Exhibit 10.1

EXECUTION VERSION

Published CUSIP Number(s):

44157UAC6 and 44157UAD4

 

 

 

AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT

dated as of

May 22, 2012

As amended and restated as of May 29, 2015

among

HOUGHTON MIFFLIN HARCOURT COMPANY, as Holdings

HOUGHTON MIFFLIN HARCOURT PUBLISHERS INC.,

HMH PUBLISHERS LLC, and

HOUGHTON MIFFLIN HARCOURT PUBLISHING COMPANY, as Borrowers,

THE SUBSIDIARY GUARANTORS AND LENDERS PARTY HERETO

and

CITIBANK, N.A.

as Administrative Agent

and

CITIBANK, N.A.

as Collateral Agent

 

 

CITIGROUP GLOBAL MARKETS INC.

and

WELLS FARGO SECURITIES, LLC

as Joint Lead Arrangers and Bookrunners

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Syndication Agent

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I    Definitions   

SECTION 1.01

  Defined Terms      2   

SECTION 1.02

  Terms Generally      38   

SECTION 1.03

  Pro Forma Calculations      39   

SECTION 1.04

  Classification of Loans and Borrowings      40    ARTICLE II    The Credits   

SECTION 2.01

  Commitments      40   

SECTION 2.02

  Loans and Borrowings      40   

SECTION 2.03

  Borrowing Procedure      41   

SECTION 2.04

  Evidence of Debt; Repayment of Loans      42   

SECTION 2.05

  Fees      42   

SECTION 2.06

  Interest on Loans      43   

SECTION 2.07

  Default Interest      43   

SECTION 2.08

  Alternate Rate of Interest      43   

SECTION 2.09

  Termination and Reduction of Commitments      44   

SECTION 2.10

  Conversion and Continuation of Borrowings      44   

SECTION 2.11

  Repayment of Borrowings      45   

SECTION 2.12

  Optional Prepayment; Prepayment Premium      46   

SECTION 2.13

  Mandatory Prepayments      47   

SECTION 2.14

  Reserve Requirements; Change in Circumstances      49   

SECTION 2.15

  Change in Legality      50   

SECTION 2.16

  Indemnity      51   

SECTION 2.17

  Pro Rata Treatment      52   

SECTION 2.18

  Sharing of Setoffs      52   

SECTION 2.19

  Payments      52   

SECTION 2.20

  Taxes      53   

SECTION 2.21

  Assignment of Commitments Under Certain Circumstances; Duty to Mitigate     
56   

SECTION 2.22

  Extensions of Term Loans      57   

SECTION 2.23

  Refinancing Facilities      60   

SECTION 2.24

  Incremental Facilities      61   

SECTION 2.25

  Defaulting Lenders      64   

SECTION 2.26

  Intentionally Deleted      65   

 

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ARTICLE III    Representations and Warranties   

SECTION 3.01

Organization; Powers   65   

SECTION 3.02

Authorization   65   

SECTION 3.03

Enforceability   66   

SECTION 3.04

Governmental Approvals   66   

SECTION 3.05

Intentionally Deleted   66   

SECTION 3.06

No Material Adverse Change   66   

SECTION 3.07

Title to Properties; Possession Under Leases   66   

SECTION 3.08

Subsidiaries   67   

SECTION 3.09

Litigation; Compliance with Laws   67   

SECTION 3.10

Agreements   68   

SECTION 3.11

Federal Reserve Regulations   68   

SECTION 3.12

Investment Company Act   68   

SECTION 3.13

Use of Proceeds   68   

SECTION 3.14

Taxes   68   

SECTION 3.15

No Material Misstatements   68   

SECTION 3.16

Employee Benefit Plans   69   

SECTION 3.17

Environmental Matters   70   

SECTION 3.18

Insurance   70   

SECTION 3.19

Security Documents   70   

SECTION 3.20

Location of Real Property and Leased Premises   72   

SECTION 3.21

Labor Matters   72   

SECTION 3.22

Solvency   72   

SECTION 3.23

No Default   73   

SECTION 3.24

Intellectual Property   73   

SECTION 3.25

Existing Indebtedness, Liens and Investments   73   

SECTION 3.26

PATRIOT Act etc.   73    ARTICLE IV    Conditions of Lending    ARTICLE V   
Affirmative Covenants   

SECTION 5.01

Existence; Compliance with Laws; Businesses and Properties   79   

SECTION 5.02

Insurance   80   

SECTION 5.03

Obligations and Taxes   81   

SECTION 5.04

Financial Statements, Reports, etc.   81   

SECTION 5.05

Litigation and Other Notices   84   

SECTION 5.06

Information Regarding Collateral   84   

SECTION 5.07

Maintaining Records; Access to Properties and Inspections; Maintenance of
Ratings   85   

 

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SECTION 5.08

Use of Proceeds   85   

SECTION 5.09

Employee Benefits   85   

SECTION 5.10

Compliance with Environmental Laws   85   

SECTION 5.11

Preparation of Environmental Reports   85   

SECTION 5.12

Further Assurances   86    ARTICLE VI    Negative Covenants   

SECTION 6.01

Indebtedness   88   

SECTION 6.02

Liens   91   

SECTION 6.03

Sale and Lease Back Transactions   95   

SECTION 6.04

Investments, Loans and Advances   95   

SECTION 6.05

Mergers, Consolidations, Sales of Assets and Acquisitions   98   

SECTION 6.06

Restricted Payments; Restrictive Agreements   100   

SECTION 6.07

Transactions with Affiliates   101   

SECTION 6.08

Other Indebtedness and Agreements   103   

SECTION 6.09

[Intentionally deleted]   103   

SECTION 6.10

[Intentionally deleted]   103   

SECTION 6.11

[Intentionally deleted]   103   

SECTION 6.12

Fiscal Year   103   

SECTION 6.13

Certain Equity Securities   103   

SECTION 6.14

Business of Holdings, Borrowers and Restricted Subsidiaries   104   

SECTION 6.15

Designation of Unrestricted Subsidiaries and Re-Designation of Restricted
Subsidiaries   104    ARTICLE VII    Events of Default   

SECTION 7.01

Events of Default   105    ARTICLE VIII    Agents   

SECTION 8.01

Authorization and Action   108   

SECTION 8.02

Agent Individually   109   

SECTION 8.03

Duties of Agents; Exculpatory Provisions   110   

SECTION 8.04

Reliance by Agents   111   

SECTION 8.05

Indemnification   111   

SECTION 8.06

Delegation of Duties   112   

SECTION 8.07

Resignation of Agent   112   

SECTION 8.08

Non-Reliance on Agent and Other Lenders   113   

SECTION 8.09

No Other Duties, etc   114   

SECTION 8.10

Agent May File Proofs of Claim   114   

SECTION 8.11

Other Secured Agreements   115   

 

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ARTICLE IX    Miscellaneous   

SECTION 9.01

Notices   115   

SECTION 9.02

Survival of Agreement   117   

SECTION 9.03

Binding Effect   118   

SECTION 9.04

Successors and Assigns   118   

SECTION 9.05

Expenses; Indemnity   124   

SECTION 9.06

Right of Setoff   126   

SECTION 9.07

Applicable Law   126   

SECTION 9.08

Waivers; Amendment   126   

SECTION 9.09

Interest Rate Limitation   128   

SECTION 9.10

Entire Agreement   128   

SECTION 9.11

WAIVER OF JURY TRIAL   128   

SECTION 9.12

Severability   128   

SECTION 9.13

Counterparts   129   

SECTION 9.14

Headings   129   

SECTION 9.15

Jurisdiction; Consent to Service of Process   129   

SECTION 9.16

Confidentiality   129   

SECTION 9.17

USA PATRIOT Act Notice   130   

SECTION 9.18

Joint and Several Liability of the Borrower Group   130   

SECTION 9.19

Borrowing Agent   132   

SECTION 9.20

LEGEND   132   

SECTION 9.21

No Fiduciary Duty   132   

SECTION 9.22

Release of Liens and Guarantees   133   

SECTION 9.23

Intercreditor Agreements   133   

 

SCHEDULES

Schedule 1.01(a)

- Mortgaged Property

Schedule 1.01(b)

- Permitted Investments

Schedule 3.08

- Subsidiaries

Schedule 3.09

- Litigation

Schedule 3.17

- Environmental Matters

Schedule 3.18

- Insurance

Schedule 3.19(c)

- Mortgage Filing Offices

Schedule 3.20(a)

- Owned Real Property

Schedule 3.20(b)

- Leased Real Property

Schedule 6.01

- Existing Indebtedness

Schedule 6.02

- Existing Liens

Schedule 6.04

- Investments

 

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EXHIBITS

 

Exhibit A - Form of Administrative Questionnaire Exhibit B - Form of Assignment
and Acceptance Exhibit C - Form of Borrowing Request Exhibit D - Form of
Guarantee and Collateral Agreement Exhibit E - Form of Term Loan/Revolving
Facility Intercreditor Agreement Exhibit F - Form of Mortgage Exhibit G -
Form of Incremental Facility Joinder Agreement Exhibit H - Forms of U.S. Tax
Compliance Certificate Exhibit I - Form of Solvency Certificate

 

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AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT dated as of May 22, 2012 (as
amended and restated on May 29, 2015) among HOUGHTON MIFFLIN HARCOURT COMPANY, a
company organized under the laws of the State of Delaware (“Holdings”), HOUGHTON
MIFFLIN HARCOURT PUBLISHERS INC., a corporation organized under the laws of the
State of Delaware (“HMHP”), HMH PUBLISHERS LLC, a limited liability company
organized under the laws of the State of Delaware (“Publishers”), HOUGHTON
MIFFLIN HARCOURT PUBLISHING COMPANY, a corporation organized under the laws of
the Commonwealth of Massachusetts (“HMCo”, and together with HMHP and
Publishers, collectively, the “Borrowers” and each a “Borrower”), the Subsidiary
Guarantors (as defined in Article I), the Lenders (as defined in Article I),
CITIBANK, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders and CITIBANK, N.A., as collateral agent (in such
capacity, the “Collateral Agent”) for the Lenders.

PRELIMINARY STATEMENTS

(1) Holdings, the Borrowers, the Subsidiary Guarantors, the lenders party
thereto, Citibank N.A., as administrative agent and collateral agent, and the
other parties party thereto are parties to that certain Superpriority Senior
Secured Debtor-In-Possession and Exit Term Loan Credit Agreement dated as of
May 22, 2012 (as further amended, supplemented or otherwise modified prior to
the date hereof, the “Existing Credit Agreement”), pursuant to which the lenders
thereto extended or committed to extend certain credit facilities to the
Borrowers.

(2) HMCo has entered into that certain Stock and Asset Purchase Agreement, dated
as of April 23, 2015 (the “Asset Purchase Agreement”) with Scholastic
Corporation (the “Parent Seller”) and Scholastic Inc. (together with the Parent
Seller, the “Sellers”), pursuant to which HMCo will purchase from the Sellers,
the education technology and services business segment of the Sellers (the
“Target”) upon the terms and conditions set forth in the Asset Purchase
Agreement (the “Specified Acquisition”).

(2) Holdings, the Borrowers and the Subsidiary Guarantors desire to refinance
the outstanding indebtedness under the Existing Credit Agreement (the
“Refinancing”), obtain financing to consummate the Specified Acquisition, to pay
fees and expenses incurred in connection with the Specified Acquisition, the
Refinancing and the other Transactions (as defined below) pursuant to the terms
of this Agreement.

(3) In connection with the Specified Acquisition, Holdings, the Borrowers and
the Subsidiary Guarantors have requested that the Lenders provide them with a
senior secured term loan credit facility in an aggregate principal amount not to
exceed $800,000,000. The Lenders are willing to extend such credit under such
facility to the Borrowers, and to amend and restate the Existing Credit
Agreement, on the terms and subject to the conditions set forth herein.

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ARTICLE I

Definitions

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

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

“Acquired Affiliate” shall mean an Affiliate of a Loan Party that is merged
into, acquired by, or that sells assets to, a Loan Party, which Affiliate is not
a Loan Party prior to such merger, acquisition or sale.

“Acquired Entity” shall have the meaning assigned thereto in the definition of
“Permitted Acquisition”.

“Acquisition” shall mean the acquisition by Holdings or any Restricted
Subsidiary of all or substantially all the assets of a person or line of
business of such person, or not less than 100% of the Equity Interests (other
than directors’ qualifying shares) not previously held by Holdings and its
Subsidiaries of a person so long as such acquisition is permitted by
Section 6.04.

“Activities” shall have the meaning set forth in Section 8.02(b).

“Adjusted LIBO Rate” shall mean, for any Interest Period, an interest rate per
annum equal to the higher of (a) the product of (i) the LIBOR Screen Rate in
respect of U.S. Dollars for the applicable Class of Loans for such Interest
Period multiplied by (ii) Statutory Reserves and (b) 1.00%.

“Administrative Agent” shall have the meaning assigned to such term in the
preamble to this Agreement.

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

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

“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified;
provided, however, that, for purposes of Section 6.07, the term “Affiliate”
shall also include any person that directly or indirectly owns 10% or more of
any class of Equity Interests of the person specified or that is an officer or
director of the person specified.

 

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“Agents” shall mean, collectively, the Administrative Agent, the Collateral
Agent and the Syndication Agent.

“Agent’s Group” shall have the meaning set forth in Section 8.02(b).

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
higher of (a) 1% plus the Adjusted LIBO Rate for a one-month Interest Period
commencing two Business Days after such day, as determined on such day and
(b) the higher of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. If the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to
clause (b)(ii) of the preceding sentence until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Adjusted LIBO Rate, Prime Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Adjusted LIBO
Rate, Prime Rate or the Federal Funds Effective Rate, as the case may be.

“Anticorruption Laws” shall mean the FCPA and any other laws, rules and
regulations of any applicable jurisdiction concerning or relating to bribery or
corruption including but not limited to FCPA and the UK 2010 Bribery Act.

“Anti-Terrorism Laws” shall mean any laws, statutes, regulations and orders, and
all applicable restrictions imposed by any Governmental Authority, relating to
terrorism or money laundering, including the Trading with the Enemy Act, as
amended, and each of the foreign assets control regulations of the United States
Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and any other
enabling legislation or executive order relating thereto, the Executive Order
and the Patriot Act.

“Applicable Percentage” shall mean, (a) in the case of ABR Loans, 2.00% per
annum and (b) in the case of Eurodollar Loans, 3.00% per annum.

“Applicable Prepayment Percentage” shall mean:

(a) in respect of any Prepayment Event that is an Asset Sale, 100%;

(b) in respect of any Prepayment Event that is a Debt Incurrence, 100%; or

(c) in respect of any prepayment based on Excess Cash Flow for any fiscal year,
50%; provided, however, that if as at the last day of any fiscal year, (i) the
Net First Lien Leverage Ratio is less than or equal to 2.50 to 1.00 but greater
than 2.00 to 1.00, the Applicable Prepayment Percentage in respect of Excess
Cash Flow for such fiscal year shall be 25% and (ii) if the Net First Lien
Leverage Ratio is less than or equal to 2.00 to 1.00, the Applicable Prepayment
Percentage in respect of Excess Cash Flow for such fiscal year shall be 0%.

 

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“Arrangers” shall mean Citigroup Global Markets Inc. and Wells Fargo Securities,
LLC, each in its capacity as a joint lead arrangers and bookrunners under this
Agreement.

“Asset Purchase Agreement” shall have the meaning assigned to such term in the
preamble to this Agreement.

“Asset Sale” shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by Holdings or any of the
Restricted Subsidiaries of (a) any Equity Interests of any of the Subsidiaries
(other than directors’ qualifying shares) or (b) any other assets of Holdings or
any of the Restricted Subsidiaries, other than (i) inventory, damaged, obsolete
or worn out assets, and scrap, in each case disposed of in the ordinary course
of business, and dispositions of Permitted Investments, (ii) sales, transfers
and other dispositions between or among Holdings and its Restricted
Subsidiaries, (iii) sales, transfers and other dispositions the aggregate Net
Cash Proceeds of which are less than $15,000,000 with respect to any transaction
or series of related transactions and less than $35,000,000 in the aggregate
during any fiscal year, (iv) sales and dispositions pursuant to Section 6.05(g),
(v) leases, licenses, or subleases or sublicenses of any real or personal
property in the ordinary course of business, (vi) abandonment of intellectual
property of Holdings or any Restricted Subsidiary determined in good faith by
the management of the Borrowers to be no longer useful or necessary in the
operation of the business of Holdings and its Subsidiaries and (vii) so long as
the Revolving Credit Agreement or any asset-based Permitted Refinancing
Indebtedness or Revolving Substitute Facility (as defined in the Term
Loan/Revolving Facility Intercreditor Agreement) in respect thereof is in
effect, any sale, transfer or other disposition of Revolving Facility First Lien
Collateral (as defined in the Term Loan/Revolving Facility Intercreditor
Agreement).

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit B or such other form as shall be approved by the Administrative
Agent.

“Availability” shall have the meaning set forth in the Revolving Credit
Agreement.

“Bankruptcy Claim” shall have the meaning assigned to such term in
Section 9.04(k).

“Bankruptcy Code” shall have the meaning assigned to such term in the
preliminary statements of this Agreement.

“Bankruptcy Laws” shall mean the Bankruptcy Code 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 or other applicable jurisdictions from
time to time in effect.

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

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

“Borrower Group” shall have the meaning assigned to such term in Section 9.18.

 

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

“Borrowing Agent” shall have the meaning assigned to such term in Section 9.19.

“Borrowing Minimum” shall mean $1,000,000.

“Borrowing Multiple” shall mean $500,000.

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

“Breakage Event” shall have the meaning assigned to such term in Section 2.16.

“Budget” shall have the meaning assigned to such term in Section 5.04(d).

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
banks in New York City are authorized or required by law to close; provided,
however, that when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in
deposits in such currency in the London interbank market.

“Capital Expenditures” shall mean, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of Holdings and its
consolidated Restricted Subsidiaries that are (or should be) set forth in a
consolidated statement of cash flows of Holdings for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations or Synthetic Lease
Obligations incurred by Holdings and its consolidated Restricted Subsidiaries
during such period. Notwithstanding the foregoing, Capital Expenditures shall
not include (a) the purchase price of equipment that is purchased substantially
contemporaneously 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 as the
proceeds of such disposition, (b) the purchase of plant, property or equipment
made within the Reinvestment Period in respect of any Asset Sale to the extent
made with the Net Cash Proceeds of such Asset Sale, (c) expenditures of proceeds
of insurance settlements, condemnation awards and other settlements in respect
of lost, destroyed, damaged or condemned assets, equipment or other property to
the extent such expenditures are made to replace or repair such lost, destroyed,
damaged or condemned assets, equipment or other property or otherwise to acquire
assets or properties useful in the business of Holdings and the Restricted
Subsidiaries within 365 days of receipt of such proceeds, (d) interest
capitalized during such period, (e) expenditures that are accounted for as
capital expenditures of such person and that actually are paid for by a third
party (excluding Holdings or any Restricted Subsidiary thereof) and for which
neither Holdings nor any Restricted Subsidiary thereof has provided, or is
required to provide or incur, any consideration or obligation to such third
party or any other person (whether before, during or after such period), (f) the
book value of any asset owned by such person prior to or during such period to
the extent that such book value is included as a Capital Expenditure during such
period as a result of such person reusing or beginning to reuse such asset
during such

 

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period without a corresponding expenditure actually having been made in such
period; provided that any expenditure necessary in order to permit such asset to
be reused shall be included as a Capital Expenditure during the period that such
expenditure actually is made and such book value shall have been included in
Capital Expenditures when such asset was originally acquired, or
(g) expenditures that constitute Permitted Acquisitions or Acquisitions. For the
avoidance of doubt, Capital Expenditure will be deemed to include the
capitalized portion of pre-publication and pre-production costs.

“Capital Lease” shall mean, as applied to any person, any lease of any property
(whether real, personal or mixed) by such person as lessee, that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of such person.

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

“Change of Control” shall mean the occurrence of any of the following:

(a) the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all of the assets of Holdings and its Subsidiaries, taken
as a whole, to any Person other than to one or more Loan Parties;

(b) the consummation of the acquisition by any Person or group (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision), including any group acting for the purpose of acquiring,
holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act), 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 more than 50% of the total voting
power of the Voting Stock of Holdings or any of its direct or indirect parent
companies holding directly or indirectly 100% of the total voting power of the
Voting Stock of Holdings;

(c) a majority of the seats (other than vacant seats) of the board of directors
of Holdings shall be occupied by individuals who are not Continuing Directors;
or

(d) any Borrower ceases to be a wholly owned Subsidiary of Holdings (except in a
transaction permitted under Section 6.05).

“Change in Law” shall mean (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender (or, for purposes of
Section 2.14, by any lending office of such Lender or by such Lender’s holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement; provided that notwithstanding anything to the contrary, (x) the

 

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Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and
regulations with respect thereto, and (y) all requests, rules, guidelines and
directions promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any similar or successor agency, or the
United States or foreign regulatory authorities, in each case, pursuant to Basel
III), shall in each case be deemed to be a “Change in Law”, regardless of the
date adopted or enacted.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, is a Term Loan or New Term
Loan and (b) when used in reference to any Commitment, refers to whether such
Commitment is a Term Loan Commitment or a New Term Loan Commitment.

“Closing Date” shall mean the first date on which all the conditions precedent
in Article IV are satisfied (or waived pursuant to Section 9.08).

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

“Collateral” shall mean all the “Collateral” as defined in any Security Document
and any other assets or property pledged or on which a Lien is granted pursuant
to any Security Document and shall also include the Mortgaged Properties.

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

“Commitment” shall mean, with respect to any Lender, such Lender’s Term Loan
Commitment and New Commitment.

“Commitment Letter” shall mean the commitment letter dated as of April 23, 2015
from the Arrangers to the Borrowers.

“Compliance Certificate” shall have the meaning assigned to such term in
Section 5.04(c).

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, plus: (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of: (i) consolidated interest
expense for such period; (ii) provisions for taxes based on income, profits or
losses (determined on a consolidated basis) during such period; (iii) all
amounts attributable to depreciation and amortization for such period; (iv) any
extraordinary losses for such period; (v) any fees, expenses or charges for such
period related to any equity offering, Investment, acquisition permitted
hereunder, permitted disposition, recapitalization or the incurrence of
Indebtedness permitted to be incurred hereunder including a refinancing thereof
(in each case, whether or not successful) and any amendment or modification to
the terms of any such transactions, deducted in computing Consolidated Net
Income for such period; provided that the aggregate amount of such costs added
back to Consolidated EBITDA shall not exceed $10,000,000 for any period of four
consecutive quarters; (vi) any non-cash charges for such period (for the
avoidance of doubt, including, but not limited to, purchase accounting
adjustments, assets impairments and equity compensation charges);
(vii) restructuring charges for such period relating to current or anticipated
future cash

 

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expenditures, including restructuring costs related to closure or consolidation
of facilities, and severance and other separation costs and post-retirement
medical expenses in an aggregate amount not to exceed $10,000,000 for any period
of four consecutive fiscal quarters; (viii) [intentionally omitted]; (ix) other
non-recurring charges for such period in an aggregate amount not to exceed
$10,000,000 for any period of four consecutive fiscal quarters (for the
avoidance of doubt, including, but not limited to, acquisition related expenses,
whether or not the acquisition was consummated); and (x) deferred financing fees
(and any write-offs thereof); provided that to the extent not reflected in
Consolidated Net Income for the period in which such cash payment is made, any
cash payment made with respect to any non-cash charges added back in computing
Consolidated EBITDA for any prior period pursuant to clause (v) above (or that
would have been added back had this Agreement been in effect during such prior
period) shall be subtracted in computing Consolidated EBITDA for the period in
which such cash payment is made; and minus (b) without duplication and to the
extent included in determining such Consolidated Net Income: (i) any
extraordinary gains for such period; and (ii) any non-cash gains for such period
(excluding any non-cash gain to the extent it represents the reversal of an
accrual or reserve for a potential cash item that reduced Consolidated EBITDA in
any prior period), in each case of clauses (a) and (b), all determined on a
consolidated basis in accordance with GAAP; provided that Consolidated EBITDA
for any period shall be calculated so as to exclude (without duplication of any
adjustment referred to above) the effect of: (A) the cumulative effect of any
changes in GAAP or accounting principles applied by management; (B) any gain or
loss for such period that represents after-tax gains or losses attributable to
any sale, transfer or other disposition or abandonment of assets by Holdings or
any of the Restricted Subsidiaries, other than dispositions or sales of
inventory and other dispositions in the ordinary course of business; (C) any
income or loss for such period attributable to the early extinguishment of
Indebtedness or accounts payable; (D) any non-cash gains or losses on foreign
currency derivatives and any foreign currency transaction non-cash gains or
losses and any foreign currency exchange translation gains or losses that arise
on consolidation of integrated operations; and (E) mark-to-market adjustments in
the valuation of derivative obligations resulting from the application of
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities.

“Consolidated First Lien Debt” shall mean, without duplication, as of any date
of determination, (a) the aggregate principal amount of all Total Debt
outstanding hereunder as of such date and all other outstanding Total Debt
secured by Liens on the Collateral that are not junior in priority to the Liens
on the Collateral securing the Obligations as of such date minus (b) the
aggregate amount of cash and Permitted Investments on the consolidated balance
sheet of Holdings and the Restricted Subsidiaries on such date, excluding cash
and Permitted Investments which are or should be listed as “restricted” on the
consolidated balance sheet of Holdings and the Restricted Subsidiaries as of
such date. It is understood that (i) the aggregate principal amount of Total
Debt outstanding under the Revolving Credit Facility as of the applicable date
of determination shall be included in clause (a) above, and (ii) when
calculating the Net First Lien Leverage Ratio for the purposes of adding any New
Revolving Loan Commitments under Section 2.24, the full amount of the
commitments in respect of such New Revolving Loan Commitments shall be deemed to
be outstanding.

 

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“Consolidated Interest Expense” shall mean, for any period, the excess of
(a) the sum of (i) the interest expense (including imputed interest expense in
respect of Capital Lease Obligations and Synthetic Lease Obligations) of
Holdings and its Restricted Subsidiaries for such period (net of cash interest
income of Holdings and the Restricted Subsidiaries for such period), determined
on a consolidated basis in accordance with GAAP plus (ii) any interest accrued
during such period in respect of Indebtedness of Holdings or any Restricted
Subsidiary that is required to be capitalized rather than included in
consolidated interest expense for such period in accordance with GAAP, plus
(iii) any cash payments made during such period in respect of obligations
referred to in clause (b)(ii) below that were amortized or accrued in a previous
period, minus (b) to the extent included in the amount determined pursuant to
clause (a) above for such period, the sum of (i) non-cash amounts attributable
to amortization of financing costs paid in a previous period, plus (ii) non-cash
amounts attributable to amortization of debt discounts or accrued interest
payable in kind for such period, plus (iii) non-cash adjustments attributed to
the effects of recording debt at fair value. For purposes of the foregoing,
interest expense shall be determined after giving effect to any net payments
made or received by Holdings or any Restricted Subsidiary with respect to
interest rate Hedging Agreements and without giving effect to the movement of
mark-to-market valuation of obligations under Hedging Agreements or other
derivative instruments pursuant to GAAP (for the avoidance of doubt, up-front
payments made to enter into Hedging Agreements to provide interest rate
protection will be spread over the period of the protection provided
thereunder).

“Consolidated Net Income” shall mean, for any period, the net income or loss of
Holdings and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that, without duplication,
there shall be (x) other than for purposes of making calculations of the
Applicable Prepayment Percentage or Net Total Leverage Ratio solely in
connection with Sections 6.06(a) and 6.08(b), included an amount equal to the
Owned Percentage of the income of any Majority-Owned Subsidiary that is
consolidated with Holdings in accordance with GAAP and (y) excluded (a) the
income of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by the Restricted Subsidiary of
that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to such Restricted Subsidiary, (b) the income
or loss of any person accrued prior to the date it becomes a Restricted
Subsidiary or is merged into or consolidated with Holdings or any Restricted
Subsidiary or the date that such person’s assets are acquired by Holdings or any
Restricted Subsidiary, (c) the income of any person (other than any
Majority-Owned Subsidiary) in which any other person (other than Holdings or a
wholly owned Restricted Subsidiary or any director holding qualifying shares in
accordance with applicable law) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to Holdings or a
wholly owned Restricted Subsidiary by such person during such period, (d) any
net after-tax gains or losses attributable to sales of assets out of the
ordinary course of business (determined in good faith by the Borrowers), (e) any
net after-tax extraordinary gains or extraordinary losses, (f) the cumulative
effect of a change in accounting principles that occurs after the Closing Date,
(g) any net after-tax income or loss from disposed, abandoned, closed or
discontinued operations and any net after-tax gain or loss on disposal of
disposed, abandoned, closed or discontinued operations, (h) any net after-tax
income or loss (less all fees and expenses or charges relating thereto)
attributable to the early extinguishment of Indebtedness, Hedging Agreements or
other derivative instruments, (i) effects of purchase accounting adjustments in
component amounts required or permitted by GAAP, resulting from the application
of purchase accounting in relation to any acquisition permitted hereunder
consummated after the Closing

 

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Date, (j) any non-cash expenses realized or resulting from stock option plans,
employee benefit plans or post-employment benefit plans, or grants or sales of
stock, stock appreciation or similar rights, stock options, restricted stock
grants or other rights to officers, directors and employees of such person or
any of its subsidiaries, (k) any accruals and reserves that are established
within twelve months after the Closing Date and that are so required to be
established in accordance with GAAP and (l) to the extent covered by insurance
and actually reimbursed, or, so long as there exists reasonable evidence that
such amount will in fact be reimbursed by the insurer and only to the extent
that such amount is (i) not denied by the applicable carrier in writing within
180 days, and (ii) in fact reimbursed within 365 days of the date of such
evidence (with a deduction for any amount so added back to the extent not so
reimbursed within 365 days), expenses with respect to liability or casualty
events or business interruption; provided that any proceeds of such
reimbursement when received shall be excluded from the calculation of
Consolidated Net Income to the extent the expense reimbursed was previously
excluded pursuant to this clause (l).

“Consolidated Secured Debt” shall mean, without duplication, as of any date of
determination, (a) the aggregate principal amount of all Total Debt, outstanding
hereunder as of such date and all other outstanding Total Debt secured by Liens
on any assets or property of Holdings or any Restricted Subsidiary minus (b) the
aggregate amount of cash and Permitted Investments on the consolidated balance
sheet of Holdings and the Restricted Subsidiaries on such date, excluding cash
and Permitted Investments which are or should be listed as “restricted” on the
consolidated balance sheet of Holdings and the Restricted Subsidiaries as of
such date. It is understood that, when calculating the Net First Lien Leverage
Ratio for the purposes of adding New Revolving Loan Commitments, the full amount
of the commitments in respect of such New Revolving Loan Commitments shall be
deemed to be outstanding.

“Consolidated Working Capital” shall mean, at any date, (a) the Current Assets
minus (b) the Current Liabilities as of such date. Consolidated Working Capital
at any time may be a positive or negative number. Consolidated Working Capital
increases when it becomes more positive or less negative and decreases when it
becomes less positive or more negative.

“Continuing Directors” shall mean the directors of Holdings on the Closing Date
and each other director if such other director’s election or nomination for
election to the board of directors of Holdings, is recommended by a majority of
the Continuing Directors who were members of the board of directors of Holdings
at the time of such election or nomination.

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

“Copyrights” shall have the meaning assigned to such term in the Guarantee and
Collateral Agreement.

“Corrective Extension Agreement” shall have the meaning set forth in
Section 2.22(e).

 

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“Cumulative Credit” means, at any time (the “Reference Date”), the sum (not less
than zero) of (without duplication and determined on a cumulative basis):

(a) an amount equal to (i) the cumulative amount of Excess Cash Flow (which
amount shall not be less than zero in any applicable Excess Cash Flow Period) of
Holdings and its Restricted Subsidiaries for the Cumulative Credit Reference
Period minus (ii) the portion of such Excess Cash Flow that has been (or is
required to be) applied to the prepayment of Loans in accordance with
Section 2.13(d); plus

(b) 100% of the aggregate amount of capital contributions and net cash proceeds
from the sale or issuance of Equity Interests of Holdings permitted hereunder
(other than any amounts constituting proceeds of issuances of Disqualified
Stock) received by Holdings during the period from and including the Business
Day immediately following the Closing Date through and including the Reference
Date; plus

(c) 100% of the aggregate amount of Declined Proceeds received by Holdings or
any of its Restricted Subsidiaries during the period from and including the
Business Day immediately following the Closing Date through and including the
Reference Date; plus

(d) an amount equal to any net cash returns (including dividends, interest,
distributions, returns of principal, profits on sale, repayments, income and
similar amounts) actually received by Holdings or any Restricted Subsidiary in
respect of any Investments made pursuant to clause (ii) of Section 6.04(s);
minus

(e) the aggregate amount of any Investments made pursuant to clause (ii) of
Section 6.04(s), any Restricted Payment made pursuant to Section 6.06(a)(iv) and
any distribution, payment, redemption, repurchase, retirement or acquisition of
Subordinated Indebtedness made pursuant to subclause (I) of Section 6.08(b)
during the period commencing on the Closing Date and ending on the Reference
Date (and, for purposes of this clause (d), without taking account of the
intended usage of the Cumulative Credit on such Reference Date in the
contemplated transaction).

“Cumulative Credit Reference Period” shall mean, with respect to any Reference
Date, the period commencing January 1, 2016 and ending on the last day of the
most recent fiscal year occurring thereafter for which financial statements
required to be delivered pursuant to Section 5.04(a), and the related Compliance
Certificate required to be delivered pursuant to Section 5.04(c), have been
received by the Administrative Agent.

“Current Assets” shall mean, at any time, the consolidated current assets (other
than cash and Permitted Investments) of Holdings and the Subsidiaries.

“Current Liabilities” shall mean, at any time, the consolidated current
liabilities of Holdings and the Subsidiaries at such time, but excluding, the
current portion of any long-term Indebtedness.

“Debt Incurrence” shall mean any issuance or incurrence by Holdings or any
Restricted Subsidiary of any Indebtedness, other than Indebtedness permitted by
Section 6.01.

 

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“Debt Service” shall mean, with respect to Holdings and the Subsidiaries, on a
consolidated basis for any fiscal year, Consolidated Interest Expense for such
fiscal year plus the aggregate principal amount of Long-Term Indebtedness repaid
or prepaid during such fiscal year, excluding (i) prepayments of the Term Loan,
(whether optional or mandatory) and (ii) repayments or prepayments of Long-Term
Indebtedness deducted in calculating the amount of Net Cash Proceeds in
connection with any Asset Sale.

“Declined Proceeds” shall have the meaning assigned to such term in
Section 2.13(i).

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

“Defaulting Lender” shall mean, at any time, subject to Section 2.25(b), any
Lender that (a) has failed to (i) fund all or any portion of its Loans within
two Business Days of the date such Loans were required to be funded hereunder
unless such Lender notifies the Administrative Agent and the Borrowers in
writing that such failure is the result of such Lender’s determination that one
or more conditions precedent to funding (each of which conditions precedent,
together with any applicable default, shall be specifically identified in such
writing) has not been satisfied, or (ii) pay to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within two
Business Days of the date when due, (b) has notified the Borrowers, the
Administrative Agent in writing that it does not intend to comply with its
funding obligations hereunder, or has made a public statement to that effect
(unless such writing or public statement relates to such Lender’s obligation to
fund a Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the
Borrowers, to confirm in writing to the Administrative Agent and the Borrowers
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon receipt of such written confirmation by the Administrative Agent
and the Borrowers), (d) has, or has a direct or indirect parent company that
has, (i) become the subject of a proceeding under any Bankruptcy Law, or
(ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender, or (e) has defaulted on its funding obligations under any other loan
agreement or credit agreement or other financing agreement. Any determination by
the Administrative Agent that a Lender is a Defaulting Lender under any one or
more of clauses (a) through (e) above shall be conclusive and binding absent
manifest error, and such Lender shall be deemed to be a Defaulting Lender
(subject to Section 2.25(b)) upon delivery of written notice of such
determination to the Borrowers and each Lender.

 

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“Designated Amount” shall have the meaning assigned to such term in
Section 8.11(a).

“Designated Non-Cash Consideration” shall mean the fair market value of non-cash
consideration received by Holdings or a Restricted Subsidiary in connection with
a disposition pursuant to Section 6.05(f) that is designated as Designated
Non-Cash Consideration pursuant to a certificate of a Financial Officer, setting
forth the basis of such valuation (which amount will be reduced by the fair
market value of the portion of the non-cash consideration converted to cash or
Permitted Investments in connection with a subsequent sale of such non-cash
consideration within 270 days following the consummation of the applicable
disposition).

“Disqualified Lenders” shall mean (a) such Persons that have been specified in
writing to the Administrative Agent and the Arrangers on or prior to the date of
the Commitment Letter as being “Disqualified Lenders,” and (b) those Persons who
are bona fide competitors of the Target that are separately identified in
writing by the Borrowers from time to time after the date falling 60 days of the
Closing Date to the Administrative Agent; provided, that in no event shall any
supplement to the list of Disqualified Lenders apply retroactively to disqualify
any parties that have previously acquired an assignment under the Term Loan
Facility that is otherwise permitted hereunder, but upon the effectiveness of
such designation, any such party may not acquire any additional commitments,
loans or participations hereunder.

“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
first anniversary of the Latest Maturity Date (as determined at the time of
incurrence or issuance), or (b) is convertible into or exchangeable (unless at
the sole option of the issuer thereof) for (i) debt securities or (ii) any
Equity Interest referred to in clause (a) above, in each case at any time prior
to the first anniversary of the Latest Maturity Date (as determined at the time
of incurrence or issuance).

“Domestic Subsidiaries” shall mean all Subsidiaries incorporated or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.

“Eligible Assignee” shall mean any commercial bank, insurance company,
investment or mutual fund, financial institution or other entity that is an
“accredited investor” (as defined in Regulation D under the Securities Act of
1933, as amended) that extends credit or invests in bank loans in the ordinary
course; provided that no natural person and none of the Borrowers, Disqualified
Lenders, Defaulting Lenders or Potential Defaulting Lenders or any Subsidiary of
the Defaulting Lenders or Potential Defaulting Lenders shall be an Eligible
Assignee.

“Employee Equity Sales” shall mean the issuance or sale of Equity Interests of
Holdings after the Closing Date to any present or former officer or employee of
Holdings or any Restricted Subsidiary.

 

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“EMU Legislation” shall mean the legislative measures of the European Union for
the introduction of, changeover to or operation of the Euro in one or more
member states.

“Environmental Laws” shall mean all applicable former, current and future
Federal, state, local and foreign laws (including common law), treaties,
regulations, rules, ordinances, codes, decrees, judgments, directives, orders
(including consent orders), and agreements in each case, relating to protection
of the environment, natural resources, human health and safety (as it relates to
exposure to Hazardous Materials) or the presence, Release of, or exposure to,
Hazardous Materials, or the generation, manufacture, processing, distribution,
use, treatment, storage, transport, recycling or handling of, or the arrangement
for such activities with respect to, Hazardous Materials.

“Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including administrative oversight costs, natural resource
damages and remediation costs), whether contingent or otherwise, arising out of
or relating to (a) compliance or non-compliance with any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials
Released into the environment, (d) the Release of any Hazardous Materials or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person, and any option, warrant or other
right entitling the holder thereof to purchase or otherwise acquire any such
equity interest.

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

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with a Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan (other
than an event for which the 30 day notice period is waived), (b) any failure by
any Plan to satisfy the minimum funding standard (within the meaning of
Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in
each case whether or not waived, (c) the filing pursuant to Section 412(c) of
the Code or Section 302(c) of ERISA, of an application for a waiver of the
minimum funding standard with respect to any Plan, (d) a determination that any
Plan is, or is expected to be, in “at risk” status (as defined in
Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence
by a Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial
withdrawal of a Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan, (f) the receipt by a Borrower or any of its ERISA Affiliates
from the PBGC or a plan administrator of any notice

 

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relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan, (g) the receipt by a Borrower or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from a
Borrower or any of its ERISA Affiliates of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA or, is in endangered or critical status, within the meaning of
Section 305 of ERISA, (h) the occurrence of a “prohibited transaction” with
respect to which the Borrower or any of the Restricted Subsidiaries is a
“disqualified person” (within the meaning of Section 4975 of the Code) or with
respect to which the Borrower or any such Restricted Subsidiary could otherwise
be liable, (i) any Foreign Benefit Event or (j) any other event or condition
with respect to any Plan, Multiemployer Plan or Foreign Pension Plan that could
result in the imposition of a Lien or the acceleration of any statutory
obligation to fund any material unfunded accrued benefit liability of such Plan,
Multiemployer Plan or Foreign Pension Plan.

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

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

“Excess Cash Flow” shall mean, with respect to Holdings and the Subsidiaries on
a consolidated basis for any fiscal year, Consolidated EBITDA for such fiscal
year, minus (to the extent not otherwise deducted in determining Consolidated
EBITDA) without duplication, (a) Debt Service for such fiscal year,
(b)(i) Capital Expenditures by Holdings and the Subsidiaries on a consolidated
basis during such fiscal year that are paid in cash and (ii) the aggregate
consideration paid in cash during such fiscal year in respect of Permitted
Acquisitions and other Investments permitted hereunder (other than Permitted
Investments, Investments in a Subsidiary and Investments permitted by
clause (d), (f), (i), (j) or (k) of Section 6.04) less any amounts received in
respect thereof as a return of capital, (c) taxes paid in cash by Holdings and
the Subsidiaries on a consolidated basis during such fiscal year including
income tax expense and withholding tax expense incurred in connection with
cross-border transactions involving its Foreign Subsidiaries, (d) an amount
equal to any increase in Consolidated Working Capital of Holdings and the
Subsidiaries for such fiscal year, (e) cash expenditures made in respect of
Hedging Agreements during such fiscal year, to the extent not reflected in the
computation of Consolidated Interest Expense, (f) Restricted Payments paid in
cash by Holdings during such fiscal year pursuant to clause (i) of
Section 6.06(a), (g)(i) special charges or any extraordinary or nonrecurring
losses paid in cash during such fiscal year, (ii) severance and other separation
costs and any post-retirement medical expenses, (iii) costs associated with
facility closures or vacancies for such fiscal year and (iv) payments made in
cash in respect of pension plans of Holdings and its Subsidiaries and (h) items
described in clauses (a)(v), (vi), (vii) and (ix) of the definition of
“Consolidated EBITDA” to the extent included in the calculation of Consolidated
EBITDA for such fiscal year and to the extent paid in cash during such fiscal
year; plus, without duplication, (1) an amount equal to any decrease in
Consolidated Working Capital for such fiscal year, (2) all proceeds received
during such fiscal year in respect of Long-Term Indebtedness, and any financing
of any type (including from the reinvestment of proceeds of Asset Sales), in
each case to the extent used to finance any Debt Service, Capital Expenditure,
Permitted Acquisitions or Investment referred to in clauses (a) through
(g) above, (3) all amounts referred to in clause

 

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(b) above to the extent funded with the proceeds of the issuance of Equity
Interests of, or capital contributions to, Holdings, (4) cash payments received
in respect of Hedging Agreements during such fiscal year to the extent (A) not
included in the computation of Consolidated EBITDA or (B) reducing Consolidated
Interest Expense, (5) any extraordinary or nonrecurring gain realized in cash
during such Excess Cash Flow Period (other than in connection with a Prepayment
Event), and (6) to the extent deducted in the computation of Consolidated
EBITDA, interest income.

“Excess Cash Flow Period” shall mean, at any date, (i) the period taken as one
accounting period beginning on January 1, 2016 and ending on December 31, 2016
and (ii) each fiscal year of Holdings thereafter.

“Excluded Accounts” shall mean (a) payroll accounts, employee benefit accounts,
withholding tax and other fiduciary accounts, escrow accounts in respect of
arrangements with non-affiliated third parties, customs accounts, cash
collateral accounts subject to Liens permitted under the Loan Documents and
accounts held by non-Loan Parties and (b) such other deposit accounts and other
bank or securities accounts held by Loan Parties the balance of all of which is
less than $10,000,000 in the aggregate at any time.

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

“Excluded Subsidiary” shall have the meaning assigned to such term in
Section 5.12(a).

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of a Borrower hereunder, (a) income, franchise or other similar Taxes
imposed on (or measured by) its net income (or its gross income in lieu thereof)
(i) by the United States of America, (ii) by the jurisdiction (or any political
subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located or (iii) as a result of a present or
former connection between such recipient and the jurisdiction imposing such Tax
(or any political subdivision thereof), (b) any branch profits taxes imposed by
the United States of America or any similar Tax imposed by any other
jurisdiction described in clause (a) above, (c) any U.S. federal withholding tax
that is imposed on amounts payable to or for the account of such Lender at the
time such Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Lender’s failure to comply with
Sections 2.20(f) and (g), except to the extent that such Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrowers with
respect to such withholding tax pursuant to Section 2.20(a) and (d) any Taxes
imposed under FATCA.

“Executive Order” shall mean Executive Order No. 13224 on Terrorist Financing,
effective on September 24, 2001.

“Existing Credit Agreement” shall have the meaning assigned to such term in the
preamble to this Agreement.

“Existing Term Loan Class” shall have the meaning set forth in Section 2.22(a).

 

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“Extended Term Loans” shall have the meaning set forth in Section 2.22(a).

“Extending Lender” shall have the meaning set forth in Section 2.22(b).

“Extension Agreement” shall have the meaning set forth in Section 2.22(c).

“Extension Date” shall have the meaning set forth in Section 2.22(d).

“Extension Election” shall have the meaning set forth in Section 2.22(b).

“Extension Series” shall mean all Extended Term Loans that are established
pursuant to the same Extension Agreement (or any subsequent Extension Agreement
to the extent such Extension Agreement expressly provides that the Extended Term
Loans provided for therein are intended to be a part of any previously
established Extension Series) and that provide for the same interest margins,
extension fees, if any, and amortization schedule.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with) and any current or
future regulations or official interpretations thereof, any agreements entered
into pursuant to Section 1471(b)(1) of the Code, any applicable
intergovernmental agreements with respect thereto and laws enacting such
intergovernmental agreements between the United States and any other
jurisdiction to implement Sections 1471 through 1474 of the Code (an “IGA”), and
any law, regulation or other official guidance enacted in any jurisdiction
implementing Sections 1471 through 1474 of the Code or an IGA.

“FCPA” shall mean the United States Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.

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

“Fee Letter” shall mean, with respect to any Agent, the applicable fee letter
then in effect between such Agent and Holdings.

“Fees” shall mean the Administrative Agent Fees and the Other Fees.

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

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

 

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“Foreign Benefit Event” shall mean, with respect to any Foreign Pension Plan,
(a) the existence of unfunded liabilities in excess of the amount permitted
under any applicable law, or in excess of the amount that would be permitted
absent a waiver from a Governmental Authority, (b) the failure to make the
required contributions or payments, under any applicable law, on or before the
due date for such contributions or payments, (c) the receipt of a notice by a
Governmental Authority relating to the intention to terminate any such Foreign
Pension Plan or to appoint a trustee or similar official to administer any such
Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension
Plan, (d) the incurrence of any liability in excess of $5,000,000 by Holdings or
any Restricted Subsidiary under applicable law on account of the complete or
partial termination of such Foreign Pension Plan or the complete or partial
withdrawal of any participating employer therein, or (e) the occurrence of any
transaction that is prohibited under any applicable law and that could
reasonably be expected to result in the incurrence of any liability by Holdings
or any of the Restricted Subsidiaries, or the imposition on Holdings or any of
the Restricted Subsidiaries of any fine, excise tax or penalty resulting from
any noncompliance with any applicable law, in each case in excess of $5,000,000.

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

“Foreign Pension Plan” shall mean any defined benefit pension plan maintained
outside the jurisdiction of the United States that is maintained or contributed
to by Holdings, any Restricted Subsidiary or any ERISA Affiliate and that under
applicable law is required to be funded through a trust or other funding vehicle
other than a trust or funding vehicle maintained exclusively by a Governmental
Authority.

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

“GAAP” shall mean generally accepted accounting principles. References to GAAP
shall mean GAAP in the United States, unless otherwise expressly provided.

“Governmental Authority” shall mean any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.

“Granting Lender” shall have the meaning assigned to such term in
Section 9.04(i).

“Guarantee” of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation or (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation; provided, however, that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business.

 

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“Guarantee and Collateral Agreement” shall mean the Amended and Restated Term
Facility Guarantee and Collateral Agreement, substantially in the form of
Exhibit D, among the Loan Parties party thereto and the Collateral Agent.

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

“Hazardous Materials” shall mean (a) any petroleum products or byproducts and
all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances and (b) any chemical, material, substance or waste
that is prohibited, limited or regulated by or pursuant to any Environmental
Law.

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

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

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

“IGA” shall have the meaning assigned thereto in the definition of “FATCA”.

“Immaterial Subsidiary” shall mean, at any date of determination, any Restricted
Subsidiary of Holdings (a) whose total assets (when combined with the assets of
such Restricted Subsidiary’s Subsidiaries, after eliminating intercompany
obligations) are an amount equal to or less than 5% of the consolidated total
assets of Holdings and its Restricted Subsidiaries at such date and (b) whose
gross revenues (when combined with the revenues of such Restricted Subsidiary’s
Subsidiaries, after eliminating intercompany obligations) are an amount equal to
or less than 5% of the consolidated gross revenues of Holdings, in each case
determined in accordance with GAAP.

“Incremental Amount” shall mean, at any time, the sum of:

(a) the excess (if any) of (i) $200,000,000 over (ii) the sum of (x) the
aggregate amount of all New Commitments established after the Closing Date and
prior to such time pursuant to Section 2.24 utilizing this clause (a) and
(y) the aggregate principal amount of Indebtedness outstanding pursuant to
Section 6.01(x) at such time; plus

 

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(b) an additional amount of Indebtedness, such that, after giving pro forma
effect to such incurrence, the Net First Lien Leverage Ratio is not greater than
2.50:1.00 and the Net Total Leverage Ratio is not greater than 4.00:1.00; plus

(c) an additional amount of Indebtedness equal to the aggregate principal amount
of any voluntary prepayments of any Term Loans or other Loans made pursuant to
Section 2.12 (in the case of any New Revolving Loans, solely to the extent
accompanied by a permanent reduction of the applicable New Revolving Commitments
in the amount of such prepayment).

“Incremental Facility Joinder Agreement” shall mean an agreement substantially
in the form of Exhibit G, among the Loan Parties, the Administrative Agent and
any existing Lender or one or more New Term Loan Lenders in respect of any New
Term Loan Commitment or one or more New Revolving Loan Lenders in respect of any
New Revolving Loan Commitment.

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (d) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding earnouts (unless such earnout is not paid after
it becomes due and payable in accordance with the terms thereof), trade accounts
payable and accrued obligations incurred in the ordinary course of business),
(e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (f) all Guarantees by such person
of Indebtedness of others, (g) Capital Lease Obligations and Synthetic Lease
Obligations of such person, (h) all obligations of such person (including
contingent obligations) as an account party in respect of letters of credit,
(i) all obligations of such person in respect of bankers’ acceptances and
(j) all net payments that such person would have to make in the event of any
early termination, on the date Indebtedness is being determined, in respect of
outstanding Hedging Agreements. The Indebtedness of any person shall include the
Indebtedness of any partnership in which such person is a general partner to the
extent such person is liable therefor as a result of such person’s ownership
interest in or other relationship with such partnership, except to the extent
the terms of such Indebtedness expressly provide that such person is not liable
therefor. Notwithstanding the foregoing, Indebtedness will be deemed not to
include obligations under, or in respect of Qualified Capital Stock.

“Indemnified Costs” shall have the meaning set forth in Section 8.05.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of the
Borrowers under any Loan Document and (b) to the extent not described in (a),
Other Taxes.

“Intellectual Property” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.

 

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“Intercreditor Agreement” shall mean (a) the Term Loan/Revolving Facility
Intercreditor Agreement, (b) to the extent executed in connection with the
incurrence of secured Indebtedness incurred by a Loan Party, the Liens on the
Collateral which are intended to rank equal in priority to the Liens on the
Collateral securing the Obligations, a customary intercreditor agreement in form
and substance reasonably satisfactory to the Administrative Agent, which
agreement shall provide that the Liens on the Collateral securing such
Indebtedness shall rank equal in priority to the Liens on the Collateral
securing the Obligations and (c) to the extent executed in connection with the
incurrence of secured Indebtedness incurred by a Loan Party, the Liens on the
Collateral which are intended to rank junior in priority to the Liens on the
Collateral securing the Obligations, a customary intercreditor agreement in form
and substance reasonably satisfactory to the Administrative Agent, which
agreement shall provide that the Liens on the Collateral securing such
Indebtedness shall rank junior in priority to the Liens on the Collateral
securing the Obligations, as the context requires.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last
Business Day of each calendar month, commencing with the last Business Day of
June, 2015 and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months’ duration, each day that would have been an Interest Payment Date had
successive Interest Periods of three months’ duration been applicable to such
Borrowing.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter (or, if made
available by all participating Lenders, 12 months), as a Borrower may elect;
provided, however, that (a) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period that commences on the last
day of a calendar month (or on a day for which there is no numerically
corresponding day in the last month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest Period. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period. For purposes hereof, the date of
a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

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

“IRS” shall mean the Internal Revenue Service of the United States.

“Joint Venture” shall mean any Person in which Holdings or any of its Restricted
Subsidiaries beneficially own any Equity Interest that is not a wholly owned
Subsidiary.

“Latest Maturity Date” shall mean, at any date of determination, the latest
maturity or expiration date applicable to any Loan or Commitment hereunder at
such date.

 

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“Lender Appointment Period” shall have the meaning set forth in Section 8.07.

“Lenders” shall mean Term Lenders, any New Term Loan Lenders, if any, any New
Revolving Loan Lenders, if any, and any Extending Lenders, if any.

“Letter of Credit” shall mean any letter of credit issued pursuant to the
Revolving Credit Agreement.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent
(which determination shall be conclusive and binding absent manifest error) to
be equal to the rate that results from interpolating on a linear basis between:
(a) the LIBOR Screen Rate for the longest period (for which the LIBOR Screen
Rate is available for the applicable currency) that is shorter than such
Interest Period and (b) the LIBOR Screen Rate for the shortest period (for which
the LIBOR Screen Rate is available for the applicable currency) that exceeds
such Interest Period, in each case, at such time.

“LIBOR Screen Rate” shall mean, for any period, the rate per annum determined on
the basis of the rate for deposits in U.S. Dollars for a period equal to such
period commencing on the first day of such period appearing on Reuters Screen
Libor01 Page as of 11:00 A.M., London time, two Business Days prior to the
beginning of such period. In the event that such rate is not available at such
time for any reason, then the “LIBOR Screen Rate” shall be a rate per annum
equal to the “LIBO Rate”.

“License” shall mean any license or agreement under which a Loan Party is
authorized to use Intellectual Property in connection with any manufacture,
marketing, distribution or disposition of Collateral or any other conduct of its
business.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset,
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.

“Liquidity” shall mean, for any date of determination, the sum of the
Availability under the Revolving Credit Agreement on such date plus the total
amount of Unrestricted Domestic Cash and Cash Equivalents at the close of
business on the immediately preceding Business Day.

“Loan Document Obligations” shall mean the due and punctual payment of (i) the
principal of and interest (including interest accruing during the pendency of
any bankruptcy, examination, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) all other monetary obligations
of the Borrowers to any of the Secured Parties under this Agreement and each of
the other Loan Documents, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during

 

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the pendency of any bankruptcy, examination, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), (iii) the due and punctual performance of all other obligations of
the Borrowers under or pursuant to this Agreement and each of the other Loan
Documents, and (iv) the due and punctual payment and performance of all the
obligations of each Loan Party under or pursuant to the Guarantee and Collateral
Agreement and each of the other Loan Documents.

“Loan Documents” shall mean this Agreement, the Security Documents, the
Incremental Facility Joinder Agreements, the Extension Agreements, if any, the
promissory notes, if any, executed and delivered pursuant to Section 2.04(e) and
the Fee Letter.

“Loan Parties” shall mean the Borrowers and the Guarantors.

“Loans” shall mean the Term Loan, any New Loans and any Extended Term Loans, if
any.

“Local Time” shall mean with respect to a Loan or Borrowing, New York City time.

“Long-Term Indebtedness” shall mean any Indebtedness that, in accordance with
GAAP, constitutes (or, when incurred, constituted) a long-term liability.

“Majority-Owned Subsidiary” shall mean a Restricted Subsidiary of Holdings of
which securities (except for directors’ qualifying shares) or other ownership
interests representing a majority of the aggregate outstanding Equity Interests
of such Restricted Subsidiary are, at the time any determination is being made,
owned, Controlled or held by Holdings or one or more wholly owned Subsidiaries
of Holdings or by Holdings and one or more wholly owned Subsidiaries of
Holdings.

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

“Material Adverse Effect” shall mean (a) a materially adverse effect on the
business, assets, properties, results of operations or financial condition of
Holdings and the Subsidiaries, taken as a whole, (b) a material impairment of
the ability of any Borrower or any other Loan Party to perform any of its
obligations under any Loan Document to which it is or will be a party or (c) a
material impairment of the rights and remedies of or benefits available to the
Lenders under any Loan Document.

“Material Indebtedness” shall mean Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
Holdings or any Restricted Subsidiary in an aggregate principal amount exceeding
$35,000,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of Holdings or any Restricted Subsidiary in respect
of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that Holdings or such Restricted
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.

“Material Real Property” shall mean any parcel of owned real property with a
fair market value of at least $5,000,000.

 

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“Material Subsidiary” shall mean each Subsidiary of Holdings that, for the most
recently completed fiscal year of Holdings for which audited financial
statements are available, either (a) has, together with its Subsidiaries, assets
that exceed 5% of the total assets shown on the consolidated statement of
financial condition of Holdings as of the last day of such period or (b) has,
together with its Subsidiaries, net sales that exceed 5% of the consolidated net
sales of Holdings for such period.

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

“Mortgage Amendments” shall have the meaning assigned to such term in
Section 4.01(j).

“Mortgaged Properties” shall mean, initially, the owned real properties of the
relevant Loan Parties specified on Schedule 1.01(a), and shall include each
other parcel of owned real property and improvements thereto with respect to
which a Mortgage is granted pursuant to Section 5.12.

“Mortgages” shall mean (a) the existing mortgages or deeds of trust encumbering
the Mortgaged Properties under the Existing Credit Agreement, each as amended by
the applicable Mortgage Amendment and (b) with respect to mortgages required to
be delivered hereafter pursuant to Section 5.12, the mortgages, charges, deeds
of trust, assignments of leases and rents and other security documents,
substantially in the form of Exhibit F (with such changes as may be reasonably
satisfactory to the Administrative Agent and its counsel in order to account for
local law matters) and otherwise pursuant to this Agreement.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA that is maintained or contributed to by Holdings,
any Restricted Subsidiary or any ERISA Affiliate.

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale, the cash
proceeds (including cash proceeds subsequently received (as and when received)
in respect of non-cash consideration initially received), net of (i) selling
expenses (including reasonable broker’s fees or commissions, legal fees,
transfer and similar taxes and the Borrowers’ good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash Proceeds) and
(iii) the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money which is secured by the asset
sold in such Asset Sale and which is required to be repaid with such proceeds
(other than the Obligations, or any such Indebtedness assumed by the purchaser
of such asset) and (b) with respect to any issuance or incurrence of
Indebtedness or other event, the cash proceeds thereof, net of all taxes and
customary fees, commissions, costs and other expenses incurred in connection
therewith.

“Net First Lien Leverage Ratio” shall mean, as of any date of determination, the
ratio of (a) Consolidated First Lien Debt as of the last day of the test period
most recently ended on or prior to such date of determination to
(b) Consolidated EBITDA for such test period. In any test period in which a
transaction described in Section 1.03(a) occurs, the Net First Lien Leverage
Ratio shall be determined on a pro forma basis in accordance with
Section 1.03(a).

 

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“Net Secured Leverage Ratio” shall mean, as of any date of determination, the
ratio of (a) Consolidated Secured Debt as of the last day of the test period
most recently ended on or prior to such date of determination to
(b) Consolidated EBITDA for such test period. In any test period in which a
transaction described in Section 1.03(a) occurs, the Net Secured Leverage Ratio
shall be determined on a pro forma basis in accordance with Section 1.03(a).

“Net Total Leverage Ratio” shall mean, as of any date of determination, the
ratio of (a) Total Debt minus the aggregate amount of cash and Permitted
Investments on the consolidated balance sheet of Holdings and the Restricted
Subsidiaries on such date, excluding cash and Permitted Investments which are or
should be listed as “restricted” on the consolidated balance sheet of Holdings
and the Restricted Subsidiaries as of such date as of the last day of the test
period most recently ended on or prior to such date of determination to
(b) Consolidated EBITDA for such test period. In any test period in which a
transaction described in Section 1.03(a) occurs, the Net Total Leverage Ratio
shall be determined on a pro forma basis in accordance with Section 1.03(a).

“New Commitment” shall mean New Revolving Loan Commitment or New Term Loan
Commitment, as applicable.

“New Loan” shall mean New Revolving Loan or New Term Loan, as applicable.

“New Loan Date” shall mean New Revolving Loan Date or New Term Loan Date, as
applicable.

“New Revolving Loan Commitment” shall mean, with respect to each New Revolving
Loan Lender, any revolving commitment provided by such New Revolving Loan Lender
pursuant to Section 2.24, or in the Assignment and Acceptance pursuant to which
such Lender assumed its New Revolving Loan Commitment, as applicable.

“New Revolving Loan Date” shall have the meaning assigned to such term in
Section 2.24(a).

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

“New Revolving Loans” shall mean the revolving loans made by the New Revolving
Loan Lenders to the Borrowers pursuant to Section 2.24.

“New Term Loan Commitment” shall mean, with respect to each New Term Loan
Lender, any Term Loan Commitment provided by such New Term Loan Lender pursuant
to Section 2.24, or in the Assignment and Acceptance pursuant to which such
Lender assumed its New Term Loan Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such New Term Loan
Lender pursuant to Section 9.04.

 

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“New Term Loan Date” shall have the meaning assigned to such term in
Section 2.24(a).

“New Term Loan Lender” shall mean a Lender with a New Term Loan Commitment.

“New Term Loans” shall mean the term loans made by the New Term Loan Lenders to
the Borrowers pursuant to Section 2.24.

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

“Non-Loan Party Asset Sale” shall have the meaning assigned to such term in
Section 2.13(j).

“Not for Profit Subsidiaries” shall mean, collectively, Foundation for Marine
Animal Husbandry, Inc., a corporation organized under the laws of the State of
Florida, Houghton Mifflin Harcourt Foundation, Inc., a corporation organized
under the laws of the Commonwealth of Massachusetts, and any other Subsidiary of
Holdings that is exempt from U.S. federal income taxation under Section 501(a)
of the Code.

“Obligations” shall mean (a) the Loan Document Obligations and (b) the Other
Secured Obligations.

“OFAC” shall mean the Office of Foreign Assets Control of the U.S. Department of
the Treasury or the U.S. Department of State.

“OID” shall mean shall mean original issue discount, as defined in Section 1273
of the Code.

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

“Other Pari Passu Secured Obligations” shall mean Other Secured Obligations
designated as Other Pari Passu Secured Obligations in accordance with
Section 8.11.

“Other Secured Agreement” shall mean, to the extent designated as such by the
Borrowers and each applicable Other Secured Party in writing to the
Administrative Agent from time to time in accordance with Section 8.11, any
agreement evidencing obligations owing by any Loan Party under (a) any Hedging
Agreement entered into by Holdings or any of its Subsidiaries with any Person
that at the time of entering into such Hedging Agreement is a Lender, Arranger
or Agent, or an Affiliate of a Lender, Arranger or Agent or (b) any cash
management services arrangement entered into by Holdings or any of its
Subsidiaries after the Petition Date with any Person that at the time of
entering into such arrangement is a Lender, Arranger or Agent, or an Affiliate
of a Lender, Arranger or Agent.

“Other Secured Obligations” shall mean the due and punctual payment and
performance of all obligations of each Loan Party under each Other Secured
Agreement designated as such in accordance with Section 8.11, excluding, in each
case, any Excluded Swap Obligations (as defined in the Guarantee and Collateral
Agreement).

 

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“Other Secured Party” shall mean a Person that (a) is a party to an Other
Secured Agreement and (b) at the time of entering into such Other Secured
Agreement, is a Lender, Arranger or Agent, or an Affiliate of a Lender, Arranger
or Agent; provided that, so long as any Lender is a Defaulting Lender, such
Lender will not be an Other Secured Party with respect to any Other Secured
Agreement entered into while such Lender was a Defaulting Lender.

“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes or any other excise
or property Taxes, charges or similar levies arising from any payment made under
any Loan Document or from the execution, performance, delivery, registration or
enforcement of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Loan Document.

“Owned Percentage” shall mean, with respect to any Majority-Owned Subsidiary,
the percentage of Equity Interests in such Majority-Owned Subsidiary owned by
Holdings and its Restricted Subsidiaries.

“Parent Seller” shall have the meaning assigned to such term in the preamble to
this Agreement.

“Participant Register” shall have the meaning assigned to such term in
Section 9.04(f).

“Patents” shall have the meaning assigned to such term in the Guarantee and
Collateral Agreement.

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

“Perfection Certificate” shall mean a Perfection Certificate substantially in
the form of Exhibit G to the Guarantee and Collateral Agreement.

“Permitted Acquisition” shall mean the acquisition by Holdings or any Restricted
Subsidiary of all or substantially all the assets of a person or line of
business of such person, or not less than 100% of the Equity Interests (other
than directors’ qualifying shares) not previously held by Holdings and its
Subsidiaries of a person (referred to herein as the “Acquired Entity”); provided
that (a) the Acquired Entity shall be in a engaged in a Permitted Business;
(b) at the time of such transaction, both before and after giving effect
thereto, no Event of Default shall have occurred and be continuing; (c) the
aggregate amount of Investments made after the Closing Date pursuant to
Section 6.04(e) by the Loan Parties in Persons that are not Loan Parties or do
not become Loan Parties upon consummation of such acquisition (valued at the
time made and without regard to any write-downs or write-offs of such
Investments) shall not exceed the greater of $100,000,000 and 31% of the
Consolidated EBITDA for the most recently ended four consecutive fiscal quarter
period for which financial statements are required to have been delivered
pursuant to Section 6.04(a) or (b); (d) Holdings shall have delivered a
certificate of a Financial Officer, certifying as to the foregoing and
containing reasonably detailed calculations in support thereof, in form
reasonably satisfactory to the Administrative Agent; and (e) all persons which
are Domestic Subsidiaries in which Holdings or any Restricted Subsidiary shall
hold any Investment as a result of such acquisition shall become a Subsidiary
Guarantor and shall comply with the applicable provisions of Section 5.12 and
the Security Documents.

 

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“Permitted Business” means (a) any business or business activity conducted by
the Borrowers and their Subsidiaries or by the Target on the Closing Date and
(b) any other business that is a natural outgrowth or reasonable extension,
development or expansion of any such business or any business similar,
reasonably related, incidental, complementary or ancillary to any of the
foregoing.

“Permitted Pari Passu Collateral Liens” means Liens permitted by
Section 6.01(w)(i) or 6.01(x); provided that such Liens are subject to an
Intercreditor Agreement.

“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

(b) (i) investments in commercial paper maturing within one year from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s or (ii) corporate debt
securities maturing within two years from the date of acquisition thereof and
having, at such date of acquisition, a rating of at least A by S&P or A2 by
Moody’s;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, and demand deposit and general banking sweep accounts with, the
Administrative Agent or any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof that has a
combined capital and surplus and undivided profits of not less than
$500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than
60 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above;

(e) securities with maturities of one year or less from the date of acquisition,
issued or fully guaranteed by any State, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least AA by S&P or Aa by Moody’s;

(f) asset backed securities maturing within two years from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least AAA by S&P or Aaa by Moody’s;

(g) municipal variable rate demand obligations maturing within two years from
the date of acquisition thereof and having, at such date of acquisition, a
rating of at least AA by S&P or Aa2 by Moody’s;

 

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(h) investments in “money market funds” within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through
(g) above, in each case (i) maturing within one year from the date of
acquisition thereof and (ii) having, at such date of acquisition, one of the
three highest credit rating obtainable from S&P or Moody’s; and

(i) other short-term investments by Holdings and Foreign Subsidiaries in
currencies other than U.S. Dollars and of a type listed on Schedule 1.01(b).

“Permitted Refinancing Indebtedness” shall mean any Indebtedness (other than any
Indebtedness incurred under this Agreement) of a Restricted Subsidiary, issued
in exchange for, or the Net Cash Proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”),
Indebtedness of such Restricted Subsidiary (including all or a portion of any
Indebtedness incurred under this Agreement) that is permitted by this Agreement
to be Refinanced; provided that:

(i) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so Refinanced (plus any related fees,
commissions and expenses, unpaid accrued interest and premium thereon and
underwriting discounts and defeasance costs),

(ii) except with respect to Section 6.01(k), the Weighted Average Life to
Maturity of such Permitted Refinancing Indebtedness is greater than or equal to
(and the maturity of such Permitted Refinancing Indebtedness is no earlier than)
that of the Indebtedness being Refinanced,

(iii) if the Indebtedness being Refinanced is subordinated in right of payment
to the Obligations, such Permitted Refinancing Indebtedness shall be
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 Refinanced,

(iv) no Permitted Refinancing Indebtedness shall have different obligors than
the Indebtedness being Refinanced, unless such new obligors are Loan Parties and
no Permitted Refinancing Indebtedness shall have greater guarantees than the
Indebtedness being Refinanced,

(v) the terms and covenants of such Permitted Indebtedness taken as a whole
shall not be more restrictive in any material respect than the terms and
covenants of the Indebtedness being Refinanced taken as a whole,

(vi) if the Indebtedness being Refinanced is secured by any collateral (whether
equally and ratably with, or junior to, the Secured Parties or otherwise), such
Permitted Refinancing Indebtedness may be secured only by such collateral
(including any collateral pursuant to after-acquired property clauses to the
extent any such collateral secured the Indebtedness being Refinanced) on terms
no less favorable to the Secured Parties than those contained in the
documentation governing the Indebtedness being Refinanced.

 

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provided, further, that with respect to a Refinancing of Indebtedness permitted
under Section 6.01(g), such Refinancing shall be in compliance with the Term
Loan/Revolving Facility Intercreditor Agreement.

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

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

“Potential Defaulting Lender” shall mean, at any time, (a) any Lender with
respect to which an event of the kind referred to in clause (d) of the
definition of “Defaulting Lender” has occurred and is continuing in respect of
any financial institution affiliate of such Lender, (b) any Lender that has
notified, or whose direct or indirect parent company or a financial institution
affiliate thereof has notified, the Administrative Agent and the Borrowers in
writing, or has stated publicly, that it does not intend to comply with its
funding obligations under any other loan agreement or credit agreement or other
financing agreement, unless such writing or statement states that such position
is based on such Lender’s determination that one or more conditions precedent to
funding cannot be satisfied (which conditions precedent, together with the
applicable default, if any, will be specifically identified in such writing or
public statement, or (c) any Lender that has, or whose direct or indirect parent
company has, a non-investment grade rating from Moody’s or S&P or another
nationally recognized rating agency. Any determination by the Administrative
Agent that a Lender is a Potential Defaulting Lender under any of the clauses
(a) through (c) above will be conclusive and binding absent manifest error, and
such Lender will be deemed a Potential Defaulting Lender (subject to
Section 2.25(b)) upon notification of such determination by the Administrative
Agent to the Borrowers and the Lenders.

“Prepayment Event” shall mean (a) each Asset Sale and (b) each Debt Incurrence.

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

“Prime Rate” shall mean the rate of interest announced publicly by Citibank,
N.A. in New York, from time to time, as Citibank N.A.’s prime rate.

“Pro Rata Percentage” of any amount means, with respect to any Lender at any
time, the product of such amount times a fraction (i) the numerator of which is
the aggregate amount Loans and Commitments of such Lender outstanding at such
time and (ii) the denominator of which is the aggregate amount of Loans and
Commitments of all Lenders outstanding at such time.

 

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

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

“Rate” shall have the meaning assigned thereto in the definition of “Type”.

“Reference Date” shall have the meaning assigned thereto in the definition of
“Cumulative Credit”.

“Refinance” shall have the meaning assigned to such term in the definition of
Permitted Refinancing Indebtedness.

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

“Refinancing Debt” shall have the meaning assigned to such term in Section 2.23.

“Refinancing Facility” shall have the meaning assigned to such term in
Section 2.23.

“Refinancing Notes” shall have the meaning assigned to such term in
Section 2.23.

“Refinancing Revolving Facility” shall have the meaning assigned to such term in
Section 2.23.

“Refinancing Term Facility” shall have the meaning assigned to such term in
Section 2.23.

“Register” shall have the meaning assigned to such term in Section 9.04(d).

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

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

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

“Reinvestment Period” shall have the meaning assigned to such term in
Section 2.13(c).

“Related Fund” shall mean, with respect to any Lender that is a fund or
commingled investment vehicle that invests in bank loans and similar extensions
of credit, any other fund that invests in bank loans and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

 

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

“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into or
through the environment or within or upon any building, structure, facility or
fixture.

“Repayment Date” shall have the meaning given such term in Section 2.11(a).

“Repricing Event” means (i) any voluntary prepayment or repayment of any Loans
with the proceeds of, or any conversion of Loans into, any new or replacement
tranche of term loans bearing a Yield that is less than the Yield applicable to
the Loans or (ii) any amendment to any Loan Document that reduces the Yield
applicable to any Loans (in each case, as such comparative yields are reasonably
determined by the Administrative Agent); provided that any such determination by
the Administrative Agent as contemplated hereunder shall be conclusive and
binding on the Borrowers and all Lenders, absent manifest error. A Repricing
Event shall not include any prepayment, repayment, conversion or amendment made
in connection with a Change of Control or Transformative Acquisition.

“Required Lenders” shall mean, at any time, Lenders having Loans and Commitments
representing more than 50% of the sum of the outstanding Loans and all
Commitments, if any, at such time; provided that Defaulting Lenders having Loans
or any unused Commitments shall be disregarded in the determination of Required
Lenders at any time.

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

“Restricted Indebtedness” shall mean Subordinated Indebtedness of Holdings or
any Restricted Subsidiary, the payment, prepayment, repurchase or defeasance of
which is restricted under Section 6.08(b).

“Restricted Payment” shall mean (a) any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
Holdings or any Restricted Subsidiary, other than dividends or distributions
payable solely in Equity Interests (other than Disqualified Stock) of the person
paying such dividends or distributions, or (b) any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in Holdings or any Restricted Subsidiary.

“Restricted Subsidiary” shall mean each Subsidiary of Holdings that is not an
Unrestricted Subsidiary.

“Revolving Credit Agreement” shall mean the Superpriority Senior Secured
Debtor-in-Possession and Exit Revolving Credit Agreement dated as of May 22,
2012 among Holdings, HMH Publishing, the Borrowers, Citibank, N.A., as
administrative agent and collateral agent and the other parties thereto.

 

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“Revolving Credit First Lien Collateral” shall have the meaning assigned to such
term in the Term Loan/Revolving Facility Intercreditor Agreement.

“S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.

“Sale and Lease Back Transaction” shall have the meaning assigned to such term
in Section 6.03.

“Sanctions” shall mean economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered or enforced by the OFAC, or (b) the United States
Security Council, the European Union or Her Majesty’s Treasury of the United
Kingdom.

“Secured Parties” shall mean (i) the Lenders, (ii) the Administrative Agent,
(iii) the Collateral Agent, (iv) each Other Secured Party, (v) the beneficiaries
of each indemnification obligation undertaken by any Loan Party under any Loan
Document and (vi) the successors and assigns of each of the foregoing.

“Security Documents” shall mean the Mortgages, the Guarantee and Collateral
Agreement, the Term Loan/Revolving Facility Intercreditor Agreement, any other
Intercreditor Agreements and each of the security agreements, mortgages and
other instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.12.

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

“Seller Representations” shall mean the representations made by or with respect
to the Target, its Subsidiaries and respective businesses in the Asset Purchase
Agreement as are material to the interests of the Lenders (in their capacities
as such) (but only to the extent that Holdings or any of its Affiliates has the
right to terminate its obligations under the Asset Purchase Agreement or decline
to consummate the Specified Acquisition as a result of a breach of such
representations in the Asset Purchase Agreement).

“Series” shall have the meaning assigned to such term in Section 2.24(a).

“SPC” shall have the meaning assigned to such term in Section 9.04(i).

“Specified Acquisition” shall have the meaning assigned to such term in the
preamble to this Agreement.

“Specified Lender” shall have the meaning assigned to such term in
Section 9.04(k).

“Specified Representations” shall mean those representations and warranties made
by the Loan Parties in Sections 3.01(a), 3.01(d), 3.02(a), 3.02(b)(i)(A), 3.03,
3.11(b), 3.12, 3.19, 3.22 and 3.26.

 

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“Specified Warehouses” shall mean, collectively, the warehouse owned by HMCo and
located at 2700 N. Richard Avenue, Indianapolis, Indiana 46219 and the warehouse
owned by HMCo and located at 200 Academic Way, Troy, Missouri 63379.

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Loan) is subject for Eurodollar
Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be
deemed to constitute Eurodollar Liabilities (as defined in Regulation D of the
Board) and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Subordinated Indebtedness” shall mean any Indebtedness of a Loan Party that is
by its terms subordinated in right of payment to the Obligations. For the
purposes of the foregoing, for the avoidance of doubt, no Indebtedness shall be
deemed to be subordinated in right of payment to any other Indebtedness solely
by virtue of being unsecured or secured by a lower priority Lien or by virtue of
the fact that the holders of such Indebtedness have entered into intercreditor
agreements or other arrangements giving one or more of such holders priority
over the other holders in the collateral held by them.

“Subsidiary” or “subsidiary” shall mean, with respect to any person (herein
referred to as the “parent”), any corporation, partnership, limited liability
company, association or other business entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or more than 50% of the general partnership interests
are, at the time any determination is being made, owned, Controlled or held, or
(b) that is, at the time any determination is made, otherwise Controlled, by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of Holdings.

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 3.08 (other
than HMH Intermediate Holdings (Delaware), LLC, the Borrowers, any Unrestricted
Subsidiary, any Dormant Subsidiary, any Not for Profit Subsidiary and the
Subsidiaries that are Foreign Subsidiaries) and each other Restricted Subsidiary
that is a Domestic Subsidiary becomes a party to the Guarantee and Collateral
Agreement after the Closing Date.

“Syndication Agent” shall mean Wells Fargo Bank, National Association, in its
capacity as the syndication agent under this Agreement.

“Synthetic Lease” shall mean, as to any person, any lease (including leases that
may be terminated by the lessee at any time) of any property (whether real,
personal or mixed) (a) that is accounted for as an operating lease under GAAP
and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such person is the lessor.

 

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“Synthetic Lease Obligations” shall mean, as to any person, an amount equal to
the capitalized amount of the remaining lease payments under any Synthetic Lease
that would appear on a balance sheet of such person in accordance with GAAP if
such obligations were accounted for as Capital Lease Obligations.

“Synthetic Purchase Agreement” shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Holdings or any
Restricted Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by any third party from a person other than Holdings
or any Restricted Subsidiary of any Equity Interest or Restricted Indebtedness
or (b) any payment (other than on account of a permitted purchase by it of any
Equity Interest or Restricted Indebtedness) the amount of which is determined by
reference to the price or value at any time of any Equity Interest or Restricted
Indebtedness; provided that no phantom stock or similar plan providing for
payments only to current or former directors, officers or employees of Holdings
or the Restricted Subsidiaries (or to their heirs or estates) shall be deemed to
be a Synthetic Purchase Agreement.

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

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Term Borrowing” shall mean a Borrowing comprised of the Term Loan advanced
pursuant to a Term Loan Commitment pursuant to Section 2.01.

“Term Lender” shall mean a Lender with a Term Loan Commitment or an outstanding
Term Loan.

“Term Loan” shall mean each the term loan made available to the Borrowers
pursuant to Section 2.01.

“Term Loan Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make a Term Loan hereunder as of the Closing Date, or in the
Assignment and Acceptance pursuant to which such Term Lender assumed its Term
Loan Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Term Lender pursuant to Section 9.04.

“Term Loan Extension Request” shall have the meaning set forth in
Section 2.22(a).

“Term Loan Facility” shall mean the term loan facility provided for by this
Agreement.

“Term Loan Maturity Date” shall mean

 

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(a) with respect to the Term Loans, the date that is the 6th anniversary of the
Closing Date;

(b) with respect to any New Term Loans, the date set forth in the applicable
Incremental Facility Joinder Agreement; and

(c) with respect to any Extended Term Loans, the date set forth in the
applicable Extension Agreement.

“Term Loan/Revolving Facility Intercreditor Agreement” shall mean the Term Loan
/ Revolving Facility Lien Subordination and Intercreditor Agreement dated as of
May 22, 2012, among the Agents, the administrative agent and the collateral
agent in respect of the Revolving Credit Agreement, and the other parties
thereto, and to be amended and restated substantially in the form of Exhibit E.

“Total Debt” shall mean, at any time, the aggregate principal amount of
Indebtedness of Holdings and the Restricted Subsidiaries outstanding at such
time; provided that (i) such Indebtedness shall not be included if it would not
be reflected on a consolidated balance sheet of Holdings at such time in
accordance with GAAP or to the extent such Indebtedness is Indebtedness under
Hedging Agreements and (ii) if such Indebtedness were to be required to be
reflected on a consolidated balance sheet of Holdings at such time in accordance
with GAAP, the amount thereof that shall constitute Total Debt shall equal the
principal amount outstanding at such time, including any portion of such
principal amount outstanding that would not be required to be reflected on a
consolidated balance sheet of Holdings in accordance with GAAP at such time as a
result of original issue discount.

“Trademarks” shall have the meaning assigned to such term in the Guarantee and
Collateral Agreement.

“Transactions” shall mean, collectively, (a) the Refinancing, (b) the entering
into of the Loan Documents, (c) the consummation of the Specified Acquisition,
and (d) payment of the transaction costs related to the foregoing.

“Transformative Acquisition” shall mean any acquisition by Holdings or any
Restricted Subsidiary that either (a) is not permitted by the terms of this
Agreement immediately prior to the consummation of such acquisition or (b) if
permitted by the terms of this Agreement immediately prior to the consummation
of such acquisition, would not provide the Borrowers and their Restricted
Subsidiaries with adequate flexibility under this Agreement for the continuation
and/or expansion of their combined operations following such consummation, as
determined by the Borrowers acting in good faith.

“Type” when used in respect of any Loan or Borrowing, shall refer to the Rate by
reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall mean the
Adjusted LIBO Rate and the Alternate Base Rate.

 

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“UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in
the State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, “UCC” shall mean the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.

“Unrestricted Domestic Cash and Cash Equivalents” shall mean domestic cash and
Permitted Investments of Holdings and its Restricted Subsidiaries that are
Domestic Subsidiaries, which cash and Permitted Investments are (a) free and
clear of all Liens (other than Liens created under the Security Documents, the
“Security Documents” (as defined in the Revolving Credit Agreement or any
Permitted Refinancing Indebtedness thereof) and Liens of banks permitted under
Section 6.02(c) or (r)), (b) not subject to any contractual, regulatory or legal
restrictions on the use thereof to repay the Loans and other obligations of any
of the Loan Parties or any of their respective Subsidiaries under this Agreement
or the other Loan Documents and (c) are held in accounts that are pledged to the
Secured Parties pursuant to the Guarantee and Collateral Agreement and subject
to one or more control agreements.

“Unrestricted Subsidiary” shall mean a Subsidiary which has been designated as
such pursuant to Section 6.15(a) and which has not been re-designated as a
Restricted Subsidiary pursuant to Section 6.15(b).

“U.S. Dollars” or “U.S.$” or “$” shall mean the lawful currency of the United
States of America.

“U.S. Person” shall mean any “United States Person” within the meaning of
Section 7701(a)(30) of the Code and any Person treated as a “domestic
corporation” for purposes of the Code.

“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“Voting Stock” shall mean, with respect to any Person as of any date, the Equity
Interests of such Person that is at the time entitled to vote in the election of
the board of directors of such Person.

“Waterfall” shall have the meaning assigned to such term in the second paragraph
of Article VII.

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

 

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“wholly owned Subsidiary” of any person shall mean a subsidiary of such person
of which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, Controlled or held by such person or one or
more wholly owned Subsidiaries of such person or by such person and one or more
wholly owned Subsidiaries of such person.

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

“Withholding Agent” shall mean the Borrowers, any Loan Party and the
Administrative Agent.

“Yield” shall mean, as to any Indebtedness, the yield thereof, whether in the
form of interest rate, margin, original issue discount, upfront fees, or
interest rate “floor” that is greater than any corresponding interest rate
“floor” for the Term Loan (with such increased amount being equated to interest
margins for purposes of determining any increase to the Applicable Percentage),
or otherwise; provided that (i) original issue discount and upfront fees shall
be equated to interest rate assuming a four-year life to maturity (or, if less,
the stated life to maturity at the time of incurrence of the applicable
Indebtedness) and (ii) “Yield” shall not include arrangement fees, structuring
fees or underwriting or similar fees not generally paid to lenders in connection
with such Indebtedness.

SECTION 1.02 Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”; and
the words “asset” and “property” shall be construed as having the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any agreement
or document shall mean such agreement or document as amended, restated,
supplemented or otherwise modified from time to time (subject to any
restrictions in any Loan Document on the amendment, restatement, supplement or
other modification thereof) and (b) all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that if the Borrowers notify the Administrative Agent
that the Borrowers wish to amend any covenant in Article VI, any other provision
hereof or any related definition to eliminate the effect of any material change
in GAAP or the application thereof occurring after the date of this Agreement on
the operation of such covenant or provision (or if the Administrative Agent
notifies the Borrowers that the Required Lenders wish to amend Article VI, any
other provision hereof or any related definition for such purpose), regardless
of whether any such notice is given before or after such change in GAAP or the
application thereof, then such covenant or provision shall be interpreted on the
basis of GAAP in effect and applied immediately before such change became
effective, until either such notice is withdrawn or such covenant or provision
is amended

 

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in a manner satisfactory to the Borrowers and the Required Lenders. In addition,
notwithstanding any other provision contained herein, the definitions set forth
in the Loan Documents and any financial calculations required by the Loan
Documents shall be computed to exclude any change to lease accounting rules from
those in effect pursuant to Financial Accounting Standards Board Accounting
Standards Codification 840 (Leases) and other related lease accounting guidance
as in effect on the Closing Date.

SECTION 1.03 Pro Forma Calculations. Unless otherwise provided herein, the Net
First Lien Leverage Ratio, the Net Secured Leverage Ratio, the Net Total
Leverage Ratio and Consolidated EBITDA for purposes of the definition of
“Applicable Prepayment Percentage”, “Incremental Amount”, “Permitted
Acquisition” and Sections 6.01(k), 6.01(m), 6.01(n), 6.01(w), 6.04(b), 6.04(s),
6.04(u), 6.04(v), 6.05(f), 6.06(a), 6.08(b) and 6.15 as of any date shall be
calculated based on the most recently completed period of four consecutive
fiscal quarters for which financial statements are available, and on a pro forma
basis, shall be calculated after giving effect to the Transactions and any
acquisition or disposition of assets with a value in excess of $5,000,000, or
any incurrence, payment, refinancing, restructuring or retirement of
Indebtedness, any designation of any Subsidiary as an Unrestricted Subsidiary
and any re-designation of an Unrestricted Subsidiary as a Restricted Subsidiary
or any other applicable transaction for which any calculation herein is required
to be made on a pro forma basis, in each case which occurred during the most
recently completed period of four consecutive fiscal quarters for which
financial statements are available or after the end of such period but on or
prior to such date, as though each such transaction had occurred at the
beginning of such period, including, without duplication, giving effect to
(i) all pro forma adjustments permitted or required by Article 11 of Regulation
S X under the Securities Act of 1933, as amended, and (ii) even if inconsistent
with preceding clause (i), pro forma adjustments for cost savings (net of
continuing associated expenses) not to exceed in the aggregate for any period of
four consecutive fiscal quarters an amount equal to 15% of Consolidated EBITDA
for such four fiscal quarter period without giving effect to this clause
(ii) and to the extent such cost savings are factually supportable, are expected
to have a continuing impact and have been realized or are reasonably expected to
be realized within 12 months following such transaction; provided that all such
adjustments shall be set forth in a reasonably detailed certificate of a
Financial Officer of the Borrowing Agent), using, for purposes of making such
calculations, the historical financial statements of Holdings and the Restricted
Subsidiaries which shall be reformulated as if such transaction, and any other
such transactions that have been consummated during the period, had been
consummated on the first day of such period. Whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a Financial Officer of the Borrowing Agent. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest on
such Indebtedness shall be calculated as if the rate in effect on the
calculation date had been the applicable rate for the entire period (taking into
account any Hedging Agreements applicable to such Indebtedness). Interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a Financial Officer of the Borrowing Agent to be the
rate of interest implicit in such Capital Lease Obligation in accordance with
GAAP. For purposes of making a pro forma computation hereunder, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurodollar 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 Borrowing Agent may designate.

 

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SECTION 1.04 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Term
Loan”) or by Type (e.g., a “Eurodollar Term Loan”) or by Class and Type (e.g., a
“Eurodollar Term Loan”). Borrowings also may be classified and referred to by
Class (e.g., a “Term Loan Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Term Loan Borrowing”).

ARTICLE II

The Credits

SECTION 2.01 Commitments. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make a single Term Loan to the Borrowers on the
Closing Date in a principal amount equal to 99.5% of its Term Loan Commitment.
Amounts paid or prepaid in respect of the Term Loan may not be reborrowed. It is
understood and agreed that the principal amount of the Term Loans owing
hereunder (and for all purposes under the Loan Documents) shall be an amount
equal to 100% of the applicable Term Lender’s Term Loan Commitment.

SECTION 2.02 Loans and Borrowings.

(a) Each Term Loan shall be made as part of a Borrowing consisting of Loans made
by the applicable Term Lenders ratably in accordance with their applicable Term
Loan Commitments; provided, however, that the failure of any Term Lender make
any Term Loan, shall not in itself relieve any other Term Lender of its
obligation to lend hereunder (it being understood, however, that no Term Lender
shall be responsible for the failure of any other Term Lender to make any Term
Loan required to be made by such other Term Lender). Loans comprising any
Borrowing shall be in an aggregate principal amount that is an integral multiple
of the Borrowing Multiple and not less than the Borrowing Minimum.

(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrowers to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that no Borrower shall be entitled to request any
Borrowing that, if made, would result in more than 10 Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.

(c) Each Lender shall make each Term Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account as the Administrative Agent may designate not later than 1:00 p.m.,
Local Time, and the

 

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Administrative Agent shall promptly credit the amounts so received to an account
designated by the applicable Borrower in the applicable Borrowing Request or, if
a Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (c) above and the Administrative Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrowers severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the applicable Borrower to but excluding the
date such amount is repaid to the Administrative Agent at (i) in the case of the
Borrowers, a rate per annum equal to the interest rate applicable at the time to
the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender’s Loan as part of
such Borrowing for purposes of this Agreement.

SECTION 2.03 Borrowing Procedure. In order to request a Term Borrowing, the
Borrowers shall notify the Administrative Agent of such request by telephone or
in writing (a) in the case of a Eurodollar Borrowing, not later than 1:00 p.m.,
New York City time, three Business Days before a proposed Borrowing and (b) in
the case of an ABR Borrowing, not later than 1:00 p.m., New York City time, one
Business Day before a proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable, and shall be confirmed promptly by hand delivery, fax or
electronic mail to the Administrative Agent of a written Borrowing Request and
shall specify the following information: (i) whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day); (iii) the number and location of the account to which
funds are to be disbursed; (iv) the amount of such Borrowing; and (v) if such
Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the requirements
set forth in Section 2.02. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then such Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Administrative Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.03(a) (and the contents thereof), and of each Lender’s portion of
the requested Borrowing.

 

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SECTION 2.04 Evidence of Debt; Repayment of Loans.

(a) Each Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender the principal amount of each Term Loan of
such Lender as provided in Section 2.11.

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

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

(d) The entries made in the accounts maintained pursuant to paragraphs (b) and
(c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of any Borrower to repay the Loans in
accordance with their terms.

(e) Any Lender may request that Loans made by it hereunder be evidenced by a
promissory note. In such event, the Borrowers shall execute and deliver to such
Lender a promissory note payable to such Lender and its registered assigns and
in a form and substance reasonably acceptable to the Administrative Agent and
the Borrowers. Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive such a promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.

SECTION 2.05 Fees.

(a) Each Borrower agrees to pay to the Administrative Agent, in U.S. Dollars,
for its own account, the administration fees set forth in the Fee Letter at the
times and in the amounts specified therein (the “Administrative Agent Fees”).
Each Borrower also agrees to pay to the Administrative Agent, in U.S. Dollars,
for the account of the parties entitled thereto, such other fees as shall be
payable under the Fee Letter at the times and in the amounts specified therein
(the “Other Fees”).

(b) All Fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.

 

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SECTION 2.06 Interest on Loans.

(a) Subject to the provisions of Section 2.07, the Loans comprising each
ABR Borrowing, shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be, when the
Alternate Base Rate is determined by reference to the Prime Rate and over a year
of 360 days at all other times and calculated from and including the date of
such Borrowing to but excluding the date of repayment thereof) at a rate per
annum equal to the Alternate Base Rate plus the Applicable Percentage in effect
from time to time.

(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.

(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

SECTION 2.07 Default Interest. If at any time after the occurrence of and during
the continuance of an Event of Default, all or a portion of the principal amount
of any Loan, any interest on the Loans or any fees or other amounts owed
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest payable on
demand at a rate that is 2.00% per annum in excess of the interest rate
otherwise payable hereunder with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2.00% per annum in
excess of the interest rate otherwise payable hereunder for ABR Loans). Payment
or acceptance of the increased rates of interest and fees provided for in this
Section 2.07 is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.

SECTION 2.08 Alternate Rate of Interest. In the event, and on each occasion,
that on the day two Business Days prior to the commencement of any Interest
Period for a Eurodollar Borrowing the Administrative Agent shall have determined
that deposits in the principal amounts of the Loans comprising such Borrowing
are not generally available in the relevant interbank market, or that the rates
at which such deposits are being offered will not adequately and fairly reflect
the cost to any Lender of making or maintaining its Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable
thereafter, give written, fax or electronic mail notice of such determination to
the Borrowers and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (a) any request by any
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to
be a request for an ABR Borrowing and (b) any request by any Borrower for a
Eurodollar Borrowing pursuant to Section 2.10 shall be deemed a request for an
ABR Borrowing. Each determination by the Administrative Agent under this
Section 2.08 shall be conclusive absent manifest error.

 

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SECTION 2.09 Termination and Reduction of Commitments.

(a) Immediately following the making of the Term Loan on the Closing Date
pursuant to Section 2.01, any undrawn Term Loan Commitments shall automatically
terminate.

(b) Upon at least three Business Days’ prior irrevocable written, fax or
electronic mail notice to the Administrative Agent, the Borrowers may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Term Loan Commitments (if any); provided, however, that each partial
reduction of the Term Loan Commitments shall be in an integral multiple of
$1,000,000 and in a minimum amount of $5,000,000.

(c) Each reduction in the Term Loan Commitments hereunder shall be made ratably
among the Lenders in accordance with their respective Term Loan Commitments.

SECTION 2.10 Conversion and Continuation of Borrowings. The Borrowers shall have
the right at any time upon prior irrevocable notice to the Administrative Agent
(a) not later than 1:00 p.m., New York City time, one Business Day prior to
conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not
later than 1:00 p.m., New York City time, three Business Days prior to
conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, and (c) not later than 1:00 p.m., Local Time,
three Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:

(i) each conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;

(ii) if less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;

(iii) each conversion shall be effected by each Lender and the Administrative
Agent by recording for the account of such Lender the new Loan of such Lender
resulting from such conversion and reducing the Loan (or portion thereof) of
such Lender being converted by an equivalent principal amount; accrued interest
on any Eurodollar Loan (or portion thereof) being converted shall be paid by the
Borrowers at the time of conversion;

(iv) if any Eurodollar Borrowing is converted at a time other than the end of
the Interest Period applicable thereto, the Borrowers shall pay, upon demand,
any amounts due to the Lenders pursuant to Section 2.16;

 

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(v) any portion of a Borrowing maturing or required to be repaid in less than
one month may not be converted into or continued as a Eurodollar Borrowing;

(vi) any portion of a Eurodollar Borrowing that cannot be converted into or
continued as a Eurodollar Borrowing by reason of the immediately preceding
clause shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing; and

(vii) upon notice to the Borrowers from the Administrative Agent given at the
request of the Required Lenders, after the occurrence and during the continuance
of an Event of Default, no outstanding Loan may be converted into, or continued
as, a Eurodollar Loan.

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (i) the identity and amount of the Borrowing that
the Borrowers request be converted or continued, (ii) whether such Borrowing is
to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing,
(iii) if such notice requests a conversion, the date of such conversion (which
shall be a Business Day) and (iv) if such Borrowing is to be converted to or
continued as a Eurodollar Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with respect to any
conversion to or continuation as a Eurodollar Borrowing, the Borrowers shall be
deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10 and of each Lender’s portion of any converted or continued
Borrowing. If the Borrowers shall not have given notice in accordance with this
Section 2.10 to continue any Eurodollar Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into an ABR Borrowing.

SECTION 2.11 Repayment of Borrowings.

(a) Each Borrower shall pay to the Administrative Agent, for the account of the
Term Lenders, on the last Business Day of each March, June, September and
December of each year (commencing on September 30, 2015), and on the Term Loan
Maturity Date (each such date being called a “Repayment Date”), a principal
amount of the Term Loan (as adjusted from time to time pursuant to Sections 2.12
and 2.13(i)) equal to (A) in the case of each such Repayment Date due prior to
the Term Loan Maturity Date, an amount equal to 0.25% of the aggregate principal
amount of the Term Loan outstanding immediately prior to the first such
scheduled Repayment Date and (B) in the case of such payment due on the Term
Loan Maturity Date, an amount equal to the then aggregate unpaid principal
amount of the Term Loan outstanding, together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
such payment.

(b) Payments for the account of the New Term Loan Lenders of any New Term Loans,
if any, shall be made in accordance with the applicable Incremental Facility
Joinder Agreement for such Series and to the extent not previously paid, an
amount equal to the then unpaid principal amount of such Series of New Term
Loans shall be due and payable on the Term Loan Maturity Date in respect of such
New Term Loans, together with accrued and unpaid interest on the principal
amount to be paid to but excluding the date of payment.

 

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(c) Payments for the account of the New Revolving Loan Lenders of any New
Revolving Loans, if any, shall be made in accordance with the applicable
Incremental Facility Joinder Agreement.

(d) Payments for the account of the Extending Lenders of any Extended Term
Loans, if any, shall be made in accordance with the applicable Extension
Agreement and to the extent not previously paid, an amount equal to the then
unpaid principal amount of such Series of Extended Term Loans shall be due and
payable on the Term Loan Maturity Date in respect of such Extended Term Loans,
together with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of payment.

(e) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.

SECTION 2.12 Optional Prepayment; Prepayment Premium.

(a) Subject to paragraph (d) below, the Borrowers shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, (i) in
the case of a Eurodollar Borrowing, upon at least three Business Days’ prior
written, fax or electronic mail notice (or telephone notice promptly confirmed
by written, fax or electronic mail notice) or (ii) in the case of an
ABR Borrowing, upon at least one Business Day’s prior written, fax or electronic
mail notice (or telephone notice promptly confirmed by written, fax or
electronic mail notice), in each case to the Administrative Agent before
1:00 p.m., New York City time; provided, however, that (i) each partial
prepayment shall be in an amount that is an integral multiple of the Borrowing
Multiple and not less than the Borrowing Minimum and (ii) any prepayment of a
Borrowing pursuant to this Section 2.12(a) shall be made on a pro rata basis
among the Loans comprising such Borrowing based on the aggregate principal
amount of such Loans then outstanding.

(b) [Intentionally omitted.]

(c) Optional prepayments shall be applied to the Class or Series of Loans as
specified by the Borrowing Agent and pro rata among the Loans comprising such
Class or Series in direct order of maturity thereof.

(d) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid and the
class or Series of Loan to be prepaid, shall be irrevocable and shall commit the
Borrowers to prepay such Borrowing by the amount stated therein on the date
stated therein; provided that, a notice of optional prepayment may state that
such notice is conditioned upon the receipt of net proceeds from other
Indebtedness, in which case such notice may be revoked by the Borrowers (by
written notice to the Administrative Agent) on or prior to the fourth Business
Day after such notice of optional prepayment is delivered. All prepayments under
this Section 2.12 shall be subject to Section 2.16 but otherwise without premium
or penalty (except as expressly provided in paragraph (b) above). All
prepayments under this Section 2.12 shall be accompanied by accrued and unpaid
interest on the principal amount to be prepaid to but excluding the date of
payment.

 

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(e) Any prepayment of Loans pursuant to this Section 2.12 in connection with a
Repricing Event that occurs after the Closing Date but on or prior to the date
that is 6 months after the Closing Date, shall be accompanied by a prepayment
premium such that the aggregate amount of such prepayment shall equal 101% of
the principal amount prepaid.

SECTION 2.13 Mandatory Prepayments.

(a) [Intentionally Omitted]

(b) [Intentionally Omitted]

(c) In the event and on each occasion that any Net Cash Proceeds are received by
or on behalf of Holdings or any Subsidiary in respect of a Prepayment Event, the
Borrowers shall, within five Business Days after such Net Cash Proceeds are so
received, prepay the outstanding Loans in an aggregate principal amount equal to
the Applicable Prepayment Percentage of such Net Cash Proceeds; provided that,
in the case of any Prepayment Event that is an Asset Sale, if the Borrowing
Agent shall deliver to the Administrative Agent a certificate of a Financial
Officer of the Borrowing Agent, on or prior to the date that a prepayment would
otherwise be required hereunder if such certificate were not delivered, to the
effect that Holdings and the Subsidiaries intend to apply the Net Cash Proceeds
from such Asset Sale (or a portion thereof specified in such certificate),
within the Reinvestment Period applicable to such Net Cash Proceeds, to acquire
real property, equipment or other tangible or intangible assets to be used in
the business of Holdings and the Subsidiaries (which real property, equipment or
other assets must be assets that become Collateral to the extent that such Net
Cash Proceeds are attributable to assets that were Collateral), and certifying
that no Default has occurred and is continuing, then no prepayment shall be
required pursuant to this paragraph in respect of such Net Cash Proceeds (or the
portion of such Net Cash Proceeds specified in such certificate, if applicable)
except to the extent of any such Net Cash Proceeds that have not been so applied
by the end of such Reinvestment Period, at which time a prepayment shall be
required in an aggregate principal amount equal to the Applicable Prepayment
Percentage of such Net Cash Proceeds that have not been so applied. For purposes
hereof, “Reinvestment Period” means, with respect to any Net Cash Proceeds, the
period beginning on the date of receipt of such Net Cash Proceeds and ending
twelve (12) months thereafter or, in respect of any portion of such Net Cash
Proceeds that is committed to be reinvested in the business of Holdings and the
Subsidiaries during such initial twelve (12) month period, the period beginning
on the date of receipt of such Net Cash Proceeds and ending eighteen (18) months
thereafter.

(d) Following the end of each fiscal year of Holdings, commencing with the
fiscal year ending December 31, 2016 (each such fiscal year, an “Excess Cash
Flow Period”), the Borrowers shall prepay the outstanding Term Loans (and any
other Indebtedness (to the extent required by the terms of the documentation
governing such other Indebtedness) secured by the Collateral on a pari passu
basis with the Obligations (provided that such other Indebtedness shall in no
event receive more than its ratable amount) in an aggregate principal amount
equal to the excess, if any, of (i) the Applicable Prepayment Percentage of
Excess Cash

 

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Flow for such fiscal year over (ii) other than to the extent funded with the
incurrence of Indebtedness (excluding any loan proceeds provided under the
Revolving Credit Agreement or any other revolving credit facility permitted
under Section 6.01), the sum of (A) the aggregate principal amount of the Term
Loans prepaid pursuant to Section 2.12, (B) a ratable portion of the aggregate
principal amount of other Indebtedness that is secured by Liens on the
Collateral on a pari passu basis with the Obligations that was prepaid, (C) the
aggregate amount of cash expended to acquire Term Loans in accordance with
Section 9.04(k) and (D) the aggregate principal amount of loans voluntarily
prepaid pursuant to the Revolving Credit Agreement to the extent accompanied by
a permanent reduction of such revolving commitments under the Revolving Credit
Agreement, in each case, (x) during such Excess Cash Flow Period or (y) after
the end of such Excess Cash Flow Period and prior to the time such prepayment
pursuant to this Section 2.13(d) is due (it being understood that any such
reduction taken pursuant to clause (y) above shall not be deducted in connection
with the calculation of the prepayment required pursuant to this Section 2.13(d)
for the immediately succeeding fiscal year). Each prepayment pursuant to this
paragraph shall be made on or prior to the date that is five Business Days after
the date on which financial statements are delivered pursuant to Section 5.04
with respect to the fiscal year for which Excess Cash Flow is being calculated
(and in any event on or prior to the date that is five Business Days after the
day that is 90 days after the end of such fiscal year).

(e) [Intentionally Omitted].

(f) [Intentionally Omitted].

(g) [Intentionally Omitted].

(h) The Borrowing Agent shall notify the Administrative Agent by telephone
(confirmed by fax or electronic mail) of any mandatory prepayment hereunder
(i) in the case of prepayment of a Eurodollar Borrowing, not later than
1:00 p.m., Local Time, three Business Days (or, in the case of a mandatory
prepayment under paragraph (c) or (d), five Business Days) before the date of
prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not later
than 1:00 p.m., New York City time, one Business Day (or, in the case of a
mandatory prepayment under paragraph (c) or (d) above, five Business Days)
before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of the Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment under
paragraph (c) or (d) above, a reasonably detailed calculation, certified by a
Financial Officer of the Borrowers, of the amount of such prepayment; provided
that a notice of prepayment may be revoked if such notice states that the
prepayment is conditioned upon consummation of a refinancing or other
transaction and if the Borrowers notify the Administrative Agent on or prior to
the specified prepayment date that such condition has not been satisfied and the
notice is revoked. Promptly following receipt of such notice, the Administrative
Agent shall advise the Lenders of the contents thereof and, other than in the
case of a Prepayment Event that is a Debt Incurrence, the Lenders have, not less
than two Business Days prior to the date of required prepayment, the right to
refuse any such prepayment by giving written notice of such refusal to the
Administrative Agent and the Borrowing Agent. The Borrowers will make all such
prepayments not so refused upon the date set forth above for such prepayment and
any refused proceeds may be retained by the Borrowers (the “Declined Proceeds”).
All mandatory prepayments shall be subject to Section 2.16, but shall otherwise
be without premium or penalty, and shall be accompanied by accrued and unpaid
interest on the principal amount to be prepaid to but excluding the date of
prepayment.

 

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(i) Mandatory prepayments of the outstanding Loans under this Agreement shall be
applied against the remaining scheduled installments of principal due in respect
of the Loans under Section 2.11 in the direct order of their maturity, unless,
in the case of New Loans, otherwise provided in the applicable Incremental
Facility Joinder Agreement.

(j) Notwithstanding any other provisions of this Section 2.13, (i) to the extent
that any or all of the Net Cash Proceeds of any Asset Sale by a non-Loan Party
(a “Non-Loan Party Asset Sale”) or Excess Cash Flow attributable to a non-Loan
Party, are prohibited, delayed or restricted by applicable local law, rule or
regulation from being repatriated to the United States, the portion of such Net
Cash Proceeds or Excess Cash Flow so affected will not be required to be applied
to repay Term Loans at the times provided in this Section 2.13 but may be
retained by the applicable non-Loan Party so long, but only so long, as the
applicable local law, rule or regulation will not permit repatriation to the
United States (the Borrowers hereby agreeing to cause the applicable non-Loan
Party to promptly take commercially reasonable actions required by the
applicable local law, rule or regulation to permit such repatriation), and once
such repatriation of any of such affected Net Cash Proceeds or Excess Cash Flow
is permitted under the applicable local law, rule or regulation, such
repatriation will be promptly effected and such repatriated Net Cash Proceeds or
Excess Cash Flow will be promptly (and in any event not later than two Business
Days after such repatriation) applied (net of additional taxes payable or
reserved against as a result thereof) to the repayment of the Term Loans
pursuant to this Section 2.13, and (ii) to the extent that the Borrowers have
determined in good faith that repatriation of any of or all the Net Cash
Proceeds of any non-Loan Party Asset Sale or Excess Cash Flow would have a
material adverse tax cost consequence with respect to such Net Cash Proceeds or
Excess Cash Flow, the Net Cash Proceeds or Excess Cash Flow so affected may be
retained by the applicable non-Loan Party.

SECTION 2.14 Reserve Requirements; Change in Circumstances.

(a) Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender (except any such reserve requirement which is reflected
in the Adjusted LIBO Rate) or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender making or maintaining any
Eurodollar Loan or increase the cost to any Lender or purchasing or maintaining
a participation therein or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material, then the Borrowers
will pay to such Lender, upon demand such additional amount or amounts as will
compensate such Lender, for such additional costs incurred or reduction
suffered.

 

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(b) If any Lender shall have determined that any Change in Law regarding capital
adequacy has or would have the effect of reducing the rate of return on such
Lender’s capital or on the capital of such Lender’s holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender pursuant hereto
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) by an amount deemed by such Lender to be material, then
from time to time the Borrowers shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender’s holding company for
any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as applicable, as specified in
paragraph (a) or (b) above, with calculations thereof, shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.

(d) Failure or delay on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital shall not constitute a waiver of such Lender’s right to demand
such compensation; provided that the Borrowers shall not be under any obligation
to compensate any Lender under paragraph (a) or (b) above with respect to
increased costs or reductions with respect to any period prior to the date that
is 120 days prior to such request if such Lender knew or could reasonably have
been expected to know of the circumstances giving rise to such increased costs
or reductions and of the fact that such circumstances would result in a claim
for increased compensation by reason of such increased costs or reductions;
provided further that the foregoing limitation shall not apply to any increased
costs or reductions arising out of the retroactive application of any Change in
Law within such 120-day period. The protection of this Section 2.14 shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of the Change in Law that shall have occurred or been
imposed.

(e) Notwithstanding anything in this Section to the contrary, this Section 2.14
shall not apply to Taxes which shall be governed exclusively by Section 2.20.

SECTION 2.15 Change in Legality.

(a) Notwithstanding any other provision of this Agreement, if any Change in Law
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Borrowers and to the
Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods) and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans, whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
or to continue a Eurodollar Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such for an additional Interest Period or to convert
such a Eurodollar Loan into an ABR Loan, as the case may be); and

 

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(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.

In the event any Lender shall exercise its rights under clause (i) or
(ii) above, all payments and prepayments of principal that would otherwise have
been applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be applied
to repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.

(b) For purposes of this Section 2.15, a notice to the Borrowers by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on
the last day of the Interest Period then applicable to such Eurodollar Loan; in
all other cases such notice shall be effective on the date of receipt by the
Borrowers.

SECTION 2.16 Indemnity. The Borrowers shall indemnify each Lender against any
loss or expense (other than any loss of the Applicable Percentage or other
profit margin) that such Lender may sustain or incur as a consequence of (a) any
event, other than a default by such Lender in the performance of its obligations
hereunder, which results in (i) such Lender receiving or being deemed to receive
any amount on account of the principal of any Eurodollar Loan prior to the end
of the Interest Period in effect therefor (including pursuant to a required
assignment pursuant to Section 2.21(a)), (ii) the conversion of any Eurodollar
Loan to an ABR Loan, or the conversion of the Interest Period with respect to
any Eurodollar Loan, in each case other than on the last day of the Interest
Period in effect therefor, or (iii) any Eurodollar Loan to be made by such
Lender (including any Eurodollar Loan to be made pursuant to a conversion or
continuation under Section 2.10) not being made after notice of such Loan shall
have been given by a Borrower hereunder (any of the events referred to in this
clause (a) being called a “Breakage Event”) or (b) any default in the making of
any payment or prepayment required to be made hereunder. In the case of any
Breakage Event, such loss shall be equal to the excess, as reasonably determined
by such Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that
is the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or that would
have been in effect) for such Loan over (ii) the amount of interest likely to be
realized by such Lender in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16 with calculations thereof, shall be delivered to
the Borrowers and shall be conclusive absent manifest error. Notwithstanding
anything in this Section to the contrary, this Section 2.16 shall not apply to
Taxes which shall be governed exclusively by Section 2.20. Failure or delay on
the part of any Lender to demand indemnification under this Section 2.16 shall
not constitute a waiver of such right to demand such indemnification; provided
that the Borrowers shall not be under any obligation to indemnify any Lender
under this Section 2.16 for any claim made more than 180 days after the
applicable Breakage Event.

 

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SECTION 2.17 Pro Rata Treatment. Except as required under Section 2.12, 2.13(i)
or 2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each reduction of the Term
Loan Commitments of any Series and each conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be allocated pro
rata among the Lenders in accordance with their respective applicable
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Loans of
the applicable Series). Each Lender agrees that in computing such Lender’s
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount.

SECTION 2.18 Sharing of Setoffs. Each Lender agrees that if it shall, through
the exercise of a right of banker’s lien, setoff or counterclaim against any
Borrower or any other Loan Party, or pursuant to a secured claim under
section 506 of the Bankruptcy Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Loans as a result of
which the unpaid principal portion of its Loans shall be proportionately less
than the unpaid principal portion of the Loans of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Loans of such other Lender, so that the aggregate unpaid
principal amount of the Loans and participations in Loans held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of all
Loans then outstanding as the principal amount of its Loans prior to such
exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all Loans outstanding prior to such exercise of banker’s
lien, setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Loan Parties expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker’s lien, setoff or counterclaim with
respect to any and all moneys owing by any Loan Party to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to a Borrower in the
amount of such participation. The provisions of this paragraph shall not be
construed to apply to any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement.

SECTION 2.19 Payments.

(a) Each Borrower shall make each payment (including principal of or interest on
any Borrowing or any Fees or other amounts) hereunder and under any other Loan
Document not later than 1:00 p.m., Local Time, on the date when due in
immediately available U.S. Dollars, without setoff, defense or counterclaim.
Each such payment shall be made to the Administrative Agent at its address set
forth in Section 9.01. The Administrative Agent shall promptly distribute to
each Lender any payments received by the Administrative Agent on behalf of such
Lender.

(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.

 

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

SECTION 2.20 Taxes.

(a) Any and all payments by or on account of any obligation of a Borrower or any
other Loan Party hereunder or under any other Loan Document shall be made free
and clear of and without deduction or withholding for any Taxes, unless required
by applicable law. If any applicable law (as determined in good faith discretion
of an applicable Withholding Agent) requires the deduction or withholding of any
Tax from such payment by such Withholding Agent, then the applicable Withholding
Agent shall be entitled to make such deduction and withholding of such Tax and
shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law. If such Tax is an
Indemnified Tax, then the sum payable by the applicable Loan Party shall be
increased as necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional sums
payable under this Section) the Administrative Agent or Lender (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions or withholdings been made.

(b) In addition, each Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) Each Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after receipt of the certificate referred to below, for the full
amount of any Indemnified Taxes paid by the Administrative Agent or such Lender,
as the case may be, on or with respect to any payment by or on account of any
obligation of such Borrower or any other Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and any other reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority; provided, however, that if the
Borrower reasonably believes that any such Indemnified Taxes were not correctly
or legally asserted by the relevant Governmental Authority, the Administrative
Agent, such Lender or such Issuing Bank, as the case may be, will use reasonable
efforts to cooperate with such Borrower to obtain a refund of such Taxes so long

 

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as such efforts would not result in any additional cost, expense or risk or be
otherwise disadvantageous to any of the Administrative Agent, such Lender or
such Issuing Bank. A certificate as to the amount of such payment or liability
setting forth in reasonable detail the calculation thereof delivered to the
Borrowers by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on behalf of itself or a Lender, shall be conclusive absent
manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by a Borrower or any other Loan Party to a Governmental Authority, such Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(e) Each Lender shall severally indemnify the Administrative Agent, within 10
days after demand therefor, for (i) any Indemnified Taxes attributable to such
Lender (but only to the extent that the Loan Parties has not already indemnified
the Administrative Agent for such Indemnified Taxes and without limiting the
obligation of such Loan Parties to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 9.04(f) relating to
the maintenance of a Participant Register and (iii) any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by the Administrative Agent to the Lender from any
other source against any amount due to the Administrative Agent under this
paragraph (e).

(f) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Borrower (with a copy to the
Administrative Agent), at such other time or times prescribed by applicable law
or as reasonably requested by such Borrower, such properly completed and
executed documentation prescribed by applicable law or reasonably requested by
such Borrower or the Administrative Agent as will permit such payments to be
made without withholding or at a reduced rate of withholding. Notwithstanding
anything to the contrary in the preceding sentence, the completion, execution
and submission of such documentation (other than such documentation set forth
below) shall not be required if in the Lender’s reasonable judgment such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender. In addition, each Foreign Lender shall, to
the extent legally entitled to do so, (i) furnish on or before it becomes a
party to this Agreement to the Borrowers (with a copy to the Administrative
Agent) either (a) two accurate and complete originally executed IRS Form W 8BEN
or IRS Form W-8BEN-E (or successor form) or an accurate and complete IRS Form W
8ECI (or successor form), as applicable, certifying, in either case, such
Foreign Lender’s legal entitlement to an exemption from U.S. federal withholding
tax with respect to all interest payments

 

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hereunder or (b) to the extent the Foreign Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN, or IRS Form W-8BEN-E (together with a certificate substantially in the
form of Exhibit H-1, H-2, H-3 or H-4 (as applicable), if the beneficial owner
providing the IRS Form W-8BEN or IRS Form W-8BEN-E is relying on the so-called
portfolio interest exemption), IRS Form W-9 or other certification documents
from each beneficial owner, as applicable, and, if applicable further IRS Forms
W-8IMY with the accompanying documentation described in this clause (b), and
(ii) provide a new Form W 8BEN or IRS Form W-8BEN-E (or successor form) or IRS
Form W 8ECI (or successor form) to the Borrowers (with a copy to the
Administrative Agent) (a) upon the expiration or obsolescence of any previously
delivered form or if the information on such form is or becomes incorrect,
(b) at such other time or times prescribed by applicable law, or (c) as
reasonably requested by the Borrowers or the Administrative Agent, to reconfirm
any complete exemption from U.S. federal withholding tax with respect to any
interest payment hereunder; provided that any Foreign Lender that is not a
“bank” within the meaning of Section 881(c)(3)(A) of the Code and is relying on
the so called “portfolio interest exemption” shall also furnish a statement
substantially in the form of Exhibit H-1, H-2, H-3 or H-4 (as applicable),
together with the applicable form. Any Lender that is a U.S. Person shall
deliver to the Borrowers (with a copy to the Administrative Agent), (w) on or
before the date such Lender becomes a party to this Agreement, (x) upon the
expiration or obsolescence of any previously delivered form or if the
information on such form is or becomes incorrect, (y) at such other time or
times prescribed by applicable law, or (z) as reasonably requested by the
Borrowers, two accurate and complete originally executed copies of IRS Form W 9,
or any successor form certifying that such Lender is exempt from U.S. backup
withholding.

(g) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrowers and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the
Borrowers or the Administrative Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrowers and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

(h) If the Administrative Agent or any Lender determines, in its reasonable
discretion, that it has received a refund in respect of any Indemnified Taxes or
Other Taxes as to which indemnification or additional amounts have been paid to
it by a Borrower pursuant to this Section 2.20, it shall promptly remit such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by such Borrower under this Section 2.20 with respect to the Indemnified
Taxes or Other Taxes giving rise to such refund plus any interest included in
such refund by the relevant Governmental Authority attributable thereto) to such
Borrower, net of all out of pocket expenses of the Administrative Agent or such
Lender, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with

 

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respect to such refund to the Administrative Agent or Lender, as applicable);
provided, that a Borrower, upon the request of the Administrative Agent or
Lender agrees to repay as soon as reasonably practicable the amount paid over to
such Borrower (plus penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or Lender to the extent the
Administrative Agent or Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent or any Lender to make available its Tax returns (or any
other information relating to its Taxes which it deems confidential) to any
Borrower or any other person.

(i) Notwithstanding anything to the contrary in this Agreement, each party’s
obligations under this Section 2.20 shall survive the resignation or replacement
of the Administrative Agent or any assignment of rights by, or the replacement
of, a Lender, the termination of the Commitments and the repayment, satisfaction
or discharge of all obligations under any Loan Document.

SECTION 2.21 Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate.

(a) In the event (i) any Lender delivers a certificate requesting compensation
pursuant to Section 2.14, (ii) any Lender delivers a notice described in
Section 2.15, (iii) a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority on account of any Lender pursuant to
Section 2.20 or (iv) any Lender refuses to consent to any amendment, waiver or
other modification of any Loan Document requested by the Borrowers that requires
the consent of a greater percentage of the Lenders than the Required Lenders and
such amendment, waiver or other modification is consented to by the Required
Lenders, the Borrowers may, at their sole expense and effort (including with
respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender, and the Administrative Agent, require any such
Lender to transfer and assign, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement to an assignee that shall assume such assigned
obligations and, with respect to clause (iv) above, shall consent to such
requested amendment, waiver or other modification of any Loan Documents (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (y) the
Borrowers shall have received the prior written consent of the Administrative
Agent, which consents shall not unreasonably be withheld or delayed, and (z) the
Borrowers or such assignee shall have paid to the affected Lender in immediately
available funds an amount equal to the sum of the principal of and interest
accrued to the date of such payment on the outstanding Loans of such Lender,
plus all Fees and other amounts accrued for the account of such Lender hereunder
with respect thereto (including any amounts under Sections 2.14 and 2.16 and if
such assignment occurs in connection with any consent, modification or amendment
that would result in a Repricing Event that occurs after the Closing Date but on
or prior to the date that is 6 months after the Closing Date, the prepayment
premium that would be payable pursuant to Section 2.12(e) if the Loans of such
Lender subject to such assignment had been prepaid by the Borrowers pursuant to
Section 2.12); provided further that, if prior to any such transfer and
assignment the circumstances or event that resulted in such Lender’s claim for
compensation under Section 2.14, notice under Section 2.15 or the amounts paid
pursuant to Section 2.20, as

 

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the case may be, cease to cause such Lender to suffer increased costs or
reductions in amounts received or receivable or reduction in return on capital,
or cease to have the consequences specified in Section 2.15, or cease to result
in amounts being payable under Section 2.20, as the case may be (including as a
result of any action taken by such Lender pursuant to paragraph (b) below), or
if such Lender shall waive its right to claim further compensation under
Section 2.14 in respect of such circumstances or event or shall withdraw its
notice under Section 2.15 or shall waive its right to further payments under
Section 2.20 in respect of such circumstances or event or shall consent to the
proposed amendment, waiver, consent or other modification, as the case may be,
then such Lender shall not thereafter be required to make any such transfer and
assignment hereunder. Each Lender hereby agrees that, in the event a Borrower
exercises its rights under and in accordance with this Section 2.21 to effect a
transfer and assignment of such Lender’s interests, rights and obligations under
this Agreement (which may be effected without such Lender’s consent or execution
and delivery of any Assignment and Acceptance), such Lender shall no longer be a
party hereto or have any rights or obligations hereunder; provided that (i) the
obligations of the Borrowers to such Lender under this Agreement which by their
terms survive the termination of this Agreement or the transfer and assignment
of the interests of a Lender hereunder and (ii) the obligations of such Lender
under Section 9.05 (with respect to unreimbursed expenses or indemnity payments
sought before or as a result of such assignment) shall, in each case, survive
the Borrowers’ exercise of such rights.

(b) If (i) any Lender shall request compensation under Section 2.14, (ii) any
Lender delivers a notice described in Section 2.15 or (iii) a Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority on account of any Lender pursuant to Section 2.20, then such Lender
shall use reasonable efforts (which shall not require such Lender to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden deemed by it to be significant) (x) to file
any certificate or document reasonably requested in writing by the Borrowers or
(y) to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. Each Borrower
hereby agrees to pay all reasonable out-of-pocket costs and expenses incurred by
any Lender in connection with any such filing or assignment, delegation and
transfer.

SECTION 2.22 Extensions of Term Loans.

(a) The Borrowers may at any time and from time to time request that all or a
portion of each Term Loan of any Class (an “Existing Term Loan Class”) be
converted or exchanged to extend the scheduled final maturity date(s) of any
payment of principal with respect to all or a portion of any principal amount of
such Term Loans (any such Term Loans which have been so extended, “Extended Term
Loans”) and to provide for other terms consistent with this Section 2.22. Prior
to entering into any Extension Agreement with respect to any Extended Term
Loans, the Borrowers shall provide written notice to the Administrative Agent
(who shall provide a copy of such notice to each of the Lenders of the
applicable Existing Term Loan Class, with such request offered equally to all
such Lenders of such Existing Term Loan Class) (a “Term Loan Extension Request”)
setting forth the proposed terms of the

 

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Extended Term Loans to be established, which terms shall be similar to the Term
Loans of the Existing Term Loan Class from which they are to be extended except
that (w) the scheduled final maturity date shall be extended and all or any of
the scheduled amortization payments of all or a portion of any principal amount
of such Extended Term Loans may be delayed to later dates than the scheduled
amortization of principal of the Term Loans of such Existing Term Loan Class
(with any such delay resulting in a corresponding adjustment to the scheduled
amortization payments reflected in Section 2.11 or in the Extension Agreement or
the Incremental Facility Joinder Agreement, as the case may be, with respect to
the Existing Term Loan Class of the Term Loans from which such Extended Term
Loans were extended, in each case as more particularly set forth in
Section 2.22(c) below), (x)(A) the interest rates (including through fixed
interest rates), interest margins, rate floors, upfront fees, funding discounts,
original issue discounts and prepayment terms and premiums with respect to the
Extended Term Loans may be different than those for the Term Loans of such
Existing Term Loan Class and/or (B) additional fees and/or premiums may be
payable to the Lenders providing such Extended Term Loans in addition to any of
the items contemplated by the preceding clause (A), in each case, to the extent
provided in the applicable Extension Agreement, (y) subject to the provisions
set forth in Sections 2.12 and 2.13, the Extended Term Loans may have optional
prepayment terms (including call protection and prepayment terms and premiums)
and mandatory prepayment terms as may be agreed between the Borrowers and the
Lenders thereof and (z) the Extension Agreement may provide for other covenants
and terms that apply to any period after the Latest Maturity Date. No Lender
shall have any obligation to agree to have any of its Term Loans of any Existing
Term Loan Class converted into Extended Term Loans pursuant to any Term Loan
Extension Request. Any Extended Term Loans of any Extension Series shall
constitute a separate Class of Term Loans from the Existing Term Loan Class of
Term Loans from which they were extended.

(b) The Borrowers shall provide the applicable Extension Request to the
Administrative Agent at least five (5) Business Days (or such shorter period as
the Administrative Agent may determine in its reasonable discretion) prior to
the date on which Lenders under the Existing Term Loan Class are requested to
respond, 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 purpose of this Section 2.22. Any Lender (an “Extending Lender”)
wishing to have all or a portion of its Term Loans of the Existing Term Loan
Class subject to such Extension Request converted or exchanged into Extended
Term Loans shall notify the Administrative Agent (an “Extension Election”) on or
prior to the date specified in such Extension Request of the aggregate
outstanding principal amount of its Term Loans of the applicable Existing Term
Loan Class which it has elected to convert or exchange into Extended Term Loans
(subject to any reasonable minimum denomination requirements imposed by the
Administrative Agent). In the event that the aggregate principal amount of Term
Loans of the applicable Existing Term Loan Class subject to Extension Elections
exceeds the aggregate outstanding principal amount of Extended Term Loans
requested pursuant to the Extension Request, Term Loans of the applicable
Existing Term Loan Class that are, subject to Extension Elections shall be
converted to or exchanged for Extended Term Loans on a pro rata basis (subject
to such rounding requirements as may be established by the Administrative Agent)
based on the aggregate principal amount of Term Loans of the applicable Existing
Term Loan Class included in each such Extension Election or as may be otherwise
agreed to in the applicable Extension Agreement.

 

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(c) Extended Term Loans shall be established pursuant to an amendment (an
“Extension Agreement”) to this Agreement (which, except to the extent expressly
contemplated by the penultimate sentence of this Section 2.22(c) and
notwithstanding anything to the contrary set forth in Section 9.8, shall not
require the consent of any Lender other than the Extending Lenders with respect
to the Extended Term Loans established thereby) executed by the Loan Parties,
the Administrative Agent and the Extending Lenders. In addition to any terms and
changes required or permitted by Section 2.22(a), each Extension Agreement in
respect of Extended Term Loans shall amend the scheduled amortization payments
pursuant to Section 2.11 or the applicable Incremental Facility Joinder
Agreement or Extension Agreement with respect to the Existing Class of Term
Loans from which the Extended Term Loans were converted or exchanged to reduce
each scheduled installment repayment amount for the Existing Class in the same
proportion as the aggregate outstanding principal amount of Term Loans of the
applicable Existing Term Loan Class is to be reduced pursuant to such Extension
Agreement (it being understood that the amount of any Repayment Amount payable
with respect to any individual Term Loan of such Existing Term Loan Class that
is not an Extended Term Loan shall not be reduced as a result thereof). In
connection with any Extension Agreement, the Borrowers shall deliver an opinion
of counsel reasonably acceptable to the Administrative Agent and addressed to
the Administrative Agent and the applicable Extending Lenders (i) as to the
enforceability of such Extension Agreement, this Agreement as amended thereby,
and such of the other Loan Documents (if any) as may be amended thereby (in the
case of such other Loan Documents as contemplated by the immediately preceding
sentence) and covering customary matters and (ii) to the effect that such
Extension Agreement, including the Extended Term Loans provided for therein,
does not breach or result in a default under the provisions of Section 9.8 of
this Agreement.

(d) Notwithstanding anything to the contrary contained in this Agreement, on any
date on which any Term Loans of an Existing Term Loan Class is converted or
exchanged to extend the related scheduled maturity date(s) in accordance with
Section 2.22(a) (an “Extension Date”), in the case of the existing Term Loans of
each Extending Lender, the aggregate principal amount of such existing Term
Loans shall be deemed reduced by an amount equal to the aggregate principal
amount of Extended Term Loans so converted or exchanged by such Lender on such
date, and the Extended Term Loans shall be established as a separate Class of
Term Loans (together with any other Extended Term Loans so established on such
date).

(e) 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 Agreement, then the Administrative Agent, the Borrowers 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
Agreement”) within 15 days following the effective date of such Extension
Agreement, which Corrective Extension Agreement shall (i) provide for the
conversion or exchange and extension of Term Loans under the Existing Term Loan
Class in such principal amount as is required to cause such Lender to hold
Extended Term Loans of the applicable Extension Series into which such other
Term Loans were initially converted or exchanged, as the case may be, in the
principal amount such Lender would have held had such

 

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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 Agreement in the absence of such error, (ii) be
subject to the satisfaction of such conditions as the Administrative Agent, the
Borrowers and such Lender may agree (including conditions of the type required
to be satisfied for the effectiveness of an Extension Agreement described in
Section 2.22(c)), and (iii) effect such other amendments of the type (with
appropriate reference and nomenclature changes) described in the penultimate
sentence of Section 2.22(c).

(f) No conversion or exchange of Loans or Commitments pursuant to any Extension
Agreement in accordance with this Section 2.22 shall constitute a voluntary or
mandatory payment or prepayment for purposes of this Agreement.

(g) This Section 2.22 shall supersede any provisions in Section 2.02 or
Section 9.8 to the contrary. For the avoidance of doubt, any of the provisions
of this Section 2.22 may be amended with the consent of the Required Lenders;
provided that no such amendment shall require any Lender to provide any Extended
Term Loans without such Lender’s consent.

SECTION 2.23 Refinancing Facilities. The Borrowing Agent may by written notice
to Administrative Agent elect to establish one or more additional tranches of
term loans under this Agreement (“Refinancing Term Facility”) or new revolving
credit facilities under this Agreement (“Refinancing Revolving Facility” and
together with any Refinancing Term Facility, “Refinancing Facility”) or one or
more series of senior unsecured notes or senior secured notes (“Refinancing
Notes” and, together with any Refinancing Facilities, “Refinancing Debt”), in
each case, to refinance the any or all Series of Loans or replace New Revolving
Loan Commitments, as the case may be, in whole or in part, and that will be
secured by the Collateral on a pari passu basis with the Obligations or secured
by the Collateral by Liens that are junior and subordinated to the Liens thereon
securing the Obligations. Each such notice shall specify the date (each, a
“Refinancing Effective Date”) on which the Borrower proposes that the
Refinancing Debt shall become effective; provided that:

(a) such Refinancing Term Facility shall mature no earlier than, and the
Weighted Average Life to Maturity of such Refinancing Term Facility shall not be
shorter than, the then remaining Weighted Average Life to Maturity of the Term
Loans being refinanced;

(b) such Refinancing Notes shall mature no earlier than, and shall not have
mandatory prepayment provisions (other than related to customary asset sale and
change of control offers) that could result in prepayments of such Refinancing
Notes prior to, the Loans being refinanced;

(c) such Refinancing Revolving Facility shall mature no earlier than (or require
commitment reductions or amortization prior to) the maturity date of the New
Revolving Loan Commitments being refinanced or replaced;

(d) there shall be no borrowers or guarantors in respect of any Refinancing Debt
that is not a Borrower or Guarantor;

 

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(e) such Refinancing Facility or Refinancing Notes will have such pricing,
premiums and, to the extent not directly and adversely affecting the Lenders of
Loans outstanding hereunder (except in the case of any applicable Refinancing
Facility) immediately after giving effect to such refinancing, optional
prepayment or redemption terms as may be agreed by the Borrowers and the lenders
or holders providing such Refinancing Facility or Refinancing Notes;

(f) if necessary, the Loan Parties and the Collateral Agent shall enter into
such amendments to the Security Documents as may be requested by the Collateral
Agent (which shall not require any consent from any Lender) in order to ensure
that the Refinancing Facility or Refinancing Notes are provided with the benefit
of the applicable Security Documents and shall deliver such other documents,
certificates and opinions of counsel in connection therewith as may be requested
by the Collateral Agent;

(g) the Net Cash Proceeds of such Refinancing Facility or Refinancing Notes
shall be applied to the repayment of the then outstanding applicable Loans on
the date of such incurrence in accordance with Section 2.12;

(h) with respect to any Refinancing Notes secured by Liens on Collateral or any
Refinancing Term Facility secured by Liens on Collateral that are junior and
subordinated to the Liens thereon securing the Obligations, such agreements or
Liens shall be subject to an Intercreditor Agreement;

(i) the aggregate principal amount of any Refinancing Debt shall not be greater
than the aggregate principal amount (or committed amount) of the Term Loan
Facility or New Loan, as the case may be, being refinanced or replaced plus any
fees, premiums, original issue discount and accrued interest associated
therewith, and costs and expenses related thereto, and such Term Loan Facility
or New Loan being refinanced or replaced shall be permanently reduced
substantially simultaneously with the issuance thereof; and

(j) the other terms and conditions, taken as a whole, of any such Refinancing
Debt are substantially similar to, or not materially less favorable to the
Borrowers and their Subsidiaries, than, the terms and conditions, taken as a
whole, applicable to the Term Loan Facility or the New Revolving Loan
Commitments being refinanced or replaced except as otherwise implicitly
permitted by this Section 2.23 above except for covenants and other provisions
that are applicable only to periods occurring after the Latest Maturity Date in
effect at such time or are otherwise reasonably satisfactory to the
Administrative Agent.

SECTION 2.24 Incremental Facilities.

(a) The Borrowers may, by written notice to the Administrative Agent from time
to time, elect to request prior to the Term Loan Maturity Date, the
establishment of (i) term loan commitments under one or more new term loan
tranches (any such term loan commitment, a “New Term Loan Commitment”; any Loan
made in respect thereof, a “New Term Loan”) or (ii) one additional revolving
credit facility (any such revolving commitment, a “New Revolving Loan
Commitment” and together any New Term Loan Commitment, the “New Commitments”;
any Loan made in respect thereof, a “New Revolving Loan” and together with any
New Term Loan, the “New Loans”) that:

 

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(i) do not exceed the Incremental Amount at the time any such New Commitment is
established; provided, that New Loans may be incurred without regard to the
Incremental Amount, to the extent that the proceeds from such New Term Loans are
used on the date of incurrence (or substantially concurrent with the date of
incurrence) of such New Term Loans to either prepay Loans in accordance with the
procedures set forth in Section 2.12 or to permanently reduce commitments under
a revolving credit facility permitted under Section 6.01(g) by an amount equal
to the aggregate amount of the New Revolving Loan Commitments so provided; and

(ii) are individually not less than $20,000,000 (or any lesser amount that is
approved by the Administrative Agent) and integral multiples of $5,000,000 in
excess of that amount, or equal to the remaining Incremental Amount (or any
lesser amount that is approved by the Administrative Agent).

Each such notice shall specify (A) the date (each, an “New Loan Date”) on which
the Borrowers propose that the New Commitments shall be effective, which shall
be a date not less than five Business Days after the date on which such notice
is delivered to the Administrative Agent and (B) the identity of each Lender or
Affiliate of a Lender or other Person that is consented to by the Administrative
Agent (such consent not to be unreasonably withheld or delayed) to whom the
Borrowers propose any portion of such New Commitments be allocated and the
amounts of such allocations; provided that any Lender approached to provide all
or a portion of the New Commitments may elect or decline, in its sole
discretion, to provide a portion of such New Commitments. Such New Commitments,
as applicable, shall become effective as of such New Loan Date; provided that
(1) no Event of Default shall exist on such New Loan Date before or after giving
effect to such New Commitments, as the case may be, except, in the case of a
provision of any New Loan in connection with a Permitted Acquisition or an
Acquisition, to the extent such condition is omitted by the applicable
Incremental Facility Joinder Agreement; (2) such New Commitments shall be
effected pursuant to one or more Incremental Facility Joinder Agreements
executed and delivered by the Loan Parties to the Administrative Agent and each
of which shall be recorded in the Register and shall be subject to the
requirements set forth in Section 2.20; (3) the Borrowers shall make any
payments required pursuant to Section 2.16 in connection with such New
Commitments; (4) the interest rate margins, original issue discount, upfront
fees (if any) and interest rate floors (if any) for any New Loan shall be
determined by the Borrowers and the applicable Lender; provided that if the
Yield in respect of any New Term Loans exceeds the Yield with respect to the
Term Loan by more than 50 basis points, the Applicable Percentage with respect
to the Term Loan shall be automatically increased on the New Loan Date with
respect to the Term Loan so that the Yield for the Term Loan is equal to the
Yield with respect to such New Term Loans minus 50 basis points; provided
further that, if the Adjusted LIBO Rate in respect of such New Term Loan
includes a floor greater than the floor applicable to the Term Loan and such
floor is greater than the Adjusted LIBO Rate in effect for a 3-month interest
period at such time, such excess amount (above the greater of such floor and
such Adjusted LIBO Rate) shall be equated to interest rate for purposes of
determining the applicable interest rate under such New Term Loan; provided
further this clause (4) shall not apply to (i) any New Term Loan with a final
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occurs 24 months after the Term Loan Maturity Date or later or (ii) any New Term
Loan that ranks junior in right of security to the Term Loan Facility, (5) the
final maturity date of any New Term Loan shall be no earlier than the Term Loan
Maturity Date and such New Term Loan shall have a Weighted Average Life to
Maturity no shorter than that of the remaining Term Loans; (6) all
representations and warranties made in the Loan Documents shall be true and
correct in all material respects immediately prior to, and after giving effect
to, such New Commitments on such date; provided that to the extent that such
representations and warranties specifically refer to an earlier date, they shall
be true and correct in all material respects as of such earlier date; (7) the
New Loans shall be senior secured obligations and shall rank pari passu with or,
at the Borrowers’ option, junior in right of security to the Term Loan Facility;
provided that, if such New Loans rank junior in right of security with the Term
Loan Facility, (i) such New Loan will be established as a separate facility from
the Term Loan Facility, and (ii) such New Loan shall be subject to an
Intercreditor Agreement, (8) the New Revolving Loans will mature no earlier than
the loans provided under the Revolving Credit Agreement and all other terms of
any New Revolving Loans (other than pricing, maturity, financial maintenance
covenants, participation in mandatory prepayments, borrowing mechanics,
assignments and participations or other provisions customarily found in
revolving credit facilities or asset based revolving credit facilities) shall be
substantially similar to the Term Loan Facility or otherwise reasonably
acceptable to the Administrative Agent, (9) with respect to mandatory
prepayments of any New Term Loan, no New Term Loan shall participate on a
greater than pro rata basis than the Term Loans, and (10) the Borrowers shall
deliver or cause to be delivered any other documents reasonably requested by
Administrative Agent in connection with any such transaction. Once any New
Commitments shall become effective as of their respective New Loan Dates in
accordance with this Section 2.24(a), extensions of credit may be made
thereunder in accordance with the terms of the applicable Incremental Facility
Joinder Agreement without any additional conditions thereto; provided that, with
respect to each such extension of credit, each of the conditions set forth in
Sections 4.02 shall be satisfied. Any New Loans made pursuant to New Commitments
that become effective on a New Loan Date, as well as the Term Loans, shall be
designated a separate series (a “Series”) of Loans for all purposes of this
Agreement.

Notwithstanding the foregoing, if the proceeds of any New Loan will be used to
consummate a Permitted Acquisition or an Acquisition, the condition set forth in
clause (6) above that representations and warranties made in the Loan Documents
shall be true and correct in all material respects immediately prior to, and
after giving effect to, such New Commitments on such date may instead be limited
in accordance with the terms of the applicable Incremental Facility Joinder
Agreement to the accuracy in all material respects of (i) the Specified
Representations as are referred to in the definition of “Specified
Representations” and (ii) any representations and warranties made by or with
respect to the target, its Subsidiaries and respective businesses in the
acquisition, sale or purchase documentation in connection with such Permitted
Acquisition or an Acquisition as are material to the interests of the Lenders
(in their capacities as such) but only to the extent that Holdings or any of its
Affiliate has the right to terminate its obligations under the applicable
acquisition, sale or purchase documentation or decline to consummate the
applicable acquisition as a result of a breach of such representation.

 

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(b) The Administrative Agent shall notify Lenders promptly upon receipt of the
Borrowers’ notice of each New Loan Date and in respect thereof the New Loan
Commitments, the Lenders providing such New Commitments and their respective
interests therein.

(c) The terms and provisions of the New Term Loans shall be identical to the
Term Loan, except as otherwise reasonably satisfactory to the Administrative
Agent or explicitly permitted by this Section 2.24.

(d) Each of the parties hereto hereby agrees that, upon the effectiveness of any
Incremental Facility Joinder Agreement, this Agreement shall be deemed amended
to the extent (but only to the extent) necessary to reflect the terms of the New
Commitments evidenced thereby. Any such deemed amendment may be memorialized in
writing by the Administrative Agent with the Borrowers’ consent (not to be
unreasonably withheld) and furnished to the other parties hereto.

SECTION 2.25 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Lenders.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VII or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 2.08 or 9.06 shall be applied at such time
or times as may be determined by the Administrative Agent as follows: first, to
the payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, as the Borrowers may request (so long as no Default
exists), to the funding of any Loan in respect of which such Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as
determined by the Administrative Agent; third, if so determined by the
Administrative Agent and the Borrowers, to be held in a deposit account and
released pro rata in order to satisfy such Defaulting Lender’s potential future
funding obligations with respect to Loans under this Agreement; fourth, to the
payment of any amounts owing to the Lenders, as a result of any judgment of a
court of competent jurisdiction obtained by any Lender, against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; fifth, so long as no Default exists, to the payment of any
amounts owing to the Borrowers as a result of any judgment of a court of
competent jurisdiction obtained by the Borrowers against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if such payment is a payment of
the principal amount of any Loans in respect of which such Defaulting Lender has
not fully funded its appropriate share, such payment shall be applied solely to
pay the Loans owed to, all Non-Defaulting Lenders holding

 

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Loans of the same Series as the Defaulting Lender on a pro rata basis prior to
being applied to the payment of any Loans of such Defaulting Lender until such
time as all Loans are held by the Lenders pro rata in accordance with the
Commitments without giving effect to clause (iv) below. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed
paid to and redirected by such Defaulting Lender, and each Lender irrevocably
consents hereto.

(b) Defaulting Lender Cure. If the Borrowers and the Administrative Agent agree
in writing that a Lender is no longer a Defaulting Lender or a Potential
Defaulting Lender, as the case may be, the Administrative Agent will so notify
the parties hereto, whereupon as of the effective date specified in such notice
and subject to any conditions set forth therein, that Lender will, to the extent
applicable, purchase at par that portion of outstanding Loans of the other
Lenders or take such other actions as the Administrative Agent may determine to
be necessary to cause the Loans of the applicable Series to be held pro rata by
the Lenders in accordance with the Commitments of such Series, whereupon such
Lender will cease to be a Defaulting Lender or a Potential Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrowers while that Lender was
a Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender or Potential Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender or a Potential Defaulting Lender.

SECTION 2.26 Intentionally Deleted.

ARTICLE III

Representations and Warranties

Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent and each of the Lenders on the Closing Date:

SECTION 3.01 Organization; Powers. Each of Holdings and the Restricted
Subsidiaries (a) is duly organized or incorporated, validly existing and, to the
extent recognized by the laws of the jurisdiction of its organization, in good
standing under the laws of such jurisdiction, (b) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect and (d) has the power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated thereby to which
it is or will be a party and, in the case of the Borrowers, to borrow hereunder.

SECTION 3.02 Authorization. The Transactions (a) have been duly authorized by
all requisite corporate and, if required, stockholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or

 

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other constitutive documents or by-laws of Holdings or any Restricted
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any indenture, agreement or other instrument to which Holdings or any Restricted
Subsidiary is a party or by which any of them or any of their property is or may
be bound, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under, or give rise to any
right to accelerate or to require the prepayment, repurchase or redemption of
any obligation under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by Holdings or any
Restricted Subsidiary (other than any Lien created hereunder or under the
Security Documents or permitted Liens that are subject to an Intercreditor
Agreement).

SECTION 3.03 Enforceability. This Agreement has been duly executed and delivered
by each Loan Party and constitutes, and each other Loan Document when executed
and delivered by each Loan Party will constitute (to the extent such persons are
a party thereto), a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws relating to or affecting the enforcement of creditors’ rights generally or
by general principles of equity.

SECTION 3.04 Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (a) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.

SECTION 3.05 Intentionally Deleted.

SECTION 3.06 No Material Adverse Change. Since December 31, 2014, except for the
Transactions, no event or condition has occurred or existed that, individually
or in the aggregate, has had, or could reasonably be expected to have, a
Material Adverse Effect.

SECTION 3.07 Title to Properties; Possession Under Leases.

(a) Each of Holdings and the Restricted Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material properties and
assets (including all Mortgaged Properties), except for (i) Liens permitted by
Section 6.02, (ii) minor defects in title that do not materially interfere with
its ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes and (iii) where the failure to
have such title in the aggregate could not reasonably be expected to result in a
Material Adverse Effect.

(b) Each of Holdings and the Restricted Subsidiaries has complied with all
obligations under all leases to which it is a party and all such leases are in
full force and effect except for such noncompliance or ineffectiveness which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

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(c) As of the Closing Date, neither Holdings nor any Subsidiary has received any
notice of, nor has any knowledge of, any pending or contemplated condemnation
proceeding affecting the Mortgaged Properties or any sale or disposition thereof
in lieu of condemnation.

(d) As of the Closing Date, none of Holdings or any of the Subsidiaries is
obligated under any right of first refusal, option or other contractual right to
sell, assign or otherwise dispose of any Mortgaged Property or any interest
therein.

SECTION 3.08 Subsidiaries. Schedule 3.08 sets forth as of the Closing Date a
list of all Subsidiaries, including the correct legal name thereof, the
jurisdiction in which each such person is organized or incorporated, the
percentage ownership interest (whether direct or indirect) of Holdings therein
and whether such Subsidiary is a Not for Profit Subsidiary. The shares of
capital stock or other ownership interests so indicated on Schedule 3.08 are
fully paid and non-assessable and are owned by Holdings, directly or indirectly,
free and clear of all Liens (other than Liens created under the Security
Documents, Liens permitted by clause (l), (v), (x) or (dd) of Section 6.02 and
in the case of Liens permitted under Section 6.02(v), (x) or (dd), subject to an
Intercreditor Agreement). Each Not for Profit Subsidiary is exempt from U.S.
federal income taxation under Section 501(a) of the Code, or if any Not for
Profit Subsidiary is not so exempt from U.S. federal income taxation, then such
Not for Profit Subsidiary is a Subsidiary Guarantor in accordance with
Section 5.12.

SECTION 3.09 Litigation; Compliance with Laws.

(a) Except as set forth on Schedule 3.09, there are no actions, suits,
investigations or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of Holdings or the
Borrowers, threatened in writing against or affecting Holdings or any Restricted
Subsidiary, or any business, property or rights of any such person (i) that
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.

(b) Since the Closing Date, there has been no change in the status of the
matters disclosed on Schedule 3.09 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

(c) None of Holdings or any of the Restricted Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting any Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.

 

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SECTION 3.10 Agreements.

(a) None of Holdings or any of the Restricted Subsidiaries is a party to any
agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Material Adverse Effect.

(b) None of Holdings or any of the Restricted Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be expected to result in a Material
Adverse Effect.

SECTION 3.11 Federal Reserve Regulations.

(a) None of Holdings or any of the Restricted Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.

(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation T, U or X.

SECTION 3.12 Investment Company Act. Neither Holdings nor any Restricted
Subsidiary is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

SECTION 3.13 Use of Proceeds. The proceeds of the Term Loan will be used to
finance the Transactions and for working capital and other general corporate
purposes of Holdings and its Subsidiaries.

SECTION 3.14 Taxes. Each of Holdings and the Restricted Subsidiaries has timely
filed or caused to be timely filed all Federal, and all state, local and
foreign, Tax returns or materials required to have been filed by it and has paid
or caused to be paid all Taxes due and payable by it and all assessments
received by it, except (i) Taxes that are being contested in good faith by
appropriate proceedings and for which Holdings or such Restricted Subsidiary, as
applicable, shall have set aside on its books adequate reserves or (ii) Taxes
and Tax returns for which the failure to so pay or file, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

SECTION 3.15 No Material Misstatements. None of (a) the Borrowers’ presentation
materials to the Lenders dated April 28, 2015 or (b) any other written
information, report, financial statement, exhibit or schedule furnished by or on
behalf of Holdings or any Restricted Subsidiary to the Administrative Agent or
any Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto contained, contains or will contain (in
each case, when furnished, and taken as a whole) any material misstatement of
fact or omitted, omits or will omit (in each case, when furnished, and taken as
a whole) to state any material fact necessary to make the statements therein, in
the light of the circumstances under

 

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which they were, are or will be made, not materially misleading; provided that
to the extent any such information, report, exhibit or schedule was based upon
or constitutes a forecast or projection or other forward-looking information,
the Loan Parties represent only that such information, report, exhibit or
schedule was prepared in good faith based upon assumptions that the Loan Parties
believed to be reasonable at the time made and at the time such information,
report, exhibit or schedule was or is so furnished. It is understood that any
forecast, projection or other forward-looking information is not to be viewed as
facts and that actual results during the periods covered thereby may differ from
projected results.

SECTION 3.16 Employee Benefit Plans.

(a) Each Plan is in compliance with the applicable provisions of ERISA and the
Code and the regulations and published interpretations thereunder except for
such noncompliance which, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. No ERISA Event has occurred
or is reasonably expected to occur that, when taken together with all other such
ERISA Events, could reasonably be expected to result in a Material Adverse
Effect. The present value of all benefit liabilities under each Plan (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the last annual valuation date applicable thereto, exceed
the fair market value of the assets of such Plan by an amount which could
reasonably be expected to result in a Material Adverse Effect, and the present
value of all benefit liabilities of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the last annual valuation dates applicable thereto,
exceed the fair market value of the assets of all such underfunded Plans by an
amount which could reasonably be expected to result in a Material Adverse
Effect.

(b) Each Foreign Pension Plan is in compliance with all requirements of law
applicable thereto and the respective requirements of the governing documents
for such plan except for such noncompliance which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. With respect to each Foreign Pension Plan, none of Holdings, its
Affiliates or any of their respective directors, officers, employees or agents
has engaged in a transaction which would subject Holdings or any Restricted
Subsidiary, directly or indirectly, to a tax or civil penalty which could
reasonably be expected , individually or in the aggregate, to result in a
Material Adverse Effect. With respect to each Foreign Pension Plan, reserves
have been established in the financial statements furnished to Lenders in
respect of any unfunded liabilities in accordance with applicable law or, where
required, in accordance with the ordinary accounting practices in the
jurisdiction in which such Foreign Pension Plan is maintained. The aggregate
unfunded liabilities with respect to such Foreign Pension Plans could not
reasonably be expected to result in a Material Adverse Effect; the present value
of the aggregate accumulated benefit liabilities of all such Foreign Pension
Plans (based on those assumptions used to fund each such Foreign Pension Plan)
did not, as of the last annual valuation date applicable thereto, exceed the
fair market value of the assets of all such Foreign Pension Plans by an amount
which could reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 3.17 Environmental Matters.

(a) Except as set forth in Schedule 3.17 and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, none of Holdings or any of the
Restricted Subsidiaries (i) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any facts or circumstances that
would be reasonably likely to result in any Environmental Liability.

(b) Since the Closing Date, there has been no change in the status of the
matters disclosed on Schedule 3.17 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

SECTION 3.18 Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all material insurance maintained by Holdings or the Restricted
Subsidiaries as of the Closing Date. As of such date, such insurance is in full
force and effect and all premiums have been duly paid. Holdings and the
Restricted Subsidiaries have insurance in such amounts and covering such risks
and liabilities as are in accordance with normal industry practice.

SECTION 3.19 Security Documents.

(a) The Guarantee and Collateral Agreement, upon execution and delivery thereof
by the parties thereto, will create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Guarantee and Collateral
Agreement) and the proceeds thereof and (i) when the Pledged Collateral (as
defined in the Guarantee and Collateral Agreement) is delivered to the
Collateral Agent (or its bailee pursuant to the provisions of the Term
Loan/Revolving Credit Intercreditor Agreement), the Lien created under Guarantee
and Collateral Agreement shall constitute a fully perfected first priority Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Pledged Collateral, in each case prior and superior in right to any
other person (other than the “Secured Parties” as defined in the Revolving
Credit Agreement whose relative rights in the Collateral are set forth in the
Term Loan/Revolving Facility Intercreditor Agreement and other holders of
Permitted Pari Passu Collateral Liens whose relative rights in the Collateral
are set forth in the applicable Intercreditor Agreement), and (ii) when
financing statements in appropriate form are filed in the offices specified in
the Perfection Certificate, the Lien created under the Guarantee and Collateral
Agreement will constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties party to the Guarantee and
Collateral Agreement in such Collateral to the extent perfection can be obtained
by filing Uniform Commercial Code financing statements (other than Patents,
Trademarks and Copyrights described in Section 3.19(b)), in each case prior and
superior in right to any other person, other than (x) the “Secured Parties” as
defined in the Revolving Credit Agreement whose relative rights in the
Collateral are set forth in the Term Loan/Revolving Facility Intercreditor
Agreement and the holders of Permitted Pari Passu Collateral Liens whose
relative rights in the Collateral are set forth in the applicable Intercreditor
Agreement (y) with respect to Liens permitted by Section 6.02 that by operation
of law or contract have priority over the Liens securing the Obligations.

 

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(b) Upon the timely recordation of the Guarantee and Collateral Agreement (or a
short-form security agreement in form and substance reasonably satisfactory to
the Borrowers and the Collateral Agent) with the United States Patent and
Trademark Office and the United States Copyright Office, together with the
financing statements in appropriate form filed in the offices specified in the
Perfection Certificate, the Lien created under the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties party to the Guarantee and
Collateral Agreement in the Patents, Trademarks and Copyrights owned by and
registered (or subject to an application for registration) in the name of the
Loan Parties, and in which a security interest may be perfected by filing in the
United States and its territories and possessions, in each case prior in right
to any other person other than the “Secured Parties” as defined in the Revolving
Credit Agreement whose relative rights in the Collateral are set forth in the
Term Loan/Revolving Facility Intercreditor Agreement and the holders of
Permitted Pari Passu Collateral Liens whose relative rights in the Collateral
are set forth in the applicable Intercreditor Agreement (it being understood
that subsequent recordings in the United States Patent and Trademark Office and
the United States Copyright Office may be necessary to perfect a Lien on
registered Trademarks and Patents, Trademark and Patent applications and
registered Copyrights and Copyright Applications).

(c) Upon the due execution and delivery of the Mortgage Amendments, the
Mortgages are effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on
all of the Loan Parties’ right, title and interest in and to the Mortgaged
Property thereunder and the proceeds thereof, and when the Mortgages (or
Mortgage Amendments) are recorded or filed in the offices specified on
Schedule 3.19(c), the Mortgages shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Mortgaged Property and the proceeds thereof, in each case prior and superior in
right to any other person, other than (x) the “Secured Parties” as defined in
the Revolving Credit Agreement whose relative rights in the Collateral are set
forth in the Term Loan/Revolving Facility Intercreditor Agreement and (y) with
respect to the rights of persons pursuant to Liens expressly permitted by
Section 6.02 that by operation of law or contract have priority over the Liens
securing the Obligations.

(d) Each Security Document (other than the Guarantee and Collateral Agreement,
any short-form security agreement referred to in clause (b) above and the
Mortgages) that purports (i) to create a Lien on any Collateral, when executed
and delivered, will be effective under applicable law to create in favor of the
Collateral Agent for the ratable benefit of the applicable Secured Parties a
valid and enforceable Lien on the Collateral subject thereto and (ii) to create
a Guarantee of any of the Obligations, when executed and delivered, will be
effective under applicable law to create in favor of the Collateral Agent for
the ratable benefit of the applicable Secured Parties a valid and enforceable
Guarantee of the Obligations subject thereto.

 

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SECTION 3.20 Location of Real Property and Leased Premises.

(a) Schedule 3.20(a) lists completely and correctly as of the Closing Date all
Material Real Property owned by Holdings and the Restricted Subsidiaries and the
addresses, record owner and book and estimated fair value thereof. As of the
Closing Date, Holdings and the Restricted Subsidiaries have good and marketable
fee title to all the real property set forth on Schedule 3.20(a), in each case,
free and clear of all Liens other than those Liens permitted under the Loan
Documents.

(b) Schedule 3.20(b) lists completely and correctly as of the Closing Date all
Material Real Property leased by Holdings and the Restricted Subsidiaries and
the addresses, lessor, lessee and expiration date thereof. Holdings and the
Restricted Subsidiaries have valid leases, subleases or licenses in, or rights
to use and occupy, all the real property set forth on Schedule 3.20(b), except
where such invalidity, inability, and/or limitation on use and occupation,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

SECTION 3.21 Labor Matters. As of the Closing Date, there are no strikes,
lockouts or slowdowns against Holdings or any Restricted Subsidiary pending or,
to the knowledge of Holdings or the Borrowers, threatened in writing. The hours
worked by and payments made to employees of Holdings and the Restricted
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters,
except for such noncompliance which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The consummation
of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Holdings or any Restricted Subsidiary is bound.

SECTION 3.22 Solvency. On the Closing Date, immediately after giving effect to
the consummation of the Transactions on and as of such date (a) the fair value
of the assets of Holdings and its Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities, direct, subordinated,
contingent or otherwise, of Holdings and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the property of Holdings and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of Holdings and its Subsidiaries on a
consolidated basis on their debts and other liabilities, direct, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) Holdings and its Subsidiaries on a consolidated basis will be able
to pay their debts and liabilities, direct, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and
(d) Holdings and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which they
are engaged as such businesses are now conducted and are proposed to be
conducted following the Closing Date. As of the Closing Date, immediately after
giving effect to the consummation of the Transactions, Holdings does not intend
to, and Holdings does not believe that it or any of its Subsidiaries will, incur
debts beyond its ability to pay such debts as they mature, taking into account
the timing and amounts of cash to be received by it or any such Subsidiary and
the timing and amounts of cash to be payable on or in respect of its debts or
the debts of any such Subsidiary.

 

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SECTION 3.23 No Default. No Default shall have occurred and be continuing.

SECTION 3.24 Intellectual Property. Each of Holdings and the Restricted
Subsidiaries owns, is licensed to use or otherwise has the right to use, all
Intellectual Property necessary for the conduct of its business except for those
for which the failure to own or license could not reasonably be expected to have
a Material Adverse Effect. No claim has been asserted in writing or is pending
by any Person challenging the use by Holdings or any of the Restricted
Subsidiaries of any such Intellectual Property or the validity or effectiveness
of any such Intellectual Property, nor does any Loan Party know of any valid
basis for any such claim, except, in either case, for such claims that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. The use of such Intellectual Property by Holdings and the Restricted
Subsidiaries does not infringe on the Intellectual Property rights of any
Person, nor has any claim been asserted in writing or is any claim pending with
respect to the foregoing, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

SECTION 3.25 Existing Indebtedness, Liens and Investments.

(a) Set forth on Schedule 6.01 is a complete and accurate list as of the Closing
Date of all Indebtedness for borrowed money (other than Indebtedness in an
aggregate amount not exceeding $50,000,000), showing as of the Closing Date the
obligor and the principal amount outstanding thereunder, the maturity date
thereof and the amortization schedule therefor.

(b) Set forth on Schedule 6.02 hereto is a complete and accurate list as of the
Closing Date of all Liens on the property or assets of any Loan Party or any of
its Subsidiaries securing any Indebtedness for borrowed money (other than
Indebtedness in an aggregate amount not exceeding $50,000,000), showing as of
the Closing Date the lienholder thereof, the principal amount of the obligations
secured thereby and the property or assets of such Loan Party or such Subsidiary
subject thereto.

(c) Set forth on Schedule 6.04 is a complete and accurate list as of the Closing
Date of all Investments (other than Investments in wholly owned Subsidiaries of
Holdings, Permitted Investments and other Investments in an aggregate amount not
exceeding $50,000,000), showing as of the Closing Date the amount and
description (including the parties thereto) of each such Investment.

SECTION 3.26 PATRIOT Act etc. To the extent applicable, each of Holdings and its
Restricted Subsidiaries is in compliance, in all material respects, with all
Anti-Terrorism Laws. Neither Holdings nor, to the knowledge of Holdings, any
Loan Party or any director, officer, agent, or employee of any Loan Party, is
currently subject to any Sanctions, and the Loan Parties will not, knowingly,
directly or indirectly use the proceeds from the Loans or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture partner
or other Person, for the purpose of financing the activities of any Person
currently subject to any Sanctions or for the purpose of funding any other
transaction that will result in a violation by any Person (including any Person
participating in the transaction, whether as underwriter, advisor, investor or
otherwise) of any Sanctions. No part of the proceeds of the Term Loans will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official

 

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of a political party, candidate for political office, or anyone else acting in
an official capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of Anticorruption Laws. Holdings and, to
the knowledge of Holdings, its Restricted Subsidiaries have conducted their
businesses in compliance, in all material respects, with all Anticorruption Laws
and Holdings and its Restricted Subsidiaries will conduct their business in a
manner designed to promote and achieve compliance, in all material respects,
with such laws and with the representation and warranty contained herein.

ARTICLE IV

Conditions of Lending

The obligation of each Lender to make advances to the Borrowers on the Closing
Date is subject to the satisfaction or waiver in accordance with Section 9.08 of
the following conditions precedent:

(a) Each of the Loan Documents and other documentation relating to the Term Loan
provided hereunder shall be in form and substance reasonably satisfactory to the
Administrative Agent and duly executed and delivered by each of the Loan Parties
and other parties thereto.

(b) Administrative Agent shall have received, in respect of each Loan Party,

(i) the notes payable to the order of the Lenders to the extent requested at
least three Business Days prior to the Closing Date in accordance with
Section 2.04(e);

(ii) copies of each organizational or constitutive document (along with any
amendments thereto) certified as of the Closing Date or a recent date prior
thereto by the appropriate Governmental Authority;

(iii) certificate of the secretary or an assistant secretary of each Loan Party
certifying the names and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder;

(iv) resolutions of the board of directors (or similar governing body) of such
Loan Party approving and authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party or by which
it or its assets may be bound as of the Closing Date, certified as of the
Closing Date by its secretary or an assistant secretary as being in full force
and effect without modification or amendment; and

(v) a good standing certificate from the applicable Governmental Authority of
such Loan Party’s jurisdiction of incorporation, organization or formation dated
the Closing Date or a recent date prior thereto.

 

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(c) All reasonable and documented out-of-pocket fees and expenses (including
reasonable and documented fees and expenses of outside counsel) required to be
paid to the Administrative Agent on or before the Closing Date shall have been
paid (including fees owed to the Lenders to be paid to the Administrative Agent
for the accounts of the Lenders), to the extent invoiced at least three Business
Days prior to the Closing Date.

(d) The Administrative Agent and Lenders and their respective counsel shall have
received originally executed copies of a favorable written opinion of Paul Weiss
Rifkind, Wharton & Garrison LLP, counsel for the Loan Parties, dated as of the
Closing Date, addressing such matters as the Administrative Agent may reasonably
request in form and substance reasonably satisfactory to the Administrative
Agent.

(e) The Administrative Agent shall have received a certificate from the chief
financial officer of Holdings substantially in the form of Exhibit I.

(f) The Administrative Agent shall have received a completed Perfection
Certificate, dated as of the Closing Date and signed by a Financial Officer of
the Borrowers, together with all attachments contemplated thereby.

(g) Since the date of the Asset Purchase Agreement until the consummation of the
Specified Acquisition, there shall not have occurred any event, change,
circumstance or effect that, individually or in the aggregate, has resulted in
or would reasonably be expected to result in a Specified Material Adverse
Effect. A “Specified Material Adverse Effect” means any event, change,
circumstance or effect that, individually or in the aggregate, materially and
adversely affects the business, operations, assets, Liabilities (as defined in
the Asset Purchase Agreement) (including contingent Liabilities), results of
operations or the financial condition of the Business (as defined in the Asset
Purchase Agreement), taken as a whole; provided, however, that none of the
following, either alone or in combination, will constitute, or be considered in
determining whether there has been, a Specified Material Adverse Effect: any
event change, circumstance or effect resulting from or arising out of (i) any
outbreak or escalation of war, civil unrest, or major hostilities or any act of
terrorism; (ii) any earthquake, hurricane, storm, flood or other natural
disaster; (iii) changes or developments in applicable law, statute,
constitution, ordinance, code, regulation, rule, treaty or other requirement of
any governmental authority, United States generally accepted accounting
principles or enforcement or interpretation thereof arising after the date
hereof; (iv) effects or changes that are generally applicable to the industry in
which the Business operates; (v) changes in financial markets, general economic
conditions (including prevailing interest rates, exchange rates, commodity
prices and fuel costs) or political conditions; (vi) any failure, in and of
itself, of the Business to meet any published or internally prepared
projections, budgets, plans or forecasts of revenues, earnings or other
financial performance measures or operating statistics (it being understood that
the facts or circumstances underlying any such failure that are not otherwise
excluded from the definition of a “Specified Material Adverse Effect” may be
considered in determining whether there has been a Specified Material Adverse
Effect); (vii) any action taken or failed to be taken at the written request of,
or consented to in writing by, HMCo (with the written consent of the Arrangers);
or

 

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(viii) the execution or delivery of any of the Transaction Documents (as defined
in the Asset Purchase Agreement), the consummation of any Contemplated
Transactions (as defined in the Asset Purchase Agreement), the consummation of
any Contemplated Transactions (as defined in the Asset Purchase Agreement) or
the public announcement with respect to any of the foregoing, including any
resulting actions of competitors; provided, with respect to foregoing clauses
(i) through (v), the events, changes, circumstances or effects do not affect the
Business in a materially disproportionate manner as compared to similarly
situated companies in the industry in which the Business is operated.

(h) Each Lender shall have received at least one Business Day prior to the
Closing Date all documentation and other information reasonably requested in
writing by them at least three Business Days prior to the Closing Date in order
to allow the Lenders to comply with applicable “know your customer” and
anti-money laundering rules and regulations, including without limitation the
Patriot Act.

(i) The Refinancing shall be consummated immediately following the Borrowing to
occur hereunder on the Closing Date.

(j) The Term Loan/Revolving Facility Intercreditor Agreement, the Guarantee and
Collateral Agreement and each other Security Document shall have been duly
executed and delivered by each of the applicable Loan Parties, in each case, in
form and substance reasonably satisfactory to the Administrative Agent and
together therewith, the Administrative Agent shall have received the following,
in form and substance reasonably satisfactory to the Administrative Agent:

(i) Proper uniform commercial code financing statements for all applicable
jurisdictions of the Loan Parties as deemed necessary by the Administrative
Agent in order to perfect and protect the Liens and security interests created
or purported to be created pursuant to the Security Documents covering the
Collateral;

(ii) Copies of a recent Lien and judgment search in each jurisdiction reasonably
requested by the Administrative Agent with respect to the Loan Parties;

(iii) for each Mortgaged Property specified on Schedule 1.01(a):

(A) evidence as to whether such Mortgaged Property is in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards (a “Flood Hazard Property”) pursuant to a standard flood hazard
determination form ordered and received by the Administrative Agent, and, if
such Mortgaged Property is a Flood Hazard Property, (I) evidence as to whether
the community in which such Mortgaged Property is located is participating in
the National Flood Insurance Program, (II) the applicable Loan Party’s written
acknowledgment of receipt of written notification from the Administrative Agent
as to the fact that such Mortgaged Property is a Flood

 

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Hazard Property and as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance Program and
(III) copies of the applicable Loan Party’s application for a flood insurance
policy plus proof of premium payment, a declaration page confirming that flood
insurance has been issued, or such other evidence of flood insurance
satisfactory to the Administrative Agent and naming the Administrative Agent as
sole loss payee on behalf of the Secured Parties;

(B) mortgage amendments, supplements or restatements of the existing Mortgages,
in each case, made for the purpose of providing that such Mortgages will secure
the Obligations and in form and substance reasonably satisfactory to the
Administrative Agent (the “Mortgage Amendments”) that have been duly executed,
acknowledged and delivered by a duly authorized officer of the appropriate Loan
Party and are in form suitable for filing and recording in all filing or
recording offices that the Administrative Agent may deem necessary or desirable,
together with:

    (I) fully paid date-down and modification endorsements to the Mortgage
Policies issued in connection with each existing Mortgage or, where such
date-down or modification endorsements are not available to insure any such
Mortgage, a new title insurance policy with respect to the applicable Mortgage,
as previously amended and as amended by such Mortgage Amendment (or, in each
case, a commitment to issue such endorsements or new policy having the effect of
such policy so endorsed or such a new policy, as the case may be), each issued
by a title insurer reasonably acceptable to the Administrative Agent and each in
form and substance reasonably satisfactory to the Administrative Agent which
insures that such Mortgage, as previously amended and as amended by the
applicable Mortgage Amendment, continues to create a valid first Lien on the
applicable Mortgaged Property described therein, subject only to Liens permitted
under the Loan Documents; and

    (II) favorable opinions of local counsel for the Loan Parties (1) in states
in which the Mortgaged Properties are located, with respect to the
enforceability and perfection of all Mortgages, as amended by the applicable
Mortgage Amendments, and any related fixture filings, in form and substance
reasonably satisfactory to the Administrative Agent and (2) in states in which
the Loan Parties party to the Mortgages are organized or formed, with respect to
the valid existence, corporate power and authority of such Loan Parties in the
granting of the Mortgage Amendments, in form and substance reasonably
satisfactory to the Administrative Agent;

(iv) evidence of all insurance required to be maintained pursuant to
Section 5.02, and evidence that the Administrative Agent shall have been named
as an additional insured or loss payee, as applicable, on all insurance policies
covering loss or damage to Collateral; and

 

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(v) evidence that such other documents, instruments or actions deemed necessary
or advisable by the Administrative Agent to perfect and protect the Liens and
security interests (and the first priority thereof with respect to Term Facility
First Lien Collateral and the second priority thereof with respect to Revolving
Facility First Lien Collateral) created or purported to be created pursuant to
the Guarantee and Collateral Agreement shall have been duly delivered or
completed, including, without limitation, the delivery of Uniform Commercial
Code financing statements in proper form for filing for all applicable
jurisdictions of the Loan Parties and provision having been made for the payment
of any fees or taxes required in connection with the filing of such documents,
instruments or financing statements;

provided, however, that, each of the requirements set forth above, (except for
the (I) execution and delivery of the Guarantee and Collateral Agreement, (II)
delivery of the evidence and documents referred to in clause (iii)(A) above, and
(III) to the extent that a Lien on such Collateral may be perfected (x) by the
filing of a financing statement under the Uniform Credit Code or customary
“short form” intellectual property filings with the United States Patent and
Trademark Office or the United States Copyright Office or (y) by the delivery of
stock certificates of the Borrowers) shall not constitute conditions precedent
to the Borrowing on the Closing Date after the Borrowers’ use of commercially
reasonable efforts to provide such items on prior to the Closing Date if the
Borrowers agree to deliver, or cause to be delivered, such search results,
documents and instruments, or take or cause to be taken such other actions as
may be required to perfect such security interests within ninety (90) days after
the Closing Date (subject to extensions approved by the Administrative Agent in
its reasonable discretion).

(k) The Administrative Agent shall have received a notice of Borrowing in
accordance with the requirements hereof.

(l) The Specified Acquisition shall be consummated simultaneously or
substantially concurrently with the closing under the Term Loan Facility on the
terms described in the Asset Purchase Agreement.

(m) The Arrangers and the Lenders shall have received (i) audited consolidated
balance sheets and related consolidated statements of operations and
comprehensive income, changes in owner’s equity and cash flows of the Parent
Seller for the three most recently completed fiscal years of the Parent Seller
ended at least 90 days before the Closing Date and (ii) unaudited consolidated
balance sheets and related consolidated statements of operations and
comprehensive income, changes in owner’s equity and cash flows of the Parent
Seller for each subsequent fiscal quarter occurring after the most recent fiscal
year for which audited financial statements have been provided pursuant to
clause (i) of this paragraph (m) through and including the fiscal quarter of the
Parent Seller (excluding the fourth quarter of the Parent Seller’s fiscal year)
ended at least 45 days before the Closing Date, in each case prepared in
accordance with GAAP.

 

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(n) On the Closing Date, after giving effect to the Transactions, none of
Holdings or any of its Subsidiaries (including Target and its Subsidiaries)
shall have any third party debt for borrowed money other than (i) the Term Loan
Facility, (ii) the facilities provided under the Revolving Credit Agreement, and
(iii) other indebtedness approved by the Arrangers in their reasonable
discretion.

(o) Holdings and its Subsidiaries shall have obtained an amendment to the
Revolving Credit Agreement permitting the Specified Acquisition and the other
transactions contemplated by the Commitment Letter, which amendment shall be in
full force and effect.

(p) The Seller Representations shall be true and correct in all material
respects, and the Specified Representations shall be true and correct in all
material respects (without duplication of any materiality qualification set
forth therein), except in the case of any Seller Representation or Specified
Representation which expressly relates to a given date or period, such
representation and warranty shall be true and correct in all material respects
as of the respective date or for the respective period, as the case may be.

ARTICLE V

Affirmative Covenants

Each Loan Party party to this Agreement jointly and severally with all of the
other Loan Parties, covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until all Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts (other than contingent indemnification liabilities to the extent no
claim giving rise thereto has been asserted) payable under any Loan Document
shall have been paid in full, unless the Required Lenders shall otherwise
consent in writing, each of Holdings and the Borrowers will, and will cause each
of the Restricted Subsidiaries to:

SECTION 5.01 Existence; Compliance with Laws; Businesses and Properties.

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

(b) Other than as could not reasonably be expected to have a Material Adverse
Effect, (i) do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations and Intellectual Property necessary or desirable to
the conduct of its business, (ii) comply with all applicable laws, rules,
regulations and decrees and orders of any Governmental Authority, whether now in
effect or hereafter enacted and (iii) maintain and preserve all property useful
to the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.

 

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SECTION 5.02 Insurance.

(a) Keep its insurable properties adequately insured at all times by financially
sound and reputable insurers; maintain such other insurance, to such extent and
against such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability insurance
against claims for personal injury or death or property damage occurring upon,
in, about or in connection with the use of any properties owned, occupied or
controlled by it; and maintain such other insurance as may be required by law.

(b) Cause all such policies covering any Collateral to be endorsed or otherwise
amended to include a customary lender’s loss payable endorsement, in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent, which endorsement shall provide that, from and after the Closing Date, if
the insurance carrier shall have received written notice from the Administrative
Agent or the Collateral Agent of the occurrence of an Event of Default, the
insurance carrier shall pay all proceeds otherwise payable to a Loan Party under
such policies directly to the Collateral Agent; and to use commercially
reasonable efforts to cause all such policies to provide that neither any
Borrower, the Administrative Agent, the Collateral Agent nor any other party
shall be a coinsurer thereunder and to contain a “Replacement Cost Endorsement”,
without any deduction for depreciation, and such other provisions as the
Administrative Agent or the Collateral Agent may reasonably require from time to
time to protect their interests; deliver evidence of such coverage to the
Collateral Agent; cause each such policy to provide that it shall not be
canceled (i) by reason of nonpayment of premium upon not less than 10 days’
prior written notice thereof by the insurer to the Administrative Agent and the
Collateral Agent (giving the Administrative Agent and the Collateral Agent the
right to cure defaults in the payment of premiums) or (ii) for any other reason
upon not less than 30 days’ prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent; deliver to the Administrative
Agent and the Collateral Agent, prior to the cancellation 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 and the
Collateral Agent) together with evidence reasonably satisfactory to the
Administrative Agent and the Collateral Agent of payment of the premium
therefor.

(c) If at any time the area in which the Premises (as defined in the Mortgages)
are located is designated (i) in an area identified by the Federal Emergency
Management Agency (or any successor agency) as a Special Flood Hazard Area with
respect to which flood insurance has been made available under the National
Flood Insurance Act of 1968 (as now or hereafter in effect or successor act
thereto), then the Borrowers shall, or shall cause each Loan Party to
(x) maintain, or cause to be maintained, with a financially sound and reputable
insurer, flood insurance in an amount and otherwise sufficient to comply with
all applicable rules and regulations promulgated pursuant to the Flood Insurance
Laws and (y) deliver to the Administrative Agent evidence of such compliance
similar to that required by Section 4.01(p)(iii) in form and substance
reasonably acceptable to the Administrative Agent, or (ii) a “Zone 1” area,
obtain earthquake insurance in such total amount as the Administrative Agent,
the Collateral Agent or the Required Lenders may from time to time require.

 

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(d) With respect to any Mortgaged Property, carry and maintain comprehensive
general liability insurance including the “broad form CGL endorsement” providing
for coverage on an occurrence basis against claims made for personal injury
(including bodily injury, death and property damage) and umbrella liability
insurance against any and all claims, in each case in such amounts (with no
greater risk retention) as are customarily maintained by companies of
established repute engaged in the same or similar businesses and operating in
the same or similar locations, naming the Collateral Agent as an additional
insured on forms reasonably satisfactory to the Collateral Agent.

(e) Notify the Administrative Agent and the Collateral Agent promptly whenever
any separate insurance concurrent in form or contributing in the event of loss
with that required to be maintained under this Section 5.02 is taken out by any
Loan Party; and promptly deliver to the Administrative Agent and the Collateral
Agent evidence of such policy or policies.

SECTION 5.03 Obligations and Taxes. Pay and discharge promptly when due all
material Taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such Tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and Holdings shall have set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested
obligation, tax, assessment or charge and enforcement of a Lien and, in the case
of a Mortgaged Property, there is no material risk of forfeiture of such
property.

SECTION 5.04 Financial Statements, Reports, etc. In the case of the Borrowers,
furnish to the Administrative Agent, which shall furnish to each Lender:

(a) within 90 days after the end of each fiscal year Holdings’ consolidated
balance sheet and related statements of income, stockholders’ equity and cash
flows showing the financial condition of Holdings and its consolidated
Restricted Subsidiaries as of the close of such fiscal year and the results of
its operations and the operations of such Restricted Subsidiaries during such
year, together with comparative figures for the immediately preceding fiscal
year, all audited by PricewaterhouseCoopers or other independent registered
public accounting firm of recognized national standing and accompanied by an
opinion of such accountants (which opinion shall be without “going concern” or
like qualifications or exceptions and without any qualification or exception as
to the scope of such audit (other than solely with respect to, or resulting
solely from an upcoming maturity date under the Term Loan Facility, the
Revolving Credit Agreement, any New Loan or any Refinancing Debt occurring
within one year from the time such opinion is delivered or any potential
inability to satisfy a financial maintenance covenant under the Term Loan
Facility, the Revolving Credit Agreement, any New Loan or any Refinancing
Facilities on a future date or in a future period)) to the effect that such
consolidated financial statements fairly present in all material respects the
financial condition and results of operations of Holdings and its consolidated
Restricted Subsidiaries on a consolidated basis in accordance with GAAP;
provided that the financial statements for each such fiscal year shall cover a
period of four consecutive fiscal quarters ending on December 31;

 

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(b) within (i) 45 days after the end of each of the first three fiscal quarters
of each fiscal year, and (ii) 90 days after the end of the last fiscal quarter
of each fiscal year, Holdings’ consolidated balance sheet and related statements
of income, stockholders’ equity and cash flows showing the financial condition
of Holdings and its consolidated Restricted Subsidiaries as of the close of such
fiscal quarter and the results of its operations and the operations of such
Restricted Subsidiaries during such fiscal quarter and the then elapsed portion
of the fiscal year, and comparative figures for the same periods in the
immediately preceding fiscal year, all certified by a Financial Officer of the
Borrowing Agent as fairly presenting in all material respects the financial
condition and results of operations of Holdings and its consolidated Restricted
Subsidiaries on a consolidated basis in accordance with GAAP;

(c) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm, and concurrently with
any delivery of financial statements under paragraph (a) or (b) above, a
certificate of a Financial Officer of the Borrowing Agent opining on or
certifying such statements (which certificate, when furnished by an accounting
firm, may be limited to accounting matters and disclaim responsibility for legal
interpretations) certifying that no Default has occurred or, if such a Default
has occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto (any such certificate
furnished pursuant to this clause (c), a “Compliance Certificate”); provided
that if there has been any material change in GAAP or in the application of GAAP
referred to in Section 1.03, the Compliance Certificate from the Financial
Officer shall identify such change and the effect of such change on the
financial statements accompanying such certificate;

(d) as soon as available, and in any event no later than 45 days after the
beginning of each fiscal year of Holdings, a detailed consolidated budget for
Holdings and its Restricted Subsidiaries for such fiscal year (including a
projected consolidated balance sheet of Holdings and its Restricted Subsidiaries
as of the end of such fiscal year, and the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income), and, as soon as available, significant revisions, if any, of such
budget with respect to such fiscal year (the “Budget”);

(e) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by Holdings or any
Restricted Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to its
shareholders, as the case may be;

(f) promptly after the receipt thereof by Holdings or any Restricted Subsidiary,
a copy of any “management letter” received by any such person from its certified
public accountants and the management’s response thereto to the extent such
certified public accountants have consented to the delivery of such management
letter to the Administrative Agent upon the request of the Borrowers;

 

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(g) promptly after the request by any Lender, all documentation and other
information that such Lender reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act;

(h) promptly following any request therefor, copies of (i) any documents
described in Section 101(k)(1) of ERISA that Holdings, any Borrower or any ERISA
Affiliates may request with respect to any Multiemployer Plan and (ii) any
notices described in Section 101(l)(1) of ERISA that any Borrower or any of its
ERISA Affiliates may request with respect to any Multiemployer Plan; provided
that if any Borrower or any of its ERISA Affiliates have not requested such
documents or notices from the administrator or sponsor of the applicable
Multiemployer Plan, Holdings, any Borrower or its ERISA Affiliates shall
promptly make a request for such documents or notices from such administrator or
sponsor and shall provide copies of such documents and notices promptly after
receipt thereof;

(i) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Holdings or any
Restricted Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request; and

(j) within 45 days after the end of each of the first three fiscal quarter of
Holdings and within 90 days after the end of the fourth fiscal quarter of
Holdings, a narrative discussion and analysis of the financial condition and
results of operations of Holdings and its Restricted Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, as compared to comparable periods of the
previous year.

Notwithstanding the foregoing, the obligations in clauses (a) and (b) of this
Section 5.04 may be satisfied with respect to financial information of Holdings
and its consolidated Restricted Subsidiaries by furnishing Holdings’ (or any
direct or indirect parent thereof; provided that such parent holds no material
assets other than cash and Equity Interests of Holdings or of any direct or
indirect parent of Holdings (and performs the related incidental activities
associated with such ownership) and complies with the requirements of Rule 3-10
of Regulation S-X promulgated by the SEC (or any successor provision)) Form 10-K
or 10-Q, as applicable, filed with the SEC; provided that, to the extent such
information is in lieu of information required to be provided under clause
(a) of this Section 5.01, such materials are accompanied by a report and opinion
of PriceWaterhouseCoopers or other independent public accountants of recognized
national 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 (other than solely with respect to, or resulting
solely from an upcoming maturity date under the Term Loan Facility, the
Revolving Credit Agreement or any Refinancing Debt occurring within one year
from the time such opinion is delivered or any potential inability to satisfy a
financial maintenance covenant under the Term Loan Facility, the Revolving
Credit Agreement, any New Loan or any Refinancing Facilities on a future date or
in a future period).

 

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Documents required to be delivered pursuant to clauses (a), (b) or (e) of this
Section 5.04 may at Holdings or the Borrowers’ election be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the earliest of (i) the date on which such documents are electronically
delivered to the Administrative Agent for posting if delivered before 5:00 p.m.
New York time on a Business Day or otherwise on the following Business Day,
(ii) the date on which such documents are posted on Holdings or the Borrowers’
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); or
(iii) the date on which such documents are filed for public availability on the
SEC’s Electronic Data Gathering and Retrieval System; provided that: upon
reasonable written request by the Administrative Agent, Holdings or the
Borrowers 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.

SECTION 5.05 Litigation and Other Notices. Furnish to the Administrative Agent
and each Lender written notice of the following promptly after any Responsible
Officer of any Loan Party becomes aware thereof:

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

(b) the filing or commencement of, or any written threat or notice of intention
of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, against HMHP or any
Affiliate thereof that could reasonably be expected to result in a Material
Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of Holdings and the Restricted Subsidiaries in an aggregate amount
exceeding $5,000,000, setting forth the details as to such ERISA Event and the
action, if any, that Holdings or the Borrowers proposes to take with respect
thereto; and

(d) any development that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect.

SECTION 5.06 Information Regarding Collateral. Furnish to the Administrative
Agent prompt written notice of any change (i) in any Loan Party’s corporate
name, (ii) in the jurisdiction of organization or formation of any Loan Party,
(iii) in any Loan Party’s identity or corporate structure or (iv) in any Loan
Party’s Federal Taxpayer Identification Number. Holdings and the Borrowers agree
not to effect or permit any change referred to in the preceding sentence unless
all filings have been made under the Uniform Commercial Code or otherwise that
are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. Holdings and the Borrowers also agree promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.

 

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SECTION 5.07 Maintaining Records; Access to Properties and Inspections;
Maintenance of Ratings.

(a) Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all requirements of law are made of all
dealings and transactions in relation to its business and activities. Each Loan
Party will, and will cause each of its Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or, upon the occurrence
and during the continuance of an Event of Default, any Lender to visit and
inspect the financial records and the properties of such person upon reasonable
notice, at reasonable times and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of such person with the officers thereof and
independent accountants therefor, in each case, subject to reasonable
requirements of confidentiality, including requirements imposed by law or by
contract; provided that (i) unless an Event of Default shall have occurred and
be continuing, such visits and inspections shall occur not more than once in any
fiscal year and shall be arranged by one or more Lenders through the
Administrative Agent and (ii) the Administrative Agent shall provide the
Borrowers with the opportunity to participate in any such discussions with such
accountants.

(b) Use commercially reasonable efforts to obtain (i) a public corporate rating
from (A) S&P and (B) Moody’s and (ii) a public credit rating of the Term Loan
Facility from (A) S&P and (B) Moody’s.

SECTION 5.08 Use of Proceeds. Use the proceeds of the Loans only for the
purposes specified in Section 3.13.

SECTION 5.09 Employee Benefits. Comply with the applicable provisions of ERISA
and the Code and the laws applicable to any Foreign Pension Plan, except for
such noncompliance which, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.

SECTION 5.10 Compliance with Environmental Laws Comply, and use commercially
reasonable efforts to cause all lessees and other persons occupying its
properties to comply, in all material respects with all Environmental Laws
applicable to its operations and properties; obtain and renew all material
environmental permits necessary for its operations and properties; and conduct
any remedial action in accordance with Environmental Laws, except in each case
with respect to this Section 5.10, to the extent the failure to do so would not
reasonable expected to have, individually or in the aggregate, a Material
Adverse Effect.

SECTION 5.11 Preparation of Environmental Reports. If a Default caused by reason
of a breach of Section 3.17 or Section 5.10 shall have occurred and be
continuing for more than 20 days without Holdings or any Restricted Subsidiary
commencing activities reasonably likely to cure such Default, at the written
request of the Required Lenders through the Administrative Agent, provide to the
Lenders within 45 days after such request, at the expense of the Loan

 

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Parties, an environmental site assessment report regarding the matters which are
the subject of such Default prepared by an environmental consulting firm
reasonably acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
remedial action in connection with such Default.

SECTION 5.12 Further Assurances.

(a) Execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Uniform Commercial
Code and other financing statements, mortgages and deeds of trust) that the
Required Lenders, the Administrative Agent or the Collateral Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests created or intended to be created
by the Security Documents. Holdings and the Borrowers will cause each wholly
owned Subsidiary of HMCo that is a Domestic Subsidiary (other than: (i) any
Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary of HMCo,
(ii) any Unrestricted Subsidiary, (iii) any Immaterial Subsidiary, (iv) any Not
for Profit Subsidiary, (v) any Domestic Subsidiary that is treated as a Foreign
Subsidiary for United States federal income tax purposes, (vi) any Subsidiary
that is prohibited by applicable law, rule, regulation or contract from
providing the Guarantee or which would require governmental (including
regulatory) consent, approval, license or authorization to provide the Guarantee
(unless such consent, approval, license or authorization has been received),
(vii) any Subsidiary for which the provision of the Guarantee with respect to
which the Collateral Agent and the Borrowers reasonably agree in writing that
the costs or other consequences (including material adverse tax consequences as
reasonably determined by the Borrowers in good faith in consultation with the
Collateral Agent) of providing such a Guarantee is excessive in view of the
benefits to be obtained by the Secured Parties, and (viii) any special purpose
securitization Subsidiary (each, an “Excluded Subsidiary”)) on the Closing Date
to become a Subsidiary Guarantor and Guarantee and secure the Obligations by
becoming a party to the Guarantee and Collateral Agreement.

If any Not for Profit Subsidiary that is a wholly owned Domestic Subsidiary
ceases to be exempt from U.S. federal income taxation under Section 501(a) of
the Code or any wholly owned Domestic Subsidiary ceases to be an Unrestricted
Subsidiary, Immaterial Subsidiary or special purpose securitization Subsidiary
(and, in each case, is not otherwise an Excluded Subsidiary), then Holdings and
the Borrowers will cause such Subsidiary to become a Subsidiary Guarantor and
Guarantee and secure the Obligations by becoming a party to the Guarantee and
Collateral Agreement. With respect to any provision or restriction affecting a
wholly owned Domestic Subsidiary the reason for which such Subsidiary is not
required to become a Guarantor in the foregoing paragraph, promptly upon the
ineffectiveness, lapse or termination of such provision or restriction, Holdings
and the Borrowers will cause such Subsidiary to become a Subsidiary Guarantor
and Guarantee and secure the Obligations by becoming a party to the Guarantee
and Collateral Agreement.

(b) In addition, from and after the Closing Date, Holdings and the Borrowers
will cause any subsequently acquired or organized wholly owned Restricted
Subsidiary (other than any Foreign Subsidiary or any Excluded Subsidiary so long
as such exclusionary provision or restriction is applicable with respect to such
Subsidiary) to become a Loan Party by executing

 

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the Guarantee and Collateral Agreement and/or each applicable Security Document
in favor of the Collateral Agent. In addition, from time to time, Holdings and
the Borrowers will, at their cost and expense, promptly secure the Obligations
by pledging or creating, or causing to be pledged or created, perfected security
interests with respect to such of the assets and properties of Holdings and the
wholly owned Restricted Subsidiaries (other than any Foreign Subsidiary or any
Excluded Subsidiary so long as such exclusionary provision or restriction is
applicable with respect to such Subsidiary) as the Administrative Agent or the
Required Lenders shall designate (it being understood that it is the intent of
the parties that the Obligations shall be secured (i) by substantially all the
assets of Holdings and the wholly owned Restricted Subsidiaries (other than any
Foreign Subsidiary or any Excluded Subsidiary so long as such exclusionary
provision or restriction is applicable with respect to such Subsidiary),
including Material Real Property (and not any other real property or interest
therein) and personal property (other than Excluded Assets) acquired subsequent
to the Closing Date and (ii) in the case of Foreign Subsidiaries that are first
tier Foreign Subsidiaries (or treated as first tier Foreign Subsidiaries for
U.S. federal income tax purposes) or any Domestic Subsidiary which is treated as
a first tier Foreign Subsidiary for U.S. federal income tax purposes, in each
case, of a Loan Party, by 66% of the voting stock and 100% of the non voting
stock of such Subsidiary). Such security interests and Liens will be created
under the Security Documents and other security agreements, mortgages, deeds of
trust and other instruments and documents in form and substance reasonably
satisfactory to the Collateral Agent, and Holdings and the Borrowers shall
deliver or cause to be delivered to the Lenders all such instruments and
documents (including legal opinions, title insurance policies and lien searches)
as the Collateral Agent shall reasonably request to evidence compliance with
this Section. Holdings and the Borrowers shall be in compliance with the
requirements of this clause (b) if they shall cause such subsequently acquired
or organized wholly-owned Restricted Subsidiary to become a Loan Party, pledge
its assets and deliver such instruments and documents (except with respect to
Mortgages and related items in respect of Material Real Property, which shall be
governed by the last sentence of this clause (b)) within 30 days (or such longer
period as the Administrative Agent may reasonably agree) after the acquisition
or organization of such Restricted Subsidiary. Holdings and the Borrowers agree
to provide such evidence as the Collateral Agent shall reasonably request as to
the perfection and priority status of each such security interest and Lien. In
furtherance of the foregoing, Holdings and the Borrowers will give prompt notice
to the Administrative Agent of the acquisition by Holdings or any of the other
Loan Parties of any Material Real Property and will, within 60 days (or such
longer period as the Administrative Agent may reasonably agree) following the
acquisition of such Material Real Property, deliver to the Administrative Agent
Mortgages and the other items described in Section 4(j)(iii) (excluding Mortgage
Amendments) as applicable to such Material Real Property, as well as such other
items as may be reasonably requested by the Administrative Agent.

ARTICLE VI

Negative Covenants

Each Loan Party party to this Agreement jointly and severally with all of the
other Loan Parties covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until all Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts (other than contingent indemnification

 

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liabilities to the extent no claim giving rise thereto has been asserted)
payable under any Loan Document have been paid in full), unless the Required
Lenders shall otherwise consent in writing, neither Holdings nor any Borrower
will, nor will they cause or permit any of the Restricted Subsidiaries to:

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

(a) (i) Indebtedness created hereunder and under the other Loan Documents and
(ii) other Indebtedness existing on the Closing Date that is listed on
Schedule 6.01;

(b) intercompany Indebtedness of Holdings and the Restricted Subsidiaries to the
extent permitted by Section 6.04(b); provided that any such intercompany
Indebtedness owed by any Loan Party to a Subsidiary that is not a Loan Party
shall be subordinated to the Obligations;

(c) Indebtedness incurred by Holdings or any of the Restricted Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price, earnouts or similar obligations, or from guaranties or letters of credit,
surety bonds or performance bonds securing the performance of Holdings or any
such Restricted Subsidiary pursuant to such agreements, in connection with
Permitted Acquisitions or Acquisitions or permitted dispositions of any business
or assets of Holdings or any of the Restricted Subsidiaries;

(d) Indebtedness which may be deemed to exist pursuant to any guaranties,
performance, surety, statutory, appeal or similar obligations incurred in the
ordinary course of business;

(e) Indebtedness in respect of netting services, overdraft protections and
otherwise in connection with deposit accounts;

(f) guaranties in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of Holdings and the Restricted
Subsidiaries;

(g) Indebtedness under the Revolving Credit Agreement and any Permitted
Refinancing Indebtedness thereof; provided that the aggregate principal amount
of Indebtedness permitted under this Section 6.01(g) shall not exceed
$350,000,000 at any time outstanding;

(h) Indebtedness owed to (including obligations in respect of letters of credit
for the benefit of) any person providing worker’s compensation, health,
disability or other employee benefits or property, casualty or liability
insurance to Holdings or any Restricted Subsidiary, pursuant to reimbursement or
indemnification obligations to such person;

 

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(i) Indebtedness of Holdings or the Restricted Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations
and trade-related letters of credit, in each case provided in the ordinary
course of business, including those incurred to secure health, safety and
environmental obligations in the ordinary course of business and any extension,
renewal or refinancing thereof to the extent that the amount of refinancing
Indebtedness is not greater than the amount of Indebtedness being refinanced;

(j) 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 incurrence;

(k) Indebtedness with respect to Capital Lease Obligations, mortgage financings
and purchase money Indebtedness incurred by any Restricted Subsidiary prior to
or within 270 days after the acquisition, lease, construction, repair,
replacement or improvement of the respective asset (whether through the direct
purchase of such asset or the Equity Interest of any person owning such asset)
permitted under this Agreement in order to finance such acquisition, lease,
construction, repair, replacement or improvement (including any Indebtedness
acquired in connection with a Permitted Acquisition or an Acquisition);
provided, any such Indebtedness (i) shall be secured only by the assets
acquired, leased, constructed, repaired or improved in connection with the
incurrence of such Indebtedness, and (ii) shall constitute not less than 75% of
the aggregate consideration paid with respect to such asset, and any
Indebtedness that Refinanced such Indebtedness pursuant to the definition of
Permitted Refinancing Indebtedness (disregarding clause (v) thereof), in an
aggregate principal amount which, immediately after giving effect to the
incurrence thereof, when aggregated with the principal amount of all other
Indebtedness then outstanding that was incurred pursuant to this clause (k), is
not in excess of the greater of (A) 23% of the Consolidated EBITDA for the most
recently ended four fiscal quarter period ending with a fiscal quarter for which
financial statements are required to have been delivered pursuant to
Section 5.04(b) and (B) $75,000,000;

(l) Indebtedness of any Restricted Subsidiary supported by a Letter of Credit in
a principal amount not in excess of the stated amount of such Letter of Credit;

(m) (i) Indebtedness of a Restricted Subsidiary of Holdings acquired after the
Closing Date and Indebtedness of a person merged or consolidated with or into a
Restricted Subsidiary after the Closing Date and Indebtedness assumed in
connection with the acquisition of assets or Equity Interests, which
Indebtedness in each case exists at the time of such acquisition, merger or
consolidation and is not created in contemplation of such event and where such
acquisition, merger or consolidation is permitted by this Agreement and (ii) any
Indebtedness that Refinanced such Indebtedness pursuant to the definition of
Permitted Refinancing Indebtedness (disregarding clause (v) thereof); provided
that (A) the aggregate outstanding principal amount of all Indebtedness acquired
or assumed by non-Loan Parties under subclause (i) of this clause (m) shall not
exceed $50,000,000 at any time and (B) at the time of such acquisition, merger
or consolidation and at the time of the incurrence or assumption of such
Indebtedness by a Restricted Subsidiary, on a pro forma basis after giving
effect

 

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thereto, no Event of Default shall have occurred and be continuing and either
(I) the ratio level set forth in subclause (i), (ii) or (iii) of clause
(w) below that would be applicable to the Indebtedness being incurred or assumed
is satisfied on a pro forma basis or (II) such applicable leverage ratio is no
worse than such ratio in effect immediately prior to such acquisition, merger or
consolidation;

(n) Indebtedness of Restricted Subsidiaries of Holdings that are not Loan
Parties in an aggregate principal amount which, immediately after giving effect
to the incurrence thereof, when aggregated with the principal amount of all
other Indebtedness then outstanding that was incurred pursuant to this clause
(n), is not in excess of the greater of (i) $100,000,000 and (ii) and 31% of the
Consolidated EBITDA for the most recently ended four fiscal quarter period
ending with a fiscal quarter for which financial statements are required to have
been delivered pursuant to Section 5.04(b);

(o) [Intentionally Omitted];

(p) [Intentionally Omitted];

(q) all premiums (if any), interest, fees, expenses, indemnities, charges and
additional or contingent interest on obligations described in
clauses (a) through (p) above;

(r) [Intentionally Omitted];

(s) Guarantees of obligations of third parties to the extent treated as
Investments in such third parties (in an amount equal to the aggregate amount of
the obligations so Guaranteed) and permitted by Section 6.04;

(t) Any Refinancing Facility or Refinancing Notes of a Loan Party incurred in
accordance with Section 2.23;

(u) Indebtedness consisting of Indebtedness issued by any Loan Party to future,
current or former officers, managers, directors, consultants and employees of
Holdings, its subsidiaries or its direct or indirect parent companies, their
respective estates, spouses or former spouses, in each case to finance the
purchase or redemption of Equity Interests of Holdings or any direct or indirect
parent company of Holdings to the extent described in Section 6.06(a)(i);
provided that the terms of any such Indebtedness with a principal amount in
excess of $2,000,000 shall be approved by the board of directors of Holdings;

(v) Indebtedness with respect to Hedging Agreements permitted under
Section 6.04(h);

(w) Indebtedness if, after giving effect to the incurrence of such Indebtedness
and the use of proceeds thereof: (i) in the case of Indebtedness that will be
secured by the Collateral on a pari passu basis with the Obligations, the Net
First Lien Leverage Ratio on a pro forma basis is not greater than 2.50 : 1.00
and the Net Total Leverage Ratio on a pro forma basis is not greater than 4.00 :
1.00, (ii) in the case of Indebtedness that will be secured by the Collateral by
Liens that are junior and subordinated to the Liens securing

 

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the Obligations, the Net Secured Leverage Ratio on a pro forma basis is not
greater than 3.50 : 1.00 and the Net Total Leverage Ratio on a pro forma basis
is not greater than 4.00 : 1.00, and (iii) in the case of other Indebtedness,
the Net Total Leverage Ratio on a pro forma basis is not greater than 4.00 :
1.00;

(x) (i) Indebtedness in an aggregate principal amount not to exceed at the time
of incurrence an amount equal to the amount determined pursuant to clause (a) of
the definition of Incremental Amount at such time; provided that (I) there shall
be no obligor in respect of any such Indebtedness that is not a Loan Party and
there shall be no borrower in respect of any such Indebtedness that is not a
Borrower, (II) in the case of Indebtedness that is secured, the obligations in
respect thereof shall not be secured by any Lien on any asset of Holdings, the
Borrowers or any Restricted Subsidiary other than any asset constituting
Collateral, (III) such Indebtedness shall be senior secured obligations and
shall rank pari passu in right of security with or, at the Borrowers’ option,
junior in right of security to the Term Loan Facility and such Indebtedness
shall be subject to an Intercreditor Agreement, (IV) the final maturity date of
such Indebtedness shall be no earlier than the Term Loan Maturity Date and such
Indebtedness shall have a Weighted Average Life to Maturity no shorter than that
of the remaining Term Loans, and (V) the terms of such Indebtedness shall not be
subject to mandatory redemption, repurchase or prepayment (except with respect
to change of control, asset sale and casualty event mandatory offers to purchase
or prepayment events and customary acceleration rights after an event of
default), in each case prior to the Term Loan Maturity Date, and (ii) Permitted
Refinancing Indebtedness in respect thereof, in each case, other than any
Indebtedness that takes the form of term loan facilities which are secured
obligations and rank pari passu with the Term Loan Facility;

(y) Indebtedness of Joint Ventures and/or Indebtedness incurred on behalf of any
Joint Venture or any Guarantees of Indebtedness of joint ventures, in an
aggregate outstanding principal amount not to exceed $50,000,000 at any time;
and

(z) any other Indebtedness in an aggregate outstanding principal amount not
exceed $150,000,000 at any time.

SECTION 6.02 Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including Equity Interests or other securities of any
person, including any Restricted Subsidiary) now owned or hereafter acquired by
it or on any income or revenues or rights in respect of any thereof, except:

(a) Liens on property or assets of Holdings or any Restricted Subsidiary
existing on the Closing Date and set forth in Schedule 6.02; provided that such
Liens shall secure only those obligations which they secure on the date hereof
and extensions, renewals and replacements thereof permitted hereunder;

(b) any Lien created under the Loan Documents;

 

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(c) statutory Liens of landlords, banks (and rights of set-off), carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law (other than any such Lien imposed pursuant to Section 401(a)(29)
or 412(n) of the Code or by ERISA), in each case incurred in the ordinary course
of business (i) for amounts not yet overdue or (ii) for amounts that are overdue
and that (in the case of any such amounts overdue for a period in excess of 30
days) are being contested in good faith by appropriate proceedings, so long as
such reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts;

(d) Liens incurred in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

(e) with respect to real property of the Restricted Subsidiaries, covenants,
conditions, easements, rights-of-way, restrictions, encroachments, encumbrances
and other imperfections or irregularities in title, in each case which were not
incurred in connection with and do not secure Indebtedness for borrowed money
and do not or will not interfere in any material respect with the ordinary
conduct of the business of Holdings or any of the Restricted Subsidiaries or
with the use of such real property for its intended use;

(f) any interest or title of a lessor or sublessor under any lease of property
permitted hereunder, and any Lien to which such interest or title is subject;

(g) Liens solely on any cash earnest money deposits made by Holdings or any of
the Restricted Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;

(h) purported Liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases of personal property entered into
in the ordinary course of business and Liens on a Specified Warehouse created in
connection with a Sale and Lease Back Transaction involving such Specified
Warehouse;

(i) 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;

(j) licenses of Patents, Trademarks, Copyrights, trade secrets, service marks,
tradenames and any other intellectual property rights granted by Holdings or any
of the Restricted Subsidiaries in the ordinary course of business and not
interfering in any material respect with the conduct of the business of Holdings
or such Restricted Subsidiary;

(k) construction liens arising in the ordinary course of business, including
liens for work performed for which payment has not been made, securing
obligations that are not due and payable or, in the case of any amounts overdue
for a period in excess of 30 days, are being contested in good faith by
appropriate proceedings and in respect of which, if applicable, Holdings or the
relevant Restricted Subsidiary thereof shall have set aside on its books
reserves as shall be required by GAAP;

 

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(l) Liens for taxes, assessments or other governmental charges or levies not yet
delinquent, or which are for less than $5,000,000 in the aggregate, or which are
being contested in good faith by appropriate proceedings or for property taxes
on property (other than Mortgaged Property or property that, pursuant to the
terms hereof, is required to become Mortgaged Property) that Holdings or one of
the Restricted Subsidiaries has determined to abandon if the sole recourse for
such tax, assessment, charge, levy or claim is to such property;

(m) deposits to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Leases), statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature made
or incurred in the ordinary course of business, including those incurred to
secure health, safety and environmental obligations in the ordinary course of
business;

(n) zoning restrictions, easements, trackage rights, leases (other than Capital
Leases), licenses, special assessments, rights-of-way, restrictions on use of
real property and other similar encumbrances incurred in the ordinary course of
business which were not incurred in connection with and do not secure
Indebtedness for borrowed money, and, individually or in the aggregate, do not
materially interfere with the ordinary conduct of the business of Holdings or
any of the Restricted Subsidiaries or with the use of such real property for its
intended use;

(o) purchase money security interests in equipment or other property or
improvements thereto hereafter acquired (or, in the case of improvements,
constructed) by any Restricted Subsidiary (including the interests of vendors
and lessors under conditional sale and title retention agreements); provided
that (i) such security interests secure Indebtedness permitted by
Section 6.01(k), (ii) such security interests are incurred, and the Indebtedness
secured thereby is created, within 270 days after such acquisition (or
construction), (iii) the Indebtedness secured thereby does not exceed 100% of
the cost of such equipment or other property or improvements at the time of such
acquisition (or construction), including transaction costs incurred by Holdings
or any Restricted Subsidiary in connection with such acquisition (or
construction), and (iv) such security interests do not apply to any other
property or assets of Holdings or any Restricted Subsidiary (other than to
accessions to such equipment or other property or improvements; provided that
individual financings of equipment provided by a single lender may be
cross-collateralized to other financings of equipment provided solely by such
lender);

(p) Liens arising out of operating lease or Capital Lease transactions permitted
under Section 6.01(k) and transactions permitted by Section 6.03, so long as
such Liens attach only to the property sold and being leased in such transaction
and any accessions thereto or proceeds thereof and related property;

 

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(q) Liens securing judgments for the payment of money in an aggregate amount not
in excess of $10,000,000 (except to the extent covered by insurance, and the
Administrative Agent shall be reasonably satisfied with the credit of such
insurer), unless such judgments shall remain undischarged for a period of more
than 30 consecutive days during which execution shall not be effectively stayed;

(r) Liens that are contractual rights of setoff (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness or (ii) pertaining to pooled deposit and/or sweep
accounts of Holdings and/or any Restricted Subsidiary to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business of
Holdings and the Restricted Subsidiaries;

(s) any Lien on any property or asset of Holdings or a Restricted Subsidiary
securing Indebtedness (including Permitted Refinancing Indebtedness) permitted
by Section 6.01(m); provided that such Lien does not apply to any other property
or assets of Holdings or any of the Restricted Subsidiaries not securing such
Indebtedness at the date of the acquisition of such property or asset (other
than after acquired property subjected to a Lien securing Indebtedness and other
obligations incurred prior to such date and permitted hereunder which contains a
requirement for the pledging of after acquired property, it being agreed that
such after acquired property shall not include property of Holdings and the
Restricted Subsidiaries, other than any such acquired Restricted Subsidiary of
Holdings, that would have been included but for such acquisition);

(t) the replacement, extension or renewal of any Lien permitted above; provided
that such replacement, extension or renewal Lien shall not cover any property
other than the property that was subject to such Lien prior to such replacement,
extension or renewal; provided further, that the Indebtedness and other
obligations secured by such replacement, extension or renewal Lien are permitted
by this Agreement;

(u) Liens securing the Refinancing Facility or Refinancing Notes permitted under
Section 6.01(t); provided that such Liens are subject to an Intercreditor
Agreement;

(v) subject to the Term Loan/Revolving Facility Intercreditor Agreement, the
Liens securing Indebtedness permitted by Section 6.01(g);

(w) [Intentionally Omitted];

(x) Liens securing Indebtedness permitted under Section 6.01(w) or 6.01(x), in
each case subject to an Intercreditor Agreement, so long as any first priority
Lien on the Collateral will be pari passu with the Lien thereon securing the
Obligations or any junior Lien on the Collateral will be junior and subordinated
to the Lien thereon securing the Obligations;

(y) Liens on any property or asset of a non-Loan Party securing Indebtedness of
non-Loan Parties permitted by Section 6.01 or other obligations (other than
Indebtedness) of a non-Loan Party not prohibited hereunder;

 

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(z) Liens encumbering reasonable customary initial deposits and margin deposits
and similar Liens attaching to brokerage accounts incurred in the ordinary
course of business, consistent with past practices and not for speculative
purposes;

(aa) 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 in the
ordinary course of business;

(bb) Liens that are contractual rights of set-off relating to purchase orders
and other agreements entered into with customers of Holdings, any Borrower or
any of its Restricted Subsidiaries in the ordinary course of business;

(cc) Liens of a collection bank arising under Section 4-210 of the UCC on items
in the course of collection;

(dd) Liens securing Other Secured Obligations (under and as defined in the
Revolving Credit Agreement); and

(ee) Liens not otherwise permitted by this Section 6.02; provided that, the
aggregate amount of Indebtedness and other obligations secured thereby does not
exceed $150,000,000 at any time.

SECTION 6.03 Sale and Lease Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred (a “Sale and Lease Back Transaction”) unless
(a) the sale or transfer of such property is permitted by clause (f) of
Section 6.05 and (b) any Capital Lease Obligations, Synthetic Lease Obligations
or Liens arising in connection therewith are permitted by Sections 6.01 and
6.02, as the case may be.

SECTION 6.04 Investments, Loans and Advances. Purchase, hold or acquire any
Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, make or permit to exist any investment
or any other interest in, or enter into any Hedging Agreement with, any other
person (collectively, “Investments”), except:

(a) Permitted Investments and Investments that were Permitted Investments when
made;

(b) Investments as of the Closing Date in Holdings or any Restricted Subsidiary
and Investments made after the Closing Date in Holdings or any Restricted
Subsidiary; provided that (i) the aggregate amount of Investments made after the
Closing Date by Loan Parties in, and Guarantees by Loan Parties of Indebtedness
or other obligations of, Restricted Subsidiaries that are not Loan Parties
(determined at the time of the making thereof without regard to any write-downs
or write-offs of such Investments) shall not exceed the greater of
(A) $75,000,000 and (B) and 23% of the Consolidated EBITDA for the most recently
ended four fiscal quarter period ending with a fiscal

 

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quarter for which financial statements are required to have been delivered
pursuant to Section 5.04(b) and (ii) no Event of Default under Sections 7.01(b),
7.01(c), 7.01(g) or 7.01(h) shall have occurred and be continuing; provided
further that, for purposes of determining compliance with the foregoing
limitation in clause (i) above as of any date, the amount of each Investment
made on or prior to such date pursuant to this clause (b) that is subject to
such limitation shall be deemed reduced (to not less than zero) by the aggregate
amount of cash, dividends, interest, returns of principal or capital, repayments
or other distributions returned to the applicable Loan Party in respect of such
Investment prior to the date of determination;

(c) Capital Expenditures;

(d) (i) Loans and advances to officers, directors and employees of Holdings and
the Restricted Subsidiaries made in the ordinary course of business in an
aggregate principal amount not to exceed $10,000,000 in the aggregate at any
time outstanding (calculated without regard to write-downs or write-offs
thereof); provided that any such loans with a principal amount in excess of
$2,000,000 shall be approved by the board of directors of Holdings and
(ii) advances of payroll payments and expenses to employees in the ordinary
course of business;

(e) Permitted Acquisitions;

(f) (i) any Investment acquired by a Loan Party (x) in exchange for any other
Investment or accounts receivable held by a Loan Party in connection with or as
a result of a bankruptcy, workout, reorganization or recapitalization of the
Person in which such other Investment is made or which is the obligor with
respect to such accounts receivable, (y) as a result of a foreclosure by a Loan
Party with respect to any secured Investment or other transfer of title with
respect to any secured Investment in default or (z) as a result of litigation,
arbitration or other disputes with Persons who are not Affiliates, (ii) accounts
receivable arising and trade credit granted in the ordinary course of business
and any securities received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order
to prevent or limit loss and (iii) prepayments and other credits to suppliers
made in the ordinary course of business consistent with the past practices of
Holdings and the Restricted Subsidiaries;

(g) Investments held by a Person acquired in a Permitted Acquisition or an
Acquisition so long as such Investment is not made in anticipation or
contemplation of such acquisition;

(h) Holdings and the Restricted Subsidiaries may enter into and perform their
obligations under Hedging Agreements or other derivative instruments entered
into in the ordinary course of business and so long as any such Hedging
Agreement or other derivative instrument is not speculative in nature;

(i) Investments existing as of the Closing Date and set forth in Schedule 6.04;

 

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(j) Investments arising out of the receipt by Holdings or any Restricted
Subsidiary of non-cash consideration with respect to sales of assets permitted
under Section 6.05; provided that such consideration (if the stated amount or
value thereof is in excess of $1,000,000) is pledged upon receipt pursuant to
the Guarantee and Collateral Agreement to the extent required thereby;

(k) Investments resulting from pledges and deposits referred to in Section 6.02;

(l) [Intentionally Omitted];

(m) [Intentionally Omitted];

(n) Investments in the ordinary course of business consisting of purchases and
acquisitions of inventory, supplies, material or equipment or the licensing or
contribution of intellectual property pursuant to joint marketing, joint
development or similar arrangements with other Persons;

(o) any advances, loans, extensions of credit to suppliers, customers and
vendors or other Investments in receivables owing to a Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as such Restricted
Subsidiary deems reasonable under the circumstances;

(p) [Intentionally Omitted];

(q) Investments in Restricted Subsidiaries that are not Loan Parties or a series
of Investments from one Restricted Subsidiary to another solely to provide a
Restricted Subsidiary that is consummating a Permitted Acquisition or an
Acquisition with funds to pay the consideration in respect thereof in an
aggregate amount not to exceed the amount of such consideration;

(r) Investments in HMH IP Company in the ordinary course of business in respect
of operating expenses of HMH IP Company and other expenses incurred by HMH IP
Company in connection with the digital development of Intellectual Property
owned by the Borrowers and the Restricted Subsidiaries; provided that the
amounts of such Investments shall be no more than amounts that would be
otherwise payable to an unaffiliated third party providing such digital
development services and in the aggregate shall not exceed $150,000,000 in any
fiscal year;

(s) Investments in an aggregate amount (determined at the time of the making
thereof without regard to any write-downs or write-offs of such Investments) not
to exceed the sum of (i) the greater of $100,000,000 and 31% of the Consolidated
EBITDA for the most recently ended fiscal year for which financial statements
are required to have been delivered pursuant to Section 5.04(b) plus (ii) the
Cumulative Credit at any time outstanding; provided that, both before and after
giving effect to such Investment, on a pro forma basis, no Event of Default
shall have occurred and be continuing; provided, further that, for purposes of
determining compliance with the foregoing limitation as of any date, the amount
of each Investment made on or prior to such date pursuant to this

 

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clause (s) shall be deemed reduced (to not less than zero) by the aggregate
amount of cash, dividends, interest, returns of principal or capital, repayments
or other distributions returned to the applicable person in respect of such
Investment prior to the date of determination;

(t) the Specified Acquisition;

(u) Investments in joint ventures in an amount (determined at the time of the
making thereof without regard to any write-downs or write-offs of such
Investments) not to exceed the greater of (i) $75,000,000 and (ii) 23% of the
Consolidated EBITDA for the most recently ended four fiscal quarter period
ending with a fiscal quarter for which financial statements are required to have
been delivered pursuant to Section 5.04(b); provided that, both before and after
giving effect thereto, on a pro forma basis, no Event of Default shall have
occurred and be continuing; provided, further that, for purposes of determining
compliance with the foregoing limitation as of any date, the amount of each
Investment made on or prior to such date pursuant to this clause (u) shall be
deemed reduced (to not less than zero) by the aggregate amount of cash,
dividends, interest, returns of principal or capital, repayments or other
distributions returned to the applicable person in respect of such Investment
prior to the date of determination; provided, further, that if any Investment
pursuant to this clause (u) is made in any person that was not a Subsidiary on
the date on which such Investment was made but becomes a wholly owned Subsidiary
thereafter, then such Investment may, at the option of the Borrowers, upon such
person becoming a wholly owned Subsidiary and so long as such person remains a
wholly owned Subsidiary, be deemed to have been made pursuant to Section 6.04(b)
(to the extent permitted by the proviso thereto in the case of any Subsidiary
that is not a Loan Party) and not in reliance on this Section 6.04(u); and

(v) other Investments so long as on a pro forma basis after giving effect
thereto, (i) no Event of Default shall have occurred and be continuing, (ii) the
Net Total Leverage Ratio is not greater than 2.50 : 1.00 and (iii) the Liquidity
of Holdings and its Restricted Subsidiaries on a consolidated basis shall be at
least $250,000,000.

The amount of any Investment made other than in the form of cash or cash
equivalents shall be the fair market value thereof (as determined by the
Borrowers in good faith) valued at the time of the making thereof, and without
giving effect to any subsequent write-downs or write-offs thereof.

SECTION 6.05 Mergers, Consolidations, Sales of Assets and Acquisitions. Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or any part of the
assets (whether now owned or hereafter acquired) of Holdings or any Restricted
Subsidiary or less than all the Equity Interests of any Restricted Subsidiary,
or purchase, lease or otherwise acquire (in one transaction or a series of
transactions) any Equity Interests in or assets of any other person, except:

(a) purchases or other acquisitions of inventory, materials, equipment or other
assets in the ordinary course of business;

 

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(b) if at the time thereof and immediately after giving effect thereto no Event
of Default shall have occurred and be continuing or would result therefrom,
(i) the merger, consolidation or amalgamation of any Subsidiary of Holdings
(other than a Borrower) into (or with) Holdings in which Holdings is the
survivor, (ii) the merger, consolidation or amalgamation of any Borrower in a
transaction in which such Borrower is the survivor, (iii) the merger,
consolidation or amalgamation or consolidation of any Subsidiary (other than any
Borrower) into or with any Loan Party in a transaction in which the surviving or
resulting entity is a Loan Party and, in the case of each of clauses (ii) and
(iii), no person other than the Borrower or the Loan Party receives any
consideration, (iv) the merger or consolidation of any Subsidiary that is not a
Loan Party into or with any other Subsidiary that is not a Loan Party, or
(v) any Subsidiary may merge, consolidate or amalgamate with any other person in
order to effect an Investment permitted pursuant to Section 6.04 so long as the
continuing or surviving person shall be a Subsidiary, which shall be a Loan
Party if the merging, consolidating or amalgamating Subsidiary was a Loan Party
and which together with each of its Subsidiaries shall have complied with the
requirements of Section 5.12;

(c) sales or other dispositions of assets described in clause (i), (ii),
(iii), (iv), (v), (vi) or (vii) of the definition of “Asset Sale”;

(d) pursuant to Permitted Acquisitions;

(e) Investments made in accordance with Section 6.04 and Liens permitted by
Section 6.02;

(f) any sale, transfer, lease or other disposition (including any Sale and Lease
Back Transactions permitted by Section 6.03) of property; provided that (i) at
the time of any such transaction, on a pro forma basis after giving effect
thereto, no Event of Default shall have occurred and be continuing, or would
result therefrom, and (ii) the consideration received for such property shall be
not less than 75% in cash and/or Permitted Investments; provided however, for
the purposes of this clause (f)(ii), each of the following shall be deemed to be
cash: (A) the amount of any liabilities (as shown on Holdings’ or such
Subsidiary’s most recent balance sheet or in the notes thereto) that are assumed
by the transferee of any such assets or are otherwise cancelled in connection
with such transaction, (B) any Designated Non-Cash Consideration received in
respect of such disposition having an aggregate fair market value as determined
by the Borrowers in good faith, taken together with all other Designated
Non-Cash Consideration received pursuant to this clause that is at that time
outstanding, not in excess of the greater of (A) $25,000,000 and (B) 7.5% of the
Consolidated EBITDA for the most recently ended four fiscal quarter period
ending with a fiscal quarter for which financial statements are required to have
been delivered pursuant to Section 5.04(b), at the time of 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, and (C) any non-cash
proceeds received in the form of Indebtedness or Equity Interests are pledged to
the Collateral Agent to the extent required under Section 5.12; provided
further, that no sale of the Equity Interests of any Subsidiary may be made
pursuant to this clause (f) except in connection with the sale of all its
outstanding Equity Interests that is held by Holdings and any other Subsidiary;

 

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(g) the sale of defaulted receivables in the ordinary course of business and not
as part of an accounts receivables financing transaction;

(h) the sale or other disposition of Revolving Facility First Lien Collateral
(as defined in the Term Loan/Revolving Facility Intercreditor Agreement);

(i) any Restricted Subsidiary that is not a Loan Party may liquidate or dissolve
into, and in connection therewith, transfer its assets and liabilities to,
Holdings or another Restricted Subsidiary if the board of directors of Holdings
or HMHP determines in good faith that such liquidation or dissolution is in the
best interests of Holdings and HMHP and is not materially disadvantageous to the
Lenders; and

(j) any Restricted Subsidiary may sell, transfer, lease or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its assets or
business to any other Restricted Subsidiary; provided that such transaction
complies with Section 6.04 and Section 6.07.

SECTION 6.06 Restricted Payments; Restrictive Agreements.

(a) Declare or make, or agree to declare or make, directly or indirectly, any
Restricted Payment (including pursuant to any Synthetic Purchase Agreement), or
incur any obligation (contingent or otherwise) to do so; provided, however, that
(i) Holdings may repurchase, or may pay cash dividends or distributions with
respect to its Equity Interests so that one or more of its parent holding
companies (if any) may repurchase, its own Equity Interests owned by present or
former officers or employees of Holdings or the Restricted Subsidiaries or make
payments to present or former officers or employees of Holdings or the
Restricted Subsidiaries upon termination of employment in connection with the
exercise of stock options, stock appreciation rights or similar equity
incentives or equity based incentives pursuant to management incentive plans or
in connection with the death or disability, retirement or termination of
employment of such present or former officers or employees; provided, that the
aggregate amount of such Restricted Payments under this clause (i) shall not
exceed in any calendar year $2,000,000; provided that any unused amount in any
calendar year may be carried forward into any succeeding calendar year (plus the
amount of net proceeds received by Holdings during such calendar year from
Employee Equity Sales and the amount of net proceeds of any key-man life
insurance received during such calendar year); and provided further, that the
aggregate amount of such purchases or redemptions that may be made pursuant to
this clause (i) shall not exceed $10,000,000 (plus the amount of net proceeds
received by Holdings after the date of this Agreement from Employee Equity
Sales); (ii) this Section 6.06(a) shall not apply to 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; (iii) any Restricted Subsidiary of Holdings may declare and make
Restricted Payments to, repurchase its Equity Interests from or make other
distributions to Holdings or to any wholly owned Restricted Subsidiary of
Holdings (or, in the case of non-wholly owned Restricted Subsidiaries, to
Holdings or any Restricted Subsidiary that is a direct or indirect parent of
such

 

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Restricted Subsidiary and to each other owner of Equity Interests of such
Restricted Subsidiary on a pro rata basis (or more favorable basis from the
perspective of Holdings or such Restricted Subsidiary) based on their relative
ownership interests; (iv) Restricted Payments may be made at any time in an
aggregate amount not exceeding the Cumulative Credit when, on a pro forma basis
after giving effect thereto, no Event of Default shall have occurred and be
continuing and the Net Total Leverage Ratio on a pro forma basis is not greater
than 3.50 : 1.00; (v) Restricted Payments may be made at any time in an
aggregate amount not exceeding $50,000,000 when, on a pro forma basis after
giving effect thereto, no Event of Default shall have occurred and be
continuing; and (vi) Restricted Payments may be made at any time when, on a pro
forma basis after giving effect thereto, (x) no Event of Default shall have
occurred and be continuing, (y) the Net Total Leverage Ratio on a pro forma
basis is not greater than 2.50 : 1.00 and (z) the Liquidity of Holdings and its
Restricted Subsidiaries on a consolidated basis shall be at least $250,000,000.

(b) Enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of Holdings,
or any Restricted Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (ii) the ability of any Restricted Subsidiary
to pay dividends or other distributions with respect to any of its Equity
Interests or to make or repay loans or advances to Holdings or any Restricted
Subsidiary or to Guarantee Indebtedness of Holdings or any Restricted
Subsidiary; provided that (A) the foregoing shall not apply to restrictions and
conditions imposed by law, any Loan Document, agreement governing any
Indebtedness permitted under Section 6.01(a), (g) or (w) or to the extent such
restrictions and conditions do not contravene the Loan Documents, under
Section 6.01(m) or (n) (with respect to Restricted Subsidiaries that are not
Loan Parties) or a Refinancing Facility or Refinancing Notes permitted under
Section 6.01(t), (B) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of, or sale of the
assets of a Restricted Subsidiary pending such sale; provided such restrictions
and conditions apply only to the Restricted Subsidiary that is, or such assets
that are, to be sold and such sale is permitted hereunder, (C) restrictions or
conditions imposed by any agreement relating to Liens permitted by Section 6.02
if such restrictions or conditions apply only to the property or assets subject
to such Liens, (D) clause (i) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof,
(E) clause (i) of the foregoing shall not apply to restrictions or conditions
imposed by the Revolving Credit Agreement and other “Loan Documents” defined
therein, (F) the foregoing shall not apply to any Not for Profit Subsidiary,
(G) customary provisions in joint venture agreements and other similar
agreements applicable to joint ventures entered into in the ordinary course of
business and (H) any agreement in effect at the time a person becomes a
Subsidiary, so long as such agreement was not entered into in contemplation of
such person becoming a Subsidiary.

SECTION 6.07 Transactions with Affiliates. Except for transactions between or
among Loan Parties, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) that Holdings or any
Restricted Subsidiary may (i) engage in any of the foregoing transactions upon
terms no less favorable to Holdings or such Restricted Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties and (ii) in the
case of a Restricted Subsidiary that is a Loan Party, make an Investment in any
Affiliate that provides

 

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services to any Borrower or its Restricted Subsidiaries; provided that (x) such
Investment is made pursuant to Section 6.04(s) or (u) and is permitted thereby,
and (y) the board of directors of Holdings determines that such Investment is in
the best interests of Holdings and the Restricted Subsidiaries, (b) Restricted
Payments permitted by Section 6.06(a), (c) the indemnification of, and the
payment of reasonable and customary fees and indemnities to, directors, officers
and employees of Holdings and the Restricted Subsidiaries in the ordinary course
of business, (d) Investments permitted by clauses (b), (d), (q) or (r) of
Section 6.04, Investments in joint ventures and non-Loan Parties permitted by
clauses (s), (u) or (v) of Section 6.04 and transfers permitted under
Section 6.05 of work-in-process and products in the ordinary course of business
among Holdings and its Subsidiaries in connection with the digital development
of Intellectual Property owned by the Loan Parties, (e) (i) any employment
agreement entered into by Holdings or any Restricted Subsidiary in the ordinary
course of business, (ii) any subscription agreement or similar agreement
pertaining to the repurchase of Equity Interests pursuant to put/call rights or
similar rights with employees, officers or directors, and (iii) any employee
compensation, benefit plan or arrangement, any health, disability or similar
insurance plan which covers employees, and any reasonable employment contract
and transactions pursuant thereto, (f) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
entered into by Holdings or any Restricted Subsidiary in the ordinary course of
business and approved by the board of directors of Holdings or HMHP, (g) the
existence of, or the performance by Holdings, any Borrower or any of the
Restricted Subsidiaries of its obligations under the terms of, any stockholders
agreement or its equivalent with the stockholders of Holdings or any direct or
indirect parent of a Borrower (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Closing
Date and any similar agreements which it may enter into thereafter,
(h) transactions by and among non-Loan Parties, (i) payments by Holdings, any
Borrower or any Restricted Subsidiary to an Affiliate for any financial
advisory, financing, underwriting or placement services or in respect of other
investment banking activities, including in connection with acquisitions or
divestitures, which payments are approved by a majority of the members of the
board of directors of Holdings in good faith, (j) transactions with respect to
which Holdings, the Borrowers or any Restricted Subsidiary, as the case may be,
delivers a letter from an Independent Financial Advisor addressed to the Lenders
and the Administrative Agent stating that such transaction is fair to Holdings,
the Borrowers or such Restricted Subsidiary from a financial point of view,
(k) investments by Affiliates in securities or Indebtedness of Holdings or any
Restricted Subsidiary so long as (i) the investment is being offered generally
to other investors on the same or more favorable terms and (ii) the aggregate
investment by Affiliates constitutes less than 50% of the proposed or
outstanding issue amount of such class of securities or Indebtedness; (l) any
transaction with an Affiliate in which the consideration paid by Holdings, the
Borrowers or any Restricted Subsidiary consists only of Equity Interests of
Holdings or any direct or indirect parent company of Holdings, and (m) any
merger, consolidation or reorganization of Holdings with an Affiliate of
Holdings not materially adverse to the interests of the Lenders and solely for
the purpose of (i) forming or collapsing a holding company structure or
(ii) reincorporating Holdings in a new jurisdiction.

 

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SECTION 6.08 Other Indebtedness and Agreements.

(a) Permit (i) any waiver, supplement, modification or amendment of any
indenture, instrument or agreement pursuant to which any Subordinated
Indebtedness in an aggregate principal amount exceeding $35,000,000 of Holdings
or any of the Restricted Subsidiaries is outstanding other than any such waiver,
supplement, modification or amendment (A) that does not increase the obligations
of the obligor or confer additional rights on the holder of such Subordinated
Indebtedness in a manner adverse in any material respect to Holdings, any of the
Restricted Subsidiaries or the Lenders or (B) otherwise complies with the
definition of “Permitted Refinancing Indebtedness” or (ii) any waiver,
supplement, modification or amendment of its certificate of incorporation, by
laws, operating, management or partnership agreement or other organizational
documents, to the extent any such waiver, supplement, modification or amendment
would be adverse to the Lenders in any material respect.

(b) (i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions) or from the proceeds of Permitted Refinancing
Indebtedness (including any Refinancing Facility or Refinancing Notes), in
respect of, or pay, or commit to pay, or, directly or indirectly (including
pursuant to any Synthetic Purchase Agreement), redeem, repurchase, retire or
otherwise acquire for consideration, or set apart any sum for the aforesaid
purposes, any Subordinated Indebtedness in an aggregate outstanding principal
amount exceeding $35,000,000 (or Permitted Refinancing Indebtedness in respect
thereof), or (ii) pay in cash any amount in respect of any Subordinated
Indebtedness in an aggregate outstanding principal amount exceeding $35,000,000
or preferred Equity Interests that may at the obligor’s option be paid in kind
or in other securities, except, in each case, (I) payments at any time in an
aggregate amount not exceeding the Cumulative Credit when, on a pro forma basis
after giving effect thereto, no Event of Default shall have occurred and be
continuing and the Net Total Leverage Ratio on a pro forma basis is not greater
than 3.50 : 1.00 or (II) if at the time of any such distribution or payment, on
a pro forma basis after giving effect thereto, (x) no Default shall have
occurred and be continuing and (y) the Net Total Leverage Ratio shall be less
than 2.50 : 1.00.

SECTION 6.09 [Intentionally deleted]

SECTION 6.10 [Intentionally deleted].

SECTION 6.11 [Intentionally deleted].

SECTION 6.12 Fiscal Year. (a) Without the consent of the Administrative Agent,
make or permit any changes in accounting policies or reporting practices, except
as permitted or required by generally accepted accounting principles or (b) with
respect to Holdings and any Borrower, change their fiscal year-end to a date
other than December 31.

SECTION 6.13 Certain Equity Securities. Issue any Equity Interest that is not
Qualified Capital Stock.

 

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SECTION 6.14 Business of Holdings, Borrowers and Restricted Subsidiaries.
(a) Except in the case of Holdings, engage at any time in any business or
business activity other than a Permitted Business and (b) in the case of
Holdings, (i) engage in any business or activity other than (A) the ownership of
Equity Interests in its Subsidiaries (and any promissory note issued to it by
any Subsidiary, provided that such promissory note is subordinated to the
Obligations on terms reasonably satisfactory to the Administrative Agent and
pledged as Collateral) and activities incidental thereto or, (B) performance of
its obligations under the Loan Documents and other Indebtedness permitted
hereunder, (C) issuance of Equity Interests or (D) as otherwise required by law
or incidental to its being a public company, (ii) own or acquire any assets
other than Equity Interests in its Subsidiaries or any other Loan Party, any
such promissory note or any cash or other assets received as a dividend or other
distribution in respect of such Equity Interests, its books and records and
deposit accounts or (iii) incur any liabilities other than liabilities under the
Loan Documents and guarantees of Indebtedness of the Borrowers and their
Subsidiaries permitted hereunder, liabilities imposed by law (including tax
liabilities) and other liabilities incidental to its existence and permitted
business and activities.

SECTION 6.15 Designation of Unrestricted Subsidiaries and Re-Designation of
Restricted Subsidiaries.

(a) Designate any Subsidiary as an Unrestricted Subsidiary by Holdings
delivering to the Administrative Agent a certificate of a Responsible Officer of
Holdings certifying the resolutions of its board of directors authorizing such
designation and the satisfaction of the following conditions: (i) neither such
Subsidiary nor any of its Subsidiaries that have been (or concurrently with such
designation will be) designated as Unrestricted Subsidiaries owns any Equity
Interests or Indebtedness of, or owns or holds any Lien on, any property of,
Holdings or any of its Restricted Subsidiaries, (ii) any Investment in such
Subsidiary by Holdings or any of its Restricted Subsidiaries existing at the
time of or subsequent to such designation shall be permitted by Section 6.04,
(iii) no Event of Default shall have occurred and be continuing and the Net
Total Leverage Ratio shall be less than 2.50 : 1.00 on a pro forma basis, and
(iv) all representations and warranties contained herein and in the other Loan
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of such designation, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.

(b) Re-designate any Unrestricted Subsidiary as a Restricted Subsidiary unless
such re-designation is made by Holdings delivering to the Administrative Agent a
certificate of a Responsible Officer of Holdings certifying the resolutions of
its board of directors authorizing such re-designation and certifying that both
before and after giving effect to such re-designation, (i) such Unrestricted
Subsidiary shall be a wholly owned Subsidiary of the Borrowers, (ii) no Event of
Default shall have occurred and be continuing or would result therefrom and the
Net Total Leverage Ratio shall be less than 2.50 : 1.00 on a pro forma basis,
(iii) all representations and warranties contained herein and in the other Loan
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of such re-designation, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.

 

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ARTICLE VII

Events of Default

SECTION 7.01 Events of Default. In case of the happening of any of the following
events (“Events of Default”):

(a) any representation or warranty made or deemed made in or in connection with
any Loan Document or the Borrowings hereunder, or any representation, warranty,
statement or information contained in any report, certificate, financial
statement or other instrument furnished in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished; provided that, in respect of any
representation or warranty made or deemed to be made on the Closing Date,
including pursuant to the Supplement to the Guarantee and Collateral Agreement
delivered by Tom Snyder Productions, Inc., a Delaware corporation, and
International Center for Leadership in Education, Inc., a New York corporation,
on the Closing Date (other than the Seller Representations and Specified
Representations), there shall not be an Event of Default under this
Section 7.01(a) if (i) the applicable representation or warranty is false or
misleading in any material respect solely as a result of any event, circumstance
or fact concerning the Target and (ii) it would be true and correct in all
material respects if made or deemed to be made by the applicable Loan Party on a
date within sixty (60) days after the Closing Date; provided further that, in
each case, such materiality qualifier shall not be applicable to any
representations and warranties that are already qualified or modified by
materiality in the text thereof;

(b) default shall be made in the payment of any principal of any Loan when and
as the same shall become due and payable whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or any Fee
or any other amount (other than an amount referred to in (b) above) due under
any Loan Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of three Business Days;

(d) default shall be made in the due observance or performance by Holdings, any
Borrower or any other Restricted Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a) (with respect to Holdings and any
Borrower), 5.05(a) or 5.08 or in Article VI;

(e) default shall be made in the due observance or performance by Holdings, any
Borrower or any other Restricted Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in
clause (b), (c) or (d) above) and such default shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent or any
Lender to the Borrowers;

 

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(f) (i) Holdings or any Restricted Subsidiary shall fail to pay any principal or
interest, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable (with all applicable grace
periods having expired), or (ii) any other event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity, provided that this clause (ii) 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; provided
further that, with respect to any financial covenant under the Revolving Credit
Agreement, a breach shall only result in an Event of Default under this
Section 7.01(f) upon the acceleration of the Indebtedness under the Revolving
Credit Agreement and/or the exercise of any remedies by the administrative agent
or the collateral agent under the Revolving Credit Agreement in respect of any
Collateral;

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of Holdings or any Restricted Subsidiary, or of a substantial part of
the property or assets of Holdings or a Restricted Subsidiary, under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, administration, insolvency, receivership,
examinership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator, examiner or similar official for Holdings
or any Restricted Subsidiary or for a substantial part of the property or assets
of Holdings or a Restricted Subsidiary or (iii) the winding-up or liquidation of
Holdings or any Restricted Subsidiary; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;

(h) Holdings or any Restricted Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, administration, insolvency, receivership,
examinership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator, examiner or
similar official for Holdings or any Restricted Subsidiary or for a substantial
part of the property or assets of Holdings or any Restricted Subsidiary,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;

(i) one or more judgments shall be rendered against Holdings, any Restricted
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties

 

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of Holdings or any Restricted Subsidiary to enforce any such judgment and such
judgment either (i) is for the payment of money in an aggregate amount in excess
of $35,000,000 (to the extent not covered by independent third-party insurance
not disputing coverage) or (ii) is for injunctive relief and could reasonably be
expected to result in a Material Adverse Effect;

(j) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

(k) any Guarantee under the Guarantee and Collateral Agreement or any other
Security Document for any reason shall cease to be in full force and effect
(other than in accordance with its terms or the terms of any other Loan
Document), or any Loan Party shall deny in writing that it has any further
liability under the Guarantee and Collateral Agreement or any of such other
Security Documents (other than as a result of the discharge of such Loan Party
in accordance with the terms of the Loan Documents);

(l) any security interest purported to be created by any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid,
perfected, first priority (except as otherwise expressly provided in this
Agreement, any other Loan Document or such Security Document) security interest
in the securities, assets or properties covered thereby, except (i) to the
extent that any such loss of perfection or priority results from the failure of
the Collateral Agent to maintain possession of certificates representing
securities pledged under the Guarantee and Collateral Agreement, (ii) to the
extent that any such loss is covered by a lender’s title insurance policy and
the related insurer promptly after such loss shall have acknowledged in writing
that such loss is covered by such title insurance policy and (iii) to the extent
that all such losses of perfection or priority involve Collateral with a fair
value aggregating less than $5,000,000; or

(m) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to any event
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrowers, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrowers accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrowers, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrowers accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein or in any other Loan Document to the
contrary notwithstanding.

 

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After the occurrence and during the continuance of any Event of Default and
acceleration of the Loans, all proceeds realized from any Loan Party or on
account of any Collateral owned by any Loan Party or, without limiting the
foregoing, on account of any Prepayment Event, any payments in respect of any
Obligations and all proceeds of the Collateral, shall be applied in the
following order (the “Waterfall”):

(i) first, ratably to pay the Obligations in respect of any fees and expenses,
indemnities and other amounts (including, without limitation, amounts in respect
of any Loans advanced by the Administrative Agent on behalf of a Lender for
which the Administrative Agent has not been reimbursed) then due to the
Administrative Agent and Collateral Agent, until paid in full;

(ii) second, ratably to pay any expenses, indemnities, and fees then due to the
Lenders, until paid in full;

(iii) third, ratably to pay the accrued but unpaid interest and fees in respect
of the Loans, until paid in full;

(iv) fourth, ratably to pay (A) the unpaid principal in respect of the Loans and
(B) the Other Secured Obligations;

(v) fifth, ratably to pay other Obligations then due, including Other Secured
Obligations that are not Other Pari Passu Secured Obligations, until paid in
full; and

(vi) sixth, to the Borrowers or such other person entitled thereto under
applicable law.

ARTICLE VIII

Agents

SECTION 8.01 Authorization and Action.

(a) Each Lender hereby irrevocably appoints Citibank, N.A. to act on its behalf
as the Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.

(b) Each Lender hereby further irrevocably appoints Citibank, N.A. to act on its
behalf as Collateral Agent hereunder and under the other Loan Documents and
authorizes the Collateral Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Collateral Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The Collateral Agent shall act on behalf of the Lenders and

 

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shall have all of the benefits and immunities (i) provided to the Collateral
Agent in this Article VIII with respect to any acts taken or omissions suffered
by the Collateral Agent in connection with its activities in such capacity as
fully as if the term “Agent” as used in this Article VIII included the
Collateral Agent with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the Collateral Agent.

(c) The provisions of this Article (except Sections 8.07 and 8.11) are solely
for the benefit of the Agents, the Collateral Agent, the Arrangers and the
Lenders, and neither Holdings nor any other Loan Party shall have rights as a
third party beneficiary of any of such provisions (except Sections 8.07 and
8.11).

SECTION 8.02 Agent Individually.

(a) The Person serving as an Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
the Person serving as an Agent hereunder in its individual capacity. Such Person
and its Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with Holdings or any of its Subsidiaries or other Affiliate thereof
as if such person were not an Agent hereunder and without any duty to account
therefor to the Lenders.

(b) Each Lender understands that the Person serving as an Agent, acting in its
individual capacity, and its Affiliates (collectively, an “Agent’s Group”) are
engaged in a wide range of financial services and businesses (including
investment management, financing, securities trading, corporate and investment
banking and research) (such services and businesses are collectively referred to
in this Section 8.02 as “Activities”) and may engage in the Activities with or
on behalf of one or more of the Loan Parties or their respective Affiliates.
Furthermore, each Agent’s Group may, in undertaking the Activities, engage in
trading in financial products or undertake other investment businesses for its
own account or on behalf of others (including the Loan Parties and their
Affiliates and including holding, for its own account or on behalf of others,
equity, debt and similar positions in Holdings or another Loan Party or their
respective Affiliates), including trading in or holding long, short or
derivative positions in securities, loans or other financial products of one or
more of the Loan Parties or their Affiliates. Each Lender understands and agrees
that in engaging in the Activities, each Agent’s Group may receive or otherwise
obtain information concerning the Loan Parties or their Affiliates (including
information concerning the ability of the Loan Parties to perform their
respective Obligations hereunder and under the other Loan Documents) which
information may not be available to any of the Lenders that are not members of
such Agent’s Group. None of the Agents nor any member of any Agent’s Group shall
have any duty to disclose to any Lender or use on behalf of the Lenders, and
shall not be liable for the failure to so disclose or use, any information
whatsoever about or derived from the Activities or otherwise (including any
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any Loan Party or any Affiliate of
any Loan Party) or to account for any revenue or profits obtained in connection
with the Activities, except that the Administrative Agent shall deliver or
otherwise make available to each Lender such documents as are expressly required
by any Loan Document to be transmitted by the Administrative Agent to the
Lenders.

 

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(c) Each Lender further understands that there may be situations where members
of an Agent’s Group or their respective customers (including the Loan Parties
and their Affiliates) either now have or may in the future have interests or
take actions that may conflict with the interests of any one or more of the
Lenders (including the interests of the Lenders hereunder and under the other
Loan Documents). Each Lender agrees that no member of an Agent’s Group is or
shall be required to restrict its activities as a result of the person serving
as Agent being a member of such Agent’s Group, and that each member of an
Agent’s Group may undertake any Activities without further consultation with or
notification to any Lender. None of (i) this Agreement nor any other Loan
Document, (ii) the receipt by any Agent’s Group of information (including
Borrower Information) concerning the Loan Parties or their Affiliates (including
information concerning the ability of the Loan Parties to perform their
respective Obligations hereunder and under the other Loan Documents) nor
(iii) any other matter shall give rise to any fiduciary, equitable or
contractual duties (including without limitation any duty of trust or
confidence) owing by any Agent or any member of any Agent’s Group to any Lender
including any such duty that would prevent or restrict any Agent’s Group from
acting on behalf of customers (including the Loan Parties or their Affiliates)
or for its own account.

SECTION 8.03 Duties of Agents; Exculpatory Provisions.

(a) The Agents’ duties hereunder and under the other Loan Documents are solely
ministerial and administrative in nature and an Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, (i) an Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (ii) an Agent shall not have any duty to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that an Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other Loan Documents), provided that
an Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose any Agent or any of its Affiliates to
liability or that is contrary to any Loan Document or applicable law, including
for the avoidance of doubt, any action that may be in violation of the automatic
stay under any Bankruptcy Law or that may effect a forfeiture, modification or
termination of property of a Defaulting Lender in violation of any Bankruptcy
Law, and (iii) an Agent shall not, except as expressly set forth herein and in
the other Loan Documents, have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to any Borrower or any of
their Affiliates that is communicated to or obtained by the Person serving as an
Agent or any of its Affiliates in any capacity.

(b) An Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as such Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Section 9.08) or (ii) in the absence of its own gross negligence or
willful misconduct. An Agent shall be deemed not to have knowledge of any
Default or the event or events that give or may give rise to any Default unless
and until the Borrowers or any Lender shall have given notice to such Agent
describing such Default and such event or events.

 

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(c) Neither any Agent nor any member of an Agent’s Group shall be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty,
representation or other information made or supplied in or in connection with
this Agreement, any other Loan Document or the information presented to the
other Lenders by any Borrower, (ii) the contents of any certificate, report or
other document delivered hereunder or thereunder or in connection herewith or
therewith or the adequacy, accuracy and/or completeness of the information
contained therein, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document or the perfection or priority of any Lien or security
interest created or purported to be created by the Collateral Documents or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than (but subject to the foregoing clause (ii)) to confirm receipt
of items expressly required to be delivered to the Agents.

(d) Nothing in this Agreement or any other Loan Document shall require any Agent
or any of its Related Parties to carry out any “know your customer” or other
checks in relation to any Person on behalf of any Lender and each Lender
confirms to an Agent that it is solely responsible for any such checks it is
required to carry out and that it may not rely on any statement in relation to
such checks made by an Agent or any of its Related Parties.

SECTION 8.04 Reliance by Agents. The Agents shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper person. Each Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan,
that by its terms must be fulfilled to the satisfaction of a Lender, an Agent
may presume that such condition is satisfactory to such Lender unless an officer
of an Agent responsible for the transactions contemplated hereby shall have
received notice to the contrary from such Lender prior to the making of such
Loan and in the case of a Borrowing, such Lender shall not have made available
to an Agent such Lender’s ratable portion of such Borrowing. An Agent may
consult with legal counsel (who may be counsel for a Borrower or any other Loan
Party), independent accountants and other experts selected by it, and shall not
be liable for any action taken or not taken by it in accordance with the advice
of any such counsel, accountants or experts.

SECTION 8.05 Indemnification.

(a) Each Lender severally agrees to indemnify the Agents (to the extent not
promptly reimbursed by the Borrowers) from and against such Lender’s pro rata
share (based on the Loans and unused Commitments held by such Lender relative to
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Commitments then outstanding) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against any Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by any Agent under this Agreement
(collectively, the “Indemnified Costs”), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from such Agent’s gross
negligence or willful misconduct as found in a non-appealable judgment by a
court of competent jurisdiction. Without limitation of the foregoing, each
Lender agrees to reimburse each Agent promptly upon demand for its ratable share
of any reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by such 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, to the extent that such Agent
is not promptly reimbursed for such expenses by the Borrowers. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified
Costs, this Section 8.05 applies whether any such investigation, litigation or
proceeding is brought by any Agent, any Lender or a third party.

(b) The failure of any Lender to reimburse any Agent promptly upon demand for
its ratable share of any amount required to be paid by the Lenders to such Agent
as provided herein shall not relieve any other Lender of its obligation
hereunder to reimburse any Agent, but no Lender shall be responsible for the
failure of any other Lender to reimburse any Agent. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the promissory notes, if any. Each of the Agents agrees to return to
the Lenders their respective ratable shares of any amounts paid under this
Section 8.05 that are subsequently reimbursed by the Borrowers.

SECTION 8.06 Delegation of Duties. Each Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more co-agents or sub-agents appointed by such
Agent. Any Agent and any such co-agent or sub-agent may perform any and all of
its duties and exercise its rights and powers by or through their respective
Related Parties. Each such co-agent and sub-agent and the Related Parties of an
Agent and each such coagent and sub-agent (including their respective Affiliates
in connection with the syndication of the Term Loan Facility) shall be entitled
to the benefits of all provisions of this Article VIII and Article IX (as though
such co-agents and sub-agents were such “Agent” under the Loan Documents) as if
set forth in full herein with respect thereto.

SECTION 8.07 Resignation of Agent. The Agents may at any time give notice to the
Lenders and the Borrowers of its resignation. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor, which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank with an office in New York, New
York. If no such successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation (such 30-day period, the “Lender Appointment
Period”), then the retiring Agent may on behalf of the applicable Lenders,
appoint a successor Agent meeting the qualifications set forth above. In
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the retiring Agent to appoint, on behalf of the Lenders, a successor Agent, the
retiring Agent may at any time upon or after the end of the Lender Appointment
Period notify the Borrowers and the Lenders that no qualifying person has
accepted appointment as successor Agent and the effective date of such retiring
Agent’s resignation. Upon the resignation effective date established in such
notice and regardless of whether a successor Agent has been appointed and
accepted such appointment, the retiring Agent’s resignation shall nonetheless
become effective and (i) the retiring Agent shall be discharged from its duties
and obligations as Agent hereunder and under the other Loan Documents as to
which it has resigned and (ii) all payments, communications and determinations
provided to be made by, to or through the retiring Agent shall instead be made
by or to each applicable Lender directly, until such time as the Required
Lenders appoint a successor Agent as provided for above in this paragraph. Upon
the acceptance of a successor’s appointment as Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties as Agent of the retiring (or retired) Agent as to which it has
resigned, and the retiring Agent shall be discharged from all of its duties and
obligations as Agent hereunder or under the other Loan Documents in respect of
the Term Loan Facility as to which it has resigned (if not already discharged
therefrom as provided above in this paragraph). The fees payable by the
Borrowers to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the retiring Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 8.05 and Section 9.05
shall continue in effect for the benefit of such retiring Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Agent was acting as Agent.

SECTION 8.08 Non-Reliance on Agent and Other Lenders.

(a) Each Lender confirms to the Agents, the Arrangers, each other Lender and
each of their respective Related Parties that it (i) possesses (individually or
through its Related Parties) such knowledge and experience in financial and
business matters that it is capable, without reliance on any Agent, any
Arranger, any other Lender or any of their respective Related Parties, of
evaluating the merits and risks (including tax, legal, regulatory, credit,
accounting and other financial matters) of (x) entering into this Agreement,
(y) making Loans and other extensions of credit hereunder and under the other
Loan Documents and (z) in taking or not taking actions hereunder and thereunder,
(ii) is financially able to bear such risks and (iii) has determined that
entering into this Agreement and making Loans and other extensions of credit
hereunder and under the other Loan Documents is suitable and appropriate for it.

(b) Each Lender acknowledges that (i) it is solely responsible for making its
own independent appraisal and investigation of all risks arising under or in
connection with this Agreement and the other Loan Documents, (ii) that it has,
independently and without reliance upon any Agent, any Arranger, any other
Lender or any of their respective Related Parties, made its own appraisal and
investigation of all risks associated with, and its own credit analysis and
decision to enter into, this Agreement based on such documents and information,
as it has deemed appropriate and (iii) it will, independently and without
reliance upon any Agent, any Arranger, any other Lender or any of their
respective Related Parties, continue to be solely responsible for making its own
appraisal and investigation of all risks arising under or in connection with,
and its own credit analysis and decision to take or not take action under, this
Agreement and the other Loan Documents based on such documents and information
as it shall from time to time deem appropriate, which may include, in each case:

 

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(A) the financial condition, status and capitalization of the Borrowers and each
other Loan Party;

(B) the legality, validity, effectiveness, adequacy or enforceability of this
Agreement and each other Loan Document and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in
connection with any Loan Document;

(C) determining compliance or non-compliance with any condition hereunder to the
making of a Loan and the form and substance of all evidence delivered in
connection with establishing the satisfaction of each such condition;

(D) the adequacy, accuracy and/or completeness of any information delivered by
any Agent, any Arranger, any other Lender or by any of their respective Related
Parties under or in connection with this Agreement or any other Loan Document,
the transactions contemplated hereby and thereby or any other agreement,
arrangement or document entered into, made or executed in anticipation of, under
or in connection with any Loan Document.

SECTION 8.09 No Other Duties, etc. Anything herein to the contrary
notwithstanding, none of the Persons acting as, Arranger or Syndication Agent
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, the Collateral
Agent or as a Lender hereunder.

SECTION 8.10 Agent May File Proofs of Claim. In case of the pendency of any
proceeding under any Bankruptcy Law or any 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 any 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 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 hereunder) 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,
interim receiver, monitor, 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, if the
Administrative Agent shall consent to the making of such payments directly to

 

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the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent hereunder.

SECTION 8.11 Other Secured Agreements.

(a) The Borrowers and any Other Secured Party may from time to time designate an
agreement that otherwise would qualify as an Other Secured Agreement as an Other
Secured Agreement upon written notice to the Administrative Agent from the
Borrowers and such Other Secured Party, in form reasonably acceptable to the
Administrative Agent, which form shall include a description of such Other
Secured Agreement, the maximum amount of obligations thereunder which are to
constitute Other Secured Obligations (each, a “Designated Amount”); provided
that any such Designated Amount of obligations shall constitute Other Secured
Obligations only to the extent that such Designated Amount, together with all
other Designated Amounts under all other Other Secured Agreements that have been
theretofore designated as Other Secured Obligations and that remain in effect,
does not exceed in the aggregate $25,000,000.

(b) The Borrowers and each applicable Other Secured Party may increase, decrease
or terminate any Designated Amount in respect of each applicable Other Secured
Agreement upon written notice to the Administrative Agent; provided that any
increase in a Designated Amount shall be deemed to be a new designation of a
Designated Amount and shall be subject to the limitations set forth in
Section 8.11(a). No obligations under any Other Secured Agreement in excess of
the applicable Designated Amount shall constitute Obligations hereunder or the
other Loan Documents.

(c) No counterparty to an Other Secured Agreement that obtains the benefits of
the Waterfall, the Guarantee and Collateral Agreement or any Collateral by
virtue of the provisions hereof or of the Guarantee and Collateral Agreement or
any Security Document shall have any right to notice of any action or to consent
to, direct or object to any action hereunder or under any other Loan Document or
otherwise in respect of the Collateral (including the release or impairment of
any Collateral) other than in its capacity as a Lender and, in such case, only
to the extent expressly provided in the Loan Documents. Notwithstanding any
other provision of this Article VIII to the contrary, no Agent shall be required
to verify the payment of, or that other satisfactory arrangements have been made
with respect to, any Obligations arising under any Other Secured Agreement
unless the Administrative Agent has received written notice of such Obligations,
together with such supporting documentation as such Agent may request, from each
applicable counterparty to such Other Secured Agreement.

ARTICLE IX

Miscellaneous

SECTION 9.01 Notices.

(a) All notices and other communications provided for hereunder shall be either
(x) in writing (including telegraphic, telecopy or electronic communication) and
mailed,

 

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telecopied or delivered or (y) as and to the extent set forth in Section 9.01(b)
and in the proviso to this Section 9.01(a), in an electronic medium and
delivered as set forth in Section 9.01(b), if to Holdings or to any Borrower, to
the attention of Eric Shuman, Chief Financial Officer, Houghton Mifflin Harcourt
Company, 222 Berkeley Street, Boston, MA 02116, Tel: (617) 351-5200,
Fax: (617) 351-3923, Email Eric.Shuman@hmhco.com, with copies to William Bayers,
Senior Vice-President & General Counsel, Houghton Mifflin Harcourt Company,
222 Berkeley Street, Boston, MA 02116-3764, Tel: (617) 351-5125, Fax:
(617) 351-5014, Email Bill.Bayers@hmhco.com, Joseph Flaherty, Senior
Vice-President & Treasurer, Houghton Mifflin Harcourt Company, 222 Berkeley
Street, Boston, MA 02116-3764, Tel: (617) 351-5223, Fax: (617) 351-1104, Email
Joe.Flaherty@hmhco.com and David Mills, Assistant Treasurer, Houghton Mifflin
Harcourt Company, 222 Berkeley Street, Boston, MA 02116-3764, Tel:
(617) 351-3766, Fax: (617) 933-7632, Email David.Mills@hmhco.com; if to any
Lender who has executed this Agreement on the Closing Date, at its Domestic
Lending Office specified opposite its name on the Register; if to any other
Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; if to the Administrative Agent,
(i) at the following address: Citibank, N.A., 1615 Brett Road, New Castle, DE
19720, Attn: Investor Relations, Tel: 302-894-6010, Fax: 646-274-5080, Email:
Global.Loans.Support@Citi.com; or, as to any Borrower or any Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to such Borrower and the
Administrative Agent; provided, however, that materials and information
described in Section 9.01(b) shall be delivered to the Administrative Agent in
accordance with the provisions thereof or as otherwise specified to the
Borrowers by the Administrative Agent. All such notices and other communications
shall, when mailed, telecopied, or e-mailed, be effective when deposited in the
mails, transmitted by telecopier or sent by electronic communication,
respectively, except that notices and communications to any Agent pursuant to
Article II, III or VII shall not be effective until received by such Agent and,
in the case of notice sent by e-mail, until replied to by such Agent confirming
expressly receipt thereof. Delivery by telecopier of an executed counterpart of
a signature page to any amendment or waiver of any provision of this Agreement
or any Loan Document shall be effective as delivery of an original executed
counterpart thereof.

(b) Each Borrower hereby agrees that it will provide to the Administrative Agent
all information, documents and other materials that it is obligated to furnish
to the Administrative Agent pursuant to the Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, Borrowing or other Credit Event (including any election of an interest
rate or interest period relating thereto), (ii) relates to the payment of any
principal or other amount due under this Agreement prior to the scheduled date
therefor, (iii) provides notice of any Default under this Agreement or (iv) is
required to be delivered to satisfy any condition precedent to the effectiveness
of this Agreement and/or any Borrowing or other Credit Event hereunder (all such
non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to an electronic mail
address specified by the Administrative Agent to such Borrower. In addition,
each Borrower agrees to continue to provide the Communications to the
Administrative Agent in the manner specified in the Loan

 

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Documents but only to the extent requested by the Administrative Agent. Each
Borrower further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
IntraLinks or a substantially similar electronic transmission system (the
“Platform”).

(c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR ANY OF THEIR RESPECTIVE
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY
TO ANY BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF ANY BORROWER’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(d) The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Loan Documents. Each Lender agrees that notice to it (as
provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Loan Documents. Each Lender agrees to notify
the Administrative Agent in writing (including by electronic communication) from
time to time of such Lender’s e-mail address to which the foregoing notice may
be sent by electronic transmission and that the foregoing notice may be sent to
such e-mail address. Nothing herein shall prejudice the right of the
Administrative Agent or any Lender to give any notice or other communication
pursuant to any Loan Document in any other manner specified in such Loan
Document.

SECTION 9.02 Survival of Agreement. All covenants, agreements, representations
and warranties made by any Borrower or Holdings herein and in the certificates
or other instruments prepared or delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the Lenders shall survive the making by the Lenders of the Loans,
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their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and as long as all Commitments have not been terminated. The provisions
of Sections 2.14, 2.16, 2.20 and 9.05 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender.

SECTION 9.03 Binding Effect. This Agreement shall become effective when it shall
have been executed by the Loan Parties and the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto.

SECTION 9.04 Successors and Assigns.

(a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of the
Loan Parties, the Administrative Agent, the Collateral Agent or the Lenders that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

(b) Each Lender may assign to one or more Eligible Assignees all or a portion of
its interests, 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 of the Administrative Agent and the Borrowers (not to be
unreasonably withheld or delayed); provided, however, that (A) the consent of
the Borrowers shall not be required to any such assignment (x) made to another
Lender or an Affiliate or a Related Fund of a Lender or (y) after the occurrence
and during the continuance of any Event of Default under Section 7.1(b), 7.1(c),
7.1(g) or 7.1(h) and (B) the Borrowers shall be deemed to have consented to any
such assignment unless it shall have objected thereto by written notice to the
Administrative Agent within ten Business Days after having received written
notice thereof from the Administrative Agent, (ii) the amount of the Commitment
or Loans of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall be in an integral multiple of, and
not less than, $1,000,000 (or, if less, the entire remaining amount of such
Lender’s Commitment or Loans of the relevant Class) without the prior written
consent of the Administrative Agent; provided that (A) such minimum amount shall
be aggregated for two or more simultaneous assignments to or by two or more
Related Funds and (B) this clause (ii) shall not apply to assignments to a
Lender, an Affiliate of a Lender or a Related Fund, (iii) each such assignment
of Commitments and/or Loans shall be of a constant, and not varying, percentage
of all the assigning Lender’s rights and obligations under this Agreement in
respect of such Lender’s Commitments and/or Loans so assigned, (iv) the parties
to each such assignment shall (A) execute and deliver to the Administrative
Agent an Assignment and Acceptance via an electronic settlement system
acceptable to the Administrative Agent or (B) if previously agreed to by the
Administrative Agent, manually execute and deliver to the Administrative Agent
an

 

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Assignment and Acceptance, together, in each case, with a processing and
recording fee of $3,500 (which fee may be waived or reduced in the sole
discretion of the Administrative Agent), (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and all applicable tax forms and (vi) the consent of the
Administrative Agent shall not be required as to any assignment (A) to a Lender,
an Affiliate of a Lender or a Related Fund or (B) pursuant to paragraph (k) or
(l) of this Section 9.04. In connection with any assignment of rights and
obligations of any Defaulting Lender hereunder, no such assignment will be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment make such additional payments to the
Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations or other compensating actions, including
funding, with the consent of the Borrowers and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent and each other
Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans. Notwithstanding the
foregoing, in the event that any assignment of rights and obligations of any
Defaulting Lender hereunder becomes effective under applicable law without
compliance with the provisions of this paragraph, then the assignee of such
interest will be deemed to be a Defaulting Lender for all purposes of this
Agreement until such compliance occurs. Subject to acceptance and recording
pursuant to paragraph (e) of this Section 9.04, from and after the effective
date specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16,
2.20 and 9.05, as well as to any Fees accrued for its account and not yet paid).

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balances of its Term Loan without giving effect
to assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of Holdings or any Subsidiary or the performance or
observance by Holdings or any Subsidiary of any of its obligations under this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is an
Eligible Assignee, legally authorized to enter into such Assignment and
Acceptance;

 

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(iv) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 5.04, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount 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 Borrowers, the Administrative Agent, the Collateral Agent and the
Lenders shall treat each person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the Collateral Agent and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of, and consent to, a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above, if applicable, and the written consent of the
Administrative Agent and, if required, the Borrowers to such assignment and any
applicable Tax forms, the Administrative Agent shall promptly (i) accept such
Assignment and Acceptance and (ii) record the information contained therein in
the Register. No assignment shall be effective unless it has been recorded in
the Register as provided in this paragraph (e).

(f) Each Lender may without the consent of the Loan Parties or the
Administrative Agent sell participations to one or more banks or other persons
(other than to Disqualified Lenders to the extent the Disqualified Lender list
is made available to all Lenders) in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided, however, 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, (iii) the participating banks or other persons shall be
entitled to the benefit of the cost protection provisions contained in
Sections 2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but,
with respect to any particular participant, to no greater extent than the Lender
that sold the participation to such participant, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
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provided such participant complies with Sections 2.20(f) and (g) as if it were a
Lender and (iv) the Loan Parties, the Administrative Agent, and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrowers relating to
the Loans and to approve any amendment, modification or waiver of any provision
of this Agreement (other than amendments, modifications or waivers decreasing
any fees payable to such participating bank or person hereunder or the amount of
principal of or the rate at which interest is payable on the Loans in which such
participating bank or person has an interest, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans in which
such participating bank or person has an interest, increasing or extending the
Commitments in which such participating bank or person has an interest or
releasing or all or substantially all of the value of the Guarantees under the
Security Documents or all or substantially all of the Collateral). Each Lender
that sells a participation shall, acting solely for this purpose as an agent of
a 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 Obligations under any Loan Document) to any person except to the
extent that such disclosure is necessary to establish that such commitment,
loan, letter of credit or other obligation is in registered form under
Section 5f.103-1(c) of the U.S. Treasury Regulations. The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to Holdings and the Subsidiaries furnished
to such Lender by or on behalf of the Borrowers; provided that, prior to any
such disclosure of information designated by the Borrowers as confidential, each
such assignee or participant or proposed assignee or participant shall execute
an agreement whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the Lenders
pursuant to Section 9.16.

(h) Any Lender may, without the consent of any Borrower or the Administrative
Agent, at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure extensions of credit to such Lender or
in support of obligations owed by such Lender; provided that no such pledge or
assignment shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(i) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
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Borrowers, the option to provide to the Borrowers all or any part of any Loan
that such Granting Lender would otherwise be obligated to make to the Borrowers
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. 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. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Section 9.04, any SPC may (i) with notice to, but
without the prior written consent of, any Borrower and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial institutions
(consented to by the Borrowers and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the funding
or maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.

(j) No Loan Party shall assign or delegate any of its rights or duties hereunder
without the prior written consent of the Administrative Agent and each Lender,
and any attempted assignment without such consent shall be null and void.

(k) Notwithstanding anything to the contrary in this Agreement, including
Section 2.19 (which provisions shall not be applicable to this paragraph (k) of
Section 9.04), Holdings and its Subsidiaries shall be permitted to be a Lender
or an assignee of the Loans and Commitments and purchase from any Lender, at
individually negotiated prices, outstanding principal amounts under the Term
Loan Facility on a non-pro rata basis; provided that:

(i) unless the seller agrees otherwise, the purchaser shall make represent and
warrant to the seller at the time of assignment that it does not possess
material non-public information (or, if Holdings is not at the time a public
reporting company, material information of a type that would not reasonably be
expected to be publicly available if Holdings was a public reporting company)
with respect to Holdings and its Subsidiaries that has not been disclosed to the
seller or Lenders generally (other than the Lenders that have elected not to
receive material non-public information);

(ii) no Default or Event of Default has occurred and is continuing or would
result therefrom; and

 

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(iii) any Term Loans so assigned shall be automatically and permanently
cancelled upon the effectiveness of such assignment and will thereafter no
longer be outstanding for any purpose hereunder;

(l) An Affiliate of any of the Loan Parties (other than Holdings and its
Subsidiaries) shall be permitted to be a Lender or an assignee of the Loans and
Commitments (such Affiliate, as an assignee of the Loans and Commitments, an
“Specified Lender”) to the extent, and only to the extent, and each Specified
Lender hereby represents and warrants to and covenants with the Agents and the
other Lenders, that (i) each Specified Lender shall be deemed to have voted its
interest as a Lender without discretion in the same proportion as the allocation
of voting with respect to such matter by Lenders who are not Specified Lenders,
provided that no amendment, modification, waiver, consent or other action with
respect to any Loan Document shall deprive such Specified Lender of any payments
to which such Specified Lender is entitled under the Loan Documents without such
Specified Lender providing its consent, (ii) a Specified Lender shall not take
any step or action in a bankruptcy proceeding to object to, impede, or delay the
exercise of any right or the taking of any action by the Administrative Agent or
the Collateral Agent (or the taking of any action by a third party that is
supported by the Administrative Agent or the Collateral Agent) in relation to
such Specified Lender’s claim with respect to its Loans (a “Bankruptcy Claim”)
(including, without limitation, objecting to any debtor in possession financing,
use of cash collateral, grant of adequate protection, sale or disposition,
compromise, or plan of reorganization) so long as such Specified Lender in its
capacity as a Lender is treated in connection with such exercise or action on
the same or better terms as the other Lenders, (iii) with respect to any matter
requiring the vote of Lenders during the pendency of a bankruptcy proceeding
(including, without limitation, voting on any plan of reorganization), the Loans
and Commitments held by such Specified Lender (and any Bankruptcy Claim with
respect thereto) shall be deemed to be voted in accordance with clause
(i) above, so long as such Specified Lender in its capacity as a Lender is
treated in connection with the exercise of such right or taking of such action
on the same or better terms as the other Lenders (the provisions set forth in
this clause (iii), and the related provisions set forth in each Assignment and
Acceptance with a Specified Lender, constitute a “subordination agreement” as
such term is contemplated by, and utilized in, section 510(a) of the United
States Bankruptcy Code, and, as such, would be enforceable for all purposes in
any case where a Borrower or a Guarantor has filed for protection under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors
applicable to such Loan Party; provided that notwithstanding anything to the
contrary herein, each Specified Lender will be entitled to vote in accordance
with its sole discretion (and not be deemed to vote in the same proportion as
Lenders that are not each Specified Lenders) in connection with any chapter 11
plan to the extent that such plan proposes to treat any obligation under the
Loan Documents held by such Specified Lender in a manner that is less favorable
to such Specified Lender than the proposed treatment of similar obligations held
by Lenders that are not Specified Lenders, (iv) no Specified Lender shall have
any right to (A) attend (including by telephone) any meeting or discussions (or
portion thereof) among the Administrative Agent, Collateral Agent, Arranger,
Syndication Agent or any Lender to which representatives of the Loan Parties are
not invited, (B) receive any information or material prepared by the
Administrative Agent, Collateral Agent, Arranger, Syndication Agent or any
Lender or any communication by or among the Administrative Agent, Collateral
Agent, Arranger, Syndication Agent and/or one or more Lenders, except to the
extent such information or materials have been made available to the Borrowers
or any Guarantor or any of their representatives, (C) the benefit of any advice

 

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provided by counsel to the Agents or the other Lenders or to challenge the
attorney-client privilege of the communications between the Agents, such other
Lenders and such counsel, or (D) to make or bring any claim, in its capacity as
Lender, against the Agents with respect to the duties of the duties and
obligations of the Agents hereunder, (v) the aggregate principal amount of all
Loans held by Specified Lenders shall in no event exceed, as calculated at the
time of the consummation of any assignment to any Specified Lender, 20% of the
aggregate principal amount of the Loans then outstanding and (vi) the
Administrative Agent shall be granted an irrevocable power of attorney, coupled
with an interest, from each Loan Party and each Specified Lender to give effect
to the foregoing.

SECTION 9.05 Expenses; Indemnity.

(a) The Borrowers and Holdings agree, jointly and severally, to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent, the Syndication Agent and the Arrangers in connection with the
syndication of the Commitments and Loans and the preparation and administration
of this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Arrangers or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made hereunder,
including without limitation, the fees, charges and disbursements of Shearman &
Sterling LLP, as counsel to the Administrative Agent and the Collateral Agent
and any other local or foreign counsel for the Administrative Agent or the
Collateral Agent, and, in connection with any such enforcement or protection,
the fees, charges and disbursements of any other counsel for the Administrative
Agent, the Collateral Agent or any Lender. Expenses payable under this clause
shall include, without limitation, as expenses incurred in connection with the
protection of the rights of the Administrative Agent, the Collateral Agent, the
Arrangers or any Lender, the fees, charges and disbursements of Shearman &
Sterling LLP, as counsel to the Administrative Agent. Notwithstanding the
foregoing, the Borrowers’ and Holdings’ obligation to reimburse the fees and
expenses of outside counsel under this Section 9.05(a) shall be limited to one
firm of counsel for the Arrangers, the Syndication Agent, the Administrative
Agent and the Lenders, taken as a whole and, if necessary, of a single local
counsel in each appropriate jurisdiction and, in the case of an actual or
perceived conflict of interest where the party affected by such conflict informs
the Borrowers of such conflict and thereafter retains its own counsel for such
affected party, each such additional retained counsel.

(b) The Borrowers and Holdings agree, jointly and severally, to indemnify each
Arranger, the Administrative Agent, the Syndication Agent, the Collateral Agent,
each Lender, and each Related Party of any of the foregoing persons (each such
person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, charges and disbursements of counsel (which
shall be limited to one counsel in each relevant jurisdiction and, in the case
of an actual or perceived conflict of interest where the party affected by such
conflict informs the Borrowers of such conflict and thereafter retains its own
counsel for such affected party, each such additional retained counsel),
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
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any other Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations thereunder or
the consummation of the Transactions and the other transactions contemplated
thereby (including the syndication of the Term Loan Facility), (ii) the use of
the proceeds of the Loans, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto (and regardless of whether such matter is initiated by a third
party or by the Borrowers, Holdings or any other Loan Party or any of their
respective Affiliates), or (iv) any actual or alleged presence or Release of
Hazardous Materials on any property currently or formerly owned or operated by
Holdings or any of the Subsidiaries, or any Environmental Liability related in
any way to Holdings or the Subsidiaries; provided that such indemnity shall not,
as to any Indemnitee, be available (A) to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence, willful misconduct, bad faith or a material breach in bad
faith under the Loan Documents of such Indemnitee or any of such Indemnitee’s
Related Parties or Hazardous Materials first Released at any property after such
property is transferred to any Indemnitee or its successors or assigns by
foreclosure, deed-in-lieu of foreclosure or similar transfer where such Release
is not attributable to a condition existing on or prior to the date of such
foreclosure or other transfer or (y) relate to claims between the Lenders that
do not involve an act or omission of any Loan Party or any of their Affiliates
(other than claims against any Arranger, the Syndication Agent, the
Administrative Agent or the Collateral Agent or any of their Affiliates in their
capacities, or in fulfilling roles, as such (or any similar roles) in connection
with the credit facilities provided for herein) and (B) in the event of any
settlement entered into by such Indemnitee without the Borrowers’ written
consent (such consent not to be unreasonably withheld or delayed); provided,
however, that this clause (B) shall not apply to any such settlement that occurs
after the Borrowers were offered the ability to assume the defense of the action
that was the subject matter of such settlement and elected not to assume such
defense.

(c) To the extent that Holdings and the Borrowers fail to pay any amount
required to be paid by them to an Arranger, the Syndication Agent, the
Administrative Agent or the Collateral Agent under paragraph (a) or (b) of this
Section (and without limiting their obligation to do so), each Lender severally
agrees to pay to such Arranger, the Syndication Agent, the Administrative Agent
or the Collateral Agent, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Arranger, the Syndication
Agent, the Administrative Agent or the Collateral Agent in its capacity as such.
For purposes hereof, a Lender’s “pro rata share” shall be determined based upon
its share of the aggregate amount of the outstanding Term Loan Commitments for
all Lenders at the time (or, if there shall be no outstanding Term Loan
Commitments at such time, based upon such Lender’s share of the aggregate amount
of outstanding unused Term Loan Commitments most recently in effect, giving
effect to any subsequent assignments).

(d) To the extent permitted by applicable law, neither Holdings nor any Borrower
shall assert, and each hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or the use of the proceeds thereof.

 

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(e) The provisions of this Section 9.05 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of either Arranger, the Syndication Agent,
the Administrative Agent, the Collateral Agent or any Lender. All amounts due
under this Section 9.05 shall be payable on written demand therefor.

(f) Notwithstanding the foregoing, this Section 9.05 shall not entitle any
Indemnitee to indemnification for Taxes which are specifically covered by
Section 2.20.

SECTION 9.06 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Borrower or Holdings against any of and all the
obligations of any Borrower or Holdings now or hereafter existing under this
Agreement and the other Loan Documents held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document and although such obligations may be unmatured;
provided that in the event that any Defaulting Lender exercises any right of
setoff, (x) all amounts so set off will be paid over immediately to the
Administrative Agent for further application in accordance with the provisions
of Section 2.25(a)(ii) and, pending such payment, will be segregated by such
Defaulting Lender from its other funds and deemed held in trust for the benefit
of the Administrative Lender and the Lenders and (y) the Defaulting Lender will
provide promptly to the Administrative Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

SECTION 9.07 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (AND, TO THE
EXTENT APPLICABLE PRIOR TO THE EXIT FACILITY CONVERSION DATE, THE BANKRUPTCY
CODE).

SECTION 9.08 Waivers; Amendment.

(a) No failure or delay of the Administrative Agent, the Collateral Agent or any
Lender in exercising any power or right hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Collateral Agent and the Lenders hereunder and
under the other

 

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Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by any Borrower, or any
other Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Borrower or Holdings in any case shall entitle any
Borrower or Holdings to any other or further notice or demand in similar or
other circumstances.

(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrowers, Holdings and the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and each Loan Party (to the extent such Loan Party is a
party thereto), in each case with the consent of the Required Lenders; provided,
however, that no such agreement shall (i) decrease or forgive the principal
amount of, or extend the maturity of or any scheduled principal payment date or
date for the payment of any interest on any Loan or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan,
without the prior written consent of each Lender directly adversely affected
thereby, (ii) except as provided in Section 2.24, increase or extend the
Commitment or decrease or extend the date for payment of any Fees (or any
prepayment premium set forth in Section 2.12) of any Lender without the prior
written consent of such Lender; provided that the foregoing shall not apply to
extensions effected in accordance with Section 2.22, (iii) amend or modify the
pro rata requirements of Section 2.17 or the sharing of payments provisions of
Section 2.18 or the provisions of this Section or release all or substantially
all of the value of the Guarantees under the Security Documents or all or
substantially all of the Collateral, without the prior written consent of each
Lender, (iv) change the provisions of any Loan Document in a manner that by its
terms adversely affects the rights in respect of payments due to Lenders holding
Loans of one Class differently from the rights of Lenders holding Loans of any
other Class without the prior written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each adversely
affected Class, (v) modify the protections afforded to an SPC pursuant to the
provisions of Section 9.04(i) without the written consent of such SPC or
(vi) reduce the percentage contained in the definition of the term “Required
Lenders” without the prior written consent of each Lender (it being understood
that with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the Term Loan Commitments on the date
hereof); provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent or the Collateral Agent.
Notwithstanding the foregoing, any Loan Document may be amended or modified
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Borrowers and each other Loan Party that is a party
thereto, without the consent of any of the Lenders, if such amendment or
modification is beneficial to the Lenders (or the Lenders holding Loans or
Commitments of any Class) and does not adversely affect the rights or
obligations of any Lender under any Loan Document.

 

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SECTION 9.09 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this
Section 9.09 shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or participations or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.10 Entire Agreement. This Agreement, the Fee Letter and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any person (other than the
parties hereto and thereto, their respective successors and assigns permitted
hereunder and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Collateral Agent any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.

SECTION 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

SECTION 9.12 Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

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SECTION 9.13 Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.

SECTION 9.14 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 9.15 Jurisdiction; Consent to Service of Process.

(a) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against any of the Loan Parties or their respective properties in the
courts of any jurisdiction.

(b) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 9.16 Confidentiality. Each of the Administrative Agent, the Collateral
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ officers, directors, trustees, employees 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 regulatory authority or
quasi-regulatory authority (such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) in connection with the exercise of

 

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any remedies hereunder or under the other Loan Documents or any suit, action or
proceeding relating to the enforcement of its rights hereunder or thereunder,
(e) subject to an agreement containing provisions substantially the same as
those of this Section 9.16, to (i) any actual or prospective assignee of or
participant in any of its rights or obligations under this Agreement and the
other Loan Documents (including any actual or prospective pledgee or assignee of
a pledge or assignment effected pursuant to Section 9.04(h)) or (ii) any actual
or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to a Borrower or any Subsidiary or any of their respective
obligations, (f) with the consent of Holdings or a Borrower, or (g) to the
extent such Information becomes publicly available other than as a result of a
breach of this Section 9.16. For the purposes of this Section, “Information”
shall mean all information received from any Borrower or Holdings and related to
any Borrower or Holdings, their Subsidiaries or their or their Subsidiaries’
business, other than any such information that was available to the
Administrative Agent, the Collateral Agent or any Lender on a nonconfidential
basis prior to its disclosure by such Borrower or Holdings; provided that, in
the case of Information received from any Borrower or Holdings after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any person required to maintain the confidentiality of Information
as provided in this Section 9.16 shall be considered to have complied with its
obligation to do so if such person has exercised the same degree of care to
maintain the confidentiality of such Information as such person would accord its
own confidential information.

SECTION 9.17 USA PATRIOT Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies Holdings and the
Borrowers that pursuant to the requirements of the USA PATRIOT Act, it is
required to obtain, verify and record information that identifies Holdings and
each Borrower, which information includes the name and address of Holdings and
each Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify Holdings and each Borrower in
accordance with the USA PATRIOT Act.

SECTION 9.18 Joint and Several Liability of the Borrower Group.

(a) In order to induce the Lenders to extend credit hereunder, HMHP, Publishers
and HMCo (collectively, the “Borrower Group”) agree that they will be jointly
and severally liable for all the Obligations, including the principal of and
interest on all Loans made to any Borrower. Each member of the Borrower Group
further agrees that the due and punctual payment of the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound hereunder notwithstanding any such
extension or renewal of any Obligation.

(b) Each member of the Borrower Group waives presentment to, demand of payment
from and protest to any other member of the Borrower Group of any of the
Obligations, and also waives notice of acceptance of its obligations and notice
of protest for nonpayment. The Obligations of any Borrower hereunder shall not
be affected by (i) the failure of any Lender or the Administrative Agent to
assert any claim or demand or to enforce or exercise any right or remedy against
any member of the Borrower Group under the provisions of this Agreement or
otherwise or (ii) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Agreement or any other agreement (other than the
payment in full in cash of all the Obligations and except to the extent that
such Obligations have been explicitly modified pursuant to an amendment or
waiver that has become effective in accordance with Section 9.08).

 

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(c) Each member of the Borrower Group further agrees that its agreement under
this Section 9.18 constitutes a promise of payment when due (whether or not any
bankruptcy or similar proceeding shall have stayed the accrual or collection of
any of the Obligations or operated as a discharge thereof) and not of
collection, and waives any right to require that any resort be had by any Lender
or the Administrative Agent to any balance of any deposit account or credit on
the books of such Lender or the Administrative Agent in favor of any member of
the Borrower Group or any other Person.

(d) The obligations of each member of the Borrower Group under this Section 9.18
shall not be subject to any reduction, limitation, impairment or termination for
any reason, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of the member of the Borrower Group under this Section 9.18 shall
not be discharged or impaired or otherwise affected by (i) the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
any remedy under this Agreement or any other agreement, (ii) any waiver or
modification in respect of any thereof, (iii) any default, failure or delay,
willful or otherwise, in the performance of any of the Obligations or (iv) any
other act or omission that may or might in any manner or to any extent vary the
risk of such member of the Borrower Group or otherwise operate as a discharge of
such Member of the Borrower Group or any member of the Borrower Group as a
matter of law or equity.

(e) Each member of the Borrower Group further agrees that its obligations under
this Section 9.18 shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Administrative Agent or any
Lender upon the bankruptcy or reorganization of any other member of the Borrower
Group or otherwise.

(f) In furtherance of the foregoing and not in limitation of any other right
which the Administrative Agent or any Lender may have at law or in equity
against any member of the Borrower Group by virtue of this Section 9.18, upon
the failure of any other member of the Borrower Group to pay any Obligation when
and as the same shall become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, each member of the Borrower Group hereby
promises to and will, upon receipt of written demand by the Administrative
Agent, forthwith pay, or cause to be paid, in cash the amount of such unpaid
Obligation.

(g) If by virtue of the provisions set forth herein, any member of the Borrower
Group is required to pay and shall pay Obligations of another member of the
Borrower Group, all rights of such member of the Borrower Group against such
other member of the Borrower Group arising as a result thereof by way of right
of subrogation, right of contribution or otherwise shall in all respects be
subordinated and junior in right of payment to the prior payment in full of all
the Obligations, and any of these rights among members of the Borrower Group
shall not be due or paid until all Obligations shall have been paid in full.

 

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SECTION 9.19 Borrowing Agent. Each member of the Borrower Group hereby
irrevocably and unconditionally appoints HMHP as borrowing agent (the “Borrowing
Agent”) hereunder and under the other Loan Documents to act as agent for each
other member of the Borrower Group for all purposes of the Loan Documents,
including, as applicable, (A) requesting Loans (including pursuant to
Section 2.02 or 2.24 hereof), (B) delivering certificates, (C) receiving and
allocating (to the extent permitted in the Loan Documents) the proceeds of the
Loans, (D) taking any other action or receiving any communication on behalf of
the Borrower Group in connection with the Loan Documents, and (E) taking such
other actions and having such other powers as are reasonably incidental thereto.
The Borrowing Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. No fees shall be payable
to the Borrowing Agent for acting as the Borrowing Agent. In performing its
functions and duties under this Agreement and the other Loan Documents, the
Borrowing Agent shall act solely as an agent of the members of the Borrower
Group. The Administrative Agent and each Lender shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, posting or other distribution) believed by it
to be genuine and to have been signed, sent or otherwise authenticated by the
Borrowing Agent. The Administrative Agent and each Lender also may rely upon any
statement made to them orally or by telephone and believed by them to have been
made by the Borrowing Agent, and shall not incur any liability for relying
thereon. Any oral or written statement, certificate, representation or
commitment made, given or delivered by the Borrowing Agent under this Agreement
or the other Loan Documents shall be deemed to have been approved by, made,
given and delivered on behalf of, and shall bind the members of the Borrower
Group, jointly and severally, as fully as if any member of the Borrower Group
had made, given or delivered such statement, certificate, representation or
commitment. The provisions of this Section 9.19 are solely for the benefit of
the Borrowers, the Administrative Agent and Lenders, and no other Person shall
have any rights as a third party beneficiary of any of such provisions.

SECTION 9.20 LEGEND. THE ISSUE PRICE, AMOUNT OF OID (IF ANY), ISSUE DATE AND
YIELD TO MATURITY OF THE LOANS MAY BE OBTAINED BY WRITING TO THE BORROWERS AT
THE ADDRESS SET FORTH IN SECTION 9.01.

SECTION 9.21 No Fiduciary Duty. The Administrative Agent, Collateral Agent, the
Syndication Agent, each Arranger, each Lender and their Affiliates
(collectively, solely for purposes of this paragraph, the “Lenders”), may have
economic interests that conflict with those of a Borrower. Each Borrower agrees
that nothing in the Loan Documents or otherwise will be deemed to create an
advisory, fiduciary or agency relationship or fiduciary or other implied duty
between the Lenders and any Borrower, its stockholders or its Affiliates. Each
Borrower acknowledges and agree that (i) the transactions contemplated by the
Loan Documents are arm’s length commercial transactions between the Lenders, on
the one hand, and the Borrowers, on the other, (ii) in connection therewith and
with the process leading to such transaction each of the Lenders is acting
solely as a principal and not the agent or fiduciary of any Borrower, its
management, stockholders, creditors or any other person, (iii) no Lender has
assumed an advisory or fiduciary responsibility in favor of any Borrower with
respect to the transactions contemplated hereby or the process leading thereto
(irrespective of whether any Lender or any of its affiliates has advised or is
currently advising any Borrower on other matters) or any other

 

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obligation to any Borrower except the obligations expressly set forth in the
Loan Documents and (iv) each Borrower has consulted its own legal and financial
advisors to the extent deemed appropriate. Each Borrower further acknowledges
and agrees that it is responsible for making its own independent judgment with
respect to such transactions and the process leading thereto. Each Borrower
agrees that it will not claim that any Lender has rendered advisory services of
any nature or respect, or owes a fiduciary or similar duty to any Borrower, in
connection with such transaction or the process leading thereto.

SECTION 9.22 Release of Liens and Guarantees. In the event that any Loan Party
conveys, sells, leases, assigns, transfers or otherwise disposes of all or any
portion of any of the Equity Interests of any Loan Party or any assets to a
person that is not (and is not required to become) a Loan Party in a transaction
not prohibited by Section 6.05, any Liens created by any Loan Document in
respect of such Equity Interests or assets shall be automatically released and
the Administrative Agent shall promptly (and the Lenders hereby authorize the
Administrative Agent and/or the Collateral Agent to) take such action and
execute any such documents as may be reasonably requested by the Borrowing Agent
and at the Borrowers’ expense to release any Liens created by any Loan Document
in respect of such Equity Interests or assets, and, in the case of a disposition
of the Equity Interests of any Loan Party in a transaction permitted by
Section 6.05, and as a result of which such Subsidiary would cease to be a Loan
Party, such Loan Party’s obligations under the Guarantee and Collateral
Agreement shall be automatically terminated and the Administrative Agent and/or
the Collateral Agent shall promptly (and the Lenders hereby authorize the
Administrative Agent and/or the Collateral Agent to) take such action and
execute any such documents as may be reasonably requested by the Borrowing Agent
to terminate such Loan Party’s obligations under the Guarantee and Collateral
Agreement. In addition, the Administrative Agent and/or the Collateral Agent
agrees to take such actions as are reasonably requested by the Borrowing Agent
and at the Borrowers’ expense to terminate the Liens and security interests
created by the Loan Documents when all Commitments have been terminated and the
principal of and interest on each Loan, all Fees and all other expenses or
amounts (other than contingent indemnification liabilities to the extent no
claim giving rise thereto has been asserted) payable under any Loan Document
have been paid in full, all Letters of Credit have been cancelled or have
expired and all amounts drawn thereunder have been reimbursed in full or, with
the consent of the Issuing Bank in its sole discretion, such Letters of Credit
shall have been Cash Collateralized pursuant to arrangements satisfactory to the
Issuing Bank (which arrangements result in the release of the Revolving Credit
Lenders from their obligation to make payments in respect of L/C Disbursements
pursuant to Section 2.23(d)) and the Administrative Agent and/or Collateral
Agent shall have received satisfactory evidence that all Other Secured
Obligations either are not due or shall have been paid in full or arrangements
with respect thereto reasonably satisfactory to the applicable Other Secured
Parties shall have been made (and the applicable Other Secured Parties have
notified the Collateral Agent of their consent to terminating such Liens and
security interests).

SECTION 9.23 Intercreditor Agreements. The Administrative Agent and the
Collateral Agent are authorized to enter into each Intercreditor Agreement and
the parties hereto acknowledge that each Intercreditor Agreement is binding upon
them. Each Lender (a) hereby consents to the provisions of the Term
Loan/Revolving Facility Intercreditor Agreement and each other Intercreditor
Agreement, (b) hereby agrees that it will be bound by and will take no actions
contrary to the provisions of any Intercreditor Agreement and (c) hereby
authorizes and

 

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instructs the Administrative Agent and Collateral Agent to enter into the Term
Loan/Revolving Facility Intercreditor Agreement and, if applicable, any other
Intercreditor Agreement and to subject the Liens on the Collateral securing the
Obligations to the provisions thereof. Notwithstanding anything to the contrary
herein, the Administrative Agent and the Collateral Agent, without the consent
of any Lender, may enter into one or more written amendments, supplements or
modifications, in each case, pursuant to procedures and documentation reasonably
required by the Administrative Agent or Collateral Agent, to any Intercreditor
Agreement as may be required or permitted under the Loan Documents (i) to add
other parties (or any authorized agent or representative thereof or trustee
therefor) holding Indebtedness that is incurred in compliance with this
Agreement that (A) is secured by Liens on the Collateral permitted under this
Agreement, (ii) establish the relative priority of the Liens on the Collateral
securing such Indebtedness as specified in this Agreement and (iii) to amend,
supplement or modify other provisions of any Intercreditor Agreement to
implement any of the foregoing as reasonably acceptable to the Administrative
Agent or Collateral Agent. The authority provided to the Administrative Agent
and Collateral Agent under this Section 9.23 shall be deemed to constitute the
approval and consent of the Lenders with respect to the amendments, supplements
and modifications described in this Section 9.23 for purposes of any
Intercreditor Agreement.

[Signature Pages Follow]

 

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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.

 

HOUGHTON MIFFLIN HARCOURT COMPANY By:

/s/ William F. Bayers

Name: William F. Bayers Title: Executive Vice President, Secretary and General
Counsel

 

HOUGHTON MIFFLIN HARCOURT PUBLISHERS INC. By:

/s/ William F. Bayers

Name: William F. Bayers Title: Executive Vice President, Secretary and General
Counsel

 

HMH PUBLISHERS LLC By:

/s/ William F. Bayers

Name: William F. Bayers Title: Executive Vice President, Secretary and General
Counsel

 

HOUGHTON MIFFLIN HARCOURT PUBLISHING COMPANY By:

/s/ William F. Bayers

Name: William F. Bayers Title: Executive Vice President, Secretary and General
Counsel

 

EACH OF THE SUBSIDIARY GUARANTORS LISTED ON SCHEDULE 3.08 HERETO By:

/s/ William F. Bayers

Name: William F. Bayers Title: Executive Vice President, Secretary and General
Counsel

[Signature Page to Amended and Restated Term Loan Credit Agreement]

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

CITIBANK, N.A.,

as Administrative Agent, Collateral Agent and a Lender

By:

/s/ Monique Renta

Name: Monique Renta Title:   Vice President

[Signature Page to HMH Amended and Restated Term Loan Credit Agreement]