period; (b) all cash dividends or other distributions paid (excluding items
eliminated in consolidation) on any series of Preferred Stock during such
period; and (c) all cash dividends or other distributions paid (excluding items
eliminated in consolidation) on any series of Disqualified Stock during such
period.

 

“Foreign Lender” has the meaning specified in Section 10.15(a).

 

“Foreign Subsidiary” means any direct or indirect Restricted Subsidiary of the
Borrower which (a) is not a Domestic Subsidiary or (b) is set forth on Schedule
1.01F.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States or any successor thereto.

 

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

 

“GAAP” means generally accepted accounting principles in the United States which
are in effect (a) for purposes of Sections 5.05(a)(i), 6.01 and 6.09 only, for
the accounting period in respect of which reference to GAAP is being made, and
(b) for all other purposes, on the Closing Date.

 

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“Governmental Authority” means any nation or government, any state, provincial,
municipal or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

“Granting Lender” has the meaning specified in Section 10.07(h).

 

“guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness or other
obligations.

 

“Guarantor Consent and Reaffirmation” means, collectively, (a) the Guarantor
Consent and Reaffirmation executed by each Subsidiary Guarantor, substantially
in the form of Exhibit R attached hereto and (b) the Canadian Guarantor Consent
and Reaffirmation executed by the Canadian Subsidiary Guarantors, substantially
in the form of Exhibit S attached hereto.

 

“Guarantors” means the Borrower, each Subsidiary Guarantor and, on and after the
execution and delivery of the Holdco Guaranty, Holdco.

 

“Guaranty” means, collectively, the Borrower Guaranty, the Subsidiary Guaranty,
the Canadian Guarantee and, on and after the execution and delivery thereof, the
Holdco Guaranty.

 

“Guaranty Supplement” has the meaning provided in the respective Guaranty.

 

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

 

“Hedge Bank” means any Person that is a Lender or an Affiliate of a Lender at
the time it enters into a Secured Hedge Agreement, in its capacity as a party
thereto, and such Person’s successors and assigns.

 

“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, commodity swap agreement, commodity cap
agreement, commodity collar agreement, foreign exchange contract, currency swap
agreement or similar agreement providing for the transfer or mitigation of
interest rate, commodity price or currency risks either generally or under
specific contingencies.

 

“Highfields” means Highfields Capital I LP, Highfields Capital II LP and
Highfields Capital III LP and each Affiliate thereof (excluding portfolio
companies of any of the foregoing).

 

“Holdco” means a holding company to be formed as the direct parent company of
the Borrower, the primary purpose of which is to own the Capital Stock of the
Borrower.

 

“Holdco Guaranty” means  the guaranty to be made (or, after execution and
delivery, made) by Holdco in favor of the Administrative Agent on behalf of the
Secured Parties substantially in the form of Exhibit F-1 attached to the
Existing Credit Agreement (with appropriate modifications to reference Holdco)
and otherwise in a form and substance reasonably satisfactory to the
Administrative Agent.

 

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“Hybrid Distribution Network Costs” shall mean costs associated with the
implementation of enhancements to the Borrower’s and its Restricted
Subsidiaries’ distribution network intended to increase the Borrower’s and its
Restricted Subsidiaries’ basic merchandise inventories that are shipped through
distribution centers.

 

“Identified Participating Lenders” has the meaning specified in
Section 2.05(a)(iii)(C)(3).

 

“Immaterial Subsidiary” means a Subsidiary of the Borrower for which (a) the
assets of such Subsidiary constitute less than or equal to 1% of the total
assets of the Borrower and its Restricted Subsidiaries on a consolidated basis
and collectively with all Immaterial Subsidiaries, less than or equal to 5% of
the total assets of the Borrower and its Restricted Subsidiaries on a
consolidated basis, and (b) the revenues of such Subsidiary account for less
than or equal to 1% of the total revenues of the Borrower and its Restricted
Subsidiaries on a consolidated basis and collectively with all Immaterial
Subsidiaries, less than or equal to 5% of the total revenues of the Borrower and
its Restricted Subsidiaries on a consolidated basis.

 

“Increased Loan” has the meaning specified in Section 10.23.

 

“incur” has the meaning specified in Section 7.03.

 

“Incremental Amendment” has the meaning specified in Section 2.17(f).

 

“Incremental Equivalent Debt” has the meaning specified in
Section 7.03(b)(xxii).

 

“Incremental Facility” means any Facility consisting of Incremental Term Loans
and/or Incremental Term Loan Commitments.

 

“Incremental Facility Closing Date” has the meaning specified in
Section 2.17(d).

 

“Incremental Loan Request” has the meaning specified in Section 2.17(a).

 

“Incremental Term Commitments” has the meaning specified in Section 2.17(a).

 

“Incremental Term Lenders” has the meaning specified in Section 2.17(c).

 

“Incremental Term Loan” has the meaning specified in Section 2.17(b).

 

“Indebtedness” means, with respect to any Person at a particular time, without
duplication:

 

(a)           any indebtedness (including principal and premium) of such Person,
whether or not contingent:

 

(i)            in respect of borrowed money;

 

(ii)           evidenced by bonds, notes, debentures or similar instruments or
letters of credit or bankers’ acceptances (or, without duplication,
reimbursement agreements in respect thereof);

 

(iii)          representing the balance deferred and unpaid of the purchase
price of any property or services (including Capitalized Lease Obligations),
except (A) any such

 

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balance that constitutes an obligation in respect of a commercial letter of
credit, a trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligations
until such obligation becomes a liability on the balance sheet of such Person in
accordance with GAAP and is not paid after becoming due and payable; or

 

(iv)          representing any Hedging Obligations;

 

if and to the extent that any of the foregoing Indebtedness (other than letters
of credit and Hedging Obligations) would appear as a liability upon a balance
sheet (excluding the footnotes thereto) of such Person prepared in accordance
with GAAP;

 

(b)           to the extent not otherwise included, any obligation by such
Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the
obligations of the type referred to in clause (a) of a third Person (whether or
not such items would appear upon the balance sheet of the such obligor or
guarantor), other than by endorsement of negotiable instruments for collection
in the ordinary course of business;

 

(c)           to the extent not otherwise included, the obligations of the type
referred to in clause (a) of a third Person secured by a Lien on any asset owned
by such first Person, whether or not such Indebtedness is assumed by such first
Person and whether or not such obligations would appear upon the balance sheet
of such Person; provided that the amount of such Indebtedness will be the lesser
of the fair market value of such asset at the date of determination and the
amount of Indebtedness so secured; and

 

(d)           all obligations of such Person in respect of Disqualified Capital
Stock;

 

provided, however, that notwithstanding the foregoing, Indebtedness shall be
deemed not to include (x) Contingent Obligations incurred in the ordinary course
of business, (y) obligations under or in respect of Receivables Facilities or
(z) obligations under or in respect of commercial letters of credit.

 

“Indemnified Liabilities” has the meaning set forth in Section 10.05.

 

“Indemnitees” has the meaning set forth in Section 10.05.

 

“Indemnified Taxes” means all Taxes and all Other Taxes.

 

“Independent Financial Advisor” means an accounting, appraisal, investment
banking firm or consultant to Persons engaged in Similar Businesses of
nationally recognized standing that is, in the good faith judgment of the
Borrower, qualified to perform the task for which it has been engaged.

 

“Individual Monthly Balance” means, with respect to any Indebtedness incurred by
the Borrower and/or its Restricted Subsidiaries under a revolving credit
facility during any fiscal month of the Borrower, the quotient of (a) the sum of
the aggregate outstanding principal amount of all such Indebtedness at the end
of each day of such fiscal month divided by (b) the number of days in such
fiscal month.

 

“Information” has the meaning specified in Section 10.08.

 

“Intercompany Note” means the Intercompany Note, substantially in the form
attached as Exhibit J attached to the Existing Credit Agreement.

 

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“Intercreditor Agreement” means the Intercreditor Agreement executed by the
Collateral Agent, the ABL Collateral Agent and the Loan Parties, substantially
in the form of Exhibit H attached to the Existing Credit Agreement.

 

“Interest Payment Date” means, (a) as to any Loan of any Class other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
applicable Maturity Date of the Facility under which such Loan was made;
provided that if any Interest Period for a Eurocurrency Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan of any Class, the last Business Day of each January, April,
July and October and the applicable Maturity Date of the Facility under which
such Loan was made.

 

“Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, or to the extent agreed to by each Lender of such
Eurocurrency Rate Loan, nine or twelve months thereafter, or to the extent
agreed to by the Administrative Agent, less than one month thereafter, as
selected by the Borrower in its Committed Loan Notice; provided that:

 

(a)           any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;

 

(b)           any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

 

(c)           no Interest Period shall extend beyond the applicable Maturity
Date for the Class of Loans of which such Eurocurrency Rate Loan is a part.

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s and BBB— (or the equivalent) by S&P, or, in either case,
an equivalent rating by any other Rating Agency.

 

“Investment Grade Securities” means (a) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents), (b) debt securities or
debt instruments with an Investment Grade Rating, but excluding any debt
securities or instruments constituting loans or advances among the Borrower and
its Subsidiaries, (c) investments in any fund that invests exclusively in
investments of the type described in clauses (a) and (b) which fund may also
hold immaterial amounts of cash pending investment or distribution, and
(d) corresponding instruments in countries other than the United States
customarily utilized for high quality investments.

 

“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
credit card and debit card receivables constituting Cash Equivalents, trade
credit, advances to customers, commission, travel and similar advances to
officers and employees, in each case made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet (excluding the
footnotes) of

 

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the Borrower in the same manner as the other investments included in this
definition to the extent such transactions involve the transfer of cash or other
property.  For purposes of the definition of “Unrestricted Subsidiary” and
Section 7.02, (a) “Investments” shall include the portion (proportionate to the
Borrower’s equity interest in such Subsidiary) of the fair market value of the
net assets of a Subsidiary of the Borrower at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall
be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary in an amount (if positive) equal to (i) the Borrower’s “Investment”
in such Subsidiary at the time of such redesignation less (ii) the portion
(proportionate to the Borrower’s equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; and (b) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Borrower.

 

“Investors” means Bain Capital, LLC and The Blackstone Group LP, each of their
respective Affiliates and any investment funds advised or managed by any of the
foregoing, but not including, however, any portfolio companies of any of the
foregoing; provided, that, for purposes of the definitions of “EBITDA” and
“Sponsor Management Agreement” only, the term “Investors” shall include
Highfields.

 

“IP Rights” has the meaning set forth in Section 5.15.

 

“IRS” means the United States Internal Revenue Service.

 

“ITA” means the Income Tax Act (Canada) and the regulations promulgated
thereunder, as amended from time to time.

 

“Judgment Currency” has the meaning provided in Section 10.21.

 

“Junior Financing Documentation” shall mean the Senior Subordinated Notes, the
Senior Subordinated Notes Indenture and the documentation governing any other
Subordinated Indebtedness of the Borrower or any of its Restricted Subsidiaries.

 

“Latest Maturity Date” means, at any date of determination, the latest Maturity
Date applicable to any Loan or Commitment hereunder at such time, including the
latest maturity date of any Incremental Term Loan, any Incremental Term
Commitment, any Refinancing Term Loan, any Refinancing Term Commitment, any
Extended Term Loan or any Extended Term Commitment, in each case as extended in
accordance with this Agreement from time to time.

 

“Laws” means, collectively, all international, foreign, Federal, state,
provincial, municipal and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case whether or not having the force of law.

 

“Lender” has the meaning specified in the introductory paragraph to this
Agreement and includes (i) each Replacement Lender and its respective successors
and assigns as permitted hereunder and (ii) each Person that shall become a
party hereto pursuant to an Incremental Amendment or a Refinancing Amendment and
its respective successors and assigns as permitted hereunder, each of which is
referred to herein as a “Lender”.

 

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“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

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

 

“Loan” means the term loans made by the Lenders on the Restatement Effective
Date to the Borrower pursuant to Section 2.01, any Extended Term Loan, any
Incremental Term Loan or any Refinancing Term Loan, as the context may require.

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Guaranty, (d) any Refinancing Amendment, Incremental Amendment or Extension
Amendment, (e) the Intercreditor Agreement, (f) the Collateral Documents, (g) on
and after the execution and delivery thereof, the Additional First Lien
Intercreditor Agreement, and (h) on and after the execution and delivery
thereof, the Additional Junior Lien Intercreditor Agreement.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Master Agreement” has the meaning specified in the definition of “Swap
Contract.”

 

“Material Adverse Effect” means (a) a material adverse effect on the business,
operations, assets, liabilities (actual or contingent) or financial condition of
the Borrower and its Restricted Subsidiaries, taken as a whole, (b) a material
adverse effect on the validity or enforceability of this Agreement or any other
Loan Document, taken as a whole, or (c) a material adverse effect on the rights
and remedies of the Lenders under any Loan Document.

 

“Material Disposition” means, with respect to a specified Person, a sale,
divestiture, spin-off, transfer or other disposition (whether through a single
transaction or series of transactions which are part of a common plan and
whether pursuant to any Debtor Relief Law or otherwise) of (a) a 50% or greater
interest in the Capital Stock of any other Person, (b) all or substantially all
of the assets of such Person, (c) a real estate portfolio or Stores to any other
Person or (d) assets constituting a business unit, line of business or division
to any other Person.

 

“Maturity Date” means (a) with respect to the Term B Loans, January 28, 2020;
provided, however, that the “Maturity Date” of the Term B Loans will
automatically become July 28, 2018 (the “Springing Maturity Date”) if as of
July 28, 2018 (i) the Consolidated Secured Debt Ratio is greater than 3.25:1.00
and (ii) the then aggregate outstanding principal amount of all of the
Borrower’s Senior Notes (and Refinancing Indebtedness in respect thereof that,
in any case, has a final scheduled maturity date or requires scheduled
amortization or payments of principal (other than with respect to a change of
control, asset sale and event of loss mandatory offers to purchase or mandatory
prepayments or customary acceleration rights after an event of default) prior to
April 28, 2020) exceeds $250,000,000, (b) with respect to any Class of Extended
Term Loans, the final maturity date as specified in the applicable Extension
Request accepted by the respective Lender or Lenders, (c) with respect to any
Class of Refinancing Term Loans, the final maturity date as specified in the
applicable Refinancing Amendment

 

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and (d) with respect to any Class of Incremental Term Loans, the final maturity
date as specified in the applicable Incremental Amendment; provided that, in
each case, if such day is not a Business Day, the applicable Maturity Date shall
be the Business Day immediately succeeding such day.

 

“Maximum Rate” has the meaning specified in Section 10.10.

 

“Merger Consideration” means the total funds required to consummate the
Recapitalization.

 

“MergerCos” has the meaning set forth in the preliminary statements to this
Agreement.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating
agency business.

 

“Mortgage” means, collectively, the deeds of trust, trust deeds, hypothecs,
charges and mortgages of real property or interests therein made by the Loan
Parties in favor or for the benefit of the Collateral Agent on behalf of the
Secured Parties in form and substance reasonably satisfactory to the Collateral
Agent (taking account of relevant local Law matters), and any other mortgages
executed and delivered pursuant to Section 6.11.

 

“Mortgage Policies” has the meaning specified in Section 6.13(b)(ii).

 

“Mortgaged Properties” has the meaning specified in paragraph (g) of the
definition of “Collateral and Guarantee Requirement”.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

 

“Net Income” means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of Preferred Stock dividends.

 

“Net Proceeds” means:

 

(a)           with respect to any Asset Sale or Casualty Event, the aggregate
cash proceeds received by the Borrower or any of its Restricted Subsidiaries in
respect of such Asset Sale or Casualty Event, including any cash received upon
the sale or other disposition of any Designated Non-cash Consideration received
in respect of such Asset Sale or Casualty Event, net of the direct costs
relating to such Asset Sale or Casualty Event and the sale or disposition of
such Designated Non-cash Consideration, including legal, accounting and
investment banking fees, and brokerage and sales commissions, any relocation
expenses incurred as a result thereof, taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), amounts required to be applied to the repayment of
principal, premium, if any, and interest on Indebtedness that is secured by the
asset subject to such Asset Sale or Casualty Event and that is required to be
repaid (and is timely repaid) in connection with such Asset Sale or Casualty
Event (other than as required by Section 2.05(c)) and any deduction of
appropriate amounts to be provided by the Borrower or any of its Restricted
Subsidiaries as a reserve in accordance with GAAP against any liabilities
associated with the asset disposed of in such transaction and retained by the
Borrower or any of its Restricted Subsidiaries after such sale or other
disposition thereof, including pension and other post—employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated

 

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with such transaction provided, however, that, upon the reversal (without the
satisfaction of any applicable liabilities in cash in a corresponding amount) of
any reserve described above, or if such liabilities have not been satisfied in
cash and such reserve is not reversed within three hundred and sixty five (365)
days after such Asset Sale or Casualty Event, “Net Proceeds” shall include the
amount of such reserve; and

 

(b)           with respect to the incurrence or issuance of any Indebtedness or
Capital Stock by the Borrower or any Restricted Subsidiary, the excess, if any,
of (i) the sum of the cash received in connection with such incurrence or
issuance over (ii) the investment banking fees, underwriting discounts,
commissions, costs and other out-of-pocket expenses and other customary
expenses, incurred by the Borrower or such Restricted Subsidiary in connection
with such incurrence or issuance.

 

“Non-Consenting Lenders” has the meaning specified in Section 3.07(c).

 

“Note” means a promissory note of the Borrower payable to any Lender or its
registered assigns, in substantially the form of Exhibit C attached hereto (with
such modifications thereto as may be necessary to reflect differing Classes of
Loans), evidencing the aggregate Indebtedness of the Borrower to such Lender
resulting from the Loans of a given Class made by such Lender.

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligations” means all (x) advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party and its Subsidiaries arising under any
Loan Document or otherwise with respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising, and (y) obligations of any Loan
Party and its Subsidiaries arising under any Secured Hedge Agreement, in each of
clauses (x) and (y) including interest and fees that accrue after the
commencement by or against any Loan Party or Subsidiary of any proceeding under
any Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding.  Without limiting the generality of the foregoing, the Obligations
of the Loan Parties under the Loan Documents (and of their Subsidiaries to the
extent they have obligations under the Loan Documents) include (a) the
obligation (including guarantee obligations) to pay principal, interest,
reimbursement obligations, charges, expenses, fees, Attorney Costs, indemnities
and other amounts payable by any Loan Party or its Subsidiaries under any Loan
Document and (b) the obligation of any Loan Party or any of its Subsidiaries to
reimburse any amount in respect of any of the foregoing that any Lender, in its
sole discretion, may elect to pay or advance on behalf of such Loan Party or
such Subsidiary.

 

“Offered Amount” has the meaning specified in Section 2.05(a)(iii)(D)(1).

 

“Offered Discount” has the meaning specified in Section 2.05(a)(iii)(D)(1).

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer or the Secretary of the Borrower.

 

“Officer’s Certificate” means a certificate signed on behalf of the Borrower by
an Officer of the Borrower, who must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the Borrower, that meets any applicable requirements set forth in this
Agreement.

 

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

 

“Organization Documents” means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; (c) with respect to any
unlimited liability company, the memorandum of association; and (d) 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, if applicable, 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 Applicable Indebtedness” has the meaning specified in
Section 2.05(c)(i)(A)(I).

 

“Other Taxes” has the meaning specified in Section 3.01(b).

 

“Outstanding Amount” means with respect to the Loans of any Class, on any date,
the outstanding principal amount thereof after giving effect to any borrowings
and prepayments or repayments of Loans of such Class occurring on such date.

 

“Outstanding Term Loans” has the meaning set forth in the preliminary statements
to this Agreement.

 

“Participant” has the meaning specified in Section 10.07(e).

 

“Participating Lender” has the meaning specified in Section 2.05(a)(iii)(C)(2).

 

“PBA” means the Pension Benefits Act (Ontario) or similar legislation of any
other Canadian federal or provincial jurisdiction, and the regulations
promulgated thereunder, as amended from time to time.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any Governmental
Authority of another jurisdiction exercising similar functions in respect of any
Pension Plan of a Loan Party (including the Pension Benefit Guarantee Fund of
Ontario).

 

“Pension Event” means (a) the whole or partial withdrawal of a Loan Party or any
Subsidiary from a Pension Plan during a Pension Plan year; or (b) the filing of
a notice of interest to terminate in whole or in part a Pension Plan or the
treatment of a Pension Plan amendment as a termination or partial termination;
or (c) the institution of proceedings by any Governmental Authority to terminate
in whole or in part or have a trustee appointed to administer a Pension Plan; or
(d) any other event or condition which might constitute grounds for the
termination of, winding up or partial termination or winding up or the
appointment of trustee to administer, any Pension Plan.

 

“Pension Plan” means (a) any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Section 412 of the Code or Section 302 or Title IV of ERISA, or
(b) Pension Plan covered by any other Laws (including the PBA and the ITA) and
is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which
any Loan Party or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple

 

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employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five (5) plan years.

 

“Perfect Store Initiative” shall mean the initiative related to the Borrower’s
and its Restricted Subsidiaries’ store standardization and remodeling program,
pursuant to which retail store layouts will be modified into a configuration
intended to enhance the customer in-store experience.

 

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of
Related Business Assets or a combination of Related Business Assets and Cash
Equivalents between the Borrower or any of its Restricted Subsidiaries and
another Person; provided that any Net Proceeds received must be applied in
accordance with Section 2.05(c).

 

“Permitted Debt” has the meaning specified in Section 7.03(b).

 

“Permitted First Priority Refinancing Debt” means any secured Indebtedness
incurred by the Borrower in the form of one or more series of senior secured
notes or loans; provided that (i) such Indebtedness is secured by (A) the TL
Priority Collateral on a pari passu first-lien basis (but without regard to the
control of remedies) with the Secured Obligations and (B) the ABL Priority
Collateral on a pari passu second-lien basis (but without regard to the control
of remedies) with the Secured Obligations, and is not secured by any property or
assets of the Borrower or any Subsidiary other than the Collateral, (ii) such
Indebtedness constitutes Credit Agreement Refinancing Indebtedness in respect of
any Class of Loans (including portions of any Class of Loans), (iii) such
Indebtedness (and the Liens securing the same) are permitted by the terms of the
ABL Credit Agreement and the Intercreditor Agreement (in each case, to the
extent the ABL Credit Agreement and the Intercreditor Agreement are then in
effect), (iv) such Indebtedness does not mature or have scheduled amortization
or payments of principal (other than customary offers to purchase and prepayment
events upon a change of control, asset sale or event of loss and a customary
acceleration right after an event of default) prior to the date that is
ninety-one (91) days after the Latest Maturity Date at the time such
Indebtedness is incurred, (v) the security agreements relating to such
Indebtedness are substantially the same as the Collateral Documents (with such
differences as are reasonably satisfactory to the Administrative Agent),
(vi) such Indebtedness is not guaranteed by any Subsidiaries other than the
Subsidiary Guarantors, and (vii) a Senior Representative acting on behalf of the
holders of such Indebtedness shall have become party to the Additional First
Lien Intercreditor Agreement, provided that if such Indebtedness is the initial
Permitted First Priority Refinancing Debt incurred by the Borrower, then the
Borrower, the Subsidiary Guarantors, the Administrative Agent, the Collateral
Agent and the Senior Representative for such Indebtedness shall have executed
and delivered the Additional First Lien Intercreditor Agreement.  Permitted
First Priority Refinancing Debt will include any Registered Equivalent Notes
issued in exchange therefor.

 

“Permitted Foreign Restructuring” means the transfer or other Disposition of the
Capital Stock of certain Foreign Subsidiaries (as elected by the Borrower) by
the Borrower or its Subsidiaries to a Foreign Subsidiary of the Borrower and, in
the case of Michaels of Canada, ULC, the re-designation by the Borrower of
Michaels of Canada, ULC as a Foreign Subsidiary (which may occur only if no
Event of Default then exists or would arise therefrom).  For the avoidance of
doubt, upon consummation of the Permitted Foreign Restructuring, Michaels of
Canada, ULC shall be an Excluded Subsidiary hereunder and shall no longer be
required to be a Loan Party hereunder and shall be released from the Canadian
Guarantee and the Canadian Security Agreement shall be terminated.

 

“Permitted Holder” means any of the Investors and members of management of the
Borrower (or its direct parent) who are holders of Equity Interests of the
Borrower (or any of its direct or indirect parent companies) on the Restatement
Effective Date.

 

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“Permitted Investments” means:

 

(a)           any Investment in the Borrower or any of its Restricted
Subsidiaries;

 

(b)           any Investment in cash and Cash Equivalents or Investment Grade
Securities;

 

(c)           any Investment by the Borrower or any of its Restricted
Subsidiaries in a Person that is engaged in a Similar Business if as a result of
such Investment:

 

(i)            such Person becomes a Restricted Subsidiary; or

 

(ii)           such Person, in one transaction or a series of related
transactions, is merged, amalgamated or consolidated with or into, or transfers
or conveys substantially all of its assets to, or is liquidated into, the
Borrower or a Restricted Subsidiary,

 

and, in each case, any Investment held by such Person; provided that such
Investment was not acquired by such Person in contemplation of such acquisition,
merger, consolidation or transfer;

 

(d)           any Investment in securities or other assets not constituting
cash, Cash Equivalents or Investment Grade Securities and received in connection
with an Asset Sale made pursuant to Section 7.01 or any other disposition of
assets not constituting an Asset Sale;

 

(e)           any Investment existing on the Restatement Effective Date and any
extension, modification, replacement or renewal of any such Investment, but only
to the extent not involving additional advances, contributions or other
Investments of cash or other assets or other increases thereof other than as a
result of the accrual or accretion of interest or original issue discount or the
issuance of pay-in-kind securities, in each case, pursuant to the terms of such
Investment as in effect on the Restatement Effective Date (or as subsequently
amended or otherwise modified in a manner not disadvantageous to the Lenders in
any material respect);

 

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

 

(g)           Hedging Obligations permitted under Section 7.03(b)(x);

 

(h)           any Investment in a Similar Business having an aggregate fair
market value, taken together with all other Investments made pursuant to this
clause (h) that are at that time outstanding, not to exceed the greater of
(x) $125,000,000 and (y) 6.50 % of Total Assets (with the fair market value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value);

 

(i)            Investments the payment for which consists of Equity Interests
(exclusive of Disqualified Stock) of the Borrower or any of its direct or
indirect parent companies; provided, however, that such Equity Interests will
not increase the amount available for Restricted Payments under
Section 7.02(a)(iii);

 

(j)            guarantees of Indebtedness of the Borrower or any Restricted
Subsidiary

 

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permitted under Section 7.03, performance guarantees and Contingent Obligations
in the ordinary course of business and the creation of liens on the assets of
the Borrower or any of its Restricted Subsidiaries in compliance with the
covenant described in Section 7.04;

 

(k)           any transaction to the extent it constitutes an Investment that is
permitted and made in accordance with the provisions of Section 7.07(b) (except
transactions described in clauses (ii), (v) and (ix) thereof);

 

(l)            Investments consisting of purchases and acquisitions of
inventory, supplies, material or equipment;

 

(m)          additional Investments having an aggregate fair market value, taken
together with all other Investments made pursuant to this clause (m) that are at
that time outstanding (without giving effect to the sale of an Unrestricted
Subsidiary to the extent the proceeds of such sale do not consist of, or have
not been subsequently sold or transferred for cash or marketable securities),
not to exceed the greater of (x) $150,000,000 and (y) 7.90% of Total Assets (in
each case, with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value);

 

(n)           Investments relating to a Receivables Subsidiary that, in the good
faith determination of the Borrower are necessary or advisable to effect any
Receivables Facility;

 

(o)           advances to, or guarantees of Indebtedness of, employees not in
excess of $15,000,000 outstanding at any one time, in the aggregate;

 

(p)           loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case incurred in the ordinary course of business or consistent with past
practices or to fund such Person’s purchase of Equity Interests of the Borrower
or any direct or indirect parent company thereof; and

 

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

 

“Permitted Junior Priority Refinancing Debt” means any secured Indebtedness
incurred by the Borrower in the form of one or more series of secured notes or
loans; provided that (i) such Indebtedness is secured by Liens on the Collateral
that are junior to the Liens securing the Secured Obligations and is not secured
by any property or assets of the Borrower or any Subsidiary other than the
Collateral, (ii) such Indebtedness constitutes Credit Agreement Refinancing
Indebtedness in respect of any Class of Loans (including portions of any
Class of Loans), (iii) such Indebtedness (and the Liens securing the same) are
permitted by the terms of the ABL Credit Agreement, the Intercreditor Agreement
and the Additional First Lien Intercreditor Agreement (in each case, to the
extent the ABL Credit Agreement, the Intercreditor Agreement and the Additional
First Lien Intercreditor Agreement are then in effect), (iv) such Indebtedness
does not mature or have scheduled amortization or payments of principal (other
than customary offers to purchase and prepayment events upon a change of
control, asset sale or event of loss and a customary acceleration right after an
event of default) prior to the date that is ninety-one (91) days after the
Latest Maturity Date at the time such Indebtedness is incurred, (v) the security
agreements relating to such Indebtedness are substantially the same as the
Collateral Documents (with such differences as are reasonably satisfactory to
the Administrative Agent), (vi) such Indebtedness is not guaranteed by any
Subsidiaries other than the Subsidiary Guarantors, and (vii) a Senior
Representative acting on behalf of the holders of such Indebtedness shall have
become party to the Additional Junior Lien Intercreditor Agreement, provided
that if such Indebtedness is the initial Permitted Junior Priority

 

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Refinancing Debt incurred by the Borrower, then the Borrower, the Subsidiary
Guarantors, the Administrative Agent, the Collateral Agent and the Senior
Representative for such Indebtedness shall have executed and delivered the
Additional Junior Lien Intercreditor Agreement.  Permitted Junior Priority
Refinancing Debt will include any Registered Equivalent Notes issued in exchange
therefor.

 

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

 

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

 

(b)           Liens imposed by law, such as landlords’, carriers’,
warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case
for sums not yet overdue for a period of more than 30 days or being contested in
good faith by appropriate actions or other Liens arising out of judgments or
awards against such Person with respect to which such Person shall then be
proceeding with an appeal or other proceedings for review if adequate reserves
with respect thereto are maintained on the books of such Person in accordance
with GAAP;

 

(c)           Liens for taxes, assessments or other governmental charges not yet
overdue for a period of more than 30 days or that remain payable without penalty
or which are being contested in good faith by appropriate actions diligently
conducted, if adequate reserves with respect thereto are maintained on the books
of such Person in accordance with GAAP, or for property taxes on property that
the Borrower or one of its Subsidiaries has determined to abandon if the sole
recourse for such tax, assessment, charge, levy or claim is to such property;

 

(d)           Liens in favor of issuers of performance, surety, bid, indemnity,
warranty, release, appeal or similar bonds or with respect to other regulatory
requirements or letters of credit or bankers’ acceptances issued, and completion
guarantees provided for, in each case pursuant to the request of and for the
account of such Person in the ordinary course of its business or consistent with
past practice prior to the Restatement Effective Date;

 

(e)           minor survey exceptions, minor encumbrances, ground leases,
easements or reservations of, or rights of others for, licenses, rights—of—way,
servitudes, sewers, electric lines, drains, telegraph and telephone and cable
television lines, gas and oil pipelines and other similar purposes, or zoning,
building codes or other restrictions (including, without limitation, minor
defects or irregularities in title and similar encumbrances) as to the use of
real properties or Liens incidental, to the conduct of the business of such
Person or to the ownership of its properties which were not incurred in
connection with Indebtedness and which do not in the aggregate materially impair
their use in the operation of the business of such Person;

 

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(f)            Liens securing Indebtedness permitted to be incurred pursuant to
Section 7.03(b)(iv), (xviii) or (xix); provided that Liens securing Indebtedness
permitted to be incurred pursuant to Section 7.03(b)(xviii) extend only to the
assets of Foreign Subsidiaries and Liens securing Indebtedness permitted to be
incurred pursuant to Section 7.03(b)(xix) are solely on acquired property or the
assets of the acquired entity, as the case may be;

 

(g)           Liens existing on the Restatement Effective Date and set forth in
Schedule 7.04;

 

(h)           Liens existing on property or shares of stock of a Person at the
time such Person becomes a Subsidiary; provided, however, such Liens are not
created or incurred in connection with, or in contemplation of, such other
Person becoming such a Subsidiary; provided, further, however, that such Liens
may not extend to any other property owned by the Borrower or any of its
Restricted Subsidiaries;

 

(i)            Liens existing on property at the time the Borrower or a
Restricted Subsidiary acquired the property, including any acquisition by means
of a merger, amalgamation or consolidation with or into the Borrower or any of
its Restricted Subsidiaries; provided, however, that such Liens are not created
or incurred in connection with, or in contemplation of, such acquisition,
merger, amalgamation or consolidation; provided, further, however, that the
Liens may not extend to any other property owned by the Borrower or any of its
Restricted Subsidiaries;

 

(j)            Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to the Borrower or another Restricted Subsidiary permitted to
be incurred in accordance with Section 7.03;

 

(k)           Liens securing Hedging Obligations so long as the related
Indebtedness is permitted to be incurred under this Agreement;

 

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

 

(m)          leases, subleases, licenses or sublicenses granted to others in the
ordinary course of business which do not materially interfere with the ordinary
conduct of the business of the Borrower or any of its Restricted Subsidiaries
and do not secure any Indebtedness;

 

(n)           Liens arising from Uniform Commercial Code (or equivalent
statutes) financing statements or PPSA registration statements or recordation
filings regarding operating leases or consignments entered into by the Borrower
and its Restricted Subsidiaries in the ordinary course of business;

 

(o)           Liens in favor of the Borrower or any Subsidiary Guarantor;

 

(p)           Liens on equipment of the Borrower or any of its Restricted
Subsidiaries granted in the ordinary course of business to the Borrower’s
clients at which such equipment is located;

 

(q)           Liens on accounts receivable and related assets incurred in
connection with a Receivables Facility;

 

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

 

(s)            deposits made or other security provided to secure liabilities to
insurance carriers under insurance or self-insurance arrangements in the
ordinary course of business;

 

(t)            other Liens securing obligations not exceeding $50,000,000 at any
one time outstanding;

 

(u)           Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h), so long as such Liens are adequately
bonded and any appropriate legal proceedings that may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired;

 

(v)           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;

 

(w)          Liens (i) of a collection bank arising under Section 4—210 of the
Uniform Commercial Code on items in the course of collection, (ii) attaching to
commodity trading accounts or other commodity brokerage accounts incurred in the
ordinary course of business, and (iii) in favor of banking institutions 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;

 

(x)           Liens deemed to exist in connection with Investments in repurchase
agreements or other Cash Equivalents permitted under Section 7.03; provided that
such Liens do not extend to any assets other than those that are the subject of
such repurchase agreement or other Cash Equivalent;

 

(y)           Liens encumbering reasonable customary initial deposits and margin
deposits and similar Liens attaching to commodity trading accounts or other
brokerage accounts incurred in the ordinary course of business and not for
speculative purposes;

 

(z)           Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts
of the Borrower or any of its Restricted Subsidiaries to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business of
the Borrower and its Restricted Subsidiaries or (iii) relating to purchase
orders and other agreements entered into with customers of the Borrower or any
of its Restricted Subsidiaries in the ordinary course of business;

 

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(aa)         Liens securing the Obligations and Liens securing Cash Management
Services (as defined in the ABL Credit Agreement);

 

(bb)         Liens solely on any cash earnest money deposits made by the
Borrower or any of its Restricted Subsidiaries in connection with any letter of
intent or purchase agreement permitted under this Agreement;

 

(cc)         the rights reserved or vested in any Person by the terms of any
lease, license, franchise, grant or permit held by the Borrower or any of its
Restricted Subsidiaries or by a statutory provision, to terminate any such
lease, license, franchise, grant or permit, or to require annual or periodic
payments as a condition to the continuance thereof;

 

(dd)         restrictive covenants affecting the use to which real property may
be put, provided, however, that the covenants are complied with;

 

(ee)         security given to a public utility or any municipality or
Governmental Authority when required by such utility or authority in connection
with the operations of that Person in the ordinary course of business;

 

(ff)          zoning by-laws and other land use restrictions, including, without
limitation, site plan agreements, development agreements and contract zoning
agreements;

 

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

 

(hh)         [Reserved];

 

(ii)           rights of a seller of unpaid goods in respect of such goods at
common law or under the Bankruptcy and Insolvency Act (Canada) and other
applicable legislation;

 

(jj)           the reservations, limitations, provisos and conditions, if any,
expressed in any original grants from the crown under Canadian law and any
statutory exceptions to title under Canadian law;

 

(kk)         customary transfer restrictions and purchase options in joint
venture and similar agreements;

 

(ll)           Liens created pursuant to the ABL Collateral Documents, securing
Indebtedness incurred pursuant to Section 7.03(b)(i)(x) in favor of the ABL
Collateral Agent, so long as same is at all times subject to the Intercreditor
Agreement;

 

(mm)      (x) Liens incurred to secure any Indebtedness or any obligation in
respect thereof permitted to be incurred pursuant to Section 7.03; provided
that, with respect to Liens securing obligations permitted under this clause
(mm), at the time of incurrence and after giving pro forma effect thereto,
(i) to the extent secured by the Collateral, such obligations are secured on
either a pari passu or junior basis with the Obligations, (ii) no Event of
Default shall have occurred and be continuing and (iii) the Consolidated Secured
Debt Ratio would be no greater than 3.25 to 1.00 as of the last day of the
Relevant Reference Period and (y) Liens securing obligations in respect of any
Refinancing Indebtedness in respect of Indebtedness described in sub-clause
(x) of this clause (mm); provided, that in the case of any Additional First Lien
Indebtedness, such Indebtedness

 

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shall be subject to the Additional First Lien Intercreditor Agreement and, in
the case of any Additional Junior Lien Indebtedness, such Indebtedness shall be
subject to the Additional Junior Lien Intercreditor Agreement; and

 

(nn)         Liens on the Collateral securing obligations in respect of
(i) Permitted First Priority Refinancing Debt (and Permitted Refinancings
thereof), (ii) Permitted Junior Priority Refinancing Debt (and Permitted
Refinancings thereof), and (iii) Incremental Equivalent Debt (and Permitted
Refinancings thereof).

 

For purposes of this definition, the term “Indebtedness” shall be deemed to
include interest on such Indebtedness.

 

“Permitted Refinancing” means, with respect to any Person, any modification,
replacement, refinancing, refunding, renewal or extension of any Indebtedness of
such Person (including, for the avoidance of doubt, any one or more successive
modifications, replacements, refinancings, refundings, renewals or extensions);
provided that (a) the principal amount (or accreted value, if applicable)
thereof does not exceed the principal amount (or accreted value, if applicable)
of the Indebtedness so modified, replaced, refinanced, refunded, renewed or
extended except by an amount equal to unpaid accrued interest and premium
(including tender premiums) thereon plus other reasonable amounts paid
(including original issue discount and upfront fees), and fees and expenses
reasonably incurred, in connection with such modification, replacement,
refinancing, refunding, renewal or extension and by an amount equal to any
existing commitments unutilized thereunder, (b) such modification, replacement,
refinancing, refunding, renewal or extension has a final maturity date equal to
or later than the final maturity date of, and has (except by virtue of prior
scheduled amortization or prepayments of the Indebtedness being modified,
replaced, refinanced, refunded, renewed or extended) a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being modified, replaced, refinanced, refunded, renewed or
extended, (c) at the time thereof, no Event of Default shall have occurred and
be continuing, (d) if such Indebtedness being modified, replaced, refinanced,
refunded, renewed or extended is subordinated in right of payment to the
Obligations, such modification, replacement, refinancing, refunding, renewal or
extension is subordinated in right of payment to the Obligations on terms at
least as favorable to the Lenders as those contained in the documentation
governing the Indebtedness being modified, replaced, refinanced, refunded,
renewed or extended, (e) the terms and conditions (including, if applicable, as
to collateral but excluding as to subordination, interest rate and redemption
premium) of any such modified, replaced, refinanced, refunded, renewed or
extended Indebtedness, taken as a whole, are not materially less favorable to
the Loan Parties or the Lenders than the terms and conditions of the
Indebtedness being modified, replaced, refinanced, refunded, renewed or
extended; provided that a certificate of a Responsible Officer delivered to the
Administrative Agent at least five Business Days prior to the incurrence of such
Indebtedness, together with a reasonably detailed description of the material
terms and conditions of such Indebtedness or drafts of the documentation
relating thereto, stating that the Borrower has determined in good faith that
such terms and conditions satisfy the foregoing requirement shall be conclusive
evidence that such terms and conditions satisfy the foregoing requirement unless
the Administrative Agent notifies the Borrower within such five Business Day
period that it disagrees with such determination (including a reasonable
description of the basis upon which it disagrees), (f) any such modification,
replacement, refinancing, refunding, renewal or extension is incurred by the
Person who is the obligor of the Indebtedness being modified, refinanced,
refunded, renewed or extended, (g) in the case of a “Permitted Refinancing” of
Permitted First Priority Refinancing Debt, such Indebtedness meets the
requirements of clauses (i), (iii), (v), (vi) and (vii) of the definition of
“Permitted First Priority Refinancing Debt” (or if such Indebtedness is to be
secured on a junior basis to the Obligations or to be unsecured, the
requirements of succeeding clause (h) or (i) below, as applicable), (h) in the
case of a “Permitted Refinancing” of Permitted Junior Priority Refinancing Debt,
such Indebtedness meets the requirements of clauses (i), (iii), (v), (vi) and
(vii)

 

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of the definition of “Permitted First Priority Refinancing Debt” (or if such
Indebtedness is to be unsecured, the requirements of succeeding clause
(i) below) and (i) in the case of  a “Permitted Refinancing” of Permitted
Unsecured Refinancing Debt, such Indebtedness meets the requirements of clauses
(iv) and (v) of the definition of “Permitted Unsecured Refinancing Debt”.

 

“Permitted Unsecured Refinancing Debt” means unsecured Indebtedness incurred by
the Borrower in the form of one or more series of unsecured notes or loans;
provided that (i) such Indebtedness constitutes Credit Agreement Refinancing
Indebtedness in respect of any Class of Loans (including portions of any
Class of Loans), (iii) such Indebtedness does not mature or have scheduled
amortization or payments of principal (other than customary offers to purchase
and prepayment events upon a change of control, asset sale or event of loss and
a customary acceleration right after an event of default) prior to the date that
is ninety-one (91) days after the Latest Maturity Date at the time such
Indebtedness is incurred, (iv) such Indebtedness is not guaranteed by any
Subsidiaries other than the Subsidiary Guarantors, and (v) such Indebtedness is
not secured by any Lien on any property or assets of the Company or any
Subsidiary.  Permitted Unsecured Refinancing Debt will include any Registered
Equivalent Notes issued in exchange therefor.

 

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

 

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Section 302 or Title IV
of ERISA, any ERISA Affiliate.

 

“Pledged Debt” has the meaning specified in the Security Agreement.

 

“Pledged Equity” has the meaning specified in the Security Agreement.

 

“PPSA” means the Personal Property Security Act of Ontario (or any successor
statute) or similar legislation of any other Canadian jurisdiction, including,
without limitation, the Civil Code of Quebec, the laws of which are required by
such legislation to be applied in connection with the issue, perfection,
enforcement, opposability, validity or effect of security interests.

 

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

 

“Prior Credit Agreement” means the “Existing Credit Agreement” as defined in the
Existing Credit Agreement.

 

“Pro Rata Share” means, with respect to each Lender, (i) at or prior to the
funding on the Restatement Effective Date, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the amount of the Commitment of such Lender at such time and the denominator of
which is the amount of the Aggregate Commitments of all Lenders at such time and
(ii) at any other time, a fraction (expressed as a percentage, carried out to
the ninth decimal place), the numerator of which is the principal amount of the
Loans of the applicable Class of such Lender at such time and the denominator of
which is the aggregate principal amount of the Loans of the applicable Class of
all Lenders at such time.

 

“Proceeds of Crime Act” means the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada) and the regulations promulgated thereunder, as
amended from time to

 

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time.

 

“Projections” shall have the meaning set forth in Section 6.01(c).

 

“Qualifying Lender” has the meaning specified in Section 2.05(a)(iii)(D)(3).

 

“Qualified Proceeds” means assets that are used or useful in, or Capital Stock
of any Person engaged in, a Similar Business; provided that the fair market
value of any such assets or Capital Stock shall be determined by the Borrower in
good faith.

 

“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not
make a rating on the Loans publicly available, a nationally recognized
statistical rating agency or agencies, as the case may be, selected by the
Borrower which shall be substituted for Moody’s or S&P or both, as the case may
be.

 

“Recapitalization” has the meaning set forth in the preliminary statements to
this Agreement.

 

“Recapitalization Agreement” means the Agreement and Plan of Merger, dated as of
June 30, 2006, between the MergerCos, Bain Paste Finco, LLC, Blackstone Paste
Finco, LLC, and the Borrower, as amended by that certain First Amendment to
Agreement and Plan of Merger, dated as of September 1, 2006.

 

“Receivables Facility” means any of one or more receivables financing facilities
as amended, supplemented, modified, extended, renewed, restated or refunded from
time to time, the Obligations of which are non-recourse (except for customary
representations, warranties, covenants and indemnities made in connection with
such facilities) to the Borrower or any of its Restricted Subsidiaries (other
than a Receivables Subsidiary) pursuant to which the Borrower or any of its
Restricted Subsidiaries sells its accounts receivable to either (a) a Person
that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn
sells its accounts receivable to a Person that is not a Restricted Subsidiary.

 

“Receivables Fees” means distributions or payments made directly or by means of
discounts with respect to any accounts receivable or participation interest
therein issued or sold in connection with, and other fees paid to a Person that
is not a Restricted Subsidiary in connection with, any Receivables Facility.

 

“Receivables Subsidiary” means any Subsidiary formed for the purpose of, and
that solely engages only in one or more Receivables Facilities and other
activities reasonably related thereto.

 

“Refinanced Term Loans” has the meaning specified in Section 10.01.

 

“Refinancing Amendment” means an amendment to this Agreement in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
executed by each of (a) the Borrower, (b) the Administrative Agent and (c) each
Additional Lender and Lender that agrees to provide any portion of the Credit
Agreement Refinancing Indebtedness being incurred pursuant thereto, in
accordance with Section 2.15.

 

“Refinancing Indebtedness” has the meaning set forth in Section 7.03(b)(xiii).

 

“Refinancing Series” shall mean all Refinancing Term Loans or Refinancing Term
Commitments that are established pursuant to the same Refinancing Amendment (or
any subsequent

 

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Refinancing Amendment to the extent such Refinancing Amendment expressly
provides that the Refinancing Term Loans or Refinancing Term Commitments
provided for therein are intended to be a part of any previously established
Refinancing Series) and that provide for the same interest margins and
amortization schedule.

 

“Refinancing Term Commitments” means one or more term loan commitments hereunder
that fund Refinancing Term Loans of the applicable Refinancing Series hereunder
pursuant to a Refinancing Amendment.

 

“Refinancing Term Lenders” means, at any time, any Lender that has a Refinancing
Term Commitment of a given Refinancing Series or a Refinancing Term Loan of a
given Refinancing Series at such time.

 

“Refinancing Term Loans” means one or more term loans hereunder that result from
a Refinancing Amendment.

 

“Refunding Capital Stock” has the meaning set forth in Section 7.02(b)(ii)(A).

 

“Register” has the meaning set forth in Section 10.07(d).

 

“Registered Equivalent Notes” means, with respect to any notes originally issued
in a Rule 144A or other private placement transaction under the Securities Act
of 1933, substantially identical notes (having the same guarantees) issued in a
dollar for dollar exchange therefor pursuant to an exchange offer registered
with the SEC.

 

“Regulation D” shall mean Regulation D of the FRB as from time to time in effect
and any successor to all or a portion thereof establishing reserve requirements.

 

“Related Business Assets” means assets (other than cash or Cash Equivalents)
used or useful in a Similar Business, provided that any assets received by the
Borrower or a Restricted Subsidiary in exchange for assets transferred by the
Borrower or a Restricted Subsidiary shall not be deemed to be Related Business
Assets if they consist of securities of a Person, unless upon receipt of the
securities of such Person, such Person would become a Restricted Subsidiary.

 

“Relevant Reference Period” means (i) in the case of any determination of EBITDA
and Consolidated Total Indebtedness (and any component definitions used therein)
for purposes of computing the Consolidated Total Leverage Ratio as used in the
definition of “Required Percentage”, the Excess Cash Flow Period then most
recently ended and (ii) in the case of any determination of (1) the Fixed Charge
Coverage Ratio, (2) the Fixed Charge Coverage Ratio Incurrence Test, (3) the
Consolidated Secured Debt Ratio, or (4) the Consolidated Total Leverage Ratio
(other than as used in the definition of “Required Percentage”), (and the
component definitions used in any of the foregoing), the Test Period then most
recently ended for which internal financial statements are available immediately
preceding the date on which the Specified Transaction for which such calculation
is being made shall occur.

 

“Replacement Term Loans” has the meaning specified in Section 10.01.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
or the regulations issued thereunder, other than events for which the thirty
(30) day notice period has been waived, and includes a Pension Event.

 

“Repricing Transaction” (a) any prepayment, repayment, refinancing, conversion,

 

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substitution or replacement of all or a portion of the Loans of a given
Class with the incurrence by the Borrower of any Indebtedness (including any
Replacement Term Loans) that is broadly marketed or syndicated to banks and
other institutional investors in financings similar to the facilities provided
for in this Agreement, the primary purpose of which is to reduce the Effective
Yield of such Indebtedness relative to the Effective Yield of such Loans of a
given Class so prepaid, repaid, refinanced, converted, substituted or replaced
and (b) any amendment to this Agreement the primary purpose of which is to
reduce the Effective Yield applicable to the Loans of a given Class; but
excluding, in any such case, any refinancing of Loans of a given Class in
connection with a Change of Control.  Any such determination by the
Administrative Agent as contemplated by preceding clauses (a) and (b) shall be
conclusive and binding on all Lenders holding Loans of the applicable Class.

 

“Required Facility Lenders” means, as of any date of determination, with respect
to one or more Facilities, Lenders having more than 50% of the sum of  (a) the
Total Outstandings under such Facility or Facilities and (b) the aggregate
unused Commitments under such Facility or Facilities; provided that the unused
Commitments of, and the portion of the Total Outstandings under such Facility or
Facilities held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of the Required Facility Lenders.

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the sum of the (a) Total Outstandings and (b) aggregate unused
Commitments; provided that the unused Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

 

“Required Percentage” shall mean, with respect to any Excess Cash Flow Period,
50%; provided, that (a) if the Consolidated Total Leverage Ratio at the end of
the applicable Excess Cash Flow Period is less than 6.00:1.00 but greater than
or equal to 5.00:1.00, such percentage shall be 25%, and (b) if the Consolidated
Total Leverage Ratio at the end of the applicable Excess Cash Flow Period is
less than 5.00:1.00, such percentage shall be 0%.

 

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, treasurer or assistant treasurer or other
similar officer of a Loan Party and, as to any document delivered on the
Restatement Effective Date, any 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.

 

“Restatement Effective Date” means January 28, 2013, the date on which all of
the conditions precedent to the amendment and restatement of the Existing Credit
Agreement shall have been satisfied.

 

“Restricted” shall mean, when referring to cash or Cash Equivalents of the
Borrower or any of its Subsidiaries, that such cash or Cash Equivalents
(i) appears (or would be required to appear) as “restricted” on a consolidated
balance sheet of the Borrower or of any such Subsidiary (unless such appearance
is related to the Loan Documents or Liens created thereunder), (ii) are subject
to any Lien in favor of any Person other than the Collateral Agent for the
benefit of the Secured Parties (except for those Liens in favor of the ABL
Collateral Agent for the benefit of the ABL Lenders, nonconsensual Liens
described in the definition of Permitted Liens and Liens described in clauses
(w) and (z)(i) and (z)(ii) of the definition of Permitted Liens, and Liens
securing Permitted First Priority Refinancing Debt, Permitted Junior Priority
Refinancing Debt or any Additional First Lien Indebtedness or Additional Junior
Lien Indebtedness permitted by this Agreement) or (iii) are not otherwise
generally available for use by the

 

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Borrower or such Subsidiary.

 

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

 

“Restricted Payments” has the meaning specified in Section 7.02(a).

 

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of
the Borrower (including any Foreign Subsidiary) that is not then an Unrestricted
Subsidiary; provided, however, that upon the occurrence of an Unrestricted
Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be
included in the definition of “Restricted Subsidiary”.

 

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
and any successor to its rating agency business.

 

“Sale and Lease-Back Transaction” means any arrangement providing for the
leasing by the Borrower or any of its Restricted Subsidiaries of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Borrower or such Restricted Subsidiary to a third Person in
contemplation of such leasing.

 

“Same Day Funds” means, with respect to disbursements and payments, immediately
available funds in Dollars.

 

“Sanctions Laws and Regulations” means any sanctions or requirements imposed by,
or based upon the obligations or authorities set forth in, the Act, the
Executive Order, the U.S. International Emergency Economic Powers Act (50 U.S.C.
§§ 1701 et seq.), the U.S. Trading with the Enemy Act (50 U.S.C. App. §§ 1 et
seq.), the U.S. Syria Accountability and Lebanese Sovereignty Act, the U.S.
Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 or the
Iran Sanctions Act, Section 1245 of the National Defense Authorization Act of
2012, all as amended, or any of the foreign assets control regulations
(including but not limited to 31 C.F.R., Subtitle B, Chapter V, as amended)  or
any other law or executive order relating thereto administered by the U.S.
Department of the Treasury Office of Foreign Assets Control, and any similar
law, regulation, or executive order enacted in the United States after the date
of this Agreement.

 

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

 

“Secured Hedge Agreement” means any Swap Contract permitted under Article VII
that is entered into by and between any Loan Party or any Restricted Subsidiary
and any Hedge Bank and with respect to which, at or prior to the time that such
Swap Contract is entered into, the Borrower (or another Loan Party) and the
Hedge Bank party thereto (except in the case of the Administrative Agent) shall
have delivered written notice to the Administrative Agent that such Swap
Contract has been entered into and that it constitutes a “Secured Hedge
Agreement” entitled to the benefits of the Collateral Documents, the
Intercreditor Agreement, the Additional First Lien Intercreditor Agreement (if
then in effect), and the Additional Junior Lien Intercreditor Agreement (if then
in effect).

 

“Secured Indebtedness” means any Indebtedness of the Borrower or any of its
Restricted Subsidiaries secured by a Lien.

 

“Secured Obligations” has the meaning specified in the Security Agreement.

 

“Secured Parties” means, collectively, the Administrative Agent, the Collateral
Agent,

 

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the Lenders, the Hedge Banks, the Supplemental Administrative Agent and each
Supplemental Administrative Agent appointed by the Administrative Agent from
time to time pursuant to Section 9.13.

 

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

 

“Security Agreement” means, collectively, the Security Agreement executed by the
Loan Parties, substantially in the form of Exhibit G-1 attached to the Existing
Credit Agreement, together with each other security agreement supplement
executed and delivered pursuant to Section 6.11.

 

“Security Agreement Supplement” has the meaning specified in the Security
Agreement or the Canadian Security Agreement, as applicable.

 

“Senior Notes” means $1,000,000,000 in aggregate principal amount of the
Borrower’s 7¾% senior unsecured notes due 2018 (as reduced by any prepayment,
redemption or retirement thereof).

 

“Senior Notes Indenture” means the Indenture for the Senior Notes, dated as of
October 21, 2010, providing for the issuance by the Borrower of $800,000,000
aggregate principal amount of its 7¾% senior unsecured notes due 2018, as
amended by that certain Supplemental Indenture, dated as of September 27, 2012,
providing for the issuance by the Borrower of an additional $200,000,000
aggregate principal amount of its 7¾% senior unsecured notes due 2018, and as
otherwise amended, supplemented or modified from time to time.

 

“Senior Representative” means, with respect to any series of Permitted First
Priority Refinancing Debt, Permitted Junior Priority Refinancing Debt, secured
Incremental Equivalent Debt or other secured Indebtedness permitted to be
incurred under Section 7.03, the trustee, administrative agent, collateral
agent, security agent or similar agent under the indenture or agreement pursuant
to which such Indebtedness is issued, incurred or otherwise obtained, as the
case may be, and each of their successors in such capacities.

 

“Senior Subordinated Notes” means $400,000,000 in aggregate principal amount of
the Borrower’s 11-3/8% senior subordinated notes due 2016 (as reduced by any
prepayment, redemption or retirement thereof).

 

“Senior Subordinated Notes Indenture” means the Indenture for the Senior
Subordinated Notes, dated as of October 31, 2006, as amended, supplemented or
modified from time to time.

 

“Similar Business” means any business conducted or proposed to be conducted by
the Borrower and its Restricted Subsidiaries on the Restatement Effective Date
or any business that is a reasonable extension, development or expansion of any
of the foregoing or is similar, reasonably related, incidental or ancillary
thereto (including, for avoidance of doubt, any sourcing companies created in
connection with any of the foregoing).

 

“Solicited Discounted Prepayment Amount” has the meaning specified in Section
2.05(a)(iii)(D)(1).

 

“Solicited Discounted Prepayment Notice” means a written notice of the Borrower
of Solicited Discounted Prepayment Offers made pursuant to Section
2.05(a)(iii)(D) substantially in the form of Exhibit O attached hereto.

 

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“Solicited Discounted Prepayment Offer” means the irrevocable written offer by
each Lender, substantially in the form of Exhibit P attached hereto, submitted
following the Administrative Agent’s receipt of a Solicited Discounted
Prepayment Notice.

 

“Solicited Discounted Prepayment Response Date” has the meaning specified in
Section 2.05(a)(iii)(D)(1).

 

“Solicited Discount Proration” has the meaning specified in Section
2.05(a)(iii)(D)(3).

 

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

 

“SPC” has the meaning specified in Section 10.07(h).

 

“Specified Discount” has the meaning specified in Section 2.05(a)(iii)(B)(1).

 

“Specified Discount Prepayment Amount” has the meaning specified in Section
2.05(a)(iii)(B)(1).

 

“Specified Discount Prepayment Notice” means a written notice of the Borrower
Offer of Specified Discount Prepayment made pursuant to Section 2.05(a)(iii)(B)
substantially in the form of Exhibit K attached hereto.

 

“Specified Discount Prepayment Response” means the irrevocable written response
by each Lender, substantially in the form of Exhibit L attached hereto, to a
Specified Discount Prepayment Notice.

 

“Specified Discount Prepayment Response Date” has the meaning specified in
Section 2.05(a)(iii)(B)(1).

 

“Specified Discount Proration” has the meaning specified in Section
2.05(a)(iii)(B)(3).

 

“Specified Legal Expenses” means all attorneys’ and experts’ fees and expenses
and all other costs and expenses paid or payable in connection with
investigating or defending or preparing to investigate or defend any threatened,
pending, completed or future claim, demand, action, suit, proceeding, inquiry or
investigation (whether civil, criminal, administrative or investigative) arising
out of or related to (i) the Borrower’s compensation practices (including option
grants) prior to the Closing Date, (ii) any disclosure or alleged lack of
disclosure on the part of the Borrower or any of its directors or officers
regarding the beneficial ownership of any securities of the Borrower prior to
the Closing Date by any such director or officer (or any trust established for
the benefit of any such director or officer or any family member thereof), (iii)
any transaction prior to the Closing Date involving any securities of the
Borrower alleged to have been engaged in by any such Person, (iv) any alleged
deficiencies in the

 

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Borrower’s financial reporting, internal control over financial reporting or
disclosure controls prior to the Closing Date and procedures relating to any of
the foregoing, and (v) any alleged bad faith, breach of fiduciary duty or other
act or omission on the part of any director or officer of the Borrower relating
to any of the foregoing, together in each case with all damages, losses,
liabilities, judgments, fines, penalties and amounts paid in settlement arising
out of or incurred in connection with any of the foregoing (including all
amounts paid to or on behalf of other Persons in connection with any of the
foregoing pursuant to any indemnification agreements, arrangements or
obligations).

 

“Specified Representations” means the representations and warranties set forth
in Sections 5.01(a) (with respect to organizational existence only), 5.02 (a),
5.04, 5.13, 5.16, 5.17 and 5.19.

 

“Specified Transaction” means, with respect to any period, any Investment,
Disposition, incurrence or repayment of Indebtedness, Restricted Payment,
Subsidiary designation or other transaction that by the terms of this Agreement
requires “Pro Forma Compliance” with a test or covenant hereunder or requires
such test or covenant to be calculated on a “pro forma basis”.

 

“Sponsor Management Agreement” means the management agreements between certain
of the management companies associated with the Investors and the Borrower, as
in effect on the Closing Date and as amended, supplemented, amended and
restated, replaced or otherwise modified from time to time after the date
hereof, provided, however, that the terms of any such amendment, supplement,
amendment and restatement or replacement agreement are not, taken as a whole,
less favorable to the Lenders in any material respect than the agreement in
effect on the Closing Date.

 

“Springing Maturity Date” has the meaning specified in the definition of
“Maturity Date”.

 

“Store” means any retail store (which includes any real property, fixtures,
equipment, inventory and other property related thereto) operated, or to be
operated, by any Loan Party.

 

“Submitted Amount” has the meaning specified in Section 2.05(a)(iii)(C)(1).

 

“Submitted Discount” has the meaning specified in Section 2.05(a)(iii)(C)(1).

 

“Subordinated Indebtedness” means, with respect to the Obligations, any
Indebtedness of the Borrower or any Guarantor which is by its terms subordinated
in right of payment to the Obligations (including, in the case of a Guarantor,
Obligations of such Guarantor under its Guaranty).

 

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

 

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“Subsidiary Guarantors” means, collectively, the Domestic Subsidiary Guarantors
and the Canadian Subsidiary Guarantors.

 

“Subsidiary Guaranty” means, collectively, (a) the Subsidiary Guaranty made by
the Domestic Subsidiary Guarantors in favor of the Administrative Agent on
behalf of the Secured Parties, substantially in the form of Exhibit F-1 attached
to the Existing Credit Agreement and (b) each other guaranty and Guaranty
Supplement delivered pursuant to Section 6.11.

 

“Successor Borrower” has the meaning set forth in Section 7.06(a)(i).

 

“Successor Guarantor” has the meaning set forth in Section 7.06(c)(i)(A).

 

“Supplemental Administrative Agent” has the meaning specified in Section 9.13
and “Supplemental Administrative Agents” shall have the corresponding meaning.

 

“Swap Contract” means (a) 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 (b) 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.

 

“Taxes” has the meaning specified in Section 3.01(a).

 

“Term Commitments” means, as to each Term Lender, its obligation to make a Loan
to the Borrower pursuant to Section 2.01 in an aggregate amount not to exceed
the amount specified opposite such Lender’s name in Schedule 2.01 hereto under
the caption “Term B Loan Commitment” or in the Assignment and Assumption
Agreement pursuant to which such Term Lender becomes a party hereto, as
applicable, as such commitment may be (a) reduced from time to time pursuant to
Section 2.05 and (b) reduced or increased from time to time pursuant to (i)
assignments by or to such Term Lender pursuant to an Assignment and Assumption
Agreement, (ii) an Incremental Amendment, (iii) a Refinancing Amendment or (iv)
an Extension Amendment.  The initial amount of each Term Lender’s Term
Commitment is specified in Schedule 2.01 hereto under the caption “Term
Commitment” or, otherwise, in the Assignment and Assumption Agreement,
Incremental Amendment, Refinancing Amendment or Extension Amendment, pursuant to
which such Lender shall have assumed its Commitment, as the case may be.  The
initial aggregate amount of the Term Commitments is $1,640,000,000.

 

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

 

“Term B Loan” means the term loans made by the Lenders on the Restatement
Effective Date to the Borrower pursuant to Section 2.01.

 

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“Term Loan Increase” has the meaning specified in Section 2.17(a).

 

“Test Period” shall mean, on any date of determination, the period of four
consecutive fiscal quarters of the Borrower then most recently ended (taken as
one accounting period).

 

“Threshold Amount” means $75,000,000.

 

“TL Priority Collateral” means all “Term Loan Priority Collateral” as defined in
the Intercreditor Agreement.

 

“Total Assets” means the total assets of the Borrower and its Restricted
Subsidiaries on a consolidated basis, as shown on the most recent balance sheet
of the Borrower or such other Person as may be expressly stated and calculated
on a pro forma basis in respect of any test or covenant hereunder.

 

“Total Outstandings” means, at any time, the aggregate Outstanding Amount of all
Loans or all Loans under a given Facility, as applicable.

 

“Transaction” means the transactions related to or incidental to, consisting of
or in connection with (a) the refinancing of the Existing Credit Agreement and
the other transactions contemplated thereby, (b) the making of the Borrowings
hereunder on the Restatement Effective Date, (c) the execution and delivery by
the Loan Parties of the Loan Documents to which they are a party, (d) the
redemption of a portion of the Senior Subordinated Notes and (e) the payment of
the Transaction Expenses.

 

“Transaction Expenses” means any fees or expenses incurred or paid by the
Borrower or any Restricted Subsidiary in connection with the Transaction,
including payments to officers, employees and directors as change of control
payments, severance payments, special or retention bonuses and charges for
repurchase or rollover of, or modifications to, stock options in connection
therewith.

 

“Treasury Capital Stock” has the meaning set forth in Section 7.02(b)(ii)(A).

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurocurrency Rate Loan.

 

“Unaudited Financial Statements” has the meaning set forth in Section 4.01(c).

 

“Unfunded Pension Liability” means, at a point in time, the excess of a Pension
Plan’s benefit liabilities, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to applicable laws for the applicable plan year and
includes any unfunded liability or solvency deficiency as determined for the
purposes of the PBA.

 

“Uniform Commercial Code” means the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York or the Uniform Commercial
Code (or similar code or statute) of another jurisdiction, to the extent it may
be required to apply to any item or items of Collateral.

 

“United States” and “U.S.” mean the United States of America.

 

“Unrestricted” shall mean, when referring to cash or Cash Equivalents of the
Borrower or any of its Subsidiaries, that such cash or Cash Equivalents are not
Restricted.

 

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“Unrestricted Subsidiary” means (a) any Subsidiary of the Borrower which at the
time of determination is an Unrestricted Subsidiary (as designated by the
Borrower, as provided below) and (b) any Subsidiary of an Unrestricted
Subsidiary.  The Borrower may designate any Subsidiary of the Borrower
(including any existing Subsidiary and any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds
any Lien on, any property of, the Borrower or any Subsidiary of the Borrower
(other than solely any Subsidiary of the Subsidiary to be so designated);
provided that

 

(i)            any Unrestricted Subsidiary must be an entity of which the Equity
Interests entitled to cast at least a majority of the votes that may be cast by
all Equity Interests having ordinary voting power for the election of directors
or Persons performing a similar function are owned, directly or indirectly, by
the Borrower;

 

(ii)           such designation complies with the covenant described under
Section 7.02;

 

(iii)          each of (A) the Subsidiary to be so designated and (B) its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of the Borrower or any Restricted Subsidiary;
and

 

(iv)          immediately after giving effect to such designation, no Default
shall have occurred and be continuing.

 

The Borrower may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to such designation,
(I) no Default shall have occurred and be continuing and (II) either (A) the
Borrower could satisfy the Fixed Charge Coverage Ratio Incurrence Test, on a pro
forma basis taking into account such designation or (B) immediately after giving
pro forma effect to such designation, as if such designation had occurred at the
beginning of the applicable four-quarter period, the Fixed Charge Coverage Ratio
for the Borrower and its Restricted Subsidiaries would be greater than the Fixed
Charge Coverage Ratio for the Borrower and its Restricted Subsidiaries
immediately prior to such transaction.

 

Any such designation by the Borrower shall be notified by the Borrower to the
Administrative Agent by promptly filing with the Administrative Agent a copy of
the resolution of the Board of Directors of the Borrower or any committee
thereof giving effect to such designation and an Officer’s Certificate
certifying that such designation complied with the foregoing provisions.

 

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

 

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

 

“Wholly—Owned Subsidiary” of any Person means a Subsidiary of such Person, 100%
of the outstanding Equity Interests of which (other than directors’ qualifying
shares and shares issued to foreign nationals as required under applicable law)
shall at the time be owned by such Person or by one or more Wholly—Owned
Subsidiaries of such Person or by such Person and one or more Wholly—Owned

 

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Subsidiaries of such Person.

 

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

 

(a)           The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

 

(b)           (i)            The words “herein”, “hereto”, “hereof” and
“hereunder” and words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any particular provision
thereof.

 

(ii)           Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.

 

(iii)          The term “including” is by way of example and not limitation.

 

(iv)          The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

(c)           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”.

 

(d)           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.

 

(e)           For purposes of any Collateral located in the Province of Quebec
or charged by any deed of hypothec (or any other Loan Document) and for all
other purposes pursuant to which the interpretation or construction of a Loan
Document may be subject to the laws of the Province of Quebec or a court or
tribunal exercising jurisdiction in the Province of Québec, (q) “personal
property” shall be deemed to include “movable property”, (r) “real property”
shall be deemed to include “immovable property”, (s) “tangible property” shall
be deemed to include “corporeal property”, (t) “intangible property” shall be
deemed to include “incorporeal property”, (u) “security interest” and “mortgage”
shall be deemed to include a “hypothec”, (v) all references to filing,
registering or recording under the UCC or the PPSA shall be deemed to include
publication under the Civil Code of Québec, (w) all references to “perfection”
of or “perfected” Liens shall be deemed to include a reference to the
“opposability” of such Liens to third parties, (x) any “right of offset”, “right
of setoff” or similar expression shall be deemed to include a “right of
compensation”, (y) “goods” shall be deemed to include “corporeal movable
property” other than chattel paper, documents of title, instruments, money and
securities, and (z) an “agent” shall be deemed to include a “mandatary”.

 

SECTION 1.03.  Accounting Terms.  (a)  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, except as otherwise specifically prescribed herein.

 

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(b)           Notwithstanding anything to the contrary herein, for purposes of
determining compliance with any test or covenant contained in this Agreement
with respect to any period during which any Specified Transaction occurs, the
Consolidated Secured Debt Ratio (including compliance with the Consolidated
Secured Debt Ratio set forth in the definition of Maturity Date), the
Consolidated Total Leverage Ratio and Fixed Charge Coverage Ratio shall be
calculated with respect to such period and such Specified Transaction in a
manner consistent with the pro forma adjustments contemplated by the respective
definition of Consolidated Secured Debt Ratio, the Consolidated Total Leverage
Ratio, Fixed Charge Coverage Ratio and Maturity Date, as the case may be.

 

(c)           The principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
GAAP.

 

SECTION 1.04.  Rounding.  Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement (or required to be satisfied in order for a
specific action to be permitted under this Agreement) shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

 

SECTION 1.05.  References to Agreements, Laws, Etc.  Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are permitted by
any Loan Document; and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

 

SECTION 1.06.  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 1.07.  Timing of Payment or Performance.  When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment (other than as described in the definition of Interest Period) or
performance shall extend to the immediately succeeding Business Day.

 

SECTION 1.08.  Currency Equivalents Generally.  Any amount specified in this
Agreement (other than in Articles II, IX and X) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by the Reuters World Currency Page for the applicable
currency at 11:00 a.m. (London time) on such day (or, in the event such rate
does not appear on any Reuters World Currency Page, by reference to such other
publicly available service for displaying exchange rates as may be agreed upon
by the Administrative Agent and the Borrower, or, in the absence of such
agreement, such rate shall instead be the arithmetic average of the spot rates
of exchange of the Administrative Agent in the market where its foreign currency
exchange operations in respect of such currency are then being conducted, at or
about 10:00 a.m. (New York City time) on such date for the purchase of Dollars
for delivery two Business Days later). For purposes of calculating the
Consolidated Secured Debt Ratio and Consolidated Total Leverage Ratio, the
equivalent in Dollars of any Indebtedness denominated in a currency other than
Dollars will reflect the currency translation effects, determined in accordance
with GAAP, of Swap Contracts for currency exchange risks with respect to the
applicable currency in effect on the date of determination of the Dollar
equivalent of such other Indebtedness.

 

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SECTION 1.09.  Change of Currency.  Each provision of this Agreement shall be
subject to such reasonable changes of construction as the Administrative Agent
may from time to time specify with the Borrower’s consent to appropriately
reflect a change in currency of any country and any relevant market conventions
or practices relating to such change in currency.

 

ARTICLE II

 

The Commitments and Credit Extensions

 

SECTION 2.01.  The Loans.  Subject to the terms and conditions set forth herein,
each Lender severally agrees to make to the Borrower a single loan denominated
in Dollars in a principal amount equal to such Lender’s Term Commitment on the
Restatement Effective Date.  Amounts borrowed under this Section 2.01 and repaid
or prepaid may not be reborrowed.  Loans may be Base Rate Loans or Eurocurrency
Rate Loans, as further provided herein.

 

SECTION 2.02.  Borrowings, Conversions and Continuations of Loans.  (a)   Each
Borrowing, each conversion of Loans of a given Class from one Type to the other,
and each continuation of Eurocurrency Rate Loans shall be made upon the
Borrower’s irrevocable notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be received by the Administrative Agent not
later than 12:30 p.m. (New York, New York time) (i) three (3) Business Days
prior to the requested date of any Borrowing or continuation of Eurocurrency
Rate Loans or any conversion of Base Rate Loans to Eurocurrency Rate Loans, and
(ii) one (1) Business Day before the requested date of any Borrowing of Base
Rate Loans or conversion of any Eurocurrency Rate Loans to Base Rate Loans. 
Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower.  Each Borrowing of, conversion to or continuation of
Eurocurrency Rate Loans shall be in a principal amount of $2,500,000 or a whole
multiple of $500,000 in excess thereof, or such other amount as requested by the
Borrower from time to time and agreed to by Administrative Agent in its sole
discretion.  Each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof,
or such other amount as requested by the Borrower from time to time and agreed
to by Administrative Agent in its sole discretion.  Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Borrowing (and the applicable Class thereof), a conversion of Loans
of a given Class from one Type to the other, or a continuation of Eurocurrency
Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Loans are to be converted, and (v)
if applicable, the duration of the Interest Period with respect thereto.  If the
Borrower fails to specify a Type of Loan in a Committed Loan Notice or fails to
give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurocurrency
Rate Loans.  If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one (1) month.

 

(b)           Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Pro Rata Share of
the applicable Class of Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans or
continuation described in Section 2.02(a).  In the case of each Borrowing, each
Appropriate Lender shall make the

 

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amount of its Loan available to the Administrative Agent in Same Day Funds at
the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice.  Upon satisfaction of the
applicable conditions set forth in Section 4.01 (or in any applicable Extension
Amendment, Incremental Amendment or Refinancing Amendment) and Section 4.02, the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of DBNY with the amount of such funds
or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower.

 

(c)           Except as otherwise provided herein, a Eurocurrency Rate Loan may
be continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan unless the Borrower pays the amount due, if any, under
Section 3.05 in connection therewith.  During the existence of an Event of
Default, the Administrative Agent or the Required Lenders may require by 
written notice to the Borrower that no Loans may be converted to or continued as
Eurocurrency Rate Loans.

 

(d)           The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurocurrency Rate Loans upon determination of such interest rate.  The
determination of the Eurocurrency Rate by the Administrative Agent shall be
conclusive in the absence of manifest error.  At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in DBNY’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

 

(e)           After giving effect to all Borrowings, all conversions of Loans of
a given Class from one Type to the other, and all continuations of Loans of a
given Class as the same Type, there shall not be more than eight (8) Interest
Periods in effect (or such greater number as may be acceptable to the
Administrative Agent); provided that after the establishment of any new Class of
Loans pursuant to an Incremental Amendment, Refinancing Amendment or Extension
Amendment, the number of Interest Periods otherwise permitted by this
Section 2.02(e) shall increase by three (3) Interest Periods for each applicable
Class so established.

 

(f)            The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such 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 the date of any Borrowing.

 

SECTION 2.03.  [RESERVED].[RESERVED].Prepayments.  (a) Optional.  (i)  The
Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay any Class or Classes of Loans in whole or in part
without premium or penalty; provided that (1) such notice must be received by
the Administrative Agent not later than 12:30 p.m. (New York, New York time)
(A) three (3) Business Days prior to any date of prepayment of Eurocurrency Rate
Loans and (B) one (1) Business Day prior to any date of prepayment of Base Rate
Loans; (2) any prepayment of Eurocurrency Rate Loans shall be in a principal
amount of $2,500,000 or a whole multiple of $500,000 in excess thereof; (3) any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding; and (4) any prepayment of Term
B Loans made prior to the first anniversary of the Restatement Effective Date in
connection with a Repricing Transaction shall be accompanied by the payment of
the fee described in Section 2.09(b).  Each such notice shall specify the date
and amount of such prepayment, the Class(es) and Type(s) of Loans to be prepaid
(such Class(es) and Type(s) of Loans to be selected by the Borrower) and the
manner in which the Borrower elects to have such prepayment applied to scheduled
repayments of Loans of a given Class required pursuant to

 

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Section 2.07; provided that in the event such notice fails to specify the manner
in which the respective prepayment shall be applied to scheduled repayments of
such Class of Loans required pursuant to Section 2.07, such prepayment of such
Class of Loans shall be applied in direct order of maturity to scheduled
repayments thereof required pursuant to Section 2.07.  The Administrative Agent
will promptly notify each Appropriate Lender of its receipt of each such notice,
and of the amount of such Lender’s Pro Rata Share of such prepayment.  If 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 on the date
specified therein.  Any prepayment of a Eurocurrency Rate Loan shall be
accompanied by all accrued interest thereon, together with any additional
amounts required pursuant to Section 3.05.  Each prepayment of the Loans of a
given Class pursuant to this Section 2.05(a) shall be paid to the Appropriate
Lenders in accordance with their respective Pro Rata Shares.

 

(ii)           Notwithstanding anything to the contrary contained in this
Agreement, the Borrower may rescind any notice of prepayment under
Section 2.05(a)(i) if such prepayment would have resulted from a refinancing of
all or a portion of the outstanding Loans of a given Class, which refinancing
shall not be consummated or shall otherwise be delayed.

 

(iii)          Notwithstanding anything in any Loan Document to the contrary, so
long as (x) no Event of Default has occurred and is continuing and (y) no
proceeds of ABL Loans or Incremental Term Loans are used for this purpose, any
Company Party may prepay the outstanding Loans (which shall, for the avoidance
of doubt, be automatically and permanently canceled immediately upon such
prepayment) (or any Holdco, the Borrower or any of its Subsidiaries may purchase
such outstanding Loans and immediately cancel them) on the following basis:

 

(A)          Any Company Party shall have the right to make a voluntary
prepayment of Loans at a discount to par pursuant to a Borrower Offer of
Specified Discount Prepayment, Borrower Solicitation of Discount Range
Prepayment Offers or Borrower Solicitation of Discounted Prepayment Offers (any
such prepayment, the “Discounted Term Loan Prepayment”), in each case made in
accordance with this Section 2.05(a)(iii); provided that no Company Party shall
initiate any action under this Section 2.05(a)(iii) in order to make a
Discounted Term Loan Prepayment unless (I) at least ten (10) Business Days shall
have passed since the consummation of the most recent Discounted Term Loan
Prepayment as a result of a prepayment made by a Company Party on the applicable
Discounted Prepayment Effective Date; or (II) at least three (3) Business Days
shall have passed since the date the Company Party was notified that no Term
Lender was willing to accept any prepayment of any Term Loan at the Specified
Discount, within the Discount Range or at any discount to par value, as
applicable, or in the case of Borrower Solicitation of Discounted Prepayment
Offers, the date of any Company Party’s election not to accept any Solicited
Discounted Prepayment Offers.

 

(B)          (1) Subject to the proviso to subsection (A) above, any Company
Party may from time to time offer to make a Discounted Term Loan Prepayment by
providing the Auction Agent with five (5) Business Days’ notice in the form of a
Specified Discount Prepayment Notice; provided that (I) any such offer shall be
made available, at the sole discretion of the Company Party, to (x) each Term
Lender and/or (y) each Term Lender with respect to any Class of Loans on an
individual tranche basis, (II) any such offer shall specify the aggregate
principal amount offered to be prepaid (the “Specified Discount Prepayment
Amount”) with respect to each applicable tranche, the tranche or tranches of
Loans subject to such offer and the specific percentage discount to par (the
“Specified Discount”) of such Loans to be prepaid (it being understood that
different Specified Discounts and/or Specified Discount Prepayment Amounts may
be offered with respect to different tranches of Loans and, in such event, each
such offer will be treated as a separate offer pursuant to the terms of this
Section 2.05(a)(iii)(B)), (III) the

 

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Specified Discount Prepayment Amount shall be in an aggregate amount not less
than $5,000,000 and whole increments of $1,000,000 in excess thereof and
(IV) each such offer shall remain outstanding through the Specified Discount
Prepayment Response Date.  The Auction Agent will promptly provide each
Appropriate Lender with a copy of such Specified Discount Prepayment Notice and
a form of the Specified Discount Prepayment Response to be completed and
returned by each such Term Lender to the Auction Agent (or its delegate) by no
later than 5:00 p.m., on the third Business Day after the date of delivery of
such notice to such Lenders (which date may be extended for a period not
exceeding three (3) Business Days upon notice by the Company Party to the
Auction Agent) (the “Specified Discount Prepayment Response Date”).

 

(2)           Each Term Lender receiving such offer shall notify the Auction
Agent (or its delegate) by the Specified Discount Prepayment Response Date
whether or not it agrees to accept a prepayment of any of its applicable then
outstanding Loans at the Specified Discount and, if so (such accepting Lender, a
“Discount Prepayment Accepting Lender”), the amount and the tranches of such
Lender’s Loans to be prepaid at such offered discount.  Each acceptance of a
Discounted Term Loan Prepayment by a Discount Prepayment Accepting Lender shall
be irrevocable.  Any Term Lender whose Specified Discount Prepayment Response is
not received by the Auction Agent by the Specified Discount Prepayment Response
Date shall be deemed to have declined to accept the applicable Borrower Offer of
Specified Discount Prepayment.

 

(3)           If there is at least one (1) Discount Prepayment Accepting Lender,
the relevant Company Party will make a prepayment of outstanding Loans pursuant
to this paragraph (B) to each Discount Prepayment Accepting Lender on the
Discounted Prepayment Effective Date in accordance with the respective
outstanding amount and tranches of Loans specified in such Lender’s Specified
Discount Prepayment Response given pursuant to subsection (2) above; provided
that, if the aggregate principal amount of Loans accepted for prepayment by all
Discount Prepayment Accepting Lenders exceeds the Specified Discount Prepayment
Amount, such prepayment shall be made pro rata among the Discount Prepayment
Accepting Lenders in accordance with the respective principal amounts accepted
to be prepaid by each such Discount Prepayment Accepting Lender and the Auction
Agent (in consultation with such Company Party and subject to rounding
requirements of the Auction Agent made in its reasonable discretion) will
calculate such proration (the “Specified Discount Proration”). The Auction Agent
shall promptly, and in any case within three (3) Business Days following the
Specified Discount Prepayment Response Date, notify (I) the relevant Company
Party of the respective Term Lenders’ responses to such offer, the Discounted
Prepayment Effective Date and the aggregate principal amount of the Discounted
Term Loan Prepayment and the tranches to be prepaid, (II) each Term Lender of
the Discounted Prepayment Effective Date, and the aggregate principal amount and
the tranches of Loans to be prepaid at the Specified Discount on such date and
(III) each Discount Prepayment Accepting Lender of the Specified Discount
Proration, if any, and confirmation of the principal amount, tranche and Type of
Loans of such Term Lender to be prepaid at the Specified Discount on such date.
Each determination by the Auction Agent of the amounts stated in the foregoing
notices to the Company Party and such Term Lenders shall be conclusive and
binding for all purposes absent manifest error.  The payment amount specified in
such notice to the Company Party shall be due and payable by such Company Party
on the Discounted Prepayment Effective Date in accordance with subsection
(F) below (subject to subsection (J) below).

 

(C)          (1) Subject to the proviso to subsection (A) above, any Company
Party may from

 

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time to time solicit Discount Range Prepayment Offers by providing the Auction
Agent with five (5) Business Days’ notice in the form of a Discount Range
Prepayment Notice; provided that (I) any such solicitation shall be extended, at
the sole discretion of such Company Party, to (x) each Term Lender and/or
(y) each Term Lender with respect to any Class of Loans on an individual tranche
basis, (II) any such notice shall specify the maximum aggregate principal amount
of the relevant Loans (the “Discount Range Prepayment Amount”), the tranche or
tranches of Loans subject to such offer and the maximum and minimum percentage
discounts to par (the “Discount Range”) of the principal amount of such Loans
with respect to each relevant tranche of Loans willing to be prepaid by such
Company Party (it being understood that different Discount Ranges and/or
Discount Range Prepayment Amounts may be offered with respect to different
tranches of Loans and, in such event, each such offer will be treated as a
separate offer pursuant to the terms of this Section 2.05(a)(iii)(C)), (III) the
Discount Range Prepayment Amount shall be in an aggregate amount not less than
$5,000,000 and whole increments of $1,000,000 in excess thereof and (IV) each
such solicitation by a Company Party shall remain outstanding through the
Discount Range Prepayment Response Date.  The Auction Agent will promptly
provide each Appropriate Lender with a copy of such Discount Range Prepayment
Notice and a form of the Discount Range Prepayment Offer to be submitted by a
responding Lender to the Auction Agent (or its delegate) by no later than
5:00 p.m., on the third Business Day after the date of delivery of such notice
to such Lenders (which date may be extended for a period not exceeding three
(3) Business Days upon notice by the Company Party to the Auction Agent) (the
“Discount Range Prepayment Response Date”).  Each Term Lender’s Discount Range
Prepayment Offer shall be irrevocable and shall specify a discount to par within
the Discount Range (the “Submitted Discount”) at which such Term Lender is
willing to allow prepayment of any or all of its then outstanding Loans of the
applicable tranche or tranches and the maximum aggregate principal amount and
tranches of such Lender’s Loans (the “Submitted Amount”) such Term Lender is
willing to have prepaid at the Submitted Discount.  Any Term Lender whose
Discount Range Prepayment Offer is not received by the Auction Agent by the
Discount Range Prepayment Response Date shall be deemed to have declined to
accept a Discounted Term Loan Prepayment of any of its Loans at any discount to
their par value within the Discount Range.

 

(2)           The Auction Agent shall review all Discount Range Prepayment
Offers received on or before the applicable Discount Range Prepayment Response
Date and shall determine (in consultation with such Company Party and subject to
rounding requirements of the Auction Agent made in its sole reasonable
discretion) the Applicable Discount and Loans to be prepaid at such Applicable
Discount in accordance with this subsection (C).  The relevant Company Party
agrees to accept on the Discount Range Prepayment Response Date all Discount
Range Prepayment Offers received by the Auction Agent within the Discount Range
by the Discount Range Prepayment Response Date, in the order from the Submitted
Discount that is the largest discount to par to the Submitted Discount that is
the smallest discount to par, up to and including the Submitted Discount that is
the smallest discount to par within the Discount Range (such Submitted Discount
that is the smallest discount to par within the Discount Range being referred to
as the “Applicable Discount”) which yields a Discounted Term Loan Prepayment in
an aggregate principal amount equal to the lower of (I) the Discount Range
Prepayment Amount and (II) the sum of all Submitted Amounts.  Each Term Lender
that has submitted a Discount Range Prepayment Offer to accept prepayment at a
discount to par that is larger than or equal to the Applicable Discount shall be
deemed to have irrevocably consented to prepayment of Loans equal to its
Submitted Amount (subject to any required proration pursuant to the following
subsection (3)) at the Applicable Discount (each such Term Lender, a
“Participating Lender”).

 

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(3)           If there is at least one (1) Participating Lender, the relevant
Company Party will prepay the respective outstanding Loans of each Participating
Lender on the Discounted Prepayment Effective Date in the aggregate principal
amount and of the tranches specified in such Lender’s Discount Range Prepayment
Offer at the Applicable Discount; provided that if the Submitted Amount by all
Participating Lenders offered at a discount to par greater than the Applicable
Discount exceeds the Discount Range Prepayment Amount, prepayment of the
principal amount of the relevant Loans for those Participating Lenders whose
Submitted Discount is a discount to par greater than or equal to the Applicable
Discount (the “Identified Participating Lenders”) shall be made pro rata among
the Identified Participating Lenders in accordance with the Submitted Amount of
each such Identified Participating Lender and the Auction Agent (in consultation
with such Company Party and subject to rounding requirements of the Auction
Agent made in its sole reasonable discretion) will calculate such proration (the
“Discount Range Proration”).  The Auction Agent shall promptly, and in any case
within five (5) Business Days following the Discount Range Prepayment Response
Date, notify (I) the relevant Company Party of the respective Term Lenders’
responses to such solicitation, the Discounted Prepayment Effective Date, the
Applicable Discount, and the aggregate principal amount of the Discounted Term
Loan Prepayment and the tranches to be prepaid, (II) each Term Lender of the
Discounted Prepayment Effective Date, the Applicable Discount, and the aggregate
principal amount and tranches of Loans to be prepaid at the Applicable Discount
on such date, (III) each Participating Lender of the aggregate principal amount
and tranches of such Term Lender to be prepaid at the Applicable Discount on
such date, and (IV) if applicable, each Identified Participating Lender of the
Discount Range Proration.  Each determination by the Auction Agent of the
amounts stated in the foregoing notices to the relevant Company Party and Term
Lenders shall be conclusive and binding for all purposes absent manifest error. 
The payment amount specified in such notice to the Company Party shall be due
and payable by such Company Party on the Discounted Prepayment Effective Date in
accordance with subsection (F) below (subject to subsection (J) below).

 

(D)          (1) Subject to the proviso to subsection (A) above, any Company
Party may from time to time solicit Solicited Discounted Prepayment Offers by
providing the Auction Agent with five (5) Business Days’ notice in the form of a
Solicited Discounted Prepayment Notice; provided that (I) any such solicitation
shall be extended, at the sole discretion of such Company Party, to (x) each
Term Lender and/or (y) each Term Lender with respect to any Class of Loans on an
individual tranche basis, (II) any such notice shall specify the maximum
aggregate amount of the Loans (the “Solicited Discounted Prepayment Amount”) and
the tranche or tranches of Loans the applicable Company Party is willing to
prepay at a discount (it being understood that different Solicited Discounted
Prepayment Amounts may be offered with respect to different tranches of Loans
and, in such event, each such offer will be treated as a separate offer pursuant
to the terms of this Section 2.05(a)(iii)(D)), (III) the Solicited Discounted
Prepayment Amount shall be in an aggregate amount not less than $5,000,000 and
whole increments of $1,000,000 in excess thereof and (IV) each such solicitation
by a Company Party shall remain outstanding through the Solicited Discounted
Prepayment Response Date.  The Auction Agent will promptly provide each
Appropriate Lender with a copy of such Solicited Discounted Prepayment Notice
and a form of the Solicited Discounted Prepayment Offer to be submitted by a
responding Lender to the Auction Agent (or its delegate) by no later than
5:00 p.m., on the third Business Day after the date of delivery of such notice
to such Term Lenders (which date may be extended for a period not exceeding
three (3) Business Days upon notice by the Company Party to the Auction Agent)
(the “Solicited Discounted Prepayment Response Date”).  Each Term Lender’s
Solicited Discounted Prepayment Offer shall (x) be irrevocable, (y) remain
outstanding until the

 

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Acceptance Date, and (z) specify both a discount to par (the “Offered Discount”)
at which such Term Lender is willing to allow prepayment of its then outstanding
Loan and the maximum aggregate principal amount and tranches of such Loans (the
“Offered Amount”) such Term Lender is willing to have prepaid at the Offered
Discount.  Any Term Lender whose Solicited Discounted Prepayment Offer is not
received by the Auction Agent by the Solicited Discounted Prepayment Response
Date shall be deemed to have declined prepayment of any of its Loans at any
discount.

 

(2)           The Auction Agent shall promptly provide the relevant Company
Party with a copy of all Solicited Discounted Prepayment Offers received on or
before the Solicited Discounted Prepayment Response Date.  Such Company Party
shall review all such Solicited Discounted Prepayment Offers and select the
largest of the Offered Discounts specified by the relevant responding Term
Lenders in the Solicited Discounted Prepayment Offers that is acceptable to the
Company Party in its sole discretion (the “Acceptable Discount”), if any.  If
the Company Party elects, in its sole discretion, to accept any Offered Discount
as the Acceptable Discount, then in no event later than by the third Business
Day after the date of receipt by such Company Party from the Auction Agent of a
copy of all Solicited Discounted Prepayment Offers pursuant to the first
sentence of this subsection (2) (the “Acceptance Date”), the Company Party shall
submit an Acceptance and Prepayment Notice to the Auction Agent setting forth
the Acceptable Discount.  If the Auction Agent shall fail to receive an
Acceptance and Prepayment Notice from the Company Party by the Acceptance Date,
such Company Party shall be deemed to have rejected all Solicited Discounted
Prepayment Offers.

 

(3)           Based upon the Acceptable Discount and the Solicited Discounted
Prepayment Offers received by Auction Agent by the Solicited Discounted
Prepayment Response Date, within three (3) Business Days after receipt of an
Acceptance and Prepayment Notice (the “Discounted Prepayment Determination
Date”), the Auction Agent will determine (in consultation with such Company
Party and subject to rounding requirements of the Auction Agent made in its sole
reasonable discretion) the aggregate principal amount and the tranches of Loans
(the “Acceptable Prepayment Amount”) to be prepaid by the relevant Company Party
at the Acceptable Discount in accordance with this Section 2.05(a)(iii)(D).  If
the Company Party elects to accept any Acceptable Discount, then the Company
Party agrees to accept all Solicited Discounted Prepayment Offers received by
Auction Agent by the Solicited Discounted Prepayment Response Date, in the order
from largest Offered Discount to smallest Offered Discount, up to and including
the Acceptable Discount.  Each Term Lender that has submitted a Solicited
Discounted Prepayment Offer with an Offered Discount that is greater than or
equal to the Acceptable Discount shall be deemed to have irrevocably consented
to prepayment of Loans equal to its Offered Amount (subject to any required
pro-rata reduction pursuant to the following sentence) at the Acceptable
Discount (each such Lender, a “Qualifying Lender”).  The Company Party will
prepay outstanding Loans pursuant to this subsection (D) to each Qualifying
Lender in the aggregate principal amount and of the tranches specified in such
Lender’s Solicited Discounted Prepayment Offer at the Acceptable Discount;
provided that if the aggregate Offered Amount by all Qualifying Lenders whose
Offered Discount is greater than or equal to the Acceptable Discount exceeds the
Solicited Discounted Prepayment Amount, prepayment of the principal amount of
the Loans for those Qualifying Lenders whose Offered Discount is greater than or
equal to the Acceptable Discount (the “Identified Qualifying Lenders”) shall be
made pro rata among the Identified Qualifying Lenders in accordance with the
Offered Amount of each such Identified Qualifying Lender and the Auction Agent
(in consultation with such

 

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Company Party and subject to rounding requirements of the Auction Agent made in
its sole reasonable discretion) will calculate such proration (the “Solicited
Discount Proration”).  On or prior to the Discounted Prepayment Determination
Date, the Auction Agent shall promptly notify (I) the relevant Company Party of
the Discounted Prepayment Effective Date and Acceptable Prepayment Amount
comprising the Discounted Term Loan Prepayment and the tranches to be prepaid,
(II) each Term Lender of the Discounted Prepayment Effective Date, the
Acceptable Discount, and the Acceptable Prepayment Amount of all Loans and the
tranches to be prepaid at the Applicable Discount on such date, (III) each
Qualifying Lender of the aggregate principal amount and the tranches of such
Term Lender to be prepaid at the Acceptable Discount on such date, and (IV) if
applicable, each Identified Qualifying Lender of the Solicited Discount
Proration.  Each determination by the Auction Agent of the amounts stated in the
foregoing notices to such Company Party and Term Lenders shall be conclusive and
binding for all purposes absent manifest error.  The payment amount specified in
such notice to such Company Party shall be due and payable by such Company Party
on the Discounted Prepayment Effective Date in accordance with subsection
(F) below (subject to subsection (J) below).

 

(E)           In connection with any Discounted Term Loan Prepayment, the
Company Parties and the Term Lenders acknowledge and agree that the Auction
Agent may require as a condition to any Discounted Term Loan Prepayment, the
payment of customary and documented fees and out-of-pocket expenses from a
Company Party in connection therewith.

 

(F)           If any Loan is prepaid in accordance with paragraphs (B) through
(D) above, a Company Party shall prepay such Loans on the Discounted Prepayment
Effective Date, without premium or penalty.  The relevant Company Party shall
make such prepayment to the Administrative Agent, for the account of the
Discount Prepayment Accepting Lenders, Participating Lenders, or Qualifying
Lenders, as applicable, at the Administrative Agent’s Office in immediately
available funds not later than 11:00 a.m. on the Discounted Prepayment Effective
Date and all such prepayments shall be applied to the remaining principal
installments of the relevant tranche of Loans on a pro-rata basis across such
installments.  The Loans so prepaid shall be accompanied by all accrued and
unpaid interest on the par principal amount so prepaid up to, but not including,
the Discounted Prepayment Effective Date.  Each prepayment of the outstanding
Loans pursuant to this Section 2.05(a)(iii) shall be paid to the Discount
Prepayment Accepting Lenders, Participating Lenders, or Qualifying Lenders, as
applicable, and shall be applied to the relevant Loans of such Term Lenders in
accordance with their respective Pro Rata Share or other applicable share
hereunder.  The aggregate principal amount of the tranches and installments of
the relevant Loans outstanding shall be deemed reduced by the full par value of
the aggregate principal amount of the tranches of Loans prepaid on the
Discounted Prepayment Effective Date in any Discounted Term Loan Prepayment.

 

(G)          To the extent not expressly provided for herein, each Discounted
Term Loan Prepayment shall be consummated pursuant to procedures consistent with
the provisions in this Section 2.05(a)(iii), established by the Auction Agent
acting in its reasonable discretion and as reasonably agreed by the applicable
Company Party.

 

(H)          Notwithstanding anything in any Loan Document to the contrary, for
purposes of this Section 2.05(a)(iii), each notice or other communication
required to be delivered or otherwise provided to the Auction Agent (or its
delegate) shall be deemed to have been given upon the Auction Agent’s (or its
delegate’s) actual receipt during normal business hours of such notice or
communication; provided that any notice or communication actually received
outside of normal

 

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business hours shall be deemed to have been given as of the opening of business
on the next Business Day.

 

(I)            Each of the Company Parties and the Term Lenders acknowledge and
agree that the Auction Agent may perform any and all of its duties under this
Section 2.05(a)(iii) by itself or through any Affiliate of the Auction Agent and
expressly consents to any such delegation of duties by the Auction Agent to such
Affiliate and the performance of such delegated duties by such Affiliate.  The
exculpatory provisions pursuant to this Agreement shall apply to each Affiliate
of the Auction Agent and its respective activities in connection with any
Discounted Term Loan Prepayment provided for in this Section 2.05(a)(iii) as
well as activities of the Auction Agent.

 

(J)            Each Company Party shall have the right, by written notice to the
Auction Agent, to revoke in full (but not in part) its offer to make a
Discounted Term Loan Prepayment and rescind the applicable Specified Discount
Prepayment Notice, Discount Range Prepayment Notice or Solicited Discounted
Prepayment Notice therefor at its discretion at any time on or prior to the
applicable Specified Discount Prepayment Response Date (and if such offer is
revoked pursuant to the preceding clauses, any failure by such Company Party to
make any prepayment to a Lender, as applicable, pursuant to this
Section 2.05(a)(iii) shall not constitute a Default or Event of Default under
Section 8.01 or otherwise).

 

(b)           Mandatory.  (i)  Within five (5) Business Days after financial
statements have been delivered pursuant to Section 6.01(a) and the related
Compliance Certificate has been delivered pursuant to Section 6.02(b), the
Borrower shall cause to be prepaid an aggregate principal amount of Loans in an
amount equal to (A) the Required Percentage of Excess Cash Flow, if any, for the
Excess Cash Flow Period covered by such financial statements minus (B) the
aggregate amount of all voluntary prepayments of Loans (excluding prepayments
pursuant to Section 2.05(a)(iii)) during such Excess Cash Flow Period to the
extent such prepayments are not funded with the proceeds of Indebtedness.

 

(ii)           (A) If the Borrower or any Restricted Subsidiary incurs or issues
any Indebtedness not expressly permitted to be incurred or issued pursuant to
Section 7.03, the Borrower shall cause to be prepaid an aggregate principal
amount of Loans in an amount equal to 100% of all Net Proceeds received
therefrom on or prior to the date which is five (5) Business Days after the
receipt of such Net Proceeds.

 

(B) If the Borrower incurs or issues any Credit Agreement Refinancing
Indebtedness (other than solely by means of extending or renewing then existing
Credit Agreement Refinancing Indebtedness of the type described in clause (a),
(b) or (c) of the definition thereof without resulting in any Net Proceeds), the
Borrower shall prepay an aggregate principal amount of Loans in an amount equal
to 100% of the Net Proceeds of such Credit Agreement Refinancing Indebtedness on
the date such Credit Agreement Refinancing Indebtedness is incurred or issued. 
Notwithstanding anything to the contrary contained in this Agreement, the
Borrower may rescind any notice of prepayment under Section 2.05(b)(ii)(B) if
such prepayment would have resulted from the incurrence of issuance of Credit
Agreement Refinancing Indebtedness, which incurrence or issuance shall not be
consummated or shall otherwise be delayed.

 

(iii)          The amount of each principal repayment of Loans made as required
by this Section 2.05(b) shall be applied pro rata to each Class of Loans (based
upon the then outstanding principal amounts of the respective Classes of Loans);
provided, that (A) any prepayment of Loans with the Net Proceeds of, or in
exchange for, Credit Agreement Refinancing Indebtedness may be applied to the
applicable Class or Classes of Refinanced Debt selected by the Borrower, and
(B) at the request of the

 

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Borrower, in lieu of such application on a pro rata basis among all Classes of
Loans, such prepayment may be applied to any Class of Loans so long as the
Maturity Date of such Class of Loans (or such Classes of Loans) precedes the
Maturity Date of each other Class of Loans then outstanding or, in the event
more than one Class of Loans shall have an identical Maturity Date, to such
Classes on a pro rata basis.  Each prepayment of Loans of a given Class pursuant
to this Section 2.05(b) shall be applied in direct order of maturity to
scheduled repayments of such Loans required pursuant to Section 2.07 and each
such prepayment shall be paid to the Appropriate Lenders in accordance with
their respective Pro Rata Shares.

 

(iv)          The Borrower shall notify the Administrative Agent in writing of
any mandatory prepayment of Loans required to be made pursuant to clauses
(i) and (ii) of this Section 2.05(b) at least three (3) Business Days prior to
the date of such prepayment.  Each such notice shall specify the date of such
prepayment and provide a reasonably detailed calculation of the amount of such
prepayment and shall specify the Class(es) and Type(s) of Loans to be prepaid
(such Class(es) and Type(s) of Loans to be selected by the Borrower in
accordance with Section 2.05(b)(iii)).  The Administrative Agent will promptly
notify each Appropriate Lender of the contents of the Borrower’s prepayment
notice and of such Appropriate Lender’s Pro Rata Share of the prepayment.

 

(c)           Asset Sale/Casualty Event Offer to Purchase.  (i)  Within 450 days
after the receipt of any Net Proceeds of any Asset Sale or Casualty Event, the
Borrower or the applicable Restricted Subsidiary, at its option, may apply cash
in an amount equal to the Net Proceeds from such Asset Sale or Casualty Event
(A) (I) if the assets subject to the respective Asset Sale or Casualty Event
constituted TL Priority Collateral (x) to make an offer to the Appropriate
Lenders to prepay Loans in accordance with the procedures set forth below for an
Asset Sale/Casualty Event Offer, with each such prepayment pursuant to this
Section 2.05(c) to be applied ratably to each Class of Loans then outstanding;
provided that, at the request of the Borrower, in lieu of such application on a
pro rata basis among all Classes of Loans, such prepayment may be applied to any
Class of Loans so long as the Maturity Date of such Class of Loans (or such
Classes of Loans) precedes the Maturity Date of each other Class of Loans then
outstanding or, in the event more than one Class of Loans shall have an
identical Maturity Date, to such Classes on a pro rata basis, or (y) to make an
offer to purchase, prepay or permanently reduce Permitted First Priority
Refinancing Debt, Incremental Equivalent Debt that is secured on a pari passu
basis (without regard to control of remedies) with the Obligations or other
Indebtedness permitted by Section 7.03 that is secured on a pari passu basis
(without regard to control of remedies) with the Obligations (or, in each case,
any Indebtedness pursuant to a Permitted Refinancing in respect thereof that is
secured on a pari passu basis (without regard to control of remedies) with the
Obligations) pursuant to the terms of the documentation governing such
Indebtedness with such Net Proceeds from such Asset Sale or Casualty Event (such
Permitted First Priority Refinancing Debt, Incremental Equivalent Debt or other
Indebtedness permitted by Section 7.03 that is incurred after the Restatement
Effective Date or, in each case, any Indebtedness pursuant to a Permitted
Refinancing in respect thereof and secured by a Permitted Lien on a pari passu
basis (without regard to control of remedies) with the Obligations (“Other
Applicable Indebtedness”); provided, however, that in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to clause (I)(y),
(1) the Borrower or such Restricted Subsidiary shall permanently retire such
Indebtedness and, in the case of obligations under revolving credit facilities
or other similar Indebtedness, shall correspondingly permanently reduce
commitments with respect thereto (other than obligations owed to the Borrower or
a Restricted Subsidiary) and (2) the Borrower or such Restricted Subsidiary will
equally and ratably reduce the amount of Indebtedness outstanding under this
Agreement by, at its option, prepaying Loans in accordance with
Section 2.05(a) or making an offer to all Appropriate Lenders to prepay their
Loans in accordance with the  procedures set forth below for an Asset
Sale/Casualty Event Offer, or (II) if the assets subject to the respective Asset
Sale or Casualty Event constituted ABL Priority Collateral, to repay outstanding
ABL Loans as, and to the extent, required by any “cash sweep” provisions in the
ABL Credit Agreement, or (B) so long as no Event of Default then

 

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exists, to acquire Additional Assets; provided, however, that, if the assets
subject to the respective Asset Sale or Casualty Event constituted TL Priority
Collateral, any such Additional Assets so acquired shall constitute TL Priority
Collateral and concurrently with their acquisition shall be added to the
Collateral securing the Secured Obligations in accordance with the provisions of
Section 6.11 and the Collateral Documents, and provided, further, that to the
extent such Additional Assets constitute the Capital Stock of any Person that is
required to become a Guarantor pursuant to the Collateral and Guarantee
Requirement and Section 6.11, the assets of such Person that may be used or
useful in a Similar Business are, in accordance with the provisions of
Section 6.11 and the Collateral Documents, concurrently with the acquisition
added to the Collateral securing the Secured Obligations.  Notwithstanding the
foregoing, if during such 450-day period the Borrower or a Restricted Subsidiary
enters into a definitive binding agreement committing it to apply such Net
Proceeds of any Asset Sale or Casualty Event to acquire Additional Assets
pursuant to clause (B) of this Section 2.05(c), then, so long as no Event of
Default then exists, such 450-day period will be extended with respect to the
amount of Net Proceeds so committed until such Net Proceeds are required to be
applied in accordance with such agreement (but such extension will in no event
be for a period longer than 180 days) (or, if earlier, the date of termination
of such agreement).

 

(ii)           Any Net Proceeds from the Asset Sale or the Casualty Event, as
the case may be, that are not invested or applied as provided and within the
time period set forth in Section 2.05(c)(i) will be deemed to constitute “Excess
Proceeds”.  When the aggregate amount of Excess Proceeds exceeds $100,000,000,
the Borrower shall (x) make an offer within ten (10) Business Days after the
date that Excess Proceeds exceed $100,000,000 to all Appropriate Lenders in
accordance with the procedures set forth below for an Asset Sale/Casualty Event
Offer, to prepay the maximum aggregate principal amount of Loans that is an
integral multiple of $1,000 that may be purchased out of the Excess Proceeds at
a prepayment price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest to the date of prepayment in accordance with the
terms contemplated in this Section 2.05(c); and (y) prepay all the Loans of such
Lenders properly accepting such offer of prepayment in accordance with such
Asset Sale/Casualty Event Offer (subject to the proration provisions set forth
in paragraph (v) of this Section 2.05(c)).  The Borrower may satisfy the
foregoing obligations with respect to any Net Proceeds from an Asset Sale or a
Casualty Event, as the case may be, by making an Asset Sale/Casualty Event Offer
with respect to such Net Proceeds prior to the expiration of the relevant
450-day period or with respect to Excess Proceeds of $100,000,000 or less.

 

(iii)          An “Asset Sale/Casualty Event Offer” means a notice delivered to
the Administrative Agent (which will promptly furnish such notice to the
Appropriate Lenders) stating:

 

(I)            that an Asset Sale/Casualty Event Offer is being made pursuant to
this Section 2.05(c) and that such Lender has the right to require the Borrower
to prepay all or a portion of such Lender’s applicable Class(es) of Loans
(subject to the proration provisions set forth in paragraph (v) of this
Section 2.05(c)) at a purchase price in cash equal to 100% of the principal
amount thereof, plus accrued and unpaid interest to the date of prepayment; and

 

(II)          the prepayment date (which shall be no earlier than thirty (30)
days nor later than sixty (60) days from the date such notice is mailed).

 

(iv)          On the prepayment date, the Borrower (subject to the proration
provisions set forth in paragraph (v) of this Section 2.05(c)) shall prepay the
applicable Class(es) of Loans of all Appropriate Lenders who accept the Asset
Sale/Casualty Event Offer at a purchase price in cash equal to 100% of the
principal amount thereof, plus accrued and unpaid interest to the date of
prepayment.  If at the time of any prepayment pursuant to this
Section 2.05(c) there shall be outstanding Borrowings of different Types or
Eurocurrency Rate Loans with different Interest Periods, and if some but not all

 

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Lenders shall have accepted such Asset Sale/Casualty Event Offer, then the
aggregate amount of such prepayment shall be allocated ratably to each
outstanding Borrowing that comprises the Loans of the accepting Lenders.  All
prepayments of Loans under this Section 2.05(c) shall be subject to
Section 2.05(d).

 

(v)           To the extent that the aggregate amount of the Loans accepted
pursuant to an Asset Sale/Casualty Event Offer is less than the Excess Proceeds,
the Borrower may use any remaining Excess Proceeds for general corporate
purposes, subject to the terms of this Agreement.  If the aggregate principal
amount of the Loans accepted in an Asset Sale/Casualty Event Offer exceeds the
amount of Excess Proceeds, the prepayment shall be applied against such Loans on
a pro rata basis based on the principal amount of the Loans tendered for
acceptance.  Upon completion of any such Asset Sale/Casualty Event Offer, the
amount of Excess Proceeds related to such Asset Sale/Casualty Event Offer shall
be reset to zero (regardless of whether or not there are any remaining Excess
Proceeds upon such completion).

 

(vi)          Pending the final application of any Net Proceeds pursuant to this
Section 2.05(c), the Borrower or the applicable Restricted Subsidiary may apply
such Net Proceeds temporarily to reduce Indebtedness outstanding under a
revolving credit facility or otherwise invest such Net Proceeds in any manner
not prohibited by this Agreement.

 

(vii)         Each prepayment of Loans pursuant to this Section 2.05(c) shall be
applied in direct order of maturity to scheduled repayments of Loans required
pursuant to Section 2.07.

 

(d)           Funding Losses, Etc.  All prepayments under this Section 2.05
shall be made together with, in the case of any such prepayment of a
Eurocurrency Rate Loan on a date prior to the last day of an Interest Period
therefor, any amounts owing in respect of such Eurocurrency Rate Loan pursuant
to Section 3.05.  Notwithstanding any of the other provisions of Section 2.05,
so long as no Event of Default shall have occurred and be continuing, if any
prepayment of Eurocurrency Rate Loans is required to be made under this
Section 2.05, prior to the last day of the Interest Period therefor, in lieu of
making any payment pursuant to this Section 2.05 in respect of any such
Eurocurrency Rate Loan prior to the last day of the Interest Period therefor,
the Borrower may, in its sole discretion, deposit the amount of any such
prepayment otherwise required to be made thereunder into a Cash Collateral
Account until the last day of such Interest Period, at which time the
Administrative Agent shall be authorized (without any further action by or
notice to or from the Borrower or any other Loan Party) to apply such amount to
the prepayment of such Loans in accordance with this Section 2.05.  Upon the
occurrence and during the continuance of any Event of Default, the
Administrative Agent shall also be authorized (without any further action by or
notice to or from the Borrower or any other Loan Party) to apply such amount to
the prepayment of the outstanding Loans in accordance with the relevant
provisions of this Section 2.05.

 

SECTION 2.06.  Termination of Commitments.  The Term Commitments of each Lender
shall be automatically and permanently reduced to $0 upon the making of such
Lender’s Term B Loan pursuant to Section 2.01.

 

SECTION 2.07.  Amortization of Loans.

 

(a)           The Borrower shall repay to the Administrative Agent for the
ratable account of the Term Lenders providing Term B Loans (i) on the last
Business Day of each July, October, January and April, commencing with the last
Business Day of July, 2013, an aggregate amount equal to 0.25% of the aggregate
principal amount of Term B Loans outstanding on the Restatement Effective Date
(as such scheduled amortization amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
Section 2.05 or in connection with any Extension as

 

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provided in Section 2.16) and (ii) on the Maturity Date for Term B Loans, the
aggregate principal amount of all such Term B Loans outstanding on such date.

 

(b)           The amount of any such payment set forth in clause (a) above shall
be adjusted to account for the addition of any Incremental Term Loans, Extended
Term Loans or Refinancing Term Loans to contemplate (i) the reduction in the
aggregate principal amount of any Loans that were paid down in connection with
the incurrence of such Incremental Term Loans, Extended Term Loans or
Refinancing Term Loans, and (ii) any increase to payments to the extent and as
required pursuant to the terms of any applicable Incremental Amendment,
Extension Amendment or Refinancing Amendment.

 

SECTION 2.08.  Interest.  (a) Subject to the provisions of Section 2.08(b),
(i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurocurrency Rate for such Interest Period plus the Applicable Rate; and
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate.

 

(b)           The Borrower shall pay interest on past due amounts hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.  Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be due and
payable upon demand.

 

(c)           Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein.  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 Debtor Relief Law.

 

(d)           All computations of interest hereunder shall be made in accordance
with Section 2.10.

 

SECTION 2.09.  Fees.  (a) The Borrower shall pay to the Agents 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 (except as expressly agreed between the
Borrower and the applicable Agent).

 

(b)           At the time of the effectiveness of any Repricing Transaction that
is consummated on or prior to the first anniversary of the Restatement Effective
Date, the Borrower agrees to pay to the Administrative Agent, for the ratable
account of each Lender with outstanding Term B Loans that are either prepaid,
refinanced, substituted, replaced or otherwise subjected to a repricing
reduction in connection with such Repricing Transaction (including each Lender
that withholds its consent to such Repricing Transaction and is replaced as a
Non-Consenting Lender under Section 3.07), a fee in an amount equal to 1.0% of
(x) in the case of a Repricing Transaction of the type described in clause
(a) of the definition thereof, the aggregate principal amount of all Term B
Loans prepaid, refinanced, substituted or replaced (or converted) in connection
with such Repricing Transaction and (y) in the case of a Repricing Transaction
described in clause (b) of the definition thereof, the aggregate principal
amount of all Term B Loans outstanding on such date that are subject to an
effective pricing reduction pursuant to such Repricing Transaction.  Such fees
shall be due and payable upon the date of the effectiveness of such Repricing
Transaction.

 

SECTION 2.10.  Computation of Interest and Fees.  All computations of interest
for Base Rate Loans when the Base Rate is determined by DBNY’s “prime rate”
shall be made on

 

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the basis of a year of three hundred and sixty-five (365) days or three hundred
and sixty-six (366) days, as applicable, and actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a three hundred
and sixty (360) day year and actual days elapsed.  Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid;
provided that any Loan that is repaid on the same day on which it is made shall,
subject to Section 2.12(a), bear interest for one (1) 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.

 

SECTION 2.11.  Evidence of Indebtedness.  (a) The Loans made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and evidenced by one or more entries in the Register maintained by the
Administrative Agent, acting solely for purposes of Treasury Regulation
Section 5f.103-1(c), as agent for the Borrower, in each case in the ordinary
course of business.  The accounts or records maintained by the Administrative
Agent and each Lender shall be prima facie evidence absent manifest error of the
amount of the Loans 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,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the 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 Note or Notes payable to such Lender, which shall
evidence such Lender’s Loans of the applicable Class or Classes in addition to
such accounts or records.  Each Lender may attach schedules to its Note and
endorse thereon the date, Type (if applicable), amount and maturity of its Loans
and payments with respect thereto.

 

(b)           Entries made in good faith by the Administrative Agent in the
Register pursuant to Section 2.11(a), and by each Lender in its account or
accounts pursuant to Sections 2.11(a), shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement and the other
Loan Documents, absent manifest error; provided that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement and the
other Loan Documents.

 

SECTION 2.12.  Payments Generally.  (a) All payments to be made by the Borrower
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as otherwise expressly provided herein, all
payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
applicable Administrative Agent’s Office in Dollars and in Same Day Funds not
later than 2:00 p.m. on the date specified herein.  The Administrative Agent
will promptly distribute to each Lender its Pro Rata Share (or other applicable
share as provided herein) of such payment in like funds as received by wire
transfer to such Lender’s Lending Office.  All payments received by the
Administrative Agent after 2:00 p.m. on the relevant date shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.

 

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(b)           If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be; provided that, if such extension would cause payment
of interest on or principal of Eurocurrency Rate Loans to be made in the next
succeeding calendar month, such payment shall be made on the immediately
preceding Business Day.

 

(c)           Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto.  If and to the extent that
such payment was not in fact made to the Administrative Agent in Same Day Funds,
then:

 

(i)            if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in Same Day Funds,
together with interest thereon in respect of each day from and including the
date such amount was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent in Same Day Funds
at the Federal Funds Rate from time to time in effect; and

 

(ii)           if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in Same
Day Funds, together with interest thereon for the period from the date such
amount was made available by the Administrative Agent to the Borrower to the
date such amount is recovered by the Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from time to time
in effect.  When such Lender makes payment to the Administrative Agent (together
with all accrued interest thereon), then such payment amount (excluding the
amount of any interest which may have accrued and been paid in respect of such
late payment) shall constitute such Lender’s Loan included in the applicable
Borrowing.  If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the applicable
Borrowing.  Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a result of
any default by such Lender hereunder.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this Section 2.12(c) shall be conclusive, absent
manifest error.

 

(d)           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 applicable 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.

 

(e)           The obligations of the Lenders hereunder to make Loans are several
and not joint.  The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for

 

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the failure of any other Lender to so make its Loan.

 

(f)            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.

 

(g)           Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in full
all amounts due and payable to the Administrative Agent and the Lenders under or
in respect of this Agreement and the other Loan Documents on any date, such
payment shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the order of priority set forth in
Section 8.04.  If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the manner in which
such funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each of the Lenders ratably in
accordance with such Lender’s pro rata share of the Outstanding Amount of all
Classes of Loans outstanding at such time, in repayment or prepayment of such of
the outstanding Loans or other Obligations then owing to such Lender.

 

SECTION 2.13.  Sharing of Payments.  If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans pro rata
with each of them; provided that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon.  The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by
applicable Law, exercise all its rights of payment (including the right of
setoff, but subject to Section 10.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.  The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section 2.13 and will in each case notify the Lenders
following any such purchases or repayments.  Each Lender that purchases a
participation pursuant to this Section 2.13 shall from and after such purchase
have the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

 

SECTION 2.14.  Provisions Applicable to Canadian Loan Parties.  (a) For the
purposes of the Interest Act (Canada), to the extent applicable, whenever any
interest payable by a Canadian Subsidiary Guarantor is calculated on the basis
of a period of time other than a year of 365 or 366 days, as applicable, the
annual rate of interest to which each rate of interest utilized pursuant to such
calculation is equivalent is such rate so utilized multiplied by the actual
number of days in the calendar year in which the same is to be ascertained and
divided by the number of days in such calculation.

 

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(b)           Notwithstanding any provision herein to the contrary, in no event
will the aggregate “interest” (as defined in section 347 of the Criminal Code
(Canada)) payable by a Canadian Loan Party under any Loan Document exceed the
maximum effective annual rate of interest on the “credit advanced” (as defined
in that section 347) permitted under that section and, if any payment,
collection or demand pursuant to such Loan Document in respect of “interest” (as
defined in that section 347) is determined to be contrary to the provisions of
such section 347, such payment, collection or demand will be deemed to have been
made by mutual mistake of such Canadian Loan Party, the Administrative Agent and
the applicable Lender or Lenders and the amount of such payment or collection
will be refunded to such Canadian Loan Party only to the extent of the amount
which is greater than the maximum effective annual rate permitted by such laws. 
For purposes of determining compliance with such section 347, the effective
annual rate of interest will be determined in accordance with generally accepted
actuarial practices and principles over the term of this Agreement and, in the
event of dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Administrative Agent will be prima facie evidence for
the purposes of such determination.

 

(c)           For the purposes of the Interest Act (Canada), to the extent
applicable, the principle of deemed reinvestment of interest will not apply to
any interest calculation under the Loan Documents, and the rates of interest
stipulated in this Agreement are intended to be nominal rates and not effective
rates or yields.

 

SECTION 2.15.  Refinancing Amendments  At any time after the Restatement
Effective Date, the Borrower may obtain from any Lender or any Additional Lender
Credit Agreement Refinancing Indebtedness in respect of all or any portion of
any Class(es) of the Loans then outstanding under this Agreement (which for this
purpose will be deemed to include any then outstanding Class(es) of Loans,
Extended Term Loans, Refinancing Term Loans or Incremental Term Loans), in the
form of Refinancing Term Loans or Refinancing Term Commitments, in each case
pursuant to a Refinancing Amendment; provided that such Credit Agreement
Refinancing Indebtedness (i) will rank pari passu in right of payment and of
security with the other Loans and Commitments hereunder, (ii) have such pricing
and optional prepayment terms as may be agreed by the Borrower and the Lenders
thereof, (iii) except as otherwise provided in Sections 2.05(a)(i),
2.05(b)(iii) and 2.05(c)(i) or as may be agreed to by the Lenders and Additional
Lenders providing such Credit Agreement Refinancing Indebtedness in the
respective Refinancing Amendment, each Class of Refinancing Term Loans shall be
prepaid and repaid (or offered to be repaid in the case of Section 2.05(c)) on a
pro rata basis with all voluntary prepayments and mandatory prepayments (other
than amortization payments) of the other Classes of Loans and (iv) otherwise be
treated hereunder no more favorably, including with respect to covenants and
events of default, than the Refinanced Debt; provided further that the terms and
conditions applicable to such Credit Agreement Refinancing Indebtedness may
provide for any additional or different financial or other covenants or other
provisions that are agreed between the Borrower and the Lenders thereof and
applicable only during periods after the Latest Maturity Date that is in effect
on the date such Credit Agreement Refinancing Indebtedness is issued, incurred
or obtained.  The effectiveness of any Refinancing Amendment shall be subject to
the satisfaction on the date thereof of each of the conditions set forth in such
Refinancing Amendment and Section 4.02 and, to the extent reasonably requested
by the Administrative Agent, receipt by the Administrative Agent of
(i) customary legal opinions, board resolutions and officers’ certificates
consistent with those delivered on the Restatement Effective Date (conformed as
appropriate) other than changes to such legal opinions resulting from a change
in law, change in fact or change to counsel’s form of opinion reasonably
satisfactory to the Administrative Agent and (ii) reaffirmation agreements
and/or such amendments to the Collateral Documents as may be reasonably
requested by the Collateral Agent (including Mortgage amendments) in order to
ensure that the Credit Agreement Refinancing Indebtedness is provided with the
benefit of the applicable Loan Documents.  Each tranche of Credit Agreement
Refinancing Indebtedness incurred under this Section 2.15 shall be in an
aggregate principal amount that is not less than $50,000,000.  The
Administrative

 

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Agent shall promptly notify each Lender as to the effectiveness of each
Refinancing Amendment.  Each of the parties hereto hereby agrees that this
Agreement and the other Loan Documents may be amended pursuant to a Refinancing
Amendment, without the consent of any other Lenders, to the extent (but only to
the extent) necessary to (i) reflect the existence and terms of the Credit
Agreement Refinancing Indebtedness incurred pursuant thereto (including any
amendments necessary to treat the Loans and Commitments subject thereto as
Refinancing Term Loans and/or Refinancing Term Commitments), (ii) provide
certain class protection to the Lenders and Additional Lenders providing such
Credit Agreement Refinancing Indebtedness with respect to voluntary prepayments
and mandatory prepayments, (iii) make such other changes to this Agreement and
the other Loan Documents consistent with the provisions and intent of the second
paragraph of Section 10.01 and (iv) effect such other amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the reasonable opinion of the Administrative Agent and the Borrower, to effect
the provisions of this Section, and the Required Lenders hereby expressly
authorize the Administrative Agent to enter into any such Refinancing Amendment.

 

SECTION 2.16.  Extended Term Loans.

 

(a)           The Borrower may at any time and from time to time request that
all or a portion of the Loans of a given Class (each, an “Existing Term Loan
Tranche”) be amended to extend the scheduled maturity date(s) of any payment of
principal with respect to all or a portion of any principal amount of such Loans
(any such Loans which have been so amended, “Extended Term Loans”) and to
provide for other terms consistent with this Section 2.16.  In order to
establish any Extended Term Loans, the Borrower shall provide a notice to the
Administrative Agent (who shall provide a copy of such notice to each of the
Lenders under the applicable Existing Term Loan Tranche) (each, an “Extension
Request”) setting forth the proposed terms of the Extended Term Loans to be
established, which shall (x) be identical as offered to each Lender under such
Existing Term Loan Tranche (including as to the proposed interest rates and fees
payable, but excluding any arrangement, structuring or other fees payable in
connection therewith that are not generally shared with all relevant Lenders)
and offered pro rata to each Lender under such Existing Term Loan Tranche and
(y) be identical to the Loans under the applicable Existing Term Loan Tranche to
which such amended Extended Term Loans relate, except that: (i) all or any of
the scheduled amortization payments of principal of the Extended Term Loans may
be delayed to later dates than the scheduled amortization payments of principal
of the Loans of such Existing Term Loan Tranche, to the extent provided in the
applicable Extension Amendment; (ii) the Effective Yield with respect to the
Extended Term Loans (whether in the form of interest rate margin, upfront fees,
original issue discount or otherwise) may be different than the Effective Yield
for the Loans of such Existing Term Loan Tranche, in each case, to the extent
provided in the applicable Extension Amendment; (iii) the Extension Amendment
may provide for other covenants and terms that apply solely to any period after
the Latest Maturity Date that is in effect on the effective date of the
Extension Amendment (immediately prior to the establishment of such Extended
Term Loans); and (iv) Extended Term Loans may have optional prepayment terms
(including call protection) as may be agreed by the Borrower and the Lenders
thereof; provided, however, that (A) no Event of Default shall have occurred and
be continuing at the time a Term Loan Extension Request is delivered to Lenders,
(B) in no event shall the Maturity Date of any Extended Term Loans of a given
Extension Series at the time of establishment thereof be earlier than the then
Latest Maturity Date of any other Loans then outstanding hereunder, (C) the
Weighted Average Life to Maturity of any Extended Term Loans of a given
Extension Series at the time of establishment thereof shall be no shorter than
the remaining Weighted Average Life to Maturity of any other Existing Term Loan
Tranche (as originally in effect prior to any amortization or prepayments
thereto) and (D) any such Extended Term Loans (and the Liens securing the same)
shall be permitted by the terms of the ABL Credit Agreement and the
Intercreditor Agreement (in each case, to the extent the ABL Credit Agreement
and the

 

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Intercreditor Agreement are then in effect).  Any Extended Term Loans amended
pursuant to any Extension Request shall be designated a series (each, an
“Extension Series”) of Extended Term Loans for all purposes of this Agreement;
provided that any Extended Term Loans amended from an Existing Term Loan Tranche
may, to the extent provided in the applicable Extension Amendment, be designated
as an increase in any previously established Extension Series with respect to
such Existing Term Loan Tranche (in which case scheduled amortization with
respect thereto shall be proportionately increased).  Each Extension Series of
Extended Term Loans incurred under this Section 2.16 shall be in an aggregate
principal amount that is not less than $50,000,000 and the Borrower may impose
an Extension Minimum Condition with respect to any Extension Request, which may
be waived by the Borrower in its sole discretion.

 

(b)           The Borrower shall provide the applicable Extension Request at
least five (5) Business Days prior to the date on which Lenders under the
Existing Term Loan Tranche are requested to respond (or such shorter period as
shall be acceptable to the Administrative Agent in any given case), and shall
agree to such procedures, if any, as may be established by, or acceptable to,
the Administrative Agent, in each case acting reasonably to accomplish the
purposes of this Section 2.16.  No Lender shall have any obligation to agree to
have any of its Loans of any Existing Term Loan Tranche amended (and converted
into Extended Term Loans) pursuant to any Extension Request.  Any Lender (each,
an “Extending Term Lender”) wishing to have all or a portion of its Loans under
the Existing Term Loan Tranche subject to such Extension Request amended and
converted into Extended Term Loans shall notify the Administrative Agent (each,
an “Extension Election”) on or prior to the date specified in such Extension
Request of the amount of its Loans under the Existing Term Loan Tranche which it
has elected to request be amended and converted into Extended Term Loans
(subject to any minimum denomination requirements imposed by the Administrative
Agent).  In the event that the aggregate principal amount of Loans under the
Existing Term Loan Tranche subject to Extension Elections exceeds the amount of
Extended Term Loans requested pursuant to the Extension Request, Loans subject
to Extension Elections shall be amended and converted to Extended Term Loans on
a pro rata basis based on the aggregate principal amount of Loans included in
each such Extension Election.

 

(c)           Extended Term Loans shall be established pursuant to an amendment
(each, an “Extension Amendment”) to this Agreement among the Borrower, the
Administrative Agent and each Extending Term Lender providing an Extended Term
Loan thereunder which shall be consistent with the provisions set forth in
Section 2.16(a) above (but which shall not require the consent of any other
Lender).  The effectiveness of any Extension Amendment shall be subject to the
satisfaction on the date thereof of each of the conditions set forth in
Section 4.02 and such other conditions as may be specified in the applicable
Extension Amendment, the Extension Minimum Condition (unless waived by the
Borrower) and, to the extent reasonably requested by the Administrative Agent,
receipt by the Administrative Agent of (i) customary legal opinions, board
resolutions and officers’ certificates consistent with those delivered on the
Restatement Effective Date (conformed as appropriate) other than changes to such
legal opinions resulting from a change in law, change in fact or change to
counsel’s form of opinion reasonably satisfactory to the Administrative Agent
and (ii) reaffirmation agreements and/or such amendments to the Collateral
Documents as may be reasonably requested by the Collateral Agent in order to
ensure that the Extended Term Loans are provided with the benefit of the
applicable Loan Documents.  The Administrative Agent shall promptly notify each
Lender as to the effectiveness of each Extension Amendment. Each of the parties
hereto hereby (x) agrees that this Agreement and the other Loan Documents may be
amended pursuant to an Extension Amendment, without the consent of any other
Lenders, to the extent (but only to the extent) necessary to (i) reflect the
existence and terms of the Extended Term Loans incurred pursuant

 

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thereto, (ii) modify the scheduled repayments set forth in Section 2.07 with
respect to any Existing Term Loan Tranche subject to an Extension Election to
reflect a reduction in the principal amount of the Loans thereunder in an amount
equal to the aggregate principal amount of the Extended Term Loans amended
pursuant to the applicable Extension (with such amount to be applied ratably to
reduce scheduled repayments of such Loans required pursuant to Section 2.07),
(iii) make such other changes to this Agreement and the other Loan Documents
consistent with the provisions and intent of the second paragraph of
Section 10.01 and (iv) effect such other amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent and the Borrower, to effect the provisions
of this Section, and the Required Lenders hereby expressly authorize the
Administrative Agent to enter into any such Extension Amendment and (y) consent
to the transactions contemplated by this Section 2.16 (including, for the
avoidance of doubt, payment of interest, fees or premiums in respect of any
Extended Term Loans on such terms as may be set forth in the relevant Extension
Amendment).

 

(d)           No conversion, amendment or extension of Loans pursuant to any
Extension Amendment in accordance with this Section 2.16 shall constitute a
voluntary or mandatory payment or prepayment for purposes of this Agreement.

 

(e)           This Section 2.16 shall supersede any provisions in Section 2.13
or 10.01 to the contrary.

 

(f)            In the event that the Administrative Agent determines in its sole
discretion that the allocation of Extended Term Loans of a given Extension
Series to a given Lender was incorrectly determined as a result of manifest
administrative error in the receipt and processing of an Extension Election
timely submitted by such Lender in accordance with the procedures set forth in
the applicable Extension Amendment, then the Administrative Agent, the Borrower
and such affected Lender may (and hereby are authorized to), in their sole
discretion and without the consent of any other Lender, enter into an amendment
to this Agreement and the other Loan Documents (each, a “Corrective Extension
Amendment”) within 15 days following the effective date of such Extension
Amendment, as the case may be, which Corrective Extension Amendment shall
(i) provide for the conversion and extension of Loans under the applicable
Existing Term Loan Tranche in such amount as is required to cause such Lender to
hold Extended Term Loans of the applicable Extension Series into which such
other Loans were initially amended, as the case may be, in the amount such
Lender would have held had such administrative error not occurred and had such
Lender received the minimum allocation of the applicable Loans or Commitments to
which it was entitled under the terms of such Extension Amendment in the absence
of such error, (ii) be subject to the satisfaction of such conditions as the
Administrative Agent, the Borrower and such Lender may agree (including
conditions of the type required to be satisfied for the effectiveness of an
Extension Amendment described in Section 2.16(c)), and (iii) effect such other
amendments of the type (with appropriate reference and nomenclature changes)
described in clause (i), (ii), (iii) and (iv) of the last sentence of
Section 2.16(c).

 

SECTION 2.17.  Incremental Borrowings.

 

(a)           Incremental Term Commitments.  The Borrower may at any time or
from time to time after the Restatement Effective Date, by notice to the
Administrative Agent (an “Incremental Loan Request”), request one or more new
commitments which may be of the same Class as any outstanding Loans (a “Term
Loan Increase”) or a new Class of term loans

 

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(collectively with any Term Loan Increase, the “Incremental Term Commitments”),
whereupon the Administrative Agent shall promptly deliver a copy to each of the
Lenders.

 

(b)           Incremental Term Loans.  Any Incremental Term Loans (other than
Term Loan Increases) made on an Incremental Facility Closing Date shall be
designated a separate Class of Incremental Term Loans for all purposes of this
Agreement.  On any Incremental Facility Closing Date on which any Incremental
Term Commitments of any Class are effected (including through any Term Loan
Increase), subject to the satisfaction of the terms and conditions in this
Section 2.17, (i) each Incremental Term Lender of such Class shall make a Loan
to the Borrower (an “Incremental Term Loan”) in an amount equal to its
Incremental Term Commitment of such Class and (ii) each Incremental Term Lender
of such Class shall become a Lender hereunder with respect to the Incremental
Term Commitment of such Class and the Incremental Term Loans of such Class made
pursuant thereto.  Notwithstanding the foregoing, Incremental Term Loans may
have identical terms to any of the Loans and be treated as the same Class as any
of such Loans.

 

(c)           Incremental Loan Request.  Each Incremental Loan Request from the
Borrower pursuant to this Section 2.17 shall set forth the requested amount and
proposed terms of the relevant Incremental Term Loans.  Incremental Term Loans
may be made by any existing Lender (but no existing Lender will have an
obligation to make any Incremental Term Commitment, nor will the Borrower have
any obligation to approach any existing Lenders to provide any Incremental Term
Commitment) or by any other bank or other financial institution or other
institutional lenders (any such other bank, other financial institution or other
institutional lenders being called an “Additional Incremental Lender”) (each
such existing Lender or Additional Incremental Lender providing such Commitment
or Loan, collectively, the “Incremental Term Lenders”); provided that the
Administrative Agent shall have consented (not to be unreasonably withheld or
delayed) to such Additional Incremental Lender’s making such Incremental Term
Loans to the extent such consent, if any, would be required under
Section 10.07(b) for an assignment of Loans to such Additional Incremental
Lender.

 

(d)           Effectiveness of Incremental Amendment.  The effectiveness of any
Incremental Amendment, and the Incremental Term Commitments thereunder, shall be
subject to the satisfaction on the date thereof (the “Incremental Facility
Closing Date”) of each of the following conditions:

 

(i)            no Event of Default shall exist after giving effect to such
Incremental Term Commitments; provided that, with respect to any Incremental
Amendment the primary purpose of which is to finance an Acquisition or any other
Investment permitted by this Agreement constituting an acquisition of assets
constituting a business unit, line of business or division of, or all or
substantially all of the Equity Interests of, another Person, this clause
(i) may be waived or omitted by Incremental Term Lenders holding more than 50%
of the aggregate Incremental Term Commitments under such Incremental Amendment;

 

(ii)           the representations and warranties of each Loan Party set forth
in Article V and in each other Loan Document shall be true and correct in all
material respects on and as of the Incremental Facility Closing Date with the
same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date; provided that any representation and warranty that is qualified as to
“materiality,” “Material Adverse Effect” or similar language shall be true and
correct (after giving effect to any qualification therein) in all respects on
such

 

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respective dates; provided further that, with respect to any Incremental
Amendment the primary purpose of which is to finance an Acquisition or any other
Investment permitted by this Agreement constituting an acquisition of assets
constituting a business unit, line of business or division of, or all or
substantially all of the Equity Interests of, another Person, this clause
(ii) (other than with respect to the Specified Representations) may be waived or
omitted (or the scope or content of any representation and warranty modified) by
Incremental Term Lenders holding more than 50% of the aggregate Incremental Term
Commitments under such Incremental Amendment; provided further that the accuracy
of the Specified Representations may not be waived without the consent of the
Required Lenders;

 

(iii)          each Incremental Term Commitment shall be in an aggregate
principal amount that is not less than $25,000,000 and shall be in an increment
of $1,000,000 (provided that such amount may be less than $25,000,000 if such
amount represents all remaining availability under the limit set forth in the
next sentence);

 

(iv)          the aggregate principal amount of the Incremental Term Loans shall
not exceed (A) $500,000,000 in the aggregate pursuant to this clause (A) or
(B) at the Borrower’s option, up to an amount of Incremental Term Loans so long
as the Consolidated Secured Debt Ratio is no more than 3.25 to 1.00 as of the
last day of the Relevant Reference Period, after giving effect to any such
incurrence on a pro forma basis (such amounts under this clause (A) and (B), the
“Available Incremental Amount”); and

 

(v)           (A) to the extent reasonably requested by the Administrative
Agent, the receipt by the Administrative Agent of (i) customary legal opinions,
board resolutions and officers’ certificates consistent with those delivered on
the Restatement Effective Date (conformed as appropriate) (other than changes to
such legal opinions resulting from a change in law, change in fact or change to
counsel’s form of opinion reasonably satisfactory to the Administrative Agent)
and (ii) reaffirmation agreements and/or such amendments to the Collateral
Documents as may be reasonably requested by the Administrative Agent in order to
ensure that the Incremental Term Loans are provided with the benefit of the
applicable Loan Documents, and (B) to the extent provided in the applicable
Incremental Amendment, such other conditions as the Borrower and the Lenders
providing such Incremental Term Commitments may agree.

 

(e)           Required Terms.  The terms, provisions and documentation of the
Incremental Term Loans and Incremental Term Commitments of any Class shall be as
agreed between the Borrower and the applicable Incremental Term Lenders
providing such Incremental Term Commitments, and except as otherwise set forth
herein, to the extent not identical to the Loans existing on the Incremental
Facility Closing Date, shall be consistent with clauses (i) and (ii) below, as
applicable, and otherwise as reasonably satisfactory to the Administrative Agent
(it being understood that covenants and other provisions that are only
applicable after the Latest Maturity Date at the time of such Incremental
Facility Closing Date shall be as agreed between the Borrower and the applicable
Incremental Term Lenders and need not be reasonably satisfactory to the
Administrative Agent); provided that in the case of a Term Loan Increase, the
terms, provisions and documentation of such Term Loan Increase shall be
identical (other than with respect to upfront fees, original issue discount or
similar fees) to the applicable Loans being increased, as existing on the
Incremental Facility Closing Date.  In any event:

 

(i)            the Incremental Term Loans:

 

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(A)          shall rank (I) pari passu in right of payment and (II) pari passu
or junior in right of security with the Loans (and shall be subject to an
Additional Junior Lien Intercreditor Agreement or an Additional First Lien
Intercreditor Agreement, as applicable) or be unsecured;

 

(B)          as of the Incremental Facility Closing Date, shall not have a
Maturity Date earlier than the Latest Maturity Date with respect to any Loans as
of the Incremental Facility Closing Date;

 

(C)          subject to clause (e)(i)(B) above, shall have an amortization
schedule as determined by the Borrower and the applicable Incremental Term
Lenders, provided that, as of the Incremental Facility Closing Date, such
Incremental Term Loans shall have a Weighted Average Life to Maturity not
shorter than the remaining Weighted Average Life to Maturity of the Loans (as
originally in effect prior to any scheduled amortization or prepayments thereto)
on the date of incurrence of such Incremental Term Loans,

 

(D)          shall have an Applicable Rate subject to clause (e)(ii) below,
determined by the Borrower and the applicable Incremental Term Lenders;

 

(E)           shall have fees determined by the Borrower and the applicable
Incremental Term Loan arranger(s);

 

(F)           may participate on a pro rata basis or less than or greater than a
pro rata basis in any voluntary repayments or prepayments of principal of the
Loans hereunder and on a pro rata basis or less than a pro rata basis (but not
on a greater than pro rata basis except for prepayments with the proceeds of
Credit Agreement Refinancing Indebtedness) in any mandatory repayments or
prepayments of principal of the Loans hereunder (or, if junior in right of
payment or security, shall be on a junior basis with respect thereto); and

 

(G)          may not be (x) secured by any assets other than Collateral or
(y) guaranteed by any Person other than a Guarantor.

 

(ii)           the Effective Yield applicable to the Incremental Term Loans of
each Class shall be determined by the Borrower and the applicable Incremental
Term Lenders and shall be set forth in each applicable Incremental Amendment;
provided, however, that with respect to any Incremental Term Loans made under
Incremental Term Commitments, in each case, that are secured on a pari passu
basis with the Obligations, the Effective Yield applicable to such Incremental
Term Loans shall not be greater than the applicable Effective Yield payable
pursuant to the terms of this Agreement as amended through the date of such
calculation with respect to Term B Loans plus 50 basis points per annum unless
the interest rate (together with, as provided in the proviso below, the
Eurocurrency Rate or Base Rate floor) with respect to the Term B Loans is
increased so as to cause the then applicable Effective Yield under this
Agreement on the Term B Loans to equal the Effective Yield then applicable to
the Incremental Term Loans minus 50 basis points; provided that any increase in
the Effective Yield to the Term B Loans due to the application or imposition of
a Eurocurrency Rate or Base Rate floor on any Incremental Term Loan shall be
effected solely through an increase in (or implementation of, as applicable) any
Eurocurrency Rate or Base Rate floor applicable to the Term B Loans.

 

(f)            Incremental Amendment.  Commitments in respect of Incremental
Term Loans shall become Commitments under this Agreement pursuant to an
amendment (an “Incremental

 

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Amendment”) to this Agreement and, as appropriate, the other Loan Documents,
executed by the Borrower, each Incremental Term Lender providing such
Commitments and the Administrative Agent.  The Incremental Amendment may,
without the consent of any other Loan Party, Agent or Lender, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent and the
Borrower, to effect the provisions of this Section 2.17, including amendments as
deemed necessary by the Administrative Agent in its reasonable judgment to
effect any lien subordination and associated rights of the applicable Lenders to
the extent any Incremental Term Loans are to rank junior in right of security. 
The Borrower will use the proceeds of the Incremental Term Loans for any purpose
not prohibited by this Agreement.  No Lender shall be obligated to provide any
Incremental Term Loans unless it so agrees.

 

(g)           This Section 2.17 shall supersede any provisions in Section 2.13
or 10.01 to the contrary.

 

ARTICLE III

 

Taxes, Increased Costs Protection and Illegality

 

SECTION 3.01.  Taxes.  (a) Except as provided in this Section 3.01 or
Section 10.15, any and all payments by the Loan Parties to or for the account of
any Agent or any Lender under any Loan Document shall be made free and clear of
and without deduction or withholding for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities (including additions to tax, penalties and
interest) with respect thereto, excluding, in the case of each Agent and each
Lender, taxes imposed on or measured by its net income or net profits (including
branch profits), franchise (and similar) taxes imposed on it in lieu of net
income taxes by any jurisdiction (or any political subdivision thereof) under
the Laws of which such Agent or such Lender, as the case may be, is organized,
maintains a Lending Office or with which such Agent or such Lender otherwise has
a present or former connection (other than any such connection arising solely
from such Agent or such Lender having executed, delivered, become party to,
received or perfected a security interest hereunder or performed its obligations
or received a payment hereunder, enforced, sold or assigned its interest in, any
Loan Document), and any U.S. federal withholding taxes imposed pursuant to
FATCA, and all liabilities (including additions to tax, penalties and interest)
with respect thereto (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
with respect thereto being hereinafter referred to as “Taxes”).  If any Loan
Party shall be required by any Laws to deduct or withhold any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to any Agent
or any Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section 3.01),
each of such Agent and such Lender receives an amount equal to the sum it would
have received had no such deductions and withholdings been made, (ii) such Loan
Party shall make such deductions and withholdings, (iii) such Loan Party shall
pay the full amount deducted and withheld to the relevant taxation authority or
other authority in accordance with applicable Laws, and (iv) within thirty (30)
days after the date of such payment (or, if receipts or evidence are not
available within thirty (30) days, as soon as reasonably possible thereafter),
such Loan Party shall furnish to such Agent or Lender (as the case may be) the
original or a certified copy of a receipt evidencing payment thereof to the
extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Administrative Agent.  If any
Loan Party fails to pay any Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to any Agent or any Lender the required
receipts or other required documentary evidence, such Loan Party shall indemnify
such Agent and such Lender for any incremental taxes, interest or penalties that
may become payable by such Agent or such Lender arising

 

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out of such failure.

 

(b)           In addition, each Loan Party agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise, property,
intangible or mortgage recording taxes or charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document other than, for the avoidance of doubt, any excluded taxes or
other similar excluded amounts described in Section 3.01(a) above (all such
taxes payable pursuant to this Section 3.01(b) hereinafter referred to as “Other
Taxes”).

 

(c)           Subject to Section 10.15, each Loan Party agrees to indemnify each
Agent and each Lender for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.01) paid by such Agent and such Lender and
(ii) any liability (including additions to tax, penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or not
such Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority; provided such Agent or Lender, as the case may
be, provides such Loan Party with a written statement thereof setting forth in
reasonable detail the basis and calculation of such amounts.  Payment under this
Section 3.01(c) shall be made within thirty (30) days after the date such Lender
or such Agent makes a demand therefor.  The obligations of the Loan Parties
under this Section 3.01(c) shall be joint and several.  Notwithstanding anything
to the contrary in this Agreement, the obligations of the Loan Parties under
this Section 3.01(c) shall survive the payment in full of principal, interest,
fees and any other amounts payable hereunder and the termination of this
Agreement.

 

(d)           No Loan Party shall be required pursuant to this Section 3.01 to
pay any additional amount to, or to indemnify, any Lender or Agent, as the case
may be, to the extent that such Lender or such Agent becomes subject to Taxes
subsequent to the Closing Date (or, if later, the date such Lender or Agent
becomes a party to this Agreement) as a result of a change in the place of
organization of such Lender or Agent or a change in the lending office of such
Lender, except to the extent that any such change is requested or required in
writing by the Borrower (and provided that nothing in this clause (d) shall be
construed as relieving the Borrower from any obligation to make such payments or
indemnification in the event of a change in lending office or place of
organization that precedes a Change in Law to the extent such Taxes result from
a Change in Law).

 

(e)           If at the date of the Assignment and Assumption pursuant to which
a Lender becomes a party to this Agreement, the Lender assignor was entitled to
payments under clause (a) of this Section 3.01 in respect of withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) withholding tax, if any,
applicable with respect to the Lender assignee on such date.

 

(f)            If any Lender or Agent determines, in its reasonable discretion,
that it has received a refund in respect of any Taxes or Other Taxes as to which
indemnification or additional amounts have been paid to it by any Loan Party
pursuant to this Section 3.01, it shall promptly remit such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by such Loan
Party under this Section 3.01 with respect to the Taxes or Other Taxes giving
rise to such refund plus any interest included in such refund by the relevant
taxing authority attributable thereto) to such Loan Party, net of all
out-of-pocket expenses of the Lender or Agent, as the case may be and without
interest (other than any interest paid by the relevant taxing authority with
respect to such refund); provided that such Loan Party, upon the request of the
Lender or Agent, as the case may be, agrees promptly to return such refund to
such party in the event such party is required to repay such refund to the
relevant taxing

 

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authority.  Such Lender or Agent, as the case may be, shall, at such Loan
Party’s request, provide such Loan Party with a copy of any notice of assessment
or other evidence of the requirement to repay such refund received from the
relevant taxing authority (provided that such Lender or Agent may delete any
information therein that such Lender or Agent deems confidential).  Nothing
herein contained shall interfere with the right of a Lender or Agent to arrange
its tax affairs in whatever manner it thinks fit nor oblige any Lender or Agent
to claim any tax refund or to make available its tax returns or disclose any
information relating to its tax affairs or any computations in respect thereof
or require any Lender or Agent to do anything that would prejudice its ability
to benefit from any other refunds, credits, reliefs, remissions or repayments to
which it may be entitled.

 

(g)           Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Section 3.01(a) or (c) with respect to such Lender it
will, if requested by the Borrower, use commercially reasonable efforts (subject
to such Lender’s overall internal policies of general application and legal and
regulatory restrictions) to designate another Lending Office for any Loan
affected by such event; provided that such efforts are made on terms that, in
the sole judgment of such Lender, cause such Lender and its Lending Office(s) to
suffer no economic, legal or regulatory disadvantage, and provided further, that
nothing in this Section 3.01(g) shall affect or postpone any of the Obligations
of any Loan Party or the rights of such Lender pursuant to Section 3.01(a) or
(c).

 

SECTION 3.02.  Illegality.  If any Lender reasonably determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurocurrency Rate Loans, or to determine or charge interest rates based
upon the Eurocurrency Rate, then, on notice thereof by such Lender to the
Borrower through the Administrative Agent, any obligation of such Lender to make
or continue Eurocurrency Rate Loans or to convert Base Rate Loans to
Eurocurrency Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist.  Upon receipt of such notice, the Borrower shall
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurocurrency Rate Loans of such Lender to Base
Rate Loans, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurocurrency Rate Loans to such
day, or promptly, if such Lender may not lawfully continue to maintain such
Eurocurrency Rate Loans.  Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted and all
amounts due, if any, in connection with such prepayment or conversion under
Section 3.05.  Each Lender agrees to designate a different Lending Office if
such designation will avoid the need for such notice and will not, in the good
faith judgment of such Lender, otherwise be materially disadvantageous to such
Lender.

 

SECTION 3.03.  Inability to Determine Rates.  If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurocurrency Rate for any requested Interest Period with respect to a
proposed Eurocurrency Rate Loan, or that the Eurocurrency Rate for any requested
Interest Period with respect to a proposed Eurocurrency Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, or
that Dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and the Interest Period of such
Eurocurrency Rate Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or
maintain Eurocurrency Rate Loans shall be suspended until the Administrative
Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon
receipt of such notice, the Borrower may revoke any pending request for a
Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

 

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SECTION 3.04.  Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurocurrency Rate Loans.  (a) If any Lender reasonably determines that as a
result of a Change in Law, in each case after the Restatement Effective Date, or
such Lender’s compliance therewith, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining Eurocurrency
Rate Loans, or a reduction in the amount received or receivable by such Lender
in connection with any of the foregoing (excluding for purposes of this
Section 3.04(a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in taxation of overall net income or overall gross income (including branch
profits), and franchise (and similar) taxes imposed in lieu of net income taxes,
by the United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or maintains a
Lending Office, (iii) reserve requirements contemplated by Section 3.04(c), and
(iv) any taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto that
are excluded from the definition of “Taxes” pursuant to Section 3.01(a)), then
from time to time within fifteen (15) days after receipt of such demand by such
Lender setting forth in reasonable detail such increased costs (with a copy of
such demand to the Administrative Agent given in accordance with Section 3.06),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.

 

(b)           If any Lender reasonably determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, in each case after the Restatement Effective Date,
regarding capital requirements has 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 it, 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 and such Lender’s desired return on
capital), then from time to time upon demand of such Lender setting forth in
reasonable detail the charge and the calculation of such reduced rate of return
(with a copy of such demand to the Administrative Agent given in accordance with
Section 3.06), the Borrower will pay to such Lender, as the case may be, within
fifteen (15) days after demand by such Lender setting forth in reasonable detail
the particulars of such reduction, such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction
suffered.

 

(c)           The Borrower shall pay to each Lender, (i) as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits, additional interest
on the unpaid principal amount of each Eurocurrency Rate Loan equal to the
actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be conclusive
in the absence of manifest error), and (ii) as long as such Lender shall be
required to comply with any reserve ratio requirement or analogous requirement
of any other central banking or financial regulatory authority imposed in
respect of the maintenance of the Commitments or the funding of the Eurocurrency
Rate Loans, such additional costs (expressed as a percentage per annum and
rounded upwards, if necessary, to the nearest five decimal places) equal to the
actual costs allocated to such Commitment or Loan by such Lender (as determined
by such Lender in good faith, which determination shall be conclusive absent
manifest error) which in each case shall be due and payable on each date on
which interest is payable on such Loan, provided the Borrower shall have
received at least fifteen (15) days’ prior notice (with a copy to the
Administrative Agent) of such additional interest or cost from such Lender.  If
a Lender fails to give notice fifteen (15) days prior to the relevant Interest
Payment Date, such additional interest or cost shall be due and payable fifteen
(15) days from receipt of such notice. Notwithstanding anything to the contrary
contained above in this clause (c), the Borrower shall not be obligated to pay
any additional amounts pursuant to this clause (c) to the extent such amounts
are already included in the calculation of the Eurocurrency Rate pursuant

 

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to clause (b) of the definition thereof.

 

(d)           Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 3.04 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 Section 3.04(a), (b) or (c) for any
such increased cost or reduction incurred more than one hundred and eighty (180)
days prior to the date that such Lender demands, or notifies the Borrower of its
intention to demand, compensation therefor, provided further, that, if the
circumstance giving rise to such increased cost or reduction is retroactive,
then such 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.

 

(e)           If any Lender requests compensation under this Section 3.04, then
such Lender will, if requested by the Borrower, use commercially reasonable
efforts to designate another Lending Office for any Loan affected by such event;
provided that such efforts are made on terms that, in the reasonable judgment of
such Lender, cause such Lender and its Lending Office(s) to suffer no material
economic, legal or regulatory disadvantage, and provided further, that nothing
in this Section 3.04(e) shall affect or postpone any of the Obligations of the
Borrower or the rights of such Lender pursuant to Section 3.04(a), (b), (c) or
(d).

 

SECTION 3.05.  Funding Losses.  Upon written demand of any Lender (with a copy
to the Administrative Agent) from time to time, which demand shall set forth in
reasonable detail the basis for requesting such amount, the Borrower shall
promptly compensate such Lender for and hold such Lender harmless from any loss,
cost or expense (but excluding any loss of anticipated profit) actually incurred
by it as a result of:

 

(a)           any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan prior to the last day of the Interest Period for
such Loan; or

 

(b)           any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;

 

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency
Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurocurrency
Rate Loan was in fact so funded.

 

SECTION 3.06.  Matters Applicable to All Requests for Compensation.  (a) Any
Agent or any Lender claiming compensation under this Article III shall deliver a
certificate to the Borrower setting forth the additional amount or amounts to be
paid to it hereunder which shall be conclusive in the absence of manifest
error.  In determining such amount, such Agent or such Lender may use any
reasonable averaging and attribution methods.

 

(b)           With respect to any Lender’s claim for compensation under
Section 3.01, 3.02, 3.03 or 3.04, the Borrower shall not be required to
compensate such Lender for any amount incurred more than one hundred and eighty
(180) days prior to the date that such Lender notifies the Borrower of the event
that gives rise to such claim; provided that, if the circumstance giving rise to
such claim is

 

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retroactive, then such 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.  If any Lender requests
compensation by the Borrower under Section 3.04, the Borrower may, by notice to
such Lender (with a copy to the Administrative Agent), suspend the obligation of
such Lender to make or continue from one Interest Period to another Eurocurrency
Rate Loans, or to convert Base Rate Loans into Eurocurrency Rate Loans, until
the event or condition giving rise to such request ceases to be in effect (in
which case the provisions of Section 3.06(d) shall be applicable); provided that
such suspension shall not affect the right of such Lender to receive the
compensation so requested.

 

(c)           If the obligation of any Lender to make or continue from one
Interest Period to another any Eurocurrency Rate Loan, or to convert Base Rate
Loans into Eurocurrency Rate Loans shall be suspended, such Lender’s
Eurocurrency Rate Loans shall be automatically converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for such Eurocurrency
Rate Loans (or, in the case of an immediate conversion required by Section 3.02,
on such earlier date as required by Law) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 3.01, 3.02,
3.03 or 3.04 hereof that gave rise to such conversion no longer exist:

 

(i)            to the extent that such Lender’s Eurocurrency Rate Loans have
been so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender’s Eurocurrency Rate Loans shall be applied
instead to its Base Rate Loans; and

 

(ii)           all Loans that would otherwise be made or continued from one
Interest Period to another by such Lender as Eurocurrency Rate Loans shall be
made or continued instead as Base Rate Loans, and all Base Rate Loans of such
Lender that would otherwise be converted into Eurocurrency Rate Loans shall
remain as Base Rate Loans.

 

(d)           If any Lender gives notice to the Borrower (with a copy to the
Administrative Agent) that the circumstances specified in Section 3.01, 3.02,
3.03 or 3.04 hereof that gave rise to the conversion of such Lender’s
Eurocurrency Rate Loans pursuant to this Section 3.06 no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Eurocurrency Rate Loans made by other Lenders are outstanding, such
Lender’s Base Rate Loans shall be automatically converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding
Eurocurrency Rate Loans, to the extent necessary so that, after giving effect
thereto, all Loans of a given Class held by the Lenders holding Eurocurrency
Rate Loans and by such Lender are held pro rata (as to principal amounts,
interest rate basis, and Interest Periods) in accordance with their respective
Commitments.

 

SECTION 3.07.  Replacement of Lenders under Certain Circumstances(a) If at any
time (i) the Borrower becomes obligated to pay additional amounts or indemnity
payments described in Section 3.01 or 3.04 as a result of any condition
described in such Sections or any Lender ceases to make Eurocurrency Rate Loans
as a result of any condition described in Section 3.02 or Section 3.04, (ii) any
Lender becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting
Lender, then the Borrower may, on five (5) Business Days’ prior written notice
to the Administrative Agent and such Lender, replace such Lender by causing such
Lender to (and such Lender shall be obligated to) assign pursuant to
Section 10.07(b) (with the assignment fee to be paid by the Borrower in such
instance) all of its rights and obligations under this Agreement to one or more
Eligible Assignees; provided that neither the Administrative Agent nor any
Lender shall have any obligation to the Borrower to find a replacement Lender or
other such Person; provided further, that (A) in the case of any such 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 and (B) in the case of any such assignment
resulting from a Lender becoming a Non-Consenting Lender, the applicable

 

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Eligible Assignees shall have agreed to, and shall be sufficient (together with
all other consenting Lenders) to cause the adoption of, the applicable
departure, waiver or amendment of the Loan Documents.

 

(b)           Any Lender being replaced pursuant to Section 3.07(a) above shall
(i) execute and deliver an Assignment and Assumption with respect to all of such
Lender’s Commitments and outstanding Loans (or, with respect to clause
(a)(iii) above, all of its applicable Commitments and outstanding Loans with
respect to the Class of Loans or Commitments that is the subject of the related
consent, waiver or amendment), and (ii) deliver any Notes evidencing such Loans
to the Borrower or Administrative Agent (or a lost or destroyed note indemnity
reasonably satisfactory to the Borrower and the Administrative Agent in lieu
thereof); provided that the failure of any such Lender to execute an Assignment
and Assumption or deliver such Notes shall not render such sale and purchase
(and the corresponding assignment) invalid and such assignment shall be recorded
in the Register and the Notes shall be deemed to be canceled upon such failure. 
Pursuant to such Assignment and Assumption, (A) the assignee Lender shall
acquire all or a portion, as the case may be, of the assigning Lender’s
Commitment and outstanding Loans, (B) all obligations of the Borrower owing to
the assigning Lender relating to the Loans so assigned shall be paid in full by
the assignee Lender to such assigning Lender concurrently with such Assignment
and Assumption and (C) upon such payment and, if so requested by the assignee
Lender, delivery to the assignee Lender of the appropriate Note or Notes
executed by the Borrower, the assignee Lender shall become a Lender hereunder
and the assigning Lender shall cease to constitute a Lender hereunder with
respect to such assigned Loans and Commitments, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
assigning Lender.  In connection with any such replacement, (i) if the Lender to
be replaced is a Non-Consenting Lender, the Borrower shall pay to each
Non-Consenting Lender, concurrently with the effectiveness of the respective
assignment, the fee set forth in Section 2.09(b) to the extent applicable and
(ii) if any such Non-Consenting Lender or Defaulting Lender does not execute and
deliver to the Administrative Agent a duly executed Assignment and Assumption
Agreement reflecting such replacement within five (5) Business Days of the date
on which the assignee Lender executes and delivers such Assignment and
Assumption Agreement to such Non-Consenting Lender or Defaulting Lender, then
such Non-Consenting Lender or Defaulting Lender shall be deemed to have executed
and delivered such Assignment and Assumption Agreement without any action on the
part of the Non-Consenting Lender or Defaulting Lender.

 

(c)           In the event that (i) the Borrower or the Administrative Agent has
requested that the Lenders consent to a departure or waiver of any provisions of
the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver
or amendment in question requires the agreement of all affected Lenders or all
Lenders in accordance with the terms of Section 10.01 or all affected Lenders or
all Lenders with respect to a certain Class of Loans and (iii) the Required
Lenders (or, in the case of a consent, waiver or amendment involving a certain
Facility, the Required Facility Lenders) have agreed to such consent, waiver or
amendment, then any Lender who does not agree to such consent, waiver or
amendment shall be deemed a “Non-Consenting Lender”.

 

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

 

ARTICLE IV

 

Conditions Precedent to Credit Extensions

 

SECTION 4.01.  Conditions to Making of Term B Loans.  The obligation of each
Lender to make its Term B Loans hereunder is subject to satisfaction of the
following conditions

 

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precedent:

 

(a)           The Administrative Agent’s receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each in form and substance reasonably satisfactory to the
Administrative Agent and its legal counsel:

 

(i)            executed counterparts of (A) this Agreement and (B) the Guarantor
Consent and Reaffirmation;

 

(ii)           a Note executed by the Borrower in favor of each Lender that has
requested a Note at least two (2) Business Days in advance of the Restatement
Effective Date;

 

(iii)          evidence that all documents, actions, recordings and filings
(including lien searches and the filing of UCC or PPSA financing statements)
that the Administrative Agent may deem reasonably necessary to satisfy the
Collateral and Guarantee Requirement shall have been taken, completed or
otherwise provided for in a manner reasonably satisfactory to the Administrative
Agent;

 

(iv)          such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may reasonably require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized
to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents to which such Loan Party is a party or is to be a party on the
Restatement Effective Date and attaching copies of the Organization Documents of
each Loan Party, certified by the Secretary of State of its jurisdiction of
organization, together with a good standing certificate from the Secretary of
State of its jurisdiction of organization, each dated as of a recent date prior
to the Restatement Effective Date;

 

(v)           (a) opinion from Ropes & Gray LLP, counsel to the Loan Parties
substantially in the form of Exhibit I attached hereto and (b) opinions of local
counsel to the Loan Parties in form and substance reasonably satisfactory to the
Administrative Agent to the extent reasonably requested by the Administrative
Agent;

 

(vi)          a certificate signed by a Responsible Officer of the Borrower
certifying that there has been no change, effect, event or occurrence since
January 28, 2012, that has had or could reasonably be expected to result in a
Material Adverse Effect;

 

(vii)         a certificate attesting to the Solvency of the Loan Parties (taken
as a whole) on the Restatement Effective Date after giving effect to the
Transaction, from the Chief Financial Officer of the Borrower;

 

(viii)        evidence that all insurance (including title insurance) required
to be maintained pursuant to the Loan Documents has been obtained and is in
effect and that the Administrative Agent has been named as loss payee or as
additional insured, as applicable, under each insurance policy with respect to
such insurance as to which the Administrative Agent shall have reasonably
requested to be so named;

 

(ix)          a copy of the irrevocable notice of redemption being delivered on
the Restatement Effective Date in connection with the redemption of
approximately $137,000,000 of

 

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the Senior Subordinated Notes pursuant to, and in accordance with the terms of,
the Senior Subordinated Notes Indenture; and

 

(x)           all accrued but unpaid interest on the Outstanding Term Loans
under the Existing Credit Agreement prior to but excluding the Restatement
Effective Date shall have been paid in full on the Restatement Effective Date.

 

(b)           All fees and expenses required to be paid hereunder and invoiced
at least three (3) Business Days before the Restatement Effective Date shall
have been paid in full in cash.

 

(c)           The Arrangers and the Lenders shall have received (i) the Audited
Financial Statements and the audit report for such financial statements and
(ii) unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of the Borrower and its Subsidiaries for
each subsequent fiscal quarter ended after January 28, 2012 and at least
forty-five (45) days before the Restatement Effective Date (collectively, the
“Unaudited Financial Statements”), which financial statements described in
clauses (i) and (ii) shall be prepared in accordance with GAAP.

 

(d)           The Arrangers and the Lenders shall have received a certificate
from a Responsible Officer of the Borrower certifying compliance with Sections
4.02(a) and (b).

 

(e)           The Administrative Agent’s shall have received all documentation
and other information about the Borrower and the Guarantors required under
applicable “know your customer” and anti-money laundering rules and regulations,
including the PATRIOT Act and the Proceeds of Crime Act, that has been requested
by the Administrative Agent in writing prior to the Restatement Effective Date.

 

SECTION 4.02.  Conditions to All Credit Extensions

 

The obligation of each Lender to honor any request for Borrowing is subject to
the following conditions precedent:

 

(a)           The representations and warranties of the Borrower and each other
Loan Party contained in Article V shall be true and correct in all material
respects on and as of the date of the Borrowing; provided that, to the extent
that such representations and warranties described in this clause
(a) specifically refer to an earlier date, they shall be true and correct in all
material respects as of such earlier date; provided further, that, any
representation and warranty described in this clause (a) that is qualified as to
“materiality,” “Material Adverse Effect”, or similar language shall be true and
correct in all respects on such respective dates.

 

(b)           No Default shall exist, or would result from the proposed
Borrowing or from the application of the proceeds therefrom.

 

(c)           The Administrative Agent shall have received a Committed Loan
Notice in accordance with the requirements hereof.

 

Each Committed Loan Notice submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Borrowing.

 

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ARTICLE V

 

Representations and Warranties

 

The Borrower represents and warrants to the Agents and the Lenders that:

 

SECTION 5.01.  Existence, Qualification and Power; Compliance with Laws.  Each
Loan Party and each of its Restricted Subsidiaries (a) is a Person duly
organized or formed, validly existing and in good standing (to the extent such
concept exists under applicable Law) under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite organizational power and
authority to (i) own or lease its assets and carry on its business and
(ii) execute, deliver and perform its obligations under the Loan Documents to
which it is a party, (c) is duly qualified 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, (d) is in compliance
with all Laws, orders, writs, injunctions and orders and (e) has all requisite
governmental licenses, authorizations, consents and approvals to operate its
business as currently conducted; except in each case referred to in clause (c),
(d) or (e), 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 a
party, and the consummation of the Transaction, are within such Loan Party’s
corporate or other powers, have been duly authorized by all necessary corporate
or other organizational action, and do not and will not (a) contravene the terms
of any of such Person’s Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under (other than as
permitted by Section 7.01), or require any payment to be made under (i) (x) any
indenture, mortgage, deed of trust or loan agreement evidencing Indebtedness in
an aggregate principal amount in excess of the Threshold Amount or (y) any other
Contractual Obligation to which such Person is a party or affecting such Person
or the properties of such Person or any of its Restricted Subsidiaries or
(ii) any material order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any material Law; except with respect to any conflict, breach or
contravention or payment (but not creation of Liens) referred to in clause
(b)(i), to the extent that such conflict, breach, contravention or payment could
not reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.03.  Governmental Authorization; Other Consents.  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 (a) the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document, or for the consummation of the Transaction, (b) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents, (c) the
perfection or maintenance of the Liens created under the Collateral Documents
(including the priority thereof) or (d) the exercise by the Administrative Agent
or any Lender of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents, except for (i) filings
necessary to perfect the Liens on the Collateral granted by the Loan Parties in
favor of the Secured Parties, (ii) the approvals, consents, exemptions,
authorizations, actions, notices and filings which have been duly obtained,
taken, given or made and are in full force and effect and (iii) those approvals,
consents, exemptions, authorizations or other actions, notices or filings, the
failure of which to obtain or make could not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 5.04.  Binding Effect.  This Agreement and each other Loan Document has
been duly executed and delivered by each Loan Party that is party thereto.  This
Agreement and each other Loan Document constitutes, 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 as such enforceability may be
limited by Debtor Relief Laws, by general principles of equity and an implied
covenant of good faith and fair dealing.

 

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SECTION 5.05.  Financial Statements; No Material Adverse Effect(a)            
The Audited Financial Statements and the Unaudited Financial Statements fairly
present in all material respects the financial position of the Borrower and its
Subsidiaries as of the dates thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the periods covered thereby, except as otherwise expressly noted therein or in
Schedule 5.05 hereto.

 

(b)           Since January 28, 2012, 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.

 

(c)           The forecasts of consolidated balance sheets, income statements
and cash flow statements of the Borrower and its Subsidiaries delivered to the
Administrative Agent prior to the Restatement Effective Date in connection with
the Transaction have been prepared in good faith on the basis of the assumptions
stated therein, which assumptions were believed to be reasonable at the time of
preparation of such forecasts, it being understood that actual results may vary
from such forecasts and that such variations may be material.

 

(d)           As of the Restatement Effective Date, neither the Borrower nor any
Subsidiary has any Indebtedness or other obligations or liabilities, direct or
contingent (other than (i) such liabilities as are set forth in the financial
statements described in clause (a) of this Section 5.05, (ii) obligations
arising under this Agreement, the ABL Loan Documents, the Senior Notes Indenture
and the Senior Subordinated Notes Indenture and (iii) liabilities incurred in
the ordinary course of business) that, either individually or in the aggregate,
have had or could reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.06.  Litigation.  There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower, threatened in writing, at
law, in equity, in arbitration or before any Governmental Authority, by or
against the Borrower or any of its Restricted Subsidiaries or against any of
their properties or revenues that either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.07.  No Default.  Neither the Borrower nor any Restricted Subsidiary
is in default under or with respect to, or a party to, any Contractual
Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

SECTION 5.08.  Ownership of Property; Liens.  Each Loan Party and each of its
Restricted Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in, or easements or other limited property
interests in, all real property necessary in the ordinary conduct of its
business, free and clear of all Liens except (i) for minor defects in title that
do not materially interfere with its ability to conduct its business or to
utilize such assets for their intended purposes, (ii) for Liens permitted by
Section 7.01 and (iii) where the failure to have such title could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.

 

SECTION 5.09.  Environmental Compliance.  (a) There are no claims, actions,
suits, or proceedings alleging potential liability or responsibility for
violation of, or otherwise relating to, any Environmental Law that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(b)           Except as could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, (i) none of the properties
currently or formerly owned, leased or

 

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operated by any Loan Party or any of its Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state, provincial
or local list or is adjacent to any such property; (ii) to the knowledge of the
Loan Parties or any of their Restricted Subsidiaries, there are no and never
have been any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials
are being or have been treated, stored or disposed of on any property currently
owned, leased or operated by any Loan Party or any of its Subsidiaries or, to
its knowledge, on any property formerly owned or operated by any Loan Party or
any of its Subsidiaries; (iii) to the knowledge of the Loan Parties or any of
their Restricted Subsidiaries, there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party or any of
its Subsidiaries; and (iv) Hazardous Materials have not been released,
discharged or disposed of by any Person on any property currently or formerly
owned, leased or operated by any Loan Party or any of its Subsidiaries and
Hazardous Materials have not otherwise been released, discharged or disposed of
by any of the Loan Parties and their Subsidiaries at any other location.

 

(c)           The properties owned, leased or operated by the Borrower and the
Subsidiaries do not contain any Hazardous Materials in amounts or concentrations
which (i) constitute, or constituted a violation of, (ii) require remedial
action under, or (iii) could give rise to liability under, Environmental Laws,
which violations, remedial actions and liabilities, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

(d)           Neither the Borrower nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law except for such investigation or assessment or remedial or
response action that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

(e)           All Hazardous Materials generated, used, treated, handled or
stored at, or transported to or from, any property currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries have been disposed of
in a manner not reasonably expected to result, individually or in the aggregate,
in a Material Adverse Effect.

 

(f)            Except as would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect, none of the Loan
Parties and their Subsidiaries has contractually assumed any liability or
obligation under or relating to any Environmental Law.

 

SECTION 5.10.  Taxes.  Except as set forth in Schedule 5.10 or as could not,
either individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, the Borrower and its Subsidiaries have filed all
Federal, state, provincial and other material tax returns and reports required
to be filed, and have paid all material Federal, state, provincial and other
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable, except
those (a) which are not overdue by more than thirty (30) days or (b) which are
being contested in good faith by appropriate actions diligently conducted and
for which adequate reserves have been provided in accordance with GAAP.

 

SECTION 5.11.  ERISA Compliance.  (a)  Except as could not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, each Plan is in compliance with the applicable provisions of ERISA, the
Code, the PBA and other Federal, state or provincial Laws.

 

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(b)           No ERISA Event has occurred during the five year period prior to
the date on which this representation is made or deemed made with respect to any
Pension Plan; (ii) no Pension Plan has an “accumulated funding deficiency” (as
defined in Section 412 of the Code), whether or not waived; (iii) neither any
Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither any Loan
Party nor any ERISA Affiliate has engaged in a transaction that could be subject
to Sections 4069 or 4212(c) of ERISA, except, with respect to each of the
foregoing clauses of this Section 5.11(b), as could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

 

(c)           Each Canadian Subsidiary is in compliance with the requirements of
the PBA and other federal, provincial or state laws with respect to each Pension
Plan, except where the failure to so comply would not reasonably be expected to
have a Material Adverse Effect.  No fact or situation that may reasonably be
expected to result in a Material Adverse Effect exists in connection with any
Pension Plan.  No Canadian Subsidiary has any withdrawal liability in connection
with a Pension Plan which could reasonably be expected to result in a Material
Adverse Effect.  No Pension Event has occurred which could reasonably be
expected to result in a Material Adverse Effect.  No lien has arisen, choate or
inchoate, in respect of a Canadian Subsidiary or its property in connection with
any Pension Plan (save for contribution amounts not yet due), except such liens
as would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.12.  Subsidiaries; Equity Interests.  As of the Restatement Effective
Date, no Loan Party has any Subsidiaries other than those specifically disclosed
in Schedule 5.12, and all of the outstanding Equity Interests in their
respective Subsidiaries have been validly issued, are fully paid and
nonassessable and all Equity Interests owned by a Loan Party are owned free and
clear of all Liens except (i) those created under the Collateral Documents and
the ABL Collateral Documents and (ii) any nonconsensual Lien that is permitted
under Section 7.04.  As of the Restatement Effective Date, Schedule 5.12
(a) sets forth the name and jurisdiction of each Subsidiary, (b) sets forth the
ownership interest of the Borrower and any other Subsidiary in each Subsidiary,
including the percentage of such ownership and (c) identifies each Subsidiary
the Equity Interests of which are required to be pledged on the Restatement
Effective Date pursuant to the Collateral and Guarantee Requirement.

 

SECTION 5.13.  Margin Regulations; Investment Company Act.

(i)  The Borrower is not engaged nor will it engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock, and no proceeds of any
Borrowings will be used for any purpose that violates Regulation U.  The value
of the margin stock (within the meaning of Regulation U) owned by the Borrower
and its Subsidiaries at any time the extensions of credit hereunder constitute
“purpose” credit (within the meaning of Regulation U) does not exceed 25% of the
value of the assets of the Borrower and its Subsidiaries taken as a whole.

 

(ii)         None of the Borrower or any Subsidiary Guarantor is required to be
registered as an “investment company” under the Investment Company Act of 1940.

 

SECTION 5.14.  Disclosure.  No report, financial statement, certificate or other
written information furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or any other Loan Document
(as modified or supplemented by other information so furnished)

 

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when taken as a whole contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not materially misleading;
provided that, with respect to projected financial information and pro forma
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed by the Borrower to be
reasonable at the time of preparation; it being understood that such projections
may vary from actual results and that such variances may be material.

 

SECTION 5.15.  Intellectual Property; Licenses, Etc.  Each of the Loan Parties
and their Restricted Subsidiaries own, license or possess the right to use, all
of the trademarks, service marks, trade names, domain names, copyrights,
patents, patent rights, licenses, technology, software, know-how database
rights, rights of privacy and publicity and other intellectual property rights
(collectively, “IP Rights”) that are reasonably necessary for the operation of
their respective businesses as currently conducted, and, without conflict with
the rights of any Person, except to the extent such failure to own, license or
possess or such conflicts, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.  The operation of the
businesses of any Loan Party or Restricted Subsidiary as currently conducted
does not infringe upon, misuse, misappropriate or violate any rights held by any
Person except for such infringements, misuses, misappropriations or violations,
individually or in the aggregate, which could not reasonably be expected to have
a Material Adverse Effect.  No claim or litigation regarding any IP Rights, is
pending or, to the knowledge of the Borrower, threatened against any Loan Party
or Restricted Subsidiary, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.16.  Solvency.  On the Restatement Effective Date after giving effect
to the Transaction, the Loan Parties, on a consolidated basis, are Solvent.

 

SECTION 5.17.  Subordination of Junior Financing.  The Obligations are “Senior
Debt”, “Senior Indebtedness”, “Guarantor Senior Debt” or “Senior Secured
Financing” (or any comparable term) under, and as defined in, the Senior
Subordinated Notes Indenture and under any other Junior Financing
Documentation.  The Obligations are “Designated Senior Indebtedness” under and
as defined in the Senior Subordinated Notes Indenture.

 

SECTION 5.18.  Labor Matters

 

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

 

SECTION 5.19.  Anti-Terrorism Laws; OFAC(a)    Anti-Terrorism Laws. Except as
could not reasonably be expected to result in a Material Adverse Effect, to the
extent applicable, the Borrower and each of its Subsidiaries is in compliance,
in all material respects, with the Sanctions Laws and Regulations.

 

(b)           OFAC. Except as could not reasonably be expected to result in a
Material Adverse Effect, none of the Borrower or any of its Subsidiaries nor, to
the knowledge of the Borrower, any director, manager, officer, agent or employee
of the Borrower or any of its Subsidiaries (i) is a person whose property or
interest in property is blocked or subject to blocking pursuant to Section 1 of
the Executive Order, (ii) engages in any dealings or transactions prohibited by
Section 2 of the Executive

 

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Order, or is otherwise associated with any such person in any manner that
violates Section 2 of the Executive Order or (iii) is a person on the list of
“Specially Designated Nationals and Blocked Persons” or subject to the
limitations or prohibitions under any other U.S. Department of Treasury’s Office
of Foreign Assets Control regulation or executive order.

 

ARTICLE VI

 

Affirmative Covenants

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied (other than contingent indemnity obligations with respect to then
unasserted claims), the Borrower shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Restricted
Subsidiary to:

 

SECTION 6.01.  Financial Statements.  Deliver to the Administrative Agent for
prompt further distribution to each Lender:

 

(a)           within ninety (90) days after the end of each fiscal year of the
Borrower beginning with the fiscal year ending January 28, 2013, a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of income or operations,
stockholders’ equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of Ernst & Young, LLP or any other independent
registered public accounting firm of nationally recognized standing, 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 (except as may be required as a result of the impending maturity of
any Indebtedness, including the Loans hereunder, the ABL Loans, the Senior Notes
or the Senior Subordinated Notes);

 

(b)           within forty-five (45) days after the end of each of the first
three (3) fiscal quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related (i) consolidated statements of income or operations for
such fiscal quarter and for the portion of the fiscal year then ended and
(ii) consolidated statements of cash flows for the portion of the fiscal year
then ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of the Borrower as fairly presenting in all material
respects the financial position, results of operations, stockholders’ equity and
cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject
only to normal year-end adjustments and the absence of footnotes;

 

(c)           no later than ninety (90) days after the end of each fiscal year
of the Borrower beginning with the fiscal year ending January 27, 2014, a
detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of
projected cash flow and projected income and a summary of the material
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to
such fiscal year (collectively, the “Projections”), which Projections shall in
each case be accompanied by a certificate of a Responsible Officer stating that
such

 

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Projections are based on estimates, information and assumptions believed by the
Borrower to be reasonable and that such Responsible Officer has no reason to
believe that such Projections are incorrect or misleading in any material
respect; and

 

(d)           simultaneously with the delivery of each set of consolidated
financial statements referred to in Sections 6.01(a) and 6.01(b) above, the
related consolidating financial statements reflecting the adjustments necessary
to eliminate the accounts of Unrestricted Subsidiaries (if any) from such
consolidated financial statements.

 

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 6.01 may be satisfied with respect to financial information of the
Borrower and the Restricted Subsidiaries by furnishing (A) the applicable
financial statements of any direct or indirect parent of the Borrower or (B) the
Borrower’s (or any direct or indirect parent thereof) Form 10-K or 10-Q, as
applicable, filed with the SEC; provided that with respect to each of clauses
(A) and (B), (i) to the extent such information relates to a direct or indirect
parent of the Borrower, such information is accompanied by consolidating
information that explains in reasonable detail the differences between the
information relating to such parent of the Borrower, on the one hand, and the
information relating to the Borrower and the Restricted Subsidiaries on a
stand-alone basis, on the other hand and (ii) to the extent such information is
in lieu of information required to be provided under Section 6.01(a), such
materials are accompanied by a report and opinion of Ernst & Young, LLP or any
other independent registered public accounting firm of nationally recognized
standing, 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 (except as may be required as a result of the
impending maturity of any Indebtedness, including the Loans hereunder, the ABL
Loans, the Senior Notes or the Senior Subordinated Notes).

 

SECTION 6.02.  Certificates; Other Information.  Deliver to the Administrative
Agent for prompt further distribution to each Lender:

 

(a)           no later than five (5) days after the delivery of the financial
statements referred to in Section 6.01(a), a certificate of its independent
registered public accounting firm certifying such financial statements (which
certificate may be limited to the extent required by accounting rules or
guidelines);

 

(b)           no later than five (5) days after the delivery of the financial
statements referred to in Section 6.01(a) and (b), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower;

 

(c)           promptly after the same are publicly available, copies of all
annual, regular, periodic and special reports and registration statements which
the Borrower files with the SEC or with any Governmental Authority that may be
substituted therefor (other than amendments to any registration statement (to
the extent such registration statement, in the form it became effective, is
delivered), exhibits to any registration statement and, if applicable, any
registration statement on Form S-8) and in any case not otherwise required to be
delivered to the Administrative Agent pursuant hereto;

 

(d)           promptly after the furnishing thereof, copies of any material
requests or material notices received by any Loan Party (other than in the
ordinary course of business) or material statements or material reports
furnished to any holder of debt securities of any Loan Party or of any of its
Restricted Subsidiaries pursuant to the terms of the Senior Notes Indenture, the
Senior Subordinated Notes Indenture or any other Indebtedness in a principal
amount greater than the

 

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Threshold Amount (but excluding material statements or material reports relating
to the “borrowing base” or the determination thereof (including appraisals and
collateral audits) furnished to any ABL Lender) and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6.02;

 

(e)           together with the delivery of each Compliance Certificate pursuant
to Section 6.02(b), (i) a report setting forth the information required by
Section 3.03(c) of the Security Agreement or confirming that there has been no
change in such information since the Restatement Effective Date or the date of
the last such report, (ii) a description of each event, condition or
circumstance during the last fiscal quarter covered by such Compliance
Certificate requiring a mandatory prepayment or offer to purchase under
Section 2.05(b) or (c) and (iii) a list of each Subsidiary that identifies each
Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary as of the
date of delivery of such Compliance Certificate (or confirming that there has
been no change in such information since the Restatement Effective Date or the
date of the last such update);

 

(f)            promptly, a copy of any final “management letter” received from
the Borrower’s independent public accountants to the extent such independent
public accountants have consented to the delivery of such management letter to
the Administrative Agent upon the request of the Borrower;

 

(g)           promptly following the Administrative Agent’s request therefor,
all documentation and other information that the Administrative Agent reasonably
requests on its behalf or on behalf of any Lender in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the Act;

 

(h)           (x) on the date of any incurrence of Indebtedness under a
revolving credit facility to finance an Acquisition, an Investment or any other
Restricted Payment, a certificate from a Responsible Officer certifying as to
the aggregate principal amount of such Indebtedness so incurred and the date of
such incurrence and (y) on the date of any repayment of Indebtedness under a
revolving credit facility with the net proceeds of a Material Disposition, a
certificate from a Responsible Officer certifying as to the aggregate principal
amount of such Indebtedness so repaid and the date of such repayment; and

 

(i)            promptly, such additional information regarding the business,
legal, financial or corporate affairs of any Loan Party or any Restricted
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender through the Administrative Agent may from
time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) or (d) (to the extent any such documents are included in
materials otherwise filed with the SEC) 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
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: 
(i) upon written request by the Administrative Agent, the Borrower shall deliver
paper copies of such documents to the Administrative Agent for further
distribution to each Lender until a written request to cease delivering paper
copies is given by the Administrative Agent and (ii) the Borrower shall notify
(which may be by facsimile or electronic mail)

 

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the Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents.  Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent.  Each
Lender shall be solely responsible for timely accessing posted documents or
requesting delivery of paper copies of such documents from the Administrative
Agent and maintaining its copies of such documents.  For purposes of this
Section 6.02, paper copies shall include copies delivered by facsimile
transmission or electronically (such as “tif”, “pdf” or similar file formats
delivered by email).

 

SECTION 6.03.  Notices.  (a) Promptly after obtaining knowledge thereof, notify
the Administrative Agent of:

 

(i)            the occurrence of any Default;

 

(ii)           any loss, damage, or destruction to the Collateral in the amount
of $20,000,000 or more, whether or not covered by insurance; and

 

(iii)          any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including arising out of or resulting from
(A) breach or non-performance of, or any default or event of default under, a
Contractual Obligation of any Loan Party or any Restricted Subsidiary, (B) any
dispute, litigation, investigation, proceeding or suspension between any Loan
Party or any Restricted Subsidiary and any Governmental Authority, (C) the
commencement of, or any material development in, any litigation or proceeding
affecting any Loan Party or any Restricted Subsidiary, including pursuant to any
applicable Environmental Laws or in respect of IP Rights or the assertion or
occurrence of any noncompliance by any Loan Party or as any of its Restricted
Subsidiaries with, or liability under, any Environmental Law or Environmental
Permit, or (D) the occurrence of any ERISA Event or any Pension Event;

 

(b)           Furnish contemporaneously to the Administrative Agent, a copy of
any notice sent to the administrative agent or collateral agent under Sections
5.02(g) and 5.03(a) of the ABL Credit Agreement, if such notice is not otherwise
required to be delivered hereunder.

 

Each notice pursuant to this Section shall be accompanied by a written statement
of a Responsible Officer of the Borrower (x) that such notice is being delivered
pursuant to Section 6.03(a)(i), (ii) or (iii) or 6.03(b) (as applicable) and
(y) setting forth details of the occurrence referred to therein and stating what
action the Borrower has taken and proposes to take with respect thereto.

 

SECTION 6.04.  Payment of Obligations.  Pay, discharge or otherwise satisfy as
the same shall become due and payable, all its material obligations and
liabilities in respect of material taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
property, except in each case, (a) to the extent the failure to pay or discharge
the same, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect and (b) that are being contested in
good faith and by proper actions if it has maintained adequate reserves with
respect thereto in accordance with GAAP.

 

SECTION 6.05.  Preservation of Existence, Etc.  (a) Preserve, renew and maintain
in full force and effect its legal existence under the Laws of the jurisdiction
of its organization except in a transaction permitted by Section 7.01 or 7.06
and (b) take all reasonable action to maintain all rights, privileges (including
its good standing), permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except (i) to the extent that failure to do
so could not reasonably be

 

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expected to have a Material Adverse Effect or (ii) pursuant to a transaction
permitted by Section 7.01 or 7.06.

 

SECTION 6.06.  Maintenance of Properties.  Except if the failure to do so could
not reasonably be expected to have a Material Adverse Effect, (a) maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order, repair and condition,
ordinary wear and tear excepted and casualty or condemnation excepted, and
(b) make all necessary renewals, replacements, modifications, improvements,
upgrades, extensions and additions thereof or thereto in accordance with prudent
industry practice.

 

SECTION 6.07.  Maintenance of Insurance.  (a) Maintain with financially sound
and reputable insurance companies, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Borrower and the Restricted Subsidiaries) as are customarily carried under
similar circumstances by such other Persons.  The Loan Parties shall furnish to
the Administrative Agent, upon written request, full information as to the
insurance carried.

 

(b)           Fire and extended coverage policies maintained with respect to any
Collateral shall be endorsed or otherwise amended to include (i) a
non-contributing mortgage clause (regarding improvements to real property) and a
lenders’ loss payable clause (regarding personal property), in form and
substance reasonably satisfactory to the Administrative Agent, which
endorsements or amendments shall provide that the insurer shall pay all proceeds
otherwise payable to the Loan Parties under the policies directly to the
Administrative Agent, (ii) a provision to the effect that none of the Loan
Parties, Secured Parties (in their capacity as such), or any other Affiliate of
a Loan Party shall be a co-insurer (the foregoing not being deemed to limit the
amount of self-insured retention or deductibles under such policies, which
self-insured retention or deductibles shall be consistent with business
practices in effect on the Restatement Effective Date or as otherwise determined
by the Responsible Officers of the Loan Parties acting reasonably in their
business judgment), and (iii) such other provisions as the Administrative Agent
may reasonably require from time to time to protect the interests of the Secured
Parties.  Commercial general liability policies shall be endorsed to name the
Administrative Agent as an additional insured.  The Loan Parties shall use
commercially reasonable efforts to obtain endorsements to each such casualty or
liability policy referred to in this Section 6.07(b) providing that it shall not
be canceled, modified in any manner that would cause this Section 6.07 to be
violated, or not renewed (i) by reason of nonpayment of premium except upon not
less than ten (10) days’ prior written notice thereof by the insurer to the
Administrative Agent (giving the Administrative Agent the right to cure defaults
in the payment of premiums) or (ii) for any other reason except upon not less
than thirty (30) days’ prior written notice thereof by the insurer to the
Administrative Agent.  The Borrower shall deliver to the Administrative Agent,
prior to the cancellation, modification or non-renewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent, including
an insurance binder) together with evidence satisfactory to the Administrative
Agent of payment of the premium therefor.

 

(c)           The Agents acknowledge that the insurance policies described on
Schedule 6.07 are satisfactory to them as of the Restatement Effective Date and
are in compliance with the provisions of this Section 6.07.

 

SECTION 6.08.  Compliance with Laws.  Comply in all material respects with the
requirements of all Laws (including, but not limited to, the Act) and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, except if the failure to comply therewith could

 

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not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.09.  Books and Records.  Maintain proper books of record and account,
in which entries that are full, true and correct in all material respects and
permit financial statements to be prepared in conformity with GAAP consistently
applied shall be made of all material financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be (it being understood and agreed that certain Foreign Subsidiaries
may maintain individual books and records in conformity with generally accepted
accounting principles in their respective countries of organization and that
such maintenance shall not constitute a breach of the representations,
warranties or covenants hereunder).

 

SECTION 6.10.  Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender 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 (subject to customary
access agreements) independent public accountants all at the reasonable expense
of the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided that, excluding any such visits and inspections during the
continuation of an Event of Default, only the Administrative Agent on behalf of
the Lenders may exercise rights of the Administrative Agent and the Lenders
under this Section 6.10 and the Administrative Agent shall not exercise such
rights more often than two (2) times during any calendar year absent the
existence of an Event of Default and only one (1) such time shall be at the
Borrower’s expense; provided further, that when an Event of Default exists, the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and upon reasonable advance
notice.  The Administrative Agent and the Lenders shall give the Borrower the
opportunity to participate in any discussions with the Borrower’s independent
public accountants.  Notwithstanding anything to the contrary in this
Section 6.10, none of the Borrower or any of the Restricted Subsidiaries will be
required to disclose, permit the inspection, examination or making copies or
abstracts of, or discussion of, any document, information or other matter that
(a) constitutes non-financial trade secrets or non-financial proprietary
information, (b) in respect of which disclosure to the Administrative Agent or
any Lender (or their respective representatives or contractors) is prohibited by
Law or any binding agreement or (c) is subject to attorney-client or similar
privilege or constitutes attorney work product.

 

SECTION 6.11.  Covenant to Guarantee Obligations and Give Security.  At the
Borrower’s expense, take all action necessary or reasonably requested by the
Administrative Agent to ensure that the Collateral and Guarantee Requirement
continues to be satisfied, including:

 

(a)           (x) upon the formation or acquisition of any new direct or
indirect Wholly Owned Subsidiary that is a Domestic Subsidiary (in each case,
other than an Unrestricted Subsidiary or an Excluded Subsidiary) by any Loan
Party or the designation of any “Unrestricted Subsidiary” as a Restricted
Subsidiary in accordance with the definition of “Unrestricted Subsidiary”, to
the extent such Subsidiary is (or will become) a Domestic Subsidiary and a
Wholly-Owned Subsidiary (other than an Excluded Subsidiary) or (y) the formation
of Holdco:

 

(i)            in the case of any such Restricted Subsidiary that is required
(or has elected) to become a Subsidiary Guarantor under the Collateral and
Guaranty Requirement, within thirty (30) days after such formation, acquisition
or designation or such longer period as the Administrative Agent may agree in
its discretion:

 

(A)  cause each such Restricted Subsidiary that is required (or has elected) to

 

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become a Subsidiary Guarantor under the Collateral and Guarantee Requirement to
furnish to the Administrative Agent a description of the real properties owned
by such Restricted Subsidiary that have a Fair Market Value in excess of
$10,000,000 in detail reasonably satisfactory to the Administrative Agent;

 

(B)  cause (x) each such Restricted Subsidiary that is required (or has elected)
to become a Subsidiary Guarantor pursuant to the Collateral and Guarantee
Requirement to duly execute and deliver to the Administrative Agent or the
Collateral Agent (as appropriate) Guaranty Supplements, Mortgages with respect
to the owned real properties which are identified to the Administrative Agent
pursuant to Section 6.11(a)(i)(A), Security Agreement Supplements, a counterpart
of the Intercompany Note, a counterpart of the Intercreditor Agreement and other
guaranties, security agreements and documents (including, with respect to such
Mortgages, the documents listed in Section 6.13(b)), as reasonably requested by
and in form and substance reasonably satisfactory to the Administrative Agent
(consistent, where applicable, with the Mortgages, Security Agreement, Canadian
Security Agreement, relevant Guaranty and other security agreements in effect on
the Closing Date), in each case granting Liens required by the Collateral and
Guarantee Requirement and (y) each direct or indirect parent of each such
Restricted Subsidiary that is required (or has elected) to be a Subsidiary
Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute
and deliver to the Administrative Agent such Security Agreement Supplements and
other security agreements as reasonably requested by and in form and substance
reasonably satisfactory to the Administrative Agent (consistent, where
applicable, with the Security Agreements and Canadian Security Agreement as in
effect on the Closing Date), in each case granting Liens required by the
Collateral and Guarantee Requirement;

 

(C)  (x) cause each such Restricted Subsidiary that is required (or has elected)
to become a Subsidiary Guarantor pursuant to the Collateral and Guarantee
Requirement to deliver any and all certificates representing Equity Interests
(to the extent certificated) that are required to be pledged pursuant to the
Collateral and Guarantee Requirement, accompanied by undated stock powers or
other appropriate instruments of transfer executed in blank and instruments
evidencing the intercompany Indebtedness held by such Restricted Subsidiary and
required to be pledged pursuant to the Collateral Documents, indorsed in blank
to the Collateral Agent and (y) cause each direct or indirect parent of such
Restricted Subsidiary that is required (or has elected) to be a Subsidiary
Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any
and all certificates representing the outstanding Equity Interests (to the
extent certificated) of such Restricted Subsidiary that are required to be
pledged pursuant to the Collateral and Guarantee Requirement, accompanied by
undated stock powers or other appropriate instruments of transfer executed in
blank and instruments evidencing the intercompany Indebtedness issued by such
Restricted Subsidiary and required to be pledged in accordance with the
Collateral Documents, indorsed in blank to the Collateral Agent; and

 

(D)  take and cause such Restricted Subsidiary and each direct or indirect
parent of such Restricted Subsidiary that is required (or has elected) to become
a Subsidiary Guarantor pursuant to the Collateral and Guaranty Requirement to
take whatever action (including the recording of Mortgages, the filing of
Uniform Commercial Code financing statements or PPSA registration statements or
recordations and delivery of stock and membership interest certificates) may be
necessary in the reasonable opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid Liens required by the Collateral and

 

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Guarantee Requirement, enforceable against all third parties in accordance with
their terms, except as such enforceability may be limited by Debtor Relief Laws,
by general principles of equity and an applied covenant of good faith and fair
dealing,

 

(ii)           in the case of Holdco, within thirty (30) days after such
formation, cause Holdco to enter into the Holdco Guaranty and cause Holdco to
take all such actions contemplated by subclauses (A), (B), (C) and (D) of
Section 6.11(a)(i) above as if Holdco were a “Restricted Subsidiary” and a
“direct or indirect parent of a Restricted Subsidiary”,

 

(iii)          within thirty (30) days after the request therefor by the
Administrative Agent, deliver to the Administrative Agent a signed copy of an
opinion, addressed to the Administrative Agent and the other Secured Parties, of
counsel for the Loan Parties reasonably acceptable to the Administrative Agent
as to such matters set forth in this Section 6.11(a) as the Administrative Agent
may reasonably request, and

 

(iv)          as promptly as practicable after the request therefor by the
Administrative Agent, deliver to the Administrative Agent any existing title
reports, surveys or environmental assessment reports with respect to each parcel
of real property that is owned by such Restricted Subsidiary and has a Fair
Market Value in excess of $10,000,000.

 

(b)           After the Closing Date, concurrently with (x) the acquisition of
any material personal property by any Loan Party or (y) the acquisition of any
owned real property by any Loan Party with a Fair Market Value in excess of
$10,000,000 if such personal property or owned real property shall not already
be subject to a perfected Lien pursuant to the Collateral and Guarantee
Requirement, the Borrower shall give notice thereof to the Administrative Agent
and promptly thereafter shall cause such assets to be subjected to a Lien to the
extent required by the Collateral and Guarantee Requirement and will take, or
cause the relevant Loan Party to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect or record
such Lien, including, as applicable, the actions referred to in
Section 6.13(b) with respect to real property.

 

(c)           If, at any time and from time to time after the Closing Date, any
Domestic Subsidiary ceases to constitute an Immaterial Subsidiary in accordance
with the definition of “Immaterial Subsidiary”, then the Borrower shall cause
such Subsidiary to become an additional Loan Party and take all the actions
contemplated by Section 6.11(a) as if such Subsidiary were a newly-formed
Domestic Subsidiary of the Borrower.

 

(d)           If, at any time after the Closing Date, any Restricted Subsidiary
becomes an obligee or obligor of any intercompany Indebtedness, then the
Borrower shall cause such Restricted Subsidiary to authorize, execute and
deliver a counterpart of the Intercompany Note.

 

(e)           Use commercially reasonable efforts to obtain a Collateral Access
Agreement from any Person from whom a Loan Party enters into a lease after the
Closing Date for a warehouse or distribution center prior to entering into such
lease, to the extent required by the ABL Collateral Agent pursuant to the terms
of ABL Credit Agreement.

 

SECTION 6.12.  Compliance with Environmental Laws.  Except, in each case, to the
extent that the failure to do so could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, comply, and take
all reasonable actions to cause all lessees and other Persons operating or
occupying its properties to comply with all applicable Environmental Laws and
Environmental Permits; obtain and renew all Environmental Permits necessary for
its operations and properties; and, in each case to the extent required by
Environmental Laws, conduct any investigation,

 

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study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws.

 

SECTION 6.13.  Further Assurances and Post-Closing Conditions.  (a) Promptly
upon reasonable request by the Administrative Agent (i) correct any material
defect or error that may be discovered in the execution, acknowledgment, filing
or recordation of any Collateral Document or other document or instrument
relating to any Collateral, and (ii) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, certificates, assurances and other instruments as the
Administrative Agent may reasonably request from time to time in order to carry
out more effectively the purposes of the Collateral Documents.

 

(b)           In the case of any real property referred to in
Section 6.11(a)(i)(A) or 6.11(b), provide the Administrative Agent with
Mortgages with respect to such owned real property within thirty (30) days (or
such longer period as shall be acceptable to the Administrative Agent in any
given case) of the acquisition of such real property, in each case together
with:

 

(i)            evidence that counterparts of the Mortgages have been duly
executed, acknowledged and delivered and are in form suitable for filing or
recording in all filing or recording offices that the Administrative Agent may
deem reasonably necessary or desirable in order to create a valid and subsisting
perfected Lien on the property and/or rights described therein in favor of the
Administrative Agent or the Collateral Agent (as appropriate) for the benefit of
the Secured Parties and that all filing and recording taxes and fees have been
paid or otherwise provided for in a manner reasonably satisfactory to the
Administrative Agent;

 

(ii)           fully paid American Land Title Association Lender’s Extended
Coverage title insurance policies or the equivalent or other form available in
each applicable jurisdiction (the “Mortgage Policies”) in form and substance,
with endorsements and in amount, reasonably acceptable to the Administrative
Agent (not to exceed the value of the real properties covered thereby), issued,
coinsured and reinsured by title insurers reasonably acceptable to the
Administrative Agent, insuring the Mortgages to be valid subsisting Liens on the
property described therein, free and clear of all defects and encumbrances,
subject to Liens permitted by Section 7.04, and providing for such other
affirmative insurance (including endorsements for future advances under the Loan
Documents) and such coinsurance and direct access reinsurance as the
Administrative Agent may reasonably request;

 

(iii)          opinions of local counsel for the Loan Parties in states in which
such real properties are located, with respect to the enforceability and
perfection of the Mortgages and any related fixture filings in form and
substance reasonably satisfactory to the Administrative Agent;

 

(iv)          to the extent required by applicable law, flood certificates
covering each Mortgaged Property in form and substance reasonably acceptable to
the Collateral Agent, certified to the Collateral Agent in its capacity as such
and certifying whether or not each such Mortgaged Property is located in a flood
hazard zone by reference to the applicable FEMA map; and

 

(v)           such other evidence that all other actions that the Administrative
Agent may reasonably deem necessary or desirable in order to create valid and
subsisting Liens on the property described in the Mortgages have been taken.

 

SECTION 6.14.  Corporate Separateness.  (a) Satisfy, and cause each of its

 

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Restricted Subsidiaries and Unrestricted Subsidiaries to satisfy, customary
corporate and other formalities, including, as applicable, the holding of
regular Board of Directors’ meetings or action by directors without a meeting
and the maintenance of corporate offices and records.

 

(b)           Ensure that (i) no bank account of any Unrestricted Subsidiary
shall be commingled with any bank account of the Borrower or any of the
Borrower’s Restricted Subsidiaries, and (ii) any financial statements
distributed to any creditors of any Unrestricted Subsidiary shall clearly
establish or indicate the corporate separateness of such Unrestricted Subsidiary
from the Borrower and the Borrower’s Restricted Subsidiaries.

 

SECTION 6.15.  Pension Plans

 

.  Each Loan Party shall cause each of its Pension Plans to be duly qualified
and administered in all respects in compliance with, as applicable, the PBA and
all Laws (including regulations, orders and directives), and the terms of the
Pension Plans and any agreements relating thereto, except for such
non-compliance as would not reasonably be expected to have a Material Adverse
Effect.  Each Loan Party and each of its Subsidiaries shall ensure that it,
except where failure to do so would not reasonably be expected to have a
Material Adverse Effect  (a) has no Unfunded Pension Liability in respect of any
Pension Plan, including any Pension Plan to be established and administered by
it or them; and (b) does not engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Pension Plan that could
reasonably be expected to result in liability.

 

SECTION 6.16.  Maintenance of Rating

 

The Borrower shall use commercially reasonable efforts to maintain (i) a public
corporate credit rating (but not any specific rating) from S&P and a public
corporate family rating (but not any specific rating) from Moody’s, in each case
in respect of the Borrower, and (ii) a public rating (but not any specific
rating) in respect of the Loans from each of S&P and Moody’s.

 

SECTION 6.17.  Redemption of Senior Subordinated Notes

 

Within thirty (30) days following the Restatement Effective Date, Borrower shall
redeem Senior Subordinated Notes in an aggregate principal amount of
approximately $137,000,000 pursuant to, and in accordance with the terms of, the
notice of redemption delivered to the Administrative Agent under
Section 4.01(a)(ix) of this Agreement and the Senior Subordinated Notes
Indenture.

 

ARTICLE VII

 

Negative Covenants

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied (other than contingent indemnity obligations with respect to then
unasserted claims):

 

SECTION 7.01.  Asset Sales.  The Borrower shall not, and shall not permit any of
its Restricted Subsidiaries to consummate an Asset Sale, unless:

 

(a)           the Borrower or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the assets sold or otherwise disposed of; and

 

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(b)           except in the case of a Permitted Asset Swap, at least 75% of the
consideration therefor received by the Borrower or such Restricted Subsidiary,
as the case may be, is in the form of Cash Equivalents; provided that the amount
of (i) any liabilities (as shown on the Borrower’s or such Restricted
Subsidiary’s most recent balance sheet or in the footnotes thereto) of the
Borrower or such Restricted Subsidiary, other than liabilities that are by their
terms subordinated to the Obligations, that are assumed by the transferee of any
such assets and for which the Borrower and all of its Restricted Subsidiaries
have been validly released by all creditors in writing, (ii) any securities
received by the Borrower or such Restricted Subsidiary from such transferee that
are converted by the Borrower or such Restricted Subsidiary into Cash
Equivalents (to the extent of the Cash Equivalents received) within 180 days
following the closing of such Asset Sale, and (iii) any Designated Non-cash
Consideration received by the Borrower or such Restricted Subsidiary in such
Asset Sale having an aggregate Fair Market Value, taken together with all other
Designated Non-cash Consideration received pursuant to this clause (iii) that is
at that time outstanding, not to exceed 7.5% of Total Assets at the time of the
receipt of such Designated Non-cash Consideration, with the Fair Market Value of
each item of Designated Non-cash Consideration being measured at the time
received and without giving effect to subsequent changes in value, shall be
deemed to be Cash Equivalents for purposes of this provision and for no other
purpose; and

 

(c)           an amount equal to 100% of the Net Proceeds of such Asset Sale are
applied in accordance with the requirements of (and to the extent required by)
Section 2.05(c).

 

SECTION 7.02.  Limitation on Restricted Payments.  (a)  The Borrower shall not,
nor shall permit any of its Restricted Subsidiaries to, directly or indirectly,
(w) declare or pay any dividend or make any payment having the effect thereof or
any distribution on account of the Borrower’s, or any Restricted Subsidiary’s,
Equity Interests, including any dividend or distribution payable in connection
with any merger or consolidation other than (A) dividends or distributions by
the Borrower payable solely in Equity Interests (other than Disqualified Stock)
of the Borrower or (B) dividends or distributions by a Restricted Subsidiary so
long as, in the case of any dividend or distribution payable on or in respect of
any class or series of securities issued by a Restricted Subsidiary other than a
Wholly-Owned Subsidiary, the Borrower or a Restricted Subsidiary receives at
least its pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities, (x) purchase, redeem,
defease or otherwise acquire or retire for value any Equity Interests of the
Borrower or any direct or indirect parent of the Borrower, including in
connection with any merger, amalgamation or consolidation, (y) make any
principal payment on, or redeem, repurchase, defease or otherwise acquire or
retire for value, in each case prior to any scheduled repayment, sinking fund
payment or maturity, any Subordinated Indebtedness, other than: 
(A) Indebtedness permitted under Section 7.03(b)(vii) or (viii), except to the
extent prohibited by the subordination provisions contained in any Intercompany
Note or (B) the purchase, repurchase or other acquisition of Subordinated
Indebtedness purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of purchase, repurchase or acquisition, or (z) make any Restricted
Investment (all such payments and other actions set forth in clauses (w) through
(z) above being collectively referred to as “Restricted Payments”), unless at
the time of such Restricted Payment:

 

(i)            no Default shall have occurred and be continuing or would occur
as a consequence thereof;

 

(ii)           immediately after giving effect to such transaction on a pro
forma basis, the Borrower could satisfy the Fixed Charge Coverage Ratio
Incurrence Test; and

 

(iii)          such Restricted Payment, together with the aggregate amount of
all other

 

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Restricted Payments made by the Borrower and its Restricted Subsidiaries after
the Restatement Effective Date (including Restricted Payments permitted by
Sections 7.02(b)(i), 7.02(b)(vi)(C), (ix) and (xiv), but excluding all other
Restricted Payments permitted by Section 7.02(b)), is less than the sum of
(without duplication):

 

(A)          50% of the Consolidated Net Income of the Borrower for the period
(taken as one accounting period) beginning October 28, 2012 to the end of the
Borrower’s most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment, or, in the case
such Consolidated Net Income for such period is a deficit, minus 100% of such
deficit; plus

 

(B)          100% of the aggregate net cash proceeds and the Fair Market Value,
as determined in good faith by the Borrower, of marketable securities or other
property received by the Borrower since immediately after the Closing Date
(other than net cash proceeds to the extent such net cash proceeds have been
used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to
Section 7.03(b)(xii)(A)) from the issue or sale of:

 

(I)    (1)   Equity Interests of the Borrower, including Treasury Capital Stock,
but excluding cash proceeds and the Fair Market Value of marketable securities
or other property received from the sale of:

 

(x)           Equity Interests to members of management, directors or
consultants of the Borrower, any direct or indirect parent company of the
Borrower and the Borrower’s Subsidiaries after the Closing Date to the extent
such amounts have been applied to Restricted Payments made in accordance with
Section 7.02(b)(iv); and

 

(y)           Designated Preferred Stock; and

 

(2)           to the extent such net cash proceeds are actually contributed to
the Borrower, Equity Interests of the Borrower’s direct or indirect parent
companies (excluding contributions of the proceeds from the sale of Designated
Preferred Stock of such companies or contributions to the extent such amounts
have been applied to Restricted Payments made in accordance with
Section 7.02(b)(iv)); or

 

(II)          debt securities of the Borrower that have been converted into or
exchanged for Equity Interests of the Borrower;

 

provided, however, that this clause (B) shall not include the proceeds from
(W) Refunding Capital Stock (as defined below), (X) Equity Interests or
convertible debt securities of the Borrower sold to a Restricted Subsidiary,
(Y) Disqualified Stock or debt securities that have been converted into
Disqualified Stock or (Z) Excluded Contributions; plus

 

(C)          100% of the aggregate amount of cash and the Fair Market Value of
marketable securities or other property contributed to the capital of the
Borrower following the Closing Date (other than (y) by a Restricted Subsidiary
and (z) from any Excluded Contributions); plus

 

(D)          100% of the aggregate amount received in cash and the Fair Market

 

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Value of marketable securities or other property received by means of:

 

(I)            the sale or other disposition (other than to the Borrower or a
Restricted Subsidiary) of Restricted Investments made by the Borrower or its
Restricted Subsidiaries and repurchases and redemptions of such Restricted
Investments from the Borrower or its Restricted Subsidiaries and repayments of
loans or advances, and releases of guarantees, which constitute Restricted
Investments by the Borrower or its Restricted Subsidiaries, in each case after
the Closing Date; or

 

(II)          the sale (other than to the Borrower or a Restricted Subsidiary)
of the stock of an Unrestricted Subsidiary or a distribution from an
Unrestricted Subsidiary (other than in each case to the extent the Investment in
such Unrestricted Subsidiary was made by the Borrower or a Restricted Subsidiary
pursuant to Section 7.02(b)(vii) or to the extent such Investment constituted a
Permitted Investment) or a dividend from an Unrestricted Subsidiary after the
Closing Date; plus

 

(E)           in the case of the redesignation of an Unrestricted Subsidiary as
a Restricted Subsidiary or the merger, amalgamation or consolidation of an
Unrestricted Subsidiary into the Borrower or a Restricted Subsidiary or the
transfer of all or substantially all of the assets of an Unrestricted Subsidiary
to the Borrower or a Restricted Subsidiary after the Closing Date, the Fair
Market Value of the Investment in such Unrestricted Subsidiary (or the assets
transferred), or if such Fair Market Value may exceed $125,000,000, as
determined in writing by an Independent Financial Advisor, at the time of the
redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at
the time of such merger, amalgamation, consolidation or transfer of assets other
than to the extent the Investment in such Unrestricted Subsidiary was made by
the Borrower or a Restricted Subsidiary pursuant to Section 7.02(b)(vii) or to
the extent such Investment constituted a Permitted Investment.

 

(b)           The provisions of Section 7.02(a) will not prohibit:

 

(i)            the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Agreement;

 

(ii)           (A) the redemption, repurchase, retirement or other acquisition
of any Equity Interests (“Treasury Capital Stock”) of the Borrower or any Equity
Interests of any direct or indirect parent company of the Borrower or any
Subordinated Indebtedness of the Borrower or a Restricted Subsidiary, in
exchange for, or out of the proceeds of, the substantially concurrent sale or
issuance (other than to a Restricted Subsidiary) of, Equity Interests of the
Borrower or any direct or indirect parent company of the Borrower to the extent
contributed to the Borrower (in each case, other than any Disqualified Stock)
(“Refunding Capital Stock”), (B) the declaration and payment of dividends on
Treasury Capital Stock out of the proceeds of the substantially concurrent sale
or issuance (other than to a Subsidiary of the Borrower or to an employee stock
ownership plan or any trust established by the Borrower or any of its
Subsidiaries) of Refunding Capital Stock, and (C) if immediately prior to the
retirement of Treasury Capital Stock, the declaration and payment of dividends
thereon was permitted under sub-clause (vi) of this Section 7.02(b), the
declaration and payment of dividends on the Refunding Capital Stock (other than

 

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Refunding Capital Stock the proceeds of which were used to redeem, repurchase,
retire or otherwise acquire any Equity Interests of any direct or indirect
parent company of the Borrower) in an aggregate amount per year no greater than
the aggregate amount of dividends per annum that were declarable and payable on
such Treasury Capital Stock immediately prior to such retirement;

 

(iii)          the redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness of the Borrower or a Subsidiary Guarantor made by
exchange for, or out of the proceeds of the substantially concurrent sale of,
new Indebtedness of the Borrower or a Subsidiary Guarantor, as the case may be,
which is incurred in compliance with Section 7.03 so long as (A) the principal
amount (or accreted value, if applicable) of such new Indebtedness does not
exceed the principal amount of (or accreted value, if applicable), plus any
accrued and unpaid interest on, the Subordinated Indebtedness being so redeemed,
repurchased, exchanged, acquired or retired for value, plus the amount of any
premium required to be paid under the terms of the instrument governing the
Subordinated Indebtedness being so redeemed, repurchased, exchanged, acquired or
retired and any reasonable fees and expenses incurred in connection with such
redemption, repurchase, exchange, acquisition or retirement and the issuance of
such new Indebtedness, (B) such new Indebtedness is subordinated to the
Obligations at least to the same extent as such Subordinated Indebtedness so
repurchased, exchanged, redeemed, acquired or retired for value, (C) such new
Indebtedness has a final scheduled maturity date equal to or later than the
final scheduled maturity date of the Subordinated Indebtedness being so
redeemed, repurchased, exchanged, acquired or retired, and (D) such new
Indebtedness has a Weighted Average Life to Maturity equal to or greater than
the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness
being so redeemed, repurchased, exchanged, acquired or retired;

 

(iv)          a Restricted Payment to pay for the repurchase, retirement or
other acquisition or retirement for value of Equity Interests (other than
Disqualified Stock) of the Borrower or any of its direct or indirect parent
companies held by any future, present or former employee, director or consultant
of the Borrower, any of its Subsidiaries or any of its direct or indirect parent
companies, or any of their respective estates, spouses or former spouses,
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement (including, for the avoidance
of doubt, any principal and interest payable on any notes issued by the Borrower
or any direct or indirect parent company in connection with any such repurchase,
retirement or other acquisition or retirement); provided, however, that the
aggregate Restricted Payments made under this clause (iv) do not exceed in any
calendar year $30,000,000 (which shall increase to $60,000,000 subsequent to the
consummation of an underwritten public Equity Offering by the Borrower or any
direct or indirect parent company of the Borrower) with unused amounts in any
calendar year being carried over to succeeding calendar years subject to a
maximum (without giving effect to the following proviso) of $60,000,000 in any
calendar year (which shall increase to $120,000,000 subsequent to the
consummation of an underwritten public Equity Offering by the Borrower or any
direct or indirect parent company of the Borrower); provided further, that such
amount in any calendar year may be increased by an amount not to exceed (A) the
cash proceeds from the sale of Equity Interests (other than Disqualified Stock)
of the Borrower and, to the extent contributed to the Borrower, Equity Interests
of any of the Borrower’s direct or indirect parent companies, in each case to
members of management, directors or consultants of the Borrower, any of its
Subsidiaries or any of its direct or indirect parent companies that occurs after
the Closing Date, to the extent the cash proceeds from the

 

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sale of such Equity Interests have not otherwise been applied to the payment of
Restricted Payments by virtue of Section 7.02(a)(iii), plus, in respect of any
sale of Equity Interests in connection with an exercise of stock options, an
amount equal to the amount required to be withheld by the Borrower or any of its
direct or indirect parent companies in connection with such exercise under
applicable law to the extent such amount is repaid to the Borrower or its direct
or indirect parent company, as applicable, constituted a Restricted Payment and
has not otherwise been applied to the payment of Restricted Payments by virtue
of Section 7.02(a)(iii), plus (B) the cash proceeds of key man life insurance
policies received by the Borrower or its Restricted Subsidiaries after the
Closing Date, less (C) the amount of any Restricted Payments previously made
with the cash proceeds described in clauses (A) and (B) of this clause (iv); and
provided further, that cancellation of Indebtedness owing to the Borrower from
employees, directors or consultants of the Borrower, any of the Borrower’s
direct or indirect parent companies or any of the Borrower’s Restricted
Subsidiaries in connection with a repurchase of Equity Interests of the Borrower
or any of its direct or indirect parent companies will not be deemed to
constitute a Restricted Payment for purposes of this Section 7.02 or any other
provision of this Agreement;

 

(v)           the declaration and payment of dividends to holders of any class
or series of Disqualified Stock of the Borrower or any of its Restricted
Subsidiaries issued in accordance with Section 7.03 to the extent such dividends
are included in the definition of “Fixed Charges”;

 

(vi)          (A) the declaration and payment of dividends to holders of any
class or series of Designated Preferred Stock (other than Disqualified Stock)
issued by the Borrower after the Closing Date, (B) the declaration and payment
of dividends to a direct or indirect parent company of the Borrower, the
proceeds of which will be used to fund the payment of dividends to holders of
any class or series of Designated Preferred Stock (other than Disqualified
Stock) of such parent company issued after the Closing Date, provided that the
amount of dividends paid pursuant to this clause (B) shall not exceed the
aggregate amount of cash actually contributed to the Borrower from the sale of
such Designated Preferred Stock, or (C) the declaration and payment of dividends
on Refunding Capital Stock that is Preferred Stock in excess of the dividends
declarable and payable thereon pursuant to Section 7.02(b)(ii); provided,
however, in the case of each of Sections 7.02(b)(vi)(A), (B) and (C), that for
the most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of issuance of such
Designated Preferred Stock or the declaration of such dividends on Refunding
Capital Stock that is Preferred Stock, after giving effect to such issuance or
declaration on a pro forma basis, the Borrower and its Restricted Subsidiaries
on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least
2.00 to 1.00;

 

(vii)         Investments in Unrestricted Subsidiaries having an aggregate Fair
Market Value, taken together with all other Investments made pursuant to this
clause (vii) that are at the time outstanding, without giving effect to the sale
of an Unrestricted Subsidiary to the extent the proceeds of such sale do not
consist of, or have not been subsequently sold or transferred for, cash or
marketable securities, not to exceed $100,000,000 (with the Fair Market Value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value); provided that immediately after giving effect to
such Investment, no Event of Default shall have occurred and be continuing;

 

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

 

(ix)          the declaration and payment of dividends on the Borrower’s common
stock (or the payment of dividends to any direct or indirect parent entity to
fund a payment of dividends on such entity’s common stock), following the first
public offering of the Borrower’s common stock or the common stock of any of its
direct or indirect parent companies after the Closing Date, of up to 6% per
annum of the net cash proceeds received by or contributed to the Borrower in or
from any public offering, other than public offerings with respect to the
Borrower’s common stock registered on Form S-8 and other than any public sale
constituting an Excluded Contribution;

 

(x)           Restricted Payments that are made with Excluded Contributions;

 

(xi)          other Restricted Payments in an aggregate amount taken together
with all other Restricted Payments made pursuant to this clause (xi) that are at
the time outstanding, without giving effect to the sale of an Investment to the
extent the proceeds of such sale do not consist of, or have not been
subsequently sold or transferred for, cash or marketable securities, not to
exceed $100,000,000 (with the Fair Market Value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value);

 

(xii)         distributions or payments of Receivables Fees;

 

(xiii)        any Restricted Payment used to fund the Closing Date Transaction
and the fees and expenses related thereto or owed to Affiliates, in each case
with respect to any Restricted Payment to or owed to an Affiliate to the extent
permitted by the covenant described under Section 7.07;

 

(xiv)        the repurchase, redemption or other acquisition or retirement for
value of any Subordinated Indebtedness pursuant to a “change of control” offer
to purchase or provisions similar to those described under Section 2.05(c);
provided that, prior to such repurchase, redemption or other acquisition, the
Borrower (or a third party to the extent permitted by this Agreement) shall have
(x) in the case of a “change of control”, repaid in full all then outstanding
Loans or (y) in the case of an asset sale, made an Asset Sale/Casualty Event
Offer with respect to the outstanding Loans of the applicable Class and repaid
all such Loans validly tendered for prepayment and not withdrawn in connection
with such Asset Sale/Casualty Event Offer;

 

(xv)         the declaration and payment of dividends or distributions by the
Borrower to, or the making of loans to, any direct or indirect parent company in
amounts required for any direct or indirect parent companies to pay, in each
case without duplication,

 

(A)  franchise taxes and other fees, taxes and expenses required to maintain
their corporate existence;

 

(B)  federal, state, provincial and local income taxes, to the extent such
income taxes are attributable to the income of the Borrower and its Restricted
Subsidiaries and, to the extent of the amount actually received from its

 

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Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent
attributable to the income of such Unrestricted Subsidiaries; provided that in
each case the amount of such payments in any fiscal year does not exceed the
excess (if any) of (I) the amount that the Borrower and its Restricted
Subsidiaries would be required to pay in respect of federal, state provincial,
municipal and local income taxes for such fiscal year were the Borrower, its
Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent
described above) to pay such taxes separately from any such parent company over
(II) the aggregate federal, state, provincial, municipal and local income taxes
paid by the Borrower and its Restricted Subsidiaries;

 

(C)  customary salary, bonus and other benefits payable to officers and
employees of any direct or indirect parent company of the Borrower to the extent
such salaries, bonuses and other benefits are attributable to the ownership or
operation of the Borrower and its Restricted Subsidiaries;

 

(D)  general corporate operating and overhead costs and expenses of any direct
or indirect parent company of the Borrower to the extent such costs and expenses
are attributable to the ownership or operation of the Borrower and its
Restricted Subsidiaries; and

 

(E)  fees and expenses other than to Affiliates of the Borrower related to any
unsuccessful equity or debt offering of such parent company;

 

(xvi)        the distribution, by dividend or otherwise, of shares of Capital
Stock of, or Indebtedness owed to the Borrower or a Restricted Subsidiary by,
Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary
assets of which are Cash Equivalents);

 

(xvii)       cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other securities
convertible into or exchangeable for Capital Stock of the Borrower or any direct
or indirect parent company of the Borrower; provided, that any such cash payment
shall not be for the purpose of evading the limitation of this covenant;

 

(xviii)      the payment of dividends and other distributions in an amount equal
to any reduction in taxes actually realized by the Borrower and its Restricted
Subsidiaries in the form of refunds or credits or from deductions when applied
to offset income or gain as a direct result of (I) transaction fees and
expenses, (II) commitment and other financing fees or (III) severance, change in
control and other compensation expense incurred in connection with the exercise,
repurchase, rollover or payout of stock options or bonuses, in each case in
connection with the Closing Date Transaction;

 

(xix)        Restricted Payments made in connection with the redemption,
repurchase, defeasance or other acquisition for value of the Senior Subordinated
Notes, so long as no Event of Default then exists or would result therefrom; and

 

(xx)         Restricted Payments so long as (x) no Event of Default shall have
occurred and be continuing and (y) immediately after giving pro forma effect to
such Restricted Payment(s) and the application of proceeds therefrom, the
Consolidated Total Leverage Ratio is less than or equal to 3.25 to 1.00;

 

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provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under Sections 7.02(b)(xi), (xvi) and (xviii), no
Default shall have occurred and be continuing or would occur as a consequence
thereof.

 

(c)           The Borrower shall not permit any Unrestricted Subsidiary to
become a Restricted Subsidiary except pursuant to the penultimate sentence of
the definition of “Unrestricted Subsidiary”.  For purposes of designating any
Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments
by the Borrower and the Restricted Subsidiaries (except to the extent repaid) in
the Subsidiary so designated shall be deemed to be Investments in an amount
determined as set forth in the last sentence of the definition of “Investment”. 
Such designation shall be permitted only if a Restricted Payment in such amount
would be permitted at such time, whether pursuant to Section 7.02(a) or under
Sections 7.02(b)(vii), (x), (xi), (xvi) or (xx), or pursuant to the definition
of “Permitted Investments,” and if such Subsidiary otherwise meets the
definition of an “Unrestricted Subsidiary”.

 

SECTION 7.03.  Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock.  (a)  The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise (collectively, “incur” and
collectively, an “incurrence”) with respect to any Indebtedness (including
Acquired Indebtedness) and the Borrower will not issue any shares of
Disqualified Stock and will not permit any Restricted Subsidiary to issue any
shares of Disqualified Stock or Preferred Stock; provided, however, that the
Borrower may incur Indebtedness (including Acquired Indebtedness) or issue
shares of Disqualified Stock, and any of its Restricted Subsidiaries may incur
Indebtedness (including Acquired Indebtedness), issue shares of Disqualified
Stock and issue shares of Preferred Stock, if (i) no Event of Default shall have
occurred and be continuing or would exist immediately after giving effect to
such incurrence or issuance and (ii) the Fixed Charge Coverage Ratio on a
consolidated basis for the Borrower and its Restricted Subsidiaries’ most
recently ended four fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock or Preferred Stock is issued would have
been at least 2.00 to 1.00, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had
been issued, as the case may be, and the application of the proceeds therefrom
had occurred at the beginning of such four-quarter period; provided that the
amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and
Preferred Stock that may be incurred or issued, as applicable, pursuant to the
foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed
$250,000,000 million at any one time outstanding.

 

(b)           The limitations set forth in Section 7.03(a) shall not apply to
any of the following items (collectively with the Indebtedness (including
Acquired Indebtedness), Disqualified Stock and Preferred Stock permitted
pursuant to Section 7.03(a), “Permitted Debt”):

 

(i)            (x) Indebtedness incurred pursuant to the ABL Loan Documents by
the Borrower or any Restricted Subsidiary; provided that immediately after
giving effect to any such incurrence, the aggregate principal amount of all
Indebtedness incurred under this clause (x) and then outstanding does not exceed
the greater of (A) $1,200,000,000 less up to $150,000,000 in the aggregate of
all principal payments with respect to such Indebtedness made following the
Closing Date pursuant to Section 2.05(c)(i) (provided that commitments are
correspondingly reduced in connection therewith) less the aggregate principal
amount of outstanding obligations under or in respect of Receivables Facilities
and (B) (i) 90.0% of the eligible credit card and debit card receivables of the
Borrower and its Restricted Subsidiaries plus (ii) 90% of the net appraised
orderly liquidation value of the eligible inventory of the Borrower and its
Restricted Subsidiaries and (y) Indebtedness incurred pursuant to the Loan
Documents by the Borrower or any Restricted

 

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Subsidiary (including any Indebtedness incurred pursuant to Sections 2.15, 2.16
and 2.17);

 

(ii)           the incurrence by the Borrower or any Subsidiary Guarantor of
Indebtedness represented by (a) the Senior Notes issued prior to the Restatement
Effective Date that are outstanding as of the Restatement Date (including any
guarantees thereof) and the exchange notes and related guarantees issued in
exchange for the Senior Notes (other than any Additional Notes (as defined in
the Senior Notes Indenture) issued after the Restatement Effective Date) and
(b) the Senior Subordinated Notes issued prior to the Restatement Effective Date
(including any guarantees thereof) and the exchange notes and related guarantees
issued in exchange for the Senior Subordinated Notes (other than any Additional
Notes (as defined in the Senior Subordinated Notes Indenture));

 

(iii)          Indebtedness existing on the Restatement Effective Date and set
forth in Schedule 7.03 (other than Indebtedness described in clauses (i) and
(ii) above of this Section 7.03);

 

(iv)          (x) Indebtedness (including Capitalized Lease Obligations)
incurred, or Disqualified Stock and Preferred Stock issued, by the Borrower or
any of its Restricted Subsidiaries, to finance the purchase, lease or
improvement of property (real or personal) or equipment that is used or useful
in a Similar Business, whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets and (y) any Indebtedness incurred
or Disqualified Stock or Preferred Stock issued to refund, refinance or replace
any other Indebtedness incurred or Disqualified Stock or Preferred Stock issued
pursuant to this clause (iv); provided that the aggregate amount of Indebtedness
incurred and Disqualified Stock and Preferred Stock issued pursuant to clauses
(x) and (y) of this clause (iv) does not exceed the greater of (A) $125,000,000
and (B) 6.50% of Total Assets, at any one time outstanding;

 

(v)           Indebtedness incurred by the Borrower or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including letters of credit in
respect of workers’ compensation claims, health, disability or other employee
benefits or property, casualty or liability insurance or self-insurance, or
other Indebtedness with respect to reimbursement type obligations regarding
workers’ compensation claims; provided, however, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;

 

(vi)          Indebtedness arising from agreements of the Borrower or its
Restricted Subsidiaries providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any portion
of such business, assets or a Subsidiary for the purpose of financing such
acquisition; provided, however, that

 

(A)  such Indebtedness is not reflected on the balance sheet of the Borrower or
any of its Restricted Subsidiaries prepared in accordance with GAAP (contingent
obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this clause (vi)(A)); and

 

(B)  the maximum assumable liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds including non-cash proceeds (the Fair
Market Value of

 

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such non-cash proceeds being measured at the time received and without giving
effect to any subsequent changes in value) actually received by the Borrower and
its Restricted Subsidiaries in connection with such disposition;

 

(vii)         Indebtedness of the Borrower to a Restricted Subsidiary; provided
that any such Indebtedness owing to a Restricted Subsidiary that is not a
Subsidiary Guarantor is expressly subordinated in right of payment to the
Obligations; provided further, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any other subsequent transfer of any
such Indebtedness (except to the Borrower or another Restricted Subsidiary or
any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed,
in each case, to be an incurrence of such Indebtedness not permitted by this
clause (vii);

 

(viii)        Indebtedness of a Restricted Subsidiary to the Borrower or another
Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such
Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor, such
Indebtedness is expressly subordinated in right of payment to the obligations of
such Subsidiary Guarantor under its Guaranty; provided further, that any
subsequent issuance or transfer of any Capital Stock or any other event which
results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary
or any subsequent transfer of any such Indebtedness (except to the Borrower or
another Restricted Subsidiary or any pledge of such Indebtedness constituting a
Permitted Lien) shall be deemed, in each case, to be an incurrence of such
Indebtedness not permitted by this clause (viii);

 

(ix)          shares of Preferred Stock of a Restricted Subsidiary issued to the
Borrower or another Restricted Subsidiary, provided that any subsequent issuance
or transfer of any Capital Stock or any other event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such shares of Preferred Stock (except to the
Borrower or another of its Restricted Subsidiaries or any pledge of such Capital
Stock constituting a Permitted Lien) shall be deemed in each case to be an
issuance of such shares of Preferred Stock not permitted by this clause (ix);

 

(x)           (x) Hedging Obligations (excluding Hedging Obligations entered
into for speculative purposes) for the purpose of limiting interest rate risk,
exchange rate risk or commodity pricing risk and (y) Indebtedness in respect of
Cash Management Services provided by any Lender or any ABL Lender or any
affiliate of any such lender (or any Person that was a Lender, an ABL Lender or
an affiliate of any such lender at the time the applicable agreement pursuant to
which such Cash Management Services are provided was entered into);

 

(xi)          obligations in respect of performance, bid, appeal and surety
bonds and performance and completion guarantees or obligations in respect of
letters of credit related thereto provided by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business;

 

(xii)         (A) Indebtedness or Disqualified Stock of the Borrower and
Indebtedness, Disqualified Stock or Preferred Stock of the Borrower or any
Restricted Subsidiary equal to 100.0% of the net cash proceeds received by the
Borrower since immediately after the Closing Date from the issue or sale of
Equity Interests of the Borrower or cash contributed to the capital of the
Borrower (in each case, other than proceeds of Disqualified Stock or sales of
Equity Interests to the Borrower or any of its Subsidiaries) as determined in
accordance with clauses (iii)(B) and (iii)(C) of Section 7.02(a) hereof to the
extent such net cash proceeds or cash have not been applied pursuant to such
clauses (or the corresponding clauses of the Existing Credit

 

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Agreement prior to the Restatement Effective Date) to make Restricted Payments
or to make other Investments, payments or exchanges pursuant to
Section 7.02(b) hereof (or the corresponding section of the Existing Credit
Agreement prior to the Restatement Effective Date) or to make Permitted
Investments since the Closing Date (other than Permitted Investments specified
in clauses (a) and (c) of the definition thereof) and (B) Indebtedness or
Disqualified Stock of the Borrower and Indebtedness, Disqualified Stock or
Preferred Stock of the Borrower or any Restricted Subsidiary not otherwise
permitted hereunder in an aggregate principal amount or liquidation preference,
which when aggregated with the principal amount and liquidation preference of
all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding
and incurred pursuant to this clause (xii), does not at any one time outstanding
exceed $200,000,000;

 

(xiii)        the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness or issuance by the Borrower or any Restricted Subsidiary of
Disqualified Stock or Preferred Stock which serves to refund or refinance any
Indebtedness incurred or Disqualified Stock or Preferred Stock issued as
permitted under Sections 7.03(a) and 7.03(b)(ii) and (iii) above, this clause
(xiii) and Section 7.03(b)(xiv) below or any Indebtedness incurred or
Disqualified Stock or Preferred Stock issued to so refund or refinance such
Indebtedness, Disqualified Stock or Preferred Stock including additional
Indebtedness incurred or Disqualified Stock or Preferred Stock issued to pay
premiums (including tender premiums), defeasance costs and fees in connection
therewith (the “Refinancing Indebtedness”) prior to its respective maturity;
provided, however, that such Refinancing Indebtedness (A) has a Weighted Average
Life to Maturity at the time such Refinancing Indebtedness is incurred which is
not less than the remaining Weighted Average Life to Maturity of the
Indebtedness, Disqualified Stock or Preferred Stock being refunded or
refinanced, (B) to the extent such Refinancing Indebtedness refinances
(i) Indebtedness subordinated or pari passu to the Obligations or the Guaranty
of any Subsidiary Guarantor, such Refinancing Indebtedness is subordinated or
pari passu to the Obligations or such Guaranty, as the case may be, at least to
the same extent as the Indebtedness being refinanced or refunded or
(ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must
be Disqualified Stock or Preferred Stock, respectively, and (C) shall not
include (I) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary
of the Borrower that is not a Subsidiary Guarantor that refinances Indebtedness,
Disqualified Stock or Preferred Stock of the Borrower, (II) Indebtedness,
Disqualified Stock or Preferred Stock of a Subsidiary of the Borrower that is
not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or
Preferred Stock of a Subsidiary Guarantor, or (III) Indebtedness, Disqualified
Stock or Preferred Stock of the Borrower or a Restricted Subsidiary that
refinances Indebtedness, Disqualified Stock or Preferred Stock of an
Unrestricted Subsidiary, and provided further, that subclause (A) of this clause
(xiii) will not apply to any refunding or refinancing of any Indebtedness
outstanding under the ABL Credit Agreement;

 

(xiv)        Indebtedness, Disqualified Stock or Preferred Stock of (x) the
Borrower or a Restricted Subsidiary incurred or issued to finance an acquisition
or (y) Persons that are acquired by the Borrower or any Restricted Subsidiary or
merged into or amalgamated or consolidated with the Borrower or a Restricted
Subsidiary in accordance with the terms of this Agreement; provided that after
giving effect to such acquisition, merger, amalgamation or consolidation, either
(A) the Borrower could satisfy the Fixed Charge Coverage Ratio Incurrence Test,
or (B) the Fixed Charge Coverage Ratio of the Borrower and its Restricted
Subsidiaries is greater than immediately prior to such acquisition, merger,
amalgamation or consolidation;

 

(xv)         Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business; provided that such Indebtedness is
extinguished within five Business Days of its

 

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incurrence;

 

(xvi)        Indebtedness of the Borrower or any of its Restricted Subsidiaries
supported by a letter of credit issued pursuant to the ABL Credit Agreement, in
a principal amount not in excess of the stated amount of such letter of credit;

 

(xvii)       (A) any guarantee by the Borrower or a Restricted Subsidiary of
Indebtedness or other obligations of any Restricted Subsidiary, so long as the
incurrence of such Indebtedness by such Restricted Subsidiary is permitted under
the terms of this Agreement or (B) any guarantee by a Restricted Subsidiary of
Indebtedness of the Borrower permitted to be incurred under the terms of this
Agreement; provided that such guarantee is incurred in accordance with
Section 7.09;

 

(xviii)      Indebtedness of Foreign Subsidiaries of the Borrower incurred not
to exceed, together with any other Indebtedness incurred under this clause
(xviii), at any time outstanding the greater of (x) $125,000,000 and (y) 6.50%
of Total Assets;

 

(xix)        (A) Indebtedness, Disqualified Stock or Preferred Stock of a
Restricted Subsidiary incurred or issued to finance or assumed in connection
with an acquisition, and (B) Indebtedness incurred to refund, refinance or
replace any other Indebtedness, Disqualified Stock or Preferred Stock permitted
under this clause (xix), in each case in an aggregate principal amount not to
exceed, together with all other Indebtedness, Disqualified Stock and/or
Preferred Stock issued under this clause (xix), $150,000,000 in the aggregate at
any one time outstanding; provided that any Indebtedness incurred pursuant to
preceding clause (B) shall satisfy the requirements of “Refinancing
Indebtedness” set forth in the proviso appearing in Section 7.03(b)(xiii) to the
same extent as if such proviso were set forth in its entirety in this clause
(xix);

 

(xx)         Indebtedness of the Borrower or any of its Restricted Subsidiaries
consisting of (x) the financing of insurance premiums or (y) take-or-pay
obligations contained in supply arrangements in each case, incurred in the
ordinary course of business;

 

(xxi)        Indebtedness consisting of Indebtedness issued by the Borrower or
any of its Restricted Subsidiaries to current or former officers, directors,
employees and consultants thereof, their respective estates, spouses or former
spouses, in each case to finance the purchase or redemption of Equity Interests
of the Borrower or any direct or indirect parent company of the Borrower to the
extent described in Section 7.02(b)(iv);

 

(xxii)       (A) Indebtedness of the Borrower (other than loans to the extent
secured on a pari passu basis with the Term B Loans), which Indebtedness (I) may
rank pari passu or junior in right of security with the Obligations and
(II) shall be pari passu or junior in right of payment to the Obligations, that
is incurred or issued or made in lieu of Incremental Term Commitments (the
“Incremental Equivalent Debt”); provided that (1) the aggregate principal amount
of all Incremental Equivalent Debt issued pursuant to this
Section 7.03(b)(xxii) shall not, together with any Incremental Term Commitments,
exceed the Available Incremental Amount (and, prior to the incurrence of such
Incremental Equivalent Debt, the Borrower shall notify the Administrative Agent
in writing whether such Incremental Equivalent Debt is being incurred under
Section 2.17(d)(iv)(A) or Section 2.17(d)(iv)(B)), (2) no Event of Default shall
have occurred and be continuing or would exist immediately after giving effect
to such incurrence, (3) as of the date of determination, such Incremental
Equivalent Debt shall not mature earlier than the Latest Maturity Date with
respect to the Loans at the time of incurrence of such Indebtedness, (4) the
documentation with respect to any such Incremental Equivalent Debt contains no
mandatory

 

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prepayment, repurchase or redemption provisions prior to the Latest Maturity
Date with respect to the Loans then in effect except with respect to change of
control, asset sale and event of loss or other mandatory offers to purchase or
mandatory prepayments and customary acceleration rights after an event of
default that are customary for financings of this type, (5) such Incremental
Equivalent Debt may participate on a pro rata basis or less than pro rata basis
(but not on a greater than pro rata basis) in any voluntary repayments or
prepayments of principal of the Loans hereunder and on a pro rata basis or less
than a pro rata basis (but not on a greater than pro rata basis) in any
mandatory repayments or prepayments of principal of the Loans hereunder (or, if
junior in right of payment or security, shall be on a junior basis with respect
thereto),  (6) such Incremental Equivalent Debt shall not be subject to any
guarantee by any Person other than a Loan Party, (7) such Incremental Equivalent
Debt shall not be secured by any Lien on any asset of the Borrower, Holdco or
any Restricted Subsidiary other than any asset constituting Collateral, (8) the
security agreements relating to such Incremental Equivalent Debt shall be
substantially the same as the Collateral Documents (with such differences as are
reasonably satisfactory to the Administrative Agent), (9) if such Incremental
Equivalent Debt is (x) secured on a pari passu basis with the Obligations, then
such Incremental Equivalent Debt shall be subject to an Additional First Lien
Intercreditor Agreement or (y) secured on a junior basis to the Obligations,
then such Incremental Equivalent Debt shall be subject to an Additional Junior
Lien Intercreditor Agreement, (10) if such Incremental Equivalent Debt is junior
in right of payment, then such Incremental Equivalent Debt shall be subject to
subordination terms reasonably acceptable to the Administrative Agent, (11) as
of the date such Incremental Equivalent Debt is incurred, such Incremental
Equivalent Debt shall have a Weighted Average Life to Maturity not shorter than
the remaining Weighted Average Life to Maturity of the Loans (as originally in
effect prior to any scheduled amortization or prepayments thereto) on the date
such Incremental Equivalent Debt is incurred and (12) the documentation with
respect to any Incremental Equivalent Debt shall contain terms and conditions
(other than with respect to pricing, fees, premiums and optional prepayment or
redemption terms) not materially more restrictive (taken as a whole) in respect
of the Borrower and the Restricted Subsidiaries than those set forth in this
Agreement (except for covenants or other provisions applicable only to periods
after the Latest Maturity Date at the time of incurrence of such Indebtedness);
provided, however, that such Incremental Equivalent Debt may be incurred in the
form of a customary “bridge” or other interim credit facility intended to be
refinanced or replaced with long-term indebtedness which does not satisfy the
requirements of clauses (3), (4), (11) and (12) above so long as, subject to
customary conditions, it would either be automatically converted into or
required to be exchanged for permanent financing which satisfies the
requirements of clauses (3), (4), (11) and (12) above and (B) any Permitted
Refinancing of any of the foregoing;

 

(xxiii)  (A) Permitted First Priority Refinancing Debt and any Permitted
Refinancing thereof and (B) Permitted Junior Priority Refinancing Debt and any
Permitted Refinancing thereof; and

 

(xxiv)     Permitted Unsecured Refinancing Debt and any Permitted Refinancing
thereof.

 

(c)           For purposes of determining compliance with this covenant:

 

(i)            in the event that an item of Indebtedness, Disqualified Stock or
Preferred Stock (or any portion thereof) meets the criteria of more than one of
the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock
described in Section 7.03(a) and Sections 7.03(b)(i) above, 7.03(b)(iv) through
(xxi) above, 7.03(b)(xxiii) above and 7.03(b)(xxiv) above, the Borrower, in its
sole discretion, will classify and may subsequently reclassify such item of
Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and
will only be

 

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required to include the amount and type of such Indebtedness, Disqualified Stock
or Preferred Stock in one of the above clauses; provided that all Indebtedness
outstanding under the ABL Loan Documents and the Loan Documents on the
Restatement Effective Date will at all times be deemed to be outstanding in
reliance on Section 7.03(b)(i); and

 

(ii)           at the time of incurrence, the Borrower will be entitled (subject
to the proviso in preceding subclause (i)) to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness described in Sections
7.03(a) and Sections 7.03(b)(i) above, 7.03(b)(iv) through (xxi) above,
7.03(b)(xxiii) above and 7.03(b)(xxiv) above.

 

(d)           The accrual of interest, the accretion of accreted value and the
payment of interest in the form of additional Indebtedness, Disqualified Stock
or Preferred Stock will not be deemed to be an incurrence of Indebtedness,
Disqualified Stock or Preferred Stock for purposes of this Section 7.03.

 

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

 

(f)            The principal amount of any Indebtedness incurred to refinance
other Indebtedness, if incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such respective Indebtedness is
denominated that is in effect on the date of such refinancing.

 

SECTION 7.04.  Liens.  The Borrower will not, and will not permit any Subsidiary
Guarantor to, directly or indirectly, create, incur, assume or suffer to exist
any Lien on any asset or property of the Borrower or any Subsidiary Guarantor
now owned or hereafter acquired, or any income or profits therefrom, or assign
or convey any right to receive income therefrom, except Permitted Liens.

 

SECTION 7.05.  [RESERVED].

 

SECTION 7.06.  Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets.  (a) The Borrower may not consolidate, merge or
amalgamate with or into or wind up into (whether or not the Borrower is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or more
related transactions, to any Person unless:

 

(i)            the Borrower is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than the Borrower) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made is a Person organized or existing under the laws of the
jurisdiction of organization of the Borrower or the laws of the United States,
any state thereof or the District of Columbia (or any territory thereof) (the
Borrower or such Person, as the case may be, being herein called the “Successor
Borrower”);

 

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(ii)           the Successor Borrower, if other than the Borrower, expressly
assumes all the obligations of the Borrower under this Agreement and the other
Loan Documents pursuant to supplements to the Loan Documents or other documents
or instruments, in each case in a form reasonably satisfactory to the
Administrative Agent;

 

(iii)          immediately after such transaction, no Default exists;

 

(iv)          immediately after giving pro forma effect to such transaction and
any related financing transactions, as if such transactions had occurred at the
beginning of the applicable four-quarter period, either (1) the Successor
Borrower could satisfy the Fixed Charge Coverage Ratio Incurrence Test or
(2) the Fixed Charge Coverage Ratio for the Successor Borrower would be greater
than the Fixed Charge Coverage Ratio for the Borrower and its Restricted
Subsidiaries immediately prior to such transaction;

 

(v)           each Restricted Subsidiary that is a Subsidiary Guarantor, unless
it is the other party to the transactions described above, in which case
Section 7.06(c)(i)(B) shall apply, shall have by supplement to the Loan
Documents confirmed that its Guaranty shall apply to such Person’s obligations
under the Loan Documents and the Loans; and

 

(vi)          the Borrower shall have delivered to the Administrative Agent an
Officer’s Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplements to the Loan Documents, if
any, comply with this Agreement and the other Loan Documents.

 

(b)           The Successor Borrower will succeed to, and be substituted for the
Borrower, as the case may be, under this Agreement and the other Loan
Documents.  The foregoing clauses (iii), (iv), (v) and (vi) of
Section 7.06(a) shall not apply to the merger contemplated by the
Recapitalization Agreement.  Notwithstanding Section 7.06(a)(iii) and (iv),
(i) any Restricted Subsidiary may consolidate with or merge into or transfer all
or part of its properties and assets to the Borrower, and (ii) the Borrower may
merge with an Affiliate of the Borrower, as the case may be, solely for the
purpose of reincorporating the Borrower in a State of the United States, so long
as the amount of Indebtedness of the Borrower and its Restricted Subsidiaries is
not increased thereby.

 

(c)           No Guarantor will, and the Borrower will not permit any Guarantor
(other than the Borrower) to, consolidate, merge or amalgamate with or into or
wind up into (whether or not the Borrower or a Guarantor is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets, in one or more related
transactions, to any Person unless:

 

(i)            (A)  such Guarantor is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made is a Person organized or existing under
the laws of the jurisdiction of organization of such Guarantor, as the case may
be, or the laws of the United States, any state thereof or the District of
Columbia or any territory thereof or, in the case of a Canadian Subsidiary
Guarantor, a province or territory of Canada (such Guarantor or such Person, as
the case may be, being herein called the “Successor Guarantor”);

 

(B)  the Successor Guarantor, if other than such Guarantor, expressly assumes
all the obligations of such Guarantor under the Guaranty and the other Loan
Documents pursuant to a joinder agreement and/or supplements to the Loan
Documents or other documents or instruments,

 

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in each case in a form reasonably satisfactory to the Administrative Agent;

 

(C)  immediately after such transaction, no Default exists;

 

(D)  the Borrower shall have delivered to the Administrative Agent an Officer’s
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such joinder agreement, supplements and/or other
documents or instruments, if any, comply with this Agreement and the other Loan
Documents; and

 

(E)  if a consolidation, merger or amalgamation includes any Canadian Subsidiary
and such Canadian Subsidiary is not the surviving entity, such transaction shall
be on terms conditions reasonably satisfactory to the Administrative Agent
(whose consent shall not be unreasonably withheld); or

 

(ii)           the transaction is made in compliance with Section 7.01.

 

(d)           In the case of Section 7.06(c)(i), the Successor Guarantor will
succeed to, and be substituted for, such Guarantor under such Guarantor’s
Guaranty and the other Loan Documents.  Notwithstanding the foregoing, any
Subsidiary Guarantor may merge or amalgamate into or with or wind up into or
transfer all or part of its properties and assets to another Subsidiary
Guarantor or the Borrower.

 

SECTION 7.07.  Transactions with Affiliates.  (a)  The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Borrower (each of the
foregoing, an “Affiliate Transaction”) involving aggregate payments or
consideration in excess of $10,000,000, unless:  (i) such Affiliate Transaction
is on terms that are not materially less favorable to the Borrower or its
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Borrower or such Restricted Subsidiary with an
unrelated Person on an arm’s-length basis, and (ii) the Borrower delivers to the
Administrative Agent with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate payments or consideration in
excess of $30,000,000, a resolution adopted by the majority of the Board of
Directors of the Borrower approving such Affiliate Transaction and set forth in
an Officer’s Certificate certifying that such Affiliate Transaction complies
with clause (i) above.

 

(b)           The limitations set forth in Section 7.07(a) will not apply to the
following:

 

(i)            transactions between or among the Borrower or any of its
Restricted Subsidiaries;

 

(ii)           Restricted Payments permitted by the provisions of Section 7.02
and Investments constituting “Permitted Investments”;

 

(iii)          the payment of management, consulting, monitoring and advisory
fees and termination fees and related indemnities and expenses pursuant to the
Sponsor Management Agreement;

 

(iv)          the payment of reasonable and customary fees and compensation paid
to, and indemnities and reimbursements provided on behalf of, officers,
directors, employees or consultants of Borrower, any of its direct or indirect
parent companies or any of its Restricted

 

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Subsidiaries;

 

(v)           transactions in which the Borrower or any of its Restricted
Subsidiaries, as the case may be, delivers to the Administrative Agent a letter
from an Independent Financial Advisor stating that such transaction is fair to
the Borrower or such Restricted Subsidiary from a financial point of view or
stating that the terms are not materially less favorable to the Borrower or its
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Borrower or such Restricted Subsidiary with an
unrelated Person on an arm’s-length basis;

 

(vi)          any agreement as in effect as of the Restatement Effective Date,
or any amendment thereto (so long as any such amendment is not disadvantageous
in any material respect to the Lenders when taken as a whole as compared to the
applicable agreement as in effect on the Restatement Effective Date);

 

(vii)         the existence of, or the performance by the Borrower or any of its
Restricted Subsidiaries of its obligations under the terms of, any stockholders
agreement (including any registration rights agreement or purchase agreement
related thereto) to which it is a party as of the Restatement Effective Date and
any similar agreements which it may enter into thereafter; provided, however,
that the existence of, or the performance by the Borrower or any of its
Restricted Subsidiaries of obligations under any future amendment to any such
existing agreement or under any similar agreement entered into after the
Restatement Effective Date shall only be permitted by this clause (vii) to the
extent that the terms of any such amendment or new agreement are not otherwise
disadvantageous in any material respect to the Lenders when taken as a whole as
compared to the original agreement in effect on the Restatement Effective Date;

 

(viii)        the Transaction and the payment of all fees and expenses related
to the Transaction, including Transaction Expenses;

 

(ix)          transactions with customers, clients, suppliers, or purchasers or
sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Agreement which are fair to
the Borrower and its Restricted Subsidiaries, in the reasonable determination of
the Board of Directors of the Borrower or the senior management thereof, or are
on terms at least as favorable as would reasonably have been obtained at such
time from an unaffiliated party;

 

(x)           the issuance of Equity Interests (other than Disqualified Stock)
of the Borrower to any direct or indirect parent of the Borrower or to any
Permitted Holder or to any director, officer, employee or consultant of the
Borrower, any Subsidiary or any direct or indirect parent of the Borrower;

 

(xi)          sales of accounts receivable, or participations therein, in
connection with any Receivables Facility;

 

(xii)         payments by the Borrower or any of its Restricted Subsidiaries to
any of the Investors made for any financial advisory, financing, underwriting or
placement services or in respect of other investment banking activities,
including, without limitation, in connection with acquisitions or divestitures
which payments are approved by a majority of the Board of Directors of the
Borrower in good faith or which are otherwise permitted by this Agreement;

 

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(xiii)        payments or loans (or cancellation of loans) to employees or
consultants of the Borrower, any of its direct or indirect parent companies or
any of its Restricted Subsidiaries and employment agreements, stock option plans
and other similar arrangements with such employees or consultants which, in each
case, are approved by the Borrower in good faith; and

 

(xiv)        investments by the Investors in securities of the Borrower or any
of its Restricted Subsidiaries, so long as (A) the investment is being offered
generally to other investors on the same or more favorable terms and (B) the
investment constitutes less than 5% of the proposed or outstanding issue amount
of such class of securities.

 

SECTION 7.08.  Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.  The Borrower will not, and will not permit any of its Restricted
Subsidiaries that are not Subsidiary Guarantors to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any such Restricted
Subsidiary to:

 

(x)           (A)  pay dividends or make any other distributions to the Borrower
or any of its Restricted Subsidiaries on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, or (B) pay
any Indebtedness owed to the Borrower or any of its Restricted Subsidiaries;

 

(y)           make loans or advances to the Borrower or any of its Restricted
Subsidiaries; or

 

(z)           sell, lease or transfer any of its properties or assets to the
Borrower or any of its Restricted Subsidiaries,

 

provided that the foregoing limitations shall not apply (in each case) to such
encumbrances or restrictions existing under or by reason of:

 

(i)            contractual encumbrances or restrictions in effect on the
Restatement Effective Date, including pursuant to the Senior Notes Indenture,
the Senior Subordinated Notes Indenture and the ABL Loan Documents;

 

(ii)           the Loan Documents;

 

(iii)          purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(z) of this Section 7.08 above on the property so acquired;

 

(iv)          applicable law or any applicable rule, regulation or order;

 

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

 

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

 

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(vii)         Secured Indebtedness otherwise permitted to be incurred pursuant
to Section 7.03 that limits the right of the debtor to dispose of the assets
securing such Indebtedness;

 

(viii)        restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;

 

(ix)          other Indebtedness, Disqualified Stock or Preferred Stock of
Foreign Subsidiaries permitted to be incurred or issued subsequent to the
Closing Date pursuant to the provisions of Section 7.03;

 

(x)           customary provisions in any joint venture agreement and other
similar agreement relating solely to such joint venture;

 

(xi)          customary provisions contained in leases, subleases, licenses or
sublicenses and other agreements, in each case, entered into in the ordinary
course of business;

 

(xii)         any encumbrances or restrictions of the type referred to in
clauses (x), (y) and (z) of this Section 7.08 above imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (xi) above; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Borrower, no
more restrictive in any material respect with respect to such encumbrances and
other restrictions taken as a whole than those prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing;

 

(xiii)        any other agreement governing Indebtedness entered into after the
Restatement Effective Date that contains encumbrances and other restrictions
that are, in the good faith judgment of the Borrower, no more restrictive in any
material respect taken as a whole with respect to any Restricted Subsidiary than
those encumbrances and other restrictions that are in effect on the Restatement
Effective Date with respect to that Restricted Subsidiary pursuant to agreements
in effect on the Restatement Effective Date; and

 

(xiv)        restrictions created in connection with any Receivables Facility
that, in the good faith determination of the Borrower are necessary or advisable
to effect such Receivables Facility.

 

SECTION 7.09.  Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries.  The Borrower will not permit any of its Wholly-Owned Subsidiaries
that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such
non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities),
other than a Subsidiary Guarantor or a Foreign Subsidiary, to guarantee the
payment of any Indebtedness of the Borrower or any other Subsidiary Guarantor
unless:

 

(a)           such Restricted Subsidiary within 30 days executes and delivers a
joinder agreement for the relevant Guaranty, except that with respect to a
guarantee of Indebtedness of the Borrower or any Subsidiary Guarantor, if such
Indebtedness is by its express terms subordinated in right of payment to the
Obligations (including such Subsidiary Guarantor’s Guaranty), any such guarantee
by such Restricted Subsidiary with respect to such Indebtedness shall be
subordinated in right of payment to the relevant Guaranty substantially to the
same extent as such Indebtedness is subordinated to the Obligations;

 

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(b)           such Restricted Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Borrower
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Guaranty; and

 

(c)           such Restricted Subsidiary shall deliver to the Administrative
Agent an Opinion of Counsel to the effect that:

 

(i)            such Guaranty has been duly executed and authorized; and

 

(ii)           such Guaranty constitutes a valid, binding and enforceable
obligation of such Restricted Subsidiary, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity;

 

provided that this Section 7.09 shall not be applicable to any guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary.

 

SECTION 7.10.  Change in Nature of Business.  The Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and the Restricted Subsidiaries on the Restatement Effective Date or
any business reasonably related or ancillary thereto or a reasonable extension
thereof.

 

SECTION 7.11.  [RESERVED].

 

SECTION 7.12.  Use of Proceeds.  The Borrower shall not, and shall not permit
any of its Restricted Subsidiaries to, use the proceeds of the Borrowing of Term
B Loans on the Restatement Effective Date, whether directly or indirectly, in a
manner inconsistent with the uses set forth in the preliminary statements to
this Agreement.

 

SECTION 7.13.  Accounting Changes.  The Borrower shall not, and shall not permit
any of its Restricted Subsidiaries to, make any change in its fiscal year,
fiscal quarter or fiscal month; provided, however, that the Borrower may, upon
written notice to the Administrative Agent, change its fiscal year, fiscal
quarter or fiscal month to any other fiscal year, fiscal quarter or fiscal
month, as the case may be, reasonably acceptable to the Administrative Agent, in
which case, the Borrower and the Administrative Agent will, and are hereby
authorized by the Lenders to, make any adjustments to this Agreement that are
necessary to reflect such change in fiscal year, fiscal quarter or fiscal month,
as the case may be.

 

SECTION 7.14.  Amendments of Indebtedness, Etc.  (a) Without the consent of the
Required Lenders, the Borrower will not amend, modify or alter (i) the
subordination provisions of the Senior Subordinated Notes Indenture and any
other Junior Financing Documentation (and the component definitions as used
therein), or (ii) any other term or condition of the Senior Subordinated Notes
Indenture and any other Junior Financing Documentation, in the case of this
clause (ii), in a manner materially adverse to the interests of the Lenders.

 

(b)           The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, designate any Indebtedness (or related interest obligations) as
“Designated Senior Indebtedness” (as

 

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defined in the Senior Subordinated Notes Indenture) or any similar term (as
defined in any Junior Financing Documentation), in each case, except for
Obligations of the type described in clause (x) of the definition of
“Obligations” and ABL Loans (and related obligations).

 

ARTICLE VIII

 

Events Of Default and Remedies

 

SECTION 8.01.  Events of Default.  Any of the following shall constitute an
Event of Default:

 

(a)           Non-Payment.  The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any Loan,
or (ii) within five (5) Business Days after the same becomes due, any interest
on any Loan or any other amount payable hereunder or with respect to any other
Loan Document; or

 

(b)           Specific Covenants.  The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Sections 6.03(a)(i) or
6.05(a) (solely with respect to the Borrower) or Article VII; or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in Section 8.01(a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for thirty (30) days after notice thereof by the
Administrative Agent to the Borrower; or

 

(d)           Representations and Warranties.  Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document required to be delivered in connection herewith or therewith shall be
incorrect or misleading in any material respect when made or deemed made; or

 

(e)           Cross-Default.  Any Loan Party or any Restricted Subsidiary
(i) fails to make any payment beyond the applicable grace period with respect
thereto, if any (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness (other than
Indebtedness hereunder) having an aggregate principal amount of not less than
the Threshold Amount, or (ii) fails to observe or perform any other agreement or
condition relating to any such Indebtedness, or any other event occurs (other
than, with respect to Indebtedness consisting of Swap Contracts, termination
events or equivalent events pursuant to the terms of such Swap Contracts), the
effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity; provided that, any such failure or the occurrence of any such other
event referred to in sub-clauses (i) and (ii) relating to Indebtedness under the
ABL Credit Agreement shall constitute an Event of Default under this
Section 8.01(e) only after the earliest to occur of (x) expiration of a 60-day
period following the commencement of such failure or the date of such
occurrence, (y) any acceleration of the ABL Obligations (as defined in the
Intercreditor Agreement) or (z) the commencement of the Exercise of Any Secured
Creditor Remedies (as defined in the Intercreditor Agreement) by the ABL
Collateral Agent or any ABL Lender as a result of such failure or occurrence;
provided further, that preceding sub-clause (ii)

 

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shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness,
if such sale or transfer is permitted hereunder and under the documents
providing for such Indebtedness; or

 

(f)            Insolvency Proceedings, Etc.  Any Loan Party or any of the
Restricted Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law (or any Canadian Subsidiary Guarantor
institutes or consents to the institution of any proposal or notice of intent to
file a proposal), or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, monitor, liquidator, rehabilitator, administrator, administrative
receiver or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, monitor, liquidator,
rehabilitator, administrator, administrative receiver or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for sixty (60) calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for sixty (60) calendar days, or an
order for relief is entered in any such proceeding; or

 

(g)           Inability to Pay Debts; Attachment.  (i) Any Loan Party or any
Restricted Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts in excess of the Threshold Amount as they become due,
or (ii) any writ or warrant of attachment or execution or similar process is
issued or levied against all or any material part of the property of the Loan
Parties, taken as a whole, and is not released, vacated or fully bonded within
forty-five (45) days after its issue or levy; or

 

(h)           Judgments.  There is entered against any Loan Party or any
Restricted Subsidiary a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer has been notified of
such judgment or order and has not denied coverage) and such judgment or order
shall not have been satisfied, vacated, discharged or stayed or bonded pending
an appeal for a period of forty-five (45) consecutive days; or

 

(i)            (A) ERISA.  (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of any Loan Party in an aggregate amount which could
reasonably be expected to result in a Material Adverse Effect, or (ii) any Loan
Party or any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount which could reasonably be expected to result in a Material Adverse
Effect; or

 

(B) Pension Plans.  Except as could not reasonably be expected to result in a
Material Adverse Effect, (i) a Pension Event shall occur which, in Collateral
Agent’s determination, constitutes grounds for the termination under any Laws,
of any Pension Plan or (ii) the appointment by the appropriate Governmental
Authority of a trustee for any Pension Plan, or (iii) if any Pension Plan shall
be terminated or any such trustee shall be requested or appointed, or (iv) if a
Loan Party is in default with respect to payments to a Pension Plan resulting
from their complete or partial withdrawal from such Pension Plan or (v) any
event that may reasonably be expected to have a Material Adverse Effect or any
Lien arises (save for contribution amounts not yet due) in connection with any
Pension Plan.

 

(j)            Invalidity of Loan Documents.  Any material provision of any Loan
Document, at

 

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any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder (including as a result of a
transaction permitted under Section 7.01 or 7.06) or as a result of acts or
omissions by the Administrative Agent or any Lender or the satisfaction in full
of all the Obligations, ceases to be in full force and effect; or any Loan Party
contests in writing the validity or enforceability of any provision of any Loan
Document or any Lien created under any Loan Document; or any Loan Party denies
in writing that it has any or further liability or obligation under any Loan
Document (other than as a result of repayment in full of the Obligations and
termination of the Aggregate Commitments), or purports in writing to revoke or
rescind any Loan Document; or

 

(k)           Collateral Documents.  Any Collateral Document after delivery
thereof pursuant to Section 4.01 of the Existing Credit Agreement or Sections
4.01 or 6.11 of this Agreement shall for any reason (other than pursuant to the
terms thereof, including as a result of a transaction permitted under
Section 7.01 or 7.06) cease to create a valid and perfected lien, with the
priority required by the Collateral Documents, the Intercreditor Agreement, the
Additional First Lien Intercreditor Agreement (if then in effect), and the
Additional Junior Lien Intercreditor Agreement (if then in effect) (or other
security purported to be created on the applicable Collateral), on and security
interest in any material portion of the Collateral purported to be covered
thereby, subject to Liens permitted under Section 7.04, except to the extent
that any such loss of perfection or priority results from (i) the failure of the
Administrative Agent or the Collateral Agent to maintain possession of
certificates or notes actually delivered to it representing securities or
instruments pledged under the Collateral Documents, (ii) to file Uniform
Commercial Code or PPSA continuation statements in the applicable filing offices
properly notified by the relevant Loan Party and (iii) any other failure of the
Administrative Agent or the Collateral Agent to maintain perfection in
circumstances where such failure does not result from the breach or
non-compliance by a Loan Party with the Loan Documents, and except as to
Collateral consisting of real property to the extent that such losses are
covered by a lender’s title insurance policy and such insurer has not denied
coverage; or

 

(l)            Change of Control.  A Change of Control shall occur; or

 

(m)          Junior Financing Documentation.  (i) Any of the Obligations of the
Loan Parties under the Loan Documents for any reason shall cease to be “Senior
Indebtedness” (or any comparable term) or “Senior Secured Financing” (or any
comparable term) under, and as defined in any Junior Financing Documentation or
(ii) the subordination provisions set forth in any Junior Financing
Documentation shall, in whole or in part, cease to be effective or cease to be
legally valid, binding and enforceable against the holders of any Subordinated
Indebtedness, if applicable.

 

SECTION 8.02.  Remedies Upon Event of Default.  If any Event of Default occurs
and is continuing, the Administrative Agent may and, at the request of the
Required Lenders, shall take any or all of the following actions:

 

(i)            declare the commitment of each Lender to make Loans to be
terminated, whereupon such commitments and obligation shall be terminated;

 

(ii)           declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and

 

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(iii)          exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
Law, subject to the terms of the Intercreditor Agreement, the Additional First
Lien Intercreditor Agreement (if then in effect) and the Additional Junior Lien
Intercreditor Agreement (if then in effect);

 

provided that upon the occurrence of an Event of Default under
Section 8.01(f) with respect to the Borrower, the obligation of each Lender to
make Loans shall automatically terminate, and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, in each case without further act of the
Administrative Agent or any Lender.

 

SECTION 8.03.  Exclusion of Immaterial Subsidiaries.  Solely for the purpose of
determining whether a Default has occurred under Section 8.01(f) or (g), any
reference in any such clause to any Restricted Subsidiary or Loan Party shall be
deemed not to include any Restricted Subsidiary affected by any event or
circumstances referred to in any such clause that did not, as of the last day of
the most recent completed fiscal quarter of the Borrower, have assets with a
value in excess of 5.0% of the Total Assets of the Borrower and the Restricted
Subsidiaries and did not, as of the four quarter period ending on the last day
of such fiscal quarter, have revenues exceeding 5.0% of the total revenues of
the Borrower and the Restricted Subsidiaries (it being agreed that all
Restricted Subsidiaries affected by any event or circumstance referred to in any
such clause shall be considered together, as a single consolidated Restricted
Subsidiary, for purposes of determining whether the condition specified above is
satisfied).

 

SECTION 8.04.  Application of Funds.  Subject in all respects to the provisions
of the Intercreditor Agreement, the Additional First Lien Intercreditor
Agreement (if then in effect) and the Additional Junior Lien Intercreditor
Agreement (if then in effect), after the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including Attorney Costs payable under Section 10.04 and amounts payable under
Article III) payable to each of the Administrative Agent and the Collateral
Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs payable under Sections 10.04 and 10.05 and
amounts payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and the termination value under Secured Hedge Agreements,
ratably among the Lenders and the other Secured Parties in proportion to the
respective amounts described in this clause Fourth held by them;

 

Fifth, to the payment of all other Obligations of the Loan Parties that are due
and payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the

 

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respective aggregate amounts of all such Obligations owing to the Administrative
Agent and the other Secured Parties on such date; and

 

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

 

ARTICLE IX

 

Administrative Agent and Other Agents

 

SECTION 9.01.  Appointment and Authorization of Agents.  (a)  Each Lender hereby
irrevocably appoints, designates and authorizes the Administrative Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, the Administrative Agent shall have no duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting the generality of the foregoing
sentence, the use of the term “agent” herein and in the other Loan Documents
with reference to any Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
Law.  Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b)           The Administrative Agent shall also act as the “collateral agent”
under the Loan Documents, and each of the Lenders (in its capacities as a Lender
and a potential Hedge Bank) hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of (and to hold any security interest
created by the Collateral Documents for and on behalf of or on trust for) such
Lender for purposes of acquiring, holding and enforcing (subject to the
Intercreditor Agreement, the Additional First Lien Intercreditor Agreement (if
then in effect), and the Additional Junior Lien Intercreditor Agreement (if then
in effect)) any and all Liens on Collateral granted by any of the Loan Parties
to secure any of the Secured Obligations, together with such powers and
discretion as are reasonably incidental thereto.  In this connection, the
Administrative Agent, as “collateral agent” (and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.02
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article IX (including,
Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact were
the “collateral agent” under the Loan Documents) as if set forth in full herein
with respect thereto.

 

SECTION 9.02.  Delegation of Duties.  The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder) by or through agents, employees or attorneys-in-fact, such
sub-agents as shall be deemed necessary by the Administrative Agent and shall be
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or sub-agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct (as determined in the final judgment of a court of competent
jurisdiction).

 

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SECTION 9.03.  Liability of Agents.  No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct,
as determined by the final judgment of a court of competent jurisdiction, in
connection with its duties expressly set forth herein), or (b) be responsible in
any manner to any Lender or Participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder.  No Agent-Related Person shall be under any obligation to any Lender
or Participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party or any Affiliate thereof.

 

SECTION 9.04.  Reliance by Agents.  (a)  Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Loan Party), independent accountants and other experts selected by such
Agent.  Each Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders (or such greater number of Lenders as may be expressly required
hereby in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

(b)           For purposes of determining compliance with the conditions
specified in 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, 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 Restatement
Effective Date specifying its objection thereto.

 

SECTION 9.05.  Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default”.  The Administrative Agent will notify the
Lenders of its receipt of any such notice.  The Administrative Agent shall take
such action with respect to any Event of Default as may be directed by the
Required Lenders in accordance with Article VIII; provided that unless and until
the Administrative Agent has received any such direction, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable or in the best interest of the Lenders.

 

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SECTION 9.06.  Credit Decision; Disclosure of Information by Agents.  Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender as to any matter,
including whether Agent-Related Persons have disclosed material information in
their possession.  Each Lender represents to each Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their respective Subsidiaries, and all applicable bank or other regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower and the other
Loan Parties hereunder.  Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by any Agent herein, such Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.

 

SECTION 9.07.  Indemnification of Agents.  Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related Person’s own gross negligence or
willful misconduct, as determined by the final judgment of a court of competent
jurisdiction; provided that no action taken in accordance with the directions of
the Required Lenders (or such other number or percentage of the Lenders as shall
be required by the Loan Documents) shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 9.07.  In the case
of any investigation, litigation or proceeding giving rise to any Indemnified
Liabilities, this Section 9.07 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person.  Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower.  The undertaking
in this Section 9.07 shall survive termination of the Aggregate Commitments, the
payment of all other Obligations and the resignation of the Administrative
Agent.

 

SECTION 9.08.  Agents in their Individual Capacities.  DBNY and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire Equity Interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with each of the Loan
Parties and their respective Affiliates as though DBNY were not the
Administrative Agent hereunder and without notice to or consent of the Lenders. 
The Lenders acknowledge that, pursuant to such activities, DBNY or its
Affiliates may receive information regarding

 

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any Loan Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them.  With respect to its Loans, DBNY shall have
the same rights and powers under this Agreement as any other Lender and may
exercise such rights and powers as though it were not the Administrative Agent
DBNY, and the terms “Lender” and “Lenders” include DBNY in its individual
capacity.

 

SECTION 9.09.  Successor Agents.  The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Lenders and the
Borrower.  If the Administrative Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be consented to by the Borrower at all
times other than during the existence of an Event of Default under
Section 8.01(f) or (g) (which consent of the Borrower shall not be unreasonably
withheld or delayed).  If no successor agent is appointed prior to the effective
date of the resignation of the Administrative Agent, the Administrative Agent
may appoint, after consulting with the Lenders and the Borrower, a successor
agent from among the Lenders.  Upon the acceptance of its appointment as
successor agent hereunder, the Person acting as such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term “Administrative Agent”, shall mean such successor
administrative agent and/or supplemental administrative agent, as the case may
be, and the retiring Administrative Agent’s appointment, powers and duties as
the Administrative Agent shall be terminated.  After the retiring Administrative
Agent’s resignation hereunder as the Administrative Agent, the provisions of
this Article IX and Sections 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Administrative
Agent under this Agreement.  If no successor agent has accepted appointment as
the Administrative Agent by the date which is thirty (30) days following the
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.  Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to (a) continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents or (b) otherwise ensure that
the Collateral and Guarantee Requirement is satisfied, the Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents.  After the retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this
Article IX shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.

 

SECTION 9.10.  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:

 

(a)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders

 

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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

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender 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 Agents
and their respective 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
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 9.11.  Collateral and Guaranty Matters.  The Lenders irrevocably agree,
subject to the terms of the Intercreditor Agreement, the Additional First Lien
Intercreditor Agreement (if then in effect), and the Additional Junior Lien
Intercreditor Agreement (if then in effect):

 

(a)           that any Lien on any property granted to or held by the
Administrative Agent or the Collateral Agent under any Loan Document shall be
automatically released (i) upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than (x) obligations under Secured
Hedge Agreements not yet due and payable, and (y) contingent indemnification
obligations not yet accrued and payable), (ii) at the time the property subject
to such Lien is transferred or to be transferred as part of or in connection
with any transfer permitted hereunder or under any other Loan Document to any
Person other than the Borrower or any other Subsidiary Guarantor, (iii) subject
to Section 10.01, if the release of such Lien is approved, authorized or
ratified in writing by the Required Lenders, (iv) if the property subject to
such Lien is owned by a Subsidiary Guarantor, upon release of such Subsidiary
Guarantor from its obligations under its Guaranty pursuant to clause (c) below
or (v) as required pursuant to the terms of the Intercreditor Agreement;

 

(b)           to release or subordinate any Lien on any property granted to or
held by the Administrative Agent or the Collateral Agent under any Loan Document
to the holder of any Lien on such property that is permitted by Section 7.04 to
the extent required by law or the terms of this Agreement (other than Liens
securing Permitted First Priority Refinancing Debt, Additional First Lien
Indebtedness, Permitted Junior Priority Refinancing Debt or any Additional
Junior Lien Indebtedness); and

 

(c)           that any Restricted Subsidiary that is a Subsidiary Guarantor
shall be automatically released from its obligations under its Guaranty (i) if
such Person ceases to be a Restricted Subsidiary as a result of a transaction or
designation permitted hereunder (including as a result of a Restricted
Subsidiary that is a Subsidiary Guarantor being redesignated as an Unrestricted
Subsidiary); provided that no such release shall occur if such Subsidiary
Guarantor continues to be a guarantor in respect of the Senior Notes, the Senior
Subordinated Notes, any Subordinated Indebtedness, the ABL Credit Agreement, any
Credit Agreement Refinancing

 

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Indebtedness (other than Refinancing Term Loans), any Incremental Equivalent
Debt or any other Indebtedness (other than Loans) in excess of the Threshold
Amount (and Permitted Refinancings in respect of the foregoing) or (ii) in
connection with any Permitted Foreign Restructuring.

 

Upon request by the Administrative Agent at any time, the Required Lenders (or
such greater number of Lenders as may be required under Section 10.01) 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 Subsidiary Guarantor from its obligations under its Guaranty pursuant to
this Section 9.11.  In each case as specified in this Section 9.11, the
Administrative Agent will (and each Lender irrevocably authorizes the
Administrative Agent to), at the Borrower’s expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release or subordination of such item of Collateral from the
assignment and security interest granted under the Collateral Documents, or to
evidence the release of such Subsidiary Guarantor from its obligations under its
Guaranty, in each case in accordance with the terms of the Loan Documents and
this Section 9.11.

 

SECTION 9.12.  Other Agents; Arrangers and Managers.  None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a “co-documentation agent”, “joint bookrunner” or “arranger” shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such.  Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender.  Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

 

SECTION 9.13.  Appointment of Supplemental Administrative Agents.  (a) It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any Law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction.  It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case the Administrative Agent
deems that by reason of any present or future Law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, the Administrative Agent is hereby authorized
to appoint an additional individual or institution selected by the
Administrative Agent in its sole discretion as a separate trustee, co-trustee,
administrative agent, collateral agent, administrative sub-agent or
administrative co-agent (any such additional individual or institution being
referred to herein individually, as a “Supplemental Administrative Agent” and
collectively, as “Supplemental Administrative Agents”).

 

(b)           In the event that the Administrative Agent appoints a Supplemental
Administrative Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to the
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Administrative Agent to the extent, and only to the
extent, necessary to enable such Supplemental Administrative Agent to exercise
such rights, powers and privileges with respect to such Collateral and to
perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Administrative Agent shall run to and
be enforceable by either the Administrative Agent or such Supplemental
Administrative Agent, and (ii) the provisions of this Article IX and of Sections
10.04 and 10.05 that refer to the Administrative Agent shall inure to the
benefit of such Supplemental Administrative Agent and all references therein to
the Administrative Agent shall be deemed to be

 

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references to the Administrative Agent and/or such Supplemental Administrative
Agent, as the context may require.

 

(c)           Should any instrument in writing from the Borrower or any other
Loan Party be required by any Supplemental Administrative Agent so appointed by
the Administrative Agent for more fully and certainly vesting in and confirming
to him or it such rights, powers, privileges and duties, the Borrower shall, or
shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by the Administrative Agent.  In case any
Supplemental Administrative Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Administrative Agent, to the extent permitted by
Law, shall vest in and be exercised by the Administrative Agent until the
appointment of a new Supplemental Administrative Agent.

 

SECTION 9.14.  Solidary Interests/Quebec Liens (Hypothecs).  Without limiting
the generality of the foregoing, for the purposes of creating a solidarité
active in accordance with Article 1541 of the Civil Code of Quebec, between each
Secured Party, taken individually, on the one hand, and the Administrative
Agent, on the other hand, the Borrower, the Guarantors and each such Secured
Party acknowledge and agree with the Administrative Agent that such Secured
Party and the Administrative Agent are hereby conferred the legal status of
solidary creditors of the Borrower and the Guarantors in respect of all
Obligations, present and future, owed by the Borrowers or the Guarantors to each
such Secured Party and the Administrative Agent (collectively, the “Solidary
Claim”).  Accordingly, but subject (for the avoidance of doubt) to Article 1542
of the Civil Code of Quebec, the Borrower and the Guarantors are irrevocably
bound towards the Administrative Agent and each Secured Party in respect of the
entire Solidary Claim of the Administrative Agent and such Secured Party.  As a
result of the foregoing, the parties hereto acknowledge that the Administrative
Agent and each Secured Party shall at all times have a valid and effective right
of action for the entire Solidary Claim of the Administrative Agent and such
Secured Party and the right to give full acquittance for it.  Accordingly,
without limiting the generality of the foregoing, the Administrative Agent, as
solidary creditor with each Secured Party, shall at all times have a valid and
effective right of action in respect of all Obligations, present and future,
owed by the Borrower or the Guarantors to the Administrative Agent and to the
Secured Parties or any of them and the right to give a full acquittance for
same.  For greater certainty, the foregoing provisions of this paragraph, and
the rights of the Secured Parties, shall at all times be subject to the
provisions of this Agreement.  In addition, and without limiting any of the
foregoing, for the purposes of holding any security granted by any Loan Party
pursuant to the laws of the Province of Quebec to secure payment of any bond
issued by any Loan Party, each of the Secured Parties hereby irrevocably
appoints and authorizes the Administrative Agent and, to the extent necessary,
ratifies the appointment and authorization of the Administrative Agent, to act
as the person holding the power of attorney (i.e. “fondé de pouvoir”) (in such
capacity, the “Attorney”) of the Secured Parties as contemplated under
Article 2692 of the Civil Code, and to enter into, to take and to hold on its
behalf, and for its benefit, any hypothec, and to exercise such powers and
duties that are conferred upon the Attorney under any hypothec.  Moreover,
without prejudice to such appointment and authorization to act as the person
holding the power of attorney as aforesaid, each of the Secured Parties hereby
irrevocably appoints and authorizes the Administrative Agent (in such capacity,
the “Custodian”) to act as agent and custodian for and on behalf of the Secured
Parties to hold and be the sole registered holder of any bond which may be
issued under any hypothec, the whole notwithstanding Section 32 of An Act
respecting the special powers of legal persons (Quebec) or any other applicable
law, and to execute all related documents.  Each of the Attorney and the
Custodian shall: (a) have the sole and exclusive right and authority to
exercise, except as may be otherwise specifically restricted by the terms
hereof, all rights and remedies given to the Attorney and the Custodian (as
applicable) pursuant to any hypothec, bond, pledge, applicable laws or
otherwise, (b) benefit from and be subject to all provisions hereof with respect
to the Administrative Agent mutatis mutandis, including, without limitation, all
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responsibility to and indemnification by the Secured Parties, and (c) be
entitled to delegate from time to time any of its powers or duties under any
hypothec, bond, or pledge on such terms and conditions as it may determine from
time to time.  Any person who becomes a Secured Party shall, by its execution of
an Assignment and Acceptance, be deemed to have consented to and confirmed:
(i) the Attorney as the person holding the power of attorney as aforesaid and to
have ratified, as of the date it becomes a Secured Party, all actions taken by
the Attorney in such capacity, and (ii) the Custodian as the agent and custodian
as aforesaid and to have ratified, as of the date it becomes a Secured Party,
all actions taken by the Custodian in such capacity.  The substitution of the
Collateral Agent pursuant to the provisions of this Article IX shall also
constitute the substitution of the Attorney and the Custodian.

 

ARTICLE X

 

Miscellaneous

 

SECTION 10.01.  Amendments, Etc.  Except as otherwise set forth in this
Agreement, no amendment, modification, supplement or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders (other than with respect to any amendment
or waiver contemplated in clause (g) (to the extent permitted by Section 2.17)
below, which shall only require the consent of the Required Facility Lenders
under the applicable Facility or Facilities) and the Borrower or the applicable
Loan Party, as the case may be, and each such waiver, amendment, modification,
supplement or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided that, no such amendment,
modification, supplement, waiver or consent shall:

 

(a)           extend or increase the Commitment of any Lender without the
written consent of such Lender (it being understood that a waiver of any
condition precedent set forth in Section 4.01 or the waiver of any Default or
mandatory prepayment or offer to purchase of the Loans shall not constitute an
extension or increase of any Commitment of any Lender);

 

(b)           postpone any date scheduled for (excluding any extension,
amendment or waiver of the Springing Maturity Date or the financial definitions
used therein), or reduce or forgive the amount of, any payment of principal or
interest under Section 2.07 or 2.08 without the written consent of each Lender
directly and adversely affected thereby, it being understood that the waiver of
(or amendment to the terms of) any mandatory prepayment or offer to purchase of
the Loans shall not constitute a postponement of any date scheduled for the
payment of principal or interest;

 

(c)           reduce the principal of, or the rate of interest specified herein
on, any Loan, or (subject to clause (i) of the first “provided further” of this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly and adversely
affected thereby, it being understood that any change to the definition of
Consolidated Secured Debt Ratio or in the component definitions thereof shall
not constitute a reduction in the rate; provided that only the consent of the
Required Lenders shall be necessary to amend the definition of “Default Rate” or
to waive any obligation of the Borrower to pay interest at the Default Rate;

 

(d)           change any provision of this Section 10.01, the definition of
“Required Lenders”, “Required Facility Lenders”, or “Pro Rata Share” or
Section 2.12(a) and (g), 2.13 or 8.04 without the written consent of each Lender
directly and adversely affected thereby;

 

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(e)           other than in connection with a transaction permitted under
Section 7.01 or 7.06, release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent of
each Lender;

 

(f)            other than in connection with a transaction permitted under
Section 7.01 or 7.06, release all or substantially all of the aggregate value of
the Guaranties, without the written consent of each Lender; or

 

(g)           amend, waive or otherwise modify any term or provision which
directly affects Lenders of one or more Series of Incremental Term Loans and
does not directly affect Lenders under any other Facility, in each case, without
the written consent of the Required Facility Lenders under such applicable
Series of Incremental Term Loans (and in the case of multiple Facilities which
are affected, such Required Facility Lenders shall consent together as one
Facility); provided, however, that, to the extent permitted under Section 2.17,
the waivers described in this clause (g) shall only require the consent of the
Required Facility Lenders under such applicable Series of Incremental Term Loans
and shall not require the consent of the Required Lenders;

 

and provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of, or any fees or other amounts
payable to, the Administrative Agent under this Agreement or any other Loan
Document (including in its capacity as Collateral Agent) and
(ii) Section 10.07(h) may not be amended, waived or otherwise modified without
the consent of each Granting Lender all or any part of whose Loans are being
funded by an SPC at the time of such amendment, waiver or other modification. 
Any such waiver and any such amendment, modification or supplement in accordance
with the terms of this Section 10.01 shall apply equally to each of the Lenders
and shall be binding on the Loan Parties, the Lenders, the Agents and all future
holders of the Loans and the Commitments.  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 (it being understood that any Commitments or Loans held or deemed
held by any Defaulting Lender shall be excluded for a vote of the Lenders
hereunder requiring any consent of the Lenders).

 

No Lender consent is required to effect any amendment, modification, joinder or
supplement to the Intercreditor Agreement, the Additional First Lien
Intercreditor Agreement, the Additional Junior Lien Intercreditor Agreement or
other intercreditor agreement or arrangement permitted under this Agreement
(a) that is for the purpose of adding the holders of Permitted First Priority
Refinancing Debt, Permitted Junior Priority Refinancing Debt, secured
Incremental Equivalent Debt or other secured Indebtedness permitted to be
incurred under Section 7.03 (or a Senior Representative with respect thereto) as
parties thereto, as expressly contemplated by the terms of the Intercreditor
Agreement, such Additional First Lien Intercreditor Agreement, such Additional
Junior Lien Intercreditor Agreement or such other intercreditor agreement or
arrangement permitted under this Agreement, as applicable (it being understood
that any such amendment or supplement may make such other changes to the
applicable intercreditor agreement as, in the good faith determination of the
Administrative Agent, are required to effectuate the foregoing and provided,
that such other changes are not adverse, in any material respect, to the
interests of the Lenders) or (b) to the extent not in conflict with, and
permitted by, this Agreement, any amendment, modification, joinder or supplement
thereto that is expressly contemplated by the Intercreditor Agreement, the
Additional First Lien Intercreditor Agreement, the Additional Junior Lien
Intercreditor Agreement or other intercreditor agreement or arrangement
permitted under this Agreement; provided, further, that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent hereunder or under any other Loan Document without the prior written
consent

 

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of the Administrative Agent.  In addition, no Lender consent is required for the
Administrative Agent and the Collateral Agent to enter into the Additional First
Lien Intercreditor Agreement, the Additional Junior Lien Intercreditor Agreement
or other intercreditor agreement or arrangement permitted by this Agreement.

 

Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (a) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents
with the Loans and the accrued interest and fees in respect thereof and (b) to
include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders.

 

In addition, notwithstanding the foregoing, this Agreement may be amended with
the written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Term Loans to permit the refinancing of all
outstanding Loans of a given Class (“Refinanced Term Loans”) with a replacement
term loan tranche denominated in Dollars (“Replacement Term Loans”) hereunder;
provided that (a) the aggregate principal amount of such Replacement Term Loans
shall not exceed the aggregate principal amount of such Refinanced Term Loans,
(b) the Applicable Rate for such Replacement Term Loans shall not be higher than
the Applicable Rate for such Refinanced Term Loans, (c) the Weighted Average
Life to Maturity of such Replacement Term Loans shall not be shorter than the
Weighted Average Life to Maturity of such Refinanced Term Loans at the time of
such refinancing (except to the extent of nominal amortization for periods where
amortization has been eliminated as a result of prepayment of the Loans) and
(d) all other terms applicable to such Replacement Term Loans shall be
substantially identical to, or less favorable to the Lenders providing such
Replacement Term Loans than, those applicable to such Refinanced Term Loans,
except to the extent necessary to provide for covenants and other terms
applicable to any period after the latest final maturity of the Loans in effect
immediately prior to such refinancing.  Notwithstanding anything to the contrary
contained in this Section 10.01, the Borrower and the Administrative Agent may,
without the input or consent of the Lenders, effect amendments to this Agreement
and the other Loan Documents as may be necessary or appropriate in the opinion
of the Borrower and the Administrative Agent to effect the provisions of this
paragraph.

 

Notwithstanding anything to the contrary contained in this Section 10.01,
guarantees, collateral security documents and related documents executed by any
Guarantor in connection with this Agreement may be in a form reasonably
determined by the Administrative Agent and 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
(a) to comply with local Law or advice of local counsel, (b) to cure ambiguities
or defects as set forth in the paragraph below or (c) to cause such guarantee,
collateral security document or other document to be consistent with this
Agreement and the other Loan Documents.

 

If the Administrative Agent and the Borrower shall have jointly identified an
obvious error (including, but not limited to, an incorrect cross-reference) or
any error or omission of a technical or immaterial nature, in each case, in any
provision of this Agreement or any other Loan Document (including, for the
avoidance of doubt, any exhibit, schedule or other attachment to any Loan
Document), then the Administrative Agent (acting in its sole discretion) and the
Borrower or any other relevant Loan Party shall be permitted to amend such
provision and such amendment shall become effective without any further action
or consent of any other party to any Loan Document.  Notification of such
amendment shall be made by the Administrative Agent to the Lenders promptly upon
such amendment becoming effective.

 

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SECTION 10.02.  Notices and Other Communications; Facsimile Copies.  (a) 
General.  Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder or under any other Loan Document shall be
in writing (including by facsimile transmission).  All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile number
or electronic mail address, 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 the Borrower or the Administrative Agent, to the address,
facsimile number, electronic mail address or telephone number specified for such
Person on Schedule 10.02 or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in a
notice to the other parties; and

 

(ii)           if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the Borrower, and the Administrative Agent.

 

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four (4) Business Days
after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when
sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
Section 10.02(c)), when delivered; provided that notices and other
communications to the Administrative Agent pursuant to Article II shall not be
effective until actually received by such Person.  In no event shall a voice
mail message be effective as a notice, communication or confirmation hereunder.

 

(b)           Effectiveness of Facsimile Documents and Signatures.  Loan
Documents may be transmitted and/or signed by facsimile, .pdf or other
electronic imaging means.  The effectiveness of any such documents and
signatures shall, subject to applicable Law, have the same force and effect as
manually signed originals and shall be binding on all Loan Parties, the Agents
and the Lenders.

 

(c)           Reliance by Agents and Lenders.  The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic
Committed Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof.  The Borrower shall indemnify each Agent-Related Person
and each Lender from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower in the absence of gross negligence or willful misconduct.  All
telephonic notices to 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 the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
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
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges herein provided, and
provided under each other Loan Document, are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law.

 

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SECTION 10.04.  Attorney Costs and Expenses.  The Borrower agrees (a) to pay or
reimburse the Administrative Agent, the Collateral Agent, the Co-Documentation
Agents and the Arrangers for all reasonable and documented out-of-pocket costs
and expenses incurred (promptly following written demand therefor, together with
reasonable backup documentation supporting such reimbursement request to the
extent such backup documentation is requested by the Borrower) in connection
with the preparation, negotiation, syndication and execution of this Agreement
and the other Loan Documents, and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all Attorney Costs of White & Case LLP and local counsel in any other relevant
jurisdiction (but excluding all other Attorney Costs), and (b) to pay or
reimburse the Administrative Agent, the Collateral Agent, the Co-Documentation
Agents, the Arrangers and each Lender for all reasonable and documented
out-of-pocket costs and expenses incurred in connection with the enforcement of
any rights or remedies under this Agreement or the other Loan Documents
(including all such costs and expenses incurred during any legal proceeding,
including any proceeding under any Debtor Relief Law, and including all Attorney
Costs, which shall be limited to Attorney Costs of White & Case LLP, counsel to
the Administrative Agent, the Attorney Costs of a single law firm acting as
counsel to the other Agents and the Lenders taken as a whole (and, if necessary,
one firm of local counsel to the Administrative Agent and one firm of local
counsel to the other Agents and the Lenders taken as a whole in any relevant
jurisdiction and, solely in the event of any actual or potential conflict of
interest, one additional counsel in each relevant jurisdiction to each group of
similarly situated affected persons taken as a whole)).  The foregoing costs and
expenses shall include all reasonable search, filing, recording and title
insurance charges and fees and taxes related thereto, and other (reasonable, in
the case of Section 10.04(a)) out-of-pocket expenses incurred by any Agent.  The
agreements in this Section 10.04 shall survive the termination of the Aggregate
Commitments and repayment of all other Obligations.  All amounts due under this
Section 10.04 shall be paid within ten (10) Business Days of receipt by the
Borrower of an invoice relating thereto setting forth such expenses in
reasonable detail.  If any Loan Party fails to pay when due any costs, expenses
or other amounts payable by it hereunder or under any Loan Document, such amount
may be paid on behalf of such Loan Party by the Administrative Agent in its sole
discretion.  This Section 10.04 shall not apply to Indemnified Taxes or Excluded
Taxes, which, in each case, shall be governed by Section 3.01.  This
Section 10.04 also shall not apply to taxes covered by Section 3.04.

 

SECTION 10.05.  Indemnification by the Borrower.  Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents, trustees,
investment advisors and attorneys-in-fact (collectively, the “Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs, but limited, in the case of legal fees and expenses,
to the reasonable and documented out-of-pocket fees, disbursements and other
charges of White & Case LLP, counsel to the Administrative Agent, and one
counsel to all other Indemnitees taken as a whole and, if reasonably necessary,
one firm of local counsel to the Administrative Agent and one firm of local
counsel to all other Indemnitees taken as a whole in each relevant jurisdiction,
and solely in the case of an actual or potential conflict of interest, one
additional counsel in each relevant jurisdiction to each group of similarly
situated affected Indemnitees) of any kind or nature whatsoever (other than
Taxes and Other Taxes, which are governed by Sections 3.01 and 10.15 herein)
which may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with
(a) the execution, delivery, enforcement, performance or administration of any
Loan Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Commitment, Loan or the use or
proposed use of the proceeds therefrom, or (c) any actual or alleged presence or
release of Hazardous Materials on or from any property currently

 

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or formerly owned or operated by the Borrower, any Subsidiary or any other Loan
Party, or any Environmental Liability related in any way to the Borrower, any
Subsidiary or any other Loan Party, or (d) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements (x) resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee or of any
Affiliate, director, officer, employee, counsel, agent or attorney-in-fact of
such Indemnitee, and (y) resulted from a breach by such Indemnitee of its
obligations to a Loan Party.  No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement (except for damages resulting from the gross
negligence, bad faith or willful misconduct of any such Indemnitee), nor shall
any Indemnitee or any Loan Party have any liability for any special, punitive,
indirect or consequential damages relating to this Agreement or any other Loan
Document or arising out of its activities in connection herewith or therewith
(whether before or after the Closing Date) (other than, in the case of any Loan
Party, in respect of any such damages incurred or paid by an Indemnitee to a
third party).  In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 10.05 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by any Loan Party, its directors, stockholders or creditors or an Indemnitee or
any other Person, whether or not any Indemnitee is otherwise a party thereto and
whether or not any of the transactions contemplated hereunder or under any of
the other Loan Documents is consummated.  All amounts due under this
Section 10.05 shall be paid within ten (10) Business Days after demand therefor;
provided, however, that such Indemnitee shall promptly refund such amount to the
extent that there is a final judicial or arbitral determination that such
Indemnitee was not entitled to indemnification or contribution rights with
respect to such payment pursuant to the express terms of this Section 10.05. 
The agreements in this Section 10.05 shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

SECTION 10.06.  Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any 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 such 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 Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by any 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.

 

SECTION 10.07.  Successors and Assigns.  (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (except as expressly permitted
by Sections 7.06(a) and (b)) and no Lender may assign or otherwise transfer any
of its rights or obligations hereunder except (i) to an Eligible Assignee and in
the case of any Assignee that is,

 

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after the formation thereof, Holdco, the Borrower or any of its Subsidiaries, in
accordance with Section 10.07(j), (ii) by way of participation in accordance
with the provisions of Section 10.07(e), (iii) by way of pledge or assignment of
a security interest subject to the restrictions of Section 10.07(g) and (h) or
(iv) to an SPC in accordance with the provisions of Section 10.07(h) (and any
other attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
Section 10.07(e) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)           (i)  Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (other than to
Disqualified Institutions and Defaulting Lenders) (“Assignees”) all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld, delayed or conditioned)
of:

 

(A)          the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default under Section 8.01(a), (f) or (g) (in the case
of (f) or (g), solely with respect to any Loan Party) has occurred and is
continuing, an assignment to any Assignee; and

 

(B)          the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment (i) of all or any
portion of a Loan to a Lender, an Affiliate of a Lender or an Approved Fund,
(ii) of all or a portion of the Loans pursuant to Section 10.07(j) or (iii) to
an Agent or an Affiliate of an Agent.

 

(ii)           Assignments shall be subject to the following additional
conditions:

 

(A)          except in the case of an assignment to a Lender or an Affiliate of
a Lender or Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless each of the Borrower and the Administrative Agent otherwise
consents, provided that (1) no such consent of the Borrower shall be required if
an Event of Default under Section 8.01(a), (f) or (g) (in the case of (f) or
(g), solely with respect to any Loan Party) has occurred and is continuing and
(2) such amounts shall be aggregated in respect of each Lender and its
Affiliates or Approved Funds, if any;

 

(B)          the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500, unless waived or reduced by the Administrative
Agent in its sole discretion; provided that only one such fee shall be payable
in the event of simultaneous assignments from any Lender or its Approved Funds
to one or more other Approved Funds; and

 

(C)          the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

This paragraph (b) shall not prohibit any Lender from assigning all or a portion
of its rights and obligations among separate Classes of Loans or Commitments on
a non-pro rata basis.

 

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(c)           Subject to acceptance and recording thereof by the Administrative
Agent pursuant to Section 10.07(d), 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, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment).  Upon request, and the surrender by the assigning Lender of
its Note, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this clause (c) shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
Section 10.07(e).

 

(d)           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, each notice of
cancellation of any Loans delivered by the Borrower pursuant to subsection
(j) below, and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts (and related interest
amounts) of the Loans owing to each Lender pursuant to the terms hereof from
time to time (the “Register”).  The entries in the Register shall be conclusive,
absent manifest error, and the Borrower, the Agents and the Lenders shall treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.  The Register shall be available for inspection by the
Borrower, any Agent and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.  Notwithstanding anything to the contrary
contained in this Agreement, the Loans are intended to be treated as registered
obligations for U.S. federal income tax purposes and this Section 10.07 shall be
construed so that the they are at all times maintained in “registered form”
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code,
Section 5f.103-1(c) of the United States Treasury Regulation and any other
related regulations (or any successor provisions of the Code or such
regulations).

 

(e)           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) (each, a “Participant”) in all or a portion of
such Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and the other Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement or the other Loan
Documents; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
that directly and adversely affects such Participant.  Subject to
Section 10.07(f), the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to
Section 10.07(c) but shall not be entitled to recover greater amounts under such
Sections than the selling Lender would be entitled to recover.  To the extent
permitted by applicable Law, each Participant also shall be entitled to the
benefits of Section 10.09 as though it were a Lender; provided that such
Participant agrees to be subject to Section 2.13 as though it

 

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were a Lender.  Each Lender that sells a participation shall, acting solely for
this purpose as an agent of the Borrower, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except (i) that the portion
of the Participant Register relating to a Participant shall be made available to
the Borrower and Administrative Agent to the extent the benefits of this
Agreement are claimed with respect to such Participant (including under
Section 3.01, 3.04 and 3.05), or (ii) otherwise to the extent that such
disclosure is necessary to establish that such commitment, loan or other
obligation is in registered form under Sections 163(f), 871(h)(2) and
881(c)(2) of the Code and Section 5f.103-1(c) of the United States Treasury
Regulations and any other related regulations (or any successor provisions of
the Code or such regulations).  The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary. 
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

 

(f)            A Participant shall not be entitled to receive any greater
payment under Section 3.01, 3.04 or 3.05 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.  A Participant shall not be entitled
to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 10.15 as though it were a
Lender.

 

(g)           Any Lender, without the consent of the Borrower or the
Administrative Agent, may at any time 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.

 

(h)           Notwithstanding anything to the contrary contained herein, any
Lender (a “Granting Lender”) may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an “SPC”) the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof.  Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.01, 3.04 or 3.05),
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender.  Notwithstanding anything to the contrary
contained herein, any SPC may (i) with notice to, but without prior consent of
the Borrower and the Administrative Agent and with the payment of a processing
fee of $3,500 (unless waived or reduced by the Administrative Agent in its sole
discretion), assign all or any

 

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portion of its right to receive payment with respect to any Loan to the Granting
Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or Guarantee or credit or liquidity enhancement to
such SPC.

 

(i)            Notwithstanding anything to the contrary contained herein,
(1) any Lender, without the consent of the Borrower or the Administrative Agent,
may in accordance with applicable Law create a security interest in all or any
portion of the Loans owing to it and the Note, if any, held by it and (2) any
Lender that is a Fund, without the consent of the Borrower or the Administrative
Agent, may create a security interest in all or any portion of the Loans owing
to it and the Note, if any, held by it to the trustee for holders of obligations
owed, or securities issued, by such Fund as security for such obligations or
securities; provided that unless and until such trustee actually becomes a
Lender in compliance with the other provisions of this Section 10.07, (i) no
such pledge shall release the pledging Lender from any of its obligations under
the Loan Documents and (ii) such trustee shall not be entitled to exercise any
of the rights of a Lender under the Loan Documents even though such trustee may
have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.

 

(j)            Any Lender may, so long as no Default has occurred and is
continuing, at any time, assign all or a portion of its rights and obligations
with respect to Loans under this Agreement to, after the formation thereof,
Holdco, or the Borrower or any of their Restricted Subsidiaries through Dutch
auctions or other offers to purchase open to all Lenders on a pro rata basis in
accordance with procedures of the type described in Section 2.05(a)(iii);
provided, that:

 

(i)            (x) if the assignee is, after the formation thereof, Holdco, or a
Restricted Subsidiary of Borrower, upon such assignment, transfer or
contribution, the applicable assignee shall automatically be deemed to have
contributed or transferred the principal amount of such Loans, plus all accrued
and unpaid interest thereon, to the Borrower; or (y) if the assignee is the
Borrower (including through contribution or transfers set forth in clause (x)),
(A) the principal amount of such Loans, along with all accrued and unpaid
interest thereon, so contributed, assigned or transferred to the Borrower shall
be deemed automatically cancelled and extinguished on the date of such
contribution, assignment or transfer, (B) the aggregate outstanding principal
amount of Loans of the remaining Lenders shall reflect such cancellation and
extinguishment of the Loans then held by the Borrower and (C) the Borrower shall
promptly provide notice to the Administrative Agent of such contribution,
assignment or transfer of such Loans, and the Administrative Agent, upon receipt
of such notice, shall reflect the cancellation of the applicable Loans in the
Register; provided that, in the case of each of clause (x) and clause (y) above,
such assignee does not use the proceeds of any ABL Loans or Incremental Term
Loans to acquire such Loans; and

 

(ii)           each Person that purchases any Loans pursuant to this subsection
(j) shall represent and warrant to the selling Lender that it does not possess
material non-public information with respect to the Borrower and its
Subsidiaries or the securities of any of them that has not been disclosed to the
Term Lenders generally (other than Term Lenders who elect not to receive such
information) or shall make a statement that such representation cannot be made.

 

(k)           The aggregate outstanding principal amount of the Loans of the
applicable Class shall be deemed reduced by the full par value of the aggregate
principal amount of the Loans purchased by, or contributed to (in each case, and
subsequently cancelled hereunder), by Holdco (after the formation thereof), the
Borrower or their Subsidiaries pursuant to Section 10.07(j) and

 

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each principal repayment installment with respect to the Loans of such
Class pursuant to Section 2.07 shall be reduced pro rata by the par value of the
aggregate principal amount of Loans so purchased or contributed (and
subsequently cancelled).

 

SECTION 10.08.  Confidentiality.  Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its Affiliates and its and its Affiliates’ directors, officers,
employees, trustees, investment advisors and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested by any Governmental Authority; (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process;
(d) to any other party to this Agreement; (e) subject to an agreement containing
provisions substantially the same as those of this Section 10.08 (or as may
otherwise be reasonably acceptable to the Borrower), to any pledgee referred to
in Section 10.07(g), counterparty to a Swap Contract, Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement; (f) with the written consent
of the Borrower; (g) to the extent such Information becomes publicly available
other than as a result of a breach of this Section 10.08; (h) to any
Governmental Authority or examiner (including the National Association of
Insurance Commissioners or any other similar organization) regulating any Lender
or its Affiliates; or (i) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender).  In addition, the Agents and the
Lenders may disclose the existence of this Agreement and information about this
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to the Agents and the Lenders in connection with
the administration and management of this Agreement, the other Loan Documents,
the Commitments, and the Loans.  For the purposes of this Section 10.08,
“Information” means all information received from any Loan Party relating to any
Loan Party or its business, other than any such information that is publicly
available to any Agent or any Lender prior to disclosure by any Loan Party other
than as a result of a breach of this Section 10.08; provided that, in the case
of information received from a Loan Party after the Restatement Effective Date,
such information is clearly identified at the time of delivery as confidential
or (ii) is delivered pursuant to Section 6.01, 6.02 or 6.03 hereof.

 

SECTION 10.09.  Setoff.  In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of
Default, each Lender and its Affiliates is authorized at any time and from time
to time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party and its Subsidiaries) 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) at any time held by, and other Indebtedness at any
time owing by, such Lender and its Affiliates to or for the credit or the
account of the respective Loan Parties and their Subsidiaries against any and
all Obligations owing to such Lender and its Affiliates hereunder or under any
other Loan Document, now or hereafter existing, irrespective of whether or not
such Agent or such Lender or Affiliate shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or Indebtedness.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set off and application
made by such Lender; provided that the failure to give such notice shall not
affect the validity of such setoff and application.  The rights of the
Administrative Agent and each Lender under this Section 10.09 are in addition to
other rights and remedies (including other rights of setoff) that the
Administrative Agent and such Lender may have.

 

SECTION 10.10.  Interest Rate Limitation.  Notwithstanding anything to the

 

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

 

SECTION 10.11.  Counterparts.  This Agreement and each other Loan Document may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  Delivery by telecopier, .pdf or other electronic imaging means of
an executed counterpart of a signature page to this Agreement and each other
Loan Document shall be effective as delivery of an original executed counterpart
of this Agreement and such other Loan Document.  The Agents may also require
that any such documents and signatures delivered by telecopier, .pdf or other
electronic imaging means be confirmed by a manually signed original thereof;
provided that the failure to request or deliver the same shall not limit the
effectiveness of any document or signature delivered by telecopier, .pdf or
other electronic imaging means.

 

SECTION 10.12.  Integration.  This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter.  In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Agents or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement.  Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.

 

SECTION 10.13.  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 each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Loan, and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied (other than Obligations under Secured Hedge
Agreements or contingent indemnification obligations, in any such case, not then
due and payable).

 

SECTION 10.14.  Severability.  If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

SECTION 10.15.  Tax Forms.  (a) Each Lender and Agent that is not a “United
States person” within the meaning of Section 7701(a)(30) of the Code (each, a
“Foreign Lender”) shall deliver to the Borrower and the Administrative Agent, on
or prior to the date which is ten

 

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(10) Business Days after the Restatement Effective Date (or upon accepting an
assignment of an interest herein), two duly signed, properly completed copies of
either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender
and entitling it to an exemption from, or reduction of, United States
withholding tax on all payments to be made to such Foreign Lender by the
Borrower or any other Loan Party pursuant to this Agreement or any other Loan
Document) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Borrower or any other Loan Party
pursuant to this Agreement or any other Loan Document) or such other evidence
reasonably satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, United States
withholding tax, including any exemption pursuant to Section 871(h) or 881(c) of
the Code, and in the case of a Foreign Lender claiming such an exemption under
Section 881(c) of the Code, a certificate that establishes in writing to the
Borrower and the Administrative Agent that such Foreign Lender is not (i) a
“bank” as defined in Section 881(c)(3)(A) of the Code, (ii) a 10-percent
shareholder within the meaning of Section 871(h)(3)(B) of the Code, or (iii) a
controlled foreign corporation related to the Borrower with the meaning of
Section 864(d) of the Code.  Thereafter and from time to time, each such Foreign
Lender shall (A) promptly submit to the Borrower and the Administrative Agent
such additional duly completed and signed copies of one or more of such forms or
certificates (or such successor forms or certificates as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States Laws and regulations to avoid, or
such evidence as is reasonably satisfactory to the Borrower and the
Administrative Agent of any available exemption from, or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign
Lender by the Borrower or other Loan Party pursuant to this Agreement, or any
other Loan Document, in each case, (1) on or before the date that any such form,
certificate or other evidence expires or becomes obsolete (including, without
limitation, by operation of law), (2) after the occurrence of any event
requiring a change in the most recent form, certificate or evidence previously
delivered by it to the Borrower and the Administrative Agent and (3) from time
to time thereafter if reasonably requested by the Borrower or the Administrative
Agent, and (B) promptly notify the Borrower and the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.  In the event that a payment will be made to a Lender or
Agent under the Canadian Guarantee, such Lender or Agent agrees to use
reasonable efforts (consistent with legal and regulatory restrictions and
subject to overall policy considerations of such Lender or Agent), if requested
by a Loan Party, to deliver such other information prescribed by applicable laws
or reasonably requested by the Loan Party as will enable such Loan Party to
determine whether such Lender or Agent is subject to Canadian withholding tax,
is entitled to an exemption from Canadian withholding tax or is eligible for a
reduced rate of Canadian withholding tax; provided, however, that nothing in
this Section 10.15(a) shall require a Lender or Agent to disclose any
confidential information (including, without limitation, its tax returns or its
calculations).

 

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(b)        Each Foreign Lender, to the extent it does not act or ceases to act
for its own account with respect to any portion of any sums paid or payable to
such Foreign Lender under any of the Loan Documents (for example, in the case of
a typical participation by such Foreign Lender), shall deliver to the Borrower
and the Administrative Agent on the date when such Foreign Lender ceases to act
for its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination of the
Borrower or the Administrative Agent (in either case, in the reasonable exercise
of its discretion), (A) two duly signed completed copies of the forms or
statements required to be provided by such Foreign Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Foreign Lender acts for its own account that is not subject to United
States withholding tax, and (B) two duly signed properly completed copies of IRS
Form W-8IMY (or any successor thereto), together with any information such
Foreign Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the Code, to establish that such Foreign
Lender is not acting for its own account with respect to a portion of any such
sums payable to such Foreign Lender.

 

(c)           Each Lender and Agent that is a “United States person” within the
meaning of Section 7701(a)(30) of the Code (each, a “U.S. Lender”) shall deliver
to the Administrative Agent and the Borrower two duly signed, properly completed
copies of IRS Form W-9 (or any successor form) on or prior to the Restatement
Effective Date (or on or prior to the date it becomes a party to this
Agreement), certifying that such U.S. Lender is entitled to an exemption from
United States backup withholding tax.

 

(d)           If a payment made to any Lender would be subject to U.S. federal
withholding tax imposed by FATCA if such Lender fails to comply with the
applicable reporting requirements of FATCA, such Lender shall deliver to the
Administrative Agent and Borrower any documentation under any requirement of Law
or reasonably requested by the Administrative Agent and the Borrower sufficient
for the Administrative Agent and the Borrower to comply with their respective
obligations under FATCA and to determine whether such Lender has complied with
such applicable reporting requirements.

 

(e)           Notwithstanding anything to the contrary in this Agreement, no
Loan Party shall be required to pay any additional amount or any indemnity
payment under Section 3.01 to (A) any Lender to the extent Taxes would not be
due but for the failure of such Lender to satisfy the foregoing provisions of
this Section 10.15 or (B) any Lender to the extent such amounts are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent such
Lender’s assignor (if any) was entitled, at the time of the assignment, to
receive additional amounts from the Borrower with respect to such Taxes pursuant
to Section 3.01 of this Agreement; provided that (i) if such Lender shall have
satisfied the requirement of this Section 10.15 on the date required in this
Section 10.15, nothing in this Section 10.15 shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 3.01 in the event that, as a
result of any change in any applicable Law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender or other Person for the account of which such Lender receives
any sums payable under any of the Loan Documents is not subject to withholding
or is subject to withholding at a reduced rate and (ii) nothing in this
Section 10.15 shall relieve the Borrower of its obligation to pay any amounts
pursuant to Section 3.01 in the event that the requirements of 10.15(b) have not
been satisfied if the Borrower is entitled, under applicable Law, to rely on any
applicable forms and statements required to be provided under this Section 10.15
by the Foreign Lender that does not act or has ceased to act for its own account
under any of the Loan Documents, including in the case of a typical
participation.

 

(f)            The Administrative Agent may deduct and withhold any taxes
required by any Laws to be deducted and withheld from any payment under any of
the Loan Documents.

 

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SECTION 10.16.  GOVERNING LAW.  (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK; PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW
YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION
OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY
LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO
APPLY TO THAT EXTENT.

 

(b)           ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK CITY IN THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE BORROWER, EACH
AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION, IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

 

SECTION 10.17.  WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 10.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

SECTION 10.18.  Binding Effect.  This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent shall have
been notified by each Lender that each such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders, except as
permitted by Section 7.06.

 

SECTION 10.19.  Lender Action.  Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan
Documents or the Secured Hedge Agreements (including the exercise of any right
of setoff, rights on account of any banker’s lien or similar claim or other
rights of self-help), or institute any actions or proceedings, or otherwise
commence any remedial procedures, with

 

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respect to any Collateral or any other property of any such Loan Party, without
the prior written consent of the Administrative Agent.  The provisions of this
Section 10.19 are for the sole benefit of the Lenders and shall not afford any
right to, or constitute a defense available to, any Loan Party.

 

SECTION 10.20.  USA PATRIOT Act; Canadian Anti-Money Laundering
Legislation(a)           Each Lender hereby notifies the Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Loan Parties, which information includes
the name and address of the Loan Parties and other information that will allow
such Lender to identify the Loan Parties in accordance with the Act.

 

(b)           Each Loan Party acknowledges that, pursuant to the Proceeds of
Crime Act and other applicable anti-money laundering, anti-terrorist financing,
government sanction and “know your client” laws (collectively, including any
guidelines or orders thereunder, “AML Legislation”), the Lenders may be required
to obtain, verify and record information regarding the Loan Parties and their
respective directors, authorized signing officers, direct or indirect
shareholders or other Persons in control of the Loan Parties, and the
transactions contemplated hereby. Each Loan Party shall promptly provide all
such information, including supporting documentation and other evidence, as may
be reasonably requested by any Lender or any prospective assignee or participant
of a Lender or any Agent, in order to comply with any applicable AML
Legislation, whether now or hereafter in existence.

 

(c)           If the Administrative Agent has ascertained the identity of any
Loan Party or any authorized signatories of the Loan Parties for the purposes of
applicable AML Legislation, then the Administrative Agent:

 

(i)                                     shall be deemed to have done so as an
agent for each Lender, and this Agreement shall constitute a “written agreement”
in such regard between each Lender and the Administrative Agent within the
meaning of the applicable AML Legislation; and

 

(ii)                                  shall provide to each Lender copies of all
information obtained in such regard without any representation or warranty as to
its accuracy or completeness.

 

Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each of the Lenders agrees that neither the Administrative Agent nor
any other Agent has any obligation to ascertain the identity of the Loan Parties
or any authorized signatories of the Loan Parties on behalf of any Lender, or to
confirm the completeness or accuracy of any information it obtains from any Loan
Party or any such authorized signatory in doing so.

 

SECTION 10.21.  Judgment Currency.  If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given.  The obligation of each
Loan Party in respect of any such sum due from it to the Administrative Agent or
the Lenders hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement (the “Agreement Currency”) be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent of any sum
adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency.  If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from any Loan

 

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Party in the Agreement Currency, such Loan Party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or the Person to whom such obligation was owing against
such loss.  If the amount of the Agreement Currency so purchased is greater than
the sum originally due to the Administrative Agent in such currency, the
Administrative Agent agrees to return the amount of any excess to such Loan
Party (or to any other Person who may be entitled thereto under Applicable Law).

 

SECTION 10.22.  Other Liens on Collateral; Terms of Intercreditor Agreement;
Etc.  (i)  THE LOAN PARTIES, THE AGENTS, THE LENDERS AND THE OTHER PARTIES
HERETO ACKNOWLEDGE THAT THE EXERCISE OF CERTAIN OF THE AGENTS’ RIGHTS AND
REMEDIES HEREUNDER MAY BE SUBJECT TO, AND RESTRICTED BY, THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT. EXCEPT AS SPECIFIED HEREIN, NOTHING CONTAINED IN THE
INTERCREDITOR AGREEMENT SHALL BE DEEMED TO MODIFY ANY OF THE PROVISIONS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL REMAIN IN FULL FORCE AND EFFECT. 
EACH LENDER HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT LIENS SHALL BE
CREATED ON THE COLLATERAL PURSUANT TO THE ABL CREDIT AGREEMENT AND THE ABL LOAN
DOCUMENTS, WHICH LIENS (x) TO THE EXTENT CREATED WITH RESPECT TO ABL PRIORITY
COLLATERAL, SHALL BE SENIOR TO THE LIENS CREATED UNDER THIS AGREEMENT AND THE
RELATED LOAN DOCUMENTS (WITH THE LIENS SO CREATED HEREUNDER AND UNDER THE OTHER
LOAN DOCUMENTS ON ABL PRIORITY COLLATERAL BEING SUBORDINATED TO SUCH LIENS
PURSUANT TO THE TERMS OF THE INTERCREDITOR AGREEMENT) AND (Y) TO THE EXTENT
CREATED WITH RESPECT TO TL PRIORITY COLLATERAL, SHALL BE REQUIRED TO BE SUBJECT
TO THE SUBORDINATION PROVISIONS (TO THE EXTENT APPLICABLE) OF THE INTERCREDITOR
AGREEMENT.  THE INTERCREDITOR AGREEMENT ALSO HAS OTHER PROVISIONS WHICH ARE
BINDING UPON THE LENDERS AND THE HEDGE BANKS PURSUANT TO THIS AGREEMENT. 
PURSUANT TO THE EXPRESS TERMS OF SECTION 7.17 OF THE INTERCREDITOR AGREEMENT, IN
THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND
ANY OF THE LOAN DOCUMENTS, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
GOVERN AND CONTROL.

 

(ii)           EACH LENDER AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT AND THE
ADMINISTRATIVE AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENT, THE ADDITIONAL
FIRST LIEN INTERCREDITOR AGREEMENT AND THE ADDITIONAL JUNIOR LIEN INTERCREDITOR
AGREEMENT ON BEHALF OF SUCH LENDER, AND TO TAKE ALL ACTIONS (AND EXECUTE ALL
DOCUMENTS) REQUIRED (OR DEEMED ADVISABLE) BY IT IN ACCORDANCE WITH THE TERMS OF
THE INTERCREDITOR AGREEMENT, THE ADDITIONAL FIRST LIEN INTERCREDITOR AGREEMENT
OR THE ADDITIONAL JUNIOR LIEN INTERCREDITOR AGREEMENT, AS THE CASE MAY BE.

 

(iii)          THE PROVISIONS OF THIS SECTION 10.22 ARE NOT INTENDED TO
SUMMARIZE ALL RELEVANT PROVISIONS OF (A) THE INTERCREDITOR AGREEMENT, THE
FORM OF WHICH IS ATTACHED AS AN EXHIBIT TO THIS AGREEMENT, (B) THE ADDITIONAL
FIRST LIEN INTERCREDITOR AGREEMENT, WHICH WILL BE IN THE FORM APPROVED BY THE
ADMINISTRATIVE AGENT AS PERMITTED BY THIS AGREEMENT OR (C) THE ADDITIONAL JUNIOR
LIEN INTERCREDITOR AGREEMENT, WHICH WILL BE IN THE FORM APPROVED BY THE
ADMINISTRATIVE AGENT AS PERMITTED BY THIS AGREEMENT.  REFERENCE MUST BE MADE TO
THE INTERCREDITOR AGREEMENT, THE ADDITIONAL FIRST LIEN INTERCREDITOR AGREEMENT
OR THE ADDITIONAL JUNIOR LIEN INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL
TERMS AND

 

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CONDITIONS THEREOF.  EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND
REVIEW OF EACH OF THE INTERCREDITOR AGREEMENT, THE ADDITIONAL FIRST LIEN
INTERCREDITOR AGREEMENT AND THE ADDITIONAL JUNIOR LIEN INTERCREDITOR AGREEMENT
AND THE TERMS AND PROVISIONS THEREOF, AND NO AGENT (AND NONE OF ITS AFFILIATES)
MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF
THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT, THE ADDITIONAL FIRST
LIEN INTERCREDITOR AGREEMENT OR THE ADDITIONAL JUNIOR LIEN INTERCREDITOR
AGREEMENT.

 

SECTION 10.23.  Effect of the Amendment and Restatement of the Existing Credit
Agreement.  On the Restatement Effective Date, the Existing Credit Agreement
shall be amended, restated and superseded in its entirety by this Agreement. 
The parties hereto acknowledge and agree that (i) the Term B Loan made on the
Restatement Effective Date shall, in part, constitute a Refinancing Term Loan
with respect to the Outstanding Term Loans and that this Agreement shall
constitute a Refinancing Amendment entered into under Section 2.15 of the
Existing Credit Agreement (such refinancing transaction, the “Effective Date
Refinancing”), (ii) the amendments related to such Refinancing Term Loan shall
be effective concurrently with the making of such Refinancing Term Loans,
(iii) the Term B Loan, to the extent in excess of the amount necessary to
refinance the Outstanding Term Loans pursuant to Section 2.15 of the Existing
Credit Agreement (such excess portion of the Term B Loan, the “Increased Loan”),
and the amendments reflecting such Increased Loan or otherwise amending the
Existing Credit Agreement, shall be made (and shall be effective) subject to
consummation of the Effective Date Refinancing and (iv) except to the extent
refinanced or increased as set forth in clause (i) and (iii) above, the
“Obligations” outstanding under the Existing Credit Agreement are in all
respects continuing (as amended and restated hereby) with the terms thereof
being modified solely as provided in this Agreement.

 

SECTION 10.24.  No Advisory or Fiduciary Responsibility.

 

In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), the Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Agents and the Arrangers
are arm’s-length commercial transactions between the Borrower and its respective
Affiliates, on the one hand, and the Administrative Agent and the Arrangers, on
the other hand, (B) the Borrower and has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Agents, the Arrangers and each Lender is and has been
acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor,
agent or fiduciary for the Borrower or any of its respective Affiliates, or any
other Person and (B) none of the Agents, the Arrangers nor any Lender has any
obligation to the Borrower or any of its respective Affiliates with respect to
the transactions contemplated hereby except those obligations expressly set
forth herein and in the other Loan Documents; and (iii) the Agents, the
Arrangers, the Lenders and their respective Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Borrower and its respective Affiliates, and none of the Agents, the Arrangers
nor any Lender has any obligation to disclose any of such interests to the
Borrower or any of its respective Affiliates.  To the fullest extent permitted
by law, the Borrower hereby waives and releases any claims that it may have
against the Agents, the Arrangers or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

MICHAELS STORES, INC.

 

 

 

 

 

By:

/s/ Charles M.Sonsteby

 

Name:

Charles M. Sonsteby

 

Title:

Member of the Interim Office of the Chief

 

 

Executive Officer, Chief Administrative

 

 

Officer & Chief Financial Officer

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH,

 

Individually and as Administrative Agent

 

 

 

By:

 

 

Name:

 

Title:

 

 

By:

 

 

Name:

 

Title:

 

[Amended and Restated
Credit Agreement]

 

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